Is it the twilight of decentralization? Testing the limits of functional reforms in the era of austerity
| Date | 01 June 2016 |
| DOI | 10.1177/0020852315581994 |
| Published date | 01 June 2016 |
| Author | Nikolaos-Komninos Hlepas |
| Subject Matter | Special Issue Articles |
Review of
Administrative
Article
Sciences
International Review of
Administrative Sciences
2016, Vol. 82(2) 273–290
Is it the twilight of
! The Author(s) 2015
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decentralization? Testing the
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DOI: 10.1177/0020852315581994
limits of functional reforms
ras.sagepub.com
in the era of austerity
Nikolaos-Komninos Hlepas
National and Kapodistrian University of Athens, Greece
Abstract
Economic crisis and rigid austerity seem to have brought a long-lasting period of decen-
tralization to an end. The comeback of centralist patterns offers the rapid implemen-
tation of austerity measures, while the lack of resources is challenging the sustainability
of decentralized services. There is an obvious inconsistency between European decen-
tralization policies, on the one side, and European austerity policies, on the other.
Empirical evidence shows that local authorities were more responsive to citizens’
demands for social services, but now municipalities without resources repulse decen-
tralization. In spite of centralist patterns, case studies of fiscal consolidation have
revealed a remarkable deviation of municipal responses to top-down fiscal policies.
Visionary leadership, active citizenry and inclusive decision-making processes predict
good performance, while reproductive leadership and a passive citizenry predetermine
unproductive central–local conflicts over burden-sharing and blame-shifting.
Points for practitioners
Our results show that both decentralization and centralization policies are highly
dependent on the attitudes and actions of local authorities. In the case of social services,
the responsiveness of local authorities brings obvious performance gains. Attempts at
burden-shifting to municipalities in times of crisis will, however, most probably face
blockades. In the case of austerity policies, top-down unitary strategies with rigid
norms and mechanisms cannot rule out performance disparities among the addressees
of these policies. The responsiveness of municipalities is highly dependent on local
leadership, actors’ constellations and the attributes of the community involved.
In case of functional reforms, the prior consultation and ongoing assistance of local
authorities and involved communities should be a standard practice.
Corresponding author:
Nikolaos-Komninos Hlepas, Faculty of Political Science and Public Administration, National and Kapodistrian
University of Athens, Themistokleous 6, 10678 Athens, Greece.
Email: nhlepas@gmail.com
274
International Review of Administrative Sciences 82(2)
Keywords
childcare, decentralization, fiscal consolidation, Greek crisis
Introduction
Greece is a typical South European example of the Napoleonic state tradition,
which was launched from the very beginning of national state-building
(Sotiropoulos, 2004). A ‘Westminster’ model of ‘pendulum democracy’ was soon
established, while public administration was subordinated to central governments.
Up to the last quarter of the 20th century, centralism has traditionally been
perceived as necessary in order to sustain national unity and the (re)distributive
capacities of the state in a country that had to cope with political instability, weak
economic development and regional divergence. Even in more recent years, Greece
has been described as ‘the most centralist state in Europe’ (Hlepas, 2010). Indeed,
the percentage of local public expenditure in gross domestic product (GDP) was
the lowest in Europe, while functions of local governments remained quite
restricted. On the other hand, a peculiar kind of ‘behind the scenes’ localism
characterized Greek politics and complemented the majoritarian, polarized and
strictly representative political system of the country. Civil society is rather weak
and civil demands are filtered through a sophisticated system of political patron-
age. Interest group systems are characterized by extreme fragmentation, segregated
sectoralization, uneven access to and influence on policy- and decision-making, ad
hoc mobilization, and lack of open pluralism (Hlepas and Getimis, 2011). The
legally strong unitary institutions of the paternalistic Jacobin state can hardly
cover an overall, multi-level, multi-sector, multi-actor fragmentation and the
coordination deficits resulting in an asymmetry of policy implementation
(Featherstone and Papadimitriou, 2013).
