Development Partners Working Group on Local Governance and Decentralisation

 

Synthesis paper on how to improve aid effectiveness in the field of

decentralisation and local governance

   

 

 Søren Villadsen  

May 19, 2011

Objectives and purposes of the study

The TOR for the present study identifies the objective for the study as

follows:

• “The purpose of the study is to identify and analyse critical issues and

challenges from improved donor coordination and to provide operational

recommendations in order to achieve greater coherence and effectiveness

in external support to Decentralisation and Local Governance.”

The TOR adds the dimension of impact to be covered by the study:

• “It will assess the implementation of the aid effectiveness principles of the

Paris Declaration/AAA in the Decentralisation and Local Governance area

and its effects on development results.”

Some remarks on methodology

• Apart from Benin, Mozambique and Peru, the present synthesis benefits

from draft input from Ghana, Uganda and information from Cambodia based

on the present author’s own experience and data collection;

• The studies in Benin, Mozambique and Peru were conducted by means of

stakeholder interviews, mostly donors, during two weeks by a consultant.

Documents, reports, laws etc. were added and presented in country papers;

• The study is thus heavily biased towards Sub-Saharan Africa;

• Inclusion of more Asian countries might have modified some of the main

findings and conclusions in the following slides;

• A more comprehensive presentation is done in the hard copy synthesis

report.

The study: Countries characterised according to local governance systems (Olowu)

A sample of countries in the different groups is provided below (country names presented in italics are added by the present author):

• Deconcentration with nominal devolution: Cameroon, Ghana, Kenya, Malawi, Zambia, Benin, Cambodia, Peru.

• Devolution: Côte d’Ivoire, Mali, Mauritius, Nigeria, Senegal, Sierra Leone, Tanzania, Uganda.

• Partial devolution (urban areas only): Botswana, Mozambique, Namibia.

• Federations: Ethiopia, Nigeria, Republic of South Africa and Tanzania.”

Comparative information on decentralisationVariable Decentralisa-

tionDeconcentra-tion

Harmonisation with sectors

Impact on local conditions

Benin One tier;Mostly political Reforms

Stronger de-concentration

Communes deliver few services

Little impact on social conditions

Ghana Multi-tier LG;Holistic princip.New decentral. reforms

Mixed D&D;Traditional leaders included

In principle for several, but no resources aligned

Mostly through ”agency – board” mechanism

Mozambique Only urban areas decentralised

In all rural and smaller urban districts

Complicated because of D&D

Improved social services, mostly for de-concentrated

Peru Multi-tier Strong D&D provincial tier

Education and health

Not known

Uganda Multi-tier; Best case?

Political and sector control

Holistic LG system

Major impact on services

Main findings: National ownership of decentralisation and local government reform

PD variable Assessment of situation 2005

Assessment of situation 2010

Most important results 05 - 10

Possible constraints

National ownership

Moderate to high (all cases)

Government ownership high: Uganda, Mozambique

Other national ownership: mixed

Moderate to high

Government ownership high: Ghana, Benin, Cambodia(?)

Ownership from other national partners mixed

New local government finance management systems;

Fine-tuning of some laws;

Free and fair elections

Most of the countries have stalled further reform process except Ghana and Cambodia;

Re-centralisation attempts in Uganda

Main findings: Assessment of alignment to government institutions

PD variable Assessment of situation 2005

Assessment of situation 2010

Most important results 05 - 10

Possible constraints

Alignment Several donors aligned with decentralisation policies, not with deconcentration Benin, Peru;

Many parallel PMUs (Benin);

“One size fits all” (examples from all cases)

Less parallel mechanisms (except Benin);

Good alignment with new financial transfer system;

Still “one size fits all” exam-ples, but fewer (Benin, Peru)

Agreement with donors on financial modalities (all cases);

Donors generally do not operate off budget (all cases);

Budget support (Benin, Mozambique, Uganda);

A few donors and most NGOs operate off budget and off plans (all cases);

Difficulties with D&D alignment (not Cambodia);

Poor geogra-phical alignment (Benin, Peru)

Main findings: The development of harmonisation

PD variable Assessment of situation 2005

Assessment of situation 2010

Most important results 05 - 10

Possible constraints

Harmonisation Some joint consultations on harmonisation (Benin, Uganda)

