Policy and Implementation Issues Decentralization represents a fundamental restructuring of power and financial relationships and is rarely implemented without controversy. A number of key issues in planning such reforms must be addressed: Phased vs. abrupt reform. Deconcentration is nearly always the first and necessary step in any process of decentralization. This puts staff from central administrations in closer contact with local people, problems, and conditions, and it also provides a channel for local interaction. Unfortunately, decentralization reforms frequently stop at this point, and central authorities often retain control over deconcentrated administrative structures. As a result, an important decision must be made about whether to phase reforms and risk getting stalled or implement total reforms at one time, recognizing the risk of serious program disruptions. Funding. Fiscal decentralization is often seen as a way to reduce central government budgets by off-loading tasks that a central government can no longer finance, a practice known as “devolving insolvency.” Intergovernmental fiscal transfers or grants are usually needed to finance decentralized programs. Concern over local administrative capacity and accountability frequently leads central governments to impose controls that are costly to administer and that restrict local flexibility in managing funds. However, experience indicates that local governments are generally capable of assuming substantial fiscal responsibility. While grants from the central government are usually necessary to maintain programs, decentralization offers opportunities to introduce cost sharing by local government and users and increase total resources available for extension. Coordination. Decentralization involves different institutions and levels of government collaborating in financing and implementing programs. Coordination is essential as program objectives, approaches, training schedules, implementation periods, and incentives vary between decentralized implementation units. There is also potential for overlap of programs in different areas, competition for staff, clients, and markets, and duplication of effort in providing support services, such as training and technical support. Level of decentralization. Decentralization may involve a decision to decentralize authority to local governments or to local community groups. Devolving program responsibility to local communities fully empowers rural people but bypasses and weakens local government. Community collaboration with local and national governments in managing programs makes it possible to coordinate programs across a broader area, ensures that interests of the poor are represented, facilitates the scaling up of successful initiatives, and overcomes local and often male-dominated authoritarian enclaves.   
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