Decentralization
Overview
 
__FORCETOC__Decentralization or decentralisation (see spelling differences) is the process of dispersing decision-making governance closer to the people and/or citizens. It includes the dispersal of administration or governance in sectors or areas like engineering
Engineering
Engineering is the discipline, art, skill and profession of acquiring and applying scientific, mathematical, economic, social, and practical knowledge, in order to design and build structures, machines, devices, systems, materials and processes that safely realize improvements to the lives of...

, management science, political science
Political science
Political Science is a social science discipline concerned with the study of the state, government and politics. Aristotle defined it as the study of the state. It deals extensively with the theory and practice of politics, and the analysis of political systems and political behavior...

, political economy
Political economy
Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...

, sociology
Sociology
Sociology is the study of society. It is a social science—a term with which it is sometimes synonymous—which uses various methods of empirical investigation and critical analysis to develop a body of knowledge about human social activity...

 and economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

. Decentralization is also possible in the dispersal of population and employment. Law
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...

, science
Science
Science is a systematic enterprise that builds and organizes knowledge in the form of testable explanations and predictions about the universe...

 and technological advancements lead to highly decentralized human endeavours.

"While frequently left undefined (Pollitt, 2005), decentralization has also been assigned many different meanings (Reichard & Borgonovi, 2007), varying across countries (Steffensen & Trollegaard, 2000; Pollitt, 2005), languages (Ouedraogo, 2003), general contexts (Conyers, 1984), fields of research, and specific scholars and studies." (Dubois and Fattore 2009)

A central theme in decentralization is the difference between:
  • a hierarchy
    Hierarchy
    A hierarchy is an arrangement of items in which the items are represented as being "above," "below," or "at the same level as" one another...

    , based on authority
    Authority
    The word Authority is derived mainly from the Latin word auctoritas, meaning invention, advice, opinion, influence, or command. In English, the word 'authority' can be used to mean power given by the state or by academic knowledge of an area .-Authority in Philosophy:In...

    : two players in an unequal-power relationship; and
  • an interface: a lateral relationship between two players of roughly equal power.

The more decentralized a system is, the more it relies on lateral relationships, and the less it can rely on command or force.
Encyclopedia
__FORCETOC__Decentralization or decentralisation (see spelling differences) is the process of dispersing decision-making governance closer to the people and/or citizens. It includes the dispersal of administration or governance in sectors or areas like engineering
Engineering
Engineering is the discipline, art, skill and profession of acquiring and applying scientific, mathematical, economic, social, and practical knowledge, in order to design and build structures, machines, devices, systems, materials and processes that safely realize improvements to the lives of...

, management science, political science
Political science
Political Science is a social science discipline concerned with the study of the state, government and politics. Aristotle defined it as the study of the state. It deals extensively with the theory and practice of politics, and the analysis of political systems and political behavior...

, political economy
Political economy
Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...

, sociology
Sociology
Sociology is the study of society. It is a social science—a term with which it is sometimes synonymous—which uses various methods of empirical investigation and critical analysis to develop a body of knowledge about human social activity...

 and economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

. Decentralization is also possible in the dispersal of population and employment. Law
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...

, science
Science
Science is a systematic enterprise that builds and organizes knowledge in the form of testable explanations and predictions about the universe...

 and technological advancements lead to highly decentralized human endeavours.

"While frequently left undefined (Pollitt, 2005), decentralization has also been assigned many different meanings (Reichard & Borgonovi, 2007), varying across countries (Steffensen & Trollegaard, 2000; Pollitt, 2005), languages (Ouedraogo, 2003), general contexts (Conyers, 1984), fields of research, and specific scholars and studies." (Dubois and Fattore 2009)

A central theme in decentralization is the difference between:
  • a hierarchy
    Hierarchy
    A hierarchy is an arrangement of items in which the items are represented as being "above," "below," or "at the same level as" one another...

    , based on authority
    Authority
    The word Authority is derived mainly from the Latin word auctoritas, meaning invention, advice, opinion, influence, or command. In English, the word 'authority' can be used to mean power given by the state or by academic knowledge of an area .-Authority in Philosophy:In...

    : two players in an unequal-power relationship; and
  • an interface: a lateral relationship between two players of roughly equal power.

The more decentralized a system is, the more it relies on lateral relationships, and the less it can rely on command or force. In most branches of engineering and economics, decentralization is narrowly defined as the study of markets and interfaces between parts of a system. This is most highly developed as general systems theory
Systems theory
Systems theory is the transdisciplinary study of systems in general, with the goal of elucidating principles that can be applied to all types of systems at all nesting levels in all fields of research...

 and neoclassical
Neoclassicism
Neoclassicism is the name given to Western movements in the decorative and visual arts, literature, theatre, music, and architecture that draw inspiration from the "classical" art and culture of Ancient Greece or Ancient Rome...

 political economy.

