Decentralization

Difference between
Centralization &
Decentralization
BASIS FOR COMPARISON DECENTRALIZATION
CENTRALIZATION

The distribution of authority, responsibility and

The maintenance of powers and authority with respect to planning accountability to the various management
Meaning and decisions, with the top management, is known as levels, is known as Decentralization.
Centralization.

Reservation authority Systematic and consistent reservation of authority. Systematic dispersal of authority.

Communication Flow Vertical Open and Free

Public participation in Few people Mass people

decision Making

Advantage Proper coordination and Leadership Sharing of burden and responsibility

Power of decision making Lies with the top management. Multiple persons have the power of decision
making.

Best suited for Small sized organization Large sized organization

 DECENTRALIZATION
The concept of decentralization is as old as public
administration. It's growing popularity in the
developing countries
Decentralization is the process of
( Deconcentration, delegation &Devolution)
redistributing or dispersing(seperating)functions,
powers, people or things away from a central
location authority & responsibility
to field level
Decentralization includes political, administrative,
  Political decentralization aims to give
citizens or their elected representatives more
power in public decision-making.

 Administrative decentralization seeks to

redistribute authority, responsibility and
financial resources for providing public
services among different levels of government.
Fiscal Decentralization: Financial responsibility
is a core component of decentralization. Fiscal
decentralization generally refers to transfer of taxing
and spending power from the control of central
government authorities to government authorities at
sub-national levels (regional , provincial, municipal
etc.)

 Economic or Market Decentralization :The

most complete forms of decentralization from a
government's perspective are privatization and
deregulation because they shift responsibility for
functions from the public to the private sector.
Drawing distinctions between these various

concepts is useful for highlighting the many

dimensions to successful decentralization and
the need for coordination among them.
Decentralization is a systematic delegation of

authority at all levels of management and in all

of the organization.
 Authority may be delegated to the middle
level and lower level of management.
Different types of decentralization should be
distinguished because they have different
characteristics, policy implications, and
conditions for success
 According to Dennis A rondinell, Decentralization

is the transfer or delegation of planning, decision

making or management authority from central
government and its agencies to field organization,
subordinate units of government, semi- autonomous
public corporation, area wide or regional authorities,
functional authorities or non-government organization,
 According to L.D. White ‘The transfer of power of

administrative authority from lower to higher level of

government is called centralization and converse
(reverse) decentralization’
 According to M.P Sharma’ The fewer subordinate

centers of decision an organization has the more

centralization it is and larger the number of such
centers the more of decentralization there would be’
 Conclusion

 Decentralization is a process of transferring

functions and power from central to local

government units and organizations including

governmental and non-governmental organization.

