Is Decentralization Understood Differently in Europe and Asia - Coursework Example

   IS DECENTRALIZATION UNDERSTOOD DIFFERENTLY IN EUROPE AND ASIA? Introduction Decentralization is a significant indicator of reforms of the previous generations in most of the nations globally (Sammoff, 1990, p.3). Different scholars have defined the term decentralization in different ways. For instance, Marcou describes it in terms of state and that there is distinction between state decentralization and decentralized governance. Charles Eisenman identifies it as a ruling system with no political color and it can be democratic or undemocratic but with a local authority that is independent of central government. According to City State Redux, big city states have declined in the last few years and powers devolved from central government to local authorities. Also, there is some evidence that cities which operate with less control of national state they tend to develop faster and in better ways than those burdened by the weight of the central government (Sammoff, 1990, p. 14). Decentralization in cities can be evaluated in three ways. One, decentralization where the local government do not control local authorities regarding expenditure but allows the local leaders to exercise freedom, retain revenue and spend it according to the needs of the local communities. Second, it can be evaluated in terms of fiscal devolution where the central government allows the local authorities to raise and retain funds via a number of existing charges and taxes systems including property taxes. Also, to allow local authorities to have flexibility in borrowing as speculated within the law including borrowing from capital markets. Third, it may be evaluated based on devolved status allowed to local authorities to have independence in terms of governance and economic responsibilities sufficient to overcome challenges that emerges as a result of devolution. The reforms in Europe started in 1980s, and since the emergence of financial crisis, currently decentralization seems to have found new life. In Europe, decentralization is understood in terms of increases in economies measure with reduced citizen proximity. Great powers are visible in big cities practicing decentralization through cutting down funds to form models of local self-government (Sammoff, 1990, p. 12). However, in Asia, decentralization started in 1990, and it is understood differently from how Europe understands it. The urban planning in Asia is more by central government, and local authorities have limited control of urban growth. Most Asian cities are yet to apply decentralization factors such as economic and environmental balances. The aim of this paper is to demonstrate how decentralization is understood in both Europe and Asia. According to Manor, (1990, p. 12) decentralization has become an important agenda in the present age of most states in Asia and Europe including China, Indonesia, United Kingdom and France, and they understand its concepts in different ways. Decentralization in most Asian countries has been an essential characteristic of basic reforms in the in the governance systems. According to Bardhan, (2002, p. 185), decentralization process in some of the Asian countries is likely to continue running smoothly as in the case of Indonesia with the so called regional independence. The course of decentralization in Indonesia started way back before the country’s independence. Since then, the process has been characterized by different motives and forms. For instance, the first experiment of decentralization was by colonialist in order to maintain the efficiency of their trading system. The colonialists practiced very strict powers and allowed very limited power to the local leaders. However, after attaining independence the first leader tried to create a balanced and proportion power sharing between the local and central governments (Chalid, 2005, p.2). The efforts aimed to help Indonesia to deal with its diverse cultures and ethnics scattered in many islands as an appropriate way to embrace and manage the diversity of the country. Conversely, the implementation of the law faced rejection from the fear that it would disintegrate the nation’s unity. As a result, decentralization process failed and a strong centralized ruling system continued until transformation took place in 1978 (White $ Smoke, 2005, p.11). In transformation era, the main focus of decentralization process has been on district level that has brought great changes in the intergovernmental dealings in Indonesia. According to Smoke, (2007, p. 141), the decentralization process in Indonesia has been a success since Indonesia practices a devolved form of government compared to the strong centralized practice before. Decentralization gives the local officials huge power as part of devolved authority from the central government which they use to govern their local regions. For instance, it enhances local democracy where they do direct elections of the heads of municipality and region without interventions by the central government. The process encourages democracy process at local levels and hence, improving the accountability of the local officials to their constituents (Satryo, et. al, 2005, p.8). The major motives that pushed for decentralization in Indonesia included political, social as well as economic reasons. The international aiders added weight on the complaints by the locals that forced the central government to decentralize more authority to the local government. Economically, decentralization was essential as part of enhancing the country’s competitiveness. The major aim of the decentralization process was to authorize the local economy by giving the local leaders a wide diplomacy to build and develop the potentials of their regions. Another decentralization practice in Indonesia is by allowing