Space to innovate at the bottom

Decentralisation is considered an important element of participatory democracy and two academic heavyweights have put together case studies for eight countries""Brazil, Indonesia, Bolivia, India, Uganda, Pakistan, China and South Africa. Overall, the idea in practice has created "a new political space and the opportunities for innovation in public policy". But it is yet to live up to its potential in "improving government performance or reducing poverty".

Perhaps the most fascinating is the story of Brazil. It is seen as a global role model in many ways but Gianpaolo Baiocchi's essay concludes that the results are mixed. Brazil could carry out the most far-reaching statute changes to bring in decentralisation because it did this when it gave itself a new constitution to mark the end of dictatorship in 1988. The popular mood then was to restrict the powers of its central government and give powers to the grassroots. A substantial amount of social service delivery, from health services to education, as also fiscal subvention, has come the way of local government. In the space created, some innovative models of participatory government, like people deciding their budgets and public expenditure programmes, have been developed and these have also become showcases. Real devolution has led to improvement in human development indicators but has not been able to remove or even reduce the historical inequalities between regions and big and small municipalities. If this is a positive-to-mixed picture, that of China, depicted by Justin Yifu Lin and others, is decidedly negative. China's story of decentralisation is really the story of its economic transition and liberalisation. Village elections have taken place since the nineties but this is not a formal level of government. The real major changes affecting local government since economic liberalisation began have been the overall fiscal decline in the eighties and the fiscal recentralisation in response in the nineties. The latter has led to more revenues for the central government but same expenditure responsibilities for local government. The underfunding has created serious local governance issues. This has had a significant impact on poverty, with greater inequality in income between regions and between urban and rural areas. Overall, decentralisation in China, it would seem, has been botched up, leading to social unrest in poorer parts of it.

Of the two essays on India, the first looks at decentralisation in rural India. Shubham Chaudhuri finds that "with perhaps a couple of exceptions, progress in the states in genuine financial and functional devolution had been extremely limited". One of those two exceptions, West Bengal, has merited a separate chapter by the two editors themselves. They find that the system is now more responsive to the needs of the rural poor and has changed traditional rural power equations. There has been significant devolution but as resources channelled through panchayats remain "pitifully low", they have limited capacity to make a dent in poverty. However, the system has served well the left forces in power in the state and created a base for their political support.

There are also two fascinating studies of decentralisation carried out for the wrong reasons, in South Africa and Pakistan. In South Africa, says Martin Wittenberg, the policy of apartheid led to the creation of black African homelands or Bantustans and black townships and consequently balkanisation and rule through local proxies. These were marked by poor government, extreme poverty and discontent. The Soweto riots in the eighties made the rulers of South Africa realise the unsustainability of the setup and a bridging structure, development regions, was created to cut across homeland borders. The history of the post-apartheid regime is one of disentangling this mess. Post-apartheid South Africa has transited from a "coercive decentralised system to a democratic decentralised system". It has passed several key laws instituting elements like an equitable share formula so that welfare benefits are now reaching wider sections of the poor. Legal and financial checks have also been introduced but the absence of civil society watchdogs is keenly felt.

Ali Cheema and others record how in Pakistan, successive military rulers""Ayub Khan, Zia-ul-Haq and now Pervez Musharraf""all followed the British example and tried to create a local tier of supporters and government to gain some political muscle while keeping politicians out of power at federal level. This made the local government an unwanted child whenever civilians like Bhutto assumed power. Under this limited decentralisation Ayub initiated "basic democracy" to give himself political legitimacy by creating an electoral college of 80,000 "basic democrats". Most recently, Musharraf has tried to energise local government through his plan for devolution of power. Its chances of striking roots are as slim as the earlier dictatorial attempts.

---

Decentralization and Local Governance in Developing countries

Pranab Bardhan and Dilip Mookherjee
Oxford University Press
Price: Rs 675; Pages: 363