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(Nharnet..com is presenting today a more detailed reading on decentralization, a principled contained in the ELF-RC proposal for a wider Eritrean coalition issued in January 2004. This principle is now part of the EDA charter that, it still calls for further revies and clarifications. We wish to acknowledge that the material was prepared by the Dutch writer, John van der Walle, for dissemination as of 2002 as part of public service by Netherlands’ KIT Information and Library Services. Good reading.)

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Introduction
Governments in developing countries tend to be more centralized than those in industrialized countries. In the 1990s, a renewed interest in the local government level by both national governments and international development agencies emerged. Economic crises and structural adjustment, globalization and democratization, as well as domestic forces such as rapid urbanization and strengthened ethnic identities contributed to this renewed interest.

Decentralization is all about sharing power and resources and holds the promise of democratization. The process of decentralization is complex because it involves many levels of government. It is also threatening to stakeholders as their interests are often incompatible with any move towards decentralization. This explains why very few decentralization processes have ever been fully implemented. To date, most of the literature on decentralization focuses more on expectations and discourse than on practice and outcomes.

Together with decentralization, a number of other related concepts have turned into ‘buzzwords' in the jargon of development co-operation: good governance, local government, democratization, local governance, civil society and participation. This paper attempts to define the above-mentioned concepts and to explain how they interrelate. Recent trends and developments in decentralization will be explained in relation to poverty reduction and the ‘new architecture of aid'. Finally, an overview of the majorchallenges for the future will be given.

Definitions
Decentralization is any act through which a central government formally transfers powers to actors and institutions at lower levels in a political-administrative and territorial hierarchy. Decentralization reforms usually focus on strengthening both central and local governance in ways that support the objectives of democratization, greater efficiency and equity in the use of public resources and service delivery, and national unity. Out of the many different types of decentralization the two most common ones are explained here (Manor, 1999; Ribot, 2001).

Administrative decentralization, also called ‘deconcentration', is the transfer of power to the local administrative offices of the central government. Administrative decentralization concerns central-state management in the local arena, whereby a higher government level delegates tasks to lower level civil servants to execute central policies. These civil servants remain accountable only to persons higher up in the hierarchy. Their tasks include service delivery, support for development activities and tax collection. One example is the Ministry of Agriculture that delegates extension tasks to its provincial and district departments.

Political or democratic decentralization, also called ‘devolution', is about creating a domain of autonomy involving the transfer of power and resources to lower level authorities which are largely independent of higher levels of government. The principle of subsidiarity applies here, whereby a higher level of government abstains from becoming involved in anything that can be better accomplished by the next lower level. Elected representatives are given the power to make decisions on behalf of local citizens and include the use of local public resources (natural or financial) for investment in whatever the local citizens need and desire. Examples of these elected bodies are urban municipalities and county councils.

Governance is about government behaviour and performance, including the exercise of economic, political and administrative authority to manage a country's affairs at all levels in a transparent and accountable manner. It provides the framework, based on the rule of law through which citizens and groups exercise their rights, meet their obligations and articulate their interests.

Good governance, as a policy framework, encompasses:

An effective state i.e. one that possesses an enabling political and legal environment for economic growth and equitable distribution;
Civil societies and communities that are represented in the policy-making process, with the state facilitating political and social interaction, and fostering societal cohesion and stability;
A private sector that is allowed to play an independent and productive role in the economy (Hamdok, 2001).

Local government is a lower level of governance created to ensure that government is brought to the grassroots population to give its members a sense of involvement in the political processes that control their daily lives. These levels include provincial or district administrations, urban municipalities and county and rural councils. Free and fair elections supervised by impartial electoral bodies determine the composition of local government and ensure its legitimacy. Local democracy denotes a political system in which the local citizenry participate actively not only in determining who will govern them but also in the design and implementation of development activities (Reddy, 1999).

The preconditions for popular democracy, the way it evolved in Western developed countries, include high levels of literacy, communication and education, an established and secure middle class, a vibrant civil society, relatively limited forms of material and social inequality and a broadly secular public ideology. These preconditions are for the most part not yet present in developing countries (Oluwo, 2001).

