Sub-national governance reform

1. Sub-national governance reform International experience regarding critical framework conditions for sub-national governance reform Governance reform conditions - international experience

2. Introduction • The presenter • The audience • The goal and objectives • The methodology • The presentation Governance reform conditions - international experience

3. The presenter • Brendan O’Driscoll • Policy Adviser, UNDP / MOI • National Committee for Democratic Development • Presenting in a personal capacity • Experience • 10 years in sub-national government • 5 years in Institute of Public Administration • 15 years in local government reform Governance reform conditions - international experience

4. The audience • Royal School students • Civil servants • Others Governance reform conditions - international experience

5. The goal • The goal is “to contribute to more effective implementation of sub-national governance reform by equipping civil servants with a theoretical and practical understanding of the reforms” Governance reform conditions - international experience

6. The objectives • The objectives are: • participants acquire a theoretical and practical understanding of sub-national governance reform in Cambodia, including their roles in the reform process; and • dialogue is promoted among government institutions by developing a common understanding and terminology regarding the reform. Governance reform conditions - international experience

7. The methodology • Approach is based on experience rather than solely on the literature • The lecture methodology is that I speak and you listen (not good) • Use of slides may help • Some interaction, Q&A will help • Sources can be provided Governance reform conditions - international experience

8. The presentation • What is sub-national governance? • Why do countries decentralise? • What is decentralisation? • Critical framework conditions • International experience • Case study from East Africa (Tanzania) • Experience in South East Asia • Experience in Cambodia Governance reform conditions - international experience

9. Governance • Concept is as old as human civilization. • UN paper defined it simply as: the process of decision-making and the process by which decisions are implemented (or not implemented). • Several contexts such as: international, corporate, national, and local governance. • Good governance and bad governance Governance reform conditions - international experience

10. Analysis of governance • Decision-making and implementation • Formal and informal actors e.g. government, big business, who else ??? • Formal and informal structures, e.g. Cabinet, Mafia, other structures ??? • Informal decision-making can lead to bad governance • Formal decision-making can also lead to bad governance Governance reform conditions - international experience

11. 8 major characteristics of Good Governance Governance reform conditions - international experience

12. Achieving good governance • Good governance is an ideal. • Difficult to achieve in its totality. • Very few countries and societies have come close – examples??? • Bad governance examples??? • But, for sustainable human development, actions must be taken to work towards making it a reality. Governance reform conditions - international experience

13. Levels of governance • National and sub-national roles, responsibilities, functions, resources • National examples??? • Sub-national examples??? • Sub-national levels • regions, provinces, capital cities • districts, urban areas / municipalities • communes, wards, villages • sub-village levels Governance reform conditions - international experience

14. Use of terms • Describing the governance system: • Sub-national government • Local government • Describing the local governance bodies: • Local authorities • Local Councils or Councils Governance reform conditions - international experience

15. Governance reformsPrivate/Public Sector convergence • The private sector is moving away from formal bureaucratic structures towards decentralisation: to devolution of real authority to lower levels as profit centres; to greater flexibility in structure and staffing and to an increased emphasis on performance and speedy response, instead of rigid hierarchical structures. However, to change the existing public system into one that is speedy, risk-taking, output-oriented, innovative and efficient requires a total change in organisational culture. Governance reform conditions - international experience

16. Governance reforms - national • Structural reforms, e.g. new issues • e.g. climate change – other examples?? • Management / Civil Service reforms • New Public Management (results based) • Financial management, procurement • Human resource management • Sector reforms, e.g. police, judiciary, health, education, land etc … • Issue reforms, e.g. HIV&AIDS Governance reform conditions - international experience

17. Governance reforms – sub-national • “..countries everywhere – large and small, rich and poor – are devolving political, fiscal and administrative powers to sub-national tiers of government” (World Bank 1999). • “In recent years, developing countries have decentralised functions and responsibilities to lower levels of government at an increasing pace (World Bank 2008) • Governance reform at sub-national level is usually in the context of decentralisation Governance reform conditions - international experience

