Last Updated on March 9, 2021 by Filip Poutintsev
Decentralization is a strategic concept, needed mainly in developing countries, which defies the general system where the decision making responsibility is predominantly the prerogative of the central government.
It aims to change how the government functions by handing down power, finances, functions, decision making responsibility as well as the day to day operations from the central government to the local government or to private sectors.
Decentralization facilitates local participation during the decisions making process, bridging the gap between the government and the public. The issues of the public are heard and solutions are implemented quickly through the local government, reducing chances of conflict with the government and maintaining peace and effective delivery service. Along with that, the distribution of power improves the system’s performance and thus, development operations run at a faster and effective pace.
Table of Contents
- Types of Decentralization
- History of Decentralization
- Advantages of Decentralization
Types of Decentralization
Decentralization is a multifaceted concept. Thus, distinguishing its types is important as they all carry different functions and policies. There are four types: political, administrative, market and fiscal decentralization.
Political decentralization gives the general citizens, either directly or through elected representatives, the power to influence public decisions. If decisions are directly made by the national political authority, it may not reflect the needs and interests of the society. With investment from the public in the process, better decisions are made.
The administrative decentralization distributes the responsibility of financing, planning, managing resources that are related to public functions from the central government to the subordinate level of government. Its three major forms are deconcentration, delegation, and devolution which all function differently.
Fiscal decentralization distributes the power to tax and generates revenues to lower levels of government. This means that the lower level of government can transfer the revenue or increase the revenue as per their need.
Market decentralization allows the government to either privatize public owned businesses or deregulate private functions.
History of Decentralization
In the 1800s, the word centralization was first mentioned after the French revolution brought a new government system. With this, the use of the word decentralization started around 1802 AD.
In the 19th and 20th century many anti-state democratic political activists who called themselves “anarchists” and “libertarian” were seen advocating the idea of decentralization.
Tocqueville, who was a French diplomat, aristocrat, and historian and who strongly advocated decentralization, wrote: “decentralization doesn’t only have administrative value but also carries civic dimension as more citizens take part in internal affairs”.
Along with him, French bureaucrat Maurice Book and influential anarchist theorist Pierre-Joseph Proudhon were seen supporting this concept through their writing.
In the 20th century, America blamed that large industries were destroying the business of small manufactures and for increasing property ownership. And started a decentralist movement that attracted many including South agrarians like Robert Penn Warren and Journalist Herbert Agar.
In the recent decade, decentralized operations have been carried out by the government as a result of the rise in free markets, expenditure and the economic downturn as decentralization increases their efficiency and effectiveness.
Advantages of Decentralization
1. Facilitates Local Participation
Decentralization promotes public participation in the decision making process ensuring continuous interaction between the public and the government. This makes the government knowledgeable about their conditions, fulfilling their needs and demands, prioritizing their legitimate interest and improving the conditions of their livelihood.
An increase in the awareness of the government is of paramount importance for good government. It helps society achieve its goals such as efficiency, stability, justice, equality, and growth. And in case if the government is unable to successfully carry out its functions, the public can demand and pressurize the government to solve issues prevalent in the system.
2. Enhances Transparency and Accountability
Another advantage of decentralization is that it enhances transparency and accountability. Corruption exists in its greatest form in multifarious activities. Whether it be political leaders or representatives from the local level, the chance of any amount of money being diverted away from any development and used for personal issues is high.
However, decentralization drastically reduces the chances of misusing the money as decentralization keeps the workers under close inspection of the local authorities, allowing the budget to be utilized for the needy people. In fact, according to the Human Development Report (2003), the decentralization of the government was associated with less corruption in 55 countries.
3. Increases Effectiveness in Service Delivery
The provision of service correlates with the wellbeing of the citizens. The government plays an important role in creating policies and transferring the resources to the local government and it holds responsibility in areas such as land management, land leases, and sales, policy development and infrastructure development. This could become easier due to the advancements in technology.
Usually, the smaller towns are dependent on the central government for these facilities. However, many developing countries face challenges and are unable to provide the proper delivery of services.
With decentralization, the chances of poor having inadequate access to service delivery is reduced. The transparency in the system allows the local government to find those service providers who are accountable.
The voices of the poor are heard, the city government is more responsive and any rigidness in law and regulation is heard, increasing effectiveness, transparency, and accountability in service delivery.
4. Decreases Overall Cost of the Government
Decentralization bridges the gap between the government and the public. As the locals are involved in the process of designing, executing and implementing these plans, political debates are centered on the needs of the local representatives. This means that the government won’t waste money on unnecessary issues and will spend the budget on what’s actually essential.
5. Alleviates Poverty
Lastly, decentralization improves the financial conditions of the poor and minorities since they are included in the decision-making process. Their voices are heard and an adequate budget is separated by the government to meet their needs, improving their lifestyle and making them financially stable.
To summarize, the transfer of responsibility from the central to the local government increases the degree of responsiveness, accountability, and transparency of the government, making a greater impact on the socio-economic condition. It leads towards good governance, effective delivery of service and facilitates local participation.
The community’s involvement in the decision-making process, planning and implementation brings substantial benefits to the quality of life of people from any background and could possibly alleviate poverty.