DEMOCRATIC DECENTRALIZATION
AND THE INDIAN DEVELOPMENT
SECTOR: Implications on Choice of
Local Institutions
Ajit Chaudhuri
E & H Foundation
25th October 2013
THE ARGUMENT - 1
• Development programmes require local
institutions to work through
• Choice of local institution has implications for
the work being done
• Choosing democratic institutions has positive
externalities
– Enhances quality of democracy in society
– This in turn leads to better development
Ajit Chaudhuri - IRMA

2
THE ARGUMENT - 2
• Democratic decentralization has led to existence
of local institutions with –
– Constitutional responsibility for development
– People’s mandate

• Development programmes that involve /
strengthen / choose such institutions –
– Help decentralization yield democratic dividends
– Are in line with spirit of Part IX of Constitution

• Those that by-pass such institutions and create /
empower / choose parallel, non-representative
institutions do not
Ajit Chaudhuri - IRMA

3
THE PAPER
• Theoretical, but attempts to examine the
practical implications of the argument
• Flow of presentation
– Setting the context
– Democratic implications of institutional choice
– Policy options for donors and NGOs
– Conclusions

Ajit Chaudhuri - IRMA

4
THE CONTEXT - 1
• Donor Organizations and Choices
– Donor Organizations
– Funding the state
• Direct Support
• Project Funding

– Do It Yourself
– Funding NGOs – the oft preferred option
– Key Downsides
• PRIs with a development mandate exist
• Creating parallel institutions and diffusing power may be not
be in the long term interests of democracy

Ajit Chaudhuri - IRMA

5
THE CONTEXT - 2
• Democratic decentralization
– Transfer of political, administrative and fiscal
responsibilities to locally elected bodies and the
empowerment of communities to exert control
over these bodies (World Bank, 2000)
– In India, driven by 73rd and 74th Amendments
• Setting up PRIs
• Delegation of authority, responsibilities and financial
resources to them

Ajit Chaudhuri - IRMA

6
THE CONTEXT - 3
• Why Democratic Decentralization
– Brings political representatives closer to electorate
– Policies more likely to represent actual needs and
preferences of communities BUT
– Coordination problems & chances of elite capture
– Measuring impact of DD is problematic – neither
governance nor decentralization are quantifiable

• Indian experience with DD is (so far) mixed
but slow and inexorable movement towards it
Ajit Chaudhuri - IRMA

7
INSTITUTIONAL CHOICE - 1
• Choosing local institutions by –
– Transferring power to them
– Conducting joint activities
– Soliciting inputs for programmes and policies

• Choice is recognition, it confers legitimacy and power,
it transforms institutional landscape
– Privatization – to private sector
– Participatory/empowerment approach – to NGOs, CBOs,
customary authorities, etc.

• Institutional choice effects more than efficiency and
effectiveness of public service provision – it impacts
process of democratic decentralization
Ajit Chaudhuri - IRMA

8
INSTITUTIONAL CHOICE - 2
• Ribot, J.C; 2007; “Representation, Citizenship
and the Public Domain in Democratic
Decentralization”; Development 50(1), 43-49
• Institutional Choice and Representation
– For an institution to be democratic, it must be
representative
• Accountable to people – positive & negative sanctions
• Equipped with power – people’s needs & aspirations
can be transformed into policy, and policy into practise
Ajit Chaudhuri - IRMA

9
INSTITUTIONAL CHOICE - 3
– By avoiding local governments
• Deprive local authorities of powers being transferred to the
local arena
• Empower parallel authorities
• Force local governments to compete for legitimacy

– Means of power transfer shapes accountability –
conditional or as a secure right

• Institutional Choice and Citizenship
– Concept of ‘belonging’ infers citizenship – the ability
to be politically engaged and shape the fate of the
polity – in democracy, this is residence based
Ajit Chaudhuri - IRMA

10
INSTITUTIONAL CHOICE - 4
– In other institutions, belonging is different
• Business, NGOs, User groups – shared interests
• Customary or religious institutions – various forms of
identity – language, ethnicity, religion, place of origin

– Choosing interest or identity based institutions results
in politics of recognition
• Forces individuals to conform to group cultures
• Sees cultural dissonance, experimentation and criticism as
disloyalty
• Overshadows intra-group divisions of gender, class, etc.
• Loses sight of role of redistribution in redressing injustice
• Undermines residency based forms of belonging, i.e.
democracy, encourages separatism
Ajit Chaudhuri - IRMA

