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Democratic, Decentralized Local Governance (DDLG)

Democratic, Decentralized Local Governance (DDLG). DCHA/DG Fundamentals Training October 29 th & 30th, 2009 Ed Connerley. Definition.

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Democratic, Decentralized Local Governance (DDLG)

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  1. Democratic, Decentralized Local Governance (DDLG) DCHA/DG Fundamentals Training October 29th & 30th, 2009 Ed Connerley

  2. Definition Decentralization is the transfer of power and resources from national governments to subnational governments or to the subnational administrative units of the national government.

  3. Fundamentals of DDLG • Activities and Practices • Concepts and Issues

  4. Fundamentals of DDLG: Activities and Practices

  5. Country Programs • Improving the Legal-Regulatory Framework for Decentralization • Building/Strengthening Local Government Associations • Fiscal Decentralization and Management • Promoting Local Economic Development • Improving Local Government Accountability to Civil Society • Improving Local Public Service Delivery

  6. Fundamentals of DDLG: Concepts and Issues

  7. Dimensions of Decentralization • Administrative Transfer of functional responsibilities Change of civil service systems • Fiscal Transfer of funds and/or revenue and expenditure authorities • Political Transfer of political authority

  8. Types of Decentralization • Devolution – The creation or strengthening of elected local governments. • Deconcentration – The transfer of decision making to a lower level administrative unit of the central government. • Delegation – The transfer of managerial responsibility for a specifically defined function outside the central government structure.

  9. The Tiebout Hypothesis

  10. The Tiebout Hypothesis • When there are many sub-national jurisdictions offering differing packages of public goods (and taxes) the movement of consumers (and firms) to jurisdictions where there wants are best satisfied and competition between jurisdictions for residents (and economic activities) will lead to near-optimal “market-like” outcomes.

  11. Conditions Facilitating Decentralization • Multiple sub-national jurisdictions • Mobile persons and/or taxable assets • Varying preferences for public services and taxes

  12. Citizens “vote with their feet!” • Citizens reveal their preferences for local public goods (and corresponding taxes) through their choice of residential jurisdiction. • Source: Charles M. Tiebout, “A Pure Theory of Local Expenditures,” The Journal of Political Economy, v. 64, Issue 5 (Oct. 1956), 416-424.

  13. Potential Advantages of Decentralized Governance • Superior revelation of citizen preferences • Local governments and citizens can learn from the experience of other, nearby or similar governments • Improved allocative efficiency in public service provision

  14. The Economic Role of Political Institutions: Market Preserving Federalism and Economic Development

  15. A Core Problem of Governance: States that are sufficiently strong to protect citizens may prey upon citizens.

  16. Question: • How might a state be constructed that will be strong, yet limited in predation?

  17. Market Preserving Federalism Decentralization with the following characteristics: • A hierarchy of governments, each with a defined scope of authority; • Autonomy of each level of government is self-enforcing; • Sub-national governments have primary regulatory responsibility over the economy

  18. Market Preserving Federalism (2) • A common, nation-wide market is insured; • Sub-national governments are subject to a hard budget constraint

  19. Where polities and economies exhibit these characteristics, the incentives of politicians tend to be well aligned with the welfare of citizens and markets tend to be protected from state predation.

  20. The Political Economy of Decentralization: Competitive Federalism

  21. Competitive Federalism • Promote sub-national inter-jurisdictional competition through: • Subsidiarity • The rule of origin • Exclusivity • Fiscal equivalence

  22. Subsidiarity • All tasks of governance should be assigned to the lowest level of government that can efficiently perform the task

  23. The rule of origin • Products legally produced in any sub-national jurisdiction are legal throughout the nation.

  24. Exclusivity • In so far as possible, tasks of governance should be assigned as the unique responsibility of a single level of government.

  25. Fiscal Equivalence • The tasks assigned to a government at a given level should be financed by taxes and fees imposed by that government at that level.

  26. Fundamentals of DDLG • Decentralization as Democratization

  27. Weaknesses in USAID’s Decentralization Support • Often fail to consider relationships between sub-national “political” and “civil” society • Sub-national representative institutions are relatively ineffective • Sub-national authoritarian governments are relatively common

  28. Political Decentralization (1) • What is it? • Under what circumstances should USAID support it?

  29. Political Decentralization (2) • “Decentralization is a process of transferring power to popularly elected local governments.” …. • “Devolution is closest to the term we consider, in this handbook, decentralization. Formally, devolution is the creation or increased reliance upon sub-national levels of government, with some degree of political autonomy, that are substantially outside direct central government control yet subject to general policies and laws, such as those regarding civil rights and rule of law.” D&DLG Programming Handbook (page 6)

  30. Political Decentralization (3) • How do we support it?

  31. Political Decentralization (4) • Free and fair elections • Electoral rules • Strong, but decentralized national political parties • Strengthen sub-national representative institutions

  32. Opportunities and Challenges for DDLG Reform • Multiple Dimensions • Multiple Goals • Multiple Arenas • Essential Characteristics

  33. Essentials Characteristics of Decentralization • Authority • Autonomy • Accountability • Capacity

  34. What is Decentralization? • Dimensions of Decentralization • Political • Fiscal • Administrative

  35. What is Decentralization? • Forms of Decentralization • Deconcentration • Delegation • Devolution

  36. Why Decentralize? • Primary Goals of Decentralization • Stability • Economic Development • Democracy

  37. Constraints on Decentralization • Strength of the Central State • Internal Structure of Political Parties • Weak Subnational Political Competition • Resource Constraints • Tradeoffs and Conflicting Goals

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