Decentralization is the process by which the activities of an
organization, particularly those regarding planning and decision-making,
are distributed or delegated away from a central, authoritative
location or group. Concepts of decentralization have been applied to group dynamics and management science in private businesses and organizations, political science, law and public administration, economics, money and technology.
History
Alexis de Tocqueville, French historian
The word "centralization" came into use in France in 1794 as the post-French Revolution French Directory leadership created a new government structure. The word "decentralization" came into usage in the 1820s. "Centralization" entered written English in the first third of the 1800s;
mentions of decentralization also first appear during those years. In the mid-1800s Tocqueville
would write that the French Revolution began with "a push towards
decentralization...[but became,] in the end, an extension of
centralization." In 1863 retired French bureaucrat Maurice Block
wrote an article called “Decentralization” for a French journal which
reviewed the dynamics of government and bureaucratic centralization and
recent French efforts at decentralization of government functions.
Ideas of liberty and decentralization were carried to their
logical conclusions during the 19th and 20th centuries by anti-state
political activists calling themselves "anarchists", "libertarians," and even decentralists. Tocqueville
was an advocate, writing: "Decentralization has, not only an
administrative value, but also a civic dimension, since it increases the
opportunities for citizens to take interest in public affairs; it makes
them get accustomed to using freedom. And from the accumulation of
these local, active, persnickety freedoms, is born the most efficient
counterweight against the claims of the central government, even if it
were supported by an impersonal, collective will." Pierre-Joseph Proudhon (1809–1865), influential anarchist theorist
wrote: "All my economic ideas as developed over twenty-five years can
be summed up in the words: agricultural-industrial federation. All my
political ideas boil down to a similar formula: political federation or
decentralization."
In early twentieth century America a response to the
centralization of economic wealth and political power was a decentralist
movement. It blamed large-scale industrial production for destroying
middle class shop keepers and small manufacturers and promoted increased
property ownership and a return to small scale living. The decentralist
movement attracted Southern Agrarians like Robert Penn Warren, as well as journalist Herbert Agar. New Left
and libertarian individuals who identified with social, economic, and
often political decentralism through the ensuing years included Ralph Borsodi, Wendell Berry, Paul Goodman, Carl Oglesby, Karl Hess, Donald Livingston, Kirkpatrick Sale (author of Human Scale), Murray Bookchin, Dorothy Day, Senator Mark O. Hatfield, Mildred J. Loomis, and Bill Kauffman.
Decentralization was one of ten Megatrends identified in this best seller.
Leopold Kohr, author of the 1957 book The Breakdown of Nations – known for its statement “Whenever something is wrong, something is too big” – was a major influence on E.F. Schumacher, author of the 1973 bestseller Small is Beautiful:Economics As If People Mattered. In the next few years a number of best-selling books promoted decentralization. Daniel Bell's The Coming of Post-Industrial Society
discussed the need for decentralization and a “comprehensive overhaul
of government structure to find the appropriate size and scope of
units”, as well as the need to detach functions from current state
boundaries, creating regions based on functions like water, transport,
education and economics which might have “different ‘overlays’ on the
map.” Alvin Toffler published Future Shock (1970) and The Third Wave
(1980). Discussing the books in a later interview, Toffler said that
industrial-style, centralized, top-down bureaucratic planning would be
replaced by a more open, democratic, decentralized style which he called
“anticipatory democracy.” Futurist John Naisbitt's 1982 book “Megatrends” was on The New York Times Best Seller list for more than two years and sold 14 million copies. Naisbitt's book outlines 10 “megatrends”, the fifth of which is from centralization to decentralization. In 1996 David Osborne and Ted Gaebler had a best selling book Reinventing Government proposing decentralist public administration theories which became labeled the "New Public Management".
Stephen Cummings wrote that decentralization became a "revolutionary megatrend" in the 1980s. In 1983 Diana Conyers asked if decentralization was the "latest fashion" in development administration. Cornell University's
project on Restructuring Local Government states that decentralization
refers to the "global trend" of devolving responsibilities to regional
or local governments. Robert J. Bennett's Decentralization, Intergovernmental Relations and Markets: Towards a Post-Welfare Agenda describes how after World War II
governments pursued a centralized "welfarist" policy of entitlements
which now has become a "post-welfare" policy of intergovernmental and
market-based decentralization.
In 1983, "Decentralization" was identified as one of the "Ten Key Values" of the Green Movement in the United States.
According to a 1999 United Nations Development Program report:
...large number of developing and transitional countries have embarked on some form of decentralization programs. This trend is coupled with a growing interest in the role of civil society and the private sector as partners to governments in seeking new ways of service delivery...Decentralization of governance and the strengthening of local governing capacity is in part also a function of broader societal trends. These include, for example, the growing distrust of government generally, the spectacular demise of some of the most centralized regimes in the world (especially the Soviet Union) and the emerging separatist demands that seem to routinely pop up in one or another part of the world. The movement toward local accountability and greater control over one's destiny is, however, not solely the result of the negative attitude towards central government. Rather, these developments, as we have already noted, are principally being driven by a strong desire for greater participation of citizens and private sector organizations in governance.
Overview
Systems approach
Graphical comparison of centralized and decentralized system.
