Introduction

In 2015, Lao People’s Democratic Republic (Laos) adopted an amended constitution that created the Local People’s Assemblies. The local governments are empowered to adopt legislation, make decisions on fundamental issues at the local level and monitor the state organizations under their jurisdiction,[1] and adopting plans for development and budget at the provincial level.[2] The constitution also guarantees universal, equal, direct suffrage and secret balloting in the local elections.[3] Bui suggested that the 2015 amendment was to “facilitate the improvement of the socialist constitutional system which in turn promotes the improvement of the material well-being of the living conditions of the local people”[4] whereas the creation of the local assemblies was a significant departure from the socialist principle of “democratic centralism”.[5] In this paper, I argue that decentralization in Laos predates the 2015 amendments but was recently fostered by the need for economic development and international donors. Meanwhile, together with the party-state system, decentralization is used by the central government to strengthen its local control.

Decentralization in Laos deserves our attention because, firstly, decentralization and authoritarianism are contradictory. With the idea that decision-making should be participatory and located closer to the people[6], democracy is strongly associated with decentralization.[7] However, authoritarianism intuitively restrains political competition and centralizes power to maintain its rule. Secondly, Laos was one of the most decentralized authoritarian countries[8] even before the constitutional change, as the provinces accounted for 45% and 56% of government expenditure and revenue respectively in 2006.[9] Thirdly, decentralization in Laos is characterized as “continued swings in the direction of reform” and no other country has experienced the alternation of decentralization and centralization over a short period.[10] As a single-party authoritarian country, why did the central government adopt decentralization?

Theories of Decentralization in Autocracies

Decentralization refers to the “transfer of authority, responsibility, and resources from the center to lower levels of administration.”[11] It allows public services to be provided by individuals or agencies that are closer to the public. While it is popular in democratic or federal states, underlying decentralization in authoritarian countries are the contradicting political and economic pressures.[12] Decentralization in autocracies is a result of balancing political risks, benefits brought by increased governance efficiency and economic competitiveness, and the incentives of globalization.

Decentralization may threaten authoritarian governments by devolving power that can gradually develop into political opposition or demand in further decentralization.[13] With new resources, regional elites may also build their patronage system and challenge the center, making it difficult for the center to renegotiate power.[14]

However, non-democratic states are incentivized to decentralize due to three main reasons, namely (1) the need for modernization and economic development, (2) political response to state crises and (3) external pressure.[15] Local authorities can provide more tailored services by better recognizing local needs whereas competition among regional authorities can boost innovation and efficiency. The center may also appease regional powers to secure its power by making limited concessions[16] and decentralize power to diffuse popular discontent. Also, decentralization has been supported by international organizations and donors to improve governance while globalization also fosters the process by requiring better governance and economic growth.

Why does LDPR adopt decentralization?

Lao’s case presents a complex reality, as it was influenced by its history, political system and low level of economic development. Unlike China’s initiative to decentralize during the economic reform,[17] decentralization in Laos started before implementing the New Economic Mechanism in 1986, as a response to the precarious situation threatening the survival of the party-state.[18]

The multiple attempts to centralize and decentralize power by the Lao People’s Revolutionary Party (LPRP) since taking power in 1975 showed that decentralization resulted from the weak central authority hampered by the legacy of regional powers. In the 18th and 19th centuries, the country was divided into 3-4 separate kingdoms and the regional loyalties guarded their presumed rights during the colonial period.[19] After gaining power, the LPRP could not unify its control[20], which eventually led to the failure of collectivization and the collapse of the economy. As a result, the provinces were required to be self-sufficient and thus given more autonomy.[21] Admitting the failure of socialism, the country started the transformation into a market economy in 1986. Central planning was abandoned, and provincial governments were empowered to control their budget and policies. The weak central government could not enforce effective monitoring systems during decentralization, while the provincial government lacked the expertise to govern and deliver services.[22] By the late 1980s, decentralization resulted in administrative chaos and a patronage system in the provinces.

Responding to the chaos obstructing economic reform, the party adopting the 1991 constitution and attempted to re-centralize power by abolishing the local councils and administrative committees and introducing the concept of “a unitary deconcentrated state”, i.e., the center organizes and direct services and the local governments coordinate and supervise. However, as Stuart-Fox suggested, “though decentralization increased provincial autonomy, re-centralization reduced it very little.”[23] With the party-state system, much of the re-centralization effort was driven by the Party by not the government. Becoming provincial governors in the new system, Provincial Party secretaries also gained new power by being brought into the Central Committee and able to influence central policy. The abolition of local elections also empowered them by ensuring the appointment of preferred candidates in the subordinate levels[24]. In other words, re-centralization in the 90s did not transfer power from the provinces to the center but strengthened the party control and the regional party elites.