Still some competition among donors (Benin, Uganda)

A few joint formulation teams;

Increased harmonisation of approaches;

Regular consultations

(all cases)

Improved harmonisation;

Informal and formal Donor Groups formed and active (all cases – some existed before Paris)

No ambition to develop one joint programme for local government reform (except Cambodia)

Main findings: Managing for results

PD variable Assessment of situation 2005

Assessment of situation 2010

Most important results 05 - 10

Possible constraints

Managing for results

A comprehen-sive system not introduced for DLG

(all cases)

Systems still being developed;

Mostly indivi-dual systems (see Uganda systems)

This is on the agenda generally;

Poor or no indicator sys-tems for LG (all cases – Uganda tried, some attempts for capacity building)

Departmenta-lised public service systems not geared to local councils (all cases), so results are for sectors;

Still many PMUs (Benin)

Main findings on mutual accountability

PD variable Assessment of situation 2005

Assessment of situation 2010

Most important results 05 - 10

Possible constraints

Mutual accountability

Partly introduced;

Ex-ante control erodes decentralisation (Benin, Uganda)

Better mutual accountability, but still administrative bottlenecks (all cases)

Increased use of government financial management systems by all except NGOs (all cases)

Still different reporting formats, too high transaction costs; A comprehensive programme approach missing (all cases except Benin and Cambodia)

Country case: BeninLG structure (defined in local government laws):• From a strongly centralised governance system, Benin has since 1999

embarked on a decentralisation policy and a deconcentration of social services through 12 departments.

• Decentralisation through the creation of 77 commune councils at local level (the previous sous-prefectures) in 2003 (one-tier system).

Services:• Communes have been attributed some smaller functions but the necessary

financial transfers did not follow in the same measure – little social impact.

• The most important social services on the ground, such as health, education, water supply, etc., are still handled by line ministries.

D & D issues:• Line ministries have only deconcentrated their services by an average of 20% of

their total operations.

See Public Expenditure Review, decentralisation and public services, World Bank, Dec. 2010; see section 2.7 in the Benin country study.

Country case: GhanaLG structure (defined by Constitution):

• Ghana has a multi-tier government system. The Regional Coordination Council consists of a Regional Minister as Chairman and his Deputy or Deputies, the Presiding Member of Metropolitan, Municipal and District Assembly, the District Chief Executives, two chiefs, and the regional heads of Departments without voting rights. It is assigned administrative, coordinating and harmonisation functions.

• Below the regions there are 6 Metropolitan Assemblies, 40 Municipal Assemblies and 124 District Assemblies. For all Assemblies, there are Urban, Zonal, Town or Area Councils. Unit Committees represent the basic units of local government.

• The Assemblies consist of the DCE, 70 per cent of the members elected on a non-partisan basis and 30 per cent appointed by the President in consultation with the chiefs and interest groups in the district. Elections to all local government structures, including campaigning by the candidates, are conducted on a non-partisan basis.

Ghana (continued)

Services:

• Mix of D&D in service provision. Very limited fiscal resources to assemblies, but in principle they are holistic (5% common fund – many subtractions)

• Social impact through “agency – board” mechanisms

D&D issues:

• The government, through a process of regional, stakeholder and national consultations, has adopted a new ‘Policy Framework for Decentralisation’ and a new ‘National Decentralisation Action Plan’ both of which were launched on 30 November 2010

• A Constitutional Review Commission has been set up to propose amendments to the 1992 Constitution of Ghana most likely to affect the provisions of Chapter 20 on “Decentralisation and Local Government”

• The present constitution is extremely detailed on DLG

The Mozambique study

Structure (Constitution and laws):

• The historic basis for participatory local governments in the country, but that there is also a tradition for centralised government, and there is permanently an understandable concern for national unity, given the country’s history with an internal war only 20 years ago.

D&D issues:

• Although Mozambique shares the mix D&D with countries with a francophone past Mozambique has a different political and administrative set-up. Decentralisation relates to cities and municipalities, but not to the rural areas yet.

• Although nation building has been a major issue decentralisation and deconcentration has advanced substantially in Mozambique since the end of the war in 1991, and especially since 2006 when the present administration took office

Services:

• Complicated harmonisation because of D&D

• Mostly deconcentrated agencies can deliver substantial services

The Peru case

Structure (Constitution and Framework Law):• A multi-tier system with strong provinces. National government commitment in

enhancing decentralisation reform at central level has been weak during the 9 years, ever since Peru regained democracy, with some occasional moments of acceleration.

