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.

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