DECENTRALIZATION AND RURAL SERVICES:

MESSAGES FROM RECENT RESEARCH AND PRACTICE

Graham B. KerrCommunity Based Rural Development Advisor

The World Bank

Regional Seminar on

“Decentralization and Participation for Sustainable Rural Development in Southern Africa”

October 26-30, 1998

The Challenges for US

• 1.3 billion still living in poverty -- 800 million in rural areas

• Significant growth in number of mouths to be fed

Why is rural development not happening?

• Rural poor have little political power

• Urban bias in the policy environment

• Agriculture seen as a declining sector

• Falling food prices

• Aid fatigue in the agriculture sector

• Integrated rural development programs have failed

Why Decentralize?

• improve access to and quality of services• give local communities control of resources to

invest in projects they care about -- often education, health, infrastructure and other growth enhancing services

• create conditions for bargaining, increase information flows, increase efficiency

• empower under-represented groups, such as local entrepreneurs to be politically active

Messages:gkerr

What is decentralization ?

• The transfer of authority and responsibility for some government functions from central government to intermediate and local governments, and often to communities and the private sector

Decentralization: A Dynamic Institution

• Deconcentration -- central staff to localities

• Delegation -- to parastatals

• Devolution -- to lower levