By Katharina Mewes
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Additional info for Decentralization on the Example of the Yemeni Water Sector: Did Decentralization from 2000 to 2009 Improve the Urban Water Supply and Sanitation in Yemen?
The new-institutionalism theory assumes that institutions operate in an environment which consists of other institutions. Therefore, every institution is influenced by the broader institutional environment. While institutions influence the behavior of the actors, the actors with their decisions and actions impact the arrangement of the institution (Schulze 1997:8). Further, this research paper focuses on the sub-field of newinstitutionalism that is closely linked to the rational choice theory, the socalled rational choice institutionalism.
Young et a1. " Tiebout's eonstruet of "voting by feet" (1956), which is the most important element of his thesis regarding deeentralization, can be seen as a normative ex post argument. The argument states that, through deeentralization, the preferenees eoneerning publie goods of different groups within the population ean be identified, loeal governments ean produee these goods and the groups ean pay tax priees that eorrespond to the benefits from these publie goods. Tiebout illustrates the point that effieient loeal governments eompete to attraet "perfeetly informed" individuals who move freely between loealities and ehoose the one that offers their optimal bundle of publie serviees and taxes.
Thus, the transaction costs of changing some institutions are lower than others. North and Ostrom argue that institutions of higher hierarchical levels are more costly and difficult to change than institutions Iower in the hierarchical Ievel (North 1990, cited in Wegerich 2002: 19, Ostrom 1990). In order to analyze a decentralization process it is important to distinguish between the powers of decision-making. These powers can be differentiated as (1) the power to create rules or modify existing rules, (2) the power to make decisions about how particular resources are used, (3) the power to implement and ensure compliance to new or altered rules, and (4) the power to adjudicate disputes that arise in the effort to create or modify mies and ensure their compliance (Agrawal/ Ribot 2002: 7).