Content uploaded by Jean-Paul Faguet
Author content
All content in this area was uploaded by Jean-Paul Faguet
Content may be subject to copyright.
A preview of the PDF is not available
A Synoptic Guide to Decentralization
Abstract and Figures
Decentralization or the devolution of power and resources from upper level to lower level governments has become one of the hot topics of our time. It is squarely in the forefront of the development debate throughout Latin America, Africa and Asia. And under the guises of subsidiarity, devolution and federalism it is also at the center of public policy-making in Europe and North America. And yet despite real experiments in decentralization under way in scores of countries, and literally hundreds of empirical studies, the economic and political effects of decentralization are still unclear. This paper seeks to provide the policy community with a synoptic guide to the state of current knowledge on decentralization and governance. Because ideal governance is an inherently subjective notion, the analysis is focused on the effects of decentralization on largely uncontroversial aspects of governance such as the degree of corruption and other arbitrary government interventions as well as efficiency in the provision of basic public services.
Section I emphasizes several aspects of decentralization related to accountability and governance. Decentralization is thought to lead to improved governance through four main channels: (i) Improved public oversight of government activity makes officials more accountable to citizens and may reduce corruption and improve efficiency in the provision of public services. This effect may be enhanced if decentralization also involves taxation. In this case both citizens and public officials face even stronger incentives to ensure efficient use of public funds. Better public oversight of government activity may improve governance more generally by making public services and policies more responsive to people’s needs. Finally, improved public oversight and government accountability may allow specific disadvantaged groups to be targeted for benefits or welfare improvements. (ii) More equal power distribution between private actors and local instead of national government agencies may reduce arbitrary government interventions and promote the efficiency of public service. (iii) Competition among local jurisdictions may improve governance at large by giving citizens the possibility to exit a given jurisdiction and allowing them to compare policy performances across jurisdictions. (iv) Political competition at the national level may be enhanced via the creation of new political platforms at the local level and new avenues to power within established parties. Governance may be improved by a more vigorous and competitive national politics leading to political entrepreneurship and policy innovation. On the other hand, governance may be worsened if the decentralizing reform allows local elites to capture the political process.
As the subsequent discussion will make clear, decentralization is not an easy fix for unresponsive or inefficient government. In order for decentralization to enhance welfare, a number of conditions must be met in addition to the basic decentralizing reform transferring power and resources from upper to lower levels of government. These can be divided into three categories: (i) Information. Politicians must have good information on what local voters want, and voters must in turn have good information on what government does. (ii) Openness and Competition. This refers to both the political party system and local firms and other economic actors that finance political parties and candidates. Openness and competition facilitate the role of policy entrepreneurs, who identify gaps in the policy offerings and devise new policies to fill these gaps. (iii) Social Trust and Civic Organization. Individuals do not participate in politics only as individual voters, but also collectively according to different cross-cutting cleavages that change over time, grouping a given set of voters in different ways. Local government depends on the relationships that collectively comprise civil society to elicit information necessary to the policy-making process, judge the efficacy of previous interventions, and plan for the future. It will be argued that complementary institutions and organizations can contribute powerfully to information, openness and competition, and social trust and civic organization.
As will be made clear below, successful decentralization also requires good governance at the center, as well as a working relationships between central and local governments. In section II the focus is on such intergovernmental relations, and to their connection with the structure of central government itself.
Section II begins with an argument why it is that any discussion of decentralization has to take intergovernmental relations into account. The next subsections describe the fiscal and political aspects of intergovernmental relations, highlighting their potential to affect the impact of decentralization. The section closes with a brief discussion of the mechanisms by which accountability (emphasized in section I) and intergovernmental relations (emphasized section II) are intertwined. The paper begins with the question of decentralization and governance, and then moves on to intergovernmental fiscal and political relations.
Figures - uploaded by Jean-Paul Faguet
Author content
All figure content in this area was uploaded by Jean-Paul Faguet
Content may be subject to copyright.