Those studying the goals and processes of implementing decentralization often use a systems theory approach. The United Nations Development Program
report applies to the topic of decentralization "a whole systems
perspective, including levels, spheres, sectors and functions and seeing
the community level as the entry point at which holistic definitions of
development goals are most likely to emerge from the people themselves
and where it is most practical to support them. It involves seeing
multi-level frameworks and continuous, synergistic processes of
interaction and iteration of cycles as critical for achieving wholeness
in a decentralized system and for sustaining its development.”
However, has been seen as part of a systems approach. Norman Johnson of Los Alamos National Laboratory
wrote in a 1999 paper: "A decentralized system is where some decisions
by the agents are made without centralized control or processing. An
important property of agent systems is the degree of connectivity between the agents, a measure global flow of information
or influence. If each agent is connected (exchange states or influence)
to all other agents, then the system is highly connected."
University of California, Irvine's
Institute for Software Research's "PACE" project is creating an
"architectural style for trust management in decentralized
applications." It adopted Rohit Khare's
definition of decentralization: "A decentralized system is one which
requires multiple parties to make their own independent decisions" and
applies it to Peer-to-peer software creation, writing:
In such a decentralized system, there is no single centralized authority that makes decisions on behalf of all the parties. Instead each party, also called a peer, makes local autonomous decisions towards its individual goals which may possibly conflict with those of other peers. Peers directly interact with each other and share information or provide service to other peers. An open decentralized system is one in which the entry of peers is not regulated. Any peer can enter or leave the system at any time...
Goals
Decentralization
in any area is a response to the problems of centralized systems.
Decentralization in government, the topic most studied, has been seen as
a solution to problems like economic decline, government inability to
fund services and their general decline in performance of overloaded
services, the demands of minorities for a greater say in local
governance, the general weakening legitimacy of the public sector and
global and international pressure on countries with inefficient,
undemocratic, overly centralized systems. The following four goals or objectives are frequently stated in various analyses of decentralization.
Participation
In decentralization the principle of subsidiarity
is often invoked. It holds that the lowest or least centralized
authority which is capable of addressing an issue effectively should do
so. According to one definition: "Decentralization, or decentralizing
governance, refers to the restructuring or reorganization of authority
so that there is a system of co-responsibility between institutions of
governance at the central, regional and local levels according to the
principle of subsidiarity, thus increasing the overall quality and
effectiveness of the system of governance, while increasing the
authority and capacities of sub-national levels."
Decentralization is often linked to concepts of participation in
decision-making, democracy, equality and liberty from higher authority. Decentralization enhances the democratic voice.
Theorists believe that local representative authorities with actual
discretionary powers are the basis of decentralization that can lead to
local efficiency, equity and development.” Columbia University's Earth Institute
identified one of three major trends relating to decentralization as:
"increased involvement of local jurisdictions and civil society in the
management of their affairs, with new forms of participation,
consultation, and partnerships."
Decentralization has been described as a "counterpoint to
globalization" which removes decisions from the local and national stage
to the global sphere of multi-national or non-national interests.
Decentralization brings decision-making back to the sub-national levels.
Decentralization strategies must account for the interrelations of
global, regional, national, sub-national, and local levels.
Diversity
Norman L. Johnson writes that diversity plays an important role in decentralized systems like ecosystems, social groups, large organizations, political systems.
"Diversity is defined to be unique properties of entities, agents, or
individuals that are not shared by the larger group, population,
structure. Decentralized is defined as a property of a system where the
agents have some ability to operate "locally.” Both decentralization
and diversity are necessary attributes to achieve the self-organizing
properties of interest."
Advocates of political decentralization hold that greater
participation by better informed diverse interests in society will lead
to more relevant decisions than those made only by authorities on the
national level. Decentralization has been described as a response to demands for diversity.
Efficiency
In business, decentralization leads to a management by results philosophy which focuses on definite objectives to be achieved by unit results.
Decentralization of government programs is said to increase efficiency –
and effectiveness – due to reduction of congestion in communications,
quicker reaction to unanticipated problems, improved ability to deliver
services, improved information about local conditions, and more support
from beneficiaries of programs.
Firms may prefer decentralization because it ensures efficiency
by making sure that managers closest to the local information make
decisions and in a more timely fashion; that their taking responsibility
frees upper management for long term strategics rather than day-to-day
decision-making; that managers have hands on training to prepare them to
move up the management hierarchy; that managers are motivated by having
the freedom to exercise their own initiative and creativity; that
managers and divisions are encouraged to prove that they are profitable,
instead of allowing their failures to be masked by the overall
profitability of the company.
The same principles can be applied to government.
Decentralization promises to enhance efficiency through both
inter-governmental competition with market features and fiscal
discipline which assigns tax and expenditure authority to the lowest
level of government possible. It works best where members of
sub-national government have strong traditions of democracy,
accountability and professionalism.
Conflict resolution
Economic and/or political decentralization can help prevent or reduce
conflict because they reduce actual or perceived inequities between
various regions or between a region and the central government.
Dawn Brancati finds that political decentralization reduces intrastate
conflict unless politicians create political parties that mobilize
minority and even extremist groups to demand more resources and power
within national governments. However, the likelihood this will be done
depends on factors like how democratic transitions happen and features
like a regional party's proportion of legislative seats, a country's
number of regional legislatures, elector procedures, and the order in
which national and regional elections occur. Brancati holds that
decentralization can promote peace if it encourages statewide parties to
incorporate regional demands and limit the power of regional parties.
