DECENTRALIZATION

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DECENTRALIZATION
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TOPICS

• DECENTRALIZATION THEORY
• HISTORICAL BACKGROUND THE ROLE OF CENTRAL
  GOVERNMENT
• THE CRISIS OF THE STATE
• STATE SUCCESSES FAILURES
• TYPES OF DECENTRALIZATION
• RATIONALE FOR DECENTRALIZATION
• MODES OF DECENTRALIZATION
• INTERGOVERNMENTAL LINKAGES
• THE USA AND MEXICO SYSTEMS

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Decentralization Theories

• RATIONAL CHOICE (Tiebout Model)
• A large number of municipalities, each offering a
  unique bundle of non-rival goods. Each household
  vote with its feet by selecting the municipality
  that offers the quantity-price bundle best suited
  to its own preferences. Voting with your feet
• In summary, this model calls for a large number
  of municipalities (decentralized government) that
  will offer choices to customers (citizens)

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Decentralization Theories

• PRINCIPLE-AGENT
• Governments are principals and agents at the same
  time in the network of governmental coordination
  (federal government is the agent of the principal
  states- which are the agent of the citizens the
  principle.
• The P-A dilemma consists in devising a set of
  rules incentives and disincentives- that will
  ensure that the agent (government) will act on
  behalf the interests of the principle (citizens)
• In sum, this theory focus on intergovernmental
  rules

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Decentralization Theories

• NORMATIVE THEORIES AND THE PRINCIPLE OF
  SUBSIDIARITY
• A given public service should be entrusted to the
  lowest level of government that is capable of
  effectively delivering the service.

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Historical Background The Role of central
Government

• The State play the role of facilitating capital
  accumulation rather than leading the way.
• Sound macroeconomic management (Accumulation
  function)
• Fiscal policy
• Macroeconomic policy
• Intergovernmental coordination
• Representative government (legitimization)

• The state played a key role in the formation of
  the nation-state
• To coordinate policy
• To unite diverse interests and groups
• To fill the vacuum of a capitalists or
  entrepreneurial class
• To accelerate the process of development

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The Crisis of the state

• Developing Nations
• Foreign debt
• Macroeconomic Mismanagement
• Lack of representative and democratic governments
  
• Former Communists countries
• Collapse of the economic model
• Democratization movements
• Credibility crisis

• OUTCOMES
• Successful transitions (Chile, Brazil, Mexico,
  Poland, Czech, Botswana, South Africa)
• Failed states (Congo, Iraq, Rwanda,)
• Fragmented States (Yugoslavia, USSR)
• Still struggling (Romania, Nigeria, Zimbabwe,
  Bolivia, etc.)

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What factors determine a successful transition?

• State disintegration is not a function of the
  degree of central control or the balance of power
  between the center and the periphery, but of the
  existence and effectiveness of institutions that
  mediate center-periphery grievances.
• Ability of the center to provide selective
  incentives to the regions, and the regions
  ability to engage in strategic bargain
• Disincentives for external support to regional
  separatists
• Diffusion of civic separatism
• Center-periphery check and balance

Mikhail A. Alexseev Decentralization vs. state
collapse Explaining Russias Endurance
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Types of Decentralization
TYPE CRITERIA
POLITICAL Democratization, citizen participation, legitimate government (s)
SPATIAL Balance pattern of regional development Primacy vs. Mature urban hierarchy
ADMINISTRATIVE Transfer of functions with regards to planning, management, allocation of resources
MARKET Transfer of some responsibilities from the States domain to the market
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Rationale for Decentralization

• DECENTRALIZATION ATTEMPTS TO
• Improve allocative efficiency
• Improve production efficiency
• Improve quality, transparency, accountability and
  legitimacy
• Greater equity

Source http//www.pitt.edu/super1/lecture/lec948
1/006.htm
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Modes of Decentralization
DECONCENTRATION
DELEGATION
DEVOLUTION
Source Adapted from V. Rodriguez
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Modes of Decentralization

• DECONCENTRATION
• Transfer of functions, powers and resources
• The center executes normative functions,
  supervision and control
• States are responsible for operational activities
  service programs
• It is mostly and administrative action and does
  not alter the flow of command in the system

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Modes of Decentralization

• DELEGATION
• Transfer of responsibilities for decision making
  administration to semi-autonomous organizations
  not controlled by but accountable to the central
  government (IFE in Mexico, Central Banking,
  Ombudsman)
• Semi-autonomous public enterprises to provide
  services more effectively and efficiently than a
  central bureaucracy

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Modes of Decentralization

• DEVOLUTION
• Strengths the relationship among the federal,
  state and local governments
• Autonomy to sub-national units of government in
  some areas (e.g. fiscal and financial powers,
  police power, eminent domain, etc. )
• Local governments acquire the necessary
  functions to govern and not only to administer

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Linkages among levels of government

• FINANCIAL Revenue-share formulas
• TECHNICAL ASSISTANCE Highly specialized services
  are more common at the highest level (e.g.
  intelligence gathering)
• REGULATORY Establishing national standards (no
  child left behind, clean air and water acts,
  etc.)
• REPRESENTATION Party-based vs. district-based
  representation
• INFORMAL Customary

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Governments in the USA
GOVERNMENT UNITS 1952-2002 GOVERNMENT UNITS 1952-2002 GOVERNMENT UNITS 1952-2002 GOVERNMENT UNITS 1952-2002 GOVERNMENT UNITS 1952-2002 GOVERNMENT UNITS 1952-2002 GOVERNMENT UNITS 1952-2002
TYPE OF GOVERNMENT 2002 1992 1982 1972 1962 1952
TOTAL 87,900 86,743 81,831 78,269 91,236 116,805
Federal Government 1 1 1 1 1 1
State Governments 50 50 50 50 50 48
             
Local Governments 87,849 86,692 81,780 78,218 91,185 116,756
 Average local/state 1756.98           
General Purpose            
County 3,034 3,043 3,041 3,044 3,043 3,052
Subcounty 35,937 35,962 35,810 35,508 35,141 34,009
Municipal 19,431 19,296 19,076 18,517 17,997 16,807
Township 16,506 16,666 16,734 16,991 17,144 17,202
             
Special Purpose            
School District 13,522 14,556 14,851 15,781 34,678 67,355
Special District 35,356 33,131 28,078 23,885 18,323 12,340
Source US Census Bureau http//ftp2.census.gov/go
vs/cog/2002COGprelim_report.pdf
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Governments in Mexico
Governments 2005
Federal 1
State 32
Municipal Average state/mun. (76.3) 2,444
Oaxaca 570
Baja California 5
Source INEGI
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Ratio Population to Governments
POP/ LOCAL GOV. RATIO
USA 295,866,633/87,849 3,367
MEXICO 97,48,3412/2,444 39,887
Source US Census Bureau INEGI
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Ratio Geographical Area to Governments
  USA MEXICO
LAND AREA (SQUARE MILES) 3,537,438 758,445
LOCAL GOVERNMENTS 87,849 2,444
RATIO LAND/GOVERNMENT 40.27 310.33
Source US Census Bureau INEGI
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Decentralization Approaches
USA MEXICO
TYPE POLITICAL ADMINISTRATIVE
MODE DEVOLUTION DECONCENTRATION
LINKAGES FINANCIAL REGULATORY INFORMAL FINANCIAL TECHNICAL REGULATORY REPRESENTATION
Source Peña, 2002