Problems and Prospects of Decentralization in Bangladesh
Subject: Modern Civilization | Topics: ,

1. Introduction

Decentralisation is a global theme. During last three decades scholars have advocated Its inclusion in the reform agenda of countries after countries. The approach to decentralisation has not been uniform in all countries. Variations have resulted due to Political pressures and changing economic circumstances. All these turn have considerably influenced the nature of public administration in the countries concerned. Strong arguments have been put forward to initiate a  process of rethought in terms role and objectives of public administration to effectively meet some critical challenges.

These are: managerial, quality, democratic,  professionalism  and responsibility.

Managerial  challenge is to move away from single actions to processes and management of apparatuses required for performing such processes. Challenge of quality includes both

satisfaction of those who are  served  and  effectiveness,  cost-efficiency and  productivity  of administrative action. Democratic challenge involves creation of an administrative system that is accessible to all citizens. Challenge of professionalism is premised on finer distinction between administration and politics and enhancing the autonomous power of permanent officials of the state in such areas as direction of offices, use of resources and  adoption of acts to ensure their autonomous status. Challenge of responsibility  concerns  the capability  to  meet  appropriate  social demands. Though the challenges are overlapping their importance cannot be overemphasized. All the challenges are indicative of an uncertain time in the context of a borderless world and shrinking resources and increasing demand or effective service. In this context decentralisation has come to occupy a preeminent position in many countries. The paper is an attempt to review theoretical concepts and approaches in decentralisation and analyse reform efforts in Bangladesh to reorganize government offices and autonomous bodies focusing specifically on two forms of decentralisation, i.e., deconcentration and delegation. In the process rationale and forms of decentralisation are discussed. In the conclusion measures have been recommended to improve the quality of administrative decentralization in Bangladesh.

Decentralization or decentralisation is the process of dispersing decision-making governance closer to the people and/or citizens. It includes the dispersal of administration or governance in sectors or areas like engineering, management science, political science, political economy, sociology and economics. Decentralization is also possible in the dispersal of population and employment. Law, science and technological advancements lead to highly decentralized human endeavours.

“While frequently left undefined (Pollitt, 2005), decentralization has also been assigned many different meanings (Reichard & Borgonovi, 2007), varying across countries (Steffensen & Trollegaard, 2000; Pollitt, 2005), languages (Ouedraogo, 2003), general contexts (Conyers, 1984), fields of research, and specific scholars and studies.” (Dubois and Fattore 2009)

A central theme in decentralization is the difference between a hierarchy, based on: authority: two players in an unequal-power relationship; and an interface: a lateral relationship between two players of roughly equal power.

The more decentralized a system is, the more it relies on lateral relationships, and the less it can rely on command or force. In most branches of engineering and economics, decentralization is narrowly defined as the study of markets and interfaces between parts of a system. This is most highly developed as general systems theory and neoclassical political economy.

2. Definition

Decentralaization means

To distribute the administrative functions or powers of (a central authority) among several local authorities.

a. To bring about the redistribution of (an urban population and industry) to suburban areas.

b. To cause to withdraw or disperse from a center of concentration: decentralize a university complex; decentralize a museum. To undergo redistribution or dispersal away from a central location or authority.

A decentralized organization is one in which decision making is not confined to a few top executives but rather is throughout the organization, with managers at various levels making key operating decisions relating to their sphere of responsibility. Decentralization is a matter of degree, since all organizations are decentralized to some extent out of necessity. At one extreme, a strongly decentralized organization is one in which even the lowest-level managers and employees are empowered to make decisions. At the other extreme, in a strongly decentralized organization, lower-level managers have little freedom to make decisions. Although most organizations fall somewhere between these two extremes, there is a pronounced trend toward more and more decentralization.

“A decentralized system is one which requires multiple parties to make their own independent decisions”

In such a decentralized system, there is no single centralized authority that makes decisions on behalf of all the parties. Instead each party, also called a peer, makes local autonomous decisions towards its individual goals which may possibly conflict with those of other peers. Peers directly interact with each other and share information or provide service to other peers.

