Examples of decentralisation programmes by S119sl3

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									                    The UK Local Government Alliance for International Development
                             c/o Local Government International Bureau
                     Local Government House, Smith Square, London, SW1P 3HZ
                                          0207 664 3102




                                Decentralisation and poverty reduction
                     A contribution by the UK Local Government Alliance for International Development
                                          to the MDG Action Plan, November 2004


    “Decentralised governance for development (DGD) encompasses decentralisation, local governance, and urban/rural
    development…DGD is a key area of democratic governance which is crucial to attaining human development and the
                                                 MDGs” UNDP, 20041

Summary

This submission has been compiled following consultation with the UK Local Government Alliance for International
Development. The Alliance is a network of local government bodies, local authorities, NGOs and community
organisations working together to boost local authorities’ involvement in international development.

Many governments have embraced decentralisation as a means to fight poverty in their countries. However, local
governments are generally not given adequate support to permit them to deliver even essential services effectively.
Donor governments alike often overlook local government’s importance. Consequently, the regard with which this
important public institution is held is diminished. But, local democracy continues to thrive in many countries, with voter
turnout rates often above those in the UK. This is an indication that local government is a vehicle that can and should be
delivering much of what is asked of it, but this can only be a realistic expectation if it receives the support it requires.
The role of local government and the services it is responsible for delivering are central to the development agenda and
the attainment of the Millennium Development Goals.

Policies which support decentralisation are increasingly being recognised as an effective means to help enable poverty
eradication and sustainable development. This includes the UN Secretary General’s ‘Cardoso’ panel of eminent persons
on ‘UN-Civil Society relations’ whose recent report recognises the “special contribution of local authorities and other
organisations” in UN policy making and supporting the implementation of global development goals2.

The following paper makes recommendations in favour of incorporating decentralisation policies into the MDG Action
Plan. The recommendations address five broad areas:

      1.   Effective decentralisation
      2.   Engaging the poor
      3.   Local capacity building
      4.   Finance
      5.   A sustainable future




1
 UNDP Practice Note: Decentralised Governance for Development http://www.undp.org/policy/docs/practicenotes/dgdpnintra.doc
2UN Secretary General’s Panel of Eminent Persons on UN-Civil Society relations report: http://ods-dds-
ny.un.org/doc/UNDOC/GEN/N04/376/41/PDF/N0437641.pdf?OpenElement
1. Effective decentralisation

For decentralisation to be effective it needs to be driven by common principles of good governance. For example, the
European Charter of Local Self Government outlines the scope, boundaries, financial resources, administrative
supervision involved in local self-government. It provides an effective legal framework for decentralisation which could be
adapted for use by governments internationally. Similarly, UN Habitat’s “Principles of Good Urban Governance” are
characterized as “sustainability, subsidarity, equity, efficiency, transparency and accountability, civic engagement and
citizenship, and security”. Such principles should be recognised and supported by the MDG action plan. The plan should
detail how regional and national systems could provide appropriate assistance and a coherent framework for
establishing effective systems of local governance.

Recommendations:

        Instituting the right values – Core principles of effective decentralisation, such as good local governance,
         human rights, sustainability and pro-poor orientation, should be recognised and encouraged
        Enabling local government - Decentralisation is required in both regulatory powers (ability to enforce local
         guidelines, policies, and create revenue through taxation and fees) and resources (finance, technical,
         management and governance capacity)
        Local and central government partnership - Involvement of the local level in national processes, policies,
         strategies, reporting and planning is strongly advised

2. Engaging the poor

A report by the World Bank about Uganda’s Poverty Reduction Strategy (PRS) indicates that Decentralization helped
expedite the implementation of equalization grants to enable districts to meet locally identified poverty priorities”3. Other
heavily indebted poor countries’ have been encouraged to support decentralisation processes in their PRSs. For
example, Bolivia’s PRS focuses specifically on:

    1) Decentralization;
    2) Improving the governance and management aspects of a wide range of government agencies;
    3) Support to civil society to monitor progress in the Poverty Reduction Strategy, such as public disclosure and
       accountability at local and national levels4.

