Decentralization
Decentralization or decentralisation is the process by which the activities of an organization, particularly those related to planning and decision-making, are distributed or delegated away from a central, authoritative location or group and given to smaller factions within it.
Concepts of decentralization have been applied to group dynamics and management science in private businesses and organizations, political science, law and public administration, technology, economics and money.
History
The word "centralisation" came into use in France in 1794 as the post-Revolution French Directory leadership created a new government structure. The word "décentralisation" came into usage in the 1820s. "Centralization" entered written English in the first third of the 1800s; mentions of decentralization also first appear during those years. In the mid-1800s Tocqueville would write that the French Revolution began with "a push towards decentralization" but became, "in the end, an extension of centralization." In 1863, retired French bureaucrat Maurice Block wrote an article called "Decentralization" for a French journal that reviewed the dynamics of government and bureaucratic centralization and recent French efforts at decentralization of government functions.Ideas of liberty and decentralization were carried to their logical conclusions during the 19th and 20th centuries by anti-state political activists calling themselves "anarchists", "libertarians", and even decentralists. Tocqueville was an advocate, writing: "Decentralization has, not only an administrative value but also a civic dimension since it increases the opportunities for citizens to take interest in public affairs; it makes them get accustomed to using freedom. And from the accumulation of these local, active, persnickety freedoms, is born the most efficient counterweight against the claims of the central government, even if it were supported by an impersonal, collective will." Pierre-Joseph Proudhon, influential anarchist theorist wrote: "All my economic ideas as developed over twenty-five years can be summed up in the words: agricultural-industrial federation. All my political ideas boil down to a similar formula: political federation or decentralization."
In the early 20th century, America responded to the centralization of economic wealth and political power with a decentralist movement. This movement blamed large-scale industrial production for the decline of middle-class shopkeepers and small manufacturers, and it promoted increased property ownership and a return to small-scale living. The decentralist movement attracted Southern Agrarians like Robert Penn Warren, as well as journalist Herbert Agar. New Left and libertarian individuals who identified with social, economic, and often political decentralism through the ensuing years included Ralph Borsodi, Wendell Berry, Paul Goodman, Carl Oglesby, Karl Hess, Donald Livingston, Kirkpatrick Sale, Murray Bookchin, Dorothy Day, Senator Mark O. Hatfield, Mildred J. Loomis and Bill Kauffman.
Leopold Kohr, author of the 1957 book The Breakdown of Nations – known for its statement "Whenever something is wrong, something is too big" – was a major influence on E. F. Schumacher, author of the 1973 bestseller Small Is Beautiful: A Study of Economics As If People Mattered. In the next few years a number of best-selling books promoted decentralization.
Daniel Bell's The Coming of Post-Industrial Society discussed the need for decentralization and a "comprehensive overhaul of government structure to find the appropriate size and scope of units", as well as the need to detach functions from current state boundaries, creating regions based on functions like water, transport, education and economics which might have "different 'overlays' on the map." Alvin Toffler published Future Shock and The Third Wave. Discussing the books in a later interview, Toffler said that industrial-style, centralized, top-down bureaucratic planning would be replaced by a more open, democratic, decentralized style which he called "anticipatory democracy". Futurist John Naisbitt's 1982 book "Megatrends" was on The New York Times Best Seller list for more than two years and sold 14 million copies. Naisbitt's book outlines 10 "megatrends", the fifth of which is from centralization to decentralization. In 1996 David Osborne and Ted Gaebler had a best selling book Reinventing Government proposing decentralist public administration theories which became labeled the "New Public Management".
Stephen Cummings wrote that decentralization became a "revolutionary megatrend" in the 1980s. In 1983 Diana Conyers asked if decentralization was the "latest fashion" in development administration. Cornell University's project on Restructuring Local Government states that decentralization refers to the "global trend" of devolving responsibilities to regional or local governments. Robert J. Bennett's Decentralization, Intergovernmental Relations and Markets: Towards a Post-Welfare Agenda describes how after World War II governments pursued a centralized "welfarist" policy of entitlements which now has become a "post-welfare" policy of intergovernmental and market-based decentralization.
In 1983, "Decentralization" was identified as one of the "Ten Key Values" of the Green Movement in the United States.
A 1999 United Nations Development Programme report stated:
Overview
Systems approach
Those studying the goals and processes of implementing decentralization often use a systems theory approach, which according to the United Nations Development Programme report applies to the topic of decentralization "a whole systems perspective, including levels, spheres, sectors and functions and seeing the community level as the entry point at which holistic definitions of development goals arefrom the people themselves and where it is most practical to support them. It involves seeing multi-level frameworks and continuous, synergistic processes of interaction and iteration of cycles as critical for achieving wholeness in a decentralized system and for sustaining its development."