An open decentralized system is one in which the entry of peers is not regulated. Any peer can enter or leave the system at any time. Due to this and the fact that peers are autonomous with possibly different goals, the system may be exposed to a number of malicious attacks. A well-known example of such attacks is in the case of p2p file-sharing applications where malicious peers disguise viruses and trojans as reliable resources. Some of these critical threats are discussed below.

In the absence of a centralized authority, each decentralized peer must safeguard itself against such attacks. Decentralized trust management provides an effective measure to counter such threats.

3. Theory of Decentralization

Some political theorists believe that there are limits to decentralization as a strategy. They assert that any relaxation of direct control or authority introduces the possibility of dissent or division at critical moments, especially if what is being decentralized is decision-making among human beings. Friedrich Engels famously responded to Bakunin, refuting the argument of total decentralization, or anarchism, by scoffing “how these people propose to run a factory, operate a railway or steer a ship without having in the last resort one deciding will, without single management, they of course do not tell us”.

However, some anarchists have, in turn, responded to his argument, by explaining that they do support a (very limited) amount of centralization, in the form of freely elected and recallable delegates. More to the point from the majority of anarchist perspectives are the real-world successes of anarchist communities, which for the majority only ended when they were defeated by the overwhelming military might of the State or neighboring States. All in all, we do not know what a truly decentralized society would look like over a long period of time since it has never been permitted to exist, however the Zapatistas of Mexico are proving to be quite resilient.

In “On Authority“, Engels also wrote of democratic workplaces that “particular questions arise in each room and at every moment concerning the mode of production, distribution of material, etc., which must be settled by decision of a delegate placed at the head of each branch of labour or, if possible, by a majority vote.”

Modern trade unions and management scientists tend to side strongly with Engels in this debate, and generally agree that decentralization is very closely related to standardisation and subordination, e.g. the standard commodity contracts traded on the commodity markets, in which disputes are resolved all according to a jurisdiction and common regulatory system, within the frame of a larger democratic electoral system which can restore any imbalances of power, and which generally retains the support of the population for its authority.

Notable exceptions among trade unions are the Wobblies, and the strong anarcho-syndicalist movement of Spain. However, a strategy of decentralization is not always so obviously political, even if it relies implicitly on authority delegated via a political system. For example, engineering standards are a means by which decentralization of supply inspection and testing can be achieved—a manufacturer adhering to the standard can participate in decentralised systems of bidding, e.g. in a parts market. A building standard, for instance, permits the building trades to train labour and building supply corporations to provide parts, which enables rapid construction of buildings at remote sites. Decentralization of training and inspection, through the standards themselves, and related schedules of standardized testing and random spot inspection, achieves a very high statistical reliability of service, i.e. automobiles which rarely stall, cars which rarely leak, and the like.

In most cases, an effective decentralization strategy and correspondingly robust systems of professional education, vocational education, and trade certification are critical to creating a modern industrial base. Such robust systems, and commodity markets to accompany them, are a necessary but not sufficient feature of any developed nation. A major goal of the industrial strategy of any developing nation is to safely decentralise decision-making so that central controls are unnecessary to achieving standards and safety. It seems that a very high degree of social capital is required to achieve trust in such standards and systems, and that ethical codes play some significant roles in building up trust in the professions and in the trades.

The consumer product markets, industrial product markets, and service markets that emerge in a mature industrial economy, however, still ultimately rely, like the simpler commodity markets, on complex systems of standardization, regulation, jurisdiction, transport, materials and energy supply. The specification and comparison of these is a major focus of the study of political economy. Political or other decision-making units typically must be large and leveraged enough for economy of scale, but also small enough that centralised authority does not become unaccountable to those performing trades or transactions at its perimeter. Large states, as Benjamin Franklin observed, were prone to becoming tyrannies, while small states, correspondingly, tended to become corrupt.

