Islamic Republic of Iran Management and Planning Organization (MPO)

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1 Islamic Republic of Iran Management and Planning Organization (MPO) Building Capacity for Governance Stakeholders towards Achieving Millennium Development Goals (MDGs) in Iran through Decentralization By: Mr. Masoud Shokrollahi Mailing Address: No. 24, Ladan St., Sheikh Bahaei St., Mollasadra Ave., Tehran, Iran Address: Telephone: (98) Fax: (98)

2 Building Capacity for Governance Stakeholders towards Achieving Millennium Development Goals (MDGs) in Iran through Decentralization Introduction During the UN Millennium Summit in 2000, 147 heads of states adopted General Assembly Resolution containing the Millennium Declaration which calls for attaining Millennium Developments Goals or MDGs including [1]: The eradication of poverty and hunger, the achievement of universal primary education, the promotion of gender equality, the reduction of child morality, the improvement of maternal health, combating HIV/AIDS and other diseases, ensuring environmental sustainability and the promotion of global partnership for development. Upon this declaration, good governance has been introduced as a necessary condition to achieve each of MDGs. Creating good governance needs capacity building for main governance stakeholders which are: government, businesses and civil society. Different strategies can be applied for building such capacities. Each country in line with its environmental situation and its strengths and weaknesses prioritizes and implements these strategies. Decentralization is one of the major strategies for building needed capacities for governance stakeholders in order to create good governance, which eventually leads to obtaining MDGs. In recent years many countries around the world have paid attention to decentralization and have been involved in Paper presented during the EROPA Twentieth General Assembly and Conference on The Role of Public Administration and Governance Stakeholders in Attaining the Millennium Development Goals, Hanoi, Vietnam, 9-14 October 2006; published in Asian Review of Public Administration, Vol. XVII, Nos. 1-2, (January-December 2005, pp

3 the process of adopting and implementing it. The Issue of decentralization has its own opponents and advocates. Advocates argue that local officials have more information about local issues and can make more proper decisions, while opponents claim that central government officials have more technical information. Advocates say that local officials can better allocate resources to vulnerable population but opponents believe that decentralization may hinder redistribution of wealth from rich regions to poor regions. However the important issue is how to decentralize? What methodology to be used? Which functions should be transferred to local areas? Who should carry out these functions and to what extent? Definition and Forms of Decentralization Different authors have put different definitions of decentralization. The World Bank Decentralization Thematic Team defines decentralization as the transfer of authority and responsibility for public functions from the central government to subordinate or quasi-independent government organization and/or the private sector [2]. In other words, it is a way in which central government transfers the authority of decision making to local institutions. One of the characteristics of a decentralized institution is its relative independence from central government in one or some particular dimensions. World Bank Publications have determined four forms of decentralization [3]. These are administrative, political, fiscal and economic decentralization. Although there is overlap between these forms, it however helps understanding different dimensions of decentralization and is useful for implementing them. 3

4 Administrative decentralization refers to the redistribution of authority and responsibility for planning, financing and management of certain public functions from the central government and its agencies to field units, subordinate levels of government, semi-autonomous public corporations, or area-wide or regional authorities. Administrative decentralization is categorized into three types: 1. Deconcentration: which involves spreading the decision-making authority and financial and management responsibilities across different levels of the central government. In this type of decentralization authority and responsibility are transferred from one central government organization to its local units. In fact deconcentration is weakest form of decentralization. 2. Delegation: involves the transfer of responsibility for decisionmaking and administration of public functions from the central government to semi-autonomous organizations that are not wholly controlled by the central government, but are ultimately accountable to it. These semi-autonomous bodies may be located at the national level or within the territory of a sub national government. 3. Devolution: The World Bank defined devolution as the transfer of authority for decision-making, finance and management to quasiautonomous units of local government with corporate status. Political decentralization is the transfer of authority to a sub national body. The aim of political decentralization is to give citizens or their elected representatives more power in public decision-making. Political decentralization has been manifested through devolution which was defined earlier. 4

