Decentralization has emerged as a highly popular strategy for improving public sector efficiency, responsiveness, and accountability in the developing world. The increased opportunities for citizen participation and ownership under decentralized systems are also claimed to contribute to social and political stability. Sceptics contend, however, that by accentuating ethnic, political, and geographic divisions in often highly fragmented societies with weak state structures, decentralization raises the risk of civil and ethnic conflict.
This paper reviews the theory and empirics of the intersection between decentralization and internal conflict. It assesses the aggregate relationship between various facets of decentralization and ethnic and civil conflict since 1995 using cross-national analysis focused on low-income countries. Finally, it presents case studies from Colombia, Ghana, the Philippines, and Uganda to illustrate the complex internal dynamics that influence the decentralization and conflict stabilization relationship.
The study finds that decentralization has highly differentiated effects on ethnic conflict. Decentralization initiatives that support increased levels of local government expenditures, employment, and elected leaders have been less likely to succumb to ethnic conflict. Conversely, countries with higher levels of local government taxes or designated structures of regional autonomy have been more susceptible to ethnic conflict. Contexts with previous ethnic conflict, weak central government control over the security sector, and disproportionate access to natural resource revenues are particularly vulnerable.
Key findings:
- Decentralization offers numerous advantages to developing countries. Yet, it is not a risk-free endeavour. Unconditional decentralization can easily play into dynamics of group identification and political polarization that are major contributors to internal conflict. Accordingly, despite its many potential benefits, decentralization initiatives should only proceed with constraints – recognizing the context, conflict risks, and need for concurrent efforts to strengthen ties between subnational and national political structures. The effects of decentralization on conflict outcomes are far more apparent for ethnic than civil conflict.
- Decentralization marked by greater degrees of legitimacy, control over expenditures, and capacity have mitigative effects on ethnic conflict. The two measures of fiscal decentralization considered – share of local expenditures and taxes – behaved very differently in explaining ethnic conflict. More extensive local government expenditures were linked to a lower propensity of post-1995 ethnic conflict. In contrast, greater levels of local taxes were associated with more frequent ethnic conflict. It may be that a relatively greater share of local expenditures originating from national sources serves a valuable conflict reduction function by strengthening the bond between the national and subnational levels of government, particularly in the many developing and democratizing countries where national identity is weak. Local governments that raise a large share of their own resources, on the other hand, may feel comparatively less affinity with and need for national structures.
- Measures of legal provincial autonomy are consistently linked to higher levels of ethnic conflict. Three different measures of decentralized legal authority – Treisman’s residual authority, independent indices of federalism, and Polity III’s centralization of state authority – all followed similar patterns of behavior. Systems where federalism was formalized or provincial governments granted some degree of autonomy were consistently linked to higher probabilities and magnitude of post-1995 ethnic conflict.
