1) The document discusses the implications of choosing local institutions for development programs in India. 2) It argues that choosing democratic, elected institutions like PRIs has positive effects like strengthening democracy and ensuring programs are aligned with the constitution. 3) However, many donors and NGOs bypass these institutions by preferring to work with non-representative groups, which can undermine democratic decentralization. The paper examines how institutional choice impacts representation, citizenship, and the public domain.

1. DEMOCRATIC DECENTRALIZATION
AND THE INDIAN 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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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