A local governance process can mature when the strengthening of local government through decentralization goes hand-in-hand with a deliberate effort to mobilize and strengthen civil society structures and institutions at lower levels in a manner that would allow their relationship with sub-national authorities to become more interactive. Civil society is located below sub-national governments and includes actors and structures that initiate social or political action, ranging from individuals, organized pressure groups, associations, churches and agencies, to the media. Furthermore, it encompasses private sector bodies, parent-teacher associations, trade unions, and local community groups. Rarely appreciated in the so-called ‘modern' governance systems, is the array of formal and informal organizations which include local and informal structures and systems of traditional leadership that are located outside the realm of the formal political domain (UNDP, 2002).

Participation is an integral part of local government in the way it performs the following functions:

Involving citizens in the performance of local public duties;
Widening the basis of political participation;
Safeguarding pluralism at various levels and in a multitude of local administrative units;
Facilitating problem-oriented grassroots approaches which are appreciated by citizens;
Strengthening the restrictions and controls (checks and balances) of political power, which are indispensable in a democracy as an element in the vertical division of power.

Participation means that citizens organize themselves, accept responsibilities and become involved in local decision-making. When participation is ensured, self-help can become a reality, be effective and have the desired impact. Participation also implies contributing to the work of legitimate political institutions or accepting representation by them once their members are elected. It is very important for elected representatives to be downwardly accountable to the local citizenry.

Recent trends and developments: Over the past few decades, many different types of governments throughout the world, whether they were left wing, right-wing, centre, autocratic or emerging democracies, have all made intermittent attempts at decentralization. During the 1980s, the political climate was such that some still believed that the centralized party-state, with its emphasis on central planning and development, was the key to the future. However, a culmination of factors necessitated a shift in focus. These factors included: the collapse of the Soviet Union, the fact that China was no longer a dominant force on the international scene, a series of economic crises, combined with increasing poverty, corruption and crime in the local arenas. Political leaders found it increasingly hard to make the machinery of government engage effectively with society, especially with those social groups that were politically aware and which either were or wished to become politically active. The more activist citizenry began to criticize government systems and performance in retaliation against their poor delivery of basic services, both in quantity and quality, inadequate levels of accountability and the weak integration between formal and informal structures of governance. This growing political awareness did not result in mass pressure for change from the grass-roots level, but it did make leaders atop of diverse political systems consider decentralization in order to cope more effectively with these emerging social forces.

Since the early 1990s, the pragmatic requirements of ‘good governance', pluralist democracy, a multiparty government and decentralization in the management of public affairs have been revived as desirable values and options (Manor, 1999; Oluwo, 2001; Reddy, 1999).

Donors have great confidence in the potential that decentralization offers for designing development in response to citizen's views. The underlying logic is that local institutions have better access to information, can better discern and are more likely to respond to local needs and aspirations, as will be explained further below.

In the second half of the 1990s a ‘new architecture of aid' developed, including new mechanisms for converting debt into aid known as the Poverty Reduction Strategy Papers (PRSPs) and programmes for public sector reform called Sector Wide Approaches (SWAps). These programmes aim at both improving people's livelihoods and reducing poverty. Further objectives include the re-establishment of domestic ownership of the development process, the prioritization of spending based on agreed opportunities and constraints, clearly defined public and private roles and co-ordinated donor support. In different degrees these programmes foresee structural changes in the organization and management of government systems that will be part of a decentralization process.

SWAps define a specific sector in terms of policy analysis, stakeholder involvement, priority setting and a framework for improved public financial management. SWAps are still ‘top-down' in character. PRSPs have the potential to catalyze national ownership of interventions by prescribing mechanisms for citizen's participation. In theory, PRSPs are general development plans for 5 years that transcend sectors and have a clear focus on poor and disadvantaged groups in society. PRSPs may integrate ‘bottom-up' approaches in a framework for action that links local governance to poverty reduction. However, a number of opportunities that respond to higher level needs and interests may not be generated by purely participatory approaches (Farrington, Lomax, 2001; UNDP, 2002).