18. What does decentralisation do? • Decentralisation shifts responsibility and accountability for the delivery of public services to sub-national levels of government, aiming to help improve service delivery and local governance. • Decentralisation changes the way government carries out its business, and usually involves radical reform of government. Governance reform conditions - international experience

19. Why do countries decentralise? 1. • Many countries decentralise for political (rather than economic) reasons, such as: • to dampen ethnic or regional discontent or conflict, e.g. South Africa, Indonesia, Sri Lanka. • However, broad agreement on economic benefits - service delivery Governance reform conditions - international experience

20. Why do countries decentralise? 2. • Improved democratic governance, leading to • Improved allocative efficiency, leading to • Improved service delivery, especially to the poor, leading to • Reduction of poverty Governance reform conditions - international experience

21. Decentralisation types • Deconcentration • Delegation • Devolution • Economic Decentralisation and Self-Governance (or ‘Privatisation’) Governance reform conditions - international experience

22. Deconcentration • Involves the transfer of selected functions within the central government hierarchy through the shifting of workload from central ministries to field offices, the creation of field agencies, or the shifting of responsibility to local administrative units that are part of central government’ Governance reform conditions - international experience

23. Delegation • Involves the transfer of responsibility for maintaining or implementing sector functions to regional, local or functional development authorities, para-statals and other semi-autonomous government agencies, that operate independently of central government control Governance reform conditions - international experience

24. Devolution • Involves the transfer of functions and discretionary authority to legally constituted local governments … bound by broad national policy guidelines … and the related human, financial and material resources and capacity. Governance reform conditions - international experience

25. Privatisation • Involves the shifting of responsibilities for economic production and activities from the public sector to private or quasi-private institutions • Not addressed in this lecture Governance reform conditions - international experience

26. International experience • International experience varies widely • No ideal ‘model’ for decentralisation or for sub-national reforms • Some common experiences from which we can draw conclusions and learn lessons • Some international critical framework conditions for decentralisation by devolution can be identified Governance reform conditions - international experience

27. Framework conditions 1 Political decentralisation • Involves a devolution of powers and the setting of the rules for councils and committees, etc. • Includes the integration of the previously centralized or deconcentrated service sectors into a holistic local government system • Installs councils as the most important local, political body within its jurisdiction • Implies the creation of real, multi-functions governments at the local level within the framework of the national legislation • Allows civil society to hold councils accountable. Governance reform conditions - international experience

28. Framework conditions 2. Financial decentralisation • Involves the decentralisation of expenditure and revenue-raising authority to sub-national government in line with allocated functions • Involves the obligation of central government to supply local governments with adequate unconditional grants and other forms of grants • allows local councils to pass their own budgets reflecting their own priorities as well as mandatory expenditure required for the attainment of national standards. Governance reform conditions - international experience

29. Framework conditions 3. Administrative decentralisation • Re-distributes authority and responsibility from central to local • Involves de-linking local authority staff from their respective ministries • Involves local governments hiring and managing their own personnel, organised in a way decided by the respective councils in order to improve service delivery • Makes local government staff accountable to local councils. Governance reform conditions - international experience

30. Framework conditions 4. Changed central-local relations • Involves a new system of inter-governmental relations with central government having the over-riding powers, usually within the framework of the Constitution / national laws • Central ministries have changed roles and functions, often • policy making • support and capacity building • monitoring and quality assurance • regulation (legal control and audit). • Local Councils take on service delivery role Governance reform conditions - international experience

31. Framework conditions 5. Legislative framework • Constitutional mandate • Legislative mandate to empower local councils • Coordinated national legislation (e.g. sector and local government legislation) Governance reform conditions - international experience

32. End of Part One • Questions / Discussions • Break for tea Governance reform conditions - international experience

33. Case Study Tanzania • Why Tanzania? • Situation in 1998 similar to current situation in Cambodia • Colonial history and centralised systems • Poverty profile • 3 levels of sub-national government • Major decentralisation-based reform programme for 10 years • Personal experience Governance reform conditions - international experience