However, it has been seen as part of a systems approach. Norman Johnson of Los Alamos National Laboratory wrote in a 1999 paper: "A decentralized system is where some decisions by the agents are made without centralized control or processing. An important property of agent systems is the degree of connectivity or connectedness between the agents, a measure global flow of information or influence. If each agent is connected to all other agents, then the system is highly connected."
University of California, Irvine's Institute for Software Research's "PACE" project is creating an "architectural style for trust management in decentralized applications." It adopted Rohit Khare's definition of decentralization: "A decentralized system is one which requires multiple parties to make their own independent decisions" and applies it to Peer-to-peer software creation, writing:
Goals
Decentralization in any area is a response to the problems of centralized systems. Decentralization in government, the topic most studied, has been seen as a solution to problems like economic decline, government inability to fund services and their general decline in performance of overloaded services, the demands of minorities for a greater say in local governance, the general weakening legitimacy of the public sector and global and international pressure on countries with inefficient, undemocratic, overly centralized systems. The following four goals or objectives are frequently stated in various analyses of decentralization.; Participation
In decentralization, the principle of subsidiarity is often invoked. It holds that the lowest or least centralized authority that is capable of addressing an issue effectively should do so. According to one definition: "Decentralization, or decentralizing governance, refers to the restructuring or reorganization of authority so that there is a system of co-responsibility between institutions of governance at the central, regional and local levels according to the principle of subsidiarity, thus increasing the overall quality and effectiveness of the system of governance while increasing the authority and capacities of sub-national levels."
Decentralization is often linked to concepts of participation in decision-making, democracy, equality and liberty from a higher authority. Decentralization enhances the democratic voice. Theorists believe that local representative authorities with actual discretionary powers are the basis of decentralization that can lead to local efficiency, equity and development." Columbia University's Earth Institute identified one of three major trends relating to decentralization: "increased involvement of local jurisdictions and civil society in the management of their affairs, with new forms of participation, consultation, and partnerships."
Decentralization has been described as a "counterpoint to globalization removes decisions from the local and national stage to the global sphere of multi-national or non-national interests. Decentralization brings decision-making back to the sub-national levels". Decentralization strategies must account for the interrelations of global, regional, national, sub-national, and local levels.
; Diversity
Norman L. Johnson writes that diversity plays an important role in decentralized systems like ecosystems, social groups, large organizations, political systems. "Diversity is defined to be unique properties of entities, agents, or individuals that are not shared by the larger group, population, structure. Decentralized is defined as a property of a system where the agents have some ability to operate "locally." Both decentralization and diversity are necessary attributes to achieve the self-organizing properties of interest."
Advocates of political decentralization hold that greater participation by better informed diverse interests in society will lead to more relevant decisions than those made only by authorities on the national level. Decentralization has been described as a response to demands for diversity.
; Efficiency
In business, decentralization leads to a management by results philosophy which focuses on definite objectives to be achieved by unit results. Decentralization of government programs is said to increase efficiency – and effectiveness – due to reduction of congestion in communications, quicker reaction to unanticipated problems, improved ability to deliver services, improved information about local conditions, and more support from beneficiaries of programs.
Firms may prefer decentralization because it ensures efficiency by making sure that managers closest to the local information make decisions and in a more timely fashion; that their taking responsibility frees upper management for long term strategics rather than day-to-day decision-making; that managers have hands on training to prepare them to move up the management hierarchy; that managers are motivated by having the freedom to exercise their own initiative and creativity; that managers and divisions are encouraged to prove that they are profitable, instead of allowing their failures to be masked by the overall profitability of the company.
The same principles can be applied to the government. Decentralization promises to enhance efficiency through both inter-governmental competitions with market features and fiscal discipline which assigns tax and expenditure authority to the lowest level of government possible. It works best where members of the subnational government have strong traditions of democracy, accountability, and professionalism.
; Conflict resolution
Economic and/or political decentralization can help prevent or reduce conflict because they reduce actual or perceived inequities between various regions or between a region and the central government. Dawn Brancati finds that political decentralization reduces intrastate conflict unless politicians create political parties that mobilize minority and even extremist groups to demand more resources and power within national governments. However, the likelihood this will be done depends on factors like how democratic transitions happen and features like a regional party's proportion of legislative seats, a country's number of regional legislatures, elector procedures, and the order in which national and regional elections occur. Brancati holds that decentralization can promote peace if it encourages statewide parties to incorporate regional demands and limit the power of regional parties.