Thursday, September 5, 2013

Decentralization and Local Governance in Bhutan ( 1st Draft)

The decentralization and local governance complement each other; one can’t function in absence of other. The decentralization is a means of local empowerment whereas local governance is an ends to the decentralization. This paper will explore the decentralization process in Bhutan, empowerment to local governance till establishment of democratic institution, types of decentralization, pros and cons of decentralization and local government etc. This paper will also analyze whether Bhutan’s devolution of power can be really termed decentralization with respect to political, administrative and fiscal policy.
Introduction, Concept & History of Decentralization and Governance in Bhutan
Decentralization is a word that has been used by different people to mean many different things (Aggrawal & Ribbot). In fact, review of the literature shows that there is no common definition of decentralization, although much work has gone into exploring its differing applications (UNDP et all, 1999). ’ Decentralization is the transfer of authority and responsibility for public functions from the central government to subordinate or quasi-independent government organizations or the private sector—covers a broad range of concepts (Ahmad, Blair, et al).World Bank Institutes defined decentralizations ‘a set of policies that encompasses fiscal, political, and administrative changes, can impact virtually all aspects of development.’ Decentralization can happened at international level, national level, intergovernmental level and intra-governmental level. It is to an extent identified with the local governance. Local governance is act of governing by local leaders. The combination of local governance and decentralization is called ‘decentralized governance (UNDP).’ UNDP  (1999) defines decentralized governance  as the systematic and harmonious interrelationship resulting from the balancing of power and responsibilities between central governments and other levels of government and non-governmental actors, and the capacity of local bodies to carry out their decentralized responsibilities using participatory mechanisms.’

In Bhutan, the decentralization process seemed to be planned from the throne so that people are educated about importance of decentralized participation and ‘facilitate direct participation of the people in the development and management of their own social, economic and environmental wellbeing through decentralization and devolution of power and authority.’
During the reign of second King, fiscal, administration and political policy was centralized.The decentralization process has been initiated from enlightened vision of Third Druk Gyalpo from the day of His enthronement in 1952. This was probably influenced by his brief stint of education in Europe which changed his vision. One year later in 1953; the National Assembly was established followed by Royal Advisory Council in 1963. In 1968 high court was created. For the first time in 1963, Gup was elected considered household as a voting unit. In 1968, council of ministers was appointed with approval of the then National Assembly. First the legislative power was devolved to National assembly represented by majority of elected people, government servants and representatives of clergy. When he was enthroned, Tibet was in turmoil. He knew that Bhutan should aspire for external recognition and internal empowerment.  In 1971, the external recognition was achieved in most important way when Bhutan became member of United Nation Organizations while internal empowerment was partially achieved with institution of national assembly.
After 3rd King passed away, his teenage son, 4th Druk Gyalpo Jigme Singye Wangchuk continued with decentralization process. The state of affairs under 4th Druk Gyalpo was keeping in mind the happiness of nation where one component is good governance which decentralization is part of.  Decentralized local government was instituted at two levels; district level and gewog level. At the same time in 1998, first council of ministers was elected by National Assembly to whom His Majesty devolved executive powers. In 1981, Dzongkhag Yargay Tshogdu (DYT)was established where ‘wide ranges of powers, authority, resources, responsibilities and functions from the central agencies to Dzongkhag Yargay Tshogchung to formulate, approve and implement geog and dzongkhag plan activities (DYT Chathrim, 2002)’ were delegated. 
With revision of DYT Chathrim of 1995 by 80th session of National Assembly in 2002, elected leader took over as chairman of DYT from Dzongdag was no more the chairperson. The chairman was elected from among the members as per the article 3 of DYT Chathrim 2002.  The members of the district level included Gups, Chimis and Mangmis of various gewogs and one member from the municipal or town. The Dzongrab or Dzongkhag Administrative Officer acted as a secretary whereas Dzongdag and sector heads were mere observers. In other words, the DYT Chathrim further empowered the members to make decisions pertaining to the wellbeing of the district. The power and scope of DYT was again widened with Local Government Act of 2007. After rectification of constitution by first parliament, Local Government Act was revised in 2009 where roles, power and responsibilities of Dzongkhag Tshogdu (erstwhile DYT) was outlined.  
Geowg Yargay Tshogchung(GYT) was established in 1991 by fourth King with ‘profound vision and conceptions to reforms’ to ‘promote local socio-economic development strategies and initiatives, by empowering the people to make decisions on their plans and programmes, and by enabling them to adopt approaches and practices adapted to local needs (GYT 2002).’ In other words, it is to further decentralize and devolve the decision makings to the grass root level. Before 2002, Gup chaired the GYT but secretary was who was headmaster of nearby school. After 2002, the clerk became the non-voting secretary. The members were gup, mangmi and tshogpas. In 2008, the newly elected members of parliament from political parties were no longer the part of neither Dzongkhag Tshogdu unlike erstwhile Chimi.  The erstwhile Royal Advisory Council was replaced by National Council which was elected based on district with five additional eminent members appointed by His Majesty the Druk Gyalpo. The National Council cannot be affiliated to any political parties while members of national assembly are from political parties. After formation of constitutional parliamentary democracy in 2008, the parliament passed the Local Government Act of Bhutan 2009 on September 11, 2009 based on provision of the constitution. Just like DYT was renamed Dzongkhag Tshogdu, GYT was renamed Gewog Tshogde as two tier local governance where plans endorsed by Gewog Tshogde were further submitted to Dzongkhag Tshogdu.