Against this background, new historical institutionalism would tend to highlight
long-existing institutional arrangements and path dependencies that predetermine
further developments (Pierson, 2000). Major change (or policy paradigm change)
would be more likely to take place at ‘critical junctures’; therefore, the timing
of reforms would be extremely important (Pierson, 2000). Although the current
economic crisis appears to be such a critical juncture (Ladi, 2014), the Greek con-
text of fragmentation and asymmetric policy implementation better matches the
actor-oriented approach of new institutionalism (Ostrom et al., 1994).
Actor-centred institutionalism has been developed against the background of
Elster’s (1979: 113) ‘two-filter model’: in a first step, structural constraints, such as
institutional arrangements and material conditions, filter out from the vast range of
possible options a much smaller ‘feasible set’ from which actors will choose, in a
second filtering process, just one of the available options. This ‘elite decision-
making’ (Politt and Bouckaert, 2004: 26) includes political definitions of the chal-
lenges and objectives in particular contexts (Heinelt and Bertrana, 2011: 15).
According to Ostrom’s Institutional Analysis and Development (IAD) framework,
Hlepas
275
actors who have to interact in a particular action situation to produce a policy
outcome are placed in an action arena. These actors have to refer to ‘rules in use’
(not only institutional, but also ‘rules in the head’), ‘attributes of the policy com-
munity involved’ (consensual/conflictual, open/closed, dominated/balanced) and
‘material, socioeconomic and policy-related circumstances’ (e.g. redistributive poli-
cies leading to confrontations). What will finally happen in the action arena also
depends on the ‘knowledge order’ of actors, that is, on their perception of which
actions are desirable and which actions are feasible. Feasibility could also be the
result of a chance event or window of opportunity, while desirability is often the
result of ideas (Heinelt and Bertrana, 2011: 18). A basic hypothesis of this article is
that unitary, top-down reform policies of functional restructuring in Greece had
deviating impacts and responses at the municipal level, depending, inter alia, on
local contexts and prevailing perceptions, actor constellations and power strategies.
In many cases, functional restructuring in Greece has been triggered and some-
times even configured by the external factor of Europeanization, which mostly
encouraged decentralization processes, often combined with funds for the develop-
ment of new social services at the local level. Especially during the 1990s, the
impetus of convergence to European standards of social services marked a
period
of
rising
public
expectations
and
increasing
fiscal
commitments
in Mediterranean countries (Lyberaki and Tinios, 2014: 194). However,
Europeanization, as mediated by obsolete political and social structures, tended
to create dysfunctional outcomes that were frequently resolved by increasing public
spending (Featherstone and Papadimitriou, 2012). Decentralization policies mostly
consisted in the transfer of administrative tasks without the delegation of the cor-
responding funding and taxing responsibility, which would promote local political
accountability for taxation and financial management.
After the outbreak of the crisis, functional rescaling moved in the opposite
direction, and the centralization of resources, tasks and procedures is now obvi-
ously seen as an adequate policy option, both by Greek and supranational deci-
sion-makers. In 2013, municipal police were abolished, and the biggest parts of
their tasks were transferred to the state police. Stabilization and austerity policies
were combined with the extensive centralization of fiscal policy and control mech-
anisms (including specific criteria for decision-making, rigid implementation con-
trols, etc.). The option for the centralization of fiscal policy was given priority
because of time pressure and the presumption that it would reduce implementation
uncertainties. The unprecedented curtailment of state grants, combined with the
banning of cross-financing at the municipal level and rigid fiscal rules, jeopardized
the sustainability of relatively recently decentralized services. In many cases, obvi-
ous asymmetries emerged between service performance requirements and the avail-
able resources, revealing a contradiction between decentralization policies in
various sectors and horizontal, cross-cutting austerity and fiscal recentralization
policies. This contradiction between decentralization and centralization policies,
both triggered by Europeanization (albeit in different times), shows that the ‘inte-
gration principle’ (Lenschow, 2002) that has been established in some fields of
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International Review of Administrative Sciences 82(2)
European Union (EU) policy (environmental policy), meaning that EU policies
should not contradict and/or undermine each other, is obviously missing here.
This article will, first, review decentralization policies in Greece and then...
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