Decentralization and Capacity. A Chicken and the Egg Situation?
In the second half of the twentieth century, the literature on public administration witnessed a rapid transformation in methods and in ways of thinking. This transformation has altered the Weberian state relying on the hierarchical state structure and functioning. Particularly, the embodiment of neoliberal principles in Thatcher and Reagan’s public policies paved the way for inclusion of private sector originated principles and techniques into the realm of public administration. New concepts such as deregulation, privatization, and adoption of management principles have occupied the public administration literature, and the field of public management has emerged as a separate branch of public administration. This change in the literature took another turn in the 1990s with the rise of another influential concept, governance. Nowadays, governing the society incorporates horizontally public, private, and civil society organizations on the one hand, and vertically local, regional, national, and supranational state organizations on the other into a complex, reticular set of relations. Hence, what used to be a unidimensional relationship between citizen and the state has turned into a multidimensional realm with various interactions among different actors.
Shifting understanding in the way of governing society necessitated local government to incur new roles and responsibilities in public governance. In this juncture, decentralization has become a fundamental part of the governance literature. It is widely acknowledged that decentralized governance contributes both to democracy and also to the efficiency and effectiveness of public services. Although decentralization policies and the degree of decentralization vary across country cases, it is expected that decentralized authority and responsibilities provide in return some advantages to governance system, such as effectiveness, efficiency, better service quality, empowerment of different segments of the society, economic growth, democratization, accountability, and even in some cases security (Rodden 2004; Pollitt 2005; Sharma 2006; Treisman 2007). So far, many studies have been conducted to evaluate the effectiveness of decentralization policies in public governance. Yet, the outcomes of decentralization policies are not coherent in each case. Especially, empirical accounts from developing countries showed that decentralization could lead to higher corruption, macroeconomic instabilities, coordination problems, inefficiency, and ineffectiveness on public services (Prud’homme 1995; Litvack et al. 1998; Smoke 2003; Oxhorn 2004). Evidence indicates that decentralization can have a positive effect but only if certain conditions are met (Smoke et al. 2006).
Even though the determinants of effective decentralization policies for public governance are equivocal, one commonly agreed element is an adequate local capacity is necessary for successful implementation of decentralization reforms and for functioning decentralized governance . In that sense, many international donor organizations (e.g., UNDP, World Bank) have undertaken extensive capacity building programs in developing and transition countries to assist them in policy implementation within and after decentralization reforms. Yet, capacity is an elusive concept (Brown et al. 2001) and the question of ‘which local capacities are functional for decentralized governance?’ remains unresolved.
Indeed, the relationship between capacity and decentralization is mostly unapprehended. Two contradicting views exist about this relationship. One view is that the preceding capacity determines the success of decentralization policies (e.g., Bahl and Linn 1992). An opposite point of view suggests a decentralized government obtains the capacity to govern in time (e.g., Rondinelli et al. 1983). In this regard, the World Bank supports the latter by stating the following;
Rather than plan and make a large up-front investment in the local capacity building as a prerequisite for devolution of responsibility, there was a broad consensus that it would be quicker and more cost-effective to begin the process of devolution, to permit learning by doing and to build up capacity through practice. The evidence increasingly shows that local capacity can be built by the process of decentralization, particularly when appropriate programs to increase interaction with the private sector are included in decentralization design1
This debate is not only limited to academic circles or international donor organizations but also relevant for policy practitioners and policy makers. For instance, during a technical consultation on decentralization, Fiszbein (1997) gives the following anecdote:
An interesting illustration of the controversies associated with these questions (i.e. whether the local level has, or can develop quickly enough the necessary capabilities) is the parliamentary debate that took place in Colombia as a new law that would create untied fiscal transfers to local governments was being discussed in the early 1980s. The mainstream opinion in Congress was that no real benefit would be derived from transferring funds and responsibilities to local governments if their lack of capacity would not allow them to manage them effectively in order to improve the quantity and quality of services offered to the population. Interestingly enough, the proponents of the law -that would eventually be passed by Congress- did not try to argue that such capacities indeed existed. Rather, their argument was that only if fiscal resources and responsibilities for service delivery were transferred to local governments would those capabilities develop, as it is only if and when faced with concrete challenges that local institutions would acquire them (Galan [1990] ).In fact, at least for some of the Colombian reformers, the creation of local capacity -- understood as the consolidation of democratic state and civic institutions particularly in more than 800 rural municipios-- was an objective rather than a condition for decentralization. Almost a decade later, Bolivia would follow a similar path, and similar discussions can be found in post-civil war debates in several countries in Central America.
Twenty years after, this debate still remains lively and unabated. The global trend shows that states extensively embrace different forms of decentralization reforms with the aim of improving public governance. It is widely assumed that the relationship between governance capacity and decentralization determines the success in governance, but how this relationship function is largely contested. Does decentralization lead to improvement in governance capacities and higher governance capacities bring better governance, or are certain capacities preconditioned for decentralization to lead better governance? As the title of the section suggests, the relationship between governance capacity and decentralization is treated so far as a chicken and the egg situation. In principle, it is difficult to refute any of these arguments, as both can occur concurrently. Yet, this debate boils down to the primary question of ‘which capacities are associated with decentralization?’. Addressing this question is not only an academic endeavor, but it is also vital for policy practitioners to design most effective decentralization policies.
An additional level of complexity is that the traditional modes of governance are changing parallel to the overall shift in public management. Now private sector organizations and civil society groups are taking a more tangible role and responsibility in governing the society. In this transitional stage, roles of the state and other actors are re-evaluated in terms of their legitimacy, responsibilities, and function in governance. Inevitably, these new dimensions are expanding the discussion on governance capacities for public organizations. All these systemic changes necessitate reconsidering the implications of decentralization and capacity in the broader sense of governance.
This book aims to reduce the ambiguity surrounding the subject of decentralization and governance capacity by drawing its conclusions from the empirical accounts on the Turkish local government. Turkey , a profound centralized state, has legislated various local administration reform acts since the early 2000s. Functions, roles, and responsibilities of local government have been extended with new legislation. Public services, which used to be under the jurisdiction of the central government, on health, tourism and culture, forest and environment, agriculture and village affairs, social care and children protection, youth and sports, industry, and public works have been devolved to local government. The administrative and financial autonomy of the local government is recognized, and local government is vested discretion in economic activities and fiscal borrowing. The rapid transition of local government has revived the discussions on the topic of capacity enhancement in public governance. These contemporary developments in Turkish public administration present a unique opportunity to explore the dynamics of capacity and decentralization behind better governance.
Theoretical Premises and Promises of Decentralization
Empowering the local versus the center and the vice versa has always been integral in the theoretical debates about governance. There are even authors who perceive the history of governments as a pendulum between centralization and decentralization (see Atasoy 2009; Sanderson 1995). When the term decentralization appeared for the first time in the English language in the mid of nineteenth century, it was used as the binary opposite of centralization which was largely accepted as the panacea of ineffective, bad governance in the post-Napoleonic Europe (see Young 1898). Tocqueville, one of the earliest supporters of decentralization, challenged this idea arguing that decentralization is not only better for democratic principles but also better for efficient and effective governance and thus contesting the key argument of the supporters of centralism. Even though the supporters of decentralization had been marginal until the second part of the twentieth century, both concepts—decentralization and centralization—have prevailed in academic circles. New battlefields were discovered to argue which concept provides the best alternative to democracy building, management, economics, and development. In the second half of the twentieth century, the balance has tipped toward decentralization, and decentrali...