How devolution undermines development

When former prime minister Costas Simitis was national economy minister in 1985, he received a very interesting offer from a Taiwanese company to build a ship breakup facility and a steel mill in the area of Kavala, in Macedonia. His ministry keenly studied the proposal but abandoned it when a local mayor protested that the project would destroy the extensive mussel cultivation in the area. The mayor might have been right in his claim in the same way that local residents a few dozen kilometers west managed quite a few years later to throw out the biggest-ever proposed foreign investment project at a gold mine in Halkidiki. However, for a country that is being steadily deindustrialized and for areas of northern Greece where unemployment is approaching a nightmarish 35 percent, it seems pertinent to ask who ultimately decides what is in the country’s best interests, the elected government or local officials who are sometimes influenced by local business interests? The question is somewhat rhetorical, for, evidently, it should be the government that makes the difficult decisions. But even it is powerless as there has never been any comprehensive zoning plan that would determine exactly where industrial concerns or wind parks may be established or take into account environmental sensitivities. Fortunately, the present government, in its drive to correct past mistakes and free the country’s productive forces, is working feverishly to draft a national zoning plan that will be ready in the spring. But if we wish to be realistic we must take into account all obstacles to development that local government can pose in the name of devolution – which tends to become a form of authority more bureaucratic and oppressive than the state itself. PASOK’s former economy minister Nikos Christodoulakis summed up the problem in his interview on constitutional revision with Kathimerini last Sunday: «It is inconceivable for someone to wish to set up a small manufacturing plant or a factory somewhere in the country and to have to go through ministries, regional or prefectural authorities, the town hall, and start all over again should any of them raise any minor objection. Corruption is born through the confusion, intransparency and despair that an investor feels in such a hostile and incomprehensible labyrinth.» Of course, now the government, in view of local government elections in the fall, is now generously dispensing taxpayers’ money to local authorities, but it should be mindful that corruption in local government is double what it is in central government. Local scandals are buried because corruption there cuts across political affiliations and is reflected in the high cost of municipal projects. It is estimated that in an average municipality with a population of 5,000, there are about 100 advisers and consultants. Some of them are simply councilors, others consultants at the so-called municipal development companies. These companies add a tragicomic dimension to the issue: on one hand, the state privatizes, and on the other, municipal authorities set up public companies which as a rule are problematic, while their deficits are paid by the taxpayer. It is estimated that a total of about 100,000 consultants serve in the country’s municipal authorities. They are well paid and have a decisive say in the country’s development. What, I wonder, does this vast bureaucracy have to do with any real devolution of authority, and in what way would devolution be adulterated if the central government retained responsibility for investment issues that are of interest to all its citizens? This is why a constitutional revision could really modernize the country.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.