There is much theoretical debate in development circles about the role of ‘good governance’ and decentralisation in alleviating poverty. What does a case study of the issue in a particular country reveal?
A paper from the Social Policy and Development Centre in Karachi examines the Pakistani experience. It identifies four issues which relate governance to poverty: democracy, the rule of law, bureaucratic performance and pro-poor institutions. The authors find fault with Pakistan’s record on all of these, but hope that decentralisation will improve it on all fronts and hence the prospects for poverty alleviation. Decentralising power and decision-making can empower local citizens, including the poor, reduce the opportunities for corruption and improve efficient use of resources through fuller local knowledge. In a comment on the article, Akhtar Mahmood, former Secretary to the Government of Pakistan, disagrees: without civil, judicial and democratic reform, decentralisation cannot achieve any significant results.
- Social and economic – not just civil – rights are identified as fundamental human rights; the authors note the emphasis on caring for the poor in all religions. Equity – including more effective redistribution – is seen as central to good governance by both the authors and Mr Mahmood.
- More democracy does not necessarily imply less poverty: an illiterate electorate may vote along tribal or ethnic lines rather than according to their real best interests; elected officials may be inaccessible to the poor.
- The rule of law is particularly important for the poor, who are most vulnerable to its breakdown, but they often have least access to it owing to poverty and illiteracy; decentralisation proposals include alternative dispute resolution mechanisms which may be more accessible.
- Civil bureaucracy is inefficient because of its antiquated incentive structure, and is too closely linked to politics. Corruption is endemic, and its burden falls most heavily on the poor, who can ill-afford the routine greasing of palms necessary to secure timely assistance.
- State institutions are too far removed from grassroots level to be pro- poor; decentralised institutions can involve the local community and design more effective interventions based on greater local knowledge.
- Pakistan’s decentralisation may reduce rural-urban migration and improve governance to some extent, but suffers some incoherence: decision-making is decentralised but without sufficient resources; some administrative units are too small to be efficient or even viable.
Decentralisation may bring many benefits, but cannot in itself guarantee pro- poor results: evidence suggests that gender imbalances have worsened in some cases, for example.
- Decentralised institutions are subject to capture by local interest groups; even at the national level power is largely oligarchic – or, periodically, military.
- Property rights are central to the rule of law, but defending particular patterns of ownership on the grounds of stability can perpetuate inequality and hinder growth.
- If it is to be effective, political decentralisation (of decision-making) must be accompanied by the financial (resources to implement decisions), and the institutional (accountability of decision-makers to those affected by decisions).
- Whether or not to decentralise a particular issue area depends on possible externalities of devolved decisions; how far it can be self-financed; whether it is justified by economies of scale; and issues of institutional capacity.