According to PRSP Watch, Bolivian NGOs assessing their PRS process conceded that the participatory process was
“having an impact inside society that promoted democracy at local level. For example, Indigenas and smallholders were
elected chairpersons of local councils, monitoring committees, etc. In addition, civil society's independent participatory
process could be regarded as representative, offering a sound basis for the further process”5.

Both Bolivia and Uganda’s PRS processes, along with Rwanda’s strategy, are reviewed in more depth in a paper by
Jaydeep Biswas6. The paper indicates however that countries need move beyond general consultation of local
communities to actually targeting the poorest to engage them in the process. It gives a more favourable view of the
process in Rwanda, stating “Rwanda utilised the PPA [Prioritising Public Action process] to organise the poor. The
experience of PPA in Butare (a province of Rwanda) is exemplary, where poor organised to analyse, plan and sustain
collective action… the poverty diagnosis of the two most ‘celebrated successes of poverty reduction model’ (Bolivia and
Uganda) do not have a trace of the ‘voices of the poor”.” The report gives a clear recommendation regarding “the
importance of human rights and popular participation in government through a bottom up approach to democratisation”.

Recommendation:



3 Uganda’s PRS - http://www.worldbank.org/poverty/strategies/uganda.htm
4 Bolivia’s PRS -
http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/BOLIVIAEXTN/0,,contentMDK:20014960~menuPK:322299~p
agePK:141137~piPK:141127~theSitePK:322279,00.html
5 PRSP Watch - Assessing the PRSP in Bolivia - http://www.prsp-watch.de/index.php?page=countries/bolivia.php
6 J. Biswas (2003) Multilateralism and state responsiveness: The case of Poverty Reduction Strategy Papers.

http://info.worldbank.org/etools/docs/Term%20Paper%20Final.doc

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        Involving the poor - Directly engaging the poor in decentralisation processes is vital for effective poverty
         eradication, as exemplified in Rwanda’s PRS and elsewhere. This approach should be clearly reflected in the
         MDG action plan, recognising that it is the poor that need to own and be a part of finding their own solutions.

3. Local capacity building

A report by the Netherlands Ministry of Foreign Affairs recognises the importance of administrative capacity building as a
part of the process of decentralisation. “Decentralisation demands fundamental changes not only in the administrative
culture, but also in society. In general, local authorities are not strong in developing countries, but in due course they will
have to be the ones driving local development forward and giving substance to effective poverty reduction.”7

Elected local government officials and staff have a number of areas where capacity building is required to enable poverty
eradication and sustainable development locally. The MDG action should outline how these areas should be supported
though national local government associations, municipal networks and cooperation between cities, in addition to
national and donor support.

Recommendations:

        Capacity building of local leadership - Capacity building of local government leaders is crucial to achieve full
         understanding of the implications of various options for service delivery, including privatisation and partnerships
        Political and governance skills – enabling local officials and officers to be effective in sustainable governance
         and tackling locally relevant MDGs in the short to long-term
        Technical practitioner support – targeted capacity building is needed by key local practitioners e.g. planners,
         environmental health officers, sanitation and waste service providers, financial administrators
        Participatory approaches - Building participation skills in local government is required, to support active
         community involvement in planning, decision-making and service delivery. Training should focus on
         establishing: transparent, participatory, decision-making; civic dialogues; negotiation skills; conflict
         management; consensus building
        Information for decision-making - Support is required to strengthen local capacity for data collection and
         analysis to enhance monitoring, reporting and decision making. This would also help provide better information
         for national government analysis and decision-making

4. Finance - Enhancing local autonomy

Financial autonomy is a core element of decentralisation and subsidiarity8 as it can enable greater:

