During the Cold War, countries throughout the developing world, especially in newly-independent South Asia and Sub-Saharan Africa, implemented socialist and statist economic models. However, as the public institutions in these fledgling nations were ill-equipped to administer state-centric economic structures, the adoption of such governance systems had, in the overwhelming majority of cases, devastating results.
In addition to setting back national economies by several decades, the rapid expansion of central government power and responsibility brought about the public sector pathologies still felt today, such as corruption, mismanagement and inadequate services. In recent decades, the vast majority of these countries have attempted to reform their economies to rely more on private sector enterprise and capital.
More recently, in an attempt to improve efficiency and service quality, many of these governments initiated decentralization programs wherein the burden of service delivery is shifted to sub-national levels of government. To be effective, decentralization requires increased capability and administrative capacity on the part of local governments. Within the international development community, therefore, there is a growing emphasis on public sector reform and capacity-building, especially at sub-sovereign levels of government.