Pierre F. Landry: Decentralization and Regime Transformation
1
Decentralization has gained considerable popularity among economists and policy
makers as an effective strategy to improve governance, promote popular participation and
stimulate economic growth (Tiebout, 1956; Burki, Perry & Dillinger, 1999; Dethier,
2000; Gibson, 2004; Shah & Thompson, 2004). Both democratic and authoritarian
regimes have adopted decentralization reforms, and some like post-1978 China have
vastly outperformed countries that have been reluctant to decentralize.
Long-term political trends suggest that authoritarian decentralizers chose these
policies at their own peril. Along with decentralization, the past two decades have also
been characterized by a rapid expansion of democracy. In 1972, there were only 39
democracies in the world, against 102 authoritarian regimes. By 2002, democracies
outnumbered autocracies 114 to 76 (
Cheibub, 2004
). The intriguing question is whether
these phenomena are independent from one another, or whether there exists a causal
relationship between democratization and decentralization.
This paper is concerned with the political incentives that underpin the choices for
or against decentralization. The correlation between decentralization and democratization
is fairly easy to establish, but the political logic behind the decision to decentralize can
only be understood if the specific causal paths are established empirically. If
decentralization is simply one of the consequences of democratization
1
, politicians are
1
See Bird et.al. (1995) on decentralization as a consequence of democratization in
Eastern Europe.
Convention