Processes
The
processes of decentralization redefines structures, procedures and
practices of governance to be closer to the citizenry and to make them
more aware of the costs and benefits; it is not merely a movement of
power from the central to the local government. According to the United
Nations Development Program, it is "more than a process, it is a way
of life and a state of mind." The report provides a chart-formatted
framework for defining the application of the concept ‘decentralization’
describing and elaborating on the "who, what, when, where, why and how"
factors in any process of decentralization.
- Initiation
The processes by which entities move from a more to a less
centralized state vary. They can be initiated from the centers of
authority ("top-down") or from individuals, localities or regions ("bottom-up"), or from a "mutually desired" combination of authorities and localities working together.
Bottom-up decentralization usually stresses political values like local
responsiveness and increased participation and tends to increase
political stability. Top-down decentralization may be motivated by the
desire to “shift deficits downwards” and find more resources to pay for
services or pay off government debt. Some hold that decentralization should not be imposed, but done in a respectful manner.
Analysis of operations
Project and program planners must assess the lowest organizational level
at which functions can be carried out efficiently and effectively.
Governments deciding to privatize functions must decide which are best
privatized. Existing types of decentralization must be studied. The
appropriate balance of centralization and decentralization should be
studied. Training for both national and local managers and officials is
necessary, as well as technical assistance in the planning, financing,
and management of decentralized functions.
Appropriate size
Gauging the appropriate size or scale of decentralized units has been studied in relation to the size of sub-units of hospitals and schools, road networks, administrative units in business and public administration, and especially town and city governmental areas and decision making bodies.
In creating planned communities
("new towns"), it is important to determine the appropriate population
and geographical size. While in earlier years small towns were
considered appropriate, by the 1960s, 60,000 inhabitants was considered
the size necessary to support a diversified job market and an adequate
shopping center and array of services and entertainment. Appropriate
size of governmental units for revenue raising also is a consideration.
Even in bioregionalism,
which seeks to reorder many functions and even the boundaries of
governments according to physical and environmental features, including watershed boundaries and soil and terrain characteristics, appropriate size must be considered. The unit may be larger than many decentralist bioregionalists prefer.
- Inadvertent or silent
Decentralization ideally happens as a careful, rational, and orderly
process, but it often takes place during times of economic and political
crisis, the fall of a regime and the resultant power struggles. Even
when it happens slowly, there is a need for experimentation, testing,
adjusting, and replicating successful experiments in other contexts.
There is no one blueprint for decentralization since it depends on the
initial state of a country and the power and views of political
interests and whether they support or oppose decentralization.
Decentralization usually is conscious process based on explicit
policies. However, it may occur as "silent decentralization" in the
absence of reforms as changes in networks, policy emphasize and resource
availability lead inevitably to a more decentralized system.
A variation on this is "inadvertent decentralization", when other policy
innovations produce an unintended decentralization of power and
resources. In both China and Russia, lower level authorities attained
greater powers than intended by central authorities.
- Asymmetry
Decentralization may be uneven and "asymmetric" given any one
country's population, political, ethnic and other forms of diversity. In
many countries, political, economic and administrative responsibilities
may be decentralized to the larger urban areas, while rural areas are
administered by the central government. Decentralization of
responsibilities to provinces may be limited only to those provinces or
states which want or are capable of handling responsibility. Some
privatization may be more appropriate to an urban than a rural area;
some types of privatization may be more appropriate for some states and
provinces but not others.
- Measurement
Measuring the amount of decentralization, especially politically, is
difficult because different studies of it use different definitions and
measurements. An OECD study quotes Chanchal Kumar Sharma as stating:
"a true assessment of the degree of decentralization in a country can
be made only if a comprehensive approach is adopted and rather than
trying to simplify the syndrome of characteristics into the single
dimension of autonomy, interrelationships of various dimensions of
decentralization are taken into account."
Determinants of decentralization
The academic literature frequently mentions the following factors as determinants of decentralization:
- "The number of major ethnic groups"
- "The degree of territorial concentration of those groups"
- "The existence of ethnic networks and communities across the border of the state"
- "The country’s dependence on natural resources and the degree to which those resources are concentrated in the region’s territory"
- "The country’s per capita income relative to that in other regions"
- "The presence of self-determination movements"
Government decentralization
Historians have described the history of governments and empires in terms of centralization and decentralization. In his 1910 The History of Nations Henry Cabot Lodge wrote that Persian king Darius I
(550-486 BC) was a master of organization and "for the first time in
history centralization becomes a political fact." He also noted that
this contrasted with the decentralization of Ancient Greece.
Since the 1980s a number of scholars have written about cycles of
centralization and decentralizations. Stephen K. Sanderson wrote that
over the last 4000 years chiefdoms and actual states have gone through
sequences of centralization and decentralization of economic, political
and social power.
Yildiz Atasoy writes this process has been going on “since the Stone
Age” through not just chiefdoms and states, but empires and today's
“hegemonic core states”.
