Decentralization and Governance

Introduction, Concepts, Types and Importance

LECTURE 1
 Contents
1. Introduction to the topic
2. What is Decentralization?
3. Decentralization: Short Historical Context
4. 5 Key Principles of Decentralization
5. 4 Main Types of Decentralization
6. What is Governance?
7. Types of Governance
8. So, What is Decentralized Governance? (Definitions)
9. Centralized Governance system vs Decentralized Governance System
10. Examples of Countries with Successful Decentralized Governance Systems
11. Governance Decentralization in Pakistan- Successful or Not ???
12. Short historical context of decentralized Governance in Pakistan
13. What you think about Pakistan Governance System???
Introduction to the Topic
Decentralization distributes power locally (within org. or societies),
while governance dictates decision-making processes & structures.
The dynamic interplay between these concepts is crucial for crafting
effective and responsive systems.
In this exploration of decentralization and governance, we will delve
into these concepts, examining their significance, various types, and
the definitions that shape effective governance structures.
Understanding the interplay between decentralization and
governance is crucial for creating resilient and responsive systems in
diverse organizational and societal contexts.
WHAT IS DECENTRALIZATION?
1. Decentralization is the dispersion of power and decision-making from a concentrated or
centralized source to multiple or dispersed sources.
This can be done horizontally, among different actors or institutions at the same level, or
vertically, among different levels of government or organization.
Some examples of countries that have experienced different degrees of power dispersion are
the United States, Canada, and Nigeria. (web.undp.org)

2. Decentralization is the process of transferring decision-making authority closer to the

point of service delivery. It is a way to improve the quality and responsiveness of public
services and to increase the participation of citizens and local governments in defining and
meeting local needs (www.worldbank.org)
WHAT IS DECENTRALIZATION?
3. Decentralization is the process of redistributing or dispersing functions, powers, people,
or things away from a central location or authority. (web.undp.org)

4. Decentralization is the assignment of tasks and responsibilities to the lowest possible

level of government or organization, according to the principle of subsidiarity.
This means that higher levels of government or organization should only intervene when
lower levels cannot perform the tasks adequately.
Some examples of countries that have adopted the principle of subsidiarity in their
constitutional or legal frameworks are Germany, Switzerland, and the European Union.
(link.springer.com)
DECENTRALIZATION: GENERAL FIGURES
DECENTRALIZATION: Historical Context (1, 2)
 Ancient and classical civilizations (around 3000 BCE (or earlier) to 500 CE):
Some of the earliest forms of decentralization can be traced back to ancient and
classical civilizations, such as the city-states of Mesopotamia, Greece, and
Rome, the tribal confederations of Germania and Arabia, and the feudal
systems of China and Japan. These societies were characterized by a high
degree of political, economic, and cultural autonomy and diversity among their
constituent units, often based on geographic, ethnic, or religious factors.

 Medieval and Early Modern Europe (around 500 CE to 1700 CE):

Decentralization played a significant role in medieval and early modern
Europe, particularly during the era of feudalism, the emergence of nation-
states, and conflicts between the pope era and secular rulers. It resulted from
power dynamics and negotiations among various authorities like the king,
nobility, clergy, towns, and peasants (workers). During this period,
decentralization aimed to attain political stability, economic development, and
social justice.
DECENTRALIZATION: Historical Context (3, 4)
 Colonialism and imperialism (late 1400s to the mid-1900s): Decentralization
played a crucial role in the history of colonialism and imperialism, addressing the
expansion and contraction of European empires, resistance from colonized
peoples, and the formation of post-colonial states. It helped manage complex
territories, address local needs, and encourage development. However, sometimes
decentralization was used for control, exploitation, or cooperation.