Organizational Theory

Decentralization is the policy of delegating decision-making
Decentralized decision making
Decentralized decision making is any process where the decision making authority is distributed throughout a larger group. It also connotes a higher authority given to lower level functionaries, executives, and workers. This can be in any organization of any size, from a governmental authority to a...

 authority down to the lower levels in an organization, relatively away from and lower in a central authority. A decentralized organization shows fewer tiers in the organizational structure, wider span of control, and a bottom-to-top flow of decision-making and flow of ideas.

In a centralized organization, the decisions are made by top executives or on the basis of pre-set policies. These decisions or policies are then enforced through several tiers of the organization after gradually broadening the span of control
Span of control
Span of control is the term now used more commonly in business management, particularly human resource management. Span of control refers to the number of subordinates a supervisor has....

 until it reaches the bottom tier.

In a more decentralized organization, the top executives delegate much of their decision-making authority to lower tiers of the organizational structure. As a correlation, the organization is likely to run on less rigid policies and wider spans of control among each officer of the organization. The wider spans of control also reduces the number of tiers within the organization, giving its structure a flat appearance. One advantage of this structure, if the correct controls are in place, will be the bottom-to-top flow of information, allowing decisions by officials of the organization to be well informed about lower tier operations. For example, if an experienced technician at the lowest tier of an organization knows how to increase the efficiency of the production, the bottom-to-top flow of information can allow this knowledge to pass up to the executive officers..

Political theory

Some political theorists believe that there are limits to decentralization as a strategy
Strategy
Strategy, a word of military origin, refers to a plan of action designed to achieve a particular goal. In military usage strategy is distinct from tactics, which are concerned with the conduct of an engagement, while strategy is concerned with how different engagements are linked...

. They assert that any relaxation of direct control or authority introduces the possibility of dissent
Dissent
Dissent is a sentiment or philosophy of non-agreement or opposition to a prevailing idea or an entity...

 or division at critical moments, especially if what is being decentralized is decision-making among human beings. Friedrich Engels
Friedrich Engels
Friedrich Engels was a German industrialist, social scientist, author, political theorist, philosopher, and father of Marxist theory, alongside Karl Marx. In 1845 he published The Condition of the Working Class in England, based on personal observations and research...

 famously responded to Bakunin
Mikhail Bakunin
Mikhail Alexandrovich Bakunin was a well-known Russian revolutionary and theorist of collectivist anarchism. He has also often been called the father of anarchist theory in general. Bakunin grew up near Moscow, where he moved to study philosophy and began to read the French Encyclopedists,...

, refuting the argument of total decentralization, or anarchism
Anarchism
Anarchism is generally defined as the political philosophy which holds the state to be undesirable, unnecessary, and harmful, or alternatively as opposing authority in the conduct of human relations...

, by scoffing "how these people propose to run a factory, operate a railway or steer a ship without having in the last resort one deciding will, without single management, they of course do not tell us".

However, some anarchists
Anarchism
Anarchism is generally defined as the political philosophy which holds the state to be undesirable, unnecessary, and harmful, or alternatively as opposing authority in the conduct of human relations...

 have, in turn, responded to his argument, by explaining that they do support a (very limited) amount of centralization, in the form of freely elected and recallable delegates. More to the point from the majority of anarchist perspectives are the real-world successes of anarchist communities
Past and present anarchist communities
This is a list of anarchist communities, representing any society or portion thereof founded by anarchists, that functions according to anarchist philosophy and principles...

, which for the majority only ended when they were defeated by the overwhelming military
Military
A military is an organization authorized by its greater society to use lethal force, usually including use of weapons, in defending its country by combating actual or perceived threats. The military may have additional functions of use to its greater society, such as advancing a political agenda e.g...

 might of the State
Sovereign state
A sovereign state, or simply, state, is a state with a defined territory on which it exercises internal and external sovereignty, a permanent population, a government, and the capacity to enter into relations with other sovereign states. It is also normally understood to be a state which is neither...

 or neighboring States. All in all, we do not know what a truly decentralized society would look like over a long period of time since it has never been permitted to exist, however the Zapatistas
Zapatista Army of National Liberation
The Zapatista Army of National Liberation is a revolutionary leftist group based in Chiapas, the southernmost state of Mexico....

 of Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...

 are proving to be quite resilient.

In "On Authority", Engels also wrote of democratic workplaces that "particular questions arise in each room and at every moment concerning the mode of production
Mode of production
In the writings of Karl Marx and the Marxist theory of historical materialism, a mode of production is a specific combination of:...

, distribution
Distribution (business)
Product distribution is one of the four elements of the marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user.The other three parts of the marketing mix are product, pricing,...

 of material, etc., which must be settled by decision of a delegate placed at the head of each branch of labour or, if possible, by a majority vote."