participation of the citizens in development programs through election of leaders of their choice who would act according to their wishes to pressure the government’s policy, since local elections acts as one of the main developed channel to voice the aspirations of citizens (Smoke, 2007, p. 23). On the other hand, the establishment of decentralization in Indonesia brought some problems alongside the local practices of reforms. The rush and lack of design and preparation of guidelines of decentralization were the major cause of the emerging obstacles. Among others, the guidelines on decentralization failed to account for the inequality of regions capacity in order to allow the laws to be imposed effectively, particularly for the poor and underdeveloped regions (Smoke, 2007, p. 86). Indonesia uses decentralization as a policy to relax security and socio-cultural tensions that is as a result of the diverse dimensional crisis, in particular regarding the public demands to have more decision-making roles in their own sphere. The increased awareness of decentralization by the public makes them to report better political stability and security compared to the days of central governance. This increases the confidence of local and foreign investors as it is revealed in the regional competitiveness indicators. Although, the role of the national defense is not under local government, they are still compelled to provide security to the citizens in their regions (Chalid, 2005, p. 34). The decentralization process faces a lot of challenges where most of them are as a result of laws that govern decentralization process in Indonesia. Apart from the problem arising from framework design that leads to implementation challenges; lack of understanding of decentralization process among the implementers of law has also contributed to poor governance practices. Consequently, corruption at local levels is very high leading to a regional imbalance that complicates the decentralization process. In the case of institutions, the law fails to provide clear guidelines for implementation process. A lot of powers have been dispatched to local leaders but vague segregation remains in their responsibilities to different levels of government. In terms of citizen participation, the law fails to provide clear guidelines on levels of participation that the public should take part, other than elections only (White $ Smoke, 2005, p. 48). Devolving of powers by the central government to local leaders in China, started way back in 1978, with an aim of forming a relatively market oriented capitalist. The results were successful since for the last thirty years China GDP has been rating at 9 percent yearly and by the year 2010, the country had transformed into the globe’s third biggest economy. However, these successes were attained through propagation of ill-fated practices such as corruption, public disputes, unemployment, financial crimes as well as spread of HIV disease. These challenges the Chinese authorities have unavoidably had to devolve important public administration services and law formulation responsibilities to the local leaders. It also delegated huge economic decision-making powers to local leaders. For instance, the local authorities have the mandate to dictate, market entry, investment approval, discharge of public spending roles as well as collection of revenue. Municipal, county as well provincial leaders are the ones now responsible for running state owned businesses on behalf of the central government. It is now the role of local government to deliver services such as education, health care and also controls the state owned businesses. As a result, a promising fiscal federalization has emerged that makes the country’s actual constitution to appear different from its de jure Constitution (Lin et al, 1997, p. 26). The general appearance on China is that it is a unitary collective system of governance; however, it also enjoys decentralization and federalism. The economic changes that the country enjoys endow the local leaders with the power to make decisions and to control resources at the expense of the central government. Administrative and fiscal federalism intimidates favorable conditions to local economic growth, and also incentivizes the local leaders to engage in protection role in areas such as managerial justice and market integration. The economic constitution was introduced in 2007, as a measure to solve the problems. The Economic Constitution required the local leaders to stop abuse of bureaucratic authority which included impending or manipulation of market activities, in particular, at the local level (Lin et al, 1997, p. 16). In china, decentralization effects are more responsive to community’s demands and compete against each other more compared to centralized effects. The fiscal decentralization leads to increased competition among the local leaders, incentivizing them to push for economic development, promote rapid growth as well as to foster strong entrepreneurial organizations. The fiscal decentralization constitution is seen as an agreement between the local authority and central government to cut costs of ruling under huge economic changes and to maximize political and economic gains. Conversely, it has led to emergence of a number of problems, currently solved under the new decentralization constitution. The decentralization constitution institutes new laws that govern the central and local relationships, in particular in form of economic policy. It reflects on the effort of the central government to carry out its responsibilities while trying to reduce powers of local leaders frustrate market business and increase social instability. However, the success of the economic constitution highly depends on the central authority willingness to replenish its political capital and win support from local and foreign investors, in