The Local Alternative: Decentralization and Economic by Rafael de la Cruz

By Rafael de la Cruz

This publication deals a breakthrough to find out how the hot decentralized institutional preparations impact neighborhood financial improvement. specifically, it analyzes how neighborhood governments can use their expanding powers and obligations to enhance productiveness and caliber of lifestyles of their territories.

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Direct intervention by higher levels is another way in which subsidiarity is disturbed, while at the same time violating the principle of choice. A strong central executive power, or merely ambiguous or overlapping LOCAL ECONOMIC DEVELOPMENT 19 jurisdictions, sometimes leads to end-run practices—nominal decentralization coupled with direct delivery by the central government. Direct intervention by national executive branches in Latin America using social funds, for instance, in Peru during the mid-1990s, is a good example of this problem in which subsidiarity is clearly violated and the effectiveness of local governments undercut.

These are all metropolitan cities in the sense that they are of great economic importance in their respective countries (Douala, Cameroon; Jakarta, Indonesia; São Paulo, Brazil), are centers of cultural heritage or religious tradition, are national capitals, or are all of these things at once. Many large cities have special regimes (Abuja, Nigeria) but no metropolitan government. Virtually all cities in this group consist of more than one municipality, and often involve many units of local government.

The policy issues linked to decentralization in metro regions fall into two familiar areas: (i) institutional issues of power, organization, and finance; and (ii) issues of democratic representation. Few organizational models seem to hold up under pressures of changing economic and political circumstances. Turkey has addressed the problem directly with reforms that link municipal, metropolitan, and national tiers in planning, functions, and the direct election of a metropolitan mayor. Russia, some former Soviet states, and China have given their capitals or largest cities special legal or financial status; many political capitals, such as Abuja, Brasilia, and Canberra, are embedded in special districts that enjoy special spending or planning status, often linked directly to central government budgets.

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