Policies and Institutions for Effective Service Delivery: The Need of a Microeconomic and Micropolitical Approach

Abstract

The recent political economy literature on institutions for growth views low and ineffective spending on service delivery sectors as a symptom of the underlying institutional environment. But if institutions are the outcome of decisions by policymakers and serve the purpose of benefitting some at the cost of the majority, what can be done to facilitate empowerment and thus the development of inclusive political institutions? In this paper, we argue that a microeconomic approach that explicitly takes political and bureaucratic incentives and constraints into account provides a fruitful, and complementary, way forward. We discuss several promising lines of research.