ANALYSIS

THEORY OF DEMOCRATIC
DECENTRALISATION AND LOCAL
GOVERNANCE ADMINISTRATION

The Concept of Decentralization

The word ‘decentralization’, literally means
‘away from centre’. Decentralization of author-
ity means dispersal of decision-making power
to the lower levels of organization (B.L.Fadia
and Kuldeep Fadia, 2010. The locus of decision
-making is transferred from Central govern-
ments to regional, municipal or local govern-
ments (Elizabeth Linda Yuliani, 2004). Decen-
tralization cannot be easily defined and it has
many forms and dimensions. Decentralization is
the process of redistributing or dispersing func-
tions, powers, people or things away from cen-
tral location or authority. There is no common
definition of decentralization and its meaning
varies because of the different ways it is applied.
The concept of decentralization has been ap-
plied to management science, in private businesses and organizations, Political Science, Law and Public Administra-
tion, Economics and Technology.

Decentralizing government is thought to be conducive to good governance, although experience suggests decen-
tralization alone is no guarantee. It can be a means to encourage participation in the public policy process and can
hold governments more accountable for their actions. At the same time, decentralization enables local officials to
take responsibility for economic and social development. For instance, decentralization can foster a more efficient
use of resources if projects are locally conceived, and economic performance can be improved since local entre-
preneurship tends to flourish in decentralized settings where there is often greater access to credit and information
on business opportunities.

The term “decentralization” implies not only the devolution of powers, but also a process in which responsibilities
and duties are transferred by a higher or central authority to the institutions or organizations at the lower levels,
thereby providing to the latter adequate incentive for autonomous functioning. Decentralization has spatial aspect
,i.e. when the activities of wide organization are spread over a wide geographical space ,then planning and control
of the widely dispersed activities may be done better not from central headquarter but away from it. The other
arguments in favour of decentralization are that decentralized units function better because of autonomy given to
them and central control is reduced. In organization theory, decentralization is an aspect of intra-organizational dif-
ferentiations, i.e. in large-scale organization, decentralization is done through segmentation and arrangement and
self-sufficient clusters or decentralized divisions are formed and these clusters have their own domain. Decentraliza-
tion has also been approached from the point of view of organization decision-making. In a complex organization
numerous decisions are taken and efficiency is achieved if decisions are taken quickly. Therefore, when speed as-
sumes critical importance, decentralized decision-making is being given importance.

Organizational decentralization manifests itself in territorial dispersion of units and delegation of authority .For
instance, field administration in the form of district and sub-divisional administration, represents decentralization
through territorial differentiation and dispersion. It is an important part of state administration. Field administration
lies away from state headquarters to provide access to the client. Delegation of authority accompanies territorial
dispersion of the governmental unit. Kochen and Deutsch in their seminar paper entitled, “Toward a Rational Theory
of Decentralization: Some implications of a Mathematical Approach,” have advanced the theoretical knowledge
about decentralization in politics and organizational designing. According to them, a functional theory of decen-
tralization has to be related to organizational task performance and ultimate survival, i.e. the survival of organization
depends on the feedback of information from the environment in order to ascertain the results of their actions and
to take corrective measures. The issue of centralization versus decentralization has to be examined from the point of
view of exchange of information and of things and persons with the environment. They look at decentralization as a
problem in logistics. Decentralization is rational or cost-effective if movement of messages, men, and materials lead
to successful task performance in relation to meeting the demands and pressures from the environment.

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ANALYSIS

Approaches to the Concept of Decentralization:

The different approaches to the concept have been clearly and pro-
foundly presented by Fesler James W. He classified the different ap-
proaches to the concept of decentralization in the following four cat-
egories: the doctrinal, the political, the administrative and the dual role.

