Decentralization in the transition economies : challenges and the road ahead
Wetzel, Deborah
Across the world countries are increasingly focusing on decentralization of decision-making authority to lower levels of government. The transition countries of Eastern Europe and the Former Soviet Union have not been excluded from this phenomenon. Indeed, the very transition itself is a process of moving away from a centrally controlled, command-driven economy towards more politically, economically and administratively decentralized and market based structures. No doubt that some countries have gone further than others, but the nature of this type of transition raises special issues for decentralization in all of these countries. Why decentralize? While in any given situation the reasons will be distinct, in transition countries there appear to be three key imperatives driving decentralization: a political imperative, an economic imperative and a service delivery imperative. The objective of this paper is to highlight the key challenges to effective decentralization that have become apparent over the past decade; and to set out ideas about how to address these issues more effectively in the future. It starts by giving a perspective on the degree of decentralization across the transition economies. Subsequent sections then consider a number of critical issues and challenges. Finally the report closes with suggestions concerning policy steps and sequencing that may help address these issues in the future.
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