DECENTRALIZATION TOPICS n DECENTRALIZATION THEORY n HISTORICAL BACKGROUND

DECENTRALIZATION

TOPICS n DECENTRALIZATION THEORY n HISTORICAL BACKGROUND: THE ROLE OF n n n n CENTRAL GOVERNMENT THE CRISIS OF THE STATE SUCCESSES & FAILURES TYPES OF DECENTRALIZATION RATIONALE FOR DECENTRALIZATION MODES OF DECENTRALIZATION INTERGOVERNMENTAL LINKAGES THE USA AND MEXICO SYSTEMS

Decentralization Theories RATIONAL CHOICE (Tiebout Model): n 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” n In summary, this model calls for a large number of municipalities (decentralized government) that will offer choices to customers (citizens)

Decentralization Theories PRINCIPLE-AGENT n 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. n 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) n In sum, this theory focus on intergovernmental rules

Decentralization Theories NORMATIVE THEORIES AND THE PRINCIPLE OF SUBSIDIARITY n A given public service should be entrusted to the lowest level of government that is capable of effectively delivering the service.

Historical Background: The Role of central Government The state played a key role in the formation of the nationstate 1. To coordinate policy 2. To unite diverse interests and groups 3. To fill the vacuum of a “capitalists” or entrepreneurial class 4. To accelerate the process of development The State play the role of facilitating capital accumulation rather than leading the way. 1. Sound macroeconomic management (Accumulation function) n Fiscal policy n Macroeconomic policy 2. Intergovernmental coordination 3. Representative government (legitimization)

The Crisis of the state 1. n n n 2. n n n Developing Nations Foreign debt Macroeconomic Mismanagement Lack of representative and democratic governments Former Communists countries Collapse of the economic model Democratization movements Credibility crisis n 1. 2. 3. 4. 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. )

What factors determine a successful transition? n 1. 2. 3. 4. 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

Types of Decentralization TYPE CRITERIA POLITICAL Democratization, citizen participation, legitimate government (s) SPATIAL Balance pattern of regional development: Primacy vs. Mature urban hierarchy ADMINISTRATIVE Transfer of functions with regards to planning, management, allocation of resources MARKET Transfer of some responsibilities from the State’s domain to the market

Rationale for Decentralization n DECENTRALIZATION ATTEMPTS TO: n Improve allocative efficiency n Improve production efficiency n Improve quality, transparency, accountability and legitimacy n Greater equity Source: http: //www. pitt. edu/~super 1/lecture/lec 9481/006. htm

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

Modes of Decentralization n DECONCENTRATION n Transfer of functions, powers and resources n The center executes normative functions, supervision and control n States are responsible for operational activities & service programs n It is mostly and administrative action and does not alter the flow of command in the system

Modes of Decentralization n DELEGATION n 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) n Semi-autonomous public enterprises to provide services more effectively and efficiently than a central bureaucracy

Modes of Decentralization n DEVOLUTION n Strengths the relationship among the federal, state and local governments n Autonomy to sub-national units of government in some areas (e. g. fiscal and financial powers, police power, eminent domain, etc. ) n Local governments acquire the necessary functions to govern and not only to administer

Linkages among levels of government n FINANCIAL: Revenue-share formulas n TECHNICAL ASSISTANCE: Highly specialized services are more common at the highest level (e. g. intelligence gathering) n REGULATORY: Establishing national standards (no child left behind, clean air and water acts, etc. ) n REPRESENTATION: Party-based vs. districtbased representation n INFORMAL: Customary

Governments in the USA GOVERNMENT UNITS 1952 -2002 TYPE OF GOVERNMENT 2002 1992 1982 1972 1962 1952 87, 900 86, 743 81, 831 78, 269 91, 236 116, 805 Federal Government 1 1 1 State Governments 50 50 50 48 Local Governments 87, 849 86, 692 81, 780 78, 218 91, 185 Average local/state 1756. 98 3, 034 3, 043 3, 041 3, 044 3, 043 3, 052 Subcounty 35, 937 35, 962 35, 810 35, 508 35, 141 34, 009 Municipal 19, 431 19, 296 19, 076 18, 517 17, 997 16, 807 Township 16, 506 16, 666 16, 734 16, 991 17, 144 17, 202 Special Purpose School District 13, 522 14, 556 14, 851 15, 781 34, 678 67, 355 Special District 35, 356 33, 131 28, 078 23, 885 18, 323 12, 340 TOTAL General Purpose County Source: US Census Bureau http: //ftp 2. census. gov/govs/cog/2002 COGprelim_report. pdf 116, 756

Governments in Mexico Governments 2005 Federal 1 State 32 Municipal Average state/mun. (76. 3) Oaxaca Baja California Source: INEGI 2, 444 570 5

Ratio Population to Governments POP/# LOCAL GOV. RATIO USA 295, 866, 633/87, 849 3, 367 MEXICO 97, 48, 3412/2, 444 39, 887 Source: US Census Bureau & INEGI

Ratio Geographical Area to Governments USA LAND AREA (SQUARE MILES) LOCAL GOVERNMENTS RATIO LAND/GOVERNMENT Source: US Census Bureau & INEGI MEXICO 758, 44 3, 537, 438 5 87, 849 2, 444 40. 27 310. 33

Decentralization Approaches USA MEXICO TYPE POLITICAL ADMINISTRATIVE MODE DEVOLUTION DECONCENTRATION LINKAGES FINANCIAL REGULATORY INFORMAL FINANCIAL TECHNICAL REGULATORY REPRESENTATION Source: Peña, 2002