In the last two decades, many developing and transitional countries have experimented with decentralization reforms. Much of Southeast Asia stood in contrast to this global trend for a long time; before the 1990s, most countries had highly centralized polities. Today, even non-democratic states such as Vietnam and China are experimenting with reform of their central-local relations in order to enhance the legitimacy and effectiveness of their political systems.

The aim of this chapter is to give an overview of recent decentralization reforms and explore whether and how decentralization impacts on democratic governance in the region.

DECENTRALIZATION AND DEMOCRATIC GOVERNANCE

In the past quarter of a century, decentralization has become an integral element in the standard template of democracy promoters around the world. It is supposed that decentralization supports the modernization of public administration, that it leads to economic growth and poverty reduction and that it contributes to democratic consolidation (Rondinelli and Cheema, 2007; Cohen and Peterson, 1999, p. 20).

However, the exact nature of this relationship is still not clear and the value of decentralization and the consequences it has for the broader democratic system and society at large are far from uncontroversial (Treisman, 2007). First, the controversy can be attributed to the lack of theoretical knowledge about the proper relationship between decentralization and democracy. Secondly, decentralization is a ‘complex concept’ and catch-all term for what proves in practice to be a highly differentiated and differently motivated range of political, economic and administrative practices and institutional reforms.

Democratic decentralization means the devolution of decision-making authority to local citizens or their democratically elected representatives. Advocates of democratic ecentralization emphasize a number of assumed positive consequences of demo-cratic decentralization. These can be sum-marized in five arguments.

First of all, the liberal tradition, which has its origins in the Federalist Papers, mainly stresses the importance of vertical checks and balances resulting from decentralization and elected sub-national governments (Madison, 1999, p. 270; Hamilton, 2001, p. 282).

Secondly, the communitarian or conservative tradition goes back to Alexis de Tocqueville. According to de Tocqueville, local self-rule and township democracy was the key to democratic freedom (de Tocqueville, 1969, p. 192).

Thirdly, following the arguments of Alexis de Tocqueville, Robert Putnam and others have emphasized the idea that democratic governance requires a solid foundation in well-functioning institutions of participatory self-governance (Putnam, 1993).