Improving the education and health of the poor: decentralization and policy reform in Colombia

A central claim in favor of decentralization is that it will improve access to public services, but few studies examine this question empirically. This paper, the policyoriented companion to Faguet and Sánchez (2009), explores the effects of decentralization on the uses and spatial distribution of public investment, and on access to health and education services in Colombia. I show that investment shifted from infrastructure to social services and human capital formation, and resources were rebalanced in favor of poorer districts. Decentralization improved enrollment rates in public schools and access to public health services. In both cases, poor people benefitted most. Four important lessons emerge. For decentralization to work well, (i) local governments must face harder budget constraints; (ii) central government must be scaled back; (iii) decentralization is composed of distinct, separable components, the sequencing of which is important.