Why decentralization?:Based on experience with democratization processes in the Western world a number of benefits from decentralization have been deduced. The most important anticipated benefits can be summarized in the following promises (Manor, 1999; Reddy, 1999; Ribot, 2001; UNDP, 2002):

Deepen democracy by extending representative politics to lower levels;
Broaden participation in political, economic and social activities;
Draw on local knowledge and preferences about development;
Increase government officials' sensitivity to local conditions and needs;
Improve efficiency in service provision;
Enhance the accountability of bureaucrats and elected representatives;
Relieve top central ministry managers of routine tasks to concentrate on policy;
Facilitate co-operation between government at different levels and lower level associations and NGOs;
Allow greater access to political decision-making and more equitable distribution of resources for marginal regions and groups in society;
Create a local focus for more effective co-ordination of all national-to-local programmes;
Allow local ‘experimentation' with more creative, innovative and responsive programmes;
Create political stability and national unity by allowing citizens to be involved in local public programmes.

Constraints
While good governance and decentralization are attractive concepts, they imply value judgements that might differ between communities and countries. To achieve many of the benefits of good governance, such as increased public sector efficiency or reduced poverty, necessarily implies a loss to some groups. On the other hand, reducing poverty might call for income redistribution measures, which could hurt the interests of richer groups. Good governance and decentralization, therefore, can not be achieved in a vacuum and is the product of a bargaining process between the various interest groups in a country (Hamdok, 2001).

From the literature it is evident that the design and implementation of decentralization processes is rather constrained, and there is not much evidence yet that shows the benefits that theory predicts (Oluwo, 2001; Ribot, 2001; UNDP, 2001; Wunsch, 2001).

A number of reasons have been given to explain decentralization's poor track record so far and to look at why it is only being practised to a very limited extent:

Central governments have not been able to set up the basic institutional infrastructure for what is supposed to be a substantial political and administrative reform. Comprehensive constitutional reforms take a long time to process. Related legal frameworks that describe the division of powers, resources and accountability are poorly developed. The reason cited for the latter is that there is always a tension between the desire to create autonomous local structures that are accountable to their local constituencies, and the need to exercise central control to prevent corruption and reduce incompetence (Ribot, 2001; UNDP, 2002).
Capacity is often constrained. This includes a shortage of qualified staff and equipment, a lack of effective management systems and the absence of accurate and comprehensive local data on which to base precise planning. Capacity is a factor that central governments often use to judge whether local institutions are able to receive powers. Since few governments have trusted local actors enough to transfer powers, whether decentralization can proceed before capacity is built remains unclear (UNDP, 2002).
Implementing a decentralization process is a costly exercise at a time when central governments are experiencing severe resource shortages. Budgeting and fiscal management are hampered by these chronic resource shortages. The inadequacy and unreliability of national grants and transfers to the local level disrupts the local resource base, diminishes effective local authority and erodes its credibility. This also provides a disincentive to local tax collection. In the situation where the allocation of national resources is already cumbersome, fiscal policy and decentralization are not yet able to provide for the stabilization and redistribution of resources to the lower levels; particularly to more disadvantaged areas and groups, including women, the rural and urban poor and ethnic minorities (Wunsch, 2001).
Some actors in the process feel threatened by the radical changes that democratic decentralization implies. Political actors may see changes in their political base and patronage systems. Civil servants may expect to lose control over resource allocation and decision-making powers. Civil servants may also resist being transferred from a central ministry to work directly for local government. This situation has led to top civil servants persistently trying to retain authority and resources. Loopholes in decentralization legislation allow central ministries and top civil servants to override or ignore local authorities (Oluwo, 2001; Ribot, 2001). In some cases this has led to a reassertion of central control that could even be described as a form of 'recentralization'. Threats may equally be felt at the local level, where formal and customary chiefs may resist further democratization (Wunsch, 2001).
A weak institutional framework often results in poor or incomplete implementation. In a number of cases local democratic structures have been created but have not been designated any powers, or powers are devolved to non-representative or upwardly accountable local authorities. This leads to unworkable situations, and undermines the credibility of the newly-created local institutions (Ribot, 2001).
Few decentralization initiatives have managed to engage local communities in effective, ‘bottom-up' planning mechanisms. For the most part, planning and decentralization seem to be mutually incompatible (UNDP, 2002).
The concept of participatory processes in communities to enforce good governance on the part of local councils, and effective service delivery by public agents at local levels is contested. Instead of bringing the ‘voices of the poor' to decision-making at local levels, signs are that decentralized local government merely recreates at district and lower levels the rent-seeking environment that previously occurred at central level (Ellis, Bahiigwa, 2001).

