jurnal ilmu administrasi negara - perpustakaan universitas riau

all tiers of a federal state and consequently the distribution of competences. The financial
relationship between the central unit and the lower tiers are of paramount importance to
the federal system as a whole. Financial stability and equalization as well as co-operation
between the tiers are the basis for an effective federal system.
As mentioned earlier, the idea of balancing the contrasting forces of
centralization and decentralization are central to both federal and unitary state.
According to Wildasin (Sharma, 2003), the right degree of decentralization depends on
what it is we are considering decentralizing and on the particular economic, historical,
political and other circumstances within which decentralization is contemplated. The
crucial issue is to identify which level of decentralization is appropriate for each kind of
activity.
Delegation of authority, development planning, and Agency Problems
Decentralization policy, both in federal and unitary state, whether in term of
politics (devolution) or management, refers to the concept of delegation of authority from
federal or central government to local government. According to Lupia (2001),
delegation occurs when some people or organization ask others to perform tasks on their
PDF Creator - PDF4Free v3.0
behalf. Governments use delegation to increase the range of services that they can
http://www.pdf4free.com
provide. With delegation, by contrast, national governments can address a wide range of