Democratic decentralisation has become increasingly important in recent years, following the wave of new support for democratisation during the late 1980s. Decentralisation is a method of spreading power and contributing to the attainment of political and economic goals. The major promise of decentralisation is enhanced accountability and building popular participation, assuming that local governments will be more responsive in their representation and service delivery will be more effective.
Local democratization and decentralization are one of the vital conditions for the successful consolidation of democracy; they provide citizens with ample opportunities for participation, civic education, and training of leadership.
Decentralised local governments can be more effective in reaching and implementing decisions by introducing more intergovernmental competition and checks and balances. The local government has an information advantage over central government; local politicians may have more incentive to use information since they are accountable to the local electorate, while central government have wider constituencies and local issues are rarely considered. Decentralisation is implemented as a way to make the government more responsive and efficient.
A benefit of decentralisation is in its grassroots approach. It fosters democracy by allowing politicians and representatives to be closer to the citizens and embedded in social networks and cultural norms. By educating voters in democratic participation, it provides a training ground for leaders; theoretically, by leading local governments first, it can produce better central leadership.
Studies from the World Bank (1995) highlight that decentralisation in Colombia has enhanced local capacity with regards to capital, technology and labour; by increasing the skills of local governments through competitive hiring, sharing services of professionals and training local employees, the capital spending capacity also increased.
Promising decentralisation reforms occurred in Kerala, India, yet local government offices in the state are characterised by inefficiency and corruption and there is an urgent need to explore a new efficient system; old procedures have deteriorated due to imprecise instructions from above, untrained staff, ineffective supervision and corrupt motives. Local political accountability is often influenced by the likelihood of corruption or dominance of interest groups.
Decentralisation may be better for democratic representation but centralism is more likely to promote economic development and create a middle class who want to engage in democracy. Using South Korea as an example, the most distinguished feature of Korean history is the consistent tendency toward the greater centralization of state power. It is suggested that local autonomy cannot exist under a centralized unitary state but, if it can exist at all, it is only as a by-product of central politics.
Centralisation is not the best option for reaching and implementing decisions on behalf of its citizens but the presence of an elite in local governments along with weak institutional capacity can make decentralisation a difficult choice. Despite decentralisation reforms, the central state must still play a key role in regulation and training to ensure that local governments carry out their appropriate functions. Democratic decentralisation is difficult to achieve if power is limited to central government, but democratic representation and accountability can worsen if decentralisation is implemented without the appropriate framework.