Poverty
Poverty is no longer viewed as simply being deprived of income, food, shelter and access to other basic needs for survival. Rather it has come to mean powerlessness, voicelessness, vulnerability, exposure to risk and fear, humiliation and social exclusion. The laws and regulations that govern the interaction of various actors in the political arena are slowly being recognized as significantly influencing the nature of the relationships that emerge in countries' attempts to find solutions to the poverty dilemma. In theory, the reduction of poverty is more likely to be assured when the people for whom pro-poor interventions are meant, are allowed, through empowerment, to effectively participate in these interventions. Decentralization is generally assumed to facilitate redistribution and poverty alleviation since it brings greater grassroots level control over resources and their utilization (Manor, 1999; UNDP, 2002).

Donor involvement
A few remarks should be made about donor involvement in relation to the ‘new architecture of aid':

Contrary to SWAps, PRSPs prescribe decentralization and participation as an integrated part of the approach. Views differ on whether the preconditions necessary for administrative decentralization to work effectively can be put in place, on how political and administrative decentralization might interact, and on whether donors can support the strengthening of local government without exposing themselves to allegations of ‘interfering in internal affairs' (Hamdok, 2001).
For some years now, donors have been ‘moving upscale' in the types of activities that they support. Essentially this has meant a substantial shift away from projects towards programme funding. For SWAps in particular, much closer coordination between donors over sector funding involves a more unified setting of the priorities with which governments are supposed to comply in order to enjoy continued or increased external assistance over time. This trend is not without its paradoxes. After a period of ‘government avoidance' caused by widespread unease about the mismanagement of project and programme-funding, the donors are once more dealing almost exclusively with governments. In doing so, through the promotion of decentralization policies (as in the case of PRSPs), they may be inadvertently multiplying outwards the governance problems that were hitherto mainly confined to centralized state agencies. In the meantime, the NGOs, that were previously beneficiaries of donors' disenchantment with governments, face reduced funding resulting from the redirection of donor funds, and a perception that their micro level interventions do not fit the scaling-up that is now in vogue. As donors and NGOs withdraw from grassroots activities in favour of higher level policy processes, feedback about the community and household impact of policies risks diminishing or disappearing altogether (Ellis, Bahiigwa, 2001).

Challenges for the future: Despite the above-mentioned constraints in the decentralization processes so far, there is still hope that these processes will result in more local ownership and improved development programmes. The major challenges are cited below:

