Decentralisation

What are decentralisation reforms?

Decentralisation is a way of transforming the structure of governance in a country. More specifically, it refers to the process of transferring political, fiscal and administrative powers to sub-national units of government, such as states, provinces, districts or municipalities. This process can take many forms. It is common to talk about three main forms of decentralisation:

1. Deconcentration, which refers to the transfer of selected functions within the central government hierarchy through shifting of workload from central ministries to field staff and offices.
2. Delegation, which refers to the transfer of responsibility for maintaining or implementing sector duties to regional and local authorities.
3. Devolution, which refers to the transfer of discretionary authorities to legally constituted local governments.

Another form of decentralisation, which not fits precisely into to the definition above, is by some researchers argued to be privatisation, which refers to the shift of the responsibility of carrying out certain activities from the public to the private sector.

The variations in power distribution between central and local governments in different countries are large, and most countries are unique in this regard. Most local government reforms entail a combination of various degrees of deconcentration, delegation and devolution. Important policy functions and decisions concerning budgets remain, however, most often with the central government.

Why decentralisation?

There are many reasons why central governments may want to undertake decentralisation reforms in their countries. Three general arguments for decentralisation are:

1. Practical appropriateness: Decentralisation establishes a closer political and administrative contact to the local context. Local authorities may have better insight into problems and be better suited to take a more nuanced approach into consideration, thereby forming better solutions than distant decision makers.
2. Democratisation: Decentralisation may create a shorter distance to the decision makers, thereby providing a better opportunity for the local citizens to influence upon their own situation, without being voted down by the outside majority. Furthermore, it can contribute to greater legitimacy to decisions for the ones being affected by it, even though the actual influence may be modest.
3. Conflict regulation: Decentralisation may contribute to the (re-)drawing of local and regional boundaries, which decide which contending parties will get the majority within the boundaries. Autonomous local government is easier to achieve when the local population is relatively homogenous and agree with each other. A potential dilemma in this case might be that local minorities may have strong interests in the protection from central governments.

The various reasons for decentralisation and the different ways of managing it will often create dilemmas, in which benefits and disadvantages have to be weighed against each other.

Decentralisation and poverty reduction

A main argument for the positive effect of decentralisation on poverty reduction is that decentralisation of decision-making will enable decisions to be taken closer to the problems to be solved, and thereby making them more relevant. More local resources may be mobilised and solutions might be more easily adapted to local context and thereby become more cost effective. Through these measures it may be possible to achieve relatively more poverty reduction with the same amount of funds. Arguments have also been presented that decentralisation allows for more innovative solutions and fresh ideas. The mobilisation and participation of the poor may, in it self, also be seen as social capital building and thereby contributing to poverty reduction.

Counter arguments to this view is that decentralisation may lead to resources being hijacked by local elites, that capacity at the local level is lacking, and that rule-bound and less innovative political and organisational cultures dominate at the lower levels of government, more often so at local level than in central government agencies. Decentralisation may also destroy carefully built-up national systems in resource-poor countries. Furthermore, local politics usually involve more face-to-face politics which may make it more difficult to take tough and necessary decisions. Lastly, decentralised power and resources may serve as a patronage mechanism linking national elites with local supporters.

It might be important to underline the difference between decentralisation as such on the one hand and strengthened local governance systems and capacity. While everyone recognises that local governance capacity is a necessity for development, there is disagreement on the best way to decentralise power to achieve the most effective poverty reduction.

How has Norway worked with decentralisation reforms?

Support to local democracy and strengthening of local public administration structures have been important for the Norwegian development aid cooperation since its beginning. During the 1970s and the 1980s the main focus was on Area based programmes. In the 1990s the focus changed to cross-cutting sector reforms and specific decentralisation reforms. Since the end of the 1990s, there has been a move towards sector specific reforms and budget support, where decentralisation constitutes an important part.

How does Norad work with decentralisation reforms?

Norad's main approaches to decentralisation reforms are through deconcentration and devolution. As part of such reforms Norad gives special attention to capacity building, development of local democracy and good governance by focusing on local election assemblies, local public administration and the local political context.

Norad gives technical assistance to Norwegian embassies on how to implement programmes they are involved in. The assistance is mainly given through appraisals, reviews and evaluations, either on behalf of the embassies or in collaboration with other donors.

Internally, Norad is working across relevant departments depending on the focus of the respective assignments concerning decentralisations reforms (health, education, environment etc.), in addition to internal networks and working groups.

Externally, Norad cooperates with donor networks, research institutions and commissioned consultants, with competence on technical aspects of decentralisation reforms.