It includes Pakistan and China
Alterations between more and less decentralization correlated with alterations between dictatorship and democracy at the national level.
Decentralization used for consolidation of military power over traditional political parties and regional powers.
Not experienced any multiparty democracy at the National level.
The Communist party used it to create strong economic incentives for development at the local level, while to restrict the political power of local governments.
Alterations are due to lack of coordination inherent in decentralized modes of governance relative to their economic incentives
Recently experimented with elections to local governments, but severe curb exists on the powers of these officials over Communist party officials.
Unique in the World, for the local governments role in promotion of development of local businesses and production enterprises.
Decentralization was not new initiative to Chinese system, it is experienced from late 1950s to late 1970s
It is the part of fundamental set of market-oriented reforms initiated from 1970s as a response to production inefficiency of enterprises and people’s communes owing to a lack of incentives for workers and farmers.
After Mao, in late 1970s administrative and fiscal decentralization, awarding de-facto control rights over production to households, awarding state owned enterprises to managers, entrusting local government leaders with various contractual responsibility systems.
Local govts involved in investment approval, entry regulation, and resource allocation.
Officials of LGs managed town-ship and village enterprises (TVEs) grew more in 1980S to 1990s.
SEZs in coastal provinces set up foreign trade corporations, set local tax rates, and provided special fiscal privileges.
Fiscal relations with LGs amended in 1980, 1982, 1988, and 1994.
Reforms of 1980s increased fiscal autonomy of LGs to generate higher local revenues allowing them to retain the bulk their revenues (TVEs surplus also), baove which remitted to the center.
LGs played key role in economic development.
1994 reforms achieved some measure of recentralization, by raising central share from 35 to 60%, but at the same time raised fiscal transfers to preserve regional allocation of funds.
The role of TVEs weakened in late 1990s as market-based developments rendered the role govt managers less important.
The positive impact is limited to only coastal provinces, inland and backward areas had less fiscal resources.
The local governments were given the charge of local infrastructure, social services and to implement central programs of grain procurement, birth control, and compulsory education.
Many mandated responsibilities are unfunded, forcing them to impose coercive levies on people allowing the scale of local bureaucracy.
Higher mandates led to higher rural taxation and higher local expenditures.
Due to centralized political system, long standing bureaucracy, absence of elections, government became more responsible to higher governments than to lower people.
Complaints of corruption and rent-seeking by local government officials became common.
Recently increase in mobility of workers, firms and direct elections to village committees since 1998, some local accountability is tried. But their authority is delicate and ambiguous.
A mechanism to lodge complaints, to lower local tax burdens, improve transparency in administration were attempted by Village Committees.
But how far, govt. tolerates a genuine participative local democracy is to be seen.