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Home»Document Library»The New Vision of Local Governance and the Evolving Roles of Local Governments

The New Vision of Local Governance and the Evolving Roles of Local Governments

Library
Anwar Shan with Sana Shah
2006

Summary

This book chapter traces the evolution and analytical underpinnings of local governance as background to a better understanding of the case studies of developing countries in the book. The chapter outlines analytical approaches to local governance that can be helpful in understanding the role of governments and comparing and contrasting institutional arrangements.

It further develops a model of local governance that integrates various strands of this literature and presents stylized models and institutions of local governance as practiced in different parts of the world during past centuries. It compares and contrasts the ancient Indian and Chinese systems of local governance with Nordic, Southern European, North American, and Australian models. Finally, it provides a comparative overview of local government organization and finance in selected developing countries as an introduction to the in-depth treatment of these countries in the rest of the book.

Key findings:

  • There are five perspectives on models of government and the roles and responsibilities of local government: (a) traditional fiscal federalism, (b) new public management (NPM), (c) public choice, (d) new institutional economics (NIE), and (e) network forms of local governance. The federalism and the NPM perspectives are concerned primarily with market failures and how to deliver public goods efficiently and equitably. The public choice and NIE perspectives are concerned with government failures. The network forms of governance perspective is concerned with institutional arrangements to overcome both market and government failures.
  • The modern role of a local government is to deal with market failures as well as government failures. This role requires a local government to operate as a purchaser of local services, a facilitator of networks of government providers and entities beyond government, and a gatekeeper and overseer of state and national governments in areas of shared rule. Local government also needs to play a mediator’s role among various entities and networks to foster greater synergy and harness the untapped energies of the broader community for improving the quality of life of residents. Globalization and the information revolution are reinforcing these conceptual perspectives on a catalytic role for local governments.
  • This view is also grounded in the history of industrial nations and ancient civilizations in China and India. Local government was the primary form of government until wars and conquest led to the transfer of local government responsibilities to central and regional governments. This trend continued unabated until globalization and the information revolution highlighted the weaknesses of centralized rule for improving the quality of life and social outcomes. The new vision of local governance argues for a leadership role by local governments in a multi-centred, multiorder, or multilevel system. This view is critical to creating and sustaining citizen-centred governance, in which citizens are the ultimate sovereigns and various orders of governments serve as agents in the supply of public governance. In developing countries, such citizen empowerment may be the only way to reform public sector governance when governments are either unwilling or unable to reform themselves.
  • Source

    Shah, A. & Shah, S. (2006). The New Vision of Local Governance and the Evolving Roles of Local Governments. In Shah, A. (eds). Local Governance in Developing Countries. Washington, D.C.: World Bank.

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