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Decentralisation and Good Governance

Thomas O. Hueglin Decentralisation and Good Governance (Work Sessions 6 and 18) 1. Overview This report begins with a brief conceptual clarification of decentralisation and governance in the context of federalism, and continues with a discussion of the four country cases: Italy, Nigeria, Mexico and the United Kingdom. The concluding critical evaluation presents common insights and lessons, which include the need for a federal balance between centralisation and decentralisation, emphasis on negotiated agreement rather than majority rule, a predisposition for bargaining, the inevitable versatility of outcomes, and a general spirit of getting along rather than getting it right. 2. The discussions The overall purpose of these work sessions was to discuss democratic possibilities of decentralisation in a number of countries with strong centralist traditions. Good governance was predefined as a move towards increased transparency of the political process, accountability and responsiveness of governments to the people, and respect for human rights. From various angles the debate revolved around the central question of whether decentralisation can improve democratic qualities of governance in the context of increasingly diverse societies. In general, most participants tended to answer this question positively. All agreed, however, that decentralisation in this sense must involve more than mere administrative devolution. Real autonomy in terms of fiscal capacities was seen to be as important as support from organised civil society at the regional and especially local level. 3. Conceptual frameworks Decentralisation and governance were the main concepts framing the discussions in the work sessions. In the context of a conference on federalism it seems appropriate to clarify the conceptual relationship between federalism as an institutionalised form of divided government, decentralisation as a procedural move towards strengthening lower-level governments, and the general paradigmatic switch from government to governance. 3.1. Federalism and decentralisation Decentralisation simply means that certain powers of the central government, legislative, regulatory or administrative, are redistributed or delegated to a lower level of government. This can happen in federal or in unitary political systems. Britain, for example, a strongly unitary state until recently, nevertheless has had a long tradition of decentralised local government. In the context of federalism as an institutionalised form of divided government, decentralisation includes a constitutional guarantee that these powers cannot be taken away from the lower level of government without its own formal consent. Decentralisation in federal systems means, in other words, a formal shift in the constitutionally designed balance of powers. The notion of balance is crucial. Federalism is a system of mutual checks and balances. Minimally, it gives expression to two manifestations of the popular will: national and regional. Decentralisation in the context of federalism therefore cannot be understood as a unilateral withdrawal from joint responsibilities. Particular autonomies remain embedded in a commitment to universal solidarity. It should be noted here that this understanding of federalism as solidarity among autonomous communities has its roots in a continental European tradition (Hueglin, 1999) that is different from the American understanding of competitive federalism (Dye, 1990). It is fair to say that the discussions of the two work sessions were inspired more by the European than the American understanding of federalism. 3.2. Federalism and governance Federalism is traditionally understood as divided government on the basis of shared sovereignty. As in unitary states, there is an assumption that responsibility for the process of governing lies exclusively in the hands of elected political representatives. This assumption has proved untenable in complex modern societies. The process of governing routinely involves all kinds of non-governmental actors, regulatory agencies, civic organisations and the private sector. This is what the paradigmatic shift from government to governance is meant to express. In the context of democratic federalism and decentralisation this raises the question of multilevel governance beyond the state (Kohler-Koch and Eising, 1999). Federal governance must find means of extending mutual control, via checks and balances, to all governing agents, governmental, nongovernmental, public and private. If that is not the case, there will be only a federalism of governments. 4. Cases The four cases discussed were very different. Italy is a unitary state with regions and provinces. The main issue is constitutional change that would transform the status of the regions from administrative decentralisation to federalism. Nigeria has only recently remerged from military dictatorship as a democratically constituted federal state. The main issues are ethical reconciliation and government accountability. The United Kingdom has finally begun a process of devolution. Scotland in particular has gained extensive domestic legislative powers, but it remains dependent on fiscal transfers from the central state. Mexico has been a federation since 1917 but for most of the twentieth century, the political process was controlled almost entirely by oneparty rule at the centre. The main issue has been the use of existing federal structures for democratisation from below. 