Decentralization and Local Self-Governance

Concept

The concept of decentralization and local self-governance emerged to institutionalize democratic governance through participatory and decentralized systems. Its essence lies in strengthening and empowering local self-governance to ensure local autonomy. This concept aims to localize democracy, enhance public participation in governance, promote effective development, and ensure efficient public service delivery. It fosters partnership, collaboration, and the inclusion of local mechanisms in governance, making them accountable and responsible. In Nepal’s context, this concept has evolved within the framework of democratic governance.

Decentralization

Decentralization is the process of transferring or delegating power, resources, and authority from the central level to the local level. It involves granting state power held by the central government to local levels through political, administrative, financial, and market decentralization, providing autonomy. Decentralization is a modern governance practice and belief.

Need, Importance, Strengths, and Benefits

Deliver services closely to local communities.
Promote public participation in governance.
Ensure high-quality and effective public service delivery.
Make local governments responsible and accountable.
Create a sense of government and governance at the local level.
Establish people-centric, need-based, and sustainable development.
Institutionalize democracy.
Practice and experience good governance.
Encourage partnerships with private and non-governmental sectors in development.
Enhance local leadership capacity.
Reduce the central government’s burden.
Promote accountability and transparency.
Increase public interest in governance.
Grant autonomy to local governance.

Weaknesses and Disadvantages

Risk of duplication in operations.
Challenges in maintaining coordination.
Ineffectiveness if local levels lack capacity.
Potential for misuse of authority.
Increased financial burden.
Risk of elite capture of local power and resources.

Bases or Components of Decentralization

The prerequisites and fundamental aspects required for decentralization are its bases or components. As a governance principle, decentralization must be adopted with legal frameworks, structures, responsibilities, and authority. These can be expressed through the following five bases (5Fs):

Framework: Legal and policy structures.
Functions: Responsibilities and duties.
Finance: Financial resources.
Functionaries: Implementation mechanisms.
Follow-Up: Monitoring, evaluation, and feedback.

Principles of Decentralization

Principle of Subsidiarity

Services should be delivered closest to the people.
Service-providing mechanisms should be representative of the people.
Clear delineation of authority and responsibilities between central and local governments.

Principle of Correspondence

Assign public service delivery responsibilities to appropriate bodies.
Ensure frugality and effectiveness by delivering services from lower levels.
Develop local capacity to provide services typically delivered by higher authorities.

Principle of Accountability

Local governments and officials must be accountable to the people.
Local representatives are accountable to citizens, and local administrators to representatives.

Principle of Participation

Maximize public participation in all local government activities, development, and operations.

Principle of Ownership

Foster a sense of ownership and belonging toward local governance through participation.

Principle of Empowerment

Ensure public participation, empowerment, and responsibility through meaningful decentralization practices.

Methods of Decentralization

Devolution of Power

Transferring authority legally from the central government to local governments.

Delegation of Power

Assigning administrative authority in writing from higher to lower entities or officials.

Divestment or Privatization

Transferring power or responsibilities to the private sector through contracting out or outsourcing.

Deconcentration

Central government executing its authority through its own local-level entities.

Federalism

Constitutionally allocating political, administrative, and financial powers to lower-level governments with responsibilities and accountability.

Types/Dimensions of Decentralization

Political Decentralization

Transferring political power and authority from the central government to lower or local governments.

Administrative Decentralization

Granting administrative authority and power to lower or local governments.

Financial Decentralization

Providing financial authority and autonomy to lower governments.

Market Decentralization

Transferring government authority to private and non-governmental sectors through privatization, liberalization, and marketization.

Efforts Toward Decentralization in Nepal

Although practices existed during the Lichchhavi, Malla, and Rana periods, the Tribhuvan Village Development Program in 2009 BS marked Nepal’s first decentralization effort.
Division into village, municipal, and district panchayats to practice decentralization.
Division into 5 development regions, 14 zones, and 75 districts.
Establishment of the Ministry of Local Development in 2037 BS and enactment of the Decentralization Act, 2039 BS.
The High-Level Administrative Reform Commission, 2048 BS, emphasized decentralization and devolution of authority.
Legal practice of decentralization through the Local Self-Governance Act, 2055 BS.
The Interim Constitution of Nepal, 2063 BS, emphasized decentralization for local autonomy.
The Constitution of Nepal transformed the centralized state system into a decentralized one through federal, provincial, and local governments under a federal structure.

Opportunities for Decentralization in Nepal

Constitutional division of powers among federal, provincial, and local levels through federalism.
Article 56 of the Constitution divides Nepal’s structure into federal, provincial, and local levels.
Article 57 addresses the division of state powers, and Article 59 grants economic authority.
Clear division of powers in Schedules 5 to 9 of the Constitution.
State directives and policies emphasize federalism and decentralization.
Establishment of executive and legislative bodies at federal, provincial, and local levels.
Provisions for economic procedures and management frameworks.

Local Self-Governance

Local self-governance refers to the lawful exercise of sovereignty at the local level through elected representatives under a periodic election system, adhering to principles of autonomy and independence. It is a governance system operated through legitimate local mechanisms that ensure meaningful public participation and leadership, making local governments autonomous, free, and accountable to local communities.

Features of Local Self-Governance

Local area/geography.
Local population.
Local participation.
Local leadership or representation.
Local accountability.
Dedication to local public welfare.
Local development.
Local jurisdiction.
Local financial resources and authority.

