On demands for greater decentralization

On demands for greater decentralization

By Elwin Tobing

BOSTON (JP): The current widespread demand for greater
decentralization emerged primarily from the dismal performance of
the highly centralized development policy under the New Order
regime. The regime not only failed to improve the social and
economic conditions of the nation but also alienated the people
and local and regional authorities from the decision-making
process of vital policies.

Defined broadly as a transfer of authority from a higher to
lower level of government for the management of public functions,
decentralization is considered an effective strategy to resolve
our national problems in improving planning and implementing
national development programs at the local level. This argument
is based at least on two reasons.

The first and more important is that decentralization will
enhance the people's participation in the development process.
Through the people's participation, the practice of democratic
principles at the grassroots level can be fostered and national
unity can be promoted.

Greater participation of the people and local governments will
also reduce potential sources of conflict. Certainly, the people
who are directly affected by a decision will not always make the
right choice. If they make a mistake, they will suffer the
consequences and this will give them the awareness to make wiser
choices in the future. However, if someone else made that
decision for them, they would have every reason to direct their
anger at the responsible institution. The separatist movements in
Aceh and Irian Jaya can be viewed as expressions of anger at the
central government in Jakarta.

The other reason is based on the principle of optimal-level
decisions. Jan Tinbergen (1981), a Noble prize winner in
economics for having developed and applied dynamic models for the
analysis of economic policies, identified two properties of an
optimal level decision. First, it is the lowest possible level
that a maximum of participation and information is used. Second,
it is high enough to entail negligible effects on the welfare of
individuals living outside the area for which the central
planners are responsible.

This is very important since central planners often do not
care about the consequences of the decisions they make on local
and regional development policies. A classic illustration is the
World War I Gallipoli campaign of 1915 to 1916. As portrayed in
the film Gallipoli, a general in a bunker deep behind the
front lines used his telephone to order wave after wave of young
men to storm a heavily defended trench, ignoring the local
commander's advice that the effort is futile. As a result of the
general's order, all the men died.

Experience shows, however, that many decentralization
programs, especially in developing countries, do not live up to
initial expectations. In several African, Asian and Latin
American countries, decentralization programs paradoxically
boosted centralization.

By examining the effects of local government reforms in six
countries, including Malaysia, Thailand and Indonesia, Nooi
(1987) concluded that decentralization programs not only failed
to enhance local autonomy, they enhanced the centralization of
power. Experience from countries such as Tanzania and Kenya also
suggests that the people's participation as a means of
decentralization did not materialize; instead the control over
development policies remained highly centralized.

The story from Latin American countries reveals the same
results. Mawhood (1993) noted that economic failings in the
region were a result of centralized development policies neatly
veiled beneath the avowed decentralization policy statements of
governments.

The failure of decentralization in many countries to enhance
the people's participation has eroded the euphoria about its
virtue as an effective strategy to improve national development
programs. There were suggestions of returning to centralization,
especially with the economic success stories of the "Asian
Tigers". The Tigers -- Hong Kong, Singapore, South Korea and
Taiwan -- have proven that economic power and a higher standard
of living can be attained not through the decentralization of
power but also the concentration of power in the hands of the
central government.

Yet, the demand for decentralization is never diminished. The
criticism expressed at the failure of decentralization was
primarily a result of the lack of increased participation by the
people. Another explanation is that power was decentralized to
the wrong people, either central government appointees or the
local elite. It is also believed proposed reforms have not been
implemented as intended and there has not been a significant
decentralization of power and authority.

The lessons for us are clear. Decentralization should not be
seen as a general solution or a quick fix for all of our current
national problems. Significant improvements in development and
the participation of the people cannot be achieved merely by
decentralizing our development programs. It is a necessary step
but not sufficient by itself.

It is also imperative to underline that the implementation of
decentralization requires strong political and administrative
commitments from national leaders. The experience of the New
Order regime revealed that national leaders misused
decentralization programs for their own economic and political
interests. The programs were designed in such a way that boosted
the authority of the central government.

In addition, decentralization requires a fundamental change in
the cultural behavior of local and central government officials.
Our local and regional authorities are used to functioning as
agents of the central government in communicating its
instructions. The virtue of decentralization is not only the
transfer of power from higher to lower-level authorities, but
also from the government to the people. Unless people are the
center of any decentralization program, there will always be a
swing back to centralization.

Last but not least, decentralization has to be supported by
adequate financial resources, skilled personnel and physical
infrastructure at the local level. Also, decentralization
programs have to be followed by rural financial reform. Almost 70
percent of our population still lives in rural areas. Without
giving them access to financial resources, any new
decentralization programs will only join the list of past
failures.

The writer is studying for his doctorate in economics at
Boston College in the United States.