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Centre for Financial and Management Studies (CeFiMS)

Decentralisation & Local Governance

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In the current era of state reform everybody seems agreed that decentralisation of government is a good thing - governments themselves, aid donors and other international agencies, many of the citizens of various countries, and certainly many academic writers on good governance, public service reform and development. The case for decentralisation is argued on both political grounds - as strengthening democracy, accountability and participation by bringing government 'closer' to its citizens - and economic grounds, those of enhancing the efficiency and effectiveness of public service provision. Decentralisation is also seen by many agencies as being effective in combating poverty.

This course asks why decentralisation is considered a good thing, and assesses a range of experiences of decentralisation in different kinds of countries and different parts of the world, to highlight issues and options in the design, implementation and management of decentralisation at various levels of government: from federal nation states to rural districts and even villages. The course's approach is that governance is a political process as much as a technical one.


Study Guide

You will receive a looseleaf binder containing eight ‘course units’. The units are carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the further assigned readings. The unit files are also available to download from the Online Study Centre.


J.M. Cohen and Stephen B. Peterson (1999) Administrative Decentralisation - Strategies for Developing Countries, Kumarian Press Inc., West Hartford, Connecticut


You will receive two volumes of Readings, which are made up of case studies, carefully selected articles and extracts of a more general analytical and empirical kind.

Online Study Centre

You will have access to the OSC, which is a web-accessed learning environment. Via the OSC, you can communicate with your assigned academic tutor, administrators and other students on the course using discussion forums. The OSC also provides access to the course Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Objectives and learning outcomes of the course

By the end of this Module you will be able to:

  • define the different approaches that governments have followed in decentralisation
  • assess the success of decentralisation in pursuit of a range of objectives
  • make a judgment about the impact of decentralisation in practice, against the claims of its proponents.

Scope and syllabus

Course Units
Unit 1: Decentralisation: What and Why?
  • Introduction
  • Different Types of Decentralisation
  • Is Decentralisation Inevitable?
  • Why is Decentralisation so Popular?
  • Arguing For and Against Decentralisation
  • Federalism: the Answer to Central–Local Relations?
  • Conclusion and Summary
Unit 2: Fiscal Decentralisation
  • The Principles of Fiscal Federalism
  • The Tax Assignment Problem
  • Intergovernmental Transfers, Grants and Revenue Sharing
  • Size of the Public Sector
  • Decentralisation of Government Borrowing
  • Criticisms of Fiscal Decentralisation
  • Conclusions and Summary
Unit 3: Cases in Fiscal Decentralisation
  • Fiscal Federalism in OECD Countries
  • Fiscal Federalism in Developing Countries and in Transition Economies (DTEs)
  • Fiscal Decentralisation in China and Brazil
  • Conclusions and Summary
Unit 4: Administrative Decentralisation
  • Introduction
  • Administrative Design Framework
  • Case Studies: Kenya and Ethiopia
  • Conclusion
Unit 5: Decentralisation and Participation
  • Defining Participation
  • The Role of Participation in Democratic Local Governance
  • The Future of Participation
  • Conclusion and Summary
Unit 6: Assessing Decentralisation in Practice
  • Introduction - Issues in Assessing Decentralisation
  • Methodologies for Assessing Decentralisation in Practice
  • Decentralisation and Corruption
  • The Measurement and Impact of Fiscal Decentralisation: A Sample of Transition Economies
  • Conclusions and Summary
Unit 7: Local Economic Development
  • Introduction to Economic Development
  • What is Development and How Might it be 'Evaluated'?
  • The Development Agenda and Development Paths
  • Industrial Districts, Clusters and Economic Development
  • Conclusion and Summary
Unit 8: Decentralisation and Poverty
  • Defining Poverty
  • How Do the Poor Perceive Local Governance?
  • Can Decentralisation Reduce Poverty?
  • Making Decentralisation Work for the Poor
  • Summary

Method of assessment

You will complete two assignments, which will be marked by your tutor. Each assignment is worth 15% of your total course mark. You will be expected to submit your first assignment by the Tuesday of Week 5, and the second assignment at the end of the course, on the Tuesday after Week 8. Assignments are submitted and feedback given online. You will also sit a three-hour examination on a specified date in October, worth 70% of your total mark. An up-to-date timetable of examinations is published in April each year.