The various forms of decentralization place different emphases on the above three factors.

Deconcentration

The primary objective may be improving the production efficiency of the administration
with an improvement in the impact of the services delivered as a second priority. This may be
achieved by introducing administrative and cultural changes within the existing unitary
structures, shifting responsibility, decision-making authority and resources for front-line
operations only to the managers of local units. Public delivery and public financing coincide
within a single administration. Central government personnel and procurement policies apply.
In these cases decentralization takes the form of deconcentration.

Deconcentration assigns specific functions and tasks performed by the staff of the
headquarters of central administrations to staff posted in peripheral locations within the
national territory. Staff, equipment, vehicles, and budgetary resources are transferred to units
such as regional and district offices. The managers of these units are given authority for
autonomous decision making regarding the operations, which were previously taken at
headquarters, or needed clearance from headquarters.

Delegation

Similar objectives regarding production and allocative efficiency can also be achieved by
separating the production or delivery from the financing of a specific public service,
introducing a modification of the existing structure of the public administration.
Responsibility and resources for implementing specific tasks and delivering certain services
are transferred to a public agency, a state enterprise, a private enterprise, or an NGO under a
contract that may provide some autonomy in interpreting the tasks assigned under the
contract. In this case, decentralization takes the form of delegation. Examples of delegation
include: a national water supply company that may be entrusted with the responsibility to
plan, construct, and operate water supply schemes (over a certain size) across the country; a
water basin development authority; an agricultural research institute; a strategic grain reserve;
a project management unit. Many delegated agencies are not bound to follow the government
administration procedures in personnel and procurement matters. Delegation can be used by
any level of government, and does not apply exclusively to the delivery of national services.

Devolution

If the primary objective is to improve allocative efficiency (with the improvement of

production efficiency as a second priority), this can be achieved by opening the system to the
influence of the beneficiaries of the services delivered. The primary objective requires that
beneficiaries participate, normally through representatives elected to the local government, in
planning the delivery of services, and in the evaluation of the services provided. In these
cases, significant changes in the system of public administration are introduced, and
decentralization takes the form of devolution. Local governments are assigned the
responsibility of deciding which services should be provided on a priority basis and to whom.
Representation of, and accountability to, beneficiaries are provided through the election
mechanism. Public production or delivery and public financing coincide, but the lower levels
of government normally receive only part of the funding required from the central
government, the balance must be raised from local tax revenue and cost recovery.
Devolution implies changes in the political and fiscal dimensions of government. Local
governments to which authority and resources are devolved acquire the power of
autonomous initiative and decision making with respect to setting their own rules, goals and
objectives. They also acquire the power of elaborating and implementing their own policies
and strategies, and of allocating resources to different activities within the domain assigned to
them. In addition, they often are given authority to raise financial resources, through taxes,
and in some cases, to borrow on the capital markets.

Devolution can be implemented to varying degrees depending on the degree of accountability

(control) which the central administration retains over the local government. This applies
particularly to the use of resources transferred from the centre, but also through other means,
such as the functions assigned to the central government representatives posted at regional
and district level (Commissioners, Prefects, Commandants de Circle, etc.). If the
accountability process, that is the control of the central administration, interferes with the
autonomy of decisions of the local government, or the transfer of resources is insufficient to
cope with the responsibilities transferred in a reasonable way, there is inadequate devolution.
It is useful to look at the three different forms of decentralization of the public administration
from the point of view of the combination of the degree of autonomy and of the locus of
accountability, which is illustrated by the matrix in Figure 1.4.

Figure 1.4 Autonomy, accountability and forms of decentralization

AUTONOMY
ACCOUNTABILITY
low high
central deconcentration delegation
local inadequate devolution effective devolution

Source: De Muro et al. (1998).

Partnership

Similar objectives of allocative and production efficiency, and a higher degree of

decentralization, can be aimed at by transferring the responsibility for planning and delivery
of services to CSOs. Whilst devolution to local governments brings the delivery of public
services one significant step nearer people, the distance between a village and the district
administration is still considerable, when seen from the point of view of the villagers. District
and municipal administrations naturally address, on a priority basis, problems which are
common to many communities, such as providing primary education, health care, water
supplies, market centres, or feeder roads which serve several villages. This also tends to
concentrate service delivery in the urban centres and in larger settlements of rural areas. The
limited capacity of local governments is often overburdened in the discharge of these
responsibilities; so the needs of people at lower level tend to be neglected. The influence of
wealthy and more powerful individuals on district and municipal administrations can be
strong and not always in the direction of providing more services to village communities.
Furthermore, certain services such as local group training, community organization,
promotion of rural financial services, funding self help projects and support to income
generating activities are often better planned and delivered by organizations other than local
governments.
Devolution measures applied to CSOs go beyond the local government level, reaching that
part of the system of governance that is outside the various levels of the public administration
and delegated agencies. The role that CSOs may play in decentralization can be considerable,
given the size of their contribution to economic, social and human development and this role
can be particularly important in rural areas. Partnership arrangements may involve a leading
NGO, or an intermediary agent of a more complex nature (an association established under
private law), in which local common interest groups and associations, the NGOs operating in
the area and representatives of local governments join together as members with equal rights.

Delegation vs partnership

This case differs from delegation to NGOs of responsibility to deliver specific services
planned by the government under contract. In the former case the CSOs formulate their own
strategies and projects to achieve the objectives within the framework of general government
policies; they decide which services or projects they wish to take responsibility for. Public
financing contributes to private delivery. The central government transfers only a share of the
funds required, the balance consists of voluntary contributions from members of the CSOs
and of other private sources mobilized by the CSOs. Government personnel and procurement
procedures do not apply. In these cases, which are relevant to rural development, devolution
takes the form of a partnership in development.

These intermediaries plan the allocation of available resources, which must be approved by
all members. They also channel funds, transferred by the central government and collected
from private sources, to the grassroots organizations. These implement their own projects and
provide training and other support services. Partnerships provide a useful mechanism for
central governments to reach specific target groups who may not be reached by devolution to
local governments, without interfering with the priorities of the members of the target groups,
and thus with the allocative efficiency of devolution. Government must design special
instruments, first, to make resources available to the CSOs, matching the resources mobilized
by their members and, second, to empower them to implement the activities that are
recognized as leading to the common objectives of the CSO and government.

Privatization

If the central government is willing to give up a direct hand in policy formulation and control
it may attempt to achieve the objectives of both production and allocative efficiency by
transferring the ownership and/or control of the public service’s assets to the private sector.
In this case, decentralization takes the form of privatization. Typically, privatization also
implies that the services are allocated through the market system with the consumer paying
for the service being delivered but government may still subsidize or tax certain services to
achieve its objectives.

‘Privatization’ in the sense that the term is defined by Adam et al. (1992) can be achieved by:

“(i) the outright, or partial, sale of assets by the state;

(ii) the transfer of assets to the private sector under leasing arrangements; and

(iii) the introduction of management contracting arrangements” (p.6).