DECENTRALIZATION AND POVERTY REDUCTION

Dr David AyresConsultant

5 November 2008

1

A Key Question

Does D&D Contribute to Poverty Reduction?

2

Problems of Definition?

What type of decentralization are we referring to? Delegation, deconcentration, devolution? Political, administrative, fiscal?

Devolution is the most extensive ... combines political, administrative, fiscal.

3

More Problems of Definition? What is poverty?

Is it an absolute or a relative status? Does it include, for example, a designated

percentage of a given country’s population by income, regardless of the wealth of the country?

Does it relate to an inability to afford life’s necessities or to the deprivation of essential capabilities? If so, what are these necessities or capabilities? Are they the same for one country as they are for

another?

4

More Problems of Definition? Most attempts to define poverty are quite

broad World Bank: poverty “is pronounced

deprivation in well-being” includes the traditional view of poverty,

measured by either income or consumption Includes other measures - voicelessness,

powerlessness, vulnerability and exposure to risk OECD: poverty “the inability of people to

meet economic, social and other standards of well-being”

5

Clarifying the Key Question ... How does devolution contribute to

people’s capacity to meet economic, social and other standards of well-being?

How does it contribute to the reduction of deprivation?

6

More Problems ....7

Decentralization does not work in isolation, and poverty cannot be reduced with a single policy idea.

How do we measure the impact of decentralization on poverty reduction? Compare decentralized and non-

decentralized areas? Long term study?

The idea is not universally accepted Veveld: “Decentralization not emerging as

a pro-poor policy”

The Ideal Situation8

Decentralisation

Political Dimension of Poverty

(Voicelessness and Powerlessness)

Economic Dimension of Poverty

(Lack of Opportunities)

Security Dimension of Poverty

(Vulnerability and Exposure to Risk)

ParticipationResponsibility for Service Provision

Judicial PowerRegional

AutonomyRevenue-

Raising Power

More Voice and Power

Increased Access to and use of

ServicesLess Vulnerability

“D&D” and Poverty Reduction

9

Decentralization does not automatically lead to the reduction of poverty.

Studies from some countries indicate decentralization sometimes has an effect on poverty reduction; in other countries it has no effect

Why? Successful decentralization requires local

governments to have enough power (and resources) to have an impact

Successful decentralization depends on participation, and the poor don’t participate

Some Thoughts ...10

What is needed for poverty reduction through D&D in Cambodia: Increased opportunities for participation Stronger local civil society More service delivery through local

government Revenue raising powers for local

government

D&D, GG and Poverty Reduction

11

QUESTIONS12