Decentralisation reform in Jordan

Defining decentralisation

Decentralisation is a complex and heterogeneous process. Decentralisation processes across the world have adopted a wide variety of forms, from the high level of decentralisation of certain federal states, such as Germany and some Spanish regions, to the more limited influence of regions in France or Hungary. Consequently, looking for a minimum common denominator is not a simple task.

The OECD broadly defines “decentralisation” (or devolution) as comprising a transfer of “public functions from higher tiers to lower tiers of governance. It can be administrative (transfer of civil servants and public functions to the local level), fiscal (devolution of fiscal resources and revenue generating powers), political (devolution of decision-making powers) or a mixture of these” (OECD, 2005). As such, the concept of decentralisation is often perceived in hierarchical terms, involving the top-down/vertical movement of administrative, fiscal and/or political/decision-making functions. Such functional movement can be intra-organisational (e.g. within government departments) or inter-organisational (e.g. from central to local administration).

For many years, international organisations like World Bank or UNDP have promoted decentralisation as a model to support policies closer to citizens. Decentralisation is directly linked to the principle of subsidiarity defined in article 5 of the Treaty on European Union5 and the Council of Europe (with the European Chart of Local Self-Government)6. The rationale is based on the need to transfer competencies and responsibilities to authorities closer to citizens so as to be more adapted to the local reality and their specific needs. This implies a certain degree of autonomy to adapt to local realities but always complying with national laws and guidelines. Different degrees of autonomy at subnational level can bring to different models of decentralisation, as mentioned earlier, that can go from a complete devolution from the top to the bottom to transfer of some competences to a lower level.

Promoting decentralisation also brings the opportunity to enhance local governance, citizen participation and local democracy. Interaction between the State and civil society is essential and often easier to be created at local than at central level. Decentralised governments can become key actors to promote an active and vibrant civil society; in fact a greater degree of decentralisation can generate more opportunities for the emergence of new civil society organisations.

Box 2.3 details the different dimensions of decentralisation, and the differences between decentralisation, deconcentration and delegation of powers.

Box 2.3. Theoretic approach to decentralisation

Decentralisation: the transfer of responsibility to democratically independent lower levels of government, thereby giving them more managerial discretion, but not necessarily more financial independence. It usually includes:

  • • Political decentralisation refers to a situation in which political power is moved either to regional or local bodies that are elected, or to administrative actors who are appointed and supervised by elected bodies. Political decentralisation requires effective constitutional, legal, and regulatory frameworks to ensure accountability and transparency.
  • • Fiscal decentralisation is the most comprehensive form of decentralisation as it is directly linked to budgetary practices. It involves resource reallocation to subnational authorities. Fiscal decentralisation touches upon all forms of decentralisation; reallocating responsibilities without assigning sufficient levels of resources to the newly empowered units will not result in effective decentralisation.
  • • Administrative decentralisation aims to transfer the position of the decision-making authority and responsibility for the delivery of select public services from the central government to other levels of government or agencies.

Box 2.3. Theoretic approach to decentralisation (cont.)

Devolution is the moving of political power from the top to the bottom. It involves a permanent - legal or constitutional - transfer of responsibility, decision making, resources and revenues from a higher level of government to a lower, local level that enjoys substantial autonomy from the decentralising authority. In terms of education decentralisation, devolution transfers responsibility for education to lower levels of government, such as governorates, municipalities, or districts.

Deconcentration transfers decision-making authority - often by administrative decree - from a higher to a lower level of bureaucracy within the same level of government. The same hierarchical accountability is maintained between local units and the central government ministry or agency that has been decentralised. Deconcentration is often the first step undertaken by newly decentralised governments to improve service delivery, that is, the transfer of responsibility from central ministries to field offices or more autonomous agencies, thereby becoming closer to citizens while remaining part of central government.

Delegation assigns - usually by administrative decree - decision-making authority for specifically defined functions to local units of government or agencies that are not necessarily branches or local offices of the decentralising authority. In terms of education decentralisation, responsibility is transferred to elected or appointed education governance bodies, such as school councils or school management.

Sources: OECD (2005), “Decentralisation and Poverty Reduction: from Lessons Learned to Policy Action”, Workshop OECD Development Centre and the OECD Development Assistance, Committee Network on Governance, OECD, Paris; OECD (2003), Managing Decentralisation: A New Role for Labour Market Policy, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264104716-en.

Under appropriate conditions, all of these forms of decentralisation and deconcentration can play important roles in broadening participation in political, economic and social activities in countries. Thus, decentralisation is not an end in itself, but is rather conceived to be “designed and evaluated for its ability to achieve broader objectives of [...] equity, efficiency, quality and financial soundness” (Bossert, 1998). When the decentralisation process starts, the medium and long-term objectives to be achieved are at the heart of the reform.

The differences between federal and unitary systems might appear to be clear and well defined. However, a closer look at the practices reveals that even within each category there are numerous variations. In OECD countries, the unitary state model is the most common form of organisation, as previously shown in table 2.3.

 
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