 Modern and contemporary world: Decentralization is a significant trend in the

modern world. It's connected to making things more democratic, global, and
regional. Many countries, including the United States, Canada, India, Pakistan,
Brazil, South Africa, and the European Union, aspire to or have achieved
decentralization for goals like enhancing democracy, efficiency, responsiveness,
participation, and diversity.
 DECENTRALIZATION: 5 Key Principles
1. Resilient Structure: Decentralized systems get stronger when faced with challenges
and can handle unexpected problems well.
2. Comprehensive Design: Open and transparent, these systems welcome diverse
participation and empower different perspectives.
3. Adaptive Flexibility: Decentralized systems use distributed networks, making it
easier to create flexible and customized solutions for specific situations.
4. Collaborative Forces: Enhancing collaboration and cooperation, these systems
support mutual aid and collective action.
5. Innovative Creativity: Known for innovation, decentralized systems generate new
ideas and possibilities across various domains.
 DECENTRALIZATION: 4 Main Types
 Political Decentralization: Involves the distribution of political power
and decision-making authority to multiple levels of government or
local authorities.
Examples: Provincial powers, Local Government Acts, Devolved Legislatures,
Local Elections, Decentralized Budgets

 Administrative Decentralization: In this type, responsibilities for

public services and administration are delegated to lower levels of
government or local agencies, while overall policy direction remains
centralized.
Examples: Education Boards, Health Dep., Public Works Dep., Police /Law
Enforcement Agencies, Welfare and Social Services Agencies

 Fiscal Decentralization: Involves the delegation of financial

responsibilities, such as taxation and budget allocation, to lower
levels of government or local entities.
 DECENTRALIZATION: 4 Main Types
 Market Decentralization: This type of decentralization
involves the transfer of economic power from the central
government to the private sector. It can be achieved through
various means, such as privatization, deregulation, and
liberalization. Market decentralization can help promote
competition, innovation, and efficiency in the economy.
Examples:
1. Cryptocurrencies, like Bitcoin, operate on a decentralized
market model. Unlike traditional centralized banking systems,
cryptocurrencies rely on a decentralized network of users to
validate transactions through a process called mining.
2. Peer-to-peer (P2P) lending platforms exemplify market
decentralization. It is like borrowing money online without a
bank. On some websites, people who need a loan connect
directly with individuals willing to lend money. Website examples
are LendingClub and Prosper etc.
DECENTRALIZATION (OF GOVERNANCE) IN
PAKISTAN (FIGURE)
This simplified
representation
shows the federal
government at the
top, followed by
provinces, districts,
tehsils, and union
councils. Each level
of government has
its own
administrative and
legislative powers,
contributing to the
political
decentralization
model in Pakistan.
WHAT IS GOVERNANCE? (Definitions 1, 2)
1. Governance refers to patterns of rule or practices
of governing (Britannica). Means, it refers to how
decisions are made and how things are managed.
It’s not just about the government; it includes other
ways of organizing and controlling resources.

2. Governance encompasses several meanings: (1)

“the activity or process of governing,” (2) “a
condition of an ordered rule,” (3) “those people
charged with the duty of governing or governors,”
and (4) “the manner, method, or system by which a
particular society is governed.” (SpringerLink)
WHAT IS GOVERNANCE? Definition 3, 4
3. Governance refers to the process of
decision-making and the implementation (or
lack thereof) of decisions. It applies to
contexts such as corporate governance,
international governance, national
governance, and local governance. (ESCAP:
United Nations)

4. Governance is the exercise of political

authority and the use of institutional resources
to manage problems and societal affairs. It
encompasses how power is exercised in
managing a country’s economic and social
resources for development. (School of Political
5 Main types of Governance
Authoritarian Governance:
A form of government characterized by strong central power and
limited political freedoms. The ruling authority exercises strict
control over political institutions, civil society, and the media. Only
one political party or a small group holds power. Opposition parties
or dissenting voices are suppressed or marginalized. Lack of
Independent Judiciary. Basic civil liberties, such as freedom of
speech, assembly, and association, are often restricted. Have some
resemblance with Dictatorship.
Examples Include North Korea, China, and Saudi Arabia.
5 Main types of Governance...
Decentralized Governance: Can co-exist with Federal and
Democratic, Distribution of Power, Local Autonomy, Flexibility
and Customization.
Examples: Pakistan, India, Brazil, United States, Germany, UK (constitutional
monarchy with a parliamentary democracy), Canada

