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In the Marxist literature, democratic centralism refers to the organization of a Leninist party that allows members participation and voice, but compels them to follow the party line once a decision has been made. A more contemporary (and liberal) meaning of the term, which is the one discussed in this entry, refers to democratic countries that are organized along unitary lines or that are characterized by a high degree of fiscal, political, or administrative centralization.
Centralization is one of the distinguishing features of the modern state. While some European proto-states before the sixteenth century and the great empires of Asia successfully extended their rule over large territories, those political organizations were decentralized arrangements, characterized by a great deal of local autonomy in, for example, the financing of the state through tax farming or the exercise of political authority through satrapies, tributary provinces, and other accommodations of local rule. A fundamental shift occurred in Europe in the modern era, particularly during the eighteenth century, as nation-states were pressed to centralize authority in order to collect sufficient revenues to wage increasingly expensive wars. Alexis de Tocqueville (1805–1859) can be credited as the earliest theorist of democratic centralism. Perhaps the most important aspect of his analysis was to note that government capacity is endogenous to centralization: to the extent that administration becomes more centralized, local authorities become less empowered and more ineffective.
Early democratic experiences were both centralized, as in France and England, or highly decentralized, as in the United States and Switzerland. Hence there is no necessary link between centralization and democracy. Democratic centralism is often equated with a unitary, as opposed to a federal, form of government. However, William Riker (1964) noted that the survival of the United States as a political unit required the creation of a centralized federalism, which could enhance the territorial scope of the country while allowing it to confront external military threats. Thus, a link between centralization and the threat of war was present in the early history of the United States, as well as in the histories of the other federations in Europe and Latin America.
In both democratic and authoritarian countries, centralization (measured through the share of fiscal resources controlled by the national government, as compared to provincial or state and local governments) increased in the course of the nineteenth and twentieth centuries. However, between the 1930s and the peak of fiscal centralization observed around the world in the 1970s, local and intermediate levels of government in democratic regimes retained a larger share of revenue and expenditure authority than their authoritarian counterparts.
After the 1970s, a trend toward decentralization swept both advanced industrial democracies and developing countries. Decentralization has often been accompanied by the introduction of elections at the subnational levels of government, and the timing of decentralization has often coincided with democratization. This has led many observers to believe that centralism is incompatible with democratization. However, democratic countries show variations in fiscal, political, and administrative centralization through time, depending on the demands placed by citizens on various levels of government. Thus, there is no necessary link between decentralization and democracy.
- Bonney, Richard. 1995. Economic Systems and State Finance. Oxford: Oxford University Press.
- Panizza, Ugo. 1999. On the Determinants of Fiscal Centralization: Theory and Evidence. Journal of Public Economics 74: 97–139.
- Riker, William. 1964. Federalism: Origin, Operation, Significance. Boston: Little, Brown.
- Tilly, Charles. 1990. Coercion, Capital, and European States, A.D. 990–1990. Oxford: Oxford University Press.
- Tocqueville, Alexis de.  1983. The Old Regime and the Revolution. New York: Anchor.
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