«The policy of decentralization ended with unclear results and did not stimulate a tangible improvement in the accountability of local authorities,» mentioned independent expert Akram Umarov in an article, written specifically for CABAR.asia.
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Kazakhstan needed large-scale reforms to lay the foundations of a new sovereign state after the collapse of the USSR and gaining independence in 1991. The main goal was to transform the existing planned economy and highly centralized system of government. The first president of Kazakhstan, Nursultan Nazarbayev, and the country’s political elites at the beginning of independence decided to create a unitary republic with a strong hierarchical presidential form of government. However, the large territory of the country, coupled with a small population, as well as the effective provision of public services, subsequently required the adoption of certain elements of the decentralization policy.
This article will first discuss a brief analysis of existing approaches to the effectiveness of the decentralization policy, the content of the decentralization reform in Kazakhstan and the main stages of its implementation, as well as an assessment of its impact on the accountability of local authorities and, finally, proposals for improving the accountability of authorities at the local level. The unfinished decentralization reform and the shortcomings of the current legislation, combined with strong resistance from the central government, a lack of independent financial resources for local governments, have led to few positive results of the decentralization policy. Strengthening accountability through the introduction of direct elections of local governors, greater independence in local budgeting, and greater participation of local communities in decision-making and implementation processes can be helpful in enhancing the accountability of local governments.
Brief description of existing approaches to decentralization
In this paper, by accountability, I mean creating the necessary conditions and structures that allow people to control the activities of government officials and make them responsible for regularly reporting to the public on their activities. I use the term decentralization as the partial transfer of power and resources from central government to local governments, municipal authorities, and civil society.
There are generally accepted types of decentralization – administrative, fiscal and political / democratic.[1]
Existing approaches on the impact of decentralization can be divided into two groups.
First, a number of studies are promoting decentralization as a solution for better performance of responsibilities, improved quality and accountability of local governments, better responsiveness to the needs and expectations of people, and increased participation in decision-making at the local level.[2]
Second, at the same time, the growing number of studies in different countries that are conducting decentralization indicates that this policy has not brought the expected positive results. The results of decentralization can lead to such negative consequences as a deterioration in the quality of public services provided, the seizure of power by local elites and an unsatisfactory improvement in the accountability of local authorities.[3] We will assess both the positive and negative outcomes of the decentralization policy at the level of local government accountability.
Kazakhstan: Review of Decentralization Policy and its Achievements
Decentralization policies were a very popular movement around the world in the 1980s and 1990s.[4] A wide range of international organizations, development agencies and external partners of Kazakhstan have declared their support for the policy of decentralization and its importance in promoting democratic processes. One of Kazakhstan’s close partners, the European Union, has actively promoted a policy of decentralization in the new post-Soviet countries under the 1985 European Charter of Local Self-Government. The United Nations Development Program has actively supported decentralization policies in different parts of the world, since “Decentralization of power … allows people to directly participate in governance processes and can help empower people who were previously excluded from decision-making … Closer contact between government officials and local communities and organizations also facilitates the exchange of information that can be used to design development programs that are adapted to local needs and priorities and, therefore, are more effective and sustainable ”.[5]
The main motives behind the announcement of a decentralization policy in Kazakhstan was the need to democratize its governance system in line with the “mainstream” of that time. In the development of its external relations with Western countries, it was important to demonstrate a commitment to reforming the country, introducing modern democratic tendencies and institutions and being on the same side of development with other progressive post-communist states of Central and Eastern Europe, which widely decentralized their political systems and transferred more powers and funds to local authorities. In this regard, the leadership of Kazakhstan considered gradual decentralization as a tool of following in line with the main trends of development in the world, a compromise solution that takes into account the interests of local elites interested in gaining more power, and stimulating market reforms and economic prosperity of the country’s regions.