5 Fiscal decentralization involves transfer of two things to local governments or private organizations: funds, to deliver decentralized functions, and revenue generating power and authority to decide on expenditures. Economic decentralization is the passing over to the private sector of the functions exclusively performed by government. It is manifested through privatization and deregulation. Privatization includes the contracting out of the provision and management of the public services to commercial enterprises, the transfer of service provision through divestment of stateowned enterprises and public-private ventures such as the build-operatetransfer scheme. Deregulation reduces the legal constraints on the private sector in their delivery of services previously monopolized by the government. Here we should take into account that necessarily all functions should not and could not be transferred. Each country on the base of its conditions determines the extent and form of decentralization. Advantages of Decentralization The World Bank Decentralization Thematic Team has noted following advantages for decentralization: It helps alleviate bottlenecks in decision-making that are often caused by central government planning and control of important economic and social activities. It can help cut complex bureaucratic procedures and it can increase government officials sensitivity to local conditions and needs. It can help national government ministries reach larger numbers of local areas with services. It allows greater political representation for divers political, ethic, 5

6 religious and cultural groups in decision-making. It can relieve top managers in central ministries of routine tasks to concentrate on policy. In some countries it may create a geographical focus at the local level for coordinating national, provincial, district and local programs more effectively and can provide better opportunities for participation by local residents in decision-making. It may lead to more creative, innovative, and responsive programs by allowing citizens to better control public programs at the local level. Decentralization in Iran After Revolution in Iran in 1979, the new Constitution of Islamic Republic of Iran has been the base for decentralization efforts. Although the exact term of decentralization has not been mentioned in the Constitution text, the issue of shaping Islamic village and city councils (as implications of decentralization) has been noted in different articles of it. According to the Constitution, Islamic councils together with parliament are considered as the pillars of decision-making and governing in the country. Islamic Council Organization Law was approved by the parliament in The mentioned law was revised in 1987 in order to be more applicable. In revised law a new council called Islamic Dehestan Council was introduced (dehestan is sum of several villages). Members of this council are elected from members of village councils for tenure of 4 years. Another law, which is currently the main base for implementation of councils in the country and is called Islamic Council Organization, Function and Election Law, was approved in According to article 2 of this law Islamic councils include: Village Council, District Council, City Council and Town Council. One of the 6

7 initiatives of this law is determining an official called dehyar who is selected by village council and is responsible for implementing council decisions in the village. Dehyar is head of dehyari which is an autonomous public institution in the village managing village public affairs. According to current laws and regulations the country has been divided into 30 provinces. Each province has a general public administrative institution called ostandari that is headed by ostandar. He is assigned by Minister of Interior, after cabinet approval. Although there are enough laws for decentralization in the country but in practice at the early years of revolution due to war condition and political requirements decision-making power remained in the hands of central government. However in post war years policy makers found the opportunity to get involved in the process of decentralization. Therefore many good measures have been taken in the third and forth five-year development plans. Third Five-Year Plan In order to exit from current condition, several policies have been formulated to transfer authority to local levels. For example it was decided to transfer following functions to municipalities: managing city health and medical centers (from Ministry of Health and Medical Education), maintenance and utilization of jungle parks, located in boundaries of cities (from Ministry of Jihad-e-Agriculture). Also for implementing part 3 of section B of article 1 of this plan, regarding separating policy from operational functions in ministries and national bodies, High Administrative Council separated operational functions from central head quarters of 13 ministries and organizations (such as Ministry of Education, Ministry of Transportation, Ministry of labor and Social Affairs, Ministry of Culture, 7