11
INSTITUTIONAL CHOICE - 5
• Institutional Choice and the Public Domain
– Public domain – a public political space where –
• Citizens feel able and entitled to influence authorities
• Maintains and re-enforces public belonging and identity
• Enables the integrative collective action that constitutes
democracy
• Necessary for the production of citizenship

– Important to retain substantial powers in the public
domain for decentralization to produce democratic
dividends – equity, efficiency and development
– Distributing public powers to interest and identity
based groups encloses the public domain
Ajit Chaudhuri - IRMA

12
POLICY OPTIONS – DONORS
• Social development activities through nonrepresentative institutions has implications on
democracy BUT
• Is it viable to work through PRIs? 3 typical arguments
against
–
–
–
–

PRIs are political (not development) institutions
PRIs are corrupt, unskilled, inefficient
For foreign donors, the law prevents funding PRIs
The arguments are valid and require consideration
• Bringing development into political space, electoral cycles, less
administration cost, decentralized corruption vs. more corruption

– Working through PRIs – recognizing primacy of mandate
Ajit Chaudhuri - IRMA

13
POLICY OPTIONS - NGOS
• Traditional space still intact, business of public service
provision for money needs rethinking
• Different types of local institutions – which scenario should
NGOs contribute to?
– Pluralism of competition and cooperation that thickens civil
society and results in efficiency, better representation, and
other positive externalities OR
– Divisive, undermining legitimacy of elected local governments,
providing conditions for elite capture

• To strengthen democratic decentralization, NGOs can –
– Use mechanisms outlined in Panchayati Raj
– Enable PRI control over planning and implementation
– Build capacity of PRIs
Ajit Chaudhuri - IRMA

14
CONCLUSION
• Paper –
– Describes democratic decentralization in India
– Theorizes on democratic implications of
institutional choices of donor organizations
– Advises on the need to think through whether to
work within the spirit of Part IX of Constitution
– Suggests that development space for PRIs will
increase, and others need to evolve to be relevant
– Requests that others join this socio-political
movement and enable it to fulfill its potential
Ajit Chaudhuri - IRMA

