What is the impact of decentralisation on poverty reduction? It is generally agreed that decentralisation does contribute to poverty alleviation. However, this paper by the Institute of Statistical, Social and Economic Research and the University of Ghana demonstrates that the effect of decentralisation is dependent on certain variables. Political, administrative and fiscal decentralisation need to be considered simultaneously. The sequencing and pace of the different types of decentralisation seem to play an important role.
Decentralisation is considered to be one of the most important strategies in the public sector reform agenda. Donors and governments in sub-Saharan Africa pursue decentralisation as a way to bring service delivery closer to consumers. It is also thought to improve the responsiveness of the central government to public demands, thereby reducing poverty, improving the efficiency and quality of public services and empowering lower units to feel more involved. Decentralisation is therefore linked to the concept of subsidiarity, that is, making decisions at the lowest feasible level. It also aims to reduce overload and congestion at the centre and speed up operational decision-making and implementation. It does this by minimising the bottlenecks associated with over-centralisation of powers and functions at just one or two points in the hierarchy of a public service organisation or ministry.
One of the most important factors behind the implementation of decentralisation programmes in sub-Saharan Africa is the potential for increased capacity of decentralised governments to formulate and implement pro-poor policies and programmes.
- This is because they are closer both institutionally and spatially to citizens in the rural areas, meaning they can be more responsive to the needs of the poor than the central government.
- Decentralisation implies greater efficiency of public management, arising from improved coordination and shorter decision making hierarchies (less bureaucracy).
- It also enhances political stability through the legitimisation of differences in local needs and perspectives (pluralism).
- Decentralisation seeks to increase the operational autonomy of line managers and agencies, leaving only broad policy guidelines to be worked out at the centre.
The following lessons and implications for poverty reduction can be drawn:
- Poverty is closely linked to political factors such as access to power and resources and the accountable and transparent management of local affairs.
- A genuine devolution of resources and authority can create openings for local communities. Thus, a democratically controlled local governance system is a precondition for poverty reduction.
- An efficient local government can play a useful role as a catalyst and coordinator of bottom-up development initiatives.
- A process of decentralisation that best serves poverty reduction is one that combines the strategies of political empowerment, resource mobilisation and enhanced service delivery.
- The degree of responsiveness to the poor and the extent to which decentralisation impacts on poverty are largely dependent on the relationship between central and local governments and the commitment of the central government to poverty reduction.
- Removing social barriers and building social institutions for poverty reduction can only be addressed if government has the political commitment to pursue decentralisation irrespective of its political and technical risks and trade offs.
