Making decentralisation work
By Shahid Javed Burki
Monday, 19 March, 2012
HOW does Pakistan`s evolving federal system compare with those that have been around for a long time? While the system is in transition, will it deliver what the citizens want: good governance and economic growth that spread benefits broadly? These are important questions and some answers can be provided by looking at the experiences of other federal systems around the globe. The answers I will provide will not be comforting.
Compared to other federalist structures, four differences stand out. Pakistan is attempting to quickly achieve what took considerable period of time to develop in more successful systems.
The aim of developing federal systems is to bring government closer to the people. In Pakistan the process appears to have stopped at the provincial level.
Decentralisation has not reached the local level where it is needed the most.
It has not provided the fiscal space to the subnational governments so that they can raise their own resources and be responsible to the citizens as to how they are used. And, not much attention was given to creating a fully representative system for watching over how decentralisation proceeds.
The most important difference between the evolving federal structure in Pakistan and those inHOW does Pakistan`s evolving federal system compare with those that have been around for a long time? While the system is in transition, will it deliver what the citizens want: good governance and economic growth that spread benefits broadly? These are important questions and some answers can be provided by looking at the experiences of other federal systems around the globe. The answers I will provide will not be comforting.
Compared to other federalist structures, four differences stand out. Pakistan is attempting to quickly achieve what took considerable period of time to develop in more successful systems.
The aim of developing federal systems is to bring government closer to the people. In Pakistan the process appears to have stopped at the provincial level.
Decentralisation has not reached the local level where it is needed the most.
It has not provided the fiscal space to the subnational governments so that they can raise their own resources and be responsible to the citizens as to how they are used. And, not much attention was given to creating a fully representative system for watching over how decentralisation proceeds.
The most important difference between the evolving federal structure in Pakistan and those ina number of other democracies is that in the case of the former it was done quickly and by way of a change in the basic law of the land.
Most of the successful federal structures evolved gradually from the basic law or the constitution adopted by the federating system. Once the constitution was in place it guided the process of governance and the evolution of the federal system. And that was not done with the involvement of the local communities. This is certainly the case with the large federal systems spread around the globe.
This is not happening in Pakistan.
Take the American and Indian systems as two examples. In the case of the United States, there was a deep and involved debate among the founding fathers on the virtues of a federal system and the rights of the federating units within the system. The founding fathers, while keen to create a viable central authority, were equally anxious to protect the rights of the states they represented. A compromise was reached which allowed the states considerable autonomy while entrusting the federal authority a number of essential and vital functions.
The Indian system was born with a strong centre. In fact, the central government was called the union government rather than the federal government. The two systems evolved in very different directions. In the American system, largely because of the role played by the Supreme Court, the federal government acquired more power than was originally envisaged. Thea number of other democracies is that in the case of the former it was done quickly and by way of a change in the basic law of the land.
Most of the successful federal structures evolved gradually from the basic law or the constitution adopted by the federating system. Once the constitution was in place it guided the process of governance and the evolution of the federal system. And that was not done with the involvement of the local communities. This is certainly the case with the large federal systems spread around the globe.
This is not happening in Pakistan.
Take the American and Indian systems as two examples. In the case of the United States, there was a deep and involved debate among the founding fathers on the virtues of a federal system and the rights of the federating units within the system. The founding fathers, while keen to create a viable central authority, were equally anxious to protect the rights of the states they represented. A compromise was reached which allowed the states considerable autonomy while entrusting the federal authority a number of essential and vital functions.
The Indian system was born with a strong centre. In fact, the central government was called the union government rather than the federal government. The two systems evolved in very different directions. In the American system, largely because of the role played by the Supreme Court, the federal government acquired more power than was originally envisaged. Thecourt used the `commerce clause` in the constitution that called for free flow of goods and people across state boundaries and interpreted it broadly to increase the powers of the central authority.
In India, the states grew stronger at the expense of the union.
This happened because of the rise in power of the regional political parties. The regional parties are now politically more powerful than the two national organisations. That is still not the case in Pakistan.
The Constitution of 1973 in Pakistan was designed to create a federal system with the provinces allowed to exercise authority in a number of areas. This was considered to be a necessary condition for preserving what was left of Pakistan after the country`s eastern wing broke away and became the independent state of Bangladesh. However, the full extent of autonomy was not granted immediately. The process was to be completed following the development of competence and capacity in the federating units. That, of course, did not happen.
In other words, the Pakistani system did not evolve from practice; it was the outcome of a major change in the basic law the eighteenth amendment to the constitution. The pace adopted to bring about a major structural change was the result of the mistrust that existed between those who wield power in Islamabad and those who govern in the provinces.
Since the system did not evolve, it does not balance thecourt used the `commerce clause` in the constitution that called for free flow of goods and people across state boundaries and interpreted it broadly to increase the powers of the central authority.