        Efficiency: better reflecting local priorities
        Accountability: establishing closer relationships between service providers and recipients
        Manageability: encouraging competition and innovation in service providers9

Agencies like UNDP support fiscal decentralization as a core governance component of its poverty programmes e.g. in
Bolivia, Ghana, Nepal and Uganda. There is a need to improve mechanisms for mobilising local fiscal resources and
local spending10. This includes training around local financial administration, revenue generation and accountability. The
MDG Action Plan needs to call for additional support from governments and external donors in the following areas
outlined below11:

Recommendations:

7 Netherlands Ministry of Foreign Affairs (2002) Decentralisation and Local Governance. Human Rights, Humanitarian Aid and
Peace Building Department, Good Governance and Peace Building Division. June 2002
http://info.worldbank.org/etools/docs/library/8790/Decentralisation%20and%20Local%20Governance%20june02.doc
8 Shah, Anwar (1999) Expenditure Assignment. Decentralization Briefing Notes, World Bank
9 Ebel, Robert (2001) Decentralization: Intergovernmental Relations. Presentation for the Intergovernmental Fiscal Relations and

Local Financial Management, World Bank http://www.worldbank.org/wbi/publicfinance/documents/PowerPoint.pdf
10 UNDP (1998) New Ways of Financing Poverty Reduction. Workshop B. First Forum of the World Alliance of Cities Against Poverty

Proceedings: 12-14 October 1998 Lyon, France http://www.undp.org/hiv/mayors/worldalliance/part3_3_2.htm
11 UNDP (2000) Ch.5 Governance: The Missing Link. UNDP Poverty Report: Overcoming Human Poverty.

http://www.undp.org/povertyreport/chapters/chap5.html

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        Development of tools and mechanisms – is urgently needed to increase finance of local infrastructure (water,
         sanitation, housing etc)
        Access to finance - Mobilised access to finance locally and local revenue creation (e.g. capacity to raise taxes
         and fees) should be enabled and supported
        New mechanisms - Support for new local finance mechanisms, e.g. coordinating local government regionally
         to access funds together

5. A sustainable future

At the Johannesburg World Summit on Sustainable in 2002 governments agreed to “Enhance the role and capacity of
local authorities as well as stakeholders in implementing Agenda 21 and the outcomes of the Summit and in
strengthening the continuing support for Local Agenda 21 programmes and associated initiatives and partnerships”12.
The MDG Action Plan needs to ensure that long term sustainable development is the desired path for all poverty
eradication and decentralisation processes. It should support the following recommendations.

Recommendations:

        Decentralisation and participation – Local Agenda 21 (LA21) participatory processes need greater support at
         all levels to ensure that sustainable local action is achieved in all the MDGs.
        Sustainable consumption and production - National policies should be enacted and formal networks of local
         governments encouraged to purchase essential goods and services (e.g. transport, shelter, water and
         sanitation delivery) that meet sustainability criteria.
        Urban – rural links - National development strategies need to foster dialogue and cooperation between urban
         and rural jurisdictions, thereby encouraging greater regional coherence in tackling poverty eradication.
        Inter-municipal cooperation - Governments and international agencies should encourage local government
         networking, technical exchanges, and study visits which support learning and capacity building for long term
         sustainable development. As well as bilateral exchanges, regional and international programmes require
         additional support e.g. UNDP Capacity 2015 programme, UN Habitat Urban Governance and Sustainable Cities
         Programmes, Commonwealth Local Government Good Practice Scheme.
        Supportive institutional framework – Governments and international agencies need to provide consistent
         policy and regulatory frameworks and greater encouragement for sustainable local action.




12
   Johannesburg World Summit on Sustainable Development Plan of Implementation. Report of the WSSD 26th August to 4th
September 2002. A/Conf.199/20
http://www.un.org/esa/sustdev/documents/WSSD_POI_PD/English/POIchapter11.htm

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