Lack of transparency, accountability, and existence of elite capture, ambiguity etc. will lead to
misallocation and misappropriation of available resources. These phenomena contribute directly
or indirectly to corruption resulting to poor efficiency and effectiveness of service delivery. These
cases exist at the local level as well during the practice of decentralized service provision, leading
to degrade the quality of and people’s trust on local public services. As represented by petty
corruption at local level it seems to be decentralization of corruption as well in the same direction
of decentralization of authorities and funds from centre to local governments. This paper tries to
examine the effect of these factors on the local public service delivery in developing countries like
Nepal. The study finds the existence of elite capture and corruption leading to the dissatisfaction
of local people due to inferior quality of local public goods and services. Using survey data, mixed
method of analysis and descriptive tools, the study examines how these maladies are affecting the
local service provision through the impact on the corruption equation by the increased monopoly
power of local officials along with discretion in decision making and reduced accountability. It
observes the various practice of corruption existing in the local bodies and people’s perception on
the corruption and local public services in the sample villages. The paper concludes that- unless
and until the proper policies and actions to tackle these maladies are adopted, no one can expect
for the effective and efficient decentralized service provision in order to improve the quality of life
of general people.