Local government refers to specific institutions or entities created by national constitutions (Brazil, Denmark, France, India, Italy, Japan, Sweden), by state constitutions (Australia, the United States), by ordinary legislation of a higher level of central government (New Zealand, the United Kingdom, most countries), by provincial or state legislation (Canada, Pakistan), or by executive order (China) to deliver a range of specified services to a relatively small geographically delineated area. Local governance is a broader concept and is defined as the formulation and execution of collective action at the local level. Thus, it encompasses the direct and indirect roles of formal institutions of local government and government hierarchies, as well as the roles of informal norms, networks, community organizations, and neighborhood associations in pursuing collective action by defining the framework for citizen-citizen and citizen-state interactions, collective decision making, and delivery of local public services.Local governance, therefore, includes the diverse objectives of vibrant, living, working, and environmentally preserved self-governing communities. Good local governance is not just about providing a range of local services but also about preserving the life and liberty of residents, creating space for democratic participation and civic dialogue, supporting market-led and environmentally sustainable local development, and facilitating outcomes that enrich the quality of life of residents.
Although the concept of local governance is as old as the history of humanity, only recently has it entered the broad discourse in the academic and practice literature. Globalization and the information revolution are forcing a reexamination of citizen-state relations and roles and the relationships of various orders of government with entities beyond government— and thereby an enhanced focus on local governance. The concept, however, has yet to be embraced fully by the literature on development economics, because of the longstanding tradition in the development assistance community of focusing on either local governments or community organizations while neglecting the overall institutional environment that facilitates or retards interconnectivity, cooperation, or competition among organizations, groups, norms, and networks that serve public interest at the local level. Several writers (Bailey 1999; Dollery and Wallis 2001; Rhodes 1997; Stoker 1999) have recently argued that the presence of a vast network of entities beyond government that are engaged in local services delivery or quality of life issues makes it unrealistic to treat local government as a single entity (see also Goss 2001).Analytical recognition of this broader concept of local governance is critical to developing a framework for local governance that is responsive (doing the right thing—delivering services that are consistent with citizens’ preferences or are citizen focused); responsible (doing the right thing the right way—working better but costing less and benchmarking with the best); and accountable (to citizens, through a rights-based approach).
Such analysis is important because the role of local government in such a setting contrasts sharply with its traditional role. This chapter traces the evolution and analytical underpinnings of local governance as background to a better understanding of the case studies of developing countries in this book. The next section outlines analytical approaches to local governance that can be helpful in understanding the role of governments and comparing and contrasting institutional arrangements.
It further develops a model of local governance that integrates various strands of this literature. This model has important implications for evaluating and reforming local governance in both industrial and developing countries. The third section presents stylized models and institutions of local governance as practiced in different parts of the world during past centuries. It compares and contrasts the ancient Indian and Chinese systems of local governance with Nordic, Southern European, North American, and Australian models. The last section provides a comparative overview of local government organization and finance in selected developing countries as an introduction to the in-depth treatment of these countries in the rest of the book.
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