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DECENTRALIZATION

DECENTRALIZATION. 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

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DECENTRALIZATION

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  1. DECENTRALIZATION

  2. 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

  3. 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)

  4. 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

  5. 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.

  6. 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 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) Historical Background: The Role of central Government

  7. 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.) The Crisis of the state

  8. 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 Russia’s Endurance

  9. Types of Decentralization

  10. 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/lec9481/006.htm

  11. Modes of Decentralization DECONCENTRATION DELEGATION DEVOLUTION Source: Adapted from V. Rodriguez

  12. 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

  13. 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

  14. 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

  15. 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

  16. Governments in the USA Source: US Census Bureau http://ftp2.census.gov/govs/cog/2002COGprelim_report.pdf

  17. Governments in Mexico Source: INEGI

  18. Ratio Population to Governments Source: US Census Bureau & INEGI

  19. Ratio Geographical Area to Governments Source: US Census Bureau & INEGI

  20. Decentralization Approaches Source: Peña, 2002

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