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Governance in developing countries: The challenge of multi-level governance

Dele Olowu
Institute of Social Studies,
The Hague, Netherlands


Introduction and Abstract
Governance, a little known political science concept until recent times, entered the center stage of policy debate in all countries towards the end of the last century. The three most prominent issues in governance discourse as it relates to developing countries include the horizontal coordination of markets, government hierarchies and networks—an issue that has become pronounced with the advent of globalization. Has globalization favored or disadvantaged many developing states in relating to markets as is claimed by protagonists and antagonists of globalization? (Scholte 2000) Second, there is the challenge of multi-level governance. This implies that states must share their powers of governance with regional and local self-governing communities. How to organize this in countries where paternalist centralism has been the principal mode of governance has become a tough challenge (McCarney 1996). Finally, there is the challenge of global governance: how nation-states relate to one another and to the many public and private supra-national bodies that now wield more power in the policy process in many developing countries. In a sense, these challenges are not peculiar to developing countries nor do they affect all developing countries in the same manner but they constitute a common denominator in the policy and scholarly discourse on governance.

This paper focuses on the second challenge for four reasons. First, the first and third challenges have been the subject of much research whereas the second has been comparatively neglected. Second, the challenge of multi-level governance is at the heart of a major revolution occurring in the Third world policy circles though not many scholars have fully appreciated its reality or significance. Finally, it is a subject which I have studied continuously for many years.

The paper begins by defining governance and then goes on to identify the main differences in multi-level governance arrangements between developed and less developed countries (LDCs). It then reviews the evidence for the policy shift in the developing world with respect to decentralization. Until the last two decades, conventional wisdom was that developing countries needed to be highly centralized for a variety of political, cultural and economic reasons. Decentralization if it is to be contemplated at all must be of the deconcentrated variety. However, since the late 1980s and early 1990s, many less developed and transitional countries have moved in the direction of democratic decentralization (DD). It has not always been smooth sailing but the experience in a number of countries is already yielding many positive policy outputs and outcomes that lead many other developing countries to begin to contemplate similar policies. This paper will identify major forces promoting change, highlight the key achievements of democratic decentralization in developing countries as well as the nagging problems but also indicate some of the ways by which key institutional actors—including donors, research organizations and policy think tanks (like GIDESCO) can best assist this process. The paper has six sub-themes:
  • What is governance: Approaches to defining governance
  • Multi-level Governance in developed and developing countries
  • Evidence of a Paradigm shift in decentralization discourse and policy
  • Explaining Policy Shift
  • Dilemmas of Devolutionary Decentralization
  • Significance of Policy Shift for Development, Democratization and GIDESCO
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