4.1. Italy Federalism and decentralisation have become catchwords in Italian politics for two main reasons. One is the ongoing process of European integration in which the regions want to play a more autonomous role that is encouraged by European Union (EU) structural programs and other regional policies. The other reason is connected with domestic constitutional reform. Federalism is widely regarded as a structural means of disentangling the notoriously corrupt networks of the central state. The presentation and discussion started from the revised Title V of the Constitution, which declares that Italy is a republic constituted by municipalities, provinces, metropolitan cities, regions, and the state. While this is certainly innovative (by comparison, the United States constitution famously begins with “we the people”, whereas the Swiss Constitution mentions the people and the cantons), it creates more questions than answers. The problem appears to be twofold. On the one hand, Italian pluralized or multilevel governance to date lacks a more autonomous distribution of resources. It is only a system of decentralised administration. On the other hand, a satisfactory delivery of service seems impossible given the unevenness of municipal resources and organisation. In addition, the strongest opposition against serious efforts towards decentralisation continues to come from the central bureaucracy. A good deal of faith was accorded to the principle of subsidiarity (Follesdal, 1998). In line with Article 3b of the European Maastricht Treaty, subsidiarity means that decisions in a multilevel system of governance should be made as close to the people as possible. Subsidiarity, in other words, is a political principle of guidance rather than a legally binding stipulation. This means that its application requires negotiated agreements. In the EU such negotiations are organised into the community method. In Italy, it is not so clear where negotiated agreements on who should do what might come from. It would require some formal degree of federalisation granting lower-level units constitutionally guaranteed bargaining positions. Such a position is available only, and then only to a certain extent, to regions with special autonomy status. In this context, Southern Tyrolia was presented as a success story where decentralisation had indeed lead to internal solutions for the accommodation of the three language groups, Germans, Italians and Ladinos. More generally, it was convincingly pointed out that decentralisation by means of constitutional federalisation would be an appropriate response to Italy’s endemic transparency and accountability problems. The main reason is the existence and long tradition of deeply embedded regional cultures that have survived the formation of the modern Italian state. The generation of economic incentives and the delivery of welfare services could be placed more autonomously in the hands of already existing political classes at the regional and local level. Italian civil society, in other words, appears well positioned to embrace federalism more fully. As a note of caution, it should be mentioned that federalist initiatives have mainly come from the rich north of the country, and that they have been forwarded as a new endorsement of competitive federalism with the intention to end the current regime of fiscal redistribution to the poorer south. The transformation of Italy into a fully developed federal state would obviously require the opposite, a strong commitment to fiscal equalisation. 4.2. Nigeria The case of Nigeria appears to be almost the exact opposite to that of Italy. Constitutional federalism has been imposed from above, yet overwhelming transparency and accountability problems persist because civil society is unprepared and lacks the socio-economic tools necessary to take an active part in it. The Nigerian state is an artificial colonial construction. Episodes of military dictatorship and constitutional federalism have followed one another during ongoing power struggles among three dominant ethnic groups in a poly-ethnic tribal society. In order to accommodate tribal elites, the dynamic of federalisation has been escapist in the sense that ever more states have been created so that 36 states have now replaced the original three. Ironically, this dynamic appears unable to cope with ethnic tensions because of its inherent divide-and-rule tactic. It was intelligently observed that democratic federalism increases these tensions, because federalism is understood as licence to self-rule without at the same time fostering a cooperative spirit of living together. This is the issue of balance mentioned earlier. The main challenge for the Nigerian federal state under these conditions is to decrease ethnic tensions via the joint experience of collective progress. Even more daunting is the task of developing a civil society capable of participating in such a joint federal enterprise. The principal obstacle is the overwhelming level of state corruption in collusion with the international corporate sector. Nigeria is one of the world’s richest oil producers, yet the mainstream of society lives at third world subsistence levels or worse. This would obviously help to explain why local government is described as weak and unable to strengthen federalism from below. As it was pointed out, there is an anti-corruption commission at work in Nigeria; but while the state governments can use it to control local government, the federal government cannot control the state governments. Herein exactly lies the problem, because it is at the state level that the corruption of political elites combines with ethnic rivalries and a general jockeying for power. A good deal of discussion was devoted to the question of whether the problems of Nigerian federalism are embedded in the divided nature of its society, or whether these divisions are in fact creations of military rule. This allows the point to be made that there are indeed two strategies of federalism at work here. One is a bottom-up strategy aiming at federalisation as a process of growing civic involvement by bringing government closer to the people. The other, which is particularly prevalent in post-colonial societies, is a top-down strategy aiming at the utilisation of regional and local elites in administering stable governance from the centre. It seems that in the Nigerian case neither is possible, because civil society is not ready to assume its role under the first strategy, and regional elites are too divided for stable cooperation under the second. Nigeria nevertheless has an impressive record of national civic organisation, including its media. However, government and opposition are mostly played out at the elite level. Viable federalism would require a cooperative learning process at the popular level. 