Finding the appropriate size of political states or other decision-making units, determining their optimal relationship to social capital and to infrastructural capital, is a major focus of political science. In management science there are studies of the ideal size of corporations, and some in anthropology and sociology study the ideal size of villages. Dennis Fox, a retired professor of legal studies and psychology, proposed an ideal village size of approximately 150 people in his 1985 paper about the relationship of anarchism to the tragedy of the commons.

All these fields recognize some factors that encourage centralised authority and other factors that encourage decentralised “democracy”—balances between which are the major focus of group dynamics. However, decentralization is not only a feature of human society. It is also a feature of ecology.

Another objection or limit to political decentralization, similar in structure to that of Engels, is that terrestrial ecoregions impose a certain fiat by their natural water-circulation, soil, and plant and animal biodiversity which constitutes a form of (what the United Nations calls) “natural capital”. Since these natural living systems can be neither changed nor replaced by man, some argue that an ecoregional democracy which follows their borders strictly is the only form of decentralization of larger political units that will not lead to endless conflict, e.g. gerrymandering, in struggle between social groups.

4. Forms of decentralization

4.1. Introduction

The transfer of responsibilities and resources involves different relationships between the central administration and the organizations to which the transfer is made. The nature of these relationships, and the objectives of the transfer, determine the form of decentralization. It is useful to distinguish the following five major forms (Figure 1.3):

  • Deconcentration
  • Delegation
  • Devolution
  • Partnership
  • Privatization

Five forms of decentralization

Three factors help to explain the differences between various forms of administrative decentralization with respect to the objectives which decentralization policy wishes to achieve:

· Production efficiency, that is the cost and quality of services delivered

· Allocative efficiency, that is, the extent to which the services delivered reflect local demand

· ‘Who delivers’ vs. ‘who pays’ for the services which should be provided

The various forms of decentralization place different emphases on the above three factors.

4.2 Deconcentration

The primary objective may be improving the production efficiency of the administration with an improvement in the impact of the services delivered as a second priority. This may be achieved by introducing administrative and cultural changes within the existing unitary structures, shifting responsibility, decision-making authority and resources for front-line operations only to the managers of local units. Public delivery and public financing coincide within a single administration. Central government personnel and procurement policies apply. In these cases decentralization takes the form of deconcentration.

Deconcentration assigns specific functions and tasks performed by the staff of the headquarters of central administrations to staff posted in peripheral locations within the national territory. Staff, equipment, vehicles, and budgetary resources are transferred to units such as regional and district offices. The managers of these units are given authority for autonomous decision making regarding the operations, which were previously taken at headquarters, or needed clearance from headquarters.

4.3 Delegation

Similar objectives regarding production and allocative efficiency can also be achieved by separating the production or delivery from the financing of a specific public service, introducing a modification of the existing structure of the public administration. Responsibility and resources for implementing specific tasks and delivering certain services are transferred to a public agency, a state enterprise, a private enterprise, or an NGO under a contract that may provide some autonomy in interpreting the tasks assigned under the contract. In this case, decentralization takes the form of delegation. Examples of delegation include: a national water supply company that may be entrusted with the responsibility to plan, construct, and operate water supply schemes (over a certain size) across the country; a water basin development authority; an agricultural research institute; a strategic grain reserve; a project management unit. Many delegated agencies are not bound to follow the government administration procedures in personnel and procurement matters. Delegation can be used by any level of government, and does not apply exclusively to the delivery of national services.

4.4 Devolution

If the primary objective is to improve allocative efficiency (with the improvement of production efficiency as a second priority), this can be achieved by opening the system to the influence of the beneficiaries of the services delivered. The primary objective requires that beneficiaries participate, normally through representatives elected to the local government, in planning the delivery of services, and in the evaluation of the services provided. In these cases, significant changes in the system of public administration are introduced, and decentralization takes the form of devolution. Local governments are assigned the responsibility of deciding which services should be provided on a priority basis and to whom. Representation of, and accountability to, beneficiaries are provided through the election mechanism. Public production or delivery and public financing coincide, but the lower levels of government normally receive only part of the funding required from the central government, the balance must be raised from local tax revenue and cost recovery.

