Impacts of decentralisation on quality and satisfaction: evidence from city bus service in Vietnam

Abstract

Decentralisation has been attributed to fruitful outcomes for public services. However, by employing agency theory in this paper we argue that full decentralisation of all dimensions may not help, at least in the public bus service. Instead, better quality and satisfaction can only be achieved in a more fiscal but less administrative and political decentralisation. Data from two municipalities in the emerging economy of Vietnam is used to provide the empirical evidence. This paper thus is contributed to the literature of decentralisation and the emerging one of quality and satisfaction in public services. Limitations of the study are also discussed.