Governance in developing countries: The challenge of multi-level governance
2. Multi-level Governance: Industrialized and Developing Countries Contrasted
Whichever way one looks at it, industrialized countries are more decentralized than
developing countries. This is the case whether one is looking at local governments, which are
semi-autonomous bodies (measured by expenditures or employees size) or field
administrations of the central government. Table 1 for instance shows that central
governments in industrialized (OECD) countries engage twice the number of officials as the
developing countries of Asia, Latin America but they engage four times the number of local
government employees. The relative difference is equally reflected in total government
expenditures as a ratio of local government expenditures 1 . These figures relate to local
governments. But field administrations of central governments in developing countries are
also more concentrated than those of industrialized countries. Generally, a substantial
proportion of central government employees in developing countries lives and works in the
capital city. In contrast, only a small proportion of central government employees lives and
works in the headquarters in most industrialized countries. The proportion of headquarter to
field officials is 20% in the United Kingdom, 25% in France and only 12% in the USA (Smith
1985, Olowu 1984). The reverse is generally the case in many developing countries. These
points can be stated in terms of three broad propositions:

Table 1: Government Employment as % of Population, 1997
- Industrialized countries are generally more decentralized than developing countries. While
this correlation is clearly established in terms of expenditure, revenue and employee size
data, the direction of causation remains unclear (UNDP 1993). Is it decentralized
governance that leads to economic development or is it economic development that makes
decentralized governance possible?
- Local governments employ more staff than central governments in industrialized countries.
The reverse is the case in the developing countries.
- Extensive devolved governance in industrialized countries correlates with high levels of
deconcentration. It is not difficult to see how an extensive system of field administration
becomes necessary to support the strong patterns of decentralized local government in
developed countries. The contrary logic may be occurring in many developing countries—
weak local governments are complemented by equally weak field administration systems.
Some LDCs have actually attempted to integrate these two institutions (local governments
and field administration) without much success (Rondinelli 1981, Wunsch & Olowu 1995,
Haque 1997).
This pattern of governance in industrialized countries has followed a historical logic whereby
local governments existed before central organs. Of the most successful of these countries,
Alexis de Tocqueville (1959: 84) wrote: ‘one can say that in general, the striking feature of
American public administration is its extraordinary decentralisation’. Other scholars who have
examined the underlying theory of governance in industrialized countries have discovered that
the system of governance in these countries is based on long struggle for the accountable use
of power. This has led to deliberate checks and balances on central power most evident in the
simultaneous exercise of power by autonomous entities: the church, municipalities,
universities, trade unions etc—each of which is capable of exercising veto powers. This
model of governance has been referred to as polycentricity –and regarded as an important
attribute of democracy (V. Ostrom 1987, E. Ostrom 1990). Different patterns of polycentricity
are observable among western countries, with variations reflected by their national cultures
(Andrew & Magnusson 1998).
Whereas LDCs came to political independence with formal structures of democratic,
representative government, political leaders in their bid to consolidate political power opted
for highly centralized modes of governance. This centralized mode of governance in LDCs
is reinforced by a culture of politics of patrimony in which all powers and resources flow
from one source of power (‘the father of the nation’) to clients to shore up the regime. This
pattern of power and resource distribution was strongly supported by both domestic and
external actors until the late 1980s. The reasons adduced for adopting this approach included
–rapid economic and social development actualized through centralized planning, unity and
national integration, containment of corruption and political stability. In fact, as earlier noted,
the argument was that if decentralization would be necessary at all it must be in the form of
administrative decentralization or deconcentration—the sharing of responsibilities between
central and local administrations which do not exercise any discretionary authority nor
dispose of resources (Riggs 1964). A monocentric governance model was adopted and this
affected the manner in which decentralization was approached--administrative
decentralization or deconcentration prevailed over political or democratic approaches. The
latter is different because it includes not only the transfer of responsibilities but also of
financial and human resources to semi-autonomous entities with their own decision-making
powers.
In the last decade however, many countries changed course dramatically. They have
abandoned the monocentric political model and sought to replace it with its exact opposite—a
polycentric structure of governance. The latter accepts the idea of multiple centers of power
within a state –which was denied by the monocentric state.