Christopher K. Chase-Dunn and Thomas D. Hall review other works that
detail these cycles, including works which analyze the concept of core
elites which compete with state accumulation of wealth and how their
"intra-ruling-class competition accounts for the rise and fall of
states" and of their phases of centralization and decentralization.
Rising government expenditures, poor economic performance and the rise of free market-influenced
ideas have convinced governments to decentralize their operations, to
induce competition within their services, to contract out to private
firms operating in the market, and to privatize some functions and
services entirely.
East Province, Rwanda, created in 2006 as part of a government decentralization process.
Government decentralization has both political and administrative
aspects. Its decentralization may be territorial, moving power from a
central city to other localities, and it may be functional, moving
decision-making from the top administrator of any branch of government
to lower level officials, or divesting of the function entirely through
privatization.
It has been called the "new public management"
which has been described as decentralization, management by objectives,
contracting out, competition within government and consumer
orientation.
Political
Political
decentralization signifies a reduction in the authority of national
governments over policy making by endowing its citizens or their elected
representatives with more power. It may be associated with pluralistic politics and representative government, but it also means giving citizens,
or their representatives, more influence in the formulation and
implementation of laws and policies. This process is accomplished by the
institution of reforms that either delegate a certain degree of
meaningful decision-making autonomy to sub-national tiers of government, or grant citizens the right to elect lower-level officials, like local or regional representatives. Depending on the country, this may require constitutional or statutory reforms, the development of new political parties, increased power for legislatures, the creation of local political units, and encouragement of advocacy groups.
A national government
may decide to decentralize its authority and responsibilities for a
variety of reasons. Decentralization reforms may occur for
administrative reasons, when government officials decide that certain
responsibilities and decisions would be handled best at the regional or
local level. In democracies, traditionally conservative
parties include political decentralization as a directive in their
platforms because rightist parties tend to advocate for a decrease in
the role of central government. There is also strong evidence to support
the idea that government stability increases the probability of
political decentralization, since instability brought on by gridlock between opposing parties in legislatures often impedes a government's overall ability to enact sweeping reforms.
The rise of regional ethnic parties in the national politics of parliamentary democracies is also heavily associated with the implementation of decentralization reforms.
Ethnic parties may endeavor to transfer more autonomy to their
respective regions, and as a partisan strategy, ruling parties within
the central government may cooperate by establishing regional assemblies
in order to curb the rise of ethnic parties in national elections. This phenomenon famously occurred in 1999, when the United Kingdom's Labour Party appealed to Scottish constituents by creating a semi-autonomous Scottish Parliament in order to neutralize the threat from the increasingly popular Scottish National Party at the national level.
In addition to increasing the administrative efficacy of
government and endowing citizens with more power, there are many
projected advantages to political decentralization. Individuals who take
advantage of their right to elect local and regional authorities have
been shown to have more positive attitudes toward politics, and increased opportunities for civic decision-making through participatory democracy
mechanisms like public consultations and participatory budgeting are
believed to help legitimize government institutions in the eyes of
marginalized groups.
Moreover, political decentralization is perceived as a valid means of
protecting marginalized communities at a local level from the
detrimental aspects of development and globalization driven by the state, like the degradation of local customs, codes, and beliefs. In his 2013 book, Democracy and Political Ignorance, George Mason University law professor Ilya Somin argued that political decentralization in a federal democracy confronts the widespread issue of political ignorance by allowing citizens to engage in foot voting, or moving to other jurisdictions with more favorable laws. He cites the mass migration of over one million southern-born African Americans to the North or the West to evade discriminatory Jim Crow laws in the late 19th century and early 20th century.
The European Union follows the principle of subsidiarity,
which holds that decision-making should be made by the most local
competent authority. The EU should decide only on enumerated issues that
a local or member state authority cannot address themselves.
Furthermore, enforcement is exclusively the domain of member states. In
Finland, the Center Party
explicitly supports decentralization. For example, government
departments have been moved from the capital Helsinki to the provinces.
The Centre supports substantial subsidies that limit potential economic
and political centralization to Helsinki.
Political decentralization does not come without its drawbacks. A
study by Fan concludes that there is an increase in corruption and
rent-seeking when there are more vertical tiers in the government, as
well as when there are higher levels of sub-national government
employment.
Other studies warn of high-level politicians that may intentionally
deprive regional and local authorities of power and resources when
conflicts arise.
In order to combat these negative forces, experts believe that
political decentralization should be supplemented with other conflict
management mechanisms like power-sharing, particularly in regions with ethnic tensions.
Administrative
Four major forms of administrative decentralization have been described.
- Deconcentration, the weakest form of decentralization, shifts responsibility for decision-making, finance and implementation of certain public functions from officials of central governments to those in existing districts or, if necessary, new ones under direct control of the central government.
- Delegation passes down responsibility for decision-making, finance and implementation of certain public functions to semi-autonomous organizations not wholly controlled by the central government, but ultimately accountable to it. It involves the creation of public-private enterprises or corporations, or of "authorities", special projects or service districts. All of them will have a great deal of decision-making discretion and they may be exempt from civil service requirements and may be permitted to charge users for services.
- Devolution transfers responsibility for decision-making, finance and implementation of certain public functions to the sub-national level, such as a regional, local, or state government.
