Urbanization and Decentralization


During the Cold War, countries throughout the developing world, especially in newly-independent South Asia and Sub-Saharan Africa, implemented socialist and statist economic models. However, as the public institutions in these fledgling nations were ill-equipped to administer state-centric economic structures, the adoption of such governance systems had, in the overwhelming majority of cases, devastating results.

In addition to setting back national economies by several decades, the rapid expansion of central government  power and responsibility brought about the public sector pathologies still felt today, such as corruption, mismanagement and inadequate services. In recent decades, the vast majority of these countries have attempted to reform their economies to rely more on private sector enterprise and capital.

More recently, in an attempt to improve efficiency and service quality, many of these governments initiated decentralization programs wherein the burden of service delivery is shifted to sub-national levels of government. To be effective, decentralization requires increased capability and administrative capacity on the part of local governments. Within the international development community, therefore, there is a growing emphasis on public sector reform and capacity-building, especially at sub-sovereign levels of government.

Against this backdrop of decentralization, the burden of managing urban population growth and mitigating urbanization’s challenges is largely born by local institutions, which therefore requires significant administrative and financial wherewithal on the part of local governments. This is highly problematic for much of the pre-industrial world, as many local authorities in developing nations struggle to subsist let alone expand service provision. In countries with long legacies of socialism and central planning, policymakers and their donor partners face especially difficult challenges because in such systems of government, local authorities were expected to do little. As a consequence, these localities remain in the earliest stages of development.

The fact that decentralization is unfolding concurrently with urbanization in the developing world makes the need for local government development all the more pressing. This is especially true in Asia.

East and South Asia are the most densely populated geographic regions in the world, and Asia is the world’s most densely populated continent. Southeast Asia has one of the world’s highest urbanization rates, which means that Southeast Asian cities are among the fastest growing on earth. With Asia’s enormous aggregate population levels, these high rates of urban population growth equate to massive influxes of people.

Therefore, if Asia’s recent economic success is to be sustained, if environmental degradation is to be avoided (and in many places reversed), and if poverty levels are to be sustainably reduced, the process of urbanization in Asia must be well managed and the pressures on local public services engendered by urbanization must be ameliorated. For this to be possible, Asian governments and their donor partners must create responsive, effective and financially sound local public institutions.