Devolution implies changes in the political and fiscal dimensions of government. Local governments to which authority and resources are devolved acquire the power of autonomous initiative and decision making with respect to setting their own rules, goals and objectives. They also acquire the power of elaborating and implementing their own policies and strategies, and of allocating resources to different activities within the domain assigned to them. In addition, they often are given authority to raise financial resources, through taxes, and in some cases, to borrow on the capital markets.

Devolution can be implemented to varying degrees depending on the degree of accountability (control) which the central administration retains over the local government. This applies particularly to the use of resources transferred from the centre, but also through other means, such as the functions assigned to the central government representatives posted at regional and district level (Commissioners, Prefects, Commandants de Circle, etc.). If the accountability process, that is the control of the central administration, interferes with the autonomy of decisions of the local government, or the transfer of resources is insufficient to cope with the responsibilities transferred in a reasonable way, there is inadequate devolution. It is useful to look at the three different forms of decentralization of the public administration from the point of view of the combination of the degree of autonomy and of the locus of accountability, which is illustrated by the matrix in Figure 1.4.

Figure 1.4 Autonomy, accountability and forms of decentralization









inadequate devolution

effective devolution

4.5 Partnership

Similar objectives of allocative and production efficiency, and a higher degree of decentralization, can be aimed at by transferring the responsibility for planning and delivery of services to CSOs. Whilst devolution to local governments brings the delivery of public services one significant step nearer people, the distance between a village and the district administration is still considerable, when seen from the point of view of the villagers. District and municipal administrations naturally address, on a priority basis, problems which are common to many communities, such as providing primary education, health care, water supplies, market centres, or feeder roads which serve several villages. This also tends to concentrate service delivery in the urban centres and in larger settlements of rural areas. The limited capacity of local governments is often overburdened in the discharge of these responsibilities; so the needs of people at lower level tend to be neglected. The influence of wealthy and more powerful individuals on district and municipal administrations can be strong and not always in the direction of providing more services to village communities. Furthermore, certain services such as local group training, community organization, promotion of rural financial services, funding self help projects and support to income generating activities are often better planned and delivered by organizations other than local governments.

Devolution measures applied to CSOs go beyond the local government level, reaching that part of the system of governance that is outside the various levels of the public administration and delegated agencies. The role that CSOs may play in decentralization can be considerable, given the size of their contribution to economic, social and human development and this role can be particularly important in rural areas. Partnership arrangements may involve a leading NGO, or an intermediary agent of a more complex nature (an association established under private law), in which local common interest groups and associations, the NGOs operating in the area and representatives of local governments join together as members with equal rights.

Delegation vs partnership

This case differs from delegation to NGOs of responsibility to deliver specific services planned by the government under contract. In the former case the CSOs formulate their own strategies and projects to achieve the objectives within the framework of general government policies; they decide which services or projects they wish to take responsibility for. Public financing contributes to private delivery. The central government transfers only a share of the funds required, the balance consists of voluntary contributions from members of the CSOs and of other private sources mobilized by the CSOs. Government personnel and procurement procedures do not apply. In these cases, which are relevant to rural development, devolution takes the form of a partnership in development.

These intermediaries plan the allocation of available resources, which must be approved by all members. They also channel funds, transferred by the central government and collected from private sources, to the grassroots organizations. These implement their own projects and provide training and other support services. Partnerships provide a useful mechanism for central governments to reach specific target groups who may not be reached by devolution to local governments, without interfering with the priorities of the members of the target groups, and thus with the allocative efficiency of devolution. Government must design special instruments, first, to make resources available to the CSOs, matching the resources mobilized by their members and, second, to empower them to implement the activities that are recognized as leading to the common objectives of the CSO and government.

4.6 Privatization

If the central government is willing to give up a direct hand in policy formulation and control it may attempt to achieve the objectives of both production and allocative efficiency by transferring the ownership and/or control of the public service’s assets to the private sector. In this case, decentralization takes the form of privatization. Typically, privatization also implies that the services are allocated through the market system with the consumer paying for the service being delivered but government may still subsidize or tax certain services to achieve its objectives.