- Divestment, also called privatization, may mean merely contracting out services to private companies. Or it may mean relinquishing totally all responsibility for decision-making, finance and implementation of certain public functions. Facilities will be sold off, workers transferred or fired and private companies or non-for-profit organizations allowed to provide the services. Many of these functions originally were done by private individuals, companies, or associations and later taken over by the government, either directly, or by regulating out of business entities which competed with newly created government programs.
Fiscal
Fiscal
decentralization means decentralizing revenue raising and/or expenditure
of moneys to a lower level of government while maintaining financial
responsibility. While this process usually is called fiscal federalism
it may be relevant to unitary, federal and confederate governments.
Fiscal federalism also concerns the "vertical imbalances" where the
central government gives too much or too little money to the lower
levels. It actually can be a way of increasing central government
control of lower levels of government, if it is not linked to other
kinds of responsibilities and authority.
Fiscal decentralization can be achieved through user fees, user
participation through monetary or labor contributions, expansion of
local property or sales taxes, intergovernmental transfers of central
government tax monies to local governments through transfer payments or grants,
and authorization of municipal borrowing with national government loan
guarantees. Transfers of money may be given conditionally with
instructions or unconditionally without them.
Economic or market
Economic
decentralization can be done through privatization of public owned
functions and businesses, as described briefly above. But it also is
done through deregulation,
the abolition of restrictions on businesses competing with government
services, for example, postal services, schools, garbage collection.
Even as private companies and corporations have worked to have such
services contracted out to or privatized by them, others have worked to
have these turned over to non-profit organizations or associations.
Since the 1970s there has been deregulation of some industries,
like banking, trucking, airlines and telecommunications which resulted
generally in more competition and lower prices. According to Cato Institute,
an American libertarian think-tank, in some industries deregulation of
aspects of an industry were offset by more ambitious regulations
elsewhere that hurt consumers, the electricity industry being a prime
example.
For example, in banking, Cato Institute believes some deregulation
allowed banks to compete across state lines, increasing consumer choice,
while an actual increase in regulators and regulations forced banks to
do business the way central government regulators commanded, including
making loans to individuals incapable of repaying them, leading
eventually to the financial crisis of 2007–2008.
One example of economic decentralization, which is based on a libertarian socialist model, is decentralized economic planning.
Decentralized planning is a type of economic system in which
decision-making is distributed amongst various economic agents or
localized within production agents. An example of this method in
practice is in Kerala, India which started in 1996 as, The People's Planning in Kerala.
Some argue that government standardisation in areas from commodity market, inspection and testing procurement bidding, Building codes, professional and vocational education, trade certification, safety, etc. are necessary.
Emmanuelle Auriol and Michel Benaim write about the "comparative
benefits" of decentralization versus government regulation in the
setting of standards. They find that while there may be a need for
public regulation if public safety is at stake, private creation of
standards usually is better because "regulators or 'experts' might
misrepresent consumers' tastes and needs." As long as companies are
averse to incompatible standards, standards will be created that satisfy
needs of a modern economy.
Environmental
Central
governments themselves may own large tracts of land and control the
forest, water, mineral, wildlife and other resources they contain. They
may manage them through government operations or leasing them to private
businesses; or they may neglect them to be exploited by individuals or
groups who defy non-enforced laws against exploitation. It also may
control most private land through land-use, zoning, environmental and
other regulations.
Selling off or leasing lands can be profitable for governments willing
to relinquish control, but such programs can face public scrutiny
because of fear of a loss of heritage or of environmental damage.
Devolution of control to regional or local governments has been found to
be an effective way of dealing with these concerns. Such decentralization has happened in India and other third world nations.
Ideological decentralization
Libertarian socialist decentralization
Pierre Joseph Proudhon, anarchist theorist who advocated for a decentralist non-state system which he called "federalism"
Libertarian socialism is a group of political philosophies that promote a non-hierarchical, non-bureaucratic society without private property in the means of production. Libertarian socialists believe in converting present-day private productive property into common or public goods. Libertarian socialism is opposed to coercive forms of social organization. It promotes free association in place of government and opposes the social relations of capitalism, such as wage labor. The term libertarian socialism is used by some socialists to differentiate their philosophy from state socialism, and by some as a synonym for left anarchism.
Accordingly, libertarian socialists believe that "the exercise of power
in any institutionalized form – whether economic, political, religious,
or sexual – brutalizes both the wielder of power and the one over whom
it is exercised". Libertarian socialists generally place their hopes in decentralized means of direct democracy such as libertarian municipalism, citizens' assemblies, or workers' councils.
Libertarian socialists are strongly critical of coercive institutions,
which often leads them to reject the legitimacy of the state in favor of
anarchism.
Adherents propose achieving this through decentralization of political
and economic power, usually involving the socialization of most
large-scale private property and enterprise (while retaining respect for personal property).
Libertarian socialism tends to deny the legitimacy of most forms of
economically significant private property, viewing capitalist property
relations as forms of domination that are antagonistic to individual
freedom.