4.3. Mexico Mexico, which has used existing federal structures for democratisation from below, in many ways illustrates what should happen at the next stage in Nigeria. However, this is easier said than done. Unlike Nigeria, Mexico has a long liberal tradition and few ethnic divisions. Mexico has been a federal state since 1917, but since the 1930s Mexican federalism has been overshadowed by corrupt one-party rule at the centre. During the past two decades, however, the existence of federal structures of government allowed the democratic opposition to gain ground from the periphery. This process began with the electoral success in Baja California in 1989 and ended, for the time being, with the electoral victory of Vicente Fox as Mexican president in 2000. This success story does not mean, of course, that the process of Mexican democratisation is complete, though it underscores the existence of regional liberal elites capable of using federal structures and processes to their advantage. Nor has it eradicated the problem of local corruption. The dangers of local tyranny were pointed out during the discussions, once again highlighting the necessity of understanding federalism as a system of mutual checks and balances. Particular emphasis was given to Article 115 of the Mexican constitution, which stipulates that municipalities are to be autonomous legal bodies within the states. The article also contains a long list of municipal responsibilities, and as in the Italian case, the issue of insufficient autonomous fiscal resources was raised. In the context of the work session’s emphasis on human rights, the question was asked whether the inability to organise efficient garbage collection constitutes a violation of basic human rights. It is at this level that federalism intersects with real life. The human rights issue became much more dramatic and urgent in the context of the indigenous struggle for autonomy in the Chiapas state. While this issue is now at the forefront of Mexican politics, it has been long neglected in the context of federalist theory and practice, because federalism has traditionally been a project of liberal elites who did not readily welcome competition from other social strata. The Chiapas struggle demonstrates powerfully that the formal structures of territorial federalism are not a sufficient safeguard for minority rights when these structures are used as a transmission belt for autocratic rule from the centre. It also highlights the need to rethink federalism as a regime of norm differentiation. In order to protect human rights as cultural rights it may not be sufficient to organise the legitimate exercise of the same set of universal norms into different levels of governance. It is necessary to develop an understanding of culturally differentiated sets of norms that finds its boundaries and limitations in negotiated understandings of the common good. 4.4. The United Kingdom At first glance it may appear odd that the United Kingdom should provide particularly important insights into federalism and decentralisation. It is the oldest unitary parliamentary democracy, in which the very notion of federalism has remained a contested concept of legitimate governance. Indeed, the very concept and terminological choice of devolution indicates that a federal division of sovereignty is not on the agenda. However, for at least two reasons, the United Kingdom may very well develop into a model case of how legitimate governance can be organised in complex societies. The first reason has to do with the accommodation of asymmetry. Although this was not a central part of the discussion, it is obvious that the United Kingdom has to cope with three very different scenarios of decentralisation. The most intriguing of these pertains to Northern Ireland and the attempt, in the Good Friday Agreement, at finding a formula of shared governance that not only involves the two conflicting parties within Northern Ireland itself but also the two adjacent nation states, Britain and Ireland. The two other contenders for home rule, Scotland and Wales, differ from one another in the level and intensity of national identity. Consequently, home rule provisions for Scotland have become more comprehensive than those for Wales. The second reason points to federalism as a political process. The Scottish parliament now possesses jurisdiction over all matters previously only administratively devolved. While this may not have revolutionised Scottish social life in material terms, especially since the new parliamentary powers do not include fiscal autonomy, it has certainly brought new life and a new dynamic to the political process. Often overlooked in this context is the gender dimension. As reported, 37% of members in the Scottish parliament now are women. This is not to say that decentralisation automatically promotes gender equality. But insofar as it opens up political spaces not yet occupied by the usual suspects and vested interests, it may allow the political process to become more inclusive. 5. Critical evaluation Can decentralisation bring about good governance? This was the central question for both work sessions. If anything emerged as a common denominator linking the four cases, then it was that the answer to this question had to be: it depends. 5.1. Decentralisation and balance Good governance was generally understood in terms of the four work session sub-headings: transparency, accountability, responsiveness and human rights, and there was almost universal agreement that decentralisation would strengthen these goals and values. This was not surprising since all four cases involved political systems with a long record of centralised power abuse. Thus decentralisation in the Nigerian case was seen as a strategy for strengthening civil society against the spectre of renewed dictatorship. In the case of Mexico, federalism was clearly recognised as an opportunity to structure democratisation from below. The Italians embraced federalism as a remedy for bureaucratic corruption organised from the centre, and in the context of the United Kingdom, the case of Scotland was celebrated as the beginning of a new political openness and inclusion. It was mainly among the participants from the older and established federal states that a more cautious endorsement of decentralisation prevailed. Here, the notion of balance was referred to time and again. Federalism, it was pointed out, could only bring about good governance if it found a middle path between self-determination and living together, fiscal autonomy and solidarity, respect for cultural identity and a commitment to a mutually agreed common good. A concept and vision of federalism emerged according to which a commitment to power sharing is at least as important if not more important than the – legitimate – quest for autonomy. This was also echoed in a reference to Romania where the first timid steps towards decentralisation beg the question of how to combine sufficient levels of local self-government with the need to organise and maintain a presence in central decision making. 