Scaling-Up CDD in the Context of Decentralization: Overview of Issues and Opportunities

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Scaling-Up CDD in the Context of
Decentralization Overview of Issues and
Opportunities

• Keith McLean
• Bank-wide CDD Anchor
• April 12, 2005
• Kwmclean_at_worldbank.org

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Objectives

• Rationale for CBOs--Local Government Linkages?
• How LG capacity and structure affect
  responsiveness
• Constraints and opportunities created by the
  decentralization framework
• On Strengthening Links

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Why Link CBOs and LGs?

• Important pillar of CDD
• Achieve scale
• Sustainability
• Anchor in the local public finance system
• Build durable local institutions
• Improve Local Governance
• Avoid by-pass of local government
• Support Deepen Decentralization

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Few Good Examples of Integration

• Few decentralization operations build effective
  systems of accountability to communities within
  LG jurisdiction
• Little attention to participatory frameworks
  (beyond some local planning process)
• Few CDD operations link to LG in ways that build
  LG capacities or can influence structural reforms
  of LG/decentralization systems

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Results

• Major Challenges for scaling up
• Parallelismthrough project structures
• Competition Duplication in the local space
• Overlapping roles and responsibilities
• LG competing and/or undermining CDD
• Central govt/agency relevance revived
• Momentum/pressures for real structural reforms
  and subnational devolution retarded
• Cant scale up approach or sustain financially or
  make dynamic

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Decision to link Key Principles

• Subsidiary
• Public Provision vs. Production
• Co-production
• Downward/upward Accountability
• Local Autonomy
• Improved Local Governance
• Dynamism and Flexibility

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Main Organizational Arrangements
Direct partnerships between CBOs and central
government or central fund
Partnerships between CBOs and local governments
Partnerships between CBOs and private support
organizations
Community-based Organizations
Community-based Organizations
Community-based Organizations
NGOs and private firms
Local or Municipal Govern-ment
Local or Municipal Govern-ment
Elected Local or Municipal Government
NGOs and private firms
Central Government or Central Fund
Central or Government Fund
Central Government or Central Fund
World Bank and other partners
World Bank and other partners
World Bank and other partners
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Clear Expenditure Assignments Functions

• Partnerships not viable if center retains strong
  role LG domain unclear
• Functions cannot be continuously in flux
• Local autonomy related to downward accountability
• Citizens can demand results when LG is actually
  responsible
• Responsibility and responsiveness linked.

• Romania Rural Development LGUs clearly
  responsible for rural roads water no formal
  central overlap
• Project objective to provide rural
  infrastructure through LG-CBO partnerships
• More Dialogue on LG reforms/improvements through
  (PAL Program)

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Local Revenue Mobilization and Accountability

• Own revenue mobilization is important
• LGs have much more fiscal flexibility
• Citizens/CBOs empowered to voice demands
• Implicit and explicit performance contracts
• Discretion on own revenues is critical

• No local government raises all of its resource
  requirements
• Transfers are very important part but should not
  be 100 of budget
• Type of transfers (grants) has implications
• Block
• Conditional/specific
• Ad hoc

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On Fiscal Flexibility

• Allocate own revenues (taxes and fees) across
  recurrent and capital costs
• Enable new investments,
• Link revenue raising to local planning process
• Taxation flexibility
• Set base and rate
• Adjust rates
• Own revenues to recurrent capital

• Expand coverage of project/program funds
• Introduce third pillar of financing
• Donor/Central Govt
• Community
• Local Government
• Multiple financing options
• Increase the number of beneficiaries
• 2/3 local sources (sustainability)

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Issues in Decentralization Common Dangers

• Constituents, villagers, communities not able
  hold representatives accountable (due to
  incomplete information)
• Patronage Politics
• Civil servants in local arenas feel compromised
• Impedes devolution

• Elite Capture
• By ethnic/racial/social groups
• Corruption
• Opaque Decision-making
• Affects accountability Upwards to center
  Downwards

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Improving Local Governance

• Common accountability challenges for both local
  government and communities
• Elite Capture
• By ethnic/racial/social groups
• Corruption
• Opaque Decision-making
• Patronage Politics
• Common citizens opinions marginalized

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Two-way accountability

• LGs are best placed to receive and act on
  complaints about CBO leaders from community
• CBO leaders are best placed to transmit community
  complaints on LGs up the project chain, and to
  mobilize for changed leadership during the
  electoral cycle.
• Cleaning-up LG processes and strengthening them
  yields governance and service delivery benefits.
• Project planning framework, and design rules can
  contribute significantly.
• Design can incorporate MOU between various
  parties (Maharashtra RWSS, AP Rural Poverty
  Reduction Project)

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Partnerships for Sustainability

• Financial
• LGs can contribute resources as well as
  implementation capacityleverage community funds,
  with project funds, and possibly private funds
• Local economic development framework
• Local enabling environment requires strong LGs

• Programmatic
• When include strong financial support from LGs,
  more difficult to disband than central programs
• Local political process empower communities
• National/international programs determined more
  by trends and new ideas
• Shifting paradigms

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CDD and Decentralization
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Deepening and Stretching Functions

• Deepening deepen citizens involvement
• Higher Value Added from Collective Action
• Movement along Vertical Axis
• Mobilization Capacity is More Important
• Greater Flexibility in Design and Execution
• Generally Older and Better Established CBOs
• (legitimacy, voluntary consent, collective action)

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Deepening and Stretching Functions

• Stretching stretching LGs authority
  territorially and functionally
• Supra-local or dysfunctional or non-mandated LGs
• Movement along Horizontal Axis
• Sub-Contractor Role for CBOs
• Technical Capacity is More Important
• Tasks can be considerably specified in advance
• New CBOs might also work well
• (multiplication, technical capacity,
  sub-contracting)

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ROLES AND RESPONSIBILITIES
  STRETCHING ROLE DEEPENING ROLE
Nature of Tasks Performing a service for a fee. Organizing citizens and mobilizing resources, often on a voluntary basis.
Length of Involvement Usually short term Usually long term
Critical CBO Capacity Technical Mobilizational
Type of CBO Well qualified technically, even if relatively new. Preferably long-standing technical strengths are secondary.
Task Assignment Contractual, considerably well defined in advance. Flexible and based on mutuality and consultation.
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Instruments

• CDD can strengthen local governance
• Structural LG reform is best managed through a
  policy reform loan or LG/Municipal project
• Indian States (AP, MP, Kerala, Karnataka),
  Romania, Thailand.
• IndonesiaDecentralization Dialogue KDP, UPP

• CDD can demonstrate good practices and processes
  locally
• Increase government faith in local capacity to
  handle devolution
• Pilot models of participation, good local
  governance, and co-production.
• Introduce tools of social account.report cards,
  participatory budget

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Conclusion

• Linking Communities and Local Governments in
  effective partnerships is not easy, but is
  important
• Scaling up
• Financial and institutional sustainability
• Improving local governance
• Best complemented w/ policy dialogue to
  strengthen decentralization framework,
  inter-governmental fiscal system and empower LGs
• Empowering communities to manage their
  development requires a systemic and integrated
  approach to local development.