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DECENTRALIZATION   Tags: decentralization  

Last Updated: Aug 25, 2015 URL: Print Guide RSS UpdatesEmail Alerts

Introduction Print Page

What is Decentralization?


The term "decentralization" embraces a variety of concepts which must be carefully analyzed in any particular country before determining if projects or programs should support reorganization of financial, administrative, or service delivery systems.

In short, decentralization is the transfer of authority and responsibility for public functions from the central government to intermediate and local governments or quasi-independent government organizations and/or the private sector. 


Types of Decentralization

Types of decentralization include political, administrative, fiscal, and market decentralization. Drawing distinctions between these various concepts is useful for highlighting the many dimensions to successful decentralization and the need for coordination among them. Nevertheless, there is clearly overlap in defining any of these terms and the precise definitions are not as important as the need for a comprehensive approach. Political, administrative, fiscal and market decentralization can also appear in different forms and combinations across countries, within countries and even within sectors.


Advatanges and Risks

Under appropriate conditions, all of these forms of decentralization can play important roles in broadening participation in political, economic and social activities in developing countries. Where it works effectively, decentralization helps alleviate the bottlenecks in decision making that are often caused by central government planning and control of important economic and social activities. Decentralization can help cut complex bureaucratic procedures and it can increase government officials' sensitivity to local conditions and needs. Moreover, decentralization can help national government ministries reach larger numbers of local areas with services; allow greater political representation for diverse political, ethnic, religious, and cultural groups in decision-making; and relieve top managers in central ministries of "routine" tasks to concentrate on policy. In some countries, decentralization may create a geographical focus at the local level for coordinating national, state, provincial, district, and local programs more effectively and can provide better opportunities for participation by local residents in decision making. Decentralization may lead to more creative, innovative and responsive programs by allowing local "experimentation." It can also increase political stability and national unity by allowing citizens to better control public programs at the local level.

But decentralization is not a panacea, and it does have potential disadvantages. Decentralization may not always be efficient, especially for standardized, routine, network-based services. It can result in the loss of economies of scale and control over scarce financial resources by the central government. Weak administrative or technical capacity at local levels may result in services being delivered less efficiently and effectively in some areas of the country. Administrative responsibilities may be transferred to local levels without adequate financial resources and make equitable distribution or provision of services more difficult. Decentralization can sometimes make coordination of national policies more complex and may allow functions to be captured by local elites. Also, distrust between public and private sectors may undermine cooperation at the local level.


Linking Centralization and Decentralization

Centralization and decentralization are not "either-or" conditions. In most countries an appropriate balance of centralization and decentralization is essential to the effective and efficient functioning of government. Not all functions can or should be financed and managed in a decentralized fashion. Even when national governments decentralize responsibilities, they often retain important policy and supervisory roles. They must create or maintain the "enabling conditions" that allow local units of administration or non-government organizations to take on more responsibilities. Central ministries often have crucial roles in promoting and sustaining decentralization by developing appropriate and effective national policies and regulations for decentralization and strengthening local institutional capacity to assume responsibility for new functions. The success of decentralization frequently depends heavily on training for both national and local officials in decentralized administration. Technical assistance is often required for local governments, private enterprises and local non-governmental groups in the planning, financing, and management of decentralized functions.


Further Introductory Reading

"Decentralization: A Sampling of Definitions," UNDP (1999).

Summary: This paper elaborates on the concept of decentralization and presents the definitions of ‘decentralized governance.’ It elaborates on decentralization in the context of alternative services delivery. It concludes by presenting a preliminary assessment of the strengths and weaknesses of the definitions.

Treisman, Daniel. "Defining and Measuring Decentralization: A Global Perspective," University of California (2002).
Summary: "As scores of countries have introduced plans to devolve powers and resources from central to subnational governments in recent decades, the causes and consequences of political decentralization have caught the interest of political economists. This paper attempts to provide some conceptual foundations and to survey some data useful for exploring these topics." [Author]
Work, Robertson. "Overview of Decentralisation Worldwide: A Stepping Stone to Improved Governance and Human Development," UNDP (2002).

Summary: This paper provides the conceptual framework linking development, governance and decentralisation. It outlines the relationship between federal and unitary states and decentralisation. Further, it presents the state of decentralisation in the world today. It looks at various measures of democracy, governance, decentralisation and current development programmes worldwide in an attempt to illustrate the widespread and diverse practices of democratic governance and decentralisation. It concludes with some lessons and recommendations for practitioners and stakeholders including government, civil society, the private sector and scholars in the field of decentralisation.

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