What is the best strategy for sustaining infrastructure investments in the developing world? Since institutional over-centralisation has clearly failed, and decentralisation has been far less successful than anticipated, what is the alternative?
This paper from Public Administration and Development addresses this question. It assesses why both institutional centralisation and its alternative, decentralisation have been inadequate in sustaining infrastructure investments, by examining various project reports and studies by academics and organisations such as USAID. It pinpoints that one failure of centralisation was poor administration defined by its lack of empathy for actual local conditions, needs, wants, resources and potentials and its ineptness to change or organise established projects to alleviate these problems. As for decentralisation, it is suggested that a lack of theoretical understanding in this area has been its chief downfall. The report concludes by suggesting an alternative strategy.
Despite the fact that many decentralisation projects have not lived up to expectations the majority of developing countries appear keen to retain their commitment to this way of sustaining their infrastructures. Some authors suggest the reasons are: Inadequate training, insufficient resources, national political reluctance and insufficient planning. Why else has this ‘reform of choice’ performed so badly?
- Decentralised planning has rarely affected the agendas or priorities of the centrally controlled sectoral ministries, which still regulate the majority of programme and project resources.
- There has been a lack of a theory to explain when, how and why to decentralise.
- Decentralisation attempts have often focussed on the ‘organisation’ as a whole and neglected individuals and their behaviour in respect of completing tasks.
- Questions such as where, when, how and with whom authority should be registered, and for which functions, have been neglected.
- Therefore, the key questions are: (1) How should incentives and disincentives be structured in order to complete a given task?; and (2) How much does it affect the chances that the task/good will be completed/provided?
An alternative strategy is to use ‘institutional analysis’ of the incentives/disincentives used to ensure that people complete a task. This type of analysis highlights the need of the individual who wishes to use the good, resource or service and then examines the ‘nature of that good’ and how it establishes a particular incentive or disincentive structure which may encourage its production/consumption. The report argues that a combination of centralised/decentralised arrangements will be needed to boost the range of goods and services that developing countries need to prosper. This includes:
- Accepting that some basic operations will remain in centralised institutions.
- The ability to determine what sorts of goods and services require what sorts of institutional arrangements.
- Analysing the core elements of desired goods, services or resources
- Examining the incentives those features bear.
- Assessing the work required to help maintain those goods.
- Discovering the institutional arrangements required to inspire people to perform those tasks.