Modern trade unions and management scientists tend to side strongly with Engels in this debate, and generally agree that decentralization is very closely related to standardisation and subordination
Subordination
Subordination may refer to one of the following.*Subordination in a hierarchy ** Insubordination, obedience*Subordination *Subordination...

, e.g. the standard commodity contracts
Standard form contract
A standard form contract is a contract between two parties where the terms and conditions of the contract are set by one of the parties, and the other party is placed in a "take it or leave it" position with little or no ability to negotiate terms more favorable to it.Examples of standard form...

 traded on the commodity markets, in which disputes are resolved all according to a jurisdiction
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...

 and common regulatory system, within the frame of a larger democratic
Democracy
Democracy is generally defined as a form of government in which all adult citizens have an equal say in the decisions that affect their lives. Ideally, this includes equal participation in the proposal, development and passage of legislation into law...

 electoral system which can restore any imbalances of power, and which generally retains the support of the population for its authority.

Notable exceptions among trade unions are the Wobblies, and the strong anarcho-syndicalist movement of Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...

. However, a strategy of decentralization is not always so obviously political, even if it relies implicitly on authority delegated via a political system. For example, engineering standards are a means by which decentralization of supply inspection
Inspection
An inspection is, most generally, an organized examination or formal evaluation exercise. In engineering activities inspection involves the measurements, tests, and gauges applied to certain characteristics in regard to an object or activity...

 and testing can be achieved—a manufacturer adhering to the standard can participate in decentralised systems of bidding
Procurement
Procurement is the acquisition of goods or services. It is favourable that the goods/services are appropriate and that they are procured at the best possible cost to meet the needs of the purchaser in terms of quality and quantity, time, and location...

, e.g. in a parts market. A building standard
Building code
A building code, or building control, is a set of rules that specify the minimum acceptable level of safety for constructed objects such as buildings and nonbuilding structures. The main purpose of building codes are to protect public health, safety and general welfare as they relate to the...

, for instance, permits the building
Building
In architecture, construction, engineering, real estate development and technology the word building may refer to one of the following:...

 trades to train labour and building supply corporations to provide parts, which enables rapid construction of buildings at remote sites. Decentralization of training and inspection, through the standards themselves, and related schedules of standardized testing and random spot inspection, achieves a very high statistical reliability
Reliability (statistics)
In statistics, reliability is the consistency of a set of measurements or of a measuring instrument, often used to describe a test. Reliability is inversely related to random error.-Types:There are several general classes of reliability estimates:...

 of service, i.e. automobile
Automobile
An automobile, autocar, motor car or car is a wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor...

s which rarely stall, cars which rarely leak, and the like.

In most cases, an effective decentralization strategy and correspondingly robust systems of professional education, vocational education
Vocational education
Vocational education or vocational education and training is an education that prepares trainees for jobs that are based on manual or practical activities, traditionally non-academic, and totally related to a specific trade, occupation, or vocation...

, and trade certification are critical to creating a modern industrial base. Such robust systems, and commodity markets
Commodity markets
Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts....

 to accompany them, are a necessary but not sufficient feature of any developed nation. A major goal of the industrial strategy
Strategy
Strategy, a word of military origin, refers to a plan of action designed to achieve a particular goal. In military usage strategy is distinct from tactics, which are concerned with the conduct of an engagement, while strategy is concerned with how different engagements are linked...

 of any developing nation is to safely decentralise decision-making so that central controls are unnecessary to achieving standards and safety
Safety
Safety is the state of being "safe" , the condition of being protected against physical, social, spiritual, financial, political, emotional, occupational, psychological, educational or other types or consequences of failure, damage, error, accidents, harm or any other event which could be...

. It seems that a very high degree of social capital
Social capital
Social capital is a sociological concept, which refers to connections within and between social networks. The concept of social capital highlights the value of social relations and the role of cooperation and confidence to get collective or economic results. The term social capital is frequently...

 is required to achieve trust in such standards and systems, and that ethical code
Ethical code
An ethical code is adopted by an organization in an attempt to assist those in the organization called upon to make a decision understand the difference between 'right' and 'wrong' and to apply this understanding to their decision...

s play some significant roles in building up trust in the professions and in the trades.

The consumer product market
Market
A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...

s, industrial product markets, and service markets that emerge in a mature industrial economy, however, still ultimately rely, like the simpler commodity markets
Commodity markets
Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts....

, on complex systems of standardization
Standardization
Standardization is the process of developing and implementing technical standards.The goals of standardization can be to help with independence of single suppliers , compatibility, interoperability, safety, repeatability, or quality....

, regulation
Regulation
Regulation is administrative legislation that constitutes or constrains rights and allocates responsibilities. It can be distinguished from primary legislation on the one hand and judge-made law on the other...

, jurisdiction
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...

, transport, materials and energy supply. The specification and comparison of these is a major focus of the study of political economy
Political economy
Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...

. Political or other decision-making units typically must be large and leveraged enough for economy of scale, but also small enough that centralised authority does not become unaccountable to those performing trades or transactions at its perimeter. Large states, as Benjamin Franklin
Benjamin Franklin
Dr. Benjamin Franklin was one of the Founding Fathers of the United States. A noted polymath, Franklin was a leading author, printer, political theorist, politician, postmaster, scientist, musician, inventor, satirist, civic activist, statesman, and diplomat...

 observed, were prone to becoming tyrannies
Tyrant
A tyrant was originally one who illegally seized and controlled a governmental power in a polis. Tyrants were a group of individuals who took over many Greek poleis during the uprising of the middle classes in the sixth and seventh centuries BC, ousting the aristocratic governments.Plato and...

, while small states, correspondingly, tended to become corrupt
Political corruption
Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by...

.

Finding the appropriate size of political states or other decision-making units, determining their optimal relationship to social capital
Social capital
Social capital is a sociological concept, which refers to connections within and between social networks. The concept of social capital highlights the value of social relations and the role of cooperation and confidence to get collective or economic results. The term social capital is frequently...

 and to infrastructural capital
Infrastructural capital
Public capital is the aggregate body of government-owned assets that are used as the means for private productivity. Such assets span a wide range including: large components such as highways, airports, roads, transit systems, and railways; local, municipal components such as public education,...

, is a major focus of political science
Political science
Political Science is a social science discipline concerned with the study of the state, government and politics. Aristotle defined it as the study of the state. It deals extensively with the theory and practice of politics, and the analysis of political systems and political behavior...

. In management science there are studies of the ideal size of corporations, and some in anthropology
Anthropology
Anthropology is the study of humanity. It has origins in the humanities, the natural sciences, and the social sciences. The term "anthropology" is from the Greek anthrōpos , "man", understood to mean mankind or humanity, and -logia , "discourse" or "study", and was first used in 1501 by German...

 and sociology
Sociology
Sociology is the study of society. It is a social science—a term with which it is sometimes synonymous—which uses various methods of empirical investigation and critical analysis to develop a body of knowledge about human social activity...

 study the ideal size of villages. Dennis Fox, a retired professor of legal studies and psychology, proposed an ideal village size of approximately 150 people in his 1985 paper about the relationship of anarchism to the tragedy of the commons
Tragedy of the commons
The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource, even when it is clear that it is not in anyone's long-term interest for this...

.

All these fields recognize some factors that encourage centralised authority and other factors that encourage decentralised "democracy"—balances between which are the major focus of group dynamics
Group dynamics
Group dynamics refers to a system of behaviors and psychological processes that occur within a social group , or between social groups...

. However, decentralization is not only a feature of human society. It is also a feature of ecology
Ecology
Ecology is the scientific study of the relations that living organisms have with respect to each other and their natural environment. Variables of interest to ecologists include the composition, distribution, amount , number, and changing states of organisms within and among ecosystems...

.

Another objection or limit to political decentralization, similar in structure to that of Engels, is that terrestrial ecoregions impose a certain fiat by their natural water-circulation, soil, and plant and animal biodiversity
Biodiversity
Biodiversity is the degree of variation of life forms within a given ecosystem, biome, or an entire planet. Biodiversity is a measure of the health of ecosystems. Biodiversity is in part a function of climate. In terrestrial habitats, tropical regions are typically rich whereas polar regions...

 which constitutes a form of (what the United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...

 calls) "natural capital
Natural capital
Natural capital is the extension of the economic notion of capital to goods and services relating to the natural environment. Natural capital is thus the stock of natural ecosystems that yields a flow of valuable ecosystem goods or services into the future...

". Since these natural living systems can be neither changed nor replaced by man, some argue that an ecoregional democracy which follows their borders strictly is the only form of decentralization of larger political units that will not lead to endless conflict, e.g. gerrymandering
Gerrymandering
In the process of setting electoral districts, gerrymandering is a practice that attempts to establish a political advantage for a particular party or group by manipulating geographic boundaries to create partisan, incumbent-protected districts...

, in struggle between social groups
Group (sociology)
In the social sciences a social group can be defined as two or more humans who interact with one another, share similar characteristics and collectively have a sense of unity...

.

Decentralization in European history

Decentralization and centralization have played major roles in the history of many societies. An excellent example is the gradual political and organizational changes that have occurred in European history. During the rise and fall of the Roman Empire, Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...

 went through major centralization and decentralization. Although the leaders of the Roman Empire created a European infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...

