Punjabi University

Faculty Of Social Science And Humanity

Department Of Public Administration And
Development Management
Comparative Local Government Paper
Seminar on Decentralization
By: Wondem MeKuriaw
Patiala, Punjab
Nov. 2016

Introduction

The original role the government can be seen

as "negative" in that it was primarily
concerned with stopping other people from
doing something wrong, things that were
inconvenient to the society.
Its function was confined on the basic and
conventional activities of
external defence,
internal law and order, and
Revenue collection.

Contd

However, the government functions became

changed as a result of the following factors
A. Industrialization and urbanization
After
industrialization
revolution,
the
development of industry and the associated
growth of towns (urbanization) led to various
socioeconomic problems such as those related
to housing, health, unemployment and so on.
These problems were not satisfactorily resolved
through the market system, and thus political
demands eventually led to state action.

Contd

2. Negative externalities
. As the scale of commercialization increased,
it became apparent that the activities of one
organization or individual could impose extra
costs upon the society in general; for example
environmental damage from pollution.
. Thus, pressure upon the state both to regulate
and to take certain responsibilities upon it
became necessary

Contd
3. Market failure
market motivated only when there is economic
incentives.
If not market cannot deliver every goods and
services.
As a result market fails in providing certain
basic facilities that would bring successful
economic growth.
Hence, the state is liable to give such goods and
services,

Contd
4. Globalization
the public became conscious of about their
right and duties
Society is organized with numbers of various
interest groups organized and presents their
views politically.
Those groups requested an integral and active
intervention of the state .

Contd
5. Rapid growth of population
Rapid growth of population is demanding
more goods and services from the government.
It increases pressure on the government to
change it role

Contd
These factors are force government more
positive in providing large scale and variety
of goods and services to the society.
The consequence of the changed role of the
state is the growth of large hierarchical
professional bureaucracies and at the end
the government hold excessive power.

Contd
The problem of centralized systems is not only
the geographical distance and the resulting
lack
of
knowledge
about
local
circumstances, but also the psychological
distance of government officials from citizens.
To curve excessive power at the centre and
address the interest of the community, the
concept of decentralization is came to exist.

Contd
Thus, decentralized the governments authority
and responsibility to local level is the best
panacea to satisfy the need and interest of the
community.
In other words, decentralization can make
government more responsive to the
constituency.

What does it mean decentralization?

Decentralization is the transfer of authority and

responsibility for planning, management, and
resource-raising allocation and service
delivering from the central government to
field units of central government ministries or
agencies;
subordinate units or levels of government;

semi-autonomous
public
authorities
or
corporations;
area-wide regional or functional authorities; or
NGOs/Private sectors

Why decentralization?
1. Support and enhance democratization process
of a country
. Decentralization is a means of giving different
ethnic and regional groups some autonomy and
control over their own affairs
. It is means of sharing power among lots of
different political parties, which may or may not
have some basis in ethnic or regional
ties./pluralism reduce abuse of power.
. Decentralization promotes pluralism and
dynamism in the society.

Contd

Enables locale people to elect their own local

leaders and representatives in periodic, free,
and fair elections.
It gives opportunity to the citizen
to
participate in decision making process

Contd
2. Decentralization is a key component of good
governance.
A decentralized, participatory model of local
governance fosters accountability, transparency &
openness, and create pressure for the adoption of
high ethical standards in the conduct of public
affairs.
When government is closer to the people, it is
more likely to be held accountable by them for its
successes and failures in the provision of basic
services, the maintenance of order, and the fair
resolution of local issues and disputes

 Government tends to be more responsive when

it is closer to the people.
Decentralization facilitates greater popular
participation in governance

Contd

3. Decentralization is basic preconditions of local

economic development/development.
It is a basic ingredient of local economic development.
Local Economic Development (LED) is an approach
towards economic development which allows and
encourages local people to work together to achieve
sustainable economic growth and development thereby
bringing economic benefits and improved quality of life
for all residents in a local municipal area.
local people are able to identify and mobilize
local/indigenous resources which would not be
available to centrally run programmes,

Contd

citizens are often willing to volunteer free labour and

expertise, and other forms of in-kind contributions, in order to
support local initiatives
Decentralization, including substantial fiscal decentralization,
provides a framework which facilitates and stimulates local
sustainable development throughout all regions of the country
By creating growth centre at local level , creating
opportunities for locals with technical, managerial and
leadership skills to remain in the region, thus reducing the
rural/urban brain-drain, and enhancing local capacity to
manage local affairs and spearhead local development Decentralization provides the opportunity for a wider
diversity of innovations, and increases flexibility of
government in the context of changing circumstances

Types of decentralization
1. Political Decentralization
Political decentralization aims to give citizens or their
elected representatives more power in public decisionmaking.
In political decentralization at different levels of
government central, regional and local are empowered
to make decisions related to what affects them
The concept implies that the selection of representatives
from local electoral jurisdictions allows citizens to know
better their political representatives and allows elected
officials to know better the needs and desires of their
constituents.

