Political decentralization includes organizations and procedures for increasing
citizen participation in selecting political representatives and in making public
policy; changes in the structure of the government through devolution of
powers and authority to local units of government; power-sharing institutions
within the state through federalism, constitutional federations, or autonomous
regions; and institutions and procedures allowing freedom of association and participation
of civil society organizations in public decisionmaking, in providing
socially beneficial services, and in mobilizing social and financial resources to
influence political decisionmaking.
—Fiscal decentralization includes the means and mechanisms for fiscal cooperation
in sharing public revenues among all levels of government; for fiscal
delegation in public revenue raising and expenditure allocation; and for fiscal
autonomy for state, regional, or local governments.
—Economic decentralization includes market liberalization, deregulation,
privatization of state enterprises, and public-private partnerships.
As the concepts and forms of decentralization became more diverse so did the
objectives of its advocates. They argued that decentralization could help accelerate
economic development, increase political accountability, and enhance public
participation in governance; and when pursued appropriately decentralization
could also help break bottlenecks in hierarchical bureaucracies and assist local
officials and the private sector to cut through complex procedures and get decisions
made and implemented more quickly. Decentralization could increase
the financial resources of local governments and provide the flexibility to respond
effectively to local needs and demands.