• Political decentralisation has been implemented; councils are being democratically elected; last regional and municipal national elections took place in October 2010.

• Substantial democracy in terms of access to economic opportunities and authority over public expenditures are still unsolved issues.

D&D issues:• Strong provincial tier. Fiscal decentralisation is incomplete yet, sub-national

governments are actually experiencing an increase in fund transfers, but because of the source of the revenue, this turns out to be heavily dependent on market prices.

Service sectors:• The decentralisation of big sectors is not clear leading to duplication e.g. in

education.

The Uganda caseStructure (based on white papers, laws and Constitution, 1988 - )• Uganda has a multi-tier government system (5 tiers, was 0-party);• The local councils at district level are holistic organisationsD&D issues • Uganda became a best case example of decentralisation and gradually

became the darling of donors on decentralisation• However, the movement or council system also included heavy political

control• At district level a relatively holistic LG system was developed• Re-centralisation (local taxes, CDEs etc.Service sector harmonisation and impact• Major impact on service management and improvement• Gradual re-centralisation of services

Some notes on CambodiaStructure: Organic Law, Policy Paper and Strategy

• Cambodia is a unitary state in which Sub-national Administrations have been established at Provincial, Capital, Khan, Municipal and District levels by the Organic Law (2008)

• The Commune/Sangkat Councils established by the Law on Commune/Sangkat Administrations (2001).

D&D issues:

• The reforms start to move away from a hierarchically-organised State administration. Under the old system the District was both an administrative and a territorial unit of the Province. Under the new system, Districts/Municipalities are autonomous administrations

• In Cambodia, the expression “sub-national administration” covers all three components: (i) an elected policy-making Council, (ii) an appointed Executive Governor and Board of Governors and (iii) an appointed administration headed by a Director.

Services:

Provided through deconcentration to this point in time

Major constraints for decentralisation: National fiscal decentralisation process

• Government and donor spending mostly on national, vertical service sector programmes

• Rather limited government transfers to local council treasuries and in the form of conditional grants

• Abolition of better yielding local taxes. In Uganda resources have been allocated, but local revenue sources have been seriously curtailed by the President’s decision to abolish the graduated tax

• Very poor local taxes (all cases)

• General and sector budget support from donors often bypassing local government

• In countries like Ghana and Benin assignment of functions to district assemblies is not followed by assignment of required fiscal means

• Weak implementation of fiscal decentralisation. Fiscal decentralisation in Peru and Mozambique is still weak

• Donor budget support to fiscal decentralisation in Benin

Constraints for holistic decentralisation: Vertical programmes and departmentalisation

• When challenges arise in service delivery the more recent response has been to centralise further (Feeder roads, Drug procurement, Secondary Education, Central appointment of Chief Administrative Officers are examples) (Uganda)

• The use of SWAPs may have reinforced vertical departmentalisation though focusing on vertical programs that neglect requirements for horizontal cooperation and coherence at LG level (Ghana, Mozambique, Benin)

• Vertical approaches minimize the availability of resources for discretional expenditures and local planning and budgeting (all cases)

• The cases from Peru, Uganda and Benin give a good illustration of the contradictions between vertical sector programmes and decentralisation

Constraint for better alignment: Poor understanding of D&D and traditional governance

• There seems to be a problem concerning some donors’ understanding of traditional authorities and D&D. There is an emphasis on the decentralised parts from donors (Benin, Peru, Cambodia, not Mozambique)

• Ghana is an interesting case in this respect. Queens Mothers and Chiefs play an important role in conflict solution at the local level. However, some major donors have refused to support this institution despite its recognition in the Constitution

• With the new reform a “District House of Chiefs and Traditional Authorities” may be established in each district (Ghana)

• Another problem is the difficulty for same donors to approach and develop deconcentrated and mixed agencies (Benin, Mozambique, Cambodia, Peru)

Constraints: Project proliferation and low effectiveness

• In several countries there has been a proliferation of projects and an over-crowding of public agencies. The main issue is that unnecessary transaction costs are draining development.

