Decentralisation often lies at the heart of effective local governance and service delivery, but local government capacity is often constrained by insufficient devolution of finance and human resources. Policy frameworks are frequently undermined by weak implementation, poor understanding of the objectives of decentralisation and lack of evidence-based understanding of its impact on local service delivery and poor people.

A paper from GHK International studies the practice and impact of decentralisation, using case studies from India and Bangladesh. While the cases show that decentralisation does have the potential to deliver improved local services and better local governance, the authors propose a research agenda to learn more about the structural, fiscal, administrative, legal and regulatory implications of decentralisation.

Decentralisation and its impacts have been analysed considerably. Yet several analytical challenges remain unaddressed, including, availability of data, the quality of indicators and the robustness of analytical links between decentralisation and its presumed impacts.

Frequently, analysis of decentralisation fails to clarify what is being discussed. Is it:

• Far-reaching decentralisation: a constitutionally-supported shift in power from central to sub-­national tiers of government which assigns revenue and other resources to local levels and is supported by elected political representation?
• Administrative decentralisation: enhancing local service delivery capacity without shifting political and fiscal power?
• Deconcentration: the transfer of functions and finances to sub-national levels of administration under the same jurisdictional authority while retaining power at the centre?
• Delegation: the transfer of greater authority and autonomy to local government or semi-autonomous organisations which are accountable to central government but are not wholly controlled by it?

It is important to consider factors other than decentralisation when assessing its impacts on intended outcomes such as accountable governance, improved service delivery or poverty reduction measures. Some analysts exaggerate the impacts of decentralisation while others attribute problems to decentralisation processes which could be caused by other factors. International comparative analysis is limited by the lack of adequate data and differences in the way in which fiscal information is collected.

Decentralisation can have conflicting and apparently contradictory impacts, such as increasing levels of participation but reducing levels of efficiency in service delivery. Public attitudes to decentralisation can be variable. A public empowered by decentralisation can paradoxically hold more critical attitudes of local government, or simply be more audible than one that does not experience the opportunities decentralised governance offers.

Often decentralisation is introduced as a series of unplanned measures rather than as a careful sequence of reforms intended to introduce incentives, accountability and improve service delivery. Badly planned decentralisation can easily worsen regional inequities, economies of scale losses and be dominated by local elites.

Lack of information on the impact of different devolution mechanisms makes it hard for donors to base programme support decisions on sound evidence. GHK therefore recommends that a series of contextualised case studies be undertaken in conjunction with local researchers. These should focus on:

• fiscal and functional mapping: comparative tracking of functional autonomy and accompanying resource flows to the local level associated with different devolution frameworks in selected states
• measuring decentralisation’s quantitative and qualitative impact on services by examining real cases linking service outputs to costs, governance and choice
• fiscal incentives analysis: assessing the impact of different incentive systems in South Asia and elsewhere
• higher level (intergovernmental) processes that shape practices and regulate relationships outside the control of local governments.

Decentralisation literature sometimes forgets that good local governance is dependent upon higher level processes that shape practices and regulate relationships. Yet decentralisation by itself cannot cure all problems at local level. It is also always necessary to understand and measure its impact in a broader policy and institutional context.

Source(s):
‘Effective decentralisation: a research scoping study’ by Chris Heymans, Andrew Preston and Richard Slater, Supporting Local Governance Series, Working Paper 653 01, GHK International, June 2004

Funded by: DFID R8326

id21 Research Highlight: 15 June 2005

Further Information:
Chris Heymans, Richard Slater
GHK International
526 Fulham Road
London SW6 5NR
United Kingdom

Tel:   +44 (0) 20 7471 8000
Fax:   +44 (0) 20 7736 0784
Contact the contributor: heymansc@ghkint.com; richard.slater@ghkint.com

GHK International, UK

Other related links:
Can local governments generate enough revenue to deliver services?

The logic of decentralisation: Mobilising cash, commitment and communities

Decentralisation in South Africa: too many chiefs and not enough democrats?

Devolution in Uganda – living up to expectations?

Decentralisation in Bolivia: a success story for the poor

Decentralisation and poverty reduction: the reality in Africa

World Bank Decentralization and sub-regional economics page