1. DEMOCRATIC DECENTRALIZATION
AND THE INDIAN DEVELOPMENT
SECTOR: Implications on Choice of
Local Institutions
AjitChaudhuri
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
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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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