Status of Decentralization and Local Governance
 Distribution of power improves the management of resources and community participation which is considered key to sustain­able development. Advocates of decentralization argue that decentralized government is source to improve community participation in rural development (Ahmad M &Talib N, 2011). Keeping the rationale in mind, Bhutan has gradually transited from centralized government during reign of third king. It was further taken forward by 4th Druk Gyalpo with ushering of constitutional democracy. The local government or decentralized government is complete as enshrined in article 22 of constitution of kingdom of Bhutan which guarantees the formation of local government whose power and responsibilities will be defined by ‘parliament from time to time’. It says, ‘power and authority shall be decentralized and devolved to elected Local Governments to facilitate the direct participation of the people in the development and management of their own social, economic and environmental well-being.’ The process of decentralization is complete legally with establishment of democratic institutions as democratization in Bhutanese context is a furtherance of decentralization. However, assessing decentralization using this yardstick would be incomplete. The status of decentralization in Bhutan would be assessed using three dimensions of decentralization and how empowered local government is in terms of political, administrative and fiscal dimensions.

Status of Administrative Decentralization
‘Administrative decentralization seeks to redistribute authority, responsibility, and financial resources for providing public services among different levels of government.’ It is the transfer of responsibility for planning, financing, and managing certain public functions from the central government and its agencies to field units of government agencies, subordinate units or levels of government, semi-autonomous public authorities or corporations, or area wide, regional, or functional authorities (Ahmad, Blair, et al).  Although the ‘constitutions, laws, and regulations codify the formal parameters in which decentralized systems are supposed to function’, it is imperative to understand whether decentralization has achieved under this broad frameworks. 

In the grass root level, Gewog Tshogde is considered highest decision making body. They directly seek inputs from the people on community’s needs. The executive powers at the gewog levels are vested in gup. The Mangmis and Gups of each gewog under the district make the Dzongkhag Tshogdu. However, the chairman of the Dzongkhag Tshogdu doesn’t have executive power. However, the administrative functions are rendered by the civil servants. They don’t have authority to appoint administrative staff, technical and expertise administrative staffs are directly under Dzongdag. Civil Servants are further overseen by line ministry but final authority on the civil servants rested on Royal Civil Service Commission. The Gup as of executive head of Gewog doesn’t have authority to decide on administrative capacity of the gewog. The administrative power of the Gup doesn’t go beyond approving leave, giving annual appraisal of the staff under them.
Comparatively, the administrative power of local government has improved. The district administration now reports to the elected body (Thompson 2010). The human resources capacity of the local administration is also increased drastically. Today, the dzongkhag can internally transfer the staff under them.

