Hans P. Binswanger-Mkhize

The vision: During the immediate post-independence period, India developed the theory of ARD decentralization that is still valid today. It includes four key elements that contribute to positive agricultural and rural development: (i) community participation, (ii) decentralization, (iii) autonomous institutions at local and community level, and (iv) the application of modern agricultural technology. Global evidence shows that the vision has tremendous value in revitalizing the rural sector.

Positive international experience: Decentralization and increased popular participation are desirable not as ends in themselves, but because it has been observed that decentralization results in a wide spectrum of benefits. Among the benefits are: (i) enhanced transparency, (ii) enhanced government responsiveness as a result of increased accountability, (iii) reduced absenteeism, (iv) improved services at no extra cost, and (v) an improved quality of government outputs because local preferences are considered.

In the Philippines and Uganda, citizens perceive more corruption at central levels rather than at the local levels where peoples’ participation is wider (Azfar et al, 2000). Panel data of 30 countries shows clearly that entrenched, centralized political and bureaucratic cultures are the most significant determinants of corruption (Ivanyna and Shah ,2010). In a number of countries decentralization and community participation has led to quality improvements, costs savings, and the more timely completion of infrastructure projects, in particular. There are many types of examples from all parts of the world that support this general observation (Binswanger et al. 2010, Sud, 2010, and Bardhan, 2002).

In India decentralization and participation are still lagging after sixty years: In 1992/93, India’s central government took a major step towards greater decentralization, with the passage of the 73rd and 74th Amendments to the Constitution. Nearly two decades after their passage, progress has been very slow, with half-hearted and very partial actions by most state governments. The delegation of increased responsibilities at lower levels of government has often not been accompanied by the granting of any significant autonomy. The fiscal system devolves less than five percent of the overall fiscal resources to local governments; and almost no revenue generation and functionaries; the design of India’s central and centrally sponsored schemes centralizes power in the ministries at the national and state level, effectively clawing back the powers that were to be devolved.

While community participation is advocated in most programs, full transfer of functions and funds to communities occurs rarely, and most programs, in design or practice, also claw back powers to higher level administrators. Therefore local governments and communities cannot function as intended, and their lack of performance, and even lack of interest, is then cited as a reason to continue to manage things for them. As a result, agricultural and rural development remains deeply centralized, with sectoral silos that have led to serious difficulties in service delivery. The plethora of centrally-sponsored schemes in India has rendered local governments and their citizens into chasers of grants and favours, and created a generalized system of bribes to access them that is so well described in the movie “Well done, Abba.”

Reforming dysfunctional rural development institutions involved a return to the four principles above:

India has been a pioneer in articulating a strong vision for decentralization and people’s participation in agricultural and rural development. It is time for India to finally translate its own vision into reality. The Second Administrative Reforms Commission, the Finance Commission, and the Planning Commission provide a full set of recommendations on how to move from decentralization as an intention to decentralization in reality. A key reform agenda would include:

1. Centrally-sponsored schemes need to be consolidated into block grants, as long recommended. Block grants should be directed at local governments, not line agencies, with sharing rules among levels of local government and with communities.

2. Further decentralization would include the transformation of local governments to independent tiers of government; strengthening of administrative decentralization and of horizontal and downwards accountability; and increasing revenue-raising and co-financing at all levels; otherwise efforts are likely to neither promote efficiency nor good governance.

3. A clear plan of action is needed. It will have to include practical ways to implement the already available recommendations of the various commissions, as well as political tactics to overcome resistance from central and state politicians and agencies. Advocacy from the highest level and a training program are needed to change the attitudes of the IAS officers and other central and state cadres to decentralization. The plan needs to involve the Interstate Council, local governments, progressive chief ministers, and members of civic society.

There are few prior conditions for success of decentralization: Decentralization has occurred in the presence AND the absence of a variety of conditions. For example, decentralization has occurred both with and without: (i) a strong middle class; (ii) prior land redistribution; (iii) a high human development index; and (iv) a strong civil society. It has occurred in countries that are ethnically diverse oe homogeneous, strife-torn or quiescent; and in countries where social hierarchies and patriarchies are strong or weak. There are few areas of the world in which inequalities are so extreme that decentralization is a dangerous option that should not be considered (Manor, 2009).

Necessary elements for success include: (i) a state that has some minimal capacity; (ii) devolution of substantial powers onto elected bodies at lower levels along with substantial resources; (iii) accountability mechanisms that ensure the horizontal accountability of bureaucrats to elected representatives, and the downward accountability of elected representatives to ordinary people (Manor, 2009). A widely shared consensus is that success depends on the details of implementation and rigorous follow through.

Conclusion :

India has been a pioneer in formulating a strong vision for decentralization and increased people’s participation in agricultural and rural development. The vision is over sixty years old and in many countries has proven to be of tremendous value to revitalizing lagging agricultural and rural development sectors. It is essential for India that now the vision be translated into reality.

References :

• Azfar, Omar, Satu Kahkonen and Patrick, Meagher. 2000. “Conditions for Effective Decentralized Governance: A Synthesis of Research Findings.” IRIS Center Working Paper, University of Maryland

• Bardhan, Pranabh, 2002, Decentralization of Governance and Development, Journal of Economic Perspectives, Volume 16, Number 4: 185–205

• Binswanger-Mkhize, Hans P., Jacomina de Regt, and Stephen Spector, 2010, “Local and Community-Driven Development: Moving to Scale in Theory and Practice,” New Frontiers in Social Policy, Washington DC, World Bank

• Ivanyna, Maksym and Anwar Shah, 2010, Decentralization (Localization) and Corruption: New Cross-country Evidence, The World Bank, Policy Research Working Paper 5299

• Manor, James, 2010, Perspectives on Decentralization, Keynote Address at the IFPRI-University of Kiel Workshop on Government Decentralization Research, Washington DC, February 3-4

• Sud, Inder. 2010 “Governance for a modern society: Combining smarter government, decentralization and accountability to people” in Kohli and Sood (eds). 2010. India 2039: An affluent society in one generation. Manila: Asian Development Bank.

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^{1 The highest shares of public resources controlled by local governments in the developing world are: China (51%), Poland (38%), South Africa (28%), Uganda (25%), Indonesia (23%), and Brazil (20 %). These numbers stand in marked contrast to most sub-Saharan African countries (an average of around 5%), and India (3-4%).}

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Hans P. Binswanger-Mkhize is Professor Extraordinaire at the Institute for Economic Research on Innovation, Tshwane University of Technology, South Africa and a Senior Fellow of Amsterdam Institute for Development.