In the wake of the 2010 Haiti earthquake, I became a strong believer in decentralization. How could I not? Consider that before the quake people from across the country would travel for hours, and even days, to the capital for basic necessities like getting a driver’s license, a passport or a building permit. There are no municipal entities in any of Haiti’s ten departments (or regions) capable of handling these matters. Imagine having to travel from Boston to Washington DC – and back – every time you had to renew your driver’s license!

Essentially, decentralization shifts responsibility from national governments to local ones (sometimes even to the private sector) so that public services are delivered more effectively. This does not mean that the national government loses all of its authority. Decentralization basically alters its role from that of a direct service provider to one that monitors service delivery by the local government. At the same time, decentralization does not just happen. The ways in which decentralization policies are designed ultimately determine its effectiveness.

Argentina’s attempt to decentralize its housing authority in the early 1990s is one to consider. In this case, regional governments received millions of dollars from the central government with no guidance on how these funds should be used. The central government showed little concern for whether the funds were being spent appropriately and officials had no obligation to achieve any goals regarding urban housing. Without the policy framework to support this influx of capital, decentralization primarily strengthened the loyalty of regional governments to the central government and of course, failed to generate improved dwelling conditions for low-income Argentineans.

If a country like Haiti wants to decentralize, it should start by establishing clear objectives in terms of what it hopes to accomplish. Secondly, it would need to conduct an assessment of its intergovernmental system in order to determine the roles and responsibilities of entities involved. National government may be held accountable for financing an initiative while the local government is responsible for meeting certain benchmarks before additional funding is distributed. Intuitively understanding the dynamics between local and national governments will help identify some of the strengths and weakness of both before a decentralization plan is devised.

For example, a country could decide that improving sanitation is a national priority and wants local governments to determine how this goal will be carried out. Yes it is true that local governments in developing countries often lack the ability to execute. It is also true that national governments are not always adept at managing. However, allowing local governments to work on policies that create a neighborhood trash collection program, towards this national objective, is a starting point – before mandating that it oversee the finance, building and maintenance of a wastewater treatment plant.

Beginning with this type of political decentralization can lead to more substantive outcomes in the short-run while also establishing the foundation for other forms of decentralization, such as fiscal, in the long-run.  Aside from not always having distinct goals at the onset, not enough attention is given to finding a proper balance between these options. Sometimes local governments are given a mandate that does not come with the fiscal resources to support it. Or in the case of Argentina, the finances are there but the political or administrative decentralization is lacking.

Decentralization is a multifaceted concept that has the potential to directly influence a country’s economic development, poverty reduction goals and more when its policies are effectively designed and implemented. It is not a concept that can develop on its own and requires collaboration and strategic planning from all levels of government for it to work well.

As originally featured in the Urban Times.

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