Fiscal Decentralization and Service Delivery in Enugu Local Government Areas: An Economic Evaluation

Fiscal decentralization is designed to improve public service delivery by bringing government resource allocation closer to citizen needs, yet empirical evidence on its effectiveness in Nigerian local governance contexts remains limited. This study evaluates the relationship between fiscal decentralization and service delivery outcomes across Enugu State local government areas (LGAs) from 2019 to 2024. The study is grounded in the Decentralization Theorem, which holds that decentralized provision of local public goods is more efficient than centralized provision when preferences are heterogeneous across communities. A longitudinal research design was adopted using secondary data from the Joint Account Allocation Committee (JAAC), Enugu State, supplemented by primary survey data from 400 residents drawn proportionately across 17 LGAs. Service delivery was assessed using composite indices covering water supply, primary healthcare access, road maintenance, and primary education quality. Findings reveal a weak but positive association between fiscal resource allocation to LGAs and service delivery improvements, with the relationship significantly moderated by local government administrative capacity and fiscal accountability mechanisms. LGAs with higher internally generated revenue exhibited markedly better service delivery outcomes than those heavily dependent on JAAC allocations. The study concludes that fiscal decentralization alone is insufficient to drive service delivery improvement in Enugu LGAs without corresponding administrative capacity development. It is recommended that Enugu State government implement capacity-building programs for LGA finance officers and introduce performance-based grant allocation mechanisms.

Keywords: Fiscal decentralization, service delivery, local government, Enugu State, decentralization theorem