order to check and balance local agents as stipulated in the constitution (Lin et al, 1997, p. 40). In China, fiscal decentralization plays an important role in the nation’s reform to a market economy, and is usually backed by many for the contributions to the country’s extraordinary economic performance over the last three decades. As part of the transition process the nation has put a lot of effort to change the old centralized fiscal management processes including the taxing and monetary contracting systems. Despite the country’s unitary system of governance, its current political system has prominent characteristics of fiscal decentralization (Detheir, 2000, p. 6). Lin et al, (1997, p. 36) states that before the fiscal decentralization process most of China’s profits and taxes would be collected by the local government and then dispatched to the central government, and later remitted back to the local government depending on their spending requirement approved by the congress at national level. The introduction of fiscal decentralization system led to an increase in the revenue share that the local government retained especially those that were as a result of major contributors to the revenue of the central government. The process continues with major changes taking place on the country’s income-sharing quotas and ratios. However, the decentralization process witnesses some challenges which include fiscal deficits, inadequate raw materials, short supply of infrastructure and circular funds and economic instability. In China, although there is decentralization, its benefits are usually held back by lack of accountability and local monopolization that is fueled by fiscal decentralization. The economic constitution in China deals with the realism of political economy as evidenced trough the rapid growth of authority in big cities. However, despite the attempts by the Anti-Monopoly law to deal with the issue, the central government continues to complicate any progress towards decentralization. Over the last three decades, France has undergone important territorial reforms that seek for an efficient and steady structure of governance. The economic crisis in most of the European nations has played a critical role in decentralization process by challenging them to change their governance structure in search of an economic balance revival. In addition, the decentralization process has been pushed further by the European Union in local and regional policies which adds pressure to the voices of the community to have a forefront position and a more active contribution to their nationwide policy making process (Keating & Hainsworth, 1986, p. 10). In France, the major initiative to decentralization was empowerment of local authorities through the presentation of a bill that aimed at clarifying the competences between the various administrative levels, which later was passed as law. Decentralization in France is viewed as a decisive change towards modernization of the state. It engages the local officials in studying the process of independence politics as one of the major reforms maintained by the law. Decentralization establishes two powers governing one territory at regional and departmental levels. The main objective of decentralization in France is to authorize expression of community demands by the government while maintaining the quality of the public services. The process entails evolution reforms both in the national organization of government and local political scheme (Schmidt, 1990, p. 7). According to Manor, (1999, p.45) major observable effect of decentralization in France is on expansion to local resource spending caused by huge number of responsibilities dispatched on the local leaders. As a result, the number of employed civil servants at the local level is high within the last two decades. Another indicator is on spending of the local government that reflects the scope and range of responsibilities that decentralization has impacted on the public services. The trend of the expenditure by the local government continues to increase which is an indication that the local government in France have increased their functional value to the locals. In addition, decentralization has led to a more and large diverse service collection for departments and municipalities in France. For instance, the civic government is the one in charge for planning at local levels. Consequently, more than half of the France local governments undertake plans that affect the overall French territory and population by more than 50 percent. Also, as a result of decentralization, most departments are increasingly restricted to only performing local social policies and being responsible for social action at the municipal level. However, concerning reforms on service delivery, decentralization creates a clearer trend towards the public and a more responsive role by the municipal government. As a consequent of transfer of duties in the field of social action, the organization of local governments has been modernized and re-structured (Schmidt, 1990, p. 27). Also, decentralization policies in France help to strengthen the multi-purpose collection of the communities, while trying to weaken the position of single-purpose nation offices in the French territories. Most big and urban cities in France are now developed into multi-purpose service providers to an extent that they no longer requires the assistance of the central government. Moreover, in local welfare and urban planning, they provide an experimental ground for new modes of ruling and policy innovations which the central government adopts as national laws. In general, as a result of decentralization in France, the responsibilities and powers of the central government has been severely reduced making the central government to experience less functional influences at the municipality