The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues.An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished.The papers carry the names of the authors and should be cited accordingly.The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors.They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent.Policy Research Working Papers are available online at http://econ.worldbank.org.* William B. stokely Distinguished Professor of Business, The University of Tennessee, and Economist, U.S. Governmental Accountability Office, respectively.The paper presents a revised version from that presented at a World Bank Decentralization and Subnational Economics thematic group seminar held on October 18, 2005.Special thanks goes to Lily Liu and Serdar Yilmaz for serving as discussants.All views and remaining errors are those of the authors, and do not necessarily represented
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