The Council of Grand Justices' constitutional interpretation regarding the Taipei City Government's postponement of borough warden elections earlier this year has caused a major dispute.
The interpretation contains two very important points. The first is: "The postponement of borough warden elections is a matter of local autonomy. The central government shall respect legitimate decisions made by local governments, but in case of wilful abuse or other illegal circumstances, the central government may cancel or change such decisions."
From a constitutional perspective, the Grand Justices are actually very clear on the division of powers between central and local governments. The next task is for the Executive Yuan -- which is responsible for running the country -- to design a mechanism that both respects and is capable of monitoring decisions made by local governments. Unfortunately, the justices' second point was: "The methods for the monitoring of local autonomy enshrined in the current Law on Local Government Systems (地方制度法) do not include mechanisms for communication and coordination between autonomous bodies and monitoring institutions. From the perspective of constitutional systemic guarantees of local autonomy, the legislative body shall follow the spirit of the Constitution and increase the number of appropriately designed mechanisms."
The interpretation thus unambiguously blames the flawed system designed by the Legislative Yuan for the fact that central and local government interpret things to their own advantage. This example of unregulated forms of governance is a fine example of legislation that can be used to suit anyone's purposes.
The crux of the problem is that there is a lack of legal mechanisms for central government authorization and the control of issues involving matters of local autonomy. In other words, did the central government authorize the postponement of borough warden elections under the principle of local autonomy? If so, how did it go about doing so? If it didn't, then the local government is of course guilty of wilful abuse. But if the central government's non-authorization violates its responsibility to "respect local government," then central government has no understanding of the "control" that follows "authorization." This lesson in management tells us that excessive control will affect organizational efficiency and increase the incidence of unnecessary disputes. So the issue of the central government's responsibility for Taipei's postponement of the borough warden elections revolves around questions of "authorization" and "control." These questions would seem to be the key to designing future rules of the game.
Let us use the "control" method from organizational theory to solve this crucial issue. According to William Ouchi of the University of California, there are three types of organizational control methods. Of these, the bureaucratic control method is the type best applied to the operations of government departments. Unlike business organizations, government departments do not compete for profit and market share. This is why control methods place more importance on policies and assessments of budgetary efficiency. The Council of Grand Justices' interpretation, for example, is that the central government can only monitor matters of local autonomy in terms of their legality. It can only review whether local government measures break the law. The central government, as the top-level administrator, therefore primarily adopts strategic planning for the distribution of resources, before auditing the resources and assessing their efficiency. Local government, the mid-level administrator, carries out effective management according to the resources allocated to it. The areas of responsibility for both levels are quite clear -- except for resource allocation and monitoring activities, top level administrators basically delegate management responsibilities to the senior ranks of the next organizational level down. These are the essential points of "balancing authorization and monitoring," which is part of the control concept emphasized by organizational theory.
If we therefore view local autonomy as authorized by central government, then central government should work on resource allocation and monitoring. It should not work on management of local government. What's more, local governments are management teams elected by the people, in accordance with the principle of local autonomy. They are also monitored by their councils. If, however, a local government, in accordance with the law, makes administrative decisions adopted by way of agreement at the local council but is still criticized by the central government for doing so, then top-level administrators are unwilling to delegate. This would immediately raise two questions. First, should the state be organized in such a way that the central government has jurisdiction over matters of local autonomy? Second, is the central government capable of exercising jurisdiction over so many local governments?
One problem is that the issue involves constitutional regulation of local autonomy. It must therefore be solved through legislation. The Cabinet may also set new game rules through organizational design. There is nothing wrong, for example, with limiting the scope of so-called "special incidents" and other topics if such limitations are clear and passed in accordance with the law. A second problem involves regional differences and the extent of organizational management. Taiwan has two special municipalities -- cities directly administered by the Cabinet -- and many other counties and cities. This is a massive managerial responsibility. The different scenarios thrown up by the separate elections in each local jurisdiction are also beyond the central government's powers. It is therefore necessary to have "authorized" local governments under the central government. This is why the design of the organizational structure must be decided by the size of the organization.
The use of organizational theory only partly explains the dividing lines between the responsibilities of central and local governments. If the "corporate governance" concept recently initiated by Taiwanese businesses can be appropriately applied to government areas, then the management and control mechanisms of "corporate governance" theory could be a good point of reference for the design of future "national governance" mechanisms.
All in all, it's better to see the dispute as a momentary pain in the process of developing Taiwan's governmental structure, than to define it as a war of words over the powers of central and local governments. A bit less political wrangling and a bit more administrative effort using the "corporate governance" concept to analyze this issue on the basis of organizational management will make for a more objective approach. It will make it easier to forge a consensus and reach agreement. We need the rule of law, and we also need a form of social justice that clearly separates right from wrong. This dispute will not be a bad thing if it can be used to highlight the urgent need for structural reform in Taiwan's government.
Pan Tung-yu is an associate professor in the Department of Business Administration at Soochow University.
Translated by Perry Svensson
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