The effect of decentralization of power on economic development: the Sri Lankan Experience

Abstract

Introduction :

Economic development at the regional level was regarded as an expected major intention with the commencement of the Provincial Council (PC) system in 1987. However, even after almost three decades of power devolution the expected outcome of the PC system is seemingly yet to be realized. Regardless of the fact that the current practice of regional development policy under the PC system is less effective, successive regimes, including the current, have made no clear decision to abolish it. According to Uduporuwa (2007), development strategies implemented by Sri Lanka within the past fifty years have not contributed to reduce the socio-economic disparities in Sri Lanka. Gunaruwan and Samarasekara (2013) found that the PCs spend largely on emoluments and spend for their own existence rather than for economic development at regional level. These arguments therefore raise the question on the rationality of continuing with the existing PC system in Sri Lanka.

The theoretical aspects of power devolution show the severe limitations of centrally controlled national planning. Rondinelli and Cheema (1983) say that decentralization allows greater representation for various political, religious, ethnic and tribal groups in decision making that could lead to greater equity in the allocation of resourcesand investment. This mechanism allows officials to disaggregate and tailor development plans and programs at sub-national levels. According to Sri Ranjith (2007) decentralization occurs when powers and responsibilities are transferred to local levels with management functions of fiscal, financial, personnel and legal authority. Although there are diverse views on this topic, the lack of proper investigation into what determines the regional growth and the strengths of respective regional driving forces will leave this debate unsolved. This research therefore investigates the effect of regional development driving forces under the PC system in Sri Lanka.