The Global Perspective

It is well documented that decentralization was a well thought and ex-
ecuted style of governance in ancient world. There are many sophisti-
cated debates on decentralization in the political literature of 18th and
19th centuries. When there was no adult franchise in the western world
then emerged the concept of devolution of power to the people. The
British system of local government found in South Asia, Africa, Australia
and North America was conceptualized as a devolved local self- gov-
ernment with the characteristics of a representative elected council
and citizen’s participation, while in Europe, parts of North and West Af-
rica and South America, it was distinguished by deconcentration, that
means domination of executive and presence of rigid hierarchy. Decen-
tralization is conceptualized as a deconcentrated administrative organ for relieving administrative congregation,
because over centralized governance did not make it clear what needs to be done for different places and how to
meet the desires of the people.

The globalization pushed more countries to adopt quasi-market economies including the countries which had dic-
tatorial, authoritarian, totalitarian governments. Good governance came to be seen as transparent, reprehensive,
accountable, and participatory and its need arose. New concepts of decentralization emerged as well. During the
1970s and 1980s, globalization forced some governments to recognize and realize the constraints of central eco-
nomic planning and management. During the same period shift in development theories and also change in strate-
gies of international aid agencies like World Bank, IMF, etc., away from central economic planning and trickle-down
theories of economic growth towards meeting basic human needs, growth with equity objectives, and participatory
development also led to increasing calls for decentralization. International aid organizations promoted decentrali-
zation as essential for development carried out by local communities and local governments. There was awaken-
ing that decentralization will accelerate development, will remove bureaucratic bottlenecks which arose because
of centralized government planning. Governments at that time followed three primary forms of decentralization,
deconcentration, devolution, delegation until the late 1980s.By the mid- 1980s with the continued weakening of
those economies which followed central planning, disappearance of cold war, increase in international trade and in-
vestment, the conventional concepts of economic development and governance and also of decentralization forces
got reshaped by economic and political forces prevailing at that time. There was fall of authoritarian regimes in Latin
America in 1980s and in Central and Eastern Europe in 1990s and switching over to market economies and rise of
democratic principles in East Asia renewed the interest in decentralization. The countries in Latin America, Central
Europe were overseeing the transition from state planned economies to market-economies and were focusing
on strengthening private sector, downsizing large central government bureaucracies, and also strengthening local
governments. In fact IMF, World Bank and other international development organizations also prescribed decen-
tralization as part of structural adjustments to promote good governance, restore markets in those countries which
were seeking aid from these institutions. Not only these aid institutions which put condition of decentralization
upon countries, there was pressure from various groups like political, ethnic ,other economically peripheral groups
to get greater autonomy in decision-making and strong control over utilization of natural resources, e.g .Africa. The
central governments in Africa was not able to deliver effectively and provide services to local areas and this led to
discontent among masses and hence calls for decentralization. The demand for decentralization(devolution) were

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ANALYSIS

raised in other large number of countries like India, Belgium, Quebec, Wales,Scotland, Malaysia ,Baltic Countries,
Mexico ,former USSR, etc as there was discontent with regard to allocation of national expenditures. Moreover,
there was,”New Public Management”movement in 1990s in rich countries which also influenced the international
development organizations and many reform-oriented public officials in developing countries. During the same
period, a book Reinventing Government which discussed about reforms in United States, also influenced the other
countries to go for decentralization for providing quality services to people .This book and advocates of, New Pub-
lic Management” supported that local problems should be dealt with by local people as they are conversant with
the problems of their respective areas and government can achieve its objectives by participation of people at the
grassroots level.

The Emergence of the Concept of Decentralization in South Asia

The factors that contributed to the emergence of concept of decentralization in South Asian countries are being
discussed below:

As mentioned earlier, many changes took place in the closing decades of the last millennium in many spheres and
these included changes in governance also. The decades of 1950s and 1960s focused on centralization but that
could not cure the maladies prevailing at that time. So demands for poverty alleviation, civic amenities, and bet-
ter health facilities were raised by people and civil society groups in several countries and central governments
were pressurized to deal with myriad problems. The need for decentralization was felt and expert writings in 1970s
also promoted decentralized system of governance. Ultimately in 1980s, debates in support of decentralization
picked up momentum and this decade saw beginning of wave of decentralization which swept the globe. During
this period, i.e. 1980s many influential people in African, Asian and Latin American governments, in international
development agencies, and in academic life became enthusiastic about decentralization. This led to adoption of
decentralization in developing countries to achieve the development goals. The phenomenon of decentralization
became a reality in Third World countries and they included South Asian countries also. There are many diverse fac-
tors which contributed towards sudden emergence of decentralization as a major theme in South Asian countries.
These factors are historical, social, political and economic. Some of the important ones are summed up as follows:

The South Asian countries like India, Sri Lanka, and Nepal, etc were governed by authoritarian regimes. There were
movements to bring democracy and finally these countries underwent transition from autocratic to democratic .The
establishment of representative form of democracy at the national level in these countries is reckoned as the first
initiative towards returning power back to the people. Once democratic governance was established at the national
level then political devolution from centre to state, provinces, or local governments came fast on the heels of nation-
al re-democratisation. Hence in these countries, decentralization can be seen as the ‘second wave’ of democratic
reform.

What has also led to emergence of decentralization for the governance at local level in South Asian countries is,
presence of village councils in the olden times as they used to be very effective in dealing with local issues. This
belief in the village councils led to opinion building for setting up of local self- government institutions as near to
the people as could be in some of these countries through political decentralization, e.g. Panchayats in India. The
other cause or factor which led to movement toward political decentralization is presence of ethnic diversity in some

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ANALYSIS

of the countries. The ethnic groups demanded political au-

tonomy. For example, in India, over centralization of power
at the Centre led to many problems, and unrest in many re-
gions also. This made the political devolution necessary to
manage stresses and strains. Similarly in Sri Lanka also there
was sense of alienation in north-eastern region and in or-
der to remove that sense of alienation and diffuse tension,
elected provincial councils were established. Besides these
factors, there are other fundamental reasons which caused
decentralization to become a widespread phenomenon.
The centralized form of development could not reach the
beneficiaries, i.e. rural communities. For example in India
centrally Sponsored schemes were started but they did not
involve the local people for village development and hence
failed. In Nepal also the distant Centrally controlled system
could not reach the remote mountain hamlets.

One reason which cannot escape notice is that in South

Asian countries with the adoption of economic liberalization policies, the process of decentralization picked up
the momentum. The government decentralization started taking place simultaneously with the introduction of
Structural Adjustment Programmes and economic liberalization policies. Conceptually, there is a logical connec-
tion between privatization and decentralization, if the context is reduction of control of central-state structures over
economic decision-making and also that decentralization will help in reaching the beneficiaries and deliver tangible
benefits arising out with economic liberalization. Moreover, some international donor agencies also encouraged de-
centralization as part of an overall Structural Adjustment Programme. Definitely economic liberalization contributed
towards providing favourable climate for the promotion of local governance institutions, but it would not be right to
consider economic decentralization as a predominant factor.

Last but not the least, the nationally planned development or centralised form of development adopted in develop-
ing countries was followed in East European Bloc. But in this Bloc, the centralized planning for development failed,
leading to inequality and poverty. The central administration was inefficient and irresponsive. This gave lesson to
developing countries to rethink and this generated consensus as well as favourable climate for decentralization. The
studies have shown that the causes which led to decentralization differ from country to country. There is no single
factor which is sufficient to explain the decision to decentralize in all countries or in a single country. Decentraliza-
tion in one country could be due to combination of causes. For example advent of multi-party political systems in
Africa, the deepening of democratization in Latin America; the transition from command to a market economy in
Eastern Europe and former Soviet Union; the need to improve delivery of local services to large populations in the
centralized countries of East Asia; the challenge of ethnic and geographic diversity in South Asia ,as well as ethnic
tensions in other countries and the attempt to keep centrifugal forces at bay by forging asymmetrical federations
;and the plain and simple reality that central governments have often failed to provide effective public servicing are
the multiple causes which made the decentralization widespread in developing countries.

Authors

Dr. Suresh Vadranam Jayaprada Sahoo

(The author is Assistant Professor, Depart- (The author is Research Scholar, Depart-
ment of Political Science (DDE), Pondi- ment of Sociology, Ravenshaw University
cherry University, Puducherry) Cuttack, Odisha)

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