Sierra Leone Institutional Reform and Capacity Building Project Yongmei Zhou AFTPR

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Sierra Leone Institutional Reform and Capacity
Building ProjectYongmei ZhouAFTPR
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Objective of presentation

• Share with participants the experience of the
  design phase of a decentralization and local
  government support operation

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Identification which reform to support?

• Original coverage of IRCBP envisaged in TSS
  2002-4 PFM, Decentralization and Local Gov
  Capacity Building, HRM, Legal Judicial Reform,
  Agricultural Sector Capacity Building.
• Too ambitious stretching implementation capacity
  of GoSL and Bank team

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Key objectives of governance reform in
post-conflict Sierra Leone

• Restore core functions of government for
  effective economic and fiscal management
• Restore trust in government
• Rebuild social capital in communities
• Address issue of social exclusion
• Address urgent needs for recovery and
  reconstruction

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Why support decentralization?

• Hot button issue
• Popular support for devolving power
• Reestablishing local councils is incumbent SLPP
  governments top agenda
• Potential benefits
• Reducing conflict by opening up space for
  political participation and improving democratic
  accountability of the state to citizenry
• Long term effect on democratization LCs as
  training ground for political leaders
• Potential for improving service delivery

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Decentralization drives broader PSR reforms

• Instill a new culture of transparency and
  accountability at the local level will translate
  into same expectation of the center
• Decentralize FM and HRM to local councils will
  later trigger changes at the central government
  level
• Fiscal decentralization shift resources to LGs
  and force restructuring of central ministries and
  agencies

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Local Government Act 2004 key features

• Election of local councils
• 20 of Paramount Chiefs in each locality will be
  un-elected councilors
• Ambitious plan for devolution of functions,
  expenditures, revenue authorities to local
  councils (Schedule III of LG Act)
• Local councils have autonomy in HRM and FM under
  guidelines
• Require transparency in council operation
• Transition arrangements

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Current local administration employment agencies
rather than service providers

• Local councils were abolished in 1972. Since then
  Management Committees have been appointed by
  President
• Few service delivery responsibilities
• Very poor performance in service delivery
• Revenue collected cannot sustain service
  delivery 80 revenue paying salary of staff and
  allowances of management committee members
• Staff largely unskilled 80 are casual workers
  little, if any, training to upgrade skills.

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Decentralization does not automatically improve
services or accountability

• Local councils may remain employment agencies, if
  current unskilled and surplus staff are
  inherited, or if councils do not practice
  restraint in hiring
• Local councils may have inadequate revenue
  capacity and expenditure management capacity to
  discharge new responsibilities
• Local councils may be captured by local elites
  and fail to address needs of marginalized groups
• Local councils may engage in corrupt practices

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Key challenges

• Design and implement a sustainable
  decentralization strategy, where phased
  functional devolution is supported by fiscal and
  administrative decentralization strategies as
  well as capacity building support.
• Address the issue of social justice and inclusion
  and establish a new culture in local governments

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GoSL Decentralization Program Sequencing

• Jun-Dec04 grace period for implementing
  functional devolution
• Build basic LG capacity to make collective
  decisions and utilize resources
• Announce phases of functional devolution
• Design fiscal decentralization strategy and
  sectoral devolution plans
• Jan05-May08 transition period for implementing
  functional devolution
• Gradual transfer of service delivery
  responsibilities
• Building LG capacity
• Intensive ME to identify improvement in policy
  and implementation
• Jun08 beyond sustainability phase

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World Bank support to decentralization

• Pre-2004 Social Fund, Education, Health projects
  
• Empower communities and local service providers
  to contribute towards the repatriation,
  resettlement, reintegration, recovery process
• 2004-8 IRCBP (supporting GoSL Decentralization
  Program Phases 1 2)
• Help design a sustainable fiscal decentralization
  strategy to ensure adequate resource transfers to
  LGs and sustainable development of local revenue
  capacity
• Help build sustainable local government
  institutions to deliver services to communities
• Support the establishment of a reform platform
  for other donors to chip in

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Decentralization Component of IRCBP Objective

