Local Employment and Economic Development (LEED Programme)

Managing Decentralisation


A tool widely used to improve local governance is decentralisation.  Decentralisation can take the form of either devolution to a lower level of government (e.g. regional or local government) or “deconcentration” of the central government administration, i.e. transferring decision making to a lower tier within the same administrative structure.  In both cases, decentralisation raises hard questions: How can decision-making power be passed on to a lower administrative tier or a sub-national entity while guaranteeing the same level of efficiency and transparency?  How can more flexibility be provided while maintaining full accountability?  The pressures to preserve full accountability for the use of public money often translate into few actual gains from decentralisation in terms of flexibility and capacity to meet local needs (OECD, 1998).  This has led several governments to turn instead to partnerships as a safer way to improve local governance (even if, as shown by the OECD Study on Local Partnerships  and other reports, partnership working is not exempt from accountability problems). 

The OECD has looked at the problems associated with decentralisation and addressed in particular the critical trade-off between administrative flexibility and public accountability.  Seeking to benefit from the advantages of both decentralisation and partnerships has required exploration of ways to reconcile accountability and flexibility.  The most innovative were examined at the Warsaw Conference on “Decentralisation of Labour Market Policy and New Forms of Governance: Tackling the Challenge of Accountability”, held in March 2003 (results published in OECD, 2003 ).

A common thrust of some of the methods identified is the assignment of more responsibility to public service officers and regional authorities for establishing and running operational co-ordination mechanisms.  One way of doing this is to require the local public service offices to review, jointly with the relevant local actors, the annual targets proposed for national programmes.  The example of the Irish Community Employment Framework shows that this allows programmes to be adapted to local needs while delivering them within the public service structure, thereby fulfilling standard accountability requirements.  In other experiments, governments have requested public services to set targets formulated in terms of local priorities, in co-operation with the local authorities.  An example is offered by the United Kingdom where public service agreements are reached in combination with local strategic partnerships chaired by local authorities.

These reforms do not involve transfers of power to lower levels of government but seek to ensure that local concerns are taken into account in the implementation of government programmes.  While the public service remains responsible for the delivery of programmes, this ensures that the programmes are better adapted to local needs and better co-ordinated with other measures.  Thus partnerships are formed, but of a different type, as government moves away from a model led by civil society and its community-based organisations to a model in which responsibility lies mainly with civil servants and local or regional authorities.

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