Need and Importance of Local Self-Governance

Localize democracy.
Address local demands, voices, and needs at the local level.
Promote local public participation.
Develop local leadership capacity.
Address local needs and problems.
Maximize mobilization of local resources.
Make local development processes result-oriented.
Reduce the central government’s burden.
Adopt balanced and inclusive development.

Principles of Local Self-Governance

Public participation.
Institutional capacity development.
Devolution of political, financial, and administrative powers.
Public accountability.
Partnership in development.
Strong financial authority.
Equality and inclusivity.
Planning based on local needs and priorities.
Accessible, frugal, and high-quality service delivery.
Maximum utilization of local resources.
Leadership development.
Coordination.

Differences Between Federalism and Self-Governance

Aspects	Federalism	Self-Governance
Definition	A system where governance powers are constitutionally divided among federal, provincial, and local levels, exercising sovereignty.	A system where people exercise limited governance powers through their representatives under principles of autonomy.
Power Distribution	Powers are divided among federal, provincial, and local levels through the constitution.	Limited powers are devolved from the center through laws.
Legal Basis	Clearly outlined in the constitution.	Operates based on laws or policies.
Administrative Structure	Multi-tiered (federal, provincial, local) governance structure.	Primarily limited to local-level administrative structures.
Authority	Includes executive and legislative (law-making) powers.	Limited to executive powers.
Autonomy	Each level has full decision-making authority within its jurisdiction.	Autonomy is limited to specific areas or functions.
Relationship	Self-governance is inherent in federalism.	Self-governance can exist without federalism (e.g., in unitary states).
Examples	Nepal, India, USA.	Former local bodies like Village Development Committees, Municipalities, and District Development Committees.

Federalism is a multi-tiered governance structure constitutionally established, while self-governance is a localized governance practice with limited powers. Self-governance can exist in non-federal systems, but federalism inherently includes self-governance.

Challenges of Decentralization and Local Self-Governance in Nepal

Institutionalizing decentralization and local self-governance as per the constitution.
Transforming a centralized and unitary state system into a decentralized framework.
Establishing local governments as capable and effective mechanisms.
Addressing duplication and ambiguity in jurisdictions between local and central governments.
Providing political, administrative, and financial autonomy to local mechanisms.
Establishing local governance and governments accountable to local communities.
Strengthening local democracy through balanced and inclusive practices.
Making local public service delivery high-quality and need-based.

Problems of Decentralization and Local Self-Governance in Nepal (Particularly in the Context of Federalism)

Ambiguity in Power Division: Unclear jurisdictions among federal, provincial, and local governments lead to duplication and conflict.
Lack of Financial Resources: Insufficient budgets and resources at local levels hinder effective service delivery.
Shortage of Human Resources: Lack of skilled manpower affects policy formulation, plan implementation, and service delivery.
Incomplete Federal Legal Framework: Absence of necessary federal laws and standards creates administrative obstacles.
Lack of Institutional Coordination: Poor coordination among the three tiers of government leads to duplicated efforts and resource misuse.
Political Interference and Instability: Partisan politics at local levels obstructs effective policy and program implementation.
Low Institutional Capacity: Local governments lack the capacity for planning, budgeting, and service delivery.
Constitutional Interpretation Disputes: Differing interpretations of powers among government tiers create conflicts.
Lack of Social Inclusion and Participation: Limited participation of women, Dalits, and indigenous groups in local governance.
Geographical and Infrastructural Challenges: Remote areas face difficulties in service delivery due to inadequate infrastructure.
Lack of Accountability and Transparency: Weak auditing and internal control systems result in accountability and transparency deficits.
Limited Technical Capacity and Digital Infrastructure: Insufficient resources for technology-driven service delivery.
Unequal Resource Distribution: Inequitable resource allocation by the federal government.
Delays in Federalism Implementation: Slow progress in fully implementing federal structures as per the constitution.
Lack of Public Awareness and Participation: Limited public awareness of federalism and rights hinders effective utilization.

Key Steps to Address Problems of Decentralization and Local Self-Governance

Clear Division of Powers: Define jurisdictions and responsibilities clearly among federal, provincial, and local governments.
Swift Development and Implementation of Federal Laws: Enact essential federal laws and standards to ensure smooth federalism implementation.
Guarantee Adequate Financial Resources: Establish clear and equitable revenue-sharing criteria to ensure financial autonomy for local governments.
Develop Skilled Manpower: Enhance capacity for planning, budgeting, and service delivery at local levels.
Strengthen Coordination Mechanisms: Develop shared systems for information, planning, and programs among the three tiers.
Promote Technology-Driven Services: Implement e-governance, MIS, and digital systems to enhance transparency and effectiveness.
Capacity Building for Representatives: Provide training to elected representatives on leadership, governance, budgeting, and legal frameworks.
Build Accountable and Transparent Systems: Strengthen public auditing, social auditing, and public hearing mechanisms.
Promote Social Inclusion: Ensure participation of women, Dalits, indigenous groups, and minorities in policy-making and implementation.
Equitable Resource Distribution: Allocate resources based on geographical, economic, and demographic factors.
Control Political Interference: Minimize partisan influence in administrative decisions to foster service-oriented governance.
Enhance Public Awareness and Participation: Conduct awareness programs on federalism and citizen rights.
Invest in Infrastructure: Provide additional resources for infrastructure development (roads, electricity, internet) in remote areas.
Long-Term Federal Strategy: Develop a strategic plan to institutionalize federal structures with a long-term vision.

Implementing these measures can strengthen federalism in Nepal, making local self-governance effective, accountable, and people-centric.

3.6 Decentralization and local autonomy