Public Sector Reform in Developing and Transitional Countries

Decentralisation and Local Governance

Christopher Rees, Farhad Hossain, Christopher J. Rees

• Publisher: Routledge
• Year: 2013
• eBook ISBN: 9781135740795
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

Over recent decades, decentralization has emerged as a key Public Sector Reform strategy in a wide variety of international contexts. Yet, despite its emergence as a ubiquitous activity that cuts across disciplinary lines in international development, decentralization is understood and applied in many different ways by parties acting from contrary perspectives.

This book offers a fascinating insight into theory and practice surrounding decentralization activities in the Public Sectors of developing and transitional countries. In drawing on the expertise of established scholars, the book explores the contexts, achievements, progress and challenges of decentralization and local governance. Notably, the contributions contained in this book are genuinely international in nature; the chapters explore aspects of decentralization and local governance in contexts as diverse as Ghana, Hong Kong, India, Indonesia, Kazakhstan, Morocco, Tanzania, Uganda, and Viet Nam. In summary, by examining the subject of decentralization with reference to specific developing and transitional Public Sector contexts in which it has been practiced, this book offers an excellent contribution towards a better understanding of the theory and practice of decentralization and local governance in international settings.

This book was published as a special double issue of the International Journal of Public Administration.

Perspectives on Decentralization and Local Governance in Developing and Transitional Countries

Christopher J. Rees and Farhad Hossain
Institute for Development Policy and Management, University of Manchester, Manchester, United Kingdom

The main aim of the article is to examine the emergence of decentralization as a strategy associated with Public Sector Reform in developing and transitional countries. In offering this discussion, the article introduces the focus of this special edition. In the article, we discuss issues such as the political underpinnings of decentralization, the influence of the private sector on decentralization in the public sector, and challenges which have emerged as a result of the implementation of decentralization initiatives in developing and transitional countries. The later sections of the article provide an overview of the articles that comprise this special edition.

Introduction

This special double issue on decentralization and local governance in developing and transitional countries is intended to explore further the contexts, achievements, progress and challenges of local governance and decentralization activities in various developing and transitional countries. The main aim of this article is to introduce the subject of the special issue. In the article, we examine the emergence of decentralization as a strategy associated with Public Sector Reform in developing and transitional countries, acknowledge and consider the influence of the private sector on decentralization in the public sector, identify various types of decentralization, and discuss various challenges which have emerged as a result of the implementation of decentralization initiatives in the public sectors of developing and transitional countries. The later sections of the article provide an overview of the articles that comprise this special edition.

The Emergence of Decentralization

Decentralization has become a byword associated with Public Sector Reform in developing and transitional countries. In the field of international development decentralization is discussed in relation to a wide array of subjects such as democracy, political reform, participation, empowerment, rural development, fiscal and economic development, accountability, and capacity building (Smoke, 2003). Yet despite its emergence as an ubiquitous term that cuts across disciplinary lines in international development, the nature, practice, and benefits of decentralization remain unclear. What has become apparent over the last three or four decades is that decentralization is more than a temporary and theory-driven faux developed by development theorists to promote academically oriented research agendas. In the field of international development, decentralization, however loosely defined, has been with us for at least 40 years and interest in it shows no sign of waning in the near future.

In the early days of decentralization, a number of writers anticipated that problems would emerge as decentralization took hold in public sector organizations. For example, at a methodological level, Fesler (1965: 537) identified a set of three linguistic, mensural, and differential deficiencies which, he argued, would hinder researchers' efforts to advance discussions of decentralization from the general to the precise. First, Felser identifies the tendency to dichotomize the terms centralization and decentralization rather than to acknowledge that the two terms represent the extreme points of a continuum. Second, he draws attention to the weakness of indices of centralization and decentralization. This mensural weakness is particularly pertinent to those wishing to undertake comparative and longitudinal studies of decentralization.

Third, he argues that intra-country analyses of decentralization tend to generalize conditions and thus "obscure patterns of decentralization" in, for example, local regions, provinces, and local governments. We refer to this as the methodological centralization of research on decentralization. At a more practical level, Kaufman (1969: 11) anticipated that decentralization would provide local officials with at least limited authority over local personnel and local offices but at a price. Thus, he predicted that decentralization would lead to effects such as a lack of equity between the decentralized units, competition between these units "which will be disastrous for many of them" as they struggle to attract talent and money, and the emergence of strong factions which "may well succeed in reviving a new spoils system, thus lowering the quality of some vital services."

