Decentralisation, Human Resource Development, and Efficiency in Water Utilities

This paper examines the relationship between decentralisation, human resource development (HRD), and operational efficiency in water utilities managed by state and local governments across Madhya Pradesh, Chhattisgarh, and Jharkhand, India. Drawing on a random sample of 200 towns and villages, the study quantifies how decentralisation influences HRD investment and how both variables jointly shape service delivery outcomes. The findings challenge the widely held assumption — promoted by international donors and development institutions — that devolving authority to lower tiers of government inherently improves public service performance. Results indicate that decentralisation, as practised in India's drinking water sector, does not enhance operational efficiency. Instead, vocational training — the primary measure of HRD employed here — emerges as the principal driver of improved performance. Since decentralisation is negatively correlated with HRD investment, transferring authority without commensurate workforce development commitments risks compounding existing inefficiencies rather than resolving them.