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Concepts of decentralization have changed rapidly over the past quarter of a century in tandem with the evolution in thinking about governance. Until the early 1980s government and the state were generally perceived of interchangeably. Government was seen as the institutional embodiment of state sovereignty and as the dominant source of political and legal decisionmaking. In developing countries, debates over the structure, roles, and functions of government focused on the effectiveness of central power and authority in promoting economic and social progress and on the potential advantages and disadvantages of decentralizing authority to subnational units of administration, local governments , or other agents of the state. Decentralization was defined as the transfer of authority, responsibility, and resources—through deconcentration, delegation, or devolution—from the center to lower levels of administration.1 By the early 1980s increasing international trade and investment; growing economic, social, and political interaction across national borders; and rapidly emerging technological innovations that increased the scope and reduced the costs of communications and transportation and helped spread knowledge and information worldwide, changed perceptions of governance and of the appropriate functions of the state. The concept of governance expanded to include not only government but also other societal institutions, including the private sector and civil associations. Debates shifted from the proper allocation of responsibilities within government to how strongly the state should intervene in economic From Government Decentralization to Decentralized Governance g. shabbir cheema and dennis a. rondinelli 1 1 10491-01_Ch01.qxd 5/3/07 2:48 PM Page 1 activities, whether central governments inhibited or promoted economic growth and social development, and the appropriate roles of government, the private sector, and civil society.2 As international economic interaction grew and as societies became more complex and interconnected, government came to be seen as only one, albeit a critically important, governance institution. The fact that people’s lives were also shaped by decisions made by individual entrepreneurs, family enterprises, and private firms; by multinational corporations and international financial institutions; and by a variety of civil society organizations operating both within and outside of national territories, became more apparent.3 As globalization pushed more countries to adopt market or quasi-market economies, and as technology drove the growth and integration of worldwide communication and transportation networks, demands for political and economic participation grew even in countries that had totalitarian, authoritarian, or dictatorial governments and in which the state traditionally played the dominant or controlling role in managing national affairs. Good governance came to be seen as transparent, representative, accountable, and participatory systems of institutions and procedures for public decisionmaking.4 From this broader perspective on governance new concepts of decentralization emerged as well. As the concept of governance became more inclusive, decentralization took on new meanings and new forms. In this book, we trace the transformation and evolution of concepts and practices of decentralization from the transfer of authority within government to the sharing of power, authority, and responsibilities among broader governance institutions. The contributors to this volume assess the emerging concepts of decentralization; the political, economic, social, and technological forces driving them; and new approaches to decentralizing both government and governance. The authors of each chapter explore the objectives of decentralization within this changing paradigm and the potential benefits of and difficulties in achieving them. Each of the chapters offers lessons of experience from countries around the world where attempts have been made to decentralize government or governance and the implications for public policy in the future. Emerging Concepts of Decentralization and Governance As the concept of decentralization evolved over the past half century, it has taken on increasingly more diverse and varied meanings, objectives, and forms.5 The first wave of post–World War II thinking on decentralization, in the 1970s and 1980s, focused on deconcentrating hierarchical government structures and bureaucracies.6 The second wave of decentralization, beginning in the mid-1980s, broadened the concept to include political power sharing, democratization, and market liberalization, expanding the scope for private sector decisionmaking. 2 g. shabbir cheema & dennis a. rondinelli 10491-01_Ch01.qxd 5/3/07 2:48 PM Page 2 During the 1990s decentralization was seen as a way of opening governance to wider public participation through organizations of civil society. After more than two decades—that is, the 1940s and the 1950s—of increasing centralization of government power and authority in both more developed and less developed countries, governments around the world began, during the 1960s and 1970s, to decentralize their hierarchical structures in an effort to make...


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