The process of decentralization in the Republic of Kazakhstan was gradual, and it can be divided into three stages:
As can be seen from these stages of the decentralization reform in Kazakhstan, the creation of a legislative framework for local self-government bodies, delegation of the preservation and independent spending of part of the collected taxes, as well as the creation of local representative councils directly elected by citizens, are the main achievements of this policy in the context of its impact on the accountability of local authorities (akims). De jure, citizens are now directly connected with local authorities by paying them income and property taxes, creating a mechanism of maslikhats, which should report to the population and represent its interests in relations with local authorities, which are directly appointed by higher authorities. In addition, the introduction of a system for electing local akims in rural areas may become the initial stage of the gradual introduction of direct elections to regional authorities, and at later stages to regional governors.
Impact of the pandemic on decentralization policy in Kazakhstan
The spread of coronavirus infection has had a serious impact on government systems around the world. At the initial stage of the explosive spread of the virus, the governments of several countries decided to introduce quarantine measures at the national level. However, the obviousness of the long-term struggle against this pandemic and the need to maintain economic activity in the country prompted the government of Kazakhstan to adopt a policy of applying more targeted restrictions and abandoning large-scale isolation measures. The country’s leadership called on local authorities to show greater initiative and readiness to take responsibility for decisions on the introduction of restrictive measures in specific territories.[12]
This decision was made in view of the understanding that it is the local executive bodies that are today at the forefront of confronting the further transmission of coronavirus infection and its consequences. However, the subsequent saltatory evolution of the pandemic in Kazakhstan indicates the low efficiency of transferring certain powers to introduce restrictive measures from the national to the local level. The lack of preparedness of local authorities for such emergencies, the lack of necessary resources in the regions and districts of the country, as well as the established practice of orienting local leaders to the central authorities became the main reasons for the problems that arose. Moreover, the lack of specific mechanisms for continuous dialogue with the population, consistent reasoning for the restrictive measures taken and the lack of accountability of local authorities to the population did not contribute to an improvement in the situation.
Controversial Decentralization Policy Results: Local Government Accountability
Decentralization reform has a very limited impact on improving the accountability of local authorities to the inhabitants of these territories. The main challenges to strengthening accountability are:
First, the reluctance of the central government to transfer powers and resources to local governments. In Kazakhstan, problems arose with the disproportionate income between the center and the regions in the early 1990s, when regional authorities collected most of the state revenues and profits from the extraction of natural resources and were practically financially independent from the central authorities, which led to their reluctance to reckon with interests of the central government.[13] The dependence of local governments on appointments from the central government reduces their accountability to local residents and leads to complete dependence on central government.
Second, incomplete decentralization in Kazakhstan has strengthened local governments from local influence. The transfer of a certain number of administrative and fiscal functions from the central government without ensuring strict accountability of local self-government has led to a decrease in the level of responsibility both to the higher authorities and to the citizens of the respective territories.[14] Kazakhstan still ranks high with 113th out of 180 countries in the world in the Corruption Perceptions Index 2019,[15] and 80% of Kazakhstani youth indicated that corruption is the most important problem.[16]
Third, the financial dependence of local governments on the center weakens motives for cooperation, responsiveness to the needs of local residents and low interest in attracting local funds, which could lead to increased cooperation and increased responsibility towards local residents. If in 2000 the share of transfers from the state budget to local budgets ranged from 6.3% to a maximum of 43.4%, then by the end of 2017 this figure was already from 55% to 79%. In 2000, 8 regions were donors, and 7 regions were subsidized, by 2017 only 4 regions were donors, and the rest were subsidized.[17]
In order to control the regions, the central government does not set a fixed amount of funds transferred to local authorities on a regular basis, preferring to annually adjust the amount of funding after a careful study of funds requested from regions and districts. Central funding of local government spending reduces their accountability to citizens, because they can always point out the lack of central funding in the event of any shortcomings and possible criticism from the local population.[18]
Fourth, the creation of local representative bodies with direct elections of its members by local residents does not increase the accountability of local governments. The power given to local maslikhats remains rather vague, the lists of functions of regional, city and district maslikhats are very similar, overlap and do not differentiate between them, which in reality leads to de facto accountability to local authorities and the adoption of all their decisions without significant discussions.[19] In addition, there is no clear mechanism for the participation of local civil society and individuals in the activities of maslikhats and interaction with local authorities. Therefore, in the regions, the role of local representative institutions – maslikhats remains insignificant, and sometimes has only a decorative function in comparison with the powers of local authorities.
