As shown in a study of decentralized participatory management in one of the poorest areas of India, corruption and systematic economic marginalization can occur even within the most traditional and homogeneous indigenous communities (Kumar 2002).
Especially in highly socioculturally diverse countries such as India where there are immense informal networks made up of communities, clans, castes and groups differentiated along various other lines, and where a long history of interactions within these groups has reinforced strong, reciprocal ties (Jeffrey 2000), there are high incentives for benefiting members of one’s own group at the cost of those from other groups.
- In theory, decentralization is argued to reduce corruption at the local level because citizens have greater information and because citizens have the chance to be more engaged in the governance process.
- In truth, corruption may occur at the smallest scales of government.
Two empirical cases : Bolivia & Brazil
Problems in Bolivia : Here, fiscal decentralization was undertaken on a massive scale in 1994 and accountability schemes have been equally ambitious.
The institutional set up:
One of the institutions of accountability established was the Local Oversight Committee. These ‘vigilance’ committees were established to oversee municipal spending and propose new projects. They consisted of representatives from local grass-roots groups who were given the authority to monitor and sanction use of official budgets by local governments if they found any foul play (Faguet 2004). These committees were also empowered to legally impose denuncia against local councils. In other words, these committees could complain to the national executive branch, which could then act through the Senate to suspend central funds to the local council (Blair 2000 , Kohl 2003).
Despite this host of institutional solutions, elections continued to be rigged and local councils continued to be captured by local elites. Additionally, NGO representatives were often prevented from acquiring a place on the vigilance committees. Even successful monitoring by citizen groups and consequent sanctioning by the central government did not fully end local corruption. In 2003 for example, 25 municipalities had their accounts frozen by the National Treasury and another 185 municipalities did not even file financial reports (Kohl 2003).
Solutions in Brazil: The case of Porto Alegre.
Institutional set up:
Decentralization-related problems have been addressed in (Brazil) through the creation of a participatory budgeting scheme. Here, the innovation has been the creation of district and citywide budget councils whose officers are elected in open assemblies. These councils have a significant role in determining details of local budgetary allocations.
Now clearly such councils will not always have the required financial expertise. Acknowledging this, the Porto Alegre administration has focused on education of council participants (Heller 2001).
Elections have usually been a success in terms of participation in elections and the reported diversity of civil society participants. Successive local administrations have continued to support public participation and also continued to support the autonomous budgetary decisions of the council (Wampler 2004).
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One solution to corruption of governments is to bring the public into the governance process as much as possible. Of course this is not THE solution since the outcomes of this approach depend on the characteristics of "the public". The public is not a seamless whole; it is fragmented. There are power players, lobbies, and opposing factions for every given issue. Involving the public is not likely to be an easy solution to implement, nor will it necessarily do away with corruption entirely. But making the process of governance as democratic as possible by having equal representation of as many different social groups as possible is very important. Of course in a representative democratic governance system, that is precisely how governments are supposed to be structured. So simply ensuring that all demographics are represented is not sufficient when there are deeper inequalities of money and power between different groups in society.
Another problem lies with the feasibility of this approach. As seen in the Brazil case, it was recognized that there could be a trade-off between transparency of governance and expertise. When decisions are made by "experts", one thinks those decisions will be made well. There are obvious apprehensions about allowing regular members of the general public to make big public policy decisions. This is a non trivial problem since it requires extensive and time consuming participation by the public. Brazil chose to educate its popularly elected councils before allowing them to make decisions in the effort to manage this trade-off of accountability and expertise. I wonder how easy it would be to implement such a scheme in other parts of the world.
Like with everything else, solutions come with kinks. Creating a social and economic system that performs well and allows for a fair, just society is an incremental process. It's trial, error, and trial again. Hopefully we will see more and more innovations in governance to allow us to experiment with and then learn from new systems. Now that would be progress.
Blair, H. 2000. Participation and accountability at the periphery: Democratic local governance in six countries. World Development, 28(1): 21 – 39
Faguet, JP. 2004. Does decentralization increase government responsiveness to local needs? Evidence from Bolivia. Journal of Public Economics, 88: 867 – 893
Heller, P. 2001. Moving the state: The politics of democratic decentralization in Kerala, South Africa, and Porto Alegre. Politics & Society, 29(1): 131 – 163
Jeffrey, C. 2000. Democratisation without representation? The power and political strategies of a rural elite in north India. Political Geography, 19: 1013 – 1036
Kumar, S. 2002. Does ‘participation’ in common pool resource management help the poor? A social cost benefit analysis of joint forest management in Jharkhand, India. World Development, 30(5): 763 – 782
Véron, R., Williams, G., Corbridge, S., Srivastava, M. 2006. Decentralized corruption or corrupt decentralization? Community monitoring of poverty-alleviation schemes in eastern India. World Development, 34(11) : 1922 – 1941
Wampler, B. 2004. Expanding accountability through participatory institutions: Mayors, citizens and budgeting in three Brazilian municipalities. Latin American Politics and Society, 46(2): 73 – 99