Empowering Local Government: Lessons from Europe
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Empowering Local Government Lessons from Europe This paper examines the literature on the evolution of local government in eight western European countries in an attempt to find clues to what makes for successful devolution of power to local governments. It appears likely that rising incomes led to a greater demand for local public goods and also helped the citizenry to articulate this demand in a politically effective way. History may have played an important role by delaying, though not halting, the devolution of power to the local level in states which inherited centralised bureaucracies. While some of the pattern of evolution seems explicable, much remains to be understood, in particular why centralised absolutist states evolved so differently in Scandinavia as compared to France, Spain, and Italy. E SOMANATHAN I diture and revenue (Figures 1 and 2).1 Why it entails building a bureaucracy. This seems Past and Present have richer countries been generally more to have been important in the history of successful at devolving power to local English local government. Secondly, it is hat lessons does Europe’s ex- authorities? This may be partly due to an harder for central authorities to undermine perience with local government increase in the demand for government local government that has deep historical Whold for the developing world services that rises more than proportion- roots. Where the public has experienced today? This study is motivated by the idea ately with income. Such an increase may local self-government, it might take a that local governments in democratic also be disproportionately in favour of political battle for higher authorities to polities are likely to be more effective in goods best provided at the local level. take this away. The value of such a system providing certain goods and services than Urbanisation is probably a cause of such is then generally known and it is difficult are national and provincial governments. a shift in demand, as Sharpe (1988) argues. to undermine it. Where there has been no Perhaps the most basic reason for this is But this is not a complete explanation such experience, the political and electoral that politicians’ accountability is enhanced of the differences in local government pressure to introduce it may be weak. when the electorate can separately reward between high and low income countries. Why do we find the geographical pattern or punish performance at local and higher Even if the demand for local government of centralised government in the centre of levels of government. Moreover, when increases, we still have to understand how Europe, with ‘looser’ government in the local public goods are provided by a the political process translates this into an northern periphery? An intriguing theory national or provincial government, this has increased supply of local government. that addresses this was proposed by Otto necessarily to be accomplished through a It is, therefore, of interest to examine to Hintze. Hintze argued that local self- bureaucracy. For the elected officials to what extent, and how, this problem was government “rests upon the fact that the supervise this bureaucracy closely, how- overcome in different European countries. general interests of the state as a whole ever, is difficult, and this is more likely Historically, there has been considerable coincide with the special interests of the to be the case when the area governed is variation in the degree of centralisation leading sectors of the population of the large. This difficulty increases when either among European countries. France, Spain, area”.2 This could not be the case in the the demand for, or the conditions of supply and Italy, influenced by the Napoleonic heartland of Europe, he argues, because of public goods and services vary from Code, have traditionally been the most states located there were subject to intense locality to locality, since a uniform system centralised. However, until the 19th cen- military competition leading to militari- of provision would not then be appro- tury, Denmark, and, to a lesser extent, sation and a concomitant bureaucratis- priate. Competition between local govern- Norway, were also highly centralised ation and centralisation. Only in England ments to attract capital could be a further polities which nevertheless converged and Scandinavia, and Poland and Hun- stimulus towards efficiency in the provi- toward the much more decentralised poli- gary, where military competition was not sion of public services. ties of northern Europe: Britain, Germany, so intense, could local government arise However, many countries, particularly and Sweden. Nevertheless, all European before this century. At the same time, the in the underdeveloped world, are countries, even the three most centralised presence of a petty nobility was necessary characterised by highly centralised govern- mentioned here, have embarked on de- for (rural) local government, for only such ments which manifestly fail to provide centralisation programmes which have a class would both be loyal to the state, local public services. A good part of the had a considerable impact. Thus, while and yet not be so powerful as to attempt reason for this resides in the reluctance of history has played a role in the present to set up mini-states of their own. higher-level governments to cede power structure of subnational government, so How does the introduction or expansion and the rents that go with power to local have the demands of modern politics. of local self-government come about in authorities. History plays an enduring role for at least modern democracies? Several themes There is a distinct correlation between two quite distinct reasons. Where the state emerge in the discussion of individual per capita income and the share of local has historically been decentralised, countries below. The increasing appeal of government in total government expen- centralisation may be expensive because the ideology of democracy is an important Economic and Political Weekly October 13, 2001 3935 one. The rhetoric accompanying appeals Figure 1: Relation between Local Share of Government Revenue to Per Capita GDP for decentralisation is one of democrati- Local share of government revenue (per cent) with regression line sation. To some degree, this is simply a 40 - recognition of the benefits of democratic MNG SWE accountability discussed above. The appeal DNK of this idea is probably due to the increa- FIN sing political sophistication of the citi- 30 - NOR zenry as incomes and educational levels ISL rise. At some juncture one or other politi- CHE cal party sees an advantage in pushing this 20 - BGR AUT USA issue, as happened with the socialists in DEU CAN France in the 1980s. A second important FRA NIC HUN LUX theme that emerges is the presence of ZAF ESP NGBR regional parties organised on more or less 10 - ISR ethnic lines. This is clearly seen in Spain BOI MEX PRT IRL BEL AUS PER CHL MYS following the end of Franco’s regime. In THA PRY BRA such a case, the regional parties have a 0 - strong interest in devolution to the level 0 5000 10000 15000 20000 at which they are powerful, and may be PPP-adjusted real per capita GDP in a strong enough position at the centre While modern local self-government has municipal councils (conseil municipal), to bring this about. thus been well established in Britain for and of councils to govern the departments over a century, this has not made it invul- (conseil généraux), but they remained un- I nerable. The conservative government of der extensive state control. The paid staff Britain Margaret Thatcher found it convenient to were state employees, and the general ad- considerably curtail local governments’ ministrative supervision (called tutelle) of At the beginning of the 19th century autonomy to tax and spend, as part of the the prefect was maintained. This system Britain had a relatively decentralised programme to roll back the state. More- continued until the 1980s, although the government.3 In the rural areas and some over, the manner in which this was done range of functions, and hence the real urban areas, the county was the unit of led to a greater burden being placed on authority of the local governments, has government. The principal local officials local authorities controlled by the Labour expanded. at the county level were the Justices of the party than those controlled by the Conser- It was the existence and pre-eminence Peace who were mostly unpaid members vatives [Wolman 1988]. Nevertheless, of the prefect, an official who has no of the landed gentry. In some of the towns, there was never any intention on the part parallel in Britain, which, more than any- there were boroughs governed by small of the conservatives to do away with local thing else, characterised the centralisation associations of merchants. Democratisation government or to take over the adminis- of the French system. However, local began in the 1830s with the extension of tration of local affairs. This is likely to interests were represented to some degree the suffrage in 1832. The middle classes have been much more difficult politically due to the existence of a system known in the towns pressed to have control over and, of course, there was no reason for the as the cumul des mandats. This meant that their local affairs removed from the hands conservatives to wish to do it. mayors and others elected to (possibly of the existing cliques which were un- multiple) local offices often were also interested in providing public services. This III elected to legislative offices at the national led to the passage by parliament of the France level. These ‘notables’ thus obtained 1835 Municipal Corporations Act which additional power in their relations with the provided for a council elected by all rate- Following the Revolution, subnational prefect.