In a thought-provoking event organized by NextGenSL in Colombo, Philip Gonzalez, Senior Director, Asia Pacific at Forum of Federation, delivered an insightful speech on the economic advantages of devolution of power. The gathering brought together a diverse audience, including young social and political activists, journalists, and civil society representatives, all eager to understand the potential economic benefits of decentralization.

Dr. Sujata Gamage, Senior Research Fellow at LirneAsia, moderated a panel discussion following Gonzalez's speech, enriching the discourse and fostering a deeper understanding of the subject.

Gonzalez's address began by providing a clear definition of devolution as the transfer of powers, responsibilities, and resources from the central government to subnational governments. These subnational entities, often elected and endowed with varying degrees of autonomy, possess their own administrative apparatus, assets, and the ability to independently generate revenue through mechanisms such as taxation, fees, and user charges.

Diving into the core of his presentation, Gonzalez underscored the virtues of devolution, emphasizing its capacity to create more responsive and accountable governments. Devolution, he noted, brings governance closer to the people, facilitating better representation of local needs and priorities. He delineated three driving motivations behind devolution.

Firstly, devolved systems are well-positioned to spur economic growth by streamlining bureaucratic processes and aligning public services with local requirements.

Secondly, devolution promotes social cohesion by fostering local decision-making and inclusivity, making citizens feel more directly engaged in the governance process.

Apart from the above two, the tailoring of services to meet specific needs, coupled with increased support and heightened efficiency and effectiveness, stands as a hallmark of devolved systems.

Drawing from international experiences, Gonzalez highlighted the case studies of Indonesia, Scotland, and South Africa as key examples. In Indonesia, the ambitious devolution policy initiated in 1998 aimed to bring government closer to the people and has significantly improved economic services and growth over the years. Scotland's tax devolution empowered local governments to design their tax base and expenditure, leading to better tax collection, more efficient spending, and higher public satisfaction. South Africa's devolution journey, focusing on promoting local and regional economic growth and social cohesion, has achieved remarkable success, improving basic services and boosting regional economies.

Gonzalez emphasized that sub-national governments play a crucial role in delivering economic development outcomes that directly impact citizens' daily lives. By enabling hands-on decision-making, devolution drives growth, empowers regions to harness their unique competitive advantages, fosters economic sectors, and ensures inclusive participation.

Furthermore, local investment, business retention, and expansion are best managed at the regional and local level, thanks to accessibility, speed, and efficiency. Gonzalez highlighted the importance of political backing and commitment, as well as varying approaches to devolution depending on institutional quality and readiness.