Decentralization

The dispersion or delegation of decision-making authority and management to more than one person or decision-making body; the undoing of the centralized control typical of federal governments and large businesses; situations in which decision-making and control over resource management, economic development and the delivery of services is the prerogative of state and local citizens and agencies. The following discussion begins with overviews of industrial decentralization, the growth of federal authority, the various kinds of devolution of federal authority, and the future of decentralization in rural communities. It ends with a brief discussion of the need for a balance between centralization and decentralization.

Industrial Decentralization

Major cities historically served as centers for business decision-making. Except for agricultural production, most major businesses and nonfarm labor were located in cities. During the 1970s, rural economies grew as manufacturing firms relocated to rural areas. Industrial decentralization was the process of moving labor and decision-making away from cities and centers of capital investment.

Not all rural areas and workers benefited from industrial decentralization. Most firms that relocated moved to exurbia, rural areas bordering metropolitan counties. These counties experienced job growth and in-migration. Many agriculturally dependent communities, particularly those in the Midwest, continued to decline. And, although decentralization led to job growth in exurbia, it concentrated many young workers in lowwage jobs.

Federalism

Prior to the New Deal in the 1930s and World War II in the 1940s, federal responsibility for Americans’ social welfare was quite limited. In response to the Great Depression, the federal government developed programs that put people back to work, built a physical infrastructure of roads, bridges and dams, and created Social Security and unemployment assistance. With the start of World War II, the federal government put the national economy on a war footing and then regulated its post-war transformation. The federal government grew during the 1950s and 1960s as it developed antipoverty programs, improved civil rights, and set educational, environmental and health standards (Sharp and Parisi, 2003). The size of the federal government continued to grow in the 1970s; however, signs of decentralization started to show.

Decentralization of Federal Authority

Decentralization is the process by which federal governmental authority is diffused to state and local governments. Decentralization of federal authority involves deconcentration, devolution and privatization. Deconcentration refers to the shift in workload from a central location to field offices. Rather than a true decentralization of power, deconcentration typically broadens the scope of federal authority. Although face-to-face meetings with field operators from governmental agencies give the impression of a government close to the people, the procedures that guide day-to-day activities are made in Washington, DC.

Devolution is relinquishing authority to local government officials. The goals of devolution are to create or strengthen independent, local and regional government. Providing block grants for welfare services to states and letting state legislatures decide how to spend those dollars is an example of devolution. Privatization is transferring government functions to nongovernment institutions, such as community development corporations, credit associations, farmer’s cooperatives, nonprofit organizations and mutual aid societies.

According to Sharp and Parisi (2003), devolution began in the Nixon administration when administrative responsibilities, and general revenue sharing and block grants to pay for those activities, went to the states. The devolution of responsibilities continued during the Reagan administration, although the funding to pay for such activities was substantially curtailed. During the Clinton administration, the administration of social welfare programs was turned over to the states.

Why Devolve?

Proponents of decentralization argue that overly centralized agencies are inefficient and ineffective. Bureaucratic, federally run programs, as the argument goes, fail because of an ignorance of local concerns, problems and resources, a one-method-fits-all philosophy, and bureaucratic red tape.

Ritzer (2004) is highly critical of overly centralized organizations. He points out that centralization leads to the “irrationality of rationality,” or using standard procedures to deal with unique, nonstandard business and organizational problems. Bureaucracies develop rules and regulations to achieve goals efficiently. These rules and regulations oftentimes identify the optimum means to achieve some goal or problem. Organizations gain control over day-to-day activities by formalizing rules and regulations. Workers only need to follow standard procedures to be efficient. However, many highly centralized bureaucracies are often inefficient because of trained incapacity, red tape, alienation and other organizational pathologies. Trained incapacity, overconformity to rules, is one disturbing consequence of strict adherence to standard procedures. When faced with an unfamiliar situation or a situation with no guidelines, workers tend to treat the situation as though it fits existing guidelines, rather than to analyze the problem objectively and develop a unique solution. Trained incapacity leads to inferior-quality work, and the organization’s clients may ultimately become dissatisfied with the services they are getting.

Alienation, another disturbing consequence of overcentralization, also leads to inefficiency. Highly centralized organizations can be dehumanizing and alienating places to work because workers have little control over their day-to-day activities. Many employees who hold very specialized jobs have no real idea how their work contributes to the organization’s overall goals. This detachment from their jobs can lead to low morale and poor-quality work.

Proponents of decentralization argue, because federal agencies are highly centralized, administrators are ignorant of local conditions and resources, use standardized procedures when locally appropriate strategies would be more efficient and effective, and, as a consequence, demoralize local residents.