, the fall of the Empire left Europe without a strong political system or military protection. Viking
Viking
The term Viking is customarily used to refer to the Norse explorers, warriors, merchants, and pirates who raided, traded, explored and settled in wide areas of Europe, Asia and the North Atlantic islands from the late 8th to the mid-11th century.These Norsemen used their famed longships to...

 and other barbarian
Barbarian
Barbarian and savage are terms used to refer to a person who is perceived to be uncivilized. The word is often used either in a general reference to a member of a nation or ethnos, typically a tribal society as seen by an urban civilization either viewed as inferior, or admired as a noble savage...

 attacks further led rich Romans to build up their latifundia
Latifundia
Latifundia are pieces of property covering very large land areas. The latifundia of Roman history were great landed estates, specializing in agriculture destined for export: grain, olive oil, or wine...

, or large estates, in a way that would protect their families and create a self-sufficient living place. This development led to the growth of the manorial system in Europe.

This system was greatly decentralized, as the lords of the manor had power to defend and control the small agricultural environment that was their manor. The manors of the early Middle Ages
Middle Ages
The Middle Ages is a periodization of European history from the 5th century to the 15th century. The Middle Ages follows the fall of the Western Roman Empire in 476 and precedes the Early Modern Era. It is the middle period of a three-period division of Western history: Classic, Medieval and Modern...

 slowly came together as lords took oaths of fealty to other lords in order to have even stronger defense against other manors and barbarian groups. This feudal system was also greatly decentralized, and the kings of weak "countries" held little power over the nobility. Although some view the Roman Catholic Church
Roman Catholic Church
The Catholic Church, also known as the Roman Catholic Church, is the world's largest Christian church, with over a billion members. Led by the Pope, it defines its mission as spreading the gospel of Jesus Christ, administering the sacraments and exercising charity...

 of the Middle Ages as a centralizing factor, it played a strong role in weakening the power of the secular kings, which gave the nobility more power. As the Middle Ages wore on, corruption in the church, foreign trade, and new political ideas slowly strengthened the secular powers and brought together the decentralized society. This centralization continued through the Renaissance
Renaissance
The Renaissance was a cultural movement that spanned roughly the 14th to the 17th century, beginning in Italy in the Late Middle Ages and later spreading to the rest of Europe. The term is also used more loosely to refer to the historical era, but since the changes of the Renaissance were not...

 and has been changed and reformed until the present centralized system which is thought to have a balance between central government and decentralized power.

Decentralised governance

Decentralization—the transfer of authority and responsibility for public functions from the central government to subordinate or quasi-independent government organizations and/or the private sector—is a complex and multifaceted concept. It embraces a variety of concepts. Different types of decentralization shows different characteristics, policy implications, and conditions for success.

Typologies of decentralization have flourished (Dubois & Fattore 2009). For example, political, administrative, fiscal, and market decentralization are the types of decentralization. Drawing distinctions between these various concepts is useful for highlighting the many dimensions of successful decentralization and the need for coordination among them. Nevertheless, there is clearly overlap in defining these terms and the precise definitions are not as important as the need for a comprehensive approach (see Sharma, 2006). Political, administrative, fiscal and market decentralization can also appear in different forms and combinations across countries, within countries and even within sectors.

Political decentralization

Political decentralization aims to give citizens or their elected representatives more power
Power (sociology)
Power is a measurement of an entity's ability to control its environment, including the behavior of other entities. The term authority is often used for power perceived as legitimate by the social structure. Power can be seen as evil or unjust, but the exercise of power is accepted as endemic to...

 in public decision-making. It is often associated with pluralistic politics and representative government, but it can also support democratization by giving citizens, or their representatives, more influence in the formulation and implementation of policies. Advocates of political decentralization 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. The concept implies that the selection of representatives from local electoral constituency allows citizens to know better their political representatives and allows elected officials to know better the needs and desires of their constituents.
Political decentralization often requires constitutional or statutory reforms, creation of local political units, and the encouragement of effective public interest groups.

Administrative decentralization

Administrative decentralization seeks to redistribute authority, responsibility and financial resources for providing public services among different levels of governance. It is the transfer of responsibility for the planning, financing and management of public functions from the central government or regional governments and its agencies to local governments, semi-autonomous public authorities or corporations, or area-wide, regional or functional authorities.
The three major forms of administrative decentralization—deconcentration, delegation, and devolution—each have different characteristics.

Deconcentration

Deconcentration is the weakest form of decentralization and is used most frequently in unitary states—redistributes decision making authority and financial and management responsibilities among different levels of the national government. It can merely shift responsibilities from central government officials in the capital city to those working in regions, provinces or districts, or it can create strong field administration or local administrative capacity under the supervision of central government ministries.

