Dilemmas of Decentralization in the Contemporary World
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Publish date: 2012-12-31
Gospodarka Narodowa 2012;260(11-12):123–145
The paper looks at the determinants and effects of decentralization policy pursued in many countries worldwide in the last several decades. The main focus is on the role of decentralization and its influence on poverty, corruption, local democracy, the competitiveness and innovativeness of local and regional economies, and the economic growth of countries. The analysis is based on various empirical studies, theoretical studies, as well as the author’s experience in researching decentralization in India. The analysis shows that decentralization is not a universal method to ensure faster economic and socio-cultural development. Decentralization reforms may have different results in different countries, depending on how they are carried out and on a number of national, regional and local determinants (economic, political, social, demographic, cultural, and religious). There is no single, universal model of decentralization that could be implemented in every country at any time, the author says. The analysis shows that a low level of decentralization inhibits economic and social development. However, excessive decentralization—too broad or too deep – also appears to be irrational. There are situations when decentralization reforms bring more harm than good to the state, the author says. A specific model of decentralization, the procedures involved and the time of implementing it should always be carefully considered and adapted to the existing economic, social, political and cultural determinants in a country, the author concludes.