Decentralization, the role of local governments in the process of national development and the financial resources they need to perform their duties

Abstract

The author starts by making a distinction between Decentralization and deconcentration, passes to a summary review of the reasons for decentralization and finishes with a reckoning of basic strategies essential to the success of the decentralization process.

In sequence, he presents a study on the evolution of the role of local governments, stressing the evergrowing understanding, detected in many countries, as to its importance in the process of national development. He points out the significance of the functions ascribed to local governments and comments on the three basic criteria for their attribution: the criterion of tradition, the criterion of proximity and the criterion of scales. He also deals with specific functions of local governments and with delegated functions, which imply allocation of a specific policy.

The article's last part deals with one of the major challenges face by decentralization: the allocation to local governments of financial resources sufficient to allowing them the fulfillment of a positive and efficient role in the development process. The author subsumes local revenues pursuant to their categories (current

revenues/capital revenues) and comments on the Brazilian system of shared taxes and on the importance it has in strengthening municipal finances.