Association for Public Policy Analysis & Management

While decentralization is lauded across Latin America as a method for improving public service delivery, in practice the actual implementation of decentralization varies greatly. This study draws on the health sector reform experience of Honduras to examine the mechanisms through which governance reforms shape the behavior of public officials and bureaucrats at the local level. Since 2007 Honduras has been rolling out decentralized health service delivery models in an effort to improve health outcomes for vulnerable, predominantly rural populations. Now implemented in about 90 of 298 Honduran municipalities, the major component of the reform is to introduce and empower new local organizations within the existing governmental hierarchy who can then contribute to the co-production of municipal services. In this study we draw on original data from a series of lab-in-the-field behavioral games conducted with 230 Honduran bureaucrats and elected officials to assess the behavioral consequences of decentralization. Specifically, we examine the ways in which changes in governance structure influence cooperation and social capital among the actual public officials charged with delivering health services to rural communities. Our preliminary findings suggest that decentralization does facilitate greater coordination among bureaucrats, largely because of more frequent contact between individuals at different positions within the service delivery hierarchy, and that this in turn creates and allows access to greater reserves of social capital. Importantly, this result suggests that decentralization may be able to help equalize power differentials between regional and local bureaucrats and thus facilitate their working together to solve complex social problems.