Despite the acknowledgement of these problems and some of the more negative predictions made in the 1960s, decentralization continued to grow in popularity and has emerged as an international phenomenon. In the case of what was commonly termed the Third World, decentralization was seen by many as a means by which the highly ". . . centralized, bureaucratic, hierarchical, organizational strategy dominant since independence in Third World administration" (Wunsch, 1991: 431) could be reformed by devolving authority and resources to local units and thus, by both definition and default, reduce the ability of central governments and other centralized authorities to exercise direct control over local affairs.

Spurred on by the activities of international agencies (see World Bank, 1981; United Nations, 1962) decentralization programs were rolled out across countries in Africa, Asia, and Latin America, thus ensuring that decentralization was to become "one of the broadest movements, and most debated policy issues, in the world of development" (Faguet, 2004). Given the diversity of the governments, agencies, and academics connected in one way or another to decentralization, the degree of this consensus was quite remarkable. Yet the question arises as to why exactly decentralization has been promoted across the field of international development by such a range of advocates.

Decentralization as a Means to What End?

After commencing his paper with the statement "Decentralization is rapidly replacing God, Country and Motherhood in popular favor," Furniss (1974: 958) proceeded to argue that the popularity of decentralization was due in part to its adoption by people from across the political spectrum including the revolutionary left, the Utopian left, the reformist right, and the status quo right: "All major shades of opinion seem to ascribe to decentralization great powers of social and/or moral regeneration. The counterpoint "centralization" is associated with most of the evils of the modern polity: delay, red tape, constraints on individual initiative, restraint of spontaneity" (Furniss, 1974: 959). Similarly, Bardhan (2002: 185-186) observes that the potential benefits of decentralization have attracted a diverse range of supporters from free-market economists who "tend to emphasize the benefits of reducing the power of the overextended or predatory state" to social thinkers who are "both anti-market and anti-centralized state, and [who] energetically support assignment of control to local self governing communities." In terms of deconstructing the meaning of decentralization, these writers make a key point for the process of decentralization has the potential to unite a wide range of views and political agendas.

At face value, one can readily see the arguments for public-sector decision-making processes to be, at very least informed, if not partly or wholly undertaken by local people using their knowledge of the service needs and resources at the local level. What is somewhat hidden by this aura of political unanimity surrounding decentralization is the fact that decentralization is more than a process; it is also about achieving an end state that has the potential to fulfill the various organizational, societal, and ultimately the political objectives of, for example, the revolutionary left, or the reformist right. As Smoke (2003: 7) has stated: "decentralization is not favored primarily because there is unambiguous proof of its desirability. The real reasons are rather varied, but ultimately political." Samoff (1990: 519) summarizes this viewpoint succinctly when he states: "Therefore, to make sense of its forms and consequences in particular settings we need to understand decentralization as a political initiative, as a fundamentally political process, and consequently as a site for political struggle."

Decentralization, Globalization, and the Private Sector

While politically based motivations may explain the forward march of decentralization in public sector organizations across the world, we also highlight that movement has not occurred in a vacuum. The popularization of decentralization from the 1970s onwards coincided with broader internationalization processes that are now generally placed under the banner of globalization (Astiz, Wiseman, & Baker, 2002). For example, during this time, the corporate world was becoming increasingly involved with mergers and acquisitions strategies designed to create large transnational companies that could operate and compete on the world stage (Andreff, 1984; Khourey, 1980). While decentralization had previously generated attention in classical business and management literature (Drucker, 1946; Lauter, 1969), the increasing rate of the internationalization of business led to the general realization that large centralized international companies could not be structured and managed in the same way that large national entities had traditionally been managed (Ford & Slocum, 1977; Galbraith, 1973). Multi-site centralized business organizations which operated on a transnational basis were facing increasingly complex cultural, political, legal, environmental, technological, financial, logistical, and staffing challenges.

As a result of these challenges, there was a renewed interest in the subject of decentralization among practitioners and researchers in international business and management literature (Govindarajan, 1986; Mascarenhas, 1982; Negandhi & Reimann, 1973; Schöllhammer, 1973; Shetty, 1979; Sim, 1977; Wells, 1971). The creation of the United Nations Center on Transnational Corporations (UNTC) in 1974 represented formal recognition of the political, economic, social and legal effects in international development which were resulting from the burgeoning activities of transnational organizations (United Nations Center on Transnational Corporations (UNTC), 2010).