levels of government. The process has been successful due to principles of multi-purpose coordination and territories at the local level of government as a fairly divisible system with more devolved powers to the local actors and increased differentiated local polity (Schmidt, 1990, p.45). Several laws regarding operations of the local government have been modified since the emergence of the financial and economic crisis in the United Kingdom. This includes laws on social and health services. It also included devolving power to British local authorities by state government. However, since the reform took place the state government has reduced its monetary transfer to local authority byb30 percent and this seem to continue in future (Tochueville, 1994, p.11). In United Kingdom, decentralization process included reforms in local government, particularly, in the election of London and other big cities officials. It also aimed to devolve limited governing powers to regions, for instance, to Wales and Scotland, as well as continued reforms in the Northern Ireland. The decentralization process brought managerial closer to local governments, and led to the creation of transparent and open government. The decentralization process helped to heal apathy and the crisis of political representation in U.K. It also helped the legislative bodies from various regions to decide priorities of the community and implement more efficient and appropriate results than the central government in London. The decentralization process therefore devolves managerial powers to regional governments including social services, health care and housing services ((Smith, 1985, p. 34). Under decentralization, the local governments take the accountability to determine the ways that the services would be designed for and delivered to the community. For instance, the local government has the mandate to alter the operations of National Health Services within the region territory which previously operated from London only. The regional government exercises the dispatched authorities in the way the community desires and needs. However, some powers are yet to be devolved which include the policy on macroeconomic, immigration and nation defense. Also, as a result of devolution, complexity and multilevel nature of governance is in increase, that heightens tensions of the current government. Decentralization by Tony, also led to an asymmetrical multi-level system of governance. For instance, an elected regional leader was empowered in Scotland and an assembly for Northern Ireland (Treisman, 2007, p.47). Decentralization in United Kingdom recognizes the immense capabilities of the citizens and places of Britain. It also requires restraint and humility on the part of the leaders in the top positions of power. The decentralization process leads to devolving of powers from Whitehall to communities, elected councils, public service experts and individuals as a way to make conditions for better public services, sustainable economic growth and a strong society (Tanzi, 1995, p. 77). Decentralization acknowledges that all regions have the potential to develop and grow. The Localism Act ensures that decentralization measures are put back to the society in order to take charge of their development process. It makes sure that the public takes part in the financial growth and that some of the benefits emanating from the growth would remain in the hands of the society. The local authorities facilitate decentralization by eliminating barriers to investment to allow job creation and regeneration. Decentralization enables the government to deliver improved public services that corresponds to the desires and needs of the people. The new law on Open Public Services sets guidelines on the principles that support a comprehensive transformation that leads to an increase in choice, transparency, funding and accountability across the public sector engaging the community as the driving force (Smith, 1985, p. 120). In general, it is true that decentralization cuts across both in Asian developmental states and European social states; however the concept is usually understood differently. In Europe, changes regarding territorial reforms have turned out to be quite common over the last few years. The main purpose of decentralization in Europe is mainly to adjust functioning to regional and local governments. Reaction to crisis by the various states in Europe is very different, owing to differences in political cultures and the administration models. Consequently, there are vast dissimilarities in territorial decentralization and organizations within the European countries. Governments across Asia continues to look towards various decentralization models as means to address problems presented by rapid industrial growth, urbanization, fragmentation due to divided communities as well as high populations. Decentralization in most Asian states is more by central government, and local authorities have limited control of urban growth. However, despite Asian cities exercising decentralization factors such as economic and environmental balances are yet to be incorporated in the decentralization process. Therefore, decentralization is understood differently in the two regions as an important reform agenda and internationally there is an increase in the devolution of powers by central governments to regional governments. References Bardhan, Pranab. (2002). Decentralization of governance and development. The Journal of Economic Perspectives, Vol. 16, No. 4, pp. 185-205. Chalid, Pheni. (2005). Otonomi daerah: masalah, perberdayaan, dan konflik. Cetakan pertama, Kemitraan, Jakarta, Indonesia. DETHIER, J.-J. (2000). Governance, decentralization and reform in China, India and Russia. Boston [u.a.], Kluwer Acad. Publ. KEATING, M., & HAINSWORTH, P. 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