Contd
2. Administrative Decentralization
Administrative
decentralization
seeks
to
redistribute
authority,
responsibility
and
financial resources for providing public services
among different levels of government.
Administrative decentralization is the transfer of
responsibility for the planning, financing and
management of certain public functions
from the central government and its agencies to
field units of government agencies, subordinate
units or levels of government, semi-autonomous
public authorities or corporations.

Contd
The three major forms of administrative
decentralization -- deconcentration, delegation, and
devolution
A. Deconcentration.
weakest form of decentralization
used most frequently in unitary states
It can merely shift responsibilities from central
government officials in the capital city to those
working in regions, provinces or districts, or it can
create strong field administration or local
administrative capacity under the supervision of
central government ministries.

Contd
B. Delegation
central governments transfer responsibility for
decision-making and administration of public
functions to semi-autonomous organizations
not wholly controlled by the central
government, but ultimately accountable to it

Contd
C. Devolution.
Devolution is a more extensive form of
decentralization
whereby
the
central
government transfers authority for decision
making, finance and management to local
governments that have clear and legally
recognized jurisdictions over which they
exercise authority, within which they perform
public functions, and to whose constituents
they are accountable

Contd

Devolution usually transfers responsibilities

for services to municipalities that elect their
own mayors and councils, raise their own
revenues, and have independent authority to
make investment decisions.
In a devolved system, local governments have
clear and legally recognized geographical
boundaries over which they exercise authority
and within which they perform public
functions

Contd
3. Fiscal Decentralization
If local governments are to carry out
decentralized functions effectively, they must
have an adequate level of revenues either
raised locally or transferred from the central
government as well as the authority to make
decisions about expenditures.

Contd
Fiscal decentralization can take many forms, including
a) self-financing or cost recovery through user charges,
b) co-financing or co-production arrangements through which
the users participate in providing services and infrastructure
through monetary or labor contributions;
c) expansion of local revenues through property or sales taxes,
or indirect charges;
d) intergovernmental transfers that shift general revenues from
taxes collected by the central government to local
governments for general or specific uses; and
e) authorization of municipal borrowing and the mobilization of
either national or local government resources through loan
guarantees

Contd

4. Economic or Market
Decentralization
The
most
complete
forms
of
decentralization from a government's
perspective are privatization and
deregulation because they shift
responsibility for functions from the
public to the private sector.

 Privatization can include:

1) allowing private enterprises to perform functions that had
previously been monopolized by government;
2) contracting out the provision or management of public services
or facilities to commercial enterprises indeed, there is a wide
range of possible ways in which function can be organized and
many examples of within public sector and public-private
institutional forms, particularly in infrastructure;
3) financing public sector programs through the capital market
(with adequate regulation or measures to prevent situations
where the central government bears the risk for this borrowing)
and allowing private organizations to participate; and
4) transferring responsibility for providing services from the
public to the private sector through the divestiture of stateowned enterprises.

Contd

Deregulation.
Deregulation reduces the legal constraints on
private participation in service provision or
allows competition among private suppliers
for services that in the past had been provided
by the government or by regulated monopolies

Disadvantage of decentralization
1. Inter-regional inequalities may increase, and
thus widen intra-national poverty gaps and
foster politically destabilizing forces
Since different regions are differently endowed in
terms of natural resources, level of economic
activities, land values, etc.

2. Without adequate safeguards, there is a risk that

powerful or well placed local elites may be able
to capture the resources/powers allocated to or
conferred on local authorities, and use these
resources/powers for their own benefit /interest

3. There are situations in which some degree of

centralization will lead to greater efficiency.
There ideal approach may be to identify those
aspects of any activity which could benefit
from centralization, e.g. bulk purchasing, high
level expertise, research & development,

I thank you very much

for your time