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
THE USA AND MEXICO SYSTEMS
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)
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
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.
Historical Background: The Role of central

Government
The state played a key role in
the formation of the
nation-state
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)
Fiscal policy
Macroeconomic policy
2. Intergovernmental
coordination
3. Representative government
(legitimization)
The Crisis of the state

1.
2.
Developing Nations
Foreign debt
Macroeconomic
Mismanagement
Lack of representative and
democratic governments
Former Communists
countries
Collapse of the economic
model
Democratization
movements
Credibility crisis
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?
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 Russias 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

States domain to the market
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
Modes of Decentralization
DECONCENTRATION
DELEGATION
DEVOLUTION
Source: Adapted from V. Rodriguez
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
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
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
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. districtbased representation
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
State Governments
50
50
50
50
50
48
Local Governments
87,849
86,692
81,780
78,218
91,185
116,756
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
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
Special Purpose
Source: US Census Bureau http://ftp2.census.gov/govs/cog/2002COGprelim_report.pdf
Governments in Mexico
Governments
2005
Federal
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
3,537,438
MEXICO
758,445
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: Pea, 2002

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DECENTRALIZATION

A given public service should be entrusted to

Historical Background: The Role of central

The State play the role of

The Crisis of the state

What factors determine a successful

State disintegration is not a function of the degree

Mikhail A. Alexseev: Decentralization vs. state collapse: Explaining Russias Endurance

Democratization, citizen participation,

Balance pattern of regional development:

Transfer of functions with regards to

Transfer of some responsibilities from the

Rationale for Decentralization

Improve allocative efficiency

Source: Adapted from V. Rodriguez

Transfer of functions, powers and resources

Transfer of responsibilities for decision making &

Strengths the relationship among the federal,

Linkages among levels of government

services are more common at the highest level

Governments in the USA

Source: US Census Bureau http://ftp2.census.gov/govs/cog/2002COGprelim_report.pdf

Ratio Population to Governments

Source: US Census Bureau & INEGI

Ratio Geographical Area to

Source: Pea, 2002

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