Delegation

Delegation is a more extensive form of decentralization. Through delegation central governments transfer responsibility for decision-making and administration of public functions to semi-autonomous organizations not wholly controlled by the central government, but ultimately accountable to it. Governments delegate responsibilities when they create public enterprises or corporations, housing authorities, transportation authorities, special service districts, semi-autonomous school districts, regional development corporations, or special project implementation units. Usually these organizations have a great deal of discretion in decision-making. They may be exempted from constraints on regular civil service personnel and may be able to charge users directly for services.

Devolution

Devolution is an administrative type of decentralisation. When governments devolve functions, they transfer authority for decision-making, finance, and management to quasi-autonomous units of local government with corporate status. Devolution usually transfers responsibilities for services to local governments that elect their own elected functionaries and councils, raise their own revenues, and have independent authority to make investment decisions. In a devolved system, local governments have clear and legally recognized geographical boundaries over which they exercise authority and within which they perform public functions. Administrative decentralization always underlies most cases of political decentralization.

Fiscal decentralization

Dispersal of financial responsibility is a core component of decentralisation
Décentralisation
Décentralisation is a french word for both a policy concept in French politics from 1968-1990, and a term employed to describe the results of observations of the evolution of spatial economic and institutional organization of France....

. If local governments and private organizations are to carry out decentralized functions effectively, they must have an adequate level of revenues – either raised locally or transferred from the central government– as well as the authority to make decisions about expenditures. Fiscal decentralization can take many forms, including
  • self-financing or cost recovery through user charges,
  • co-financing or co-production arrangements through which the users participate in providing services and infrastructure through monetary or labor contributions;
  • expansion of local revenues through property or sales taxes, or indirect charges;
  • intergovernmental transfers that shift general revenues from taxes collected by the central government to local governments for general or specific uses; and
  • authorization of municipal borrowing and the mobilization of either national or local government resources through loan guarantees.


In many developing countries local governments or administrative units possess the legal authority to impose taxes, but the tax base is so weak and the dependence on central government subsidies so ingrained that no attempt is made to exercise that authority.

Fiscal decentralization and fiscal federalism

The concept of fiscal federalism is not to be associated with fiscal decentralization in officially declared federations only; it is applicable even to non-federal states ( having no formal federal constitutional arrangement) in the sense that they encompass different levels of government which have defacto decision making authority ( Sharma, 2005a: 44). This however does not mean that all forms of governments are 'fiscally' federal; it only means that 'fiscal federalism' is a set of principles, that can be applied to all countries attempting 'fiscal decentralization'. In fact, fiscal federalism is a general normative framework for assignment of functions to the different levels of government and appropriate fiscal instruments for carrying out these functions (Oates, 1999: 1120-1). The questions arise: (a) How federal and non-federal countries are different with respect to 'fiscal federalism' or 'fiscal decentralization' and (b): How fiscal federalism and fiscal decentralization are related ( similar or different)? Chanchal Kumar Sharma (2005a, 2005b) clarifies: While fiscal federalism constitutes a set of guiding principles, a guiding concept, that helps in designing financial relations between the national and subnational levels of the government, fiscal decentralization on the other hand is a process of applying such principles ( Sharma,2005b: 178). Federal and non-federal countries differ in the manner in which such principles are applied. Application differs because unitary and federal governments differ in their political & legislative context and thus provide different opportunities for fiscal decentralization (Sharma, 2005a:44).

Fiscal federalism: the federal approach to governance

In common parlance political and constitutional aspects (e.g. giving citizens or their elected representatives more power in political decision-making, establishment of subnational political entities for decision making and making them politically accountable to local electorate which often entails constitutional or statutory reforms like providing for representation of the member states, the strengthening of legislatures, creation of local political units along with the encouragement of effective public interest groups and pluralistic political parties) are considered crucial for federalism.
Chanchal Kumar Sharma (2005b) however argues that it is the fiscal side of the federalism (fiscal federalism) that is crucial for federal dynamism. This is because Federalism is not a fixed allocation of spheres of central and provincial autonomy (as assumed in federal finance models) or a particular set of distribution of authority between governments, it is a process, structured by a set of institutions, through which authority is distributed and redistributed.

A Federalised System is a “balanced approach between the contrasting forces of centralisation and decentralisation for combining the political and economic advantages of unity while preserving the valued identity of the sub national units" ( Sharma, 2005). Fiscal federal principles guide how boundaries, assignments, the level and nature of transfers should be revised from time to time to ensure efficiency and perhaps equity. Thus fiscal federalism provides the tools for "application of the federal approach to governance which lies in its ability to balance the contrasting forces of centralization and decentralization" (Sharma, 2005b: 177). In the age of Globalization, when fiscal decentralization is in vogue, all countries (federal or not) are applying what may be called, in Sharma's (2005b) words "the federal approach to governance”. The only difference is that in federal countries the subnational governments may be involved in decision making process through some appropriate political or constitutional forum while Central government may dominate quite heavily in a unitary country. Its no surprise then argues Sharma (2005b:177; 2008) that fiscal federalism literature is far away from Centralization Vs Decentralization focus. Final aim is not to decentralize just
for sake of it but to ensure good governance. Thus, in fiscal federalism -states Sharma (2008)"decentralization is not seen as an alternative to centralization. Both are needed. The complementary roles of national and subnational actors are determined by analyzing the most effective ways and means of achieving a desired objective"