Public sector governance has been the primary focus of the developing countries to ensure that they realise their developmental goals. In ensuring the public sector governance, decentralisation has been considered as the primary initiative. However, most of the previous empirical studies concentrate on political decentralisation meanwhile excluding administrative decentralisation and mediation effect of contingent factors i.e. technological capacity and institutional culture as institutional characteristics. In view of the aforementioned missing knowledge, the article investigated the influence of administrative decentralisation on public sector governance considering the mediation effect of institutional characteristics adopting Stewardship theory and Contingency theory. The article collected data from Dar es Salaam, Dodoma and Kigoma through self-administered questionnaire and analysed by using Mean scores and Structural Equation Model (SEM). The results revealed that administrative decentralisation had significant positive influence on public sector accountability and transparency. Moreover, technological capacity and institutional culture partially mediated the relationship between administrative decentralisation and, public sector accountability and transparency. In view of such results, among others, the article recommends that there is a need of developing the National Decentralisation Strategy (NADIS) to guide the decentralisation process and ensure its effective implementation for the sake of achieving public sector governance goals.
This paper analyses community participation in Cambodian schools, looking at the spaces for participation and the cluster school system strategy adopted by the royal government to decentralise education. While institutionalised spaces of participation are relatively new, Cambodian communities have traditionally supported schools despite 25 years of political turmoil. Today communities provide material contributions but their participation in internal decision‐making processes is still limited. While some local NGOs have shown that more active participation is possible, the factors that limit the establishment of democratic spaces for participation are to be found in the institutional set‐up and, more importantly, in the trauma caused by the conflict, and in Cambodian socio‐cultural norms.
Bolivia’s 1994 Popular Participation reforms devolved political powers and resources to hundreds of municipal governments throughout the land. The country is currently implementing a further round of reforms that would grant a degree of autonomy to departmental, regional, municipal, and indigenous and rural governments. What effects might this have on public investment patterns, government responsiveness, government fiscal relations, the sustainability of public finances, and political accountability? Acknowledging from the outset that it is too soon to analyze the effects of this reform, I instead examine its main provisions in light of the insights provided by the international fiscal federalism literature, and extensive evidence on the effects of Bolivia’s 1994 reforms. By submitting the law to the dual rigors of theory and evidence, we can try to arrive at contingent predictions of its likely effects which, if not precise, are at least reasonable baselines. These in turn allow us to make recommendations for amendments and adjustments, not so much to the legal text as to the more complicated question of the implementation of reform. The deeper aim of this paper is to enrich the current debate on how decentralization can be implemented in ways that strengthen democracy and give voice to the poor.
This paper presents new evidence on the effects of fiscal performance on the incumbent's party probability of reelection. We study all gubernatorial elections in Argentina from the recovery of democracy in 1983. Unlike Peltzman (1992) findings for the U.S. and more recent evidence for Israel and Colombia, we find that voters are not conservatives but liberals. They reward fiscal profligacy. After controlling for political and socioeconomic variables, we find that incumbent parties that increase real per capita public expenditures augment their probabilities of retaining in power. We conjecture that the tax sharing agreement and bailouts provide powerful incentives to voters to reward local politicians who are effective at extracting resources from the federal government.
The Argentine Congress plays a limited role in the production of public policy and is a relatively ineffective check on the Argentine Executive Branch. We argue this is the combined result of incentives created by several features of Argentine political institutions. In this article we emphasize the role of the country's electoral rules, which place the legislator reelection decision not in the hands of the voters, but rather in the hands of the voters, but rather in the hands of the provincial governor/party boss(es). These rules limit legislators' ability to develop a professional legislative career and reduce their incentives to specialize and to develop strong legislative institutions. We provide empirical evidence of the short duration of congressional careers, the province-based nature of Argentine political careers, and the lack of specialization among legislators resulting from the above-mentioned institutional incentives.
As Canadians question the future of their federation and consider changes to it, there is much that can be learned from federal systems elsewhere. At present there are twenty-three federations in the world (representing over forty per cent of the world's population) comprising a variety of forms and variations. In this study, Ronald Watts provides a clear analysis of the design and operation of a sample of federations chosen for their relevance to Canadian issues.
Clear fiscal policy effects appear in American state gubernatorial and legislative elections between 1968 and 1992, independent of the effects of incumbency, coattails, term limits, and macroeconomic conditions. The results show that accountability is generally stronger following a period of unified party control than under divided government. Voter reactions to taxes and spending relative to the state economy are conditional on expectations, which differ for each party. Net of these expectations, Republican gubernatorial candidates lose votes if their party is responsible for unanticipated increases in the size of the state budget; Democrats do not and, indeed, may be rewarded for small increases. Independent of this, the incumbent governor's party is punished in legislative elections for failing to maintain fiscal balance. Taken together, these results show how electoral accountability for fiscal policy outcomes is strong but highly contingent on a complex configuration of party labels, partisan control, expectations, and institutions.