Political will is required to bring about wider institutiona, political and economic reforms in order to achieve decentralization, including land reforms and reforms to the banking system, both of which are dominated by the political elite. The decentralization policy should cater for an enabling and clear constitutional, legislative and regulatory framework. This framework should provide a fairly comprehensive division of responsibilities between the various levels of government and civil society and clarify the relationship between these levels. Establishing an enabling environment to empower local-level structures in service delivery is considered to be especially important (Oluwo, 2001; UNDP, 2002).
Where national and local interests are contradictory there is the challenge of balancing these realities in a manner that recognizes both the virtues of devoluting power, authority and resources to lower levels and the importance of realizing the goals of national development as defined by central authorities. In terms of the new architecture of aid, the challenge is to combine horizontal local planning (PRSPs) with vertical sector investment programmes (SWAps). Innovative and responsive participatory planing approaches should be introduced and applied. This will increase the number of decision-makers (levels) and partners and requires a change in attitudes and way of communicating (from direction to guidance, from coercion to response). The challenge is to involve local communities and respond to their needs without losing the central role that governments still have to play in directing the more global macro challenges of development. As a matter of sequence, in legislating the power and relational structures between the centre and lower level decision-making, consideration of how much power is devolved must be weighed against the need for central control over expenditure, staffing cost levels, and tight scrutiny over budgets to prevent over-expenditure and corruption (Farrington, Lomax, 2001; Wunsch, 2001).
Capacity-building programmes should be developed for both government officials of different levels and civil society representatives. Local government authorities should be able to promote participatory planning, and implement and improve public services to local citizens. These authorities would then be in a better position to assume the role of facilitator or catalyst of a real partnership that promotes cooperative approaches to rural and urban development. This may lead to the establishment of a community consultation process and the optimization of citizens' access to government decision-making that helps generate a widely accepted set of major development goals (UNDP, 2001).
Decentralizing power and authority does not guarantee the emergence of enhanced local governance. Effective civil society involvement does not come easily as it calls for a deliberate effort to reach out to local communities beyond the decentralized structures of sub-national authorities. Effective participation requires enlightened intervention, including the improvement of the institutional environment in which varying interest groups co-exist. Equally as fundamental but often overlooked, is that bringing the decentralized sub-national authorities closer to some civil society actors can risk taking them ever further away from others. Not all organizations of civil society (e.g. political parties, NGOs, lobby groups) are adequately accountable, either to their own members or to the public at large. And although some groups may be quite vocal, the interests they represent may not be widely shared. In reaching out to groups in civil society, the governance system must be conscious not only of the interests those groups represent, but also of those they do not. Otherwise national pro-poor interventions could risk creating new disparities between the newly accommodated and those whose voices remain unheard: women, the urban and rural poor in informal human settlements, and ethnic minorities (UNDP, 2002).
Management structures should be further developed to better integrate the activities of relevant NGOs, the private sector, and other community-based institutions into government frameworks of poverty reduction at different levels (Farrington, Lomax, 2001, UNDP, 2002).
In fiscal decentralization central government should on the one hand allow sub-national authorities to gain direct access to as many revenue resources as possible, and on the other provide them with regular, stable, reliable and commensurate appropriations and in a predictable manner. If well-designed, fiscal decentralization may contribute to economic stabilization and the redistribution of resources (Wunsch, 2001).
Accountability and efficient public expenditure can be improved through participatory budgeting, greater transparency in public procurement and contracting procedures, including enhancement of government finance, accounting and internal audit systems and procedures. To avoid any misappropriation of funds the financial management capacity of both national and local governments should be strengthened (UNDP, 2002; Wunsch, 2001)
To broaden the capacity of the lower-level structures, public-private partnerships are recommended. To utilize these partnerships more effectively, strong administrative and management structures and systems within the public and private sector (including civil society organizations) are seen as being important prerequisites. Nevertheless, one should be cautious about having blind faith in the power of the private sector to correct the inequalities in service provision (UNDP, 2002).
One should also be wary of the dangers inherent in uniformly decentralizing power and authority to lower-level bodies that may possess varying levels of capacity to productively accommodate new mandates and management challenges. In future, when designing policy or legislating for the various functions, decentralization should not be applied uniformly in a manner that pre-supposes that all local-level structures have equal capacity and the same level of political will with which to take devolved functions on board. It is acknowledged that such asymmetric decentralization can lead to complex legal and regulatory difficulties (UNDP, 2002).
The reduction of poverty is more likely to be assured when the people for whom pro-poor interventions were intended are allowed, through empowerment, to effectively participate in these interventions. Unless there are strong oversight-cum-accountability institutions, decentralization can reinforce, as it often has done, the power of local elites and further exacerbate spatial inequalities; a phenomenon that has adverse implications for poverty reduction itself (UNDP, 2002).

References

Ellis, F. and G. Bahiigwa (2001), Livelihoods and rural poverty reduction in Uganda, LADDER Working Paper no.5

Farrington, J. and J.Lomax (2001), Rural development and the ‘new architecture of aid': convergence and constraints, Development Policy Review, 2001, 19(4) 533-544
KIT Library code E 1988-19(2001)4

Hamdok, A. (2001), Governance and policy in Africa, recent experiences, WIDER discussion paper no. 2001/126
KIT Library code K 3125-(2001)126

Manor, J. (1999), The political economy of democratic decentralization, Washington, World Bank
KIT Library code U 99-112

Reddy, P.S. (1999), Local Government, democratisation and decentralisation: a review of the Southern African region, Kenwijn, South Afica, Juta

KIT Library code N 02-1361

Ribot, J. (2001), Local actors, powers and accountability in African decentralizations: a review of issues, Geneva, UNRISD

UNDP (2002), Local governance for poverty reduction in Africa: AGF-V Concept paper, Africa Governance Forum.

Wunsch, J. (2001), Decentralization, local governance and ‘recentralization' in Africa, Public Administration and Development 21(2001) 277-288
KIT Library code E 1227-21(2001)4

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