5.2. Negotiated agreement Particular emphasis was placed upon the political process. Human rights in particular, it became clear, often cannot simply be defined in the abstract but require mutual respect and negotiated agreement among the various members of diverse societies. At the same time, however, they must be justiciable by a strong and independent court system – albeit a court system that is itself reflective of diversity. The principle of inclusion overrides all numerical formulae of federal representation. As was pointed out in the case of India, for example, the protection of small minorities might call for representative affirmative action such as the reservation of a certain number of parliamentary seats (at all levels of government) regardless of numerical strength. 5.3. Spirit of the federalist bargain The two most compelling comments heard at the two work sessions referred neither to improved institutional design nor to procedural efficiency. They appealed to the spirit rather than the letter of the federalist bargain. The first one occurred in the context of cultural accommodation among Italians and Germans under South Tyrolia’s autonomy statute. The autonomous organisation of official bilingualism, it was declared with emphatic enthusiasm, not only resulted in understanding each other’s language but also each other’s mentality. Differences, in other words, must not just be tolerated, they must be understood and even appreciated. This is the spirit of living together. The second comment spoke of federalisation and decentralisation as processes that aim at creating a more complex system in order to simplify things. Nothing could capture the essence and spirit of federalism more accurately. The modern nation state has operated on exactly the opposite premise. At least for complex and diverse societies, it has enormously complicated things by creating a system of governance based on simple majority rule. Federalist governance is not meant to be easy. One could also describe the difference in this way: while decision making in a unitary state is comparatively simple, policy implementation may be intensely complicated in diverse or fragmented societies. Conversely, the process of decision making in federal systems is usually arduous and complicated, yet once a negotiated agreement has been reached among all constituent members of a federation, policy implementation may be simpler indeed. 5.4. Federalist versatility The comparison with unitary statehood also leads to a further observation. The four cases under consideration in the work sessions were very different from one another. If the mandate of political accommodation in diverse societies is to be taken seriously, one might ask how one can possibly hope to find the solution in federalism and decentralisation for all. Is not the advocacy of one uniform system of governance substituted by another? Satisfactory answers to these questions are difficult, but this much can perhaps be said: the unitary model of modern statehood has itself existed more in theory than in practice. Variations between, say, the French, the British and the Scandinavian form of statehood, for example, have been and are significant. They have been shaped by differences in the composition, mentality and aspirations of different peoples, and by the compromises among different groups of people sharing the same nation-state boundaries. If the unitary state model allowed that much variability, it should be reasonable to assume that this variability is enhanced if not multiplied by federalism as a form of multilevel governance. The ultimate point of all discussion in this context was not to construct a firm vision of decentralised multilevel federalism and then to see how these different cases could be made to fit. Rather it was to attempt to understand these cases in their own right, and then to investigate whether the general principles of decentralised federal governance can be adapted accordingly. 6. Concluding observation: getting it right versus getting along These two work sessions and their participants would be misrepresented by attributing to them an undue indulgence in relativism. The discussions were carried throughout by a firm commitment to basic human values and rights including the right to make meaningful individual choices within the context of one’s own cultural identity, and the right to political participation. What was particularly impressive was that the search for possible solutions was less driven by the insistence of getting it right than by a spirit of getting along (Williams, 2001). This is what strikes this scientific summary writer as federalism at its best. References Dye, T.R., 1990. American Federalism: Competition among Governments. Lexington: Lexington Books. Follesdal, A., 1998. Survey Article: Subsidiarity. The Journal of Political Philosophy, 6 (2), 190-218. Hueglin, T.O., 1999. Early Modern Concepts for a Late Modern World: Althusius on Community and Federalism. Waterloo: Wilfrid Laurier University Press. Kohler-Koch, B. and Eising, R., eds, 1999. The Transformation of Governance in the European Union. London: Routledge. Williams, M.S., 2001. Toleration, Canadian-Style: Reflections of a Yankee-Canadian. In: R. Beiner and W. Norman, eds. Canadian Political Philosophy. Don Mills: Oxford University Press, 216-231.