CFFN (Canada Foundation for Nepal)

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The Law of Rule: Centralized, Decentralized and Distributed Systems


"Prepared for CFFN, NRN-Canada, and NRNA as an input to the constitutional development process in Nepal"
Ottawa, Canada
2009 April 03


Many debates on the merits and demerits of centralized, decentralized and distributed system of governance have been carried for a long time in Nepal but very few actually understand what these words really mean. Consequently, the best debating "experts" are able to sway our opinions based on rhetoric than on the basis of rational logic. Despite carrying profoundly different meanings and implications to the society we tend to view these word almost interchangeably, especially when it comes to decentralized and distributed systems. It has been noticed that even highly educated and politically veteran people also lack critical scrutiny of the implications of those systems. Sometimes, even scientific literature fumble. This article aims to clarify these terms in a hope that it will help people select social and political systems that represent the aspirations of the general public.

Centralized System

Centralized systems have been in use for a long time such as in master and slaves based systems. The centralized systems directly control the operation of the individual units and flow of information from a single centre. All individuals are directly dependent on the central power to send and receive information, and to be commanded. The working arrangement of a centralized system is shown in Figure 1.A. In this system, individual units (represented by nodes in the figure), like local governments, are directly controlled by the central power. The local governments are forbidden to coordinate and work-together among themselves. Instead, each of them is obliged to follow the order from the centre.

Centralized, Decentralized and Distributed System Figure 1 Centralized, Decentralized and Distributed Systems (Paul Baran, 1964)

Decentralized System

The concept of decentralised system was developed after centralised systems. This system gave rise to the birth of hierarchical civil and military systems and, therefore, the birth of empires. In this system, political power is decentralised in a hierarchical order such that there are middle tier powers between the central and local nodes. For example, Panchayat regime in Nepal had decentralised the system by creating centre, regions, zones, districts and local bodies for the hierarchical control. In such decentralised system, one authority controls others directly below it and becomes controlled by the one directly above it. In doing so, the central authority can control the entire system. The working arrangement of a decentralised system is shown in Figure 1.B. Here too, the local governments are forbidden to coordinate and work-together among themselves. A decentralised system is also known as layered system or hierarchical system.

Distributed Systems

Although this was the oldest system, its practice was dismantled by modern empires, which found the decentralised system to be in their advantage. The advantage was in the ability to divide and rule. The implementation of distributed system came into existence in modern times as a tool for the freedom seeking but militarily less-powerful entities to withstand the threat of an empire. The newly independent states in North America, for example, united together using distributed protocol to form the United States of America so that they could collectively counter the then British Empire.

Unlike a centralised system, which can be ruined by means of destroying a small number of nodes at higher up in the hierarchy, a distributed system has no centre. And to not have to depend on a centre for the functioning is the most prized asset of the distributed system. All nodes in a distributed system are networked on the basis of equality, independence, and cooperation. The lowest level nodes (authorities) can network with their neighbouring nodes using commonly agreed protocols, thereby building strong network that can be many times more resilient than centralised or decentralised systems. The greatest advantage of this system is that the resilience of the system increases with the increase in the number of participants. The working arrangement of a distributed system is shown in Figure 1.C. Here, the local governments are sovereign to coordinate and work-together among themselves. A distributed system is also known as layer-less system or hierarchy-less system. A distributed system uses lateral (horizontal) protocols based on equality of relationship as opposed to a decentralized system, which uses hierarchical protocols where a higher node must always control the lower ones.


The centralized and decentralized systems thrive on the use of authority. The concept of authority and subjugation inhibits the treatment of all humans as equal, which is against the principle of a truly democratic system. These systems emphasize the vertical relationship and weaken the horizontal ones. Consequently, the mutually-beneficial communication and collaborations among local authorities do not exist. On the contrary, distributed systems operate inherently in the principle of justice and equality of all. And this has been the ultimate goal of democracy, which in-practice has ironically been ridiculed by most of the existing systems in the world.