Globalisation and the information revolution are profoundly
influencing the division of power within, across, and beyond
nation-states. Within nations, this mega change has led to a diminished
economic relevance of the intermediate order of government (states and
provinces) and an enhanced need for home rule (empowered local
governments) in both unitary and federal countries. Considerations of
peace, order, and good government further warrant that intermediate
orders of governments must assume a relatively less prominent role in
multi-order governance. The recent fiscal crisis and the ever-growing
concern about corruption have further heightened the need to the get the
government right, thereby creating additional pressures to limit the
size of the government by possibly downsizing the role of the
states/provinces and reconstituting these as provincial councils of
local governments to perform inter-local functions and coordination.
These economic imperatives, calling for an hourglass model of
federalism, are at odds with the political realties in countries
conforming to the traditional dual federalism model, i.e., federalism of
the provinces model of economic governance as prevalent in Australia,
India, Mexico, and Pakistan, among others. The political order in these
latter countries has blocked local governments from assuming their due
role as the primary agents of the people providing oversight on the
shared rule and as facilitators for network governance to improve the
economic and social outcomes. Such a role of local government is also
critical to international competitiveness and growth as demonstrated by
the experiences of China, Japan, Korea, and the Nordic countries. This
paper outlines reform options for multi-order governance to conform with
the new world economic order. The paper elaborates the role of local
governments under ‘glocalised governance’—the new vision of multi-order
governance—and argues that growth and economic prosperity of nations in
the coming decades would critically depend on how quickly political and
institutional impediments to the new (or the oldest?) paradigm of local
governance are overcome. The paper concludes that path dependency makes
such radical reforms infeasible in countries with strong provincial
governments run by feudal, military, and industrial elites.
Liberal Democracy and the Political Management of Structural Adjustment in India: Conceptual Tensions in the Good Government Agenda