As a matter of fact, smaller village communities—on account of the survival of the traditional value system of peasant societies—even encourage informal solutions and public work in order to compensate for the lack of money or available services. Furthermore, in the traditional peasant value system the use of money is the last possible solution to a problem, let it be the building of a house for one of the villagers or harvesting the grapes.
Should the quality of social provision, the principle of equal access to care and the equity of distribution, not be present in the public discourse, when the welfare prog-rams are not systematically and regularly evaluated as against the realization of these principles, and local actors are tempted to give preference to the interests of the middle-class voters, there is the danger that certain people are discriminated against by being excluded from certain types of social provisions and the benefits are “smuggled” from the target groups to other, preferred groups. In this way the interests of the vulnerable groups are subordinated to those of the ruling elite.
There are unintended consequences of decentralization such as the failure to reduce territorial differences or, in other words, the failure to accomplish territorial justice because of the lack of adequate policies and resources. Regional- and settlement-level economic and societal differences are on the increase in the CEE countries. The danger of poverty and unemployment correlates with the place of residence (town or village, rich or poor region). In Hungary and Latvia there are attempts to reduce these inequalities by imple-menting quite sophisticated equalizing mechanisms. These mechanisms, however, have not as yet provided the appropriate solution for the problem of horizontal inequalities since the compensation for the disadvantages is unsatisfactory. The compensatory mechanisms may even overrule other principles and values—including those that should be asserted by the decentralizing policies themselves. Such mechanisms can strengthen patron-client relationships in which the generosity of the central administration compensates for local difficulties. The latter danger needs to be underlined in the case of the post-communist countries. Where there is competition for compensatory funds (which are meant to even out differences), the “plan-bargaining” deals (including blackmail) of the communist regime survive. Moreover, the former patron-client relationships are reintroduced in political life.
• the number of organizations that discharge public functions of the state has been growing and their structure is becoming increasingly differentiated,
• the legal autonomy and self-determination of public institutions (including private organizations that fulfill public functions) other than the central agencies of the state (parliament, government and the courts) have become stronger than ever before,
• the decentralized units that lie outside the central agencies of the state have access to additional funds,
• the influence of these decentralized units on certain societal and political issues (including issues of social policy) is stronger than ever.
If we suppose that during the past decade in the three countries under survey the historical processes were the same as those taking place globally, it is justifiable to put forth the following questions:
• What public personalities play a role in social policy?
• What kind of legal autonomy and competence do those public personalities have?
• What is the size and composition of the funds they have at their disposal?
• What role do decentralized units play in social policy and what influence do they exert?
These questions do not cover every aspect of statehood and state functions. They focus on issues that are related to the “decentralization” of the political decision-making and executive branches.
In addition to the empirical questions that focus on the characteristics of the decentralized units, we also intend to examine those questions that refer to the interplay between state agencies and the features and causes of the distribution of functions, competence, and responsibility.
4.2 The Various Types of Decentralized Units
—or Public Functions Outside the Center
The decentralization of state functions supposes—by definition—an arrangement of state functions that is “centralized” per se, in which decision competence, and the tools of implementation and responsibilities are concentrated in a power center. With the countries of Central and Eastern Europe, it is customary to use—by way of example—
the communist state structure before the transition of the CEE countries to the multi-party system. It might be questioned whether or not it is appropriate to use them as examples, yet such simplification seems to be acceptable as a starting point. Bearing
that in mind, examination of the process of decentralization means examining the process of dismantling the totally centralized state.
Administrative decentralization may have three major forms: de-concentration, delegation, and devolution. In the following sections of this chapter we will focus on the forms of decentralization that are the most relevant in relation to social policy in the post-communist countries.
4.2.1 De-concentration
In our interpretation, de-concentration—the historical predecessor of devolution—is the weakest form of decentralization. It is an institutional transformation in which bureau-cratically subordinated government agencies assume partially independent functions and competence (as for instance the right to manage assets independently and dispose of separate budgetary funds). De-concentration of resources is not equivalent with their political de-volution, with the dismantling of the state center. Instead, it is similar to the organizational transformation in industry in which “combines” and “plants” are turned into “holdings”
and into the “independent subsidiaries” and “profit centers” of a company group. “In cases of de-concentration, resources such as civil service positions or budgetary funds are re-allocated from central government to a lower administrative unit (e.g. a district prefecture).
