Does democratic local governance facilitate local economic development? Evidence from Bangladesh

 

Abstract

This paper tests whether the improvement of democratic local governance (DLG) positively impacts local economic development (LED). Based on a nationally representative citizen perception survey of 3,024 households across 56 Union Parishads (UPs) in Bangladesh, the results suggest that, although the UP governance program (UPGP) has improved the administrative governance of UPs, functional governance involving citizens remains weak. Thus, due to partial improvement of DLG, UPGP does not appear to have a significant impact on the overall local economic development and service delivery of UPs. A significant gap can be seen to exist between the claims of UPs and the perceptions of citizens around UPs’ governance performance, which may result from the poor awareness building structures of the UPGP. However, our results suggest that providing training to UP officials can partially offset the shortfalls of DLG in its pursuit of LED.