Decentralization In Developing Nations

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Decentralization InDeveloping Nations
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What is decentralization?

• Transfer of authority from central to local
• Encompasses a variety of concepts which must be
  carefully analyzed in any particular country
  before application.
• Each country has its own rhythm of change
• This analysis should include the various types of
  decentralization

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What types of decentralization? OrIn what ways
does decentralization occur?

• ?

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Types of Decentralization

• Political
• Aims to give citizens or their elected
  representatives more power in public
  decision-making. Advocates assume that decisions
  made with greater participation will be better
  informed and more relevant to diverse interests
  in society than those made only by national
  political authorities.

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Types continued..

• Administrative Decentralization
• Seeks to redistribute authority and financial
  resources among different levels of government.
  The 3 forms are Deconcentration, Delegation, and
  Devolution

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Types continued..

• Fiscal Decentralization
• Giving local governments and private
  organizations revenues to carry out service
  effectively. Forms include a) self-financing b)
  expansion of local revenues c) intergovernmental
  transfers d) authorization of municipal borrowing

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Types continued..

• Privatization
• Government and private sector cooperate to
  provide services or infrastructure
• Deregulation
• Reduces legal constraints on private
  participation or allows competition among private
  suppliers for services that in the past were
  provided by the government or regulated monopolies

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What are some drawbacks or potential dangers of
decentralization?

• ?

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Argument against decentralization

• Makes stabilization policies more difficult to
  implement, or even destabilization of public
  expenditures and debt
• Offloading of fiscal imbalances by central
  governments to local governments. Strong
  association between decentralization and fiscal
  imbalances at lower levels
• Possibility that decentralization retards
  economic growth

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Argument for decentralization

• Efficiency
• Decisions about public expenditure on a closer
  level of government are more responsive and
  reflect local demand more so than remote govt.
  Also, improvement of competitiveness of govt and
  enhances innovation more likely to act to
  satisfy the wishes of citizens.

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Argument for decentralization

• Political
• Decentralization an essential part of
  democratization as autocratic central regimes are
  replaced by elected governments

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Rationale for balanced Decentralization not
either-or

• Not all functions can or should be financed and
  managed in decentralized way
• If national govt delegates responsibilities,
  they usually need to retain policy and
  supervisory roles
• National govt creates and maintains enabling
  conditions that allow local responsibility
• Decentralization depends on training and
  coordination of local govt, private enterprises,
  and local NGOs in planning, financing, and
  management