 Areas of Decentralization are group actives and

management of private businesses and organizations,

political science, Law and public administration,

economics and technology etc. sectors

 Decentralization as a philosophy entails the sharing of

power and functions between and among various level of

government and other public and non-public organization

and agencies
 BASICS IDEA OR MAIN THEMES OF
DECENTRALIZATION
 Political and administrative independence to
local bodies.
 Devolution of revenues to local bodies and
empowering them to levy taxes to fund part
of their expenditure.
 Periodic local body elections.
 Reservation of seats on local bodies for
weaker social sections.
  Local record on administration.
Local voluntary and private sector organizations
collaborate with local governments in addressing
development issues.
Build local human capacities through improved
access to health care, education and Productive
assets to ensure etc that decentralization
empowers the poor
 The ultimate end of decentralization is
privatization. Privatization refers to the reducing
the role of Central as well as local government
Why Decentralization
 DIMENSIONS OR TYPES OF
DECENTRALIZATION
 Types of decentralization include political,
administrative, fiscal, and market decentralization.
Political Decentralization
 Political decentralization aims to give citizens or
their elected representatives more power in public
decision-making.
 It believe pluralistic politics , political
decentralization ,Public representative government,
support democratization by giving
 Public representatives formulate and
implementation of policies.
 Administrative Decentralization:
Administrative decentralization seeks to
redistribute authority, responsibility and
financial resources for providing public
services among different levels of
government.
 It is the transfer of responsibility for the planning,
financing and management of certain public
functions from the central government and its
agencies to
 field units of government agencies,
 subordinate units or levels of government,
 semi-autonomous public authorities or
corporations, or area-wide, regional or functional
authorities.
  Fiscal Decentralization:
 Financial responsibility is a core component of
decentralization.
 Fiscal decentralization generally refers to transfer of
taxing and spending power from the control of central
government authorities to government authorities at
sub-national levels (regional , provincial, municipal etc.)
 cal decentralization can take many forms, including
 a) Self-financing through user charges,
 b) Co-financing or co-production arrangements through
which the users participate in providing services and
infrastructure through monetary or labor contributions.
 c) Expansion of local revenues through
property or sales taxes, or indirect charges.
 d) intergovernmental transfers that shift
general revenues from taxes collected by the
central government to local governments for
general or specific uses; and
 e) Authorization of municipal borrowing and
the mobilization of either national or local
government resources through loan
guarantees
 Economic or Market Decentralization
The most complete forms of decentralization
from a government's perspective are
privatization and deregulation because they shift
responsibility for functions from the public to the
private sector.
They allow functions that had been primarily or
exclusively the responsibility of government to
be carried out by businesses, community groups,
cooperatives, private voluntary associations, and
other non-government organizations.
 Privatization.
1) Allowing private enterprises to perform
functions that had previously been
monopolized by government;
 2) contracting out the provision or
management of public services or facilities to
commercial enterprises
 3) financing public sector programs through
the capital market and allowing private
organizations to participate; and
PROCESS FORMS OR MODES OF ADMINISTRATIVE
DECENTRALIZATION
OR
PROCESS OF DECENTRALIZATION
 DECONCENTRATION
 It is weakest form of decentralization and is used most
frequently in unitary states-- redistributes decision
making authority and financial and management
responsibilities among different levels of the central
government
 Transfer of functions, powers and resources
 The center executes normative functions,
supervision and control
 States are responsible for operational activities &
service programs
 It is mostly and administrative action and does not
alter the flow of command in the system
 DELEGATION
Delegation is a more extensive form of decentralization.
Through delegation central governments transfer
responsibility for decision-making and administration of public
functions to semi-autonomous organizations not wholly
controlled by the central government, but ultimately
accountable to it
 Transfer of responsibilities for decision making &
administration to semi-autonomous organizations not
controlled by but accountable to the central government
 Semi-autonomous public enterprises to provide services
more effectively and efficiently than a central bureaucracy
 DEVOLUTION
Devolution. A third and most important type of
administrative decentralization is devolution.
When governments federalize functions, they
transfer authority for decision-making, finance,
and management to quasi-autonomous units of
local government with corporate status.
Devolution usually transfers responsibilities for
services to VDCs, municipalities that elect their
own mayors and councils, raise their own
revenues, and have independent authority to
 local governments have clear and legally recognized
geographical boundaries over which they exercise
authority and within which they perform public
functions.
 Strengths the relationship among the federal, state
and local governments
 Autonomy to sub-national units of government in some
areas (e.g. fiscal and financial powers, police power,
etc. )
 Local governments acquire the necessary functions to
govern and not only to administer
  WHAT IS CENTRALIZATION
 It is anti system of People participation pluralistic
politics , democratic value and Political and
administrative independence to local bodies.
(Decentralization)
Few powerful people or few elite are formulate policies
this system and they decided all major decision

 All the important decision and actions at the lower

level, all subjects and actions at the lower level are
subject to the approval of top management.
 According to Allen, “Centralization” is the
systematic and consistent reservation of
authority at central points in the
organization.
  The centralization can be :-
 Reservation of decision making power at top
level.
 Reservation of operating authority with the
middle level managers.
Reservation of operation at lower level at the
orders of the top level.
 Under centralization, the important and key
decisions are taken by the top management and
the other levels are into implementations as per
the directions of top level.
Difference between Centralization &
Decentralization
Meaning
Reservation authority
Communication Flow
Public participation in decision Making
Advantage
Power of decision making
Best suited for
34
 PEOPLE
PARTICIPATION
 The process of participating in somethings is called
participation.
The opportunity or right of the people to participate in
any activities is called people participation
People participant means the participation of people in
the following activities :
Decision making
Decision Implementing
Monitoring & evaluation
Benefit Sharing

participate is to take part, to share and act together.

