Why devolution is key to Kenya’s economy

Devolution is the creation or strengthening - financially or legally - of sub-national units of government, the activities of which are substantially outside the direct control of the central government.

Under devolution, local units of government are autonomous and independent of the central government, and their legal status makes them separate and distinct from the central government.

Central government may exercise only indirect supervisory control over such units. Sub-national governments have corporate or statutory authority to raise revenues and make expenditures.

In some countries, the intention of devolution was to place the mechanism of governance much closer to, or in direct contact with the citizens. The idea was to reduce the levels of administration through which activities had to pass, and to enhance productivity with increased participation by citizens in the development process.

Decentralisation with fiscal and political devolution has taken a stronghold in European states, while other developed economies have also deepened their decentralised government structures in recent years. There are various reasons for these states to do this, responding to a variety of forces.

Political nature

Some may be of a political nature such as keeping a country together or reacting to past centralised undemocratic regimes; others may be of a more economic nature such as replacing a failed economic model of which centralised socialism is a common example. Finally, improving governance by making the public sector more efficient and accountable is also an explanation for the initiation of decentralisation.

But decentralisation is not always easily implemented, and in fact many developing countries have failed or are failing to introduce effective decentralised governance systems for various reasons.

One of these is fundamental flaws in the design of the decentralisation system having to do, among other things, with murky assignments of expenditure responsibilities or overwhelming transfer dependence on the revenue side of sub-national budgets.

Two, weak central government institutions in the form of political instability or lack of control of the basic levels of government, such as domestic taxes and customs administration.

Three, effective resistance from tribal elites and traditional powers to newly imposed decentralised power architecture.

Four, impact of history and colonial influences with a tradition of hierarchical power and key employees of decentralised entities that do not necessarily have career goals in agreement with decentralisation goals.

Five, reluctance of central authorities because of fear of losing political control and six, the imperative of central authority preserving power control, where genuine decentralisation never was meant to work, but rather it is used as a political decoy to preserve otherwise unsustainable political unitary.

Likelihood of success

Devolution has the highest likelihood of success if it is a goal that society as a whole subscribes to as opposed to just being a programme element. It creates new centres of power that can confront the central government. For the devolution process to fully work, this reality must be accepted by the party in power.

Devolution also needs a powerful champion at the centre for it to be successful. The institutional arrangements in that respect matter a lot. The most direct way to achieve clarity and transparency in the assignment of functional responsibilities is to assign each of them exclusively and fully to a single level of government.

Devolution will work well only if decentralised entities have access to adequate revenues. It is not only about centre-regions’ relations, but also fiscal devolution and autonomy at the lowest level of government.

An analysis of experiences of 46 decentralised countries shows that developed countries are, on average, more decentralised than developing countries.

This is why Kenya should strengthen its devolved system for economic security and shared prosperity. 

— Mr Wainaina is the Executive Director, International Center for Policy and Conflict @NdunguWainaina