Decentralisation and broader political economy

In the last few decades most countries around the world have attempted some form of decentralisation, and since 2011 Myanmar has begun its own (limited) decentralisation process. There are strong political pressures for further decentralisation, and this is expected to happen at some point in the future. Decentralisation can offer a range of possible benefits for Myanmar, including: making government more accountable, responsive, and efficient in providing services to its citizens; reducing abuses of power by officials (including corruption); improving political stability and reducing conflict; and raising political competition. However, an inappropriately designed decentralisation process can result in negative effects such as: subnational policy-making serving the interests of local elites; overspending by subnational governments resulting in large deficits and macroeconomic instability; increased corruption; and lower quality public services.

This paper outlines the current form of fiscal and administrative decentralisation in Myanmar, and the associated priorities for reform. It subsequently goes on to explore the relationship between fiscal decentralisation and three crucial related issues: i) political decentralisation; ii) natural resources; iii) conflict and the peace process.