Suggestions to Improve Local Government Accountability
First, the main focus of the legal framework for decentralization in Kazakhstan is on the transfer of power from central government to local government, although greater emphasis on the empowerment of local civic communities can help strengthen local accountability. Poland is also a former communist republic that has successfully implemented decentralization reform with the support of local civil society,[20] and could be considered as a good example of involving local civil communities in local decision-making processes. However, in Kazakhstan there are still no clear mechanisms for the participation of civil communities in local self-government, with the exception of the election of representatives of maslikhats. Citizens, local civil society and activists should have more opportunities to participate in decision-making, budgeting and spending processes, requiring reports, transparency of local government leaders and other officials, regularly assessing their work, providing feedback that will be guaranteed at the level of national legislation.
Secondly, the introduction of direct elections of local governors, starting with the akims of villages and gradually reaching the level of the regional governor. The OECD proposes “to establish fixed mandates for akims at all levels of local government and consider setting time limit for all akims to be elected”.[21] Increased competition in local elections with the participation of local civil society can enhance accountability. Akims will know that their mandate and term of office will directly depend on local voters. Decentralization reform with large-scale local elections, competition between different parties and involvement of local communities in Bulgaria,[22] another post-communist republic, can serve as a good example for Kazakhstan.
Third, the level of accountability of local governments can be enhanced by transferring greater autonomy in the collection and spending of revenues. It has been established that tax collection can have a significant impact on the relationship between citizens and government agencies.[23] Taxing local residents can raise concerns and activism about how effectively and transparently collected funds are spent, stimulate the demand for regular reporting on the correct use of these funds, and generally lead to better accountability of local authorities. An analysis of a number of Central and Eastern European countries, such as Poland, Hungary and the Baltic States, shows that the independence of local governments in generating revenue through tax collection “can create greater accountability and efficiency in a healthy institutional, legal and regulatory environment.”[24]
Conclusion
Decentralization is widely promoted as a mechanism to ensure better accountability. Nevertheless, an analysis of the situation in Kazakhstan with more than 20 years of history of implementation of decentralization shows that the peculiarities of the existing centralized political system can significantly hinder the positive impact of this policy on increasing the accountability of local authorities. The implementation of decentralization mainly as a consequence of the democratization processes in most post-communist countries, which were politically and financially supported by a group of international organizations and developed countries, led to the creation of a largely “facade” decentralization. The central government implemented decentralization but limited it in general to the adoption of several laws and strategies that were largely declarative and did not fundamentally change the established practice.
Thus, these policies ended up with unclear results and did not stimulate tangible improvements in local government accountability. On the contrary, it has led to greater inequality in the size of the budgets of different regions, an increase in the dependence of local elites on the central government and insufficient attention to the needs of local residents, limited efforts to develop the local economy and improve the welfare of residents. The creation of a system that allows wider involvement of local civil communities, the phased introduction of direct elections to local governments, together with greater opportunities for collecting and spending local revenues, can stimulate further decentralization reforms in Kazakhstan.
This material has been prepared as part of the Giving Voice, Driving Change – from the Borderland to the Steppes Project. The opinions expressed in the article do not reflect the position of the editorial board or donor.
Cover photo: natalya-solokhina.blogspot.com
[1] See.: Robinson, M., 2007. ‘Does Decentralisation Improve Equity and Efficiency in Public Service Delivery Provision?’, IDS Bulletin 38, 7–17; Schneider, A., 2003. ‘Decentralization: Conceptualization and Measurement’. Studies in Comparative International Development, 38, 32–56.
[2] See.: Grindle, M., 2007. ‘Going Local: Decentralization, Democratization, and the Promise of Good Governance’. Princeton University Press, Princeton.; Faguet, J.P., 2014. ‘Decentralization and Governance’. World Development, 53, 2–13.; Khan, S., 2008. Local Governments and Local Elites. Local Government Studies, 34, 509–528.
