Is the country ready for “decentralization”? Is “decentralization” ready for the country? – The Economic Journal


On the table are areas as neuralgic as Education, Health, Housing, Justice and Social Action, in the case of local authorities or Tourism Promotion and Investment Funding, in the case of inter-municipal entities.
One of the main challenges currently facing local authorities and inter-municipal entities is the assumption of new powers, transferred by the central state following the approval of Law 50/2018, in a process commonly referred to as “Decentralization”.

Within a year and a half of the deadline for the imperative start-up of the measure, all sectoral decrees prescribing the transfer of new competences, the identification of their nature and how their resources are allocated are not yet known. In turn, where these are already public knowledge, there is uncertainty and opacity regarding the financial envelope that will be delivered to local government as a counterpart to the increased responsibilities.

At the same time, there are no known technical studies to substantiate, on a national or local scale, the goodness of the new “framework law” or to assess the impacts of this “decentralization”. As a corollary, are the tensions and uncertainties surrounding a phenomenon that? if not before? From January 2021, it will invariably shake the country.

By the middle of this month, 184 of the 278 municipalities of mainland Portugal have said “yes” to the total or partial assumption of these new tasks, making a decision that is lacking in rationality. Only 55 municipalities have made it known to the Executive that they are not interested in voluntarily embracing any competencies that until now were the responsibility of the central government.

We are therefore warned that the target entities seek to prepare, in good time and reasonably, for the demands associated with the alleged transfer of competences and to ensure that “decentralization” takes place in a serene, knowledgeable and competent manner in the interests of sustainability. local government accounts and the accuracy and transparency of public accounts.

This will be virtually impossible without an adequate dimensioning and mapping of the patrimonial, human and financial resources indispensable for the viability of the various sectoral areas whose competences will be transferred.

Given the “hatches” still open in the Law, it will be wise for municipalities and inter-municipal entities to back up with independent studies that serve as a conceptual, strategic and financial guideline to support the preparation of the decentralization process, contributing to the mitigation of uncertainties and, moreover. importantly, in cases where this is necessary for business purposes, to justify the financial envelope to be received from the central government in return for the transfer of their respective powers.



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