Economic decentralization

Privatization
Privatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...

 and deregulation
Deregulation
Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or...

 shift responsibility for functions from the public to the private sector
Private sector
In economics, the private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the state...

 and is another type of decentralization. Privatization and deregulation are usually, but not always, accompanied by economic liberalization
Economic liberalization
Economic liberalization is a very broad term that usually refers to fewer government regulations and restrictions in the economy in exchange for greater participation of private entities; the doctrine is associated with classical liberalism...

 and market development policies. They allow functions that had been primarily or exclusively the responsibility of government to be carried out by businesses, community groups, cooperatives, private voluntary associations, and other non-government organizations.

Privatization

Privatization can range in scope from leaving the provision of goods and services entirely to the free operation of the market to "public-private partnerships" in which government and the private sector cooperate to provide services or infrastructure. Privatization can include:
  • allowing private enterprises to perform functions that had previously been monopolized by government;
  • contracting out the provision or management of public services or facilities to commercial enterprises indeed, there is a wide range of possible ways in which function can be organized and many examples of within public sector and public-private institutional forms, particularly in infrastructure;
  • financing public sector programs through the capital market (with adequate regulation or measures to prevent situations where the central government bears the risk for this borrowing) and allowing private organizations to participate; and
  • transferring responsibility for providing services from the public to the private sector through the divestiture of state-owned enterprises.


Privatization cannot in the real sense be considered equivalent to decentralisation.

Deregulation

Deregulation reduces the legal constraints on private participation in service provision or allows competition among private suppliers for services that in the past had been provided by the government or by regulated monopolies. In recent years privatization and deregulation have become more attractive alternatives to governments in developing countries. Local governments are also privatizing by contracting out service provision or administration.

Silent Decentralization

An often ignored dimension of decentralization is whether it emerged explicitly by policies, or not. Decentralization in the absence of reforms is also referred to as “silent decentralization.” Consequently, it distinguishes itself mainly by its potential
origins: network changes, initiative shifts, policy emphasis developments, or resource availability alterations. (Dubois and Fattore 2009)

Measuring Decentralization

While diversity in degree of decentralization across the world is a fact yet there is no consensus in the empirical literature over the questions like ‘which country is more decentralized?’ This is because decentralization is defined and measured differently in different studies (Sharma, 2006).

Chanchal Kumar Sharma (2006: 54) finds in his literature survey:

"On the basis of ‘decentralization instrument’ there are two strands in the literature that argue for two different approaches to measure fiscal autonomy. One gives more weightage to devolution of tax authority as an instrument of decentralization and hold it crucial for subnational autonomy, the other gives more weight to the nature of intergovernmental transfers (discretionary or not) as an instrument impacting upon the subnational behaviour and effecting their autonomy and accountability. Thus former choose to focus on fiscal policy i.e., the relationship between expenditures and allocated revenues (vertical imbalance) while latter pay attention to regulatory or financial mechanisms i.e. the nature of intergovernmental transfers".

Out of these two approaches, observes Sharma (2006), "when it comes to the measurement of fiscal decentralization ‘the share of subnational expenditures and revenues’ is considered the best indicator. This is because fiscal instruments are easier to measure while regulatory and financial instruments are extremely complex and difficult to measure statistically because nowhere transfers remain strictly confined to the technical objectives. Transfers pursue a mix of objectives and politically motivated transfers remain key part of the intergovernmental relations across the globe" (Sharma, 2006: 54).

Arjan H. Schakel (2008) notes that various experts such as Akai and Sakata 2002; Breuss and Eller 2004; Ebel and Yilmaz 2002; Fisman and Gatti 2002; Panizza 1999; Sharma 2006, have found the fiscal indicators on the expenditure side to be quite problematic for capturing decision-making decentralization. This is because argues Schakel (2008) "it is difficult to tell whether the expenditure is coming from conditional or unconditional grants, whether the central government is determining how the money should be spent, whether it is setting the framework legislation within which subnational governments implement, or whether −indeed− subnational governments are spending the money autonomously".

Chanchal Kumar Sharma (2006:49) states,

"...a true assessment of the degree of decentralization in a country can be made only if a comprehensive approach is adopted and rather than trying to simplify the syndrome of characteristics into the single dimension of autonomy, interrelationships of various dimensions of decentralization are taken into account."