[3] See.: Crook, R., 2003. ‘Decentralisation and poverty reduction in Africa: the politics of local-central relations. Public Administration and Development, Volume 23, 77–88.; Treisman, D., 2007. ‘The architecture of government: rethinking political decentralization’. Cambridge University Press, Cambridge; New York.
[4] Treisman, D., 2007. ‘The architecture of government: rethinking political decentralization’. Cambridge University Press, Cambridge; New York.
[5] UNDP, 2000. ‘The UNDP Role in Decentralization and Local Governance’. Evaluation Office, The United Nations Development Programme
[6] Makhmutova, M., 2001. ‘Local Government in Kazakhstan’, in: ‘Developing New Rules in the Old Environment’. OSI/LGI, Budapest, Hungary, pp. 403–468.
[7] Nazarbayev, N., 1997. ‘The Strategy for development of the Republic of Kazakhstan until the year 2030’.
[8] Republican Center of Legal Information of the Ministry of Justice, 2019. The legal information system of Regulatory Legal Acts of the Republic of Kazakhstan.
[9] Keene, E., 2013. ‘Kazakhstan 2050 Strategy Leads to Government Restructuring’. Carnegie Endowment for International Peace.
[10] Sarsembayev, M., 2013. ‘How Rural Akims Are Elected in Kazakhstan’. The Astana Times
[11] Kapital.kz, 2018. ‘More than a thousand rural districts have switched to an independent budget’. https://kapital.kz/economic/69106/boleye-tysyachi-sel-skikh-okrugov-pereshli-na-samostoyatel-nyy-byudzhet.html
[12] Radio Azattyk, 2020. Quarantine in the regions: restrictive measures and possible consequences. https://rus.azattyq.org/a/kazakhstan-coronavirus-quarantine-in-regions/30543610.html
[13] Luong, P.J., 2004. ‘Economic “Decentralisation” in Kazakhstan: causes and consequences’, in: ‘The Transformation of Central Asia: States and Societies from Soviet Rule to Independence’. Cornell University Press, Ithaca, New York, pp. 182–210.
[14] Sharipova, D., 2018. ‘State-Building in Kazakhstan: Continuity and Transformation of Informal Institutions’. Rowman & Littlefield, Lanham, Maryland.
[15] Transparency International, 2020. ‘Corruption Perceptions Index 2019’. https://www.transparency.org/en/countries/kazakhstan
[16] OECD, 2017. ‘Anti-corruption reforms in Kazakhstan’. Fourth Round of Monitoring of the Istanbul Anti-Corruption Action Plan. Paris.
[17] Aygazin, J., 2018. ‘The rich get richer, the poor get poorer: how the regions of Kazakhstan are developing differently’. Forbes Kazakhstan. https://forbes.kz//stats/uroki_disgarmonii_1538924048/
[18] Rodden, J., 2002. ‘The Dilemma of Fiscal Federalism: Intergovernmental Grants and Fiscal Performance around the World’. American Journal of Political Science, 46, 670.
[19] Bhuiyan, S.H., 2010. ‘Decentralization and Local Governance in Kazakhstan’. International Journal of Public Administration, 33, 658–672.
[20] Verheijen, A., 2004. ‘Removing Obstacles to Effective Decentralization: Reflecting on the Role of the Central State Authorities’. The World Bank 43–54.
[21] OECD, 2017. ‘Decentralisation and Multi level Governance in Kazakhstan’, OECD Public Governance Reviews. OECD Publishing, Paris. p.4
[22] International Republican Institute, 1996. Bulgaria: Municipal Election Report, October 1995.
[23] Moore, M., 2007. ‘How Does Taxation Affect the Quality of Governance?’ IDS Working Paper No. 280. IDS, Brighton, UK.
[24] Rodríguez-Pose, A., Krøijer, A., 2009. ‘Fiscal Decentralization and Economic Growth in Central and Eastern Europe’ (LEQS Paper No. 12), LSE ‘Europe in Question’ Discussion Paper Series. London School of Economics. p.14