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)

Decentralization Theories
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

Decentralization Theories
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

Modes of Decentralization
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

Modes of Decentralization
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

Modes of Decentralization
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