Status of Fiscal Decentralization and Local Governance
Fiscal decentralization regards the extent to which local entities collect taxes, undertake expenditures, and rectify the imbalance (White, 2011). According to the Local Government (LG) Act 2009, ‘Local Governments shall be entitled to levy, collect and appropriate taxes, duties, tolls and fees in accordance with such procedure and subject to limitations as may be provided for by law.’  However, local government can’t legislate to collect taxes. The taxes collected by local government as empowered by legislations are direly insufficient even to meet the basic administrative cost of the government. Therefore, central government gave local governments the fund in the form of ‘annual grants.’ In 9th Five Year Plan, district and gewogs were given 25.5% of total budget outlay whereas in 10th Five Year Plan around 18.75 of the total outlay were projected (source: Thomson,2010 ).The big projects in the local government are directly funded by the central government either through GNH commissions or Ministry of Finance in tandem with line ministry. However, local government can aspire to be financially self-government through allocation of ‘a proportion of the national revenue to promote self-reliant and self-sustaining units or activities of Local Self-Government’ (LG Act 2009). They can also ‘own assets and incur liabilities by borrowing on their own account subject to such limitations as may be provided for by law’ (LG Act 2009). But with size of economy in its jurisdiction and development status of the nation, attaining the financial self-sustainability is a distant dream.

Despite the increasing empowerment of the local government fiscally like collecting certain tax and fees, the local government has to rely upon central government or legislatives on types and amounts of tax to be collected. It doesn’t have freedom to decide like state government or India or United States.

Status of Political decentralization and Local Governance
Decentralization through the involvement of local representative in the formulation of plans for development as well as their implementation is being advocated in the interest of efficient utilization of resources and for ensuring more equitable sharing of benefit from development (Ahmad M &Talib N, 2011) Political decentralization is fundamental to the concept of local self-governance providing a platform for democratic accountability beyond de-concentrated government (UNCDF, 2006). The political decentralization must not be seen only as election of local leaders but also freedom and empowerment to fulfill the wishes of the people locally without having to acquire permission from the centre. The responsibilities shouldered by local leaders should be consummated with authority. The elected leaders should be accountable and answer to the electorates. People should be consulted about development, plans and policies. On other hand, electorate should also involve in decision making other than electorates. The participation of women in the election should be encourage but going by the record, the participation of women in democratic as well as decentralized process is negligible. Even those women who contested are not trusted by women electorates themselves who are in majority. The Joint Evaluation of Danish-Bhutanese Country Programme 2000-09 on Thematic Paper on Decentralization and Local Empowerment, political decentralization found out that decentralization was consolidated since enactment of GYT AND DYT Chatrim 2002 and the election of first ever local leaders on adult franchise with 34% of the voter turnout. Tshogpas which is lowest elected representatives provide the first level contact between people and plans mediated through village meetings (zomdoos) and as such are crucial to the devolution process (Decentralization Evaluation Report-Bhutan).However, after the enactment of LG Act in 2009, ‘elections were conducted for all 205 Gewog Tshogdes, 4 Dzongkhag Thromde Tshogdes and 16 Thromde Tshogpas to Gewog Tshogdes Tshogpas by June 2011(Wangdi, 2011)’. Dzongkhag Tshogdu is the highest decision making in the district whereas Gewog Tshogde is highest decision making in the gewog whereas Dzongkhag Thromde Tshogde is the highest decision making body in A-Grade municipalities.

