Population Reports' Q&As

Meeting the Urban Challenge

Making Urban Areas Work

What are the three conditions that must be met for decentralization of power, authority, and responsibility from national to local governments to be effective?

• First, national and state authorities need to devolve budget authority to the municipal level (51, 110, 136, 156). In most countries the main sources of municipal revenues are local taxes and transfers from central to local governments (137). Officials at higher levels of government often are reluctant to relinquish financial resources to lower levels, however (85). Without this crucial revenue, municipal governments have little ability to operate.
• Second, the administrative capacity of local governments must grow. Local governments often lack the experience of central governments. Local government officials and employees may need training in such areas as accounting, public administration, financial management, public communication, and community relations (140, 156).
• Third, decentralization works best when it is inclusive-that is, when authorities ask about and respond to community needs and interests and when community members participate in decision-making. Community participation helps ensure responsiveness and accountability in public decision-making (137, 140, 141). Community leaders and residents know the problems they face and often can suggest effective solutions. Governments can help to ensure people's participation through elections and referenda, opinion surveys, and open meetings, and by setting up advisory groups or community oversight committees (85).

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