Totalitarian Governance: Much similar to Authoritarian

governance, Single-Party Rule, State Control of Media, State
Control of Economy, State Surveillance (monitoring of civilians
through technology to track and control, Cult of Personality
(portraying themselves as infallible and all-powerful), Limited
Civil Liberties, State ideology.
Examples: Nazi Germany under Adolf Hitler, the Soviet Union under Joseph
Stalin, North Korea under the Kim dynasty and Israeli Zionism in Palestine
5 Main types of Governance...
Monarchy: Where a single individual, known as a monarch,
holds supreme authority and power. The monarch is usually a
hereditary ruler, meaning that their position is passed down
through a royal family lineage.
Examples: United Kingdom, Japan, Saudi Arabia, Sweden, Norway, Denmark,
Spain, etc.
Oligarchy: A form of government where power is concentrated in
the hands of a small group of individuals or families who belong
to a particular social, economic, or political elite. It can exist in
both Democratic and Authoritarian systems. Rule by the wealthy.
Rule by the nobility. Rule by experts or professionals.
Examples: ancient Athens, modern Russia
SO, WHAT IS DECENTRALIZED GOVERNANCE ???
 Decentralized governance refers to a system of governance where decision-
making authority, power, and responsibilities are dispersed across multiple levels
of government, non-governmental organizations, or community entities. In a
decentralized governance system, the central government delegates some of its
powers and functions to lower levels of government or non-state actors, such as
local governments, regional authorities, or grassroots organizations.

 Decentralized governance means the transfer of authority from a central

government to a sub-national entity. (SpingerLink)

 Decentralized governance means transfers authority and responsibility of major

government functions from the central level to sub-national entities, including
local governments, civil society, and the private sector. (World Bank)
 WHAT IS DECENTRALIZED GOVERNANCE ???
 Decentralizing governance refers to the restructuring or reorganization of authority
so that there is a system of co-responsibility between institutions of governance at the
central, regional and local levels according to the principle of subsidiarity, thus
increasing the overall quality and effectiveness of the system of governance while
increasing the authority and capacities of sub-national levels. (Wikipedia)

 Decentralization governance is the transfer of authority, responsibility, and resources

from the center to lower levels of administration. This can occur through de-
concentration, delegation, or devolution. (Brookings.edu)
 Centralized Gov. System vs Decentralized Gov. System
Centralized Gov. System Decentralized Gov. System
Decision-Making Authority: concentrated at the Decision-Making Authority: dispersed across
top, typically with the central government or a multiple levels, such as local, regional, and
single authority. national.
Uniformity: uniform across the entire jurisdiction, Flexibility: greater flexibility and customization.
with little room for local variation or customization. Local authorities can tailor policies and programs to
meet local needs.
Standardization: often prioritize standardization Innovation: can foster innovation and
and uniformity, which can lead to consistency but experimentation. Have freedom to try new
may not always be responsive to local needs. approaches
Accountability: a clear line of accountability, as Accountability: more complex accountability
decisions are made by a single authority. structures, as multiple authorities are involved in
decision-making.
Resource Allocation: can be more efficient in Resource Allocation: challenges in resource
terms of coordination and resource allocation, as allocation and distribution, as resources may not
decisions are made at a single point. always be distributed equitably across regions.
Centralized Gov. System vs Decentralized Gov.
System
Examples of countries with Successful Decentralized
Governance Systems
1. Switzerland:
Switzerland is known for its highly decentralized governance system,
where significant political, administrative, and fiscal powers are devolved
to cantonal and municipal authorities.
The Swiss cantons have considerable autonomy in areas such as education,
healthcare, and taxation, allowing for tailored policies and services to meet
local needs.
This decentralized system
has contributed to Switzerland's
political stability, economic
prosperity, and high quality of life.
Examples of Successful Decentralized Governance
Systems
2. Germany:
Germany operates under a federal system of
governance, where authority is divided
between the federal government and 16
states.
The states have significant autonomy in areas
such as education, policing, and cultural
affairs, allowing for policy experimentation
and diversity.
Germany's decentralized system has fostered
regional identity, innovation, and economic
competitiveness, contributing to the country's
overall success.
 Examples of Successful Decentralized Gov.
Systems
3. India:
• India's system of governance is characterized by a multi-
tiered structure, with authority shared between the central
government, state governments, and local government
bodies such as municipalities and panchayats.
• Decentralization efforts such as the 73rd and 74th
Constitutional Amendments have empowered local
governments with responsibilities for rural and urban
development.
• Successful examples include Kerala's decentralized
healthcare system and Tamil Nadu's participatory
budgeting initiatives, which have improved service
delivery and citizen engagement.
Examples of Successful Dec. Gov. Systems
4. Canada:
Canada operates under a federal system
where powers are divided between the
federal government and 10 provinces, as
well as three territories.
Provinces have significant autonomy in
areas such as healthcare, education, and
natural resource management, allowing for
tailored policies to meet regional needs.
Canada's decentralized governance system
has contributed to its cultural diversity,
social cohesion, and economic prosperity.
 Examples of Successful Dec. Gov. Systems
5. Brazil:
Brazil has implemented decentralized governance reforms, such as the
Sistema Único de Saúde (Unified Health System), which devolves
healthcare responsibilities to municipal governments.
This decentralized healthcare system has led to improvements in access,
coverage, and quality of healthcare services, particularly in underserved
areas.
Additionally, participatory budgeting initiatives in some cities have
promoted citizen engagement and transparency in decision-making
processes.
Governance Decentralization in Pakistan-
Successful or Not ???
Successful Aspects
Local Empowerment: Decentralization initiatives
such as the Devolution Plan of 2001 have aimed to
empower local governments and enhance their
capacity to address local needs and priorities.