Since the early 2000s, there is a new wave of decentralization with the new budget law and the law on local governance.[25] One explanation is that international NGOs and agencies promoted it with the aim of stimulating regional development and reducing poverty, while the government worked with the international partners to achieve the goal of graduating from the list of least developed countries by 2020.[26] For example, the UNDP introduced an “inclusive, community-led and local development” project in 2015 with reference to Korea’s Saemaul Initiative.[27] Meanwhile, to accelerate rural development, the Lao government also launched in 2012 the Sam Sang Initiative, which was suggested to be the motives behind the creation of local councils in 2015.[28]

Nevertheless, the de facto effect is the strengthened LPRP’s control over local governance and political legitimacy. In the name of decentralization, the Sam Sang Initiative in fact aims to strengthen links between party resolutions and policy implementation. Meetings and training sessions were organized as a practical impact of the initiative. Besides, though local elections were introduced, the LPRP maintained its control at the local level by controlling the candidacy of the local election.[29] The Laws on Local Administration also requires the local administration to serve under “democratic centralism” and report to the party committee.[30] Culturally, as the party is understood as the state even by rural villagers in the most remote areas,[31] the rule of the LPRP is unthreatened.

Conclusion

The above discussion showed that decentralization has been long adopted by the Lao government initially because of the low capacity of the center but was recently pushed forward by the international partners and used as a discourse to gain political legitimacy. The development of the party-state and the patronage system have enabled LPRP to maintain its rule under the wave of decentralization.

[1]Amended Const. of Lao People’s Democratic Republic art. 76 (2015).

[2]Ibid art. 77 (2015).

[3]Ibid art. 4 (2015)

[4] Ngoc Son Bui, ‘Constitutional amendment in Laos’ (2019) [Oxford University Press] 17 International journal of constitutional law 756

[5] Ibid 769

[6] Mark Turner, ‘Central-Local Relations: Themes and Issues’ in Mark Turner (ed), Central-local relations in Asia-Pacific : convergence or divergence? (Macmillan 1999) 2

[7] Mohammad Arzaghi and J. Vernon Henderson, ‘Why countries are fiscally decentralizing’ (2005) 89 Journal of Public Economics 1157; Daniel Treisman, ‘Explaining Fiscal Decentralisation: Geography, Colonial History, Economic Development and Political Institutions’ (2006) [Routledge] 44 Commonwealth & Comparative Politics 289; Leonardo Letelier S, ‘Explaining fiscal decentralization’ (2005) 33 Public finance review 155

[8] Aurel Croissant and Philip Lorenz, Comparative Politics of Southeast Asia : An Introduction to Governments and Political Regimes (1st ed. 2018 edn, Springer International Publishing 2018) 129

[9] Bounlonh J Soukamneuth, ‘The political economy of transition in Laos: From peripheral socialism to the margins of global capital’ (PhD Dissertation, Cornell University 2006)

[10] Juan Luis Gomez, Jorge Martinez-Vazquez and Cristian Sepúlveda, ‘Reining in Provincial Fiscal ‘Owners’: Decentralization in Lao PDR’ in Decentralization in Developing Countries Global Perspectives on the Obstacles to Fiscal Devolution (Edward Elgar Publishing 2011) 192

[11] G. Shabbir Cheema and Dennis A. Rondinelli, ‘From Government Decentralization to Decentralized Governance’ in G. Shabbir Cheema and Dennis A. Rondinelli (eds), Decentralizing Governance: Emerging Concepts and Practices (Brookings Institution Press 2007) 1

[12] Irina Busygina, Mikhail Filippov and Elmira Taukebaeva, ‘To decentralize or to continue on the centralization track: The cases of authoritarian regimes in Russia and Kazakhstan’ (2018) 9 Journal of Eurasian studies 61 63

[13] Pierre F. Landry, Decentralized Authoritarianism in China: The Communist Party’s Control of Local Elites in the Post-Mao Era (New York: Cambridge University Press 2008) 10

[14] Ibid 8

[15] Busygina, Filippov and Taukebaeva 63

[16] Jennifer Gandhi, Political institutions under dictatorship (Cambridge University Press 2008)

[17] Landry

[18] Croissant and Lorenz 128

[19] Martin Stuart-Fox, ‘Politics and Reform in the Lao People’s Democratic Republic’ [2005] Asia research centre working paper 126 17-8

[20] Norihiko Yamada, ‘Legitimation of the Lao People’s Revolutionary Party: Socialism, Chintanakan Mai (New Thinking) and Reform’ (2018) [Routledge] 48 Journal of Contemporary Asia 717 721

[21] Stuart-Fox 18

[22] Ibid 19

[23] Ibid 22

[24] Ibid 20

[25] Gomez, Martinez-Vazquez and Sepúlveda

[26] Buavanh Vilavong, ‘LAOS IN 2015 A Pivotal Year in Moving Towards the AEC’ (2016) Southeast Asian Affairs 169

[27] United Nations Development Programme, Project Brief – Saemaul Initiative Towards Sustainable and Inclusive New Communities (ISNC) (2017)

[28] Bui 769

[29] Supitcha Punya, ‘Restructuring Domestic Institutions: Democratization and Development in Laos’ (DPhil Dissertation, Humboldt University of Berlin 2019) 64

[30]Law on Local Administration art. 5 (2003)

[31] Simon Creak and Keith Barney, ‘Conceptualising Party-State Governance and Rule in Laos’ [2018] 48 Journal of Contemporary Asia 693 698