• In Cambodia a joint donor statement expressed their concern: “In Cambodia today, more than 500 projects and programmes are being implemented. In addition NGO projects are being supported by over 200 international NGOs, some in partnership with Government and approximately 500 by Cambodian NGOs and CBOs. The work associated with these activities severely strains the capacity of both Government and donors. . .” (also Benin)

• There is also often a geographical bias clustering projects in attractive regions, (Benin, Mozambique)

See Aid Effectiveness, Presented on behalf of the Donor Community by H.E. Ulrik Helweg-Larsen, Ambassador, Royal Danish Ministry of Foreign Affairs, CG meeting 6-7 December 2004.

Constraint for alignment: ”One size fits all”?

• It appears from the studies that there has been a tendency for many donors to apply a universal model for DLG support in all countries they support

• Many or most donors have their own trade mark for local governance, be it local development funds, support to NGOs, public participation in local planning etc.

• The problem seems to be that the projects are pre-designed at the donor HQs and do not necessarily fit well with the local circumstances and may lead to unnecessary transaction costs

• There are some crosscutting objectives going into all projects, which do not always fit well with local governance

• Local government is often conceived as a sector, and this is wrong and leads to misunderstandings. The holistic perspective is lost

Implementation of PD on DLG• In relation to the Paris Declaration principles there has generally been

progress, but progress in varying degrees as shown already

• On ownership: Increasing Donor consultations and donor – ministry consultations have either improved (Benin, Mozambique) or remained the same or being contentious (Uganda)

• Donor harmonisation is better because of systematic consultations, but there are still programmes developed by single donors without early consultation (Ghana). Improved donor coordination leads to aid effectiveness (Mozambique)

• Direct impact of the PD on DLG reform is today rather limited. The local government reforms were initiated long time before the PD, and donor support was offered in the spirit of alignment and good will

• Donor alignment with national systems has improved particularly in Benin, Mozambique, Cambodia

• Mutual accountability and management for results are slowly being introduced (Mozambique, Benin, Cambodia)

Reform: Strong leadership seems to be the key

• Very importantly, strong, national leadership had already designed new local government systems in the 1990s in most of the studied countries

• Support to decentralisation reforms became increasingly popular in the donor community in support of people’s participation, local development and abolition of over-centralised governance (Cambodia, before Uganda)

• Recently there have been new developments. Benin has moved towards a commitment to a decentralisation and deconcentration (and territorial management) policy, with the new National Decentralisation and Deconcentration Policy document and the creation of the corresponding Communal Development Support Fund since 2008

• In Ghana the government is preparing major steps towards a more decentralised and holistic local government system. Again, this is a result of a dedicated, political leadership

Conclusion

• Relatively good results for the PD concerning donor coordination, harmonisation and cooperation; a serious agenda in all countries

• Less positive results on alignment and complementarity; new approach needed and more ambition on further progress

• Concerning local governance impact the results are less evident. Decentralisation reforms are depending upon the national, political leadership and moves forward only when governments are ready

• Most of the LG reforms were designed and put into practice in the 1990s (with TA and fiscal donor support); since then there have been both re-centralisation and decentralisation moves

• The level of ambition to go further in the Paris process is limited

Recommendations

On ownership:• Better understanding and improvement of the D&D mixed

structures; study group formed among donors and government specialists;

• Joint government – donor TA introduced through negotiation between the donor group, the local government association and government;

• Training seminar on PD importance for ownership for all

stakeholders;

Recommendations on alignment

• A more programmatic approach combining donor input with national strategic and policy development is negotiated between donors and donor group and government

• Capacity building is subsumed under the local government associations to avoid replication and waste

• Non-aligned projects are discussed between the donor group and national stakeholders and solutions proposed

Recommendations on harmonisation

• Assessment of sector programmes on harmonisation with DLG (joint TA);

• Development of a strategy on harmonisation between the sector programmes to be developed by a joint, technical group;

• Negotiations between donors to adopt the “Tanzania approach” or something similar;

Recommendations on mutual accountability and management for results

• To use the same reporting and accounting system seem still not complete, but is recommended. This is even not the case within the UN system. Must be seriously considered by the donors;

• Much better instruments to measure results are needed. A general indicator system to be developed by a joint technical group to serve both government and donors;