Impact of Decentralization on the Corruption Phenomenon

Matei, Ani and Popa, Florin (2009): Impact of Decentralization on the Corruption Phenomenon.

Abstract

Decentralization can take many forms, depending on the nature of the functions which are decentralized, at the level of the control exerted by the local authorities on these functions and the type of institution to which the responsibilities are transferred. In the developing countries, the objectives of the decentralization process are, in general, focused on improving efficiency, equity, accessibility and the quality of the services supplied, as well as of the extent to which they cover the local needs. In fact, decentralization is very clearly linked to the economic development, as well as to the democratic government systems.

Through decentralization one seeks the improvement of the performances of a certain service, by changing the authority and responsibility between key-actors, the improvement of the informational flux for fundamenting decisions and assessing performance, the establishing of the accountability mechanisms and the modalities of motivating all actors to be responsible in the fulfillment of their duties (Paul L. Hutchinson, Monitoring and Evaluation of Decentralization Reforms, 2004). A mechanism for assessing changes with respect to accountability is represented by the "accountability frame” (Brinkerhoff 2003, Aucoin and Heintzman 2000). These changes, applied in a consistent and coherent manner, will lead, implicitly, to the reduction of the level of corruption in the public system. Political decentralization (devolution) - the only actual one, as considered by analysts - presupposes the transfer of attributions and afferent decisional power to the local levels of government and the implicit limitation of the central intervention capacity. This being the case, decentralization constitutes an important change in the plan of the formal institutions in a state. Fiscal decentralization presupposed the creation of mechanisms for the transfer of the financial resources to the local level. It often, but not always, goes in parallel with political decentralization. To attempt to measure the degree of political decentralization solely through the percentage of public resources spent at the local level is deceiving, because many times the local administrations simply receive mandates to execute, from the center, namely precise duties, sometimes accompanied by resources with this well indicated destination, but this does not mean in any case that their decisional power has increased. Decentralization (promoted in parallel with a certain dosage of administrative deconcentration of the central government) proved it can sometimes solve local decision problems, has eased access to the information of local nature, has certain services more efficient and made the citizens feel better represented politically. However, sometimes it has proven to be a source of new problems in its turn: The increase of the discrepancies between rich and poor communities, heavy coordination, fiscal indiscipline (Manor, 1999; Tanzi, 2001). But, especially, since through decentralization the centers of political decision are multiplied, it raised concerns related to the possibility of aggravating corruption by the local elites capturing the public institutions.

In fact, the impact on the level of corruption is one of the most interesting aspects of the decentralization process, still insufficiently researched. The promoters of decentralization usually place the limitation of corruption among the benefits to be expected, this being for them an argument in favour of expediting the process. Many times, it is believed that the simple transfer of attributions and resources from the center to the other government levels will solve the problem. However, reality has proven a lot more complicated - many times, decentralization seems to be accompanied by a multiplication of the cases of corruption, at least as it is shown by anecdotic testimonies, as well as by an increase of the public concern towards this phenomenon. Some comparative studies in the latest period even reached the conclusion that, in total, more decentralization actually means more corruption (Treisman, 1999). In short, a long list of factors which can act on the relationship between corruption and decentralization, in both directions (Treisman, 2002). On the one hand, decentralization may lead to the reduction of corruption, because: • The local electives know better than the central ones the real needs of the community; therefore, it is less likely for them to act only as assignees for duties directed from the center, whose utility they doubt (fertile terrain for cynicism and corruption). • Inversely, in certain conditions, the citizens know more about the decision making process and they involve themselves more. • Competition occurs between the local administrations: Through the quality of the package of taxes and services supplied (in principle, the citizens thus being able to move, in order to opt for the package they agree most with); through the image of local government, more or less clean, moral pressure is created in order for the most corrupt administrations to act for the remedying of the situation. • Promotes, in judicious combination with deconcentration (but most often, to the detriment of the ladder), decentralization may lead to the limitation of the power of action of the bureaucratic extensions of the central government in the territory - usually, the most opaque and non-responsive part of the central administration. On the other hand, decentralization may lead to the proliferation of corruption, because: • Where the costs of civic information and participation are high, and the tradition in this sense is weak, the citizens may know more about what is happening at the center than at the local level; the few civic competences which exist concentrate in this direction. • The multiplication of the decision centers, correlated with the non-existence or weakness of the horizontal control mechanisms between the public institutions (horizontal accountability), may encourage discretionary behaviour and the breach of the law by the local political elites. • Where there are several levels of intermediary governance between the center and the local communities (regions, district, etc), it is difficult to achieve an adequate balance of power between the state’s administrative levels, such as the intermediary to not abusively exercise the newly-gained powers to the detriment of the local basic administration (the actual local authority). • Where a chamber of the national parliament is elected on explicitly territorial principles (in order to represent regions, districts, etc), and these constituencies coincide with strong intermediary governance levels, there are great chances for the emergence of obscure interests coalitions between the regional leaders and the central representatives. Taking into consideration all these aspects, the paper aim to make a analysis of the impact of the impact of decentralization on the corruption phenomenon.

• Item Type: MPRA Paper
• Language: English
• Keywords: decentralization, corruption, impact
• Subjects: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy ; Administrative Processes in Public Organizations ; Corruption; ; A - General Economics and Teaching > A1 - General Economics > A14 - Sociology of Economics

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