‘Privatization’ in the sense that the term is defined by Adam et al. (1992) can be achieved by:

“(i) the outright, or partial, sale of assets by the state;

(ii) the transfer of assets to the private sector under leasing arrangements; and

(iii) the introduction of management contracting arrangements” .


Bangladesh  is  an  administered  polity.  Bureaucratic culture is characterized by centralization of authority, elitism, authoritarianism, corruption, lack of accountability and transparency, resistance to change and subordinate status of citizens vis-a-vis civil servants.

Centralization of authority is noticed in the tendency to concentrate power at the top of the hierarchy leaving little scope of decision making at lower levels. A centralized bureaucratic edifice has been built around four closely related factors, i.e., the secretariat system, the systematic preference for generalists, the cadre system and rigid and formal patterns of rank hierarchy. Elitism is pervasive in the civil service and like centralization a legacy from the days of the British Raj (rule). This is reflected in how different services have been organized within civil service system and how civil servants interact with citizens. Closed career concept nurtures elitism.

Emphasis on age and seniority in promotion, red tapism, down- ward flow of communication, unwillingness to hear critical feed- back from subordinates all indicate the existence of authoritarian tendencies among civil servants. Corruption is a dominant component of bureaucratic culture. There is a widespread feeling that corruption has been institutionalized in the civil service. No one denies its existence. Differences in opinion exist in terms of its nature, level and extent. Accountability system in the civil service is not effective. Internal mechanisms, i.e. hierarchy, rules and regulations do not serve the intended purpose. External mechanisms like ministerial supervision, parliamentary committees, and press have not worked well. Transparency still remains alien to bureaucratic culture. Decision making process is kept out of the purview of clients and anything of significance is marked secret and guarded closely. Non-transparent nature of decision making is linked to both lack of accountability and bureaucratic corruption.

Resistance to change is all pervasive. Major administrative reform initiatives have failed mostly due to resistance from within resulting a civil service that is mostly inefficient, incompetent, and lethargic and suffer from tunnel vision.

The administrative system encourages total and complete dependence of citizens on civil servants. This dependency has adversely affected the status of citizens vis-a-vis civil servants. Changes in the behavioural orientation has not taken place among civil servants thereby a tendency exists among them to treat citizens as subordinates.

In the backdrop of prevailing bureaucratic culture a brief picture of the size, structure and management of the civil service is in order. Little over 0.93 million people are working in the civil service of Bangladesh. These individuals are in place in ministries/divisions. There are some 48,000 sanctioned class I officer posts, but class I civil servants in posts number 39,862 of whom 35,043 are male and 4,819 are female. Of the total class I officers 28,446 are cadre officers and 11,416are non- cadre officers. There are 29 cadres

in the civil service. The structure of the civil service indicates a rigid pattern of rank which corresponds to occupational type and hence the horizontal classification is based on a number of factors including levels of responsibility, educational requirements and pay range. Management of the civil service is conducted within an integrated framework. The Ministry of Establishment (MOE) acts as the central personnel agency of the government. It lays down broad policies, principles and regulations for managing the civil service  and initiates  measures  for  employee  welfare  and  for improvement of procedures and techniques relating to personnel administration. The Bangladesh Public Service Commission (BPSC), a constitutional body, also performs important personnel functions pertaining to civil service. One of the major functions of BPSC is to conduct tests and examinations for the selection of suitable persons for appointment to the civil service.


In  this  section  the  discussion  focuses  on  extent  and   level   of administrative decentralisation in Bangladesh The powers and functions of departments/directorates and autonomous bodies/ corporations are reviewed vis-a-vis role and authority of ministries/ divisions from the perspective of deconcentratron and delegation. In order to get a clear picture of administrative deconcentration, the powers and functions given to  ministries/divisions  and   departments/ directorates   and autonomous bodies/corporations by office memos and what these public organizations are exercising in reality, observations of two relevant administrative reform bodies are also examined. Recommendations of these bodies to improve upon the existing situation are also reviewed.

