Pitfalls of decentralization

Published On: February 25, 2018 01:05 PM NPT By: Saurabh Shah

Saurabh Shah

Saurabh Shah

The contributor for Republica.

We need a central government that is flexible to local needs and a strong active civil society to guide our decentralization experiment

Nepal has successfully elected autonomous local and state level governments. Decentralization is expected to improve people’s ‘voice’ which in turn should incentivize officials to prioritize local needs and create governance from bottom up. This expectation assumes a causal link between decentralization and development, one that is vulnerable to pitfalls.  

Local capture
An elected local government is supposed to be closer to people, allowing them to ‘voice’ their needs more effectively. However, research shows that dominant businesses, landowners and other interest groups might ‘capture’ or gain control of local government. This ‘capture’ is tied to increased corruption, poor policies and wasteful programs—a combination that ultimately derails development. In Nepal, past attempts at decentralization have resulted in capture of local programs by elite groups or castes. This trend was encouraged by the then central government which influenced local government structure so that their personal favorites or ‘afno manche’ were elected. With federal decentralization little seems to have changed. Elections have produced locally elected officials, but the part played by local businessmen and powerful individuals in the outcome is an open secret. In response, civil society needs to coordinate local people’s voice so that incentive to misuse power is checked. This could be in the form of holding regular public hearings where officials discuss issues from budget spending to development policy with the public. Any disagreements can be clearly voiced, recorded and later used to inform the people if the local government does not act on them. We need to make officials accountable as well.

Poor awareness 
Local government accountability and performance is driven by people’s ability to ‘voice’ their needs and complaints. In turn this is guided by people’s awareness of local government system, individual rights and civic responsibilities. Lack of this awareness leads to, for example, inadequate public service provision to poorest areas, as their needs are not adequately voiced. Improvement in education and civic engagement improved awareness to some extent in Nepal’s case. What is still needed is an understanding of local government responsibilities. The elected ward official for my area, in central Kathmandu, recently complained that he is busy dealing with issues far from his responsibilities. These vary from mediating minor personal arguments to explaining to people why local funds cannot be used to hire cleaners for their homes. Uninformed voice here is creating local government inefficiency in the capital. One can only imagine the situation elsewhere. What is required immediately is clarity of local government function for the people. The central government needs to play a more active role to do so and in the process coordinate with civil society for better information delivery. 

Resource constraints 
New local governments commonly experience short term financial constraints but given illicit practices such as tax evasion this can easily become a longer-term problem. This is serious for two reasons. First, required technical experts cannot be hired, which causes development program design and implementation to suffer. Second, local government could become dependent on central government for funds. The second is more important as it will cause local government to lose its autonomy in responding to people’s voice. For Nepal, this is an even more pressing issue at the moment. In the past the central government financed over 70 percent of local Village Development Committee (VDC) budget, leading to a focus on national development priorities over local needs. Local government needs strong leadership to promote and tax private sector to fund local projects. Within its efforts, civil society can contribute by building its administrative capacity and ensuring public engagement.

Decentralization alone will not solve our development problems. Local level economic, social and political context will play a large role in avoiding the pitfalls discussed above. We need a central government that is flexible to local needs and a strong active civil society to guide our decentralization experiment in the coming months.

The author is a graduate from London School of Economics and Political Science with experience in business and development consulting



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