ALTERATION BETWEEN MORE OR LESS DECENTRALIZED GOVERNANCE

— It includes Pakistan and China
—
PAKISTAN
— 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.

6. CHINA
— 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.
— Uniqu
e 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, en
try 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 ro
le 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.

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