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Decentralization of any development scheme. - Printable Version

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Decentralization of any development scheme. - shweta - 12-14-2016

Decentralization of any development scheme.

In an era of globalization, decentralization is the principal countervailing trend which can ensure that the growth process is pro-poor, pro-women, pro-nature and pro-jobs. As market integration and technological innovation renders the national frontiers more permeable, it is crucial to put in place and strengthen systems of negotiation, regulation and decentralized governance.

faces of decentralization—fiscal, administrative, or political


Fiscal decentralization, as one of the major dimensions of decentralization, has not been progressing very fast. ULBs are still too depended from the central government which, in some cases, comprises up to 80-90% of the local budget. Although local revenues are small compared to the needs, in almost all ULBs they have been increasing over the years. Fiscal decentralization can levy their own taxes they cannot yet engage into effective tax policy.
 
Political Decentralisation provides a more durable ‘rational-legal’ framework that makes Decentralisation an integral part of the political and civic discourse. India is the world leader in creating space for political decentralisation. Now the concomitant arenas of fiscal devolution and economic decentralisation require greater attention.
International experience bears out the close link between reform and Decentralisation. Apart from the theoretical logic of a reduced role of government creating opportunities both for private enterprise and for community action, in many countries actual reform programme has been built upon increasing institutional space for Decentralisation.
When decentralization is partial, citizens continue to place their expectations of service delivery at the door of national governments. They are more likely to punish national politicians at the polls for inadequacies of service delivery rather than local politicians. This in turn weakens incentives of local governments to allocate budgetary resources optimally across competing public needs. Instead, local incentives are likely geared towards serving narrow interest groups or extracting rents, with poor quality public services being blamed upon insufficient transfers from higher tiers of government


Three stages of decentralization—initiation, scaling up and consolidation. 
Initiation 
 Many countries today have little or no local participation, decentralization or  local funds. Reformers in some of these countries are keen to initiate local empowerment.
  An important starting point is to harmonize and strengthen ongoing efforts in community participation. In many countries, a plethora of uncoordinated donor-driven funds already exist.
The aim must be to get resources and the authority to spend these to as many communities as possible, as quickly as possible
Many projects will continue to be executed by central agencies, and new procedures can make  it mandatory, wherever feasible, to use potential beneficiaries to appraise, implement and monitor such projects. It is a major development challenge which is unlikely to be met by community action: it will need targeted central  schemes from the outset.
Countries with weak -- or no --  local governments need to engage in a dialog with stakeholders and donors on the merits and feasibility of decentralization. Some countries may be convinced of the need to proceed quickly, and  donors can assist them in drawing up a framework that harmonizes the political, administrative and fiscal aspects of decentralization.

 Scaling Up
Many countries have crossed the initial stage and achieved some progress in participation and decentralization. The challenge they now face is to scale up operations.
 Experience shows that community empowerment can be scaled up rapidly. Entire regions can be covered within months, and entire countries soon afterwards. 

For early starters, which have already put local governments in place,  the challenge will be to strengthen their capacity and accountability mechanisms. Successful community empowerment will typically create a good environment for effective local governments, and the two can evolve in a mutually reinforcing manner. In the scaling up stage, local governments  can gradually assume full responsibility for frontline service delivery.

 Communities in the initial stage typically rely on temporary funds from social/other funds financed by donors. Local governments could gradually take over this task in the case of early starters. This has proved is a good way to promote competition in good governance, accountability and capacity creation. It enhances community empowerment as well as local government empowerment, and helps both develop a mutually profitable interaction. 

Consolidation
 Not many developing countries have gone beyond the scaling-up stage to consolidation, but that is the logical third stage. In this stage decentralization will be fully operational, but many glitches and problems will remain. This is the stage for fine-tuning political, administrative and fiscal arrangements, and for further upgrading local skills.

 Where local governments are already functioning well, donors should consider a switch in strategy. They could switch progressively from funding communities directly to  providing budget support for central  governments, conditional on arrangements to channel an assured share of central government revenue to local governments, which in turn will support communities. 
 
This stage may witness much greater emphasis on targeted schemes to fill gaps in social inclusion left by local governments. The local revenue base should increase substantially in this stage, and dependence on donors should decrease.

Sequencing: Combine immediate action with the long term agenda  These three stages represent an idealized conceptual framework: the reality will differ widely from country to country.