Harmonisation, Decentralisation and Local Governance

Key questions

A deeper understanding of Political-Economy factors and the state of Local Governments in a country should enhance capability to provide effective support.

 It’s not only important to know what initiatives would be politically feasible at a given point in time (present)?

 But also if these initiatives have the potential within the political context to bring about sustainable results over the medium to long term (future)?

Content

1. Present  Support decentralisation, or not?

 How to determine adequate support strategies?

 How to harmonise with other development partners?

2. Future  Sustainability of support  Adapting support to changing framework conditions  Small group work on PED Analysis-to-action typology

Analysis to Action typology: present

Present Feasible “Non-threatening” Alternative/ “Good Enough” Creating reform space Gaining Consensus Supporting Domestic Constituencies/Coalitions

Source: The Political Economy of Decentralization Reforms (World Bank, 2010)

Case study Peru

 Many decentralisation reforms (notably around revenue sharing) are deadlocked.  At the same time there is a broader consensus that the country’s intergovernmental framework needs reform.

 Rather than pushing for an important reform that is not feasible, place emphasis on gaining consensus around a package of reforms that could gain traction;  Or prepare for a future political moment when effectively pursuing the desired reform becomes possible. More on this later.

Support decentralisation, or not?

How to determine adequate support strategies?

How to harmonise with other development partners?

How to determine adequate support strategies?

‘Classic’ sector support programmes Direct support to decentralisation Applying an “open systems” perspective Identifying strategic options Understanding the country context Mapping and understanding the actors

How to determine adequate support strategies?

 Adequate identification process  Focus  Entry points  Sequencing of support  Capacity development approach

Ensure adequate identification process

 Actors-driven rather than expert-driven  Carefully consider key choices with regard to: - actors to be supported - deregulation - capacity support required - funding modalities - support structures - constituencies and alliances

Focus of support

It is important to be clear on:  The nature of the decentralisation programme: bottom-up, top-down or a combination of both;  Whether the support is to strengthen administrative de-concentration, fiscal decentralisation and/or political decentralisation;  To what extent the support is concentrated on improving service delivery, stimulating economic (rural) development and strengthening state institutions.

Entry points

A variety of entry options may emerge from the assessments:  Central government institutions;  Regional governments;  Local governments;  Local economic actors, private companies;  Civil society, non-governmental organisations, associations;  Supervisory bodies, such as parliaments, audit courts and ombudsmen.

Choosing the right sequencing

Tips and Tricks on sequencing

 Invest in a shared vision on decentralisation  Avoid trying to do too much too quickly  Incorporate the various dimensions (political, administrative, fiscal) throughout the process  Prioritise reforms with the greatest possibility of achieving results in a relatively short period of time  Transfer powers before capacity building  Provide modest funding to be used in a discretionary manner (‘learning by doing’)  Create incentives for improved performance

Capacity development approach

 To ensure sustainability of support the strengthening of capacities needs to be considered, as well as how capacity building should occur  Chose if it is adequate and acceptable to:  Work “through”  Be “attached to”  Work “outside of” partner structures

More on this tomorrow morning

Summarising: identifying strategic options

Broad strategic design questions

Should the support have a multi-actor and/or network focus? Which relevant players to involve?

Choosing a single-layer or multi-layer focus? Which levels are appropriate to intervene at?

Should it be a country-wide or a regionally focused intervention?

Which processes do we want to engage in? Which other partner processes do we need to link up with? How to sequence the support? At which right time/ moment is it relevant to come in?

How should capacity development be understood and addressed? E.g., is it adequate/acceptable to work “ through ” , to be “ attached to ” , or to work “ outside of ” partner structures?

Harmonisation

How can we come to an “implementation of a division of labour amongst DP’s so that the mix of support programmes and aid modalities covers the key issues and actors in the country specific DLG process”?

(IDPWGs’ country specific guiding principles)

Comparative advantages of Development Partners

 Each organisation has its comparative advantages within a given country context  This depends heavily on the nature of the donor agency involved  Multilateral agencies (such as EC, for example) can use political leverage and funding weapon (e.g. through sector budget support to decentralisation)  Each agency has to define its own added value and comparative advantage

Main types of DPs support programmes

 General Public Sector Reform programmes  Good Governance programmes  Decentralisation (system)  Sector support programmes (with some support to DLG considered)  Local Governance (LG and non state actors)  Area-based support (territory and multi-actor)

Assessing the power of my organisation as a change agent

Try to answer the following questions (using the country case study from this morning)

• • • What is the added value and comparative advantage of my organisation within the case countries’ context?

How does this relate to the countries’ own objectives?

What would be an entry point for my organisation to provide support?

Discussion

Now form small groups of 4-5 persons. Share the outcomes of the individual exercises and discuss the following questions:

• How do the initiatives of the different organisations within the group relate to one another and to the country context and goals (are the actors likely to work in harmony or on • cross-purposes)? How can we improve harmonisation to provide productive support with sustainable results?

