Entering the 21st century, the 1999-2000World Development Report (WDR), identifies two main forcesthat are shaping the world in which development policy isbeing defined and implemented: (i) globalization, theincreasing worldwide integration of private sectorinteraction and commercial relationships; and (ii)localization, a process of devolving fiscal andadministrative roles and responsibilities from central tosub-national tiers of government. It goes on to note thatthese global-private and local-public pressures are not onlyreinforcing, but also challenging traditional paradigms andforms of intergovernmental systems. Politicaldecentralization, often associated with pluralistic politicsand representative government, aims to give citizens moresay in public policy and decision-making. Its advocatesassume that decisions made with greater participation willbe better informed and more relevant to diverse interests insociety than those made only by national politicalauthorities. The concept implies that the selection ofrepresentatives from local electoral jurisdictions allowscitizens to know better their political representatives andallows elected officials to know better the needs anddesires of their constituents. Administrativedecentralization aims to redistribute authority,responsibility and financial resources for providing publicservices among different levels of government. It typicallytakes three forms: de-concentration, delegation anddevolution. Fiscal decentralization vests greater autonomyand authority with local governments in matters of fiscalimportance, empowering local governments to generate theirown revenues, through taxes and user charges, as well asdetermining their expenditure priorities based on a clearassignment of functions and responsibilities. Over the lasttwo decades, it has been estimated that more than 100countries, most of them in the developing world, haveexperimented with various forms of decentralization.
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