Decentralisation-A Step towards Progress | Social Issue Essay, Article, Paragraph for Class 12, Graduation and Competitive Examination.

Decentralisation-A Step towards Progress

Scheme of the essay

Exposition: More than sixty developing and transitional countries have decided to decentralise power.

Rising Action: The experiment has revealed the huge capacity of local government to develop.

Climax:

(1) Decentralisation means different things in different countries.

(2) There are many problems encountered by these countries.

(3) Lessons we derive from the experiments

(4) (a) Political issues, (b) Administrative issues and fiscal issues.

Falling Action: Conditionalities can also be of help

Ending: The experience so far provides ground for continuous optimism.

More than 60 developing and transitional countries have decided to decentralise power and responsibilities to local governments. This is partly because autocracies in many of these countries have been replaced by democracies, and partly because centralised blueprints for rural development have failed so often that countries (and lending institutions) are looking for alternatives. The World Bank has financed decentralisation programmes in Mexico, Colombia and Brazil, and is researching the experience of decentralisation in Bangladesh, India, Ivory Coast and Ghana.

The evidence so far is encouraging. It reveals a huge, unsuspected capacity of local governments to innovate and implement rural projects. However it has revealed several pitfalls. The Bank is now sifting through countries’ experiences to identify the pitfalls to be avoided, as well as the mechanisms and strategies most likely to succeed.

Decentralisation means different things in different countries. So, it is necessary to categorise different sorts of decentralisation and then measure their impact before coming to conclusions. Besides, many experiments in decentralisation have just begun, and it may be too early to assess their impact. Initial findings reveal both positive and negative features.

Decentralisation sets free the large latent capacity of local communities earlier suppressed by centralised rule. Local governments can often tackle rural development more effectively. It was once thought that local governments lacked technical capacity. But experience shows motivation and innovation matter much more.

Local governments have proved especially good at identifying and implementing micro-projects, and have often improved the delivery of services. Decentralisation has improved the response time of governments to problems or suggestions, improving the quality of governance. Local governments have improved transparency and accountability. They have reduced (though, by now, means eliminated) corruption, often by breaking traditional patronage networks. They have often been more effective in targeting the poor. In many cases, they have proved cost-effective, by improving the office attendance of civil servants, by getting tasks done faster, by improving the response time of administrators, and by devising projects that cover a larger number of beneficiaries. In north-east Brazil, case studies indicate 95 per cent of funds reached targeted beneficiaries, benefit-cost ratios exceeded 3, social internal rates of return of sub-projects touched 50 per cent, and investment per job created fell 90 per cent. Local governments have in some cases raised substantial local revenue (up 231 per cent in per capita terms in five years in one Colombian municipio), and persuaded locals to supply free labour and materials.

However, the overall record is spotty, including failures as well as successes. Opinion polls on the performance of local councils indicate an approval rating of 66-69 per cent in Karnataka, 36-37 per cent in Bangladesh, 36 per cent in Ivory Coast and just 18 per cent in Ghana.

The main problems encountered in different countries were:

 Sometimes the legal framework did not make clear what the powers and responsibilities of local governments were. Even where the framework was clear, it could be undercut by political interference (Ivory Coast.) In some cases, local leaders regarded themselves as accountable to the central rulers, not local voters (Bangladesh, Ivory Coast.) Countries with autocratic traditions had a traditional master-servant relationship between administrators and villagers, which inhibited villagers from pressing demands and administrators from responding. Elections helped improve accountability and credibility. Local governments were often hamstrung by a lack of funds, and so lost credibility. While local councils proved excellent at local micro-projects, many had neither the motivation nor expertise for more complex tasks cutting across districts or covering watersheds. Decentralisation reduced corruption, but also made it more transparent to locals, leading sometimes to the erroneous notion that corruption had increased effective local government’s additional fiscal support, and more professional staff, equipment and buildings.

More research is needed to get a clear picture of what works and what does not. But it is possible to extract some major lessons from the experience so far.