Sustainability of support Adapting support to changing framework conditions Small group work on PED Analysis-to-action typology

Analysis to Action typology

Feasible Creating reform space Present Future “Non-threatening” Alternative/ “Good Enough” Gaining Consensus Supporting Domestic Constituencies/Coalitions Good idea whose time has come Window of opportunity Appreciating new players/dynamics

Source: The Political Economy of Decentralization Reforms (World Bank, 2010)

Case study: Indonesia

 Significant switch in political power in 1999, created incentives to undertake a major decentralisation initiative.

 Subnational powers had long existed and had been supported by several development partners, but they were dominated by deconcentrated agencies that were heavily managed by the central government.

 Despite being held back for decades, the local institutions and human resource capacity provided a critical building block for stronger political, fiscal, and administrative DC.

Need for long term support

• Most decentralisation reforms take some time to get • started. Moreover, even after they have started, they may be changed or abandoned after only a few years or an • electoral cycle. Thus, successful decentralisation takes time – at least ten to fifteen years in the context of financial and political • stability.

This will normally require both long and short-term vision by donors.

Sustainability: avoid building sand-castles

A major challenge for DC programmes is sustainability: • There is a general lack of strategic, long-term • sustainability. Only a few programmes have been successful in securing short-term sustainability by institutionalising their programme output, replicating pilot projects nationwide, providing effective feedback to national policy-makers or elaborating on exit and mainstream strategies.

Case examples: CIDA's support programme in the Philippines

Both long and short-term sustainability is insufficiently managed: • If the Canadian funds for training of LG personnel are terminated, partner institutions (a.o. NGOs, academic institutions) may not seek alternative funding to continue • support Very few members of local government are in a position to invest in capacity building of their staff and councillors.

It is recommended that the programme work more closely with academic institutions that are part of the government’s own institution-building programme for local government.

Case examples: UNCDF’s Local Development Funds (LDFs)

LDFs are stimulating co-financing, institutionalisation and, to a lesser extent, project replication by other donors: • In Uganda, for example, the UNCDF project is an integrated part of government planning for decentralisation of capital funding to districts, and upscaled nation-wide through a joint donor basket fund • and WB/IDA sources. In Malawi the UNCDF pilot districts have also been upscaled nation-wide and LDFs have received positive attention from other donors.

Lessons learned on sustainability of support

• The importance of institutionalisation of programme • input.

Challenge of replicating pilot and district programmes • • at a national level.

Feedback on national policy.

Phasing-out framework should be formulated at an early stage.

Dynamics of decentralisation

• In many cases, decentralisation dynamics shift • substantially after the initiation phase ends. The generally highly dynamic nature of decentralisation poses both special challenges and potential opportunities for development partners.

• Given the shifting incentives that politicians and bureaucrats face as decentralisation unfolds, development partners working in this area must remain flexible.

Dynamics of decentralisation (cont’)

• • •

Three important points:

Politicians make mistakes. Decentralisation may set into motion unintended consequences that donors must take seriously. Institutional positions that politicians and bureaucrats occupy change over time. Officials who previously supported decentralisation may withdraw their earlier support in line with their new incentives, and vice versa.

As decentralisation has aged and conditions change or new information becomes available, struggles can unfolded not only over the implementation of initial frameworks, but also over attempts to redesign these frameworks.

Country examples

 In Latin America, growing evidence of irresponsible fiscal behaviour in subnational governments drove recentralising changes in Argentina, Brazil, and Colombia.  On the other hand, the early success (in certain respects) of the nascent commune decentralization in Cambodia created a political window to push for broader decentralisation to district and provincial levels.

Brainstorm

 Choose one of the participants countries in which framework conditions are expected to change in the foreseeable future  Generate a list of opportunities and threats for the decentralisation process that might result from the new situation  Distil the most important opportunity and threat and try to come up with innovative approaches for overcoming challenges / making use of windows of opportunity  Plenary presentations of the key approaches

Revisiting the PEA and LG assessments

If the nature of decentralisation are likely to change over time as circumstances and perspectives evolve....

... then assessments will need to be revisited periodically, particularly if there is evidence of relevant existing or impending political shift, that may open up new opportunities.

Summarising: Guiding principles for good practices in supporting decentralisation

ALIGNMENT HARMONISATION Support to home grown agendas – focus on 3 “Cs” coherence, complementarity and coordination FLEXIBILITY AND PRAGMATISM Use all available windows of opportunities LONG-TERM AND GRADUAL PROCESS Adopt a change perspective supported by incremental action Guiding principles to supporting decentralisation governance LEGALITY AND LEGITIMACY Respect legal framework and legitimate role of each actor COUNTRY SPECIFIC APPROACHES No ‘one-size-fits-all’ models. Need for the ‘right’ policy mix OWNERSHIP AND PARTNERSHIP . Progress will depend on an effective demand and capacity to carry out reforms. Need for multi-actor dialogue on national policy