Balancing Institutional Power: The Integration of Centralisation and Decentralisation

What is Institutional Power?

Our world is built upon institutions, and they are central to our lives in a plethora of domains. They manage your education, your finances, your governance, and are also paramount to law, healthcare and, in a communal sense, religion. Institutions sometimes evolve and often reproduce themselves into new variants of themselves, but they have, almost always, been established for a vast stretch of time – enough to give them significant social, and often legislative, authority and credibility. For example, universities are a form of institution that is, and has been for a while, fundamental to our lives. They are the highest and most accepted institution in the domains of education and academia. Undeniably, universities are the authority in this area and carry largely undoubted credibility across the board. This can be seen not just in universities but in all other societal domains, such as courts with law, churches with religion and hospitals with healthcare.

Beyond their established authority and credibility, key institutions are often spread out and intertwined in a hierarchical network to amplify their authority, trustworthiness and domain of influence in a centralised and consistent manner. In particular, this is clear in law where we see an arranged and evident hierarchy of courts across the spread of a government’s jurisdiction. At the lowest level are the local or district courts which deal with the basic or minor issues, beyond this are the state courts which deal with the next stage of these issues relating to state law, with greater influence to governance and local communities. Then, at the highest end, is the federal court which deals with disputes of greater national importance – involving federal law and the constitution. Another example of this structure can be seen with religions, for instance Catholicism. The institution of the Church operates, at the lowest level, with local parishes that are involved in local religious communities, and run by pastors and other similar clergy. This continues with the Diocese, run by Bishops, the Ecclesiastical Province, run by archbishops, and then eventually up to the universal level. This includes the Holy See (Vatican City) and the Papacy which are run by the Pope, who oversees the entire scope of Catholicism – governing them according to doctrine. Overall, the central influence, authority and breadth of institutions is clear, and it can be seen that they are vital to a functioning society. Yet, as our world evolves, these institutions must inevitably transform as well. It is crucial that we approach this adaptation with care and foresight, ensuring their resilience and preserving their foundational societal role that sustains order and functionality within society.

Balanced Institutions or No Institutions 

You don’t have to peer too deep into our modern society to see the change occurring, much of which has been sparked by the internet and similar digital innovations. In education, we can see the rapid rise of online education, often high-quality and significantly cheaper than traditional education, as well as lacking geographical restriction. In finance, we are currently seeing the rise of cryptocurrency – a decentralised and unrestricted form of financial transaction .In religion, we have not seen a technological change, but instead a social one. Religion has, in the light of increasing scientific knowledge (among other things), drastically declined in popularity, as well as hugely diversifying – one single religion does not, and will not in the future, hold nearly as much power as it often has in its glory. It seems clear that trend is set to continue, not just in these domains but many others, such as law. This offers the potential for enormous decentralisation, possibly even bordering on anarchism. The path this offers, of decentralisation and democracy, should not be blocked nor denied – but the importance of institutions, typically centralised, must be recognised to maintain societal order and functionality.

How can a balance be created between centralisation and decentralisation? 

What will this new world look like?  

I think that this may be best visualised as a building, involving both its structural foundations and essential infrastructure, as well as its architectural design. For instance, one may well visualise financial institutions in this manner. All buildings must have a strong structural foundation to keep stable, safe and firm. In terms of finance, this role falls toward central and somewhat traditional institutions. Even if evolved from our common perception toward them, it is important that banks, in some form, are kept central and influential. In times of turmoil, whether social, political or economic, it is paramount that we have a central banking system to steer society clear from disaster. Not only in turmoil, but even when experiencing minor tremors, it is important to have a system to keep society safe, structured and in order. Yet even so, we must accommodate for the changing world to improve our lives, society and economy. This is the architecture – that which separates the Burj Khalifa from an old and unexciting building, such as a typical warehouse. So it is here we find the place for our modern decentralised and democratic systems. Above the structural and central foundations we may construct a building that inspires awe – where we may implement new systems, such as cryptocurrencies, that will bring us a better society.

Furthermore, we must note that it is not just financial institutions where this applies. Instead, this analogy must be generalised and applied in many, if not all, of the institutions familiar to our world. Particularly, this system is of great value to governments – it is something imperative to ensure well-functioning societies. At the structural foundation, governments must ensure a certain standard (which must be enforced by some functional government body), in terms of all domains of their governance, such as the economy, that must be upheld. Only upon this can we implement, as an addition, the will of certain political parties who support their particular ideology, such as socialism, to attempt to further grant that nation the ability to flourish. Overall, it is evident of the need to adapt institutions, and to do so both carefully and with the right vision in mind.