Improved Service Delivery: In some cases,

decentralization has led to improved service
delivery at the local level, particularly in sectors
such as education and healthcare where local
authorities have been given greater autonomy and
resources.
Successful Aspects…
Political Participation: Decentralization has encouraged political
participation at the grassroots level by providing opportunities for local
leaders and communities to engage in decision-making processes and
governance.

Efficiency and Accountability: Devolving administrative and financial

responsibilities to local governments has the potential to increase efficiency
and accountability in the use of resources, as decision-makers are more
directly accountable to the communities they serve.

Capacity Building: Decentralization efforts have focused on building the

capacity of local governments and institutions through training programs and
technical assistance, which can contribute to more effective governance at the
local level.
Governance Decentralization in Pakistan-
Successful or Not ???
Unsuccessful Aspects
 Resource Constraints: Many local governments in
Pakistan face resource constraints, including limited
fiscal autonomy and inadequate financial resources,
which hinder their ability to effectively deliver
services and implement development projects.

 Political Interference: Decentralization efforts have

often been undermined by political interference from
higher levels of government, leading to challenges in
decision-making processes and the misuse of local
government resources for political purposes.
 Unsuccessful Aspects…
 Capacity Challenges: Despite efforts to build the capacity of local
governments, many continue to lack the necessary technical expertise and
institutional capacity to effectively manage their responsibilities, leading to
inefficiencies and service delivery gaps.

 Inequitable Distribution: There have been concerns about the inequitable

distribution of resources and benefits under decentralized governance systems,
with marginalized communities often being neglected in resource allocation
and service delivery.

 Coordination Issues: Decentralization has sometimes resulted in coordination

challenges between different tiers of government, leading to overlapping
mandates, duplication of efforts, and inconsistencies in policy implementation.
 Short Historical Overview of
Decentralized Governance in Pakistan
 1959: The Local Government Ordinance in 1959 under the regime of
President Ayub Khan. This ordinance aimed to devolve administrative and
financial powers to local governments at the district, tehsil (sub-district), and
union council levels. However, the system was largely centralized, with local
governments serving as extensions of the central government rather than
autonomous entities.
 2001:In 2001, the Local Government Plan in Pakistan brought significant
reforms aiming to decentralize governance. It established district, tehsil, and
union councils with elected representatives to strengthen local government
institutions, enhance their autonomy, and improve grassroots service delivery.
 Continue…
 2003: 17th Amendment: The 17th Amendment to Pakistan's Constitution,
enacted in December 2003, primarily aimed to rebalance powers among the
executive, legislative, and judicial branches. While the amendment didn't
directly tackle decentralization or provincial autonomy, it sparked discussions
on constitutional matters, laying the groundwork for future reforms in these
areas.
 2010: 18th Amendment: It significantly decentralized governance by transferring
key powers to the provinces. It gave provinces greater legislative authority over
areas like health and education and reinforced provincial autonomy. Additionally,
the amendment granted provinces more control over natural resources. It limited
the president's powers, strengthening parliamentary democracy and enhancing
provincial autonomy.
What you think about Pakistan
Governance System???