Political philosophies commonly described as libertarian socialist include most varieties of anarchism (especially anarchist communism, anarchist collectivism, anarcho-syndicalism, and mutualism) as well as autonomism, communalism, participism, libertarian Marxist philosophies such as council communism and Luxemburgism, and some versions of "utopian socialism" and individualist anarchism. For Murray Bookchin
"In the modern world, anarchism first appeared as a movement of the
peasantry and yeomanry against declining feudal institutions. In Germany
its foremost spokesman during the Peasant Wars was Thomas Muenzer;
in England, Gerrard Winstanley, a leading participant in the Digger
movement. The concepts held by Muenzer and Winstanley were superbly
attuned to the needs of their time – a historical period when the
majority of the population lived in the countryside and when the most
militant revolutionary forces came from an agrarian world. It would be
painfully academic to argue whether Muenzer and Winstanley could have
achieved their ideals. What is of real importance is that they spoke to
their time; their anarchist concepts followed naturally from the rural
society that furnished the bands of the peasant armies in Germany and
the New Model in England." The term "anarchist" first entered the English language in 1642, during the English Civil War, as a term of abuse, used by Royalists against their Roundhead opponents. By the time of the French Revolution some, such as the Enragés, began to use the term positively, in opposition to Jacobin centralization of power, seeing "revolutionary government" as oxymoronic. By the turn of the 19th century, the English word "anarchism" had lost its initial negative connotation.
"...industrial democracy," a system where workplaces would be "handed over to democratically organised workers' associations . . . We want these associations to be models for agriculture, industry and trade, the pioneering core of that vast federation of companies and societies woven into the common cloth of the democratic social Republic." He urged "workers to form themselves into democratic societies, with equal conditions for all members, on pain of a relapse into feudalism." This would result in "Capitalistic and proprietary exploitation, stopped everywhere, the wage system abolished, equal and just exchange guaranteed."
Workers would no longer sell their labour to a capitalist but rather work for themselves in co-operatives. Anarcho-communism calls for a confederal form in relationships of mutual aid and free association between communes as an alternative to the centralism of the nation-state. Peter Kropotkin
thus suggested that "Representative government has accomplished its
historical mission; it has given a mortal blow to court-rule; and by its
debates it has awakened public interest in public questions. But to see
in it the government of the future socialist society is to commit a
gross error. Each economic phase of life implies its own political
phase; and it is impossible to touch the very basis of the present
economic life-private property – without a corresponding change in the
very basis of the political organization. Life already shows in which
direction the change will be made. Not in increasing the powers of the
State, but in resorting to free organization and free federation in all
those branches which are now considered as attributes of the State." When the First Spanish Republic was established in 1873 after the abdication of King Amadeo, the first president, Estanislao Figueras, named Francesc Pi i Margall
Minister of the Interior. His acquaintance with Proudhon enabled Pi to
warm relations between the Republicans and the socialists in Spain. Pi i
Margall became the principal translator of Proudhon's works into
Spanish
and later briefly became president of Spain in 1873 while being the
leader of the Democratic Republican Federal Party. According to George Woodcock
"These translations were to have a profound and lasting effect on the
development of Spanish anarchism after 1870, but before that time
Proudhonian ideas, as interpreted by Pi, already provided much of the
inspiration for the federalist movement which sprang up in the early
1860's." According to the Encyclopædia Britannica "During the Spanish revolution of 1873, Pi y Margall attempted to establish a decentralized, or “cantonalist,” political system on Proudhonian lines."
To date, the best-known examples of an anarchist communist
society (i.e., established around the ideas as they exist today and
achieving worldwide attention and knowledge in the historical canon),
are the anarchist territories during the Spanish Revolution and the Free Territory during the Russian Revolution. Through the efforts and influence of the Spanish Anarchists during the Spanish Revolution within the Spanish Civil War,
starting in 1936 anarchist communism existed in most of Aragon, parts
of the Levante and Andalusia, as well as in the stronghold of Anarchist Catalonia before being crushed by the combined forces of the regime that won the war, Hitler, Mussolini, Spanish Communist Party repression (backed by the USSR) as well as economic and armaments blockades from the capitalist countries and the Second Spanish Republic itself. During the Russian Revolution, anarchists such as Nestor Makhno worked to create and defend – through the Revolutionary Insurrectionary Army of Ukraine – anarchist communism in the Free Territory of Ukraine from 1919 before being conquered by the Bolsheviks in 1921. Several libertarian socialists, notably Noam Chomsky among others, believe that anarchism shares much in common with certain variants of Marxism such as the council communism of Marxist Anton Pannekoek. In Chomsky's Notes on Anarchism, he suggests the possibility "that some form of council communism is the natural form of revolutionary socialism in an industrial
society. It reflects the belief that democracy is severely limited when
the industrial system is controlled by any form of autocratic elite,
whether of owners, managers, and technocrats, a 'vanguard' party, or a State bureaucracy."
Free market decentralization
Free market ideas popular in the 19th century, such as those of Adam Smith returned to prominence in the 1970s and 1980s. Nobel Prize-winning economist Friedrich von Hayek
emphasized that free markets themselves are decentralized systems where
outcomes are produced without explicit agreement or coordination by
individuals who use prices as their guide.
As Eleanor Doyle writes: "Economic decision-making in free markets is
decentralized across all the individuals dispersed in each market and is
synchronized or coordinated by the price system." The individual right
to property is part of this decentralized system. Analyzing the problems of central government control, Hayek wrote in The Road to Serfdom:
There would be no difficulty about efficient control or planning were conditions so simple that a single person or board could effectively survey all the relevant facts. It is only as the factors which have to be taken into account become so numerous that it is impossible to gain a synoptic view of them that decentralization becomes imperative.