8 Ministry of Industries and Mines, Ministry of Jihad-e-Agriculture, Ministry of Housing, Ministry of Health and Medical Education, Ministry of Trade, Organization of Sports, Management and Planning Organization, Organization of Environment Protection) and transferred them to their provincial units. Fourth Five-Year Plan In the fourth plan (which its execution has started from the current year) important policies has been designed for the development of decentralization in the country. Some of main articles of this plan are as follow: Article 73: During the first year of the plan, government has to prepare and submit a comprehensive map for revising the current political and geographical division of the country including introducing criteria for division and adapting it with decentralization principles. It should strengthen the role of ostandar as high representative of central government in the local areas. Establishment of any new political levels has to be made according to this article. Article 77: In order to make coordination among development affairs in different provinces, government has permission to regionalize the country, create coordinating bodies and determine their functions in inter-provincial level. Execution procedure of this article should be prepared by management and planning organization with coordination of related governmental bodies and approved in cabinet. As it is mentioned in the previous paragraphs, proper activities has been took place in line with decentralization. If the mentioned activities and plans come to practice, important development will be achieved in this respect. As 8

9 it was noted earlier, decentralization is an effective measure in line with enriching ability of governance stakeholders which its practice in Iran, will provide foundation for establishing good governance and eventually achievement of MDGs in this regard and considering Iran political, economical and cultural situation, and also taking account the policies which have been made in forth five-year development plan two methods for advancement of decentralization policies in Iran can be implemented. These two measures are administrative kind of decentralization in Iran should come later when necessary developments have been made. First Method: Redistribution of authority and responsibility for planning, financing and management of certain public functions from the central government and its agencies to local units. In this method a local official can be determined and necessary authority and resources for managing local affairs will be given to him/her. Therefore, accountability level can be detached from related ministers and transferred to a local official. This official will be elected by direct vote of local people. In this method, local units will be villages and cities and other present local level such as dehestan will be eliminated. The extent of authority of local official will be determined on the base of local abilities. Second Method: Creating regional ministries The objectives of this method are: Gradual movement from deconcentration phase to devolution phase, at the beginning, through piloting some villages and cities. Maintaining national unity and making use of collaboration and local innovation for policy-making in execution of article 100 of 9

10 Constitution. Liberating government from performing unnecessary activities, dividing duties among national, middle, and local levels and defining balanced geographical regions. Introducing regional ministers who are accountable to parliament for performance of their respective regional units. Revising functions and organization of central ministries. Attracting experts and elites to central ministries. Transferring operational functions to regional ministries. Establishing administrative justice courts in every region in order to take complaints about regional public bodies. Revising internal structure of parliament commissions in order to provide sound context for approval of necessary temporary laws in regions. Separating ministries into national, central and regional ministries. Transferring national, strategic and policy functions to national and central ministries. Responsibilities of central ministers will be: Determining national objectives, strategies and policies in related section and providing them to regional ministries. Supervision and evaluation of performance of regional ministries. Promoting planning and executive affairs in regions. Implementing plans and programs which regions do not have necessary abilities for implementing them. Regional minister is responsible for implementing functions of central ministries in the respective region. He/She, in accordance with article 10

11 100 of Constitution, is responsible for promoting social, economical, developmental, health, cultural, educational and other welfare-related affairs in the region with participation of regional people through regional organizations such as village and city councils, municipalities and so on. The mentioned duties have to be added to potential responsibilities of regional ministries. In this respect following points should be considered: Regional minister as a high coordinating official should supervise ostandars in that region. Ostandars act as deputy of regional ministers in each province and are in charge of leading and managing provincial public organizations. Ostandars are accountable to regional minister for performance of provincial organizations. The heads of regional public organizations are determined by proposal of ostandars and approval of regional minister. They are accountable to ostandars for performance of their related organization. Ostandars supervise all provincial administrative affairs and are accountable to regional minister 11

12 References 1. The Declaration of the Millennium Assembly, Official Records of third General Assembly, Fifty-Fifth Session, A/RES/55/2 2. World Bank Decentralization Thematic Team (no date), The Online Source Book on decentralization and Local Development, Available at: 3. Asian Resource Center for Decentralization, 200, Decentralization & Power Shift: An Imperative for good Governance, Vol. I, Edited by: B. Brillantes and N. Cuachon 12

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