If overly centralized agencies are inefficient and ineffective, grassroots development programs and locally delivered social services should be more cost-effective and responsive than those managed by federal bureaucrats. Proponents of devolution argue that local citizens are better positioned to identify and address their development and service needs. They contend that community control leads to better relations between citizens and government officials, improves the managerial and technical skills of local citizens and government officials, and is more inclusive—minority groups within the community have more input concerning program goals and delivery of services. Community control, rather than centralized decision-making, provides a better structure to deliver services and to coordinate various community development activities.

The Future of Decentralization in Rural America

Devolution of decision-making authority, regardless of its form, has important implications for rural development, resource management and service delivery systems. There are many faces of rural America. One set of faces is economically vital and growing. Another set is stagnant and declining, suffering from poverty, environmental degradation, decaying infrastructures, and has limited capacities to revitalize itself. The latter will experience more problems meeting the expectations set by devolution.

The devolution of public welfare is a case in point. With the passage of the Personal Responsibility and Work Reconciliation Act during the Clinton administration, state governments were given the responsibility to set welfare policy and guidelines, local governments were to take more responsibility in providing the poor with jobs, and welfare participants were given more responsibility to find jobs. To encourage personal responsibility, assistance was limited to 24 continuous months and a total of five years during participants’ lifetimes. Small and isolated communities with sluggish economies do not have the jobs, and they often do not have the fiscal resources, technical skills and social networks for economic development to occur.

Indeed, rural development programs are often too demanding in their organizational requirements to be left totally to local communities. State governments have responded by encouraging community leaders to build on their own competitive advantages, such as climate, location to markets, natural resource base and workforce characteristics. Together, state and local leaders promote the business climates of rural communities and the strong work ethic of their citizens. States also offer financial incentives to create new rural businesses, support the expansion of existing ones, and offer seed money for economic and technological innovations. Some state governments have encouraged their public universities to educate business entrepreneurs and help communities build the social infrastructure or social networks that are the heart of cooperative development activities.

At the local level, development activities go by the names of “self-help,” “street-level government,” “community betterment programs,” “community development corporations,” and “business incubators.” Selfhelp is a rural community betterment strategy that relies on the cooperation of local residents to enrich their own lives by improving their community’s natural resources, facilities, service delivery systems and job opportunities.

Balance Between Centralization and Decentralization

Centralization and decentralization are not necessarily mutually exclusive categories. In reality, rural development programs and service delivery systems can be too demanding in their organizational requirements to be left totally to local communities, or even to the states. Some problems will be difficult to overcome without federal assistance. A reorganization of federal policies toward rural America also may be in order. Many proponents of decentralization want federal bureaucrats to recognize the diversity of rural communities and economies, that a one-method-fits-all approach will not work to reinvigorate these communities, and that the solutions to local problems will derive from grassroots, self-help initiatives supported by state and federal agencies.

— Donald E. Arwood

See also

Agri/Food System; Cooperative State Research, Education, and Extension Service; Development, Community and Economic; Future of Rural America; Government; Policy (various); Telecommunications; Trade, International; Urbanization

References

• Sharp, Jeffrey S. and Domenico M. Parisi. “Devolution: Who is Responsible for Rural America.” Pp. 353-362 in Challenges for Rural America in the Twenty-First Century. Edited by D.L. Brwon and L.E. Swanson. University Park, PA: The Pennsylvania State University Press, 2003.
• Christenson, James A. and Cornelia B. Flora. “A Rural Policy Agenda for the 1990s.” Pp. 333-37 in Rural Policies for the 1990s. Edited by C.B. Flora and J.A. Christenson. Boulder, CO: Westview Press, 1991.
• Green, Gary Paul. “What Role Can Community Play in Local Economic Development.” Pp. 343-352 in Challenges for Rural America in the Twenty-First Century. Edited by D.L. Brown and L.E. Swanson. University Park, PA: The Pennsylvania State University Press, 2003.
• Ritzer, George. The McDonaldization of Society, Revised New Century Edition. Thousand Oaks, CA: Pine Forge Press, 2004.
• Rondinelli, Dennis A. and G. Shabbir Cheema. “Implementing Decentralization Policies: An Introduction.” Pp. 9-34 in Decentralization and Development: Policy Implications in Developing Countries. Edited by G.S. Cheema and D.A. Rondinelli. Beverly Hills, CA: Sage Publications, 1983.
• Zimmerman, Julie L. and Thomas A. Hirshi. “Welfare Reform in Rural Areas.” Pp. 363-374 in Challenges for Rural America in the Twenty-First Century. Edited by D.L. Brown and L.E. Swanson. University Park, PA: The Pennsylvania State University Press, 2003.