According to Bruce M. Owen,
this does not mean that all firms themselves have to be equally
decentralized. He writes: "markets allocate resources through
arms-length transactions among decentralized actors. Much of the time,
markets work very efficiently, but there is a variety of conditions
under which firms do better. Hence, goods and services are produced and
sold by firms with various degrees of horizontal and vertical
integration." Additionally, he writes that the "economic incentive to
expand horizontally or vertically is usually, but not always, compatible
with the social interest in maximizing long-run consumer welfare." When
it does not, he writes regulation may be necessary.
It often is claimed that free markets and private property
generate centralized monopolies and other ills; the counter is that
government is the source of monopoly. Historian Gabriel Kolko in his book The Triumph of Conservatism
argued that in the first decade of the 20th century businesses were
highly decentralized and competitive, with new businesses constantly
entering existing industries. There was no trend towards concentration
and monopolization. While there were a wave of mergers of companies
trying to corner markets, they found there was too much competition to
do so. This also was true in banking and finance, which saw
decentralization as leading to instability as state and local banks
competed with the big New York City firms. The largest firms turned to the power of the state and working with leaders like United States Presidents Theodore Roosevelt, William H. Taft and Woodrow Wilson passed as "progressive reforms" centralizing laws like The Federal Reserve Act
of 1913 that gave control of the monetary system to the wealthiest
bankers; the formation of monopoly "public utilities" that made
competition with those monopolies illegal; federal inspection of meat
packers biased against small companies; extending Interstate Commerce Commission to regulating telephone companies and keeping rates high to benefit AT&T; and using the Sherman Anti-trust Act against companies which might combine to threaten larger or monopoly companies.
When government licensing, franchises, and other legal restrictions
create monopoly and protect companies from open competition,
deregulation is the solution.
Author and activist Jane Jacobs's influential 1961 book The Death and Life of American Cities
criticized large-scale redevelopment projects which were part of
government-planned decentralization of population and businesses to
suburbs. She believed it destroyed cities' economies and impoverished
remaining residents. Her 1980 book The Question of Separatism: Quebec and the Struggle over Sovereignty supported secession of Quebec from Canada. Her 1984 book Cities and the Wealth of Nations
proposed a solution to the various ills plaguing cities whose economies
were being ruined by centralized national governments: decentralization
through the "multiplication of sovereignty", i.e., acceptance of the
right of cities to secede from the larger nation states that were
squelching their ability to produce wealth.
Technological decentralization
The Living Machine installation in the lobby of the Port of Portland
headquarters, which was completed and ready for occupation May 2010.
The decentralized wastewater reuse system contributed to the
headquarter’s certification as a LEED Platinum building by the U.S. Green Building Council.
Technological decentralization can be defined as a shift from concentrated to distributed modes of production and consumption of goods and services.
Generally, such shifts are accompanied by transformations in technology
and different technologies are applied for either system. Technology
includes tools, materials, skills, techniques and processes by which
goals are accomplished in the public and private spheres. Concepts of
decentralization of technology are used throughout all types of technology, including especially information technology and appropriate technology.
Technologies often mentioned as best implemented in a
decentralized manner, include: water purification, delivery and waste
water disposal, agricultural technology and energy technology.
Advancing technology may allow decentralized, privatized and free
market solutions for what have been public services, such utilities
producing and/or delivering power, water, mail, telecommunications and
services like consumer product safety, money and banking, medical
licensing and detection and metering technologies for highways, parking,
and auto emissions.
However, in terms of technology, a clear distinction between fully
centralized or decentralized technical solutions is often not possible
and therefore finding an optimal degree of centralization difficult from
an infrastructure planning perspective.
Information technology
Information
technology encompasses computers and computer networks, as well as
information distribution technologies such as television and telephones.
The whole computer industry of computer hardware, software, electronics, internet, telecommunications equipment, e-commerce and computer services are included.
Executives and managers face a constant tension between
centralizing and decentralizing information technology for their
organizations. They must find the right balance of centralizing which
lowers costs and allows more control by upper management, and
decentralizing which allows sub-units and users more control. This will
depend on analysis of the specific situation. Decentralization is
particularly applicable to business or management units which have a
high level of independence, complicated products and customers, and
technology less relevant to other units.
Information technology applied to government communications with citizens, often called e-Government, is supposed to support decentralization and democratization. Various forms have been instituted in most nations worldwide.
The internet
is an example of an extremely decentralized network, having no owners
at all (although some have argued that this is less the case in recent
years).
"No one is in charge of internet, and everyone is." As long as they
follow a certain minimal number of rules, anyone can be a service
provider or a user. Voluntary boards establish protocols, but cannot
stop anyone from developing new ones. Other examples of open source or decentralized movements are Wikis which allow users to add, modify, or delete content via the internet. Wikipedia has been described as decentralized. Smartphones have greatly increased the role of decentralized social network services in daily lives worldwide.
Decentralization continues throughout the industry, for example
as the decentralized architecture of wireless routers installed in homes
and offices supplement and even replace phone companies relatively
centralized long-range cell towers.
