OECD - Making Decentralisation Work

Decentralisation is among the most important reforms of the past 50 years. Implemented to varying degrees in a majority of developed and developing countries around the world, decentralisation has profound implications due to its complex and systemic nature. Engaging in a decentralisation process affects all spheres of society, from the nature and the quality of governance, to a national wealth and economic growth and, more broadly, to citizen well-being.

The 2019 OECD report Making Decentralisation Work: a Handbook for Policy-Makers provides one of the most comprehensive overviews on the current trends in the decentralisation policies of OECD countries and beyond, and on the ways to make decentralisation work. It argues that the question should not be whether decentralisation is good or bad in itself, but that decentralisation outcomes in terms of democracy, efficiency, accountability, regional and local development depend greatly on the way decentralisation is designed and implemented.

The report argues that decentralisation should not be considered a panacea for any problem a country may face, nor should it be seen as an objective in and of itself. Rather it is a means to achieve certain goals. Empirical research and a number of country examples show that decentralisation can be conducive to public sector efficiency, democratisation and political stability. There are also examples of failures with decentralisation, when the reforms were not properly designed and implemented, and where the multi-faceted dimension of the process was not well understood.

The report identifies 10 guidelines for decentralisation to work and be conducive to regional and local development. Beyond the guidelines, the report proposes concrete tools for policy-makers, including detailed sets of recommendations, checklists, pitfalls to avoid and examples of good practices, both in unitary and federal countries.

The report is part of the OECD Multi-Level Governance Studies series. It was conducted by the OECD Centre for Entrepreneurship, SMEs, Regions and Cities (CFE), under the leadership of the Regional Development Policy Committee. It was discussed at the 40th RDPC meeting on 8 November 2018 and approved on 22 February 2019 by written approval procedure under the reference [CFE/RDPC(2018)17/REV1]. It was also discussed in the 14th annual meeting of the OECD Network on Fiscal Relations across Levels of Government on 20 November 2018.