There are now 35 ministries, 50 divisions, 221 departments, 131 directorates and autonomous bodies and 153 state-owned enterprises. All the ministries and divisions are collectively known as the secretariat. There is no difference between a ministry and a division, except that a ministry may be constituted with one or more divisions and headed by a cabinet minister. Structurally, a ministry/ division is divided into wings, branches and sections in order to en- sure disposal of its business. Departments and  directorates provide executive  direction  in  the implementation of policies laid down by ministries/divisions, act as repository of technical information and advice ministries/divisions on technical matters. Compared to a

directorate a department is a bigger unit and headed by a director general. A directorate is headed by a director. A subordinate office is a territorial unit of a department and acts  as  its  field  establishment. Public corporations/autonomous/semi-autonomous bodies are set up under law to perform certain specialized public functions or to implement specific development tasks.


Official documents like Rules of Business and office memos clearly point out  what  should   be   the  functions   and   responsibilities   of ministries/divisions on the one hand and departments/directorates on the other.  But  reality  is  very  different.    Roles  and  functions  of a ministry/division  on  paper  is  limited  to:  (a)  policy  formulation,(b) planning, (c) evaluation of execution of plans, (d) legislative measures, (e) assisting the minister in the discharge of his responsibilities to the parliament, (f) personnel management at the top level and (g) any other matter as may be determined by the prime minister from time to time.

The Establishment Division, Government of Pakistan in a memo dated 5 January 1960 gave heads of attached departments a number of administrative powers. In 19 June 1976 Establishment Division issued a letter to all concerned to adhere to the directives contained in 1960 office memo. The memo in effect directed that barring policy- making, planning, direction and control, all executive functions should be performed by the departments. Heads of departments were given specific authority over of class I officers (excepting first appointment and discipline) classes II,III and IVofficers and employees appointment, posting, transfer, increment, disciplinary and appeal matters.


The extent of delegation of powers – administrative and financial – in practice to departments and directorates is rather limited. Two reform bodies found that even the powers given could not be exercised by the departments/directorates.  The  Public  Administration  Study  (PAES) Working  Group  on  Ministry-Department Relationship  studied  six ministries Agriculture, Commerce, Establishment,  Finance,  Industries and Planning and eighteen departments and directorates under them. The PAES Working Group found (1) key constraint on effective departmental operations and the major cause of delays in their activities was a lack of adequate delegation of authority over personnel and financial matters though delegation of administrative and financial powers  made  by the government to  departments  contained  in Establishment Division letter of 19 June 1976 and Ministry of Finance Memo dated 29 July 1985; (ii) in many cases, departments had to pass matters to the ministries for decisions when these involved routine, non-policy decisions which they should have been able to decide. Administration Reorganization Committee (ARC) conducted surveys to ascertain actual activities of three departments and one corporation focusing on such variables as activities of ministries/divisions, departments and corporations, method of decision making, decision making power, mutual relationship, accountability and transparency to obtain first hand knowledge about the nature and extent of delegation. It may be mentioned that during ARC’S tenure it reviewed 224 public organizations for rationalization. The findings of the ARC in regard to delegation of powers are as follows:

1) Little policy direction/guidance from ministries/divisions is provided.   All functional   and   implementation   activities of departments/directorates     are     controlled     by concerned ministries/divisions resulting in centralization of power in the latter and adverse impact of it on the activities of the former

2) Everything    including    small    matters    is sent    by departments/directorates to ministries/divisions as proposals for decisions.  This allows departments/directorates to avoid their responsibilities.  Heads of departments/directorates cannot be held accountable because they are not given power of decision making and implementation.

3) In  ministries/divisions  officials  who  are  neither  experts  nor possess technical knowledge scrutinize technical proposals received from departments/directorates.

4) Proposals sent from departments/directorates are received at lower levels in ministries/divisions and then sent to successive higher levels for decisions. This practice among others requires opening of files at both ends and thereby deployment of additional manpower.

5) Proposals signed by heads of departments/directorates are examined by and comments made directly by officials two levels junior in the ministry/division. This practice is considered by officials in the departments/directorates as an affront to their dignity.