Decentralisation has three important elements-political, administrative and fiscal. All three have to be designed appropriately, and all three must be in harmony. Otherwise, decentralisation will be jeopardised.

In many countries, rural development has been frustrated by an implicit coalition of rural and urban elites. Patronage networks in such countries run deep and divert public funds to private profit, especially in autocracies. Breaking the patronage networks is an important but difficult task. It is no accident that many countries are decentralising after the replacement of autocracies by democracies-this sort of upheaval is often necessary to provide the political impetus for overcoming elite networks. The elites will fight back to sabotage or even reverse decentralisation (Karnataka, 1990.) Changes in the law and constitution can help prevent such reversals.

In many centralised countries, administrators have long acted as local councils. Legal clarity and committed central governments are needed in this respect. Elections bring about competition in the political and civic marketplace, improving consumer choice and product quality. They improve accountability, transparency and responsivity. Rural elites are well-organised and literate, and so tend to dominate local councils. The poor are often illiterate, poorly organised and sometimes tyrannised. A tradition of regular elections will gradually improve the organisation and empowerment of poor groups, but supplementary steps like reservation for women and lower castes as in India can also help.

However, elections do not solve all problems. The defeat of a mayor in an election can lead to discontinuity in policies and projects. Elites often capture councils and divert funds to serve their own interests. Term limitations mean councils are interested overwhelmingly in projects with a short gestation period.

When reforming highly centralised systems, it is advisable to deconcentrate (open new central government offices in the district) before or along with centralisation. Deconcentration ensures that bureaucrats and technicians are in position in rural areas and small towns, and can provide professional support to local councils.

Technical assistance is needed, especially for weaker councils and municipalities. In the past, many technical assistance programmes failed because they were designed from outside, were not taken seriously by the patronage networks, and often failed to address local needs. The Colombian experience suggests that technical assistance should be demand-driven-local councils should identify projects and then demand the related technical assistance, which should then be tailored to local conditions. The Colombian experience also suggests that councillors can find ways of using NGOs and private sector agencies to supply skills, maximising local resource use and employment. The smallest and remotest councils often have problems in accessing skills, but a way out was the clubbing of efforts by two or more municipios to achieve the necessary scale economies. Local governments are good at handling relatively simple tasks like micro-projects. But they are not well-suited, and often disinclined, to do complex tasks. So, a high level of government will still be needed for complex tasks.

Councils have little idea of what strategies have succeeded or failed elsewhere and often repeat the mistakes of others. Systematic dissemination is needed of the best technical and organisational practices in different sectors Tender documents should be standardised to improve the quality, speed and transparency of decisions.

Systems of monitoring and evaluation must be put in place. These will check malpractice, apart from identifying new and innovative techniques that need to be publicised.

Decentralisation fails if not accompanied by sufficient taxation powers or transfers from the Centre (Ghana, Ivory Coast.) The notion that decentralisation can reduce central government spending is illusory. Indeed, decentralisation typically involves new startup costs, including additional professional staff, buildings and equipments.

Unconditional block grants improve the flexibility of local decision-making, but also facilitate the capture of funds by local elites. Nor do they provide incentives to local governments to raise their own resources. Matching grants carry the right incentives. In one project in north-east Brazil, local governments provide 10 per cent of funds, the national government 30 per cent and the World Bank 60 per cent. In Colombia, villagers provide free labour and materials to local projects, greatly improving the sense of people’s ‘ownership’.

Conditionalities can also help. In Mexico, a cap of 25 per cent has been placed on spending within town centres (favoured by local elites), so, more public investment goes to neglected outlying and remote areas.

In India, a portion of central grants is earmarked for anti-poverty schemes. Such guidelines may be evaded by local elites, but such evasion may be checked by monitoring, and by regular elections.

The experience so far provides ground for cautious optimism. But more research is needed to establish the conditions under which decentralisation is most likely to succeed.