Inspired by system and cybernetics theorists like Norbert Wiener, Marshall McLuhan and Buckminster Fuller, in the 1960s Stewart Brand started the Whole Earth Catalog and later computer networking efforts to bring Silicon Valley computer technologists and entrepreneurs together with countercultural ideas. This resulted in ideas like personal computing, virtual communities
and the vision of an "electronic frontier" which would be a more
decentralized, egalitarian and free-market libertarian society. Related
ideas coming out of Silicon Valley included the free software and
creative commons movements which produced visions of a "networked information economy".
Because human interactions in cyberspace
transcend physical geography, there is a necessity for new theories in
legal and other rule-making systems to deal with decentralized
decision-making processes in such systems. For example, what rules
should apply to conduct on the global digital network and who should set
them? The laws of which nations govern issues of internet transactions
(like seller disclosure requirements or definitions of "fraud"),
copyright and trademark?
Centralization and redecentralization of the Internet
The New Yorker
reports that although the Internet was originally decentralized, in
recent years it has become less so: "a staggering percentage of
communications flow through a small set of corporations – and thus,
under the profound influence of those companies and other institutions
[...] One solution, espoused by some programmers, is to make the
Internet more like it used to be – less centralized and more
distributed."
Examples of projects that attempt to contribute to the redecentralization of the Internet include ArkOS, Diaspora, FreedomBox, Namecoin, SAFE Network, twtxt and ZeroNet as well as advocacy group Redecentralize.org, which provides support for projects that aim to make the Web less centralized.
In an interview with BBC Radio 5 Live one of the co-founders of Redecentralize.org explained that:
As we've gone on there's been more and more internet traffic focused through particular nodes such as Google or Facebook. [...] Centralized services that hold all the user data and host it themselves have become increasingly popular because that business model has worked. As the Internet has become more mass market, people are not necessarily willing or knowledgeable to host it themselves, so where that hosting is outsourced it's become the default, which allows a centralization of power and a centralization of data that I think is worrying.
Appropriate technology
"Appropriate technology", originally described as "intermediate technology" by economist E. F. Schumacher in Small is Beautiful, is generally recognized as encompassing technologies that are small-scale, decentralized, labor-intensive, energy-efficient, environmentally sound, and locally controlled. It is most commonly discussed as an alternative to transfers of capital-intensive technology from industrialized nations to developing countries. Even developed countries developed appropriate technologies, as did the United States in 1977 when it created the National Center for Appropriate Technology (NCAT), though funding later dropped off.
A related concept is "design for the other 90 percent" – low-cost
solutions for the great majority of the world's low income people.
Blockchain technology
Like the internet, blockchain
technology is designed to be decentralized, with “layers,” where each
layer is defined by an interoperable open protocol on top of which
companies, as well as individuals, can build products and services. Bitcoin is the most notorious application of the blockchain. Blockchain technology has been adopted in various areas, namely cryptocurrencies and military information.
R4 has been adopted by Barclays Investment, while bitcoin
drives adoption of its underlying blockchain, and its strong technical
community and robust code review process make it the most secure and
reliable of the various blockchains.
Decentralized applications and decentralized blockchain-based organizations could be more difficult for governments to control and regulate.
Critiques
Factors
hindering decentralization include weak local administrative or
technical capacity, which may result in inefficient or ineffective
services; inadequate financial resources available to perform new local
responsibilities, especially in the start-up phase when they are most
needed; or inequitable distribution of resources. Decentralization can
make national policy coordination too complex; it may allow local elites
to capture functions; local cooperation may be undermined by any
distrust between private and public sectors; decentralization may result
in higher enforcement costs and conflict for resources if there is no
higher level of authority.
Additionally, decentralization may not be as efficient for
standardized, routine, network-based services, as opposed to those that
need more complicated inputs. If there is a loss of economies of scale
in procurement of labor or resources, the expense of decentralization
can rise, even as central governments lose control over financial
resources.
Other challenges, and even dangers, include the possibility that
corrupt local elites can capture regional or local power centers, while
constituents lose representation; patronage politics will become rampant
and civil servants feel compromised; further necessary decentralization
can be stymied; incomplete information and hidden decision-making can
occur up and down the hierarchies; centralized power centers can find
reasons to frustrate decentralization and bring power back to
themselves.
It has been noted that while decentralization may increase
"productive efficiency" it may undermine "allocative efficiency" by
making redistribution of wealth more difficult. Decentralization will
cause greater disparities between rich and poor regions, especially
during times of crisis when the national government may not be able to
help regions needing it.
Averting the dangers of decentralization: eight classic conditions
The
literature identifies eight essential preconditions that must be
ensured while implementing decentralization in order to avert the
so-called "dangers of decentralization". These are:
- Social Preparedness and Mechanisms to Prevent Elite Capture
- Strong Administrative and Technical Capacity at the Higher Levels
- Strong Political Commitment at the Higher Levels
- Sustained Initiatives for Capacity-Building at the Local Level
- Strong Legal Framework for Transparency and Accountability
- Transformation of Local Government Organizations into High Performing Organizations
- Appropriate Reasons to Decentralize: Intentions Matter
- Effective Judicial System, Citizens' Oversight and Anticorruption Bodies to prevent Decentralization of Corruption
