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Decentralization of government has been one way of increasing government responsiveness. This is true for municipal systems where a city-wide government may be decentralized to subdistrict units as well as the federal system, where responsibilities may be delegated to state or local units. This paper reviews advantages and disadvantages of decentralized units. Evidence for municipal systems is based on analysis of 215 case studies; evidence for the federal system is drawn from an ongoing study of federal aid programs for urban areas. The paper identified tradeoffs with regard to equity, efficiency, and responsiveness to residents' needs. It also identifies an often overlooked dilemma: public services are functionally organized — e.g., transportation, public safety, education, health, and housing — and different types of decentralization are suitable for each functional area; to the extent that this is true, horizontal integration is extremely difficult. The paper concludes by raising some key policy questions about decentralization.
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