6) There is a practice on the part of lower level officials in ministries/divisions to send directions and issue repeated reminders. This unnecessary interference results in extra work load for departments/directorates. Also personnel in these bodies remain busy with less important matters and spend more time, labour and money on these rather than concentrate on important issues.

7) In reality most heads of departments/directorates  have  no authority to post class I officers, issue order pertaining their crossing of efficiency bar, and approve their earned and foreign leave. The heads power in the arena of transfer is restricted up to officials of the 9th grade. Officials of departments/directorates are therefore dependent on concerned ministry/division for their posting, transfer and leave and in the process spend Considerable of time pursuing these matters and consequently neglecting their duties.

8) Though the scope of developmental activities has increased com- pared to 1985 the financial powers of departments/directorates have decreased to a significant extent. By an order promulgated by the Ministry of Finance dated 12 April 1994 the financial powers of heads of departments/directorates in the area of works and goods have been reduced from taka 5 crore to taka 2 crore.

9) The power of appointment of all project-related class I officials including the project directors is in the hands of the ministry/ division while the responsibility of all developmental projects lies with the concerned department/directorate. This situation affect quality of project work and raises questions about the allegiance of the project staff including the project director,

10) Heads of departments/directorates have to seek approval of the concerned ministry for purchase of vehicles and office equipments even if these   are   in   line   with   existing   rules and   included   in   approved organogram and table and in spite of their inclusion in the budget.


The legal framework that governs the relationship between ministry and corporation consists  of Guidelines  of  1976,  Resolution of  1983, Ordinance 48 of 1986, Ordinance VII of 1987, Ministry of Industries Notification of 9 July 1988. We discuss the two important ones below. Cabinet Division’s Guidelines of 1976 has important bearings on the relationship between ministries and corporations. The salient features of Guidelines are:

1) Functions  of  the  ministry  are  confined  to  policy  making, appointment  of  chairman/directors/members,  approval  of budget, appointment of auditors and review of audit reports and evaluation of performance.

2) Functions of a  corporation  are restricted to its  smooth  and efficient operations  within  the  limits  of  respective  laws. rules  and regulations.

3) The corporation must submit performance report periodically in such form as may be prescribed by the government,

4) Financial control will be exercised by the ministry through the annual budget.

5) Once the budget is approved, corporations will he free to manage  their finance. Resolution 1983 of Cabinet Division contains certain directives on ministry-corporation relationship. These are :

1) The  ministry/division  shall  not  interfere   in  the  day-to-day management of autonomous and semi-autonomous bodies and shall limit its control within the ambit of the law.

2) The ministry shall scrupulously respect the operational freedom of corporations.


In spite of the legal coverage the corporations do not enjoy delegated powers to any significant degree. This is evident from the comments of ARC. It states that review of administrative and financial powers of corporations indicate that in cases  of purchase  of vehicles and equipments and acquisition of land like department/directorates they have to seek approval of the concerned ministry/division rather than from their respective boards. In a similar vein, the ARC adds that power of approval of budget, structure and list of equipments, bonus of companies within corporations is vested with relevant ministry/ division rather than with their boards. Also power of the chairman and the board of a corporation in terms of works and goods and appointment of foreign and local consultants is minimal. It appears that autonomy in public corporations is absent. Ministerial control extends over personnel, financial, production  and marketing functions of corporations.


After  reviewing the  unsatisfactory situation  in terms  of relationship between  ministries  and  divisions  on  the  one  hand and departments/directorates and corporations on the other both PAES and ARC made a number of specific recommendations to alleviate the situation. The PAES volume on ministry-corporation include the following recommendations.

a) Guidelines of 1976 defining the relationship between government and corporations should be implemented.

b) Resolution  of 1983  concerning  operational  autonomy  of the corporations be adhered to.

c) Effective participation of chief executives of the corporations in the decision making process both at the corporation and ministry level be ensured.

d) Once the  budget is  approved and the target is fixed, the corporations should have full operational authority subject to adequate cash flow position. The recommendations of ARC is based on the assigned responsibilities of ministries/divisions and departments/corporations and findings of surveys conducted  and  aimed  at  increasing  the efficiency  of ministries/divisions and  departments/corporations. The recommendations are intended to redistribute administrative and financial powers and responsibilities between ministries/divisions and departments/corporations.