34. Sub-national Reform Programme • Local government problems • Abolished and re-instated • Civil Service Reform • Policy Paper 1998 • LGRP began 1999 • Designed to implement the policy for government Governance reform conditions - international experience

35. The Change Environment • Political, social and economic change • Tradition of central planning and control • Low resource and capacity baseline at LGA level • Changing, complex policy framework Governance reform conditions - international experience

36. Decentralisation by Devolution Policy (1) • Political decentralisation • Financial decentralisation • Administrative decentralisation • Changed central – local relations • Principle of subsidiarity • Fair revenue assignments Governance reform conditions - international experience

37. Decentralisationby Devolution Policy (2) Government’s Vision • Services the raison d’etre • Strong, autonomous LGAs • Central government’s new role • LAs properly resourced - HR and finance • Democratic LGAs / Participation • Functions relate to local demands • Transparency, accountability, ethics Governance reform conditions - international experience

38. Implementation experience • Plans & Budgets – 3 year • Common Basket Fund established • Both ‘systemic’ and ‘operational’ achievements, but many obstacles encountered • Progress slower than anticipated • Reviews informed ongoing plans • Results achieved Governance reform conditions - international experience

39. Reform Goal and Purpose GOAL • Proportion of Tanzanians living in poverty reduced. PURPOSE • Political, administrative, and fiscal responsibilities devolved from central to local government, underpinned by good governance, so enabling LGAs to provide more appropriate, equitable, quality services to Tanzanians, especially the poor. Governance reform conditions - international experience

40. Systemic Outcome 1 • Decentralisation by devolution policy articulated, understood and embedded across government • High level champions • Information • Advocacy • Assignment of responsibilities • Assessments • Monitoring and evaluation Governance reform conditions - international experience

41. Systemic Outcome 2 • Fiscal empowerment of local government • Central – Local financial framework • Recurrent transfers • Capital development transfers • Own-source revenues • Institutional coordination framework • Administrative framework and systems Governance reform conditions - international experience

42. Systemic Outcome 3 • Human resource empowerment of local government • Devolution of powers & responsibilities • Pay and incentives • Training policy, strategy and programmes • Decentralised HRM procedures • HIV / AIDS in the Workplace Campaign Governance reform conditions - international experience

43. Systemic Outcome 4 • Legal framework for decentralisation by devolution in place • Constitutional amendment • Unified and over-arching local government legislation • Central and sector legislation reviewed and amended Governance reform conditions - international experience

44. Operational Outcome1 • Councils restructured to more effectively and efficiently respond to identified local priorities of service delivery in a sustainable manner. • OD process completed in all Councils • Councils re-structured • Councils supported in improving critical areas of service delivery Governance reform conditions - international experience

45. Operational Outcome 2 • Principles of good governance adhered to at all levels of local government • Transparency • Accountability • Local Democracy / Participation • Rule of Law • Ethics • Gender Governance reform conditions - international experience

46. The costs of reform • Expenditure 1999 – 2008: US$ 100 million • Expensive to build capacity • Human resource development • Organisation development • Equipment • IT systems • Additional expenditure capital works: US$150 million (2005 – 2008) Governance reform conditions - international experience

47. Some positive results • Councils gained some autonomy • Governance has improved, e.g. • Accountability • Financial management / audit results • Local capacity has been built • Councils do have more finances • Transfers are more equitable Governance reform conditions - international experience

48. Remaining challenges • Human resource decentralisation • Fiscal decentralisation incomplete • Legal harmonisation incomplete • Corruption remains an issue • Another 5-year programme began on 1st July 2008 Governance reform conditions - international experience

49. Lessons learned • ‘Big Bang’ approach did not work • Phasing, pilots and ‘learning by doing’ can work well • Reform of sub-national government is a long-term change programme, and is a huge, expensive undertaking. • Commitment of central and line ministries is essential for success • Reforms need ring-fenced funds Governance reform conditions - international experience

50. South East Asia Governance reform conditions - international experience