The following table demonstrates the most frequently cited advantages of decentraliza-tion, together with some skeptical considerations as well (M. Steinich 2000).
Table 1.1
Pros and Cons of Decentralization
Pros Cons
Better service delivery: Dangers for service delivery:
• moral adequate to local needs • decentralization of corruption
• more flexible • untamed spending
• more innovative • rolling-back of many of the
• cheaper economic, and particularly social,
• good for mobilizing the comparative functions of the state
advantages of local enterprises • local cadre will not be independent and the local non-profit sector enough and motivated enough to
take responsibility for risky undertakings
Table 1.1 (continued) Pros and Cons of Decentralization
Pros Cons
Local democratization: Local politics is still politics:
• integrating people’s needs and interests • reproduction/re-labeling of local elites
• giving third-sector organizations • poor people may refrain from and local enterprises the freedom to act promoting their interests
and to articulate their views and needs • local politicians may be responsive to the
• training ground for a participatory/ local needs of their defined constituency democratic culture, negotiation • accountability may be attenuated capacity and conflict settlement if local elections are not viewed as
• granting a certain autonomy and important, and produce low turn-outs degree of political integration to minorities
National integration: Moves for separation:
• can reach a more equal distribution • institutionalizing factions along
of national resources ethnical lines
• dispersion of political power in • reproducing discriminatory policies
a vertical way of the ruling party
• common decision or planning bodies or the common execution of tasks
• national diversity can thus be realized in national unity
SOURCE: Steinich, M. (2000) Monitoring and Evaluating Support to Decentralization.
Decentralization may be a better or worse form of communicating difficult or un-manageable problems. In politics if there is nothing relevant or satisfactory to be told of a problem—due to the lack of resources, widely acceptable solutions, or other reasons—
it is either passed over in silence, or is allowed to be the subject of public discussion only at forums at a low level. More precisely, if there is little meaningful to be said about the key issues of social policy, then discussion of those problems should be transferred to forums which are beyond public attention and far from the political center. In this case the themes are kept separately, the problems do not accumulate and instead of horizontal communication and co-operation to enforce the solution of problems handed centrally (like the distribution of tax revenues between the central and local budgets) the decent-ralized units compete with each other—first of all for the scarce resources.
Decentralization means, among other things, the shifting of responsibility. On the face of it, it is nothing more than passing on direct executive and management functions as if the conditions under which the problems are to be solved were also decentralized or sufficient to implement the intended policies. But sometimes they are not. That the conditional mode is often used in the bylaws for decentralized units is an eloquent
illustration of that point: [if certain conditions are met, then] the decentralized unit
“may grant” certain benefits, “may establish” certain entitlements or “may require” that certain conditions be met—as is the case, for example, with the Hungarian Social Law.
The conditions and capacities under which the decentralized functions have to be dis-charged are often lacking—they have to be ensured by the decentralized units themselves.
Decentralized solutions can be successful if the increase in the funds granted to the local government authorities and non-governmental organizations enables them to fulfill the growing tasks. In the first years of transition, however, the statistics showed that at macro-level the number of people dependent on social care was growing and net public spending on welfare was decreasing. It has yet to be seen whether it is possible to com-pensate at macro-level for the decrease in central funds by mobilizing additional local resources and establishing partnership relations with players in the market.
When there is a decline in resources, either the standard of social provisions has to be lowered or the number of recipients has to be reduced, or both. Such dangers are doubly menacing in those post-communist countries where the political, institutional, and professional norms that could act as controlling mechanisms for the quality and impact of social provisions are missing. To employ again the analogy of the manufacture of cars it certainly does make a difference if a company that intends to cut production costs replaces the electrically-operated window opener with a mechanical one, or replaces a sophisticated brake system with an inferior one. In the post-communist countries, which lack long-standing traditions, the “welfare motorcar” often has very poor brakes.
It is quite a widespread phenomenon in the post-communist countries to “copy” and institutionalize those informal household management techniques or survival strategies, which make it possible for masses of households to adjust themselves to privation and poverty.
(Due to methodological difficulties it is almost natural that there is no macro-data on the extent and weight within the budget of the institutions run by local self-governments of these practices.) If there is a lack of financial resources, households have to make decisions whether to pay the electricity bill, or whether to buy their child a pair of new shoes. Even statutory obligations are ignored if there is no cash, and life must go on.
For instance, in 1998 only 8% of the Hungarian municipalities provided all the basic social services provided for in the Social Act. This type of institutionalized deviant behavior, while by no means can it be a legitimate method at the national level, may be locally accepted as a way of managing situations characterized by the lack of resources.
When households are short of cash they tend to revive the “oikos”; in other words, the methods of the traditional peasant societies. People try to repair household utensils that are out of order, from two worn-out dresses they stitch together a third “new” one. Collective knowledge and skills of this kind are mobilized when parents fix the shaky furniture in their children’s school, or children take their own toilet paper to the kindergarten.
A bizarre form of this practice in the Ukraine is the covering of wages and even pensions by goods instead of money. In other words, a return to the barter system.
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.