Many countries throughout the world are undertaking some forms of decentralization by shifting fiscal, political, and administrative responsibilities to lower levels of government. Decentralization is driven by unique circumstances in each setting. In some countries it is linked to recent democratization, while in others it is spurred by the failure of central government to deliver basic public services. The four elements of empowerment put forward in this paper-access to information, inclusion and participation, local organizational capacity, and accountability-are often integral components of successful decentralization.
In some countries, particularly those in the Europe and Central Asia Region, central governments have decentralized responsibilities to local governments for another reason: to reduce national fiscal deficits. By pushing expenditure functions down to local governments while retaining centralized tax bases, governments maintain macroeconomic balance; yet service delivery often declines due to underfunding. In these cases, the decentralization agenda is unlikely to achieve benefits unless it is modified to empower local governments through greater resources and a sound intergovernmental framework, and empower people so they can hold their local governments accountable.
The idea behind decentralization is that moving decision making closer to people will lead to public sector decisions that better reflect local needs and priorities. This in turn will lead to greater efficiency in public expenditures, improved governance, and greater equity. These results, however, are by no means automatic or easy to achieve. Efforts to decentralize usually stop at the local government level and often go no farther than the provincial or state level. Decentralization is unlikely to achieve its theoretical impact unless it extends down to the population, permits informed input in public decisions, and motivates local government to respond to this input. Further, as noted below, although empowerment can help achieve benefits of decentralization and vice versa, these processes are only part of an effective poverty alleviation strategy. There remains a strong role for central governments in ensuring adequate funding and incentives that target the poor, along with a legal framework that enables them to live securely.
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