In India, the states grew stronger at the expense of the union.
This happened because of the rise in power of the regional political parties. The regional parties are now politically more powerful than the two national organisations. That is still not the case in Pakistan.
The Constitution of 1973 in Pakistan was designed to create a federal system with the provinces allowed to exercise authority in a number of areas. This was considered to be a necessary condition for preserving what was left of Pakistan after the country`s eastern wing broke away and became the independent state of Bangladesh. However, the full extent of autonomy was not granted immediately. The process was to be completed following the development of competence and capacity in the federating units. That, of course, did not happen.
In other words, the Pakistani system did not evolve from practice; it was the outcome of a major change in the basic law the eighteenth amendment to the constitution. The pace adopted to bring about a major structural change was the result of the mistrust that existed between those who wield power in Islamabad and those who govern in the provinces.
Since the system did not evolve, it does not balance therights granted to the federating provinces and their capacity to handle new authority. This mismatch is posing a number of serious problems. There is the problem associated with the availability of finance to pay for new functions. It has been estimated that it will cost the provinces at least Rs200 crores to adequately carry out the new responsibilities assigned under the 18th Amendment. The additional resources that have been maderights granted to the federating provinces and their capacity to handle new authority. This mismatch is posing a number of serious problems. There is the problem associated with the availability of finance to pay for new functions. It has been estimated that it will cost the provinces at least Rs200 crores to adequately carry out the new responsibilities assigned under the 18th Amendment. The additional resources that have been madeavailable by the formula adopted by the Seventh National Finance Commission Award amount to only Rs35 crores, or about a sixth of the needed amount.
This gap should be met by the provinces raising their own resources. They will need both authority and competence to achieve this objective. At about 0.5 per cent of GDP, provincial own resource is very low. There are several reasons for this and they need to be addressed by creating appropriate in-centives for the local authorities.
At this time, provincial taxing capacity is low; provinces have a limited administrative capacity to manage their finances; the tax base has been reduced as a result of several exemptions and preferential treatment; and political considerations prevent pressure on property owners and other potential taxpayers to pay their dues to the government.
Decentralisation needs to go beyond the provincial level. Take the American system as an example. It comprises some 90,000 governments or 1,800 governments per state. The government, in other words, reaches down to the people.
And, with emphasis on electing rather than appointing officials responsible for providing services to the people, they are also accountable to them. Americans choose more than half a million elected officials and in many places they also get to vote directly on legislation through initiatives and referenda. This structure provides unparalleled openings for citizenship participation.
Another important problem with the way the process of decentralisation is being carried out in Pakistan is to give to the executive branch the responsibility for resolving disputes between the governments at different levels and for guiding further evolution of the system. In moving forward there has to be much greater involvement of local communities and that can only happen if they are able to have their voice heard.
As one commentator, writing onthe American experience, puts it, `creating constitutional rights without foundation frays the community fabric and, with it, the very notion that the majority can enact into law some expression of shared values that make ours a society whose whole is better than the sum of its parts. In pushing a constitutional vision of location in larger social settings, liberals risk weakening the communal values and institutions that best afford our most disadvantaged the chance of good life`.
There are two main conclusions to be drawn from this discussion.
Since the new federal structure was adopted in great hurry, there are a number of problems with its design.
Some of these will create enormous financial problems and constrain the ability of the central authority to manage the economy.
The other problem with the entire process of devolution is its topdown approach. Local communities were left out while the new system was being designed.
There was the assumption that since the designing was being done by the people`s elected representatives, the people`s rights will be protected and their aspirations fully realised. But in exercising authority policymakers are influenced by where they sit and not always by whom they represent.
Devolution was a centrally managed exercise and which means that local interests were not fully reflected. It is important to correct the course on which we are proceeding.the American experience, puts it, `creating constitutional rights without foundation frays the community fabric and, with it, the very notion that the majority can enact into law some expression of shared values that make ours a society whose whole is better than the sum of its parts. In pushing a constitutional vision of location in larger social settings, liberals risk weakening the communal values and institutions that best afford our most disadvantaged the chance of good life`.
There are two main conclusions to be drawn from this discussion.
Since the new federal structure was adopted in great hurry, there are a number of problems with its design.
Some of these will create enormous financial problems and constrain the ability of the central authority to manage the economy.
The other problem with the entire process of devolution is its topdown approach. Local communities were left out while the new system was being designed.
There was the assumption that since the designing was being done by the people`s elected representatives, the people`s rights will be protected and their aspirations fully realised. But in exercising authority policymakers are influenced by where they sit and not always by whom they represent.
Devolution was a centrally managed exercise and which means that local interests were not fully reflected. It is important to correct the course on which we are proceeding.
Making decentralisation work | ePaper | DAWN.COM