The decision-making authority remains with the central government and local staff answer to their upstream superiors. When authority devolves down to a lower level, decisions about the use of the resources are made locally, and administrative staff tend to be account-able to the local political leadership” (Jean Bossuyt and Jeremy Gould 2000, p. 2). Often de-concentration occurs simultaneously with the “regionalization” of central management, as for instance with the establishment of “prefecture systems,” or sectoral inspectorates.
The decentralization of public administration in the Ukraine, which is taking place under close presidential control and bureaucratic supervision, can be described as de-concentration. Similarly, the “decentralization” of the social insurance system and the labor market organizations in Latvia and Hungary is in effect de-concentration.
4.2.2 Corporation—Decentralization of Public Bodies
It is possible to delegate state functions into public bodies where members are not appointed, nominated or elected exclusively (or not at all) by governmental agencies (or parliament or the political parties). As commissioned by law, these public bodies dispose of public monies and the instruments of implementing public functions. Although these organizations are not wholly controlled by the central government, they are accountable to it. In the sphere of social provision, “tripartite” corporative public bodies
can be found in the field of social insurance and employment policy (labor market).
Examples of similar cases of the decentralization of public bodies can be seen in the arts and scientific life (“Academies”). Similar public bodies often discharge various training and accreditation functions. A few years ago, for instance, the body managing the Hun-garian social insurance system was of a corporative, tripartite type. Even today the county-level employment councils—which are organized along corporative lines—possess strong powers (in deciding how to use the active tools of employment policy).
4.2.3 Local Government Decentralization: Devolution?
The most common definition of decentralization refers to the transfer of central govern-ment functions (decision-making, finance, and managegovern-ment) to the local governgovern-ment authorities of localities and regions. Although local municipalities elected locally (or on a regional basis) can be found almost everywhere, their functions are occasionally confined to politically representing the area concerned. The most important criterion of local government decentralization is not the election of mayors and local municipal assemblies, but rather the transfer of responsibility for providing services, the raising of their own revenues, and the making of their own investment decisions. As far as the welfare system is concerned, decentralization in the form of local authorities may affect every aspect of public services (health service, housing, education, and welfare institutions) and the various social assistance programs.
4.2.4 Private Welfare Systems by Government Fiat
A peculiar form of decentralization is when the government may oblige private organiza-tions to operate welfare services, and citizens may become clients of private organizaorganiza-tions by government fiat. An example of the first category is when employers are obliged to discharge certain welfare functions (to grant sick leave, to provide mandatory health screening, to offer preventive medical care, etc.). As for the second category, consider the legal obligation of citizens to seek social insurance (pension, health or accident care) at private institutions. The Hungarian pension reform involves such an obligation.
4.2.5 Making the Welfare System Plural,
Privatization of Public Services, NGOs Gain Ground
The fact that private organizations may also operate (either on a profit or a non-profit basis) in areas that used to be set aside for public institutions cannot in itself be regarded as decentralization. (Instead, this should be considered as the introduction of market
principles to new areas.) The entry of private organizations into traditionally state-controlled public services can be considered decentralization if that activity is carried out in the form of regulated relations with a government agency. Such a relationship may include citizens
“contracting out,” in which a private organization assumes government functions, and/
or the regular state financing of such activity. Private (i.e. non-state) organizations may be in contractual relations with the state at any level of public administration, and they assume functions that transcend those of the local authorities. In Latvia, the only recognition that a function discharged by an NGO is “public” is tax allowances, but the state does not purchase social services from them. In Hungary the non state-owned residential welfare institutions are eligible to the same per capita normative state subsidy as the state-owned ones. In addition, the government finances the discharge of various welfare functions by private organizations in the form of contractual relations. “Funding of service-delivery NGOs in isolation from local government may not promote dialog, but rather competition and even confrontation between local authorities and civic groups. The challenge is to support civic actions at local level while ensuring that their autonomous activities are linked, to the greatest possible extent, with broader development processes and institu-tional dynamics in a given territory” (Jean Bossuyt and Jeremy Gould 2000, p. 10).