Why are decentralization reforms so hard to enact effectively?

[jorgemartinez]

     Decentralization with fiscal and political devolution has taken a stronghold in some European states such as Belgium, Italy, Spain and the United Kingdom, while other developed economies have also deepened their decentralized government structures in recent years, but the phenomenon of decentralization is mainly playing out in Africa, Asia, and Latin America at this time.  There are various reasons for these states to do this, responding to a variety of forces. Some may be of a political nature such as keeping a country together or, reacting to past centralized undemocratic regimes; others may be of a more economic nature such as replacing a failed economic model of which centralized socialism is a common example. Finally improving governance by making the public sector more efficient and accountable is also an explanation for the initiation of decentralization.
 
     But decentralization is not always easily implemented, and in fact many developing countries have failed or are failing to introduce effective decentralized governance systems. Why? Many reasons are possible. I have recently published an edited volume (Edward Elgar, 2011) with Francois Vaillancourt entitled, “Decentralization in Developing Countries: Global Perspectives on the Obstacles of Fiscal Decentralization”. The main purpose of this book is to seek out some of these reasons in a systematic fashion. The book is a collection of invited original essays bringing together a group of experts in decentralization reforms from all around the world. They are drawn from both academia and international institutions but all have in common the fact that they have advised a good number of countries over the years and worked with domestic authorities with different degrees of eventual success on fundamental decentralization reform or various aspects of the implementation of a decentralization policy such as the assignment of specific expenditure responsibilities or of revenue sources. While these experts have written extensively on the various points of the reform process, they had not had the opportunity to set down in writing their reflections on why decentralization reforms often times are so hard to enact effectively. The chapters in the volume are thus the product of interactions among the members of this group through reading and commenting on each other’s papers and presentation and discussion of the essays during a two-day workshop held in Atlanta, Georgia in September 2008 sponsored by the International Studies Program of the Andrew Young School of Policy Studies at Georgia State University.

     The book examines the experiences of 16 countries in different regions of the world all of which have seriously attempted to decentralize or continue to do so and all of which have faced obstacles serious enough to either derail or significantly delay their decentralization objectives. The countries covered in this volume cover various geographical areas of the world and offer a cross section of different decentralization experiences and stages of decentralization. Attached to this blog post is list of the 16 countries addressed in this volume in table format. More information about this book can be found at http://aysps.gsu.edu/isp/4213.html . (This post is a modified excerpt from the first chapter of the book published by Edward Elgar in 2011).

[FitzFord]

This is a "must read" for those of us who are asked to assist in the design or reform of decentralization programs.

Fitz.

[John Short]

A very well researched report on regional policy has been published by Mossavar-Rahmani Center for Business & Government Harvard Kennedy School | www.hks.harvard.edu/mrcbg

WHY HASN’T UK REGIONAL POLICY WORKED? The views of leading practitioners

Dan Turner Harvard Kennedy School Nyasha Weinberg Harvard Kennedy School Esme Elsden University College London Ed Balls King’s College London Harvard Kennedy School October 2023


https://www.hks.harvard.edu/centers/mrcbg/publications/awp/awp216

Abstract
“UK domestic policy – especially in England - in recent years has focused on regional inequalities in economic outcomes and public service delivery, which are tied to a political ‘geography of discontent’ that emerged in the 2010s. These inequalities are nothing new; nor are public policy efforts to address them. We conducted interviews with ninety-three top level political and official policymakers across the UK (spanning six decades of experience). This paper summarises practitioners’ views on the lessons we can learn from past efforts to address to address regional divides. We find broad political consensus on a range of areas: that widening divides are not inevitable; that previous policy regimes have lacked sufficient ambition; that excessive past centralisation has driven policy instability. We find that the Mayoral Combined Authority model, coupled with sustainable local government funding, could form the basis for a cross-party consensus on regional growth. Our interviewees diverge on how future reforms ought to be prioritised, with open questions on: the division of powers across tiers of government; how much institutional pluralism there ought to be in devolved governments; how to devolve power (and whether the current ‘bottom-up’ approach ought to remain); and on the design of fair funding formulae and fiscal devolution.”


One of the aims of the work was learning the lessons of history.   The starting point of the investigation was 1979 and as a result it did not include the work of the Northern Region Strategy Team whose report was published in 1978.  One of the first actions of the incoming Government in 1979 was to dismiss the report, perhaps on ideological grounds.

The output of the NRST was a five-volume Strategic Plan for the Northern Region:

Volume 1 Main Report which was a summary of the analysis and recommendations
Volume 2 Economic Development Policies
Volume 3 Social & Environmental Policies
Volume 4 Settlement Pattern & Transport Policies
Volume 5 Public Expenditure Priorities

A great deal of hard work and research underpinned the realisation of these outputs. Key to this was the composition of the team which was made of economists with sector specialism in the main areas and strategic planners. Critical input also was the leadership. Head of the team was Bevan Waide who had previously been on the staff of the World Bank with deputies on the economic side, Nick Segal and on the planning side, Ian Crowther.  I have to admit a vested interest as I was responsible for the work on public expenditure which is covered in Applied Economic which is  referenced elsewhere in the PFM Board.

[John Short]

Article in Guardian

https://www.msn.com/en-gb/news/uknews/britain-s-inequalities-are-growing-and-levelling-up-is-difficult-here-s-why/ar-AA1j24Tg?ocid=msedgntp&cvid=98dc863f81c447b382d7bd9e24e24915&ei=32