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Types of Decentralization

Types of decentralization include political, administrative, and fiscal decentralization. Drawing distinctions between these various concepts is useful for highlighting the many dimensions to successful decentralization and the need for coordination among them - these three forms of decentralization are complementary to each other and are important for creating an effective environment for CDD.

  • Political decentralization  transfers policy and legislative powers from central governments to autonomous, lower level assemblies and local councils that have been democratically elected by their constituencies. To be effective, it requires regular elections, clearly defined jurisdictions and powers, and the appropriate legal, political and functional space.  
  • Administrative decentralization   places planning and implementation responsibilities in the hands of locally situated civil servants and these local civil servants under the jurisdiction of elected local governments. To be effective, it requires ability to make independent staffing decisions and ability to negotiate conditions of service (though the center may retain a useful role in training )
  • Fiscal decentralization   accords substantial revenue and expenditure autonomy to local governments, including the power to levy taxes and user charges. To be effective, it requires linking pleasure of spending with pain of revenue generation, increasing revenue autonomy, building capacity to analyze data for budget decisions and establishing proper fiduciary controls.

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