The point that is mainly overlooked in international development literature on the subject of decentralization is that, as they engaged with governments, organizations, and managers in host countries, these transnational organizations were inevitably influencing management practices in Public sectors around the world. At a time when policy research working papers issued by the World Bank were seeking to "draw lessons from the theory of the firm," specifically to inform the decentralization of public services (Cremer, Estache, & Seabright, 1994), decentralized organizations together with their associated management practices were already installed and prevalent in developing countries via the activities of transnational corporations.

In terms of international development literature, Samoff (1990: 515) was undoubtedly correct when he stated that: "Much of the recent writing on decentralization reflects a liberal interventionist perspective. The orientation is liberal (progressive) in that authors foresee not only improved government but also an improved standard of living for the populace at large. For some, decentralization promises increased citizen participation." When, however, writings on decentralization are explored from a wider perspective this liberal progressive orientation may be contrasted with a free-market orientation and the vocabulary of efficiency, performance, and value for money that is evident in international business and management literature. The fact that privatization has emerged as a type of decentralization provides some evidence of the influence of free-market perspectives, as recognized in wider discourse on New Public Management and decentralization (Battaglio, 2009; Common, 1998; Hood, 1991).

Types of Decentralization

As Bardhan (2002: 186) notes: "As is usually the case when a subject draws advocates from sharply different viewpoints, different people mean different things by decentralization." These different interpretations of decentralization are apparent in the various forms of decentralization that have emerged since the 1960s. That is, given that its advocates were embracing decentralization from very different ideological positions, it is unsurprising to note that, regardless of other opportunities and constraints, governmental approaches to decentralization can be seen to have taken on varied forms. In a concise contribution, Rondinelli & Nellis (1986: 6-10) identified four major types of decentralization, that is, deconcentration, delegation, devolution, and privatization. As a summary, deconcentration mainly involves shifting some authority or responsibility from centrally located offices and staff to, for example, local administrative units outside of the national capital. Delegation mainly involves "the transfer of managerial responsibility for specifically defined functions to organizations outside the regular bureaucratic structure" though ultimate responsibility is retained by the central authority. Devolution involves the creation or strengthening of local units of government which can, to a large extent, operate outside of the direct control of the central authority. Privatization involves governments transferring some of their responsibilities to private organizations and/or voluntary organizations.

In returning to themes discussed above, it must not be assumed that the type of decentralization adopted by a specific central government will necessarily reflect the expressed political ideology and stated objectives of the government in question. For example, in the world of international development, international agencies, including donor organizations, may explicitly link aid to political reform which includes aspects of decentralization; as a result, external agencies encourage and perhaps impose decentralization on central governments by means of conditional aid. The situation becomes even more problematic in cases where central governments participate in decentralization initiatives in order to actually curtail local democracy, while at the same time working in conjunction with external agencies seeking to promote local democracy.

Conyers (1983: 100) writes about the "implicit motives of the individual governments of the countries actually involved in decentralization" and the: ". . . imp...

Table of contents

• Cover
• Title
• Copyright
• Contents
• 1. Perspectives on Decentralization and Local Governance in Developing and Transitional Countries
• 2. Digitized Government in Worldwide Municipalities between 2003 and 2007
• 3. Choosing between Centralized and Decentralized Models of Tax Administration
• 4. The Past, Present, and Future of Decentralisation in Africa: A Comparative Case Study of Local Government Development Trajectories of Ghana and Uganda
• 5. Challenges of Making Donor-Driven Public Sector Reform in Sub-Saharan Africa Sustainable: Some Experiences from Ghana
• 6. Indonesian Decentralization: Accountability Deferred
• 7. Decentralization and Local Governance in Kazakhstan
• 8. Decentralizing Local Governance in Thailand: Contemporary Trends and Challenges
• 9. Is Decentralization Still Recentralization? The Local Government Reform Programme in Tanzania
• 10. An Analysis of Quasi-Decentralized Budgeting in Vietnam
• 11. Decentralization and 'Consumerization' of the Training Function: The 'Re-invention' of the Central Training Institute of Hong Kong
• 12. Local Government Reform Programs and Human Resource Capacity Building in Africa: Evidence from Local Government Authorities (LGAs) in Tanzania
• 13. Assessing the Scope for Partnerships Between Local Governments and Community-Based Organizations: Findings from Rural Morocco
• 14. Decentralisation, Service Delivery, and People's Perspectives: Empirical Observations on Selected Social Protection Programs in India
• 15. Decentralised Management of Solid Waste in Mumbai Slums: Informal Privatisation through Patronage
• Index