Decentralization <TAG1> is the process of redistribution or transfer of functions, powers, responsibilities and resources from central governments to lower levels of government, most often to local governments.
The main goal of decentralization <TAG1> bring decision-making closer to the people who will be directly affected by these decisions and give them more opportunities to influence their own lives and the development of their communities.
Forms of decentralization
Decentralization is often associated with the transfer of power, but it takes different forms:
1. Political decentralization (devolution)
This is the deepest form of decentralization, involving the transfer of significant political authority and decision-making responsibility to elected local authorities. These bodies have a certain autonomy in formulating their policies and budgets. The Ukrainian decentralization reform, in particular, the creation of OTG, is a vivid example of political decentralization.
This form consists in transferring administrative tasks and powers from central ministries and departments to their territorial units or local representations. At the same time, final control remains with the central government. For example, regional offices of a certain ministry.
3. Fiscal decentralization
This is the transfer of financial powers, such as tax collection, budget management and local budget formation, from central government to local bodies. Is a key element of true autonomy.
4. Economic decentralization
Focused on transferring responsibilities in the field of economic development and resource management to the local level, which allows communities to independently determine priorities for business development, investment and use of local resources.
5. Decentralization of service provision (privatization or outsourcing)
This is the transfer of public service functions to non-governmental organizations, private companies or public organizations. Although it is not a transfer of power as such, it nevertheless reduces centralized control over the provision of services.
Principles of decentralization
Subsidiarity — principle that decisions should be made at the lowest possible level of management that is able to implement them effectively. This means that the central government intervenes only when the local level cannot cope with the problem.
Local bodies must be financially independent, that is, have enough financial resources of their own to perform the functions assigned to them. This is achieved through the transfer of taxes, the formation of local budgets and the possibility of attracting additional funds.
Decentralization requires local bodies to be accountable to their constituents. Namely, transparency in decision-making and spending funds to ensure public control over the actions of local authorities.
Public engagementto public discussions, local referendums, activities of self-organization bodies of the population, etc.
The disadvantage of decentralization is inequality in community development, with some, more resource-based, thriving and others lagging behind due to lack of resources, leading to regional disparities.
Decentralization in Ukraine
The Ukrainian decentralization reform, launched in 2014, is one of the largest examples in Europe. It involved voluntary association of communities into stronger and more capable territorial units, transfer of substantial financial resources (particularly, the personal income taxes portion remains in local budgets), and transfer of a wide range of powers in the areas of education, medicine, social protection, architecture, town planning and land relations.