15

Ajit democratic decentralization

  • 1.
    DEMOCRATIC DECENTRALIZATION AND THEINDIAN DEVELOPMENT SECTOR: Implications on Choice of Local Institutions Ajit Chaudhuri E & H Foundation 25th October 2013
  • 2.
    THE ARGUMENT -1 • Development programmes require local institutions to work through • Choice of local institution has implications for the work being done • Choosing democratic institutions has positive externalities – Enhances quality of democracy in society – This in turn leads to better development Ajit Chaudhuri - IRMA 2
  • 3.
    THE ARGUMENT -2 • Democratic decentralization has led to existence of local institutions with – – Constitutional responsibility for development – People’s mandate • Development programmes that involve / strengthen / choose such institutions – – Help decentralization yield democratic dividends – Are in line with spirit of Part IX of Constitution • Those that by-pass such institutions and create / empower / choose parallel, non-representative institutions do not Ajit Chaudhuri - IRMA 3
  • 4.
    THE PAPER • Theoretical,but attempts to examine the practical implications of the argument • Flow of presentation – Setting the context – Democratic implications of institutional choice – Policy options for donors and NGOs – Conclusions Ajit Chaudhuri - IRMA 4
  • 5.
    THE CONTEXT -1 • Donor Organizations and Choices – Donor Organizations – Funding the state • Direct Support • Project Funding – Do It Yourself – Funding NGOs – the oft preferred option – Key Downsides • PRIs with a development mandate exist • Creating parallel institutions and diffusing power may be not be in the long term interests of democracy Ajit Chaudhuri - IRMA 5
  • 6.
    THE CONTEXT -2 • Democratic decentralization – Transfer of political, administrative and fiscal responsibilities to locally elected bodies and the empowerment of communities to exert control over these bodies (World Bank, 2000) – In India, driven by 73rd and 74th Amendments • Setting up PRIs • Delegation of authority, responsibilities and financial resources to them Ajit Chaudhuri - IRMA 6
  • 7.
    THE CONTEXT -3 • Why Democratic Decentralization – Brings political representatives closer to electorate – Policies more likely to represent actual needs and preferences of communities BUT – Coordination problems & chances of elite capture – Measuring impact of DD is problematic – neither governance nor decentralization are quantifiable • Indian experience with DD is (so far) mixed but slow and inexorable movement towards it Ajit Chaudhuri - IRMA 7
  • 8.
    INSTITUTIONAL CHOICE -1 • Choosing local institutions by – – Transferring power to them – Conducting joint activities – Soliciting inputs for programmes and policies • Choice is recognition, it confers legitimacy and power, it transforms institutional landscape – Privatization – to private sector – Participatory/empowerment approach – to NGOs, CBOs, customary authorities, etc. • Institutional choice effects more than efficiency and effectiveness of public service provision – it impacts process of democratic decentralization Ajit Chaudhuri - IRMA 8
  • 9.
    INSTITUTIONAL CHOICE -2 • Ribot, J.C; 2007; “Representation, Citizenship and the Public Domain in Democratic Decentralization”; Development 50(1), 43-49 • Institutional Choice and Representation – For an institution to be democratic, it must be representative • Accountable to people – positive & negative sanctions • Equipped with power – people’s needs & aspirations can be transformed into policy, and policy into practise Ajit Chaudhuri - IRMA 9
  • 10.
    INSTITUTIONAL CHOICE -3 – By avoiding local governments • Deprive local authorities of powers being transferred to the local arena • Empower parallel authorities • Force local governments to compete for legitimacy – Means of power transfer shapes accountability – conditional or as a secure right • Institutional Choice and Citizenship – Concept of ‘belonging’ infers citizenship – the ability to be politically engaged and shape the fate of the polity – in democracy, this is residence based Ajit Chaudhuri - IRMA 10
  • 11.
    INSTITUTIONAL CHOICE -4 – In other institutions, belonging is different • Business, NGOs, User groups – shared interests • Customary or religious institutions – various forms of identity – language, ethnicity, religion, place of origin – Choosing interest or identity based institutions results in politics of recognition • Forces individuals to conform to group cultures • Sees cultural dissonance, experimentation and criticism as disloyalty • Overshadows intra-group divisions of gender, class, etc. • Loses sight of role of redistribution in redressing injustice • Undermines residency based forms of belonging, i.e. democracy, encourages separatism Ajit Chaudhuri - IRMA 11
  • 12.
    INSTITUTIONAL CHOICE -5 • Institutional Choice and the Public Domain – Public domain – a public political space where – • Citizens feel able and entitled to influence authorities • Maintains and re-enforces public belonging and identity • Enables the integrative collective action that constitutes democracy • Necessary for the production of citizenship – Important to retain substantial powers in the public domain for decentralization to produce democratic dividends – equity, efficiency and development – Distributing public powers to interest and identity based groups encloses the public domain Ajit Chaudhuri - IRMA 12
  • 13.
    POLICY OPTIONS –DONORS • Social development activities through nonrepresentative institutions has implications on democracy BUT • Is it viable to work through PRIs? 3 typical arguments against – – – – PRIs are political (not development) institutions PRIs are corrupt, unskilled, inefficient For foreign donors, the law prevents funding PRIs The arguments are valid and require consideration • Bringing development into political space, electoral cycles, less administration cost, decentralized corruption vs. more corruption – Working through PRIs – recognizing primacy of mandate Ajit Chaudhuri - IRMA 13
  • 14.
    POLICY OPTIONS -NGOS • Traditional space still intact, business of public service provision for money needs rethinking • Different types of local institutions – which scenario should NGOs contribute to? – Pluralism of competition and cooperation that thickens civil society and results in efficiency, better representation, and other positive externalities OR – Divisive, undermining legitimacy of elected local governments, providing conditions for elite capture • To strengthen democratic decentralization, NGOs can – – Use mechanisms outlined in Panchayati Raj – Enable PRI control over planning and implementation – Build capacity of PRIs Ajit Chaudhuri - IRMA 14
  • 15.
    CONCLUSION • Paper – –Describes democratic decentralization in India – Theorizes on democratic implications of institutional choices of donor organizations – Advises on the need to think through whether to work within the spirit of Part IX of Constitution – Suggests that development space for PRIs will increase, and others need to evolve to be relevant – Requests that others join this socio-political movement and enable it to fulfill its potential Ajit Chaudhuri - IRMA 15