The Empowerment of Local Democracy and Decentralisation of Service Delivery in Local Government Reform: Evidence from Portugal

Abstract

Local government reforms in Europe over the last few decades show a gap between central government promises of decentralisation and practice. The political rhetoric of central government favours increased local government autonomy and supports the growth of local democracy. This contrasts with a de facto centralising trend, whereby central government defines the priorities and targets of local government. In many countries, local funding powers remain limited, and central government remains the main source of local government revenue. This chapter examines recent changes in the structure, functions, finance, and regulation of central-local relations, in Portugal, in the period from 2005 to 2009, up to the onset of the 2009 financial crisis. In 2000, a newly elected government promised and implemented significant reforms to local government. The government promised increased local autonomy and the empowerment of local democracy, local government expectations. At the same time, the government also created new inter-municipal institutions to be responsible for planning and other specialist functions, particularly the administration of regional transportation systems. The government also strengthened regional identities by harmonising judicial and administrative regions. The evidence suggests the existence of a mixed trend. Service delivery has been somewhat decentralised, mediated by central government. However, issues of local democracy and the participatory rights of local citizens were relatively neglected. Decentralisation took place alongside a centralising trend, associated with institutional reorganisation and with changes in the legal framework of key components of the spatial planning system. Direct control by central government of local government was replaced by indirect control through regulations. Local governments remain restricted in their ability to challenge legislative decisions, and decisions affecting local competences and budgets are often taken by state budgetary institutions rather than by the national legislature. The evidence also suggests that the response to the fiscal crisis inhibited the full development of local autonomy.