Decentralisation of Environmental Management

Decentralisation has also moved into the environmental management sphere. Since neo-liberalism in the 1970/1980s and the emergence of the climate change crises, there has been abrupt evidence that the State is failing to effectively manage our environmental resources. Hardin’s Tragedy of the commons
Tragedy of the commons
The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource, even when it is clear that it is not in anyone's long-term interest for this...

 (1986) shows people cannot be left to do as they wish with land. Decentralisation offers an alternative solution as theory states, it:
“aims to increase popular participation to promote more equitable and efficient forms of local management and development... key to effective decentralisation is increase broad-based participation in local public decision making. Theorists believe that downwardly accountable or representative authorities with meaningful discretionary powers are the basic institutional elements of decentralisation that should lead to local efficiency, equity and development.” Ribot, 2003; 53
Therefore, with the right opportunities to share knowledge and gain the appropriate powers local communities have a greater chance of success than the State. This leads from the assumption that people are excluded (Ribot, 2007) by the state in decision-making, causing them to appear to not care, when in fact they do but can do little about it. Hence, environmental governance should be at the lowest possible level. One, in many cases the environmental is central to local communities, especially in developing nations. Secondly, it creates a sense of citizenship and democracy (Ribot, 2002).
Depending on the type of decentralisation used (see above and Oyono, 2004; 92), in many circumstance local people are represented by others; these could be elected or local authorities chosen by the government. Either way, they must be accountable and have the power to do what they promise; if not people will not support them. Yet, this can also be affected by the decentralisation of fiscal power which can create limitations as many environmental management strategies require some degree of fiscal input.
Within environmental management the most effective form of decentralisation is devolution. As state releases all control to the lowest possible level (Larson, 2003). However, there are still factors that can limit its success: Political infrastructure, history, territory, culture and society. In any given community there will be multiple environmental issues that need to be managed alongside diversity in opinion and people. Subsequently, decentralisation is more effective in communities where achieving consensus is relatively straightforward. As processes will move smoother with fewer objections.
This was put to practice in the Aga Khan Rural Support Programme (AKRSP)http://www.akdn.org/AKF in the Gujarat province of India. Shah, 1994 found that non-governmental organisations, within decentralisation acted as a catalyst to aid villagers in a community water management programme which was deemed a success as there was no State involvement. Thus, decentralisation opens up opportunities for local people to make a difference by coming together and giving them the resources to effect the local governments (Larson, 2002). Unfortunately, this is not always the case in reality.
The theory of environmental governance by decentralisation relies on assumptions and in practice, these may not deem true. Until discourse advocates decentralisation as a priority in policy, the “potential benefits of decentralisation (will) remain unrealized” (Ribbot, 2002; 2).

See also

  • Anarchism
    Anarchism
    Anarchism is generally defined as the political philosophy which holds the state to be undesirable, unnecessary, and harmful, or alternatively as opposing authority in the conduct of human relations...

  • Centralization
    Centralization
    Centralisation, or centralization , is the process by which the activities of an organisation, particularly those regarding planning and decision-making, become concentrated within a particular location and/or group....

  • Federalism
    Federalism
    Federalism is a political concept in which a group of members are bound together by covenant with a governing representative head. The term "federalism" is also used to describe a system of the government in which sovereignty is constitutionally divided between a central governing authority and...

  • Empowerment
    Empowerment
    Empowerment refers to increasing the spiritual, political, social, racial, educational, gender or economic strength of individuals and communities...

  • Localism
    Localism
    Localism may refer to:*Localism *Localism in Thailand, sustainability, moderation and broad-based development*Surf localism, conflicts for large waves...

  • Parochialism
    Parochialism
    Parochialism means being provincial, being narrow in scope, or considering only small sections of an issue. It may, particularly when used pejoratively, be contrasted to universalism....

  • Peer-to-peer
    Peer-to-peer
    Peer-to-peer computing or networking is a distributed application architecture that partitions tasks or workloads among peers. Peers are equally privileged, equipotent participants in the application...

  • Political economy
    Political economy
    Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...

  • Self-ownership
    Self-ownership
    Self-ownership is the concept of property in one's own person, expressed as the moral or natural right of a person to be the exclusive controller of his own body and life. According to G...

  • Sociocracy
    Sociocracy
    Sociocracy is a system of governance, using consent-based decision making among equivalent individuals and an organizational structure based on cybernetic principles...

  • Methodological individualism
    Methodological individualism
    Methodological individualism is the theory that social phenomena can only be accurately explained by showing how they result from the intentional states that motivate the individual actors. The idea has been used to criticize historicism, structural functionalism, and the roles of social class,...

  • User-generated content
    User-generated content
    User generated content covers a range of media content available in a range of modern communications technologies. It entered mainstream usage during 2005 having arisen in web publishing and new media content production circles...

  • List of micro-regional organizations
The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
x
OK