Political economy factors are just as important for urban service delivery as funding and technical capacity. These factors are influenced by both the characteristics and accountability relationships of the services in question, and the political economy of the wider context. Urban areas may benefit from greater resources, better technical capacity, and receive more political attention than rural areas, which can make providing and improving services easier. However, incentives in urban centres do not ensure that these advantages lead to more equitable or better-quality service delivery, so that even if urban areas have the resources, the politics of service delivery may hamper performance.
This discussion paper reviews literature on the political economy of four key urban services: solid waste management, water supply, transport, and urban health services. The four sector reviews demonstrate the importance of governance factors – partly rooted in physical, economic, social and political differences between rural and urban environments – in shaping service delivery in urban environments.While there are important variations between and within urban environments, urban service sectors display common as well as distinct characteristics in respect to the goods provided, their market failure traits, and their task- and demand-related qualities. At the same time, and often as a result of these sector characteristics, urban environments display patterns of common governance constraints, such as prevalence of certain political market imperfections, a proneness to policy, regulatory and managerial incoherence, and demand-side collective action challenges.