 How to collected Public information
Public Meetings.
Public Hearings.
The Internet.
Free-phone Telephone Lines
Interviews.
Surveys.
Response Sheets
 Since 1960s in developing countries ,the term ‘people
participation’ has been a noise word for all walks of life.
 People's participation is becoming the central issue of
current period.
 Participation means that people are closely involved in
the economic, social and cultural and political processes
that affect their lives.
 People may in some cases have complete and direct
control over these processes as in other cases the control
may be partial or indirect
 . People have constant (stable) right of entry to decision
making and power.
According to UNDP ‘ People participatory means
that people are closely involved in the economic,
social, cultural and political processes that
affected their lives’

According to United nations article 21 of the

universal Declaration of human right’ Every
one has to right to take part in the government of
his country, directly thoroughly freely chosen
representatives …This will the people shall be the
basis of the authority of government’
 Participation in this sense is an essential element of
human development.
 It refers to people's involvement in particular
projects or programmes.
 But today in modern period participation means an
overall development strategy focusing on the central
role that people should play in all fields of life..
 People can participate as individuals or groups.
 As individuals in a democracy they may participate
as voters or political activists or in the market as
entrepreneurs or workers.
  Participation from the human development
perspective is both a means and an end.
Human development stresses the need to invest
( provide) in human capabilities and then ensure
that those capabilities are used for benefit of all.
 Greater participation has to helps to maximize
the use of human capabilities
 Human development is also concerned with
personal fulfillment. So active participation
which allows people to realize their full potential
and make their best contribution to society is
also an end in itself.
Participation especially helps to operating
Successfully community development plans &
programs for developing countries
 People participation which is essential for
the survival (continued existence) of
democracy
 Democracy might be damaged when people
are unable to influence government decisions
PROCESS OF PEOPLE PARTICIPATION AT
FOUR LEVELS
 Decision making process
Implementation of the program/project.
Monitoring/evaluation and,
Benefit sharing.
 WHY PEOPLE PARTICIPATION
OR
NEED OR IMPORTANCE OR SIGNIFICANCE
OF PEOPLE PARTICIPATION
It helps to implementation of comprehensive
(complete) social-economic program of
community development.
 It is essential for the survival (continued
existence) of democracy
 It helps to democratic decentralization.
It is two way learning process between the
project and local people
 Promotion of co-operatives at various levels
of society.
For sustainable development.
It helps to maximum use of human
capabilities.
It is helpful to reduce the misuse of resources
CHARACTERISTICS OF PEOPLE
PARTICIPATION
Work to be done
 according to his/her(local people/public ) own
will.
 With public force
Voluntarily
without limiting the time.
as per the constitution/public law.
without self interest.
with public satisfaction
 TYPES OF PARTICIPATION
(Socio-cultural , political, economic)
Participation among
 The governmental bodies
 The organizations.
 The local bodies.
 Central government activity
 Resource participation.
 Labour/Job participation.
 Program support.
 Philosophical support.
Public Private
Partnership (PPP)
 Definition of PPP
• Public private partnerships (PPPs) are agreements between government and the
private sector for the purpose of providing public infrastructure, community facilities
and related services.

• The private sector enter into a contract with government for the design, delivery, and
operation of the facility or infrastructure and the services provided.

• The private sector finance the capital investment and recover the investment over the
course of the contract.

• The asset transfers back to the public sector at the end of the contract
 Features of Public-Private Partnership

To understand the PPP concept, we must

know its fundamental characteristics. Some
of these are discussed in detail below:
 Service-Oriented: The PPP approach deals with the facilitation of long-term public services. It

includes roads for transportation, dams for electricity etc.

 • Whole Life Costing: In the PPP model, the project’s total cost is computed at once for its

entire life duration • Innovation: With the involvement of the private firms, the PPP approach
also initiates the implication of creativity and technology to the infrastructure projects.
 • Participants: The two parties involve in the public-private alliance are, the government and
the respective private company.
 • Risk allocation: Infrastructure projects involve high risk, thus, PPP helps government to

transfer this risk to private firms.

 • Long-term relationship; These projects are usually for years, therefore, the government

authority and the private entity remains associated for an extended period.
 • Resource Sharing; The capital, financial, design and other resources required, are share

between the government and the firm for successful period accomplished.
Important of PPP
 Ensure the necessary investments into public sector and more
effective public resources management;
 Ensure higher quality and timely delivery of public services;
 Mostly investment projects are implemented in due terms and do
not impose unforeseen public sectors extra expenditures;
 A private entity is granted the opportunity to obtain a long-term
 Private sector expertise and experience are utilized in PPP
projects implementation;
 PPP project risks allocation enables to reduce the risk
management expenditures;
 In many cases assets designed under PPP agreements could be
classified off the public sector balance sheet.
Frameworks for PPP’s Project level:
project level PPP deals with the design and
operation of infrastructure assets on behalf of
the public sectors.
Policy level: Policy level deals with specialized
decision making on behalf of public sector.