The elected members of the local governments don’t have the legislative authority. But it has authority to make rules and regulations that are consistent to the laws passed by the parliament. With the advent of democracy, the authority and scope of local government has been enhanced greatly. Having said that development plans and policies developed by the local government is subject to approval of cabinet. At the present, other than proposing plan and policies needs for the community, the role of local government is to ‘ensure the provision of such social and economic services for the general wellbeing of the residents of the communities in a sustainable and equitable manner’ (LG Act 2009). One can also argue that the political authority of the local government is greatly limited by fiscal dependence on the central government. Despite these limitations, the 2007 GNH survey found out that people give higher rating to the local leaders than the chief executive officers of the district which explained the importance and performance of the local leaders.

Positive and Negative of the Decentralization in Bhutan
The most important goal of the decentralization is bestowing decision making power to the people as they know best what they want. The accountability and transparency is improved and people are also empowered to have a say on policies and activities that affect them most. In a way, local governance is a form of good governance. Decentralization is also viewed as an indispensable part of sustainable development efforts particularly those focused on the alleviation of poverty (White, 2011). In her book, Government decentralization in 21st century, Stacey White came out with various positive and negative aspects of decentralization based on extensive literature reviews. Based on her book, some of the deemed advantages of decentralization relevant to Bhutan’s context could be improvement in the responsiveness to people’s demand, betterment of delivery of public services and the reduction in nature and space of corruptions. She mentioned other aspects of decentralization like limiting ‘the size of public sector, intensifying the ‘intergovernmental competition’ and limiting the ‘conflict’ and protecting ‘minority rights’ which is either irrelevant or insignificant in Bhutan’s context at the present. However, one of main positive aspects of decentralization in our context is to involve and empower every citizen in decision making process and let people understand their rights and duties properly. Stacy White also compiled some of the arguments against decentralization which are relevant even in Bhutan’s context. Literature reviews show that despite the aim to reduce size of public sector by giving power and choice to people within theoretical framework of good governance, the size of the public sector is hardly limited. This will be never truer than in Bhutanese context. This mainly is because creation of new organizations to suit democratic set ups, responding to international organization’s demand and empowering local government with human resources capacity and so on.  The decentralization also creates space for local corruptions. When Dzongdag were empowered with financial administration in 1990s, many dzongdag misused the fund and some were convicted. Such thing can happen in local level as local leaders may feel easy to fool local people especially in remote places. Some literatures also argue that decentralization is ‘inherently destabilizing specifically when lower levels of government are expected to respond to the needs of ethically or culturally heterogeneous populations.  Bhutan can face such problems and regionalism may develop if we are not careful about it.
Since the origination of decentralization concept during French Revolution, the decentralization has spread throughout the world. The degree and nature of decentralization differs from country to country depending of nature of state whether country is unitary state, federal or confederates. In Bhutan, since 1960’s decentralization has come a long way culminating with democracy in 2008. Bhutan today has necessary constitutional and legal frameworks necessary for the conducive functions of decentralized governance.
However, if one to assess based on Arnstein Ladder of citizen participation, Bhutan has yet to enter citizen control. Bhutan is in the rungs of tokenism where citizens are informed, consultation and placated regarding social, economic and financial policies of the nation.
The local government at the present plays the role of policy implementer rather than policy makers. The policy is made by center government under political leadership elected political leaders. The five year plan is made by Gross National Commission under the chairmanship of Prime Minister. Local Government can submit their plans either independent or through Tshogde and Tshogdu, but it will be for centre government to either approve or reject based on financial availability and political ideology.
Having said that, with 63% literacy rate majority of which are below matriculation level, it wouldn’t not be the right time to hand over all the decision power in the hands of citizens. Even with democracy, citizens are yet to make full use of democracy and understand their duties and responsibilities. But government has started private-government partnership on some selected sectors which means Bhutan will soon be on border to citizen control.

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UNDP& Government of Germany (1999). Decentralization; Sampling Definitions; Working paper prepared in connection with the Joint UNDP-Government of Germany evaluation of the UNDP role in decentralization and local governance.

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