1) Ministries/divisions are to confine their activities to only policy formulation and policy guidance with regard   to departments/ directorates/ autonomous  bodies  under  them. Other executive, functional and implementation responsibilities and power be vested with departments/directorates/ autonomous bodies. Heads of departments/autonomous bodies should ensure that those proposals which do not fall within the purview of policy formulation and policy guidelines not be sent to ministries/divisions.

2) For all implemented/completed tasks at departments/bodies level the heads of departments/bodies to be made directly responsible to the concerned minister and secretary and they have to share equally with them the responsibility for success and failure of tasks performed. In July at the beginning the financial year head of the department/body will be required to provide along with financial and annual statement a report about his organization’s administrative activities, i.e., appointment, transfer, training, discipline, purchase, sale, repair etc. And send to the concerned secretary/minister.

3) Technical  proposals  received  in  ministries/divisions  will not require any technical examination as for accuracy as heads of departments/bodies will be held responsible for such proposals.

4) Excepting first appointment and disciplinary measures heads of departments/bodies will have total administrative power with respect to class 1 and class II officers posting, transfer, pay increment, crossing of efficiency bar and all types of leave excepting foreign leave.

5) Within the  parameter  of approved organogram and  list  of equipments and availability of money sanctioned in the budget, the heads of departments/bodies will have power to purchase all kinds of vehicles and equipments.

6) In view of the extensiveness of developmental activities and rate of inflation the financial power of heads of departments/ bodies may be raised from taka 2 crore to taka 7 crore to imple- ment projects. Likewise, the financial power of heads of departments/bodies be increased from taka 75 lac to taka 1.50 rore in the appointment of local and foreign consultants.

The ARC also made certain other recommendations to transfer some powers from ministries/divisions to boards/heads of corporation to make the latter autonomous in real sense of the term. These powers included:

i) power to purchase all vehicles and equipments provided inclusion of those in the list of approved organogram and equipments and monetary provision exists in the budget and adherence to government’s purchase guideline and standardization order ensured;

ii) Power to approve the budget of the corporation and companies within its jurisdiction;

iii) Power to approve organization and equipment list of companies within the purview of the corporation;

iv) enhancement of financial power of the chairman and the board from taka five crore to taka twenty crore for works and goods in the implementation of development projects; and

v) Financial power of the chairman of the corporation and the board should be raised to taka 1.50 crore and taka 7.50 to appoint local and foreign consultants.


There is a clear unanimity at this juncture about the meaning of decentralisation and its forms. Decentralisation as a concept is useful as it deals with critical issues of power and authority. Key to the understanding of a particular form of decentralisation is the distribu-

tion of power among different levels. In the process exercise of decision making authority becomes crucial. Deconcentration and delegation as forms of decentralization provide us with a handle to gauge the nature and extent of transfer of authority within an administrative system from higher to lower level organizations and organizations which are not directly under the control of a central government ministry.

For administrative delegation to become reality in Bangladesh several changes must take place. First, political commitment needs to be demonstrated by concrete actions at both macro and micro aspects of decentralisation, i.e. political and administrative. Regular vigilance by politicians to see that this happens will help. Second, a consensus among broader segments of the population need to be garnared so that support for decentralisation becomes unstoppable.  Third, a sea change in the attitude of civil servants of all types must take place so that each understands and accepts his/her responsibilities and refrains from withholding authority that belongs to some one at another level. For this effective training and appropriate indoctrination will be required. Nothing short of a ‘mental revolution’ on the part of the civil servants will bring about a dent in the present tendency to centralise power at the hands of few and at a higher level. The motivation for decentralisation is an important determinant of the real degree of autonomy for civil servants operating outside the ‘centre of power’.


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