• Help GoSL establish a functioning local
  government system
• LCs institutionalize participatory planning
• LCs have basic FM capacity
• LCs establish local revenue mobilization capacity
• Service delivery at local level maintain at
  current level and later expand and improve
• Outcome and output indicators in Annex 3 of PAD

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Decentralization Component of IRCBP strategic
choices

• Invest in implementation capacity and embed it in
  government structure
• Learning by doing approach of capacity building
  offer LG with discretionary resources so they can
  practice planning, budgeting, spending,
  accounting, monitoring, reporting skills.
• Consciously create demand for performance
• Tap multiple sources of training providers

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Decentralization Component of IRCBP operational
subcomponents

• 1. Strengthen policy and implementation capacity
  DS, LGFD
• 2. Finance start-up administrative infrastructure
  of new LGs
• 3. Capacity building for LGs and other
  stakeholders
• 4. Local Government Development Grant
• 5. Monitoring and evaluation

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Strengthen policy and implementation capacity of
decentralization program

• Decentralization Secretariat of MLGCD (serving
  Inter-ministerial Committee on Decentralization
  and Local Government) and Local Government
  Finance Department of MoF (serving LG Finance
  Committee)
• Legislative/regulatory changes
• Fiscal decentralization strategy
• Project planning/implementation/ME

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Capacity building for LGs demand side

• Demand v.s. need
• How to increase demand for performance?
• Electoral demand
• Competitive pressure among LGs
• Enforce LG Act and minimum conditions for
  accessing LGDG
• Types of support
• Orientation training
• Skills training and hands-on mentoring

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Capacity building for LGs supply side

• Training providers using existing institutions
  or encourage creation of training market?
• IPAM
• Pro existing infrastructure
• Con lukewarm response from leadership weak
  training capacity, curriculum
• Private providers
• Pro motivated, as reward based on performance
• Con limited of local trainers no guarantee
  for sustainable capacity
• Training of Trainers identify entrepreneurial
  individuals, open to IPAM staff
• Mentoring by practitioners

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Local Government Development Grant

• Objectives
• Offer resources to LGs so they can practice basic
  resource management skills (planning, budgeting,
  contract management, accounting, monitoring,
  reporting)
• Use LGDG as a carrot to induce desirable behavior
  of LGs focus first on governance culture, then
  skills
• Establish a credible transfer system for other
  financiers to use in future

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Local Government Development Grant

• Provide block grant to LGs for financing
  development projects, as part of IGT
• Access rules focus on transparency and
  accountability requirements of LG Act 2004
• Encourage transparent and accountable governance
  culture from the very start!
• Address fiduciary concerns of IDA
• Give incentive to develop management skills
• Allocation of LGDG among LGs based on equity
  criteria, infrastructure needs, other financing
  available

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Eight Steps of Successful Change

• Increase urgency
• Build the guiding team
• Get the vision right
• Communicate for buy-in
• Empower action
• Create short-term wins
• Dont let up
• Make change stick
• John P. Kotter and Dan S. Cohen, the Heart of
  Change

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Donor coordination

• Government coordinate donors political oversight
  by IMC, technical implementation led by
  Decentralization Secretariat, MLGCD
• Donor harmonization to reduce transaction costs
  for gov
• Shared/joint consultation with stakeholders,
  diagnosis analytical work
• Common implementation arrangements
• Joint ME
• Shared capacity building framework

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Working with the Country Team

• Sector programs
• Adjustment of existing projects social funds
• Design of new projects
• Implementation arrangement needs to adjust to new
  functional assignment
• New CAS

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Other tricks for task managers

• Get a PHRD grant for gov to finance preparatory
  activities
• Get good consultants
• Recently retired civil servants practioners and
  devoted
• Practitioners from countries your client aspires
  to
• Talk to the urban group
• Build quality assurance in the project

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Challenges for Bank supervision

• Intensive supervision requires big budget and
  time commitment
• Work closely with FM and Procurement staff
• Joint ME with GoSL and other donors
• Collect baseline data before decentralization, if
  feasible
• Design research framework and build data
  collection as part of ME
• Be ready for difficulties
• LGs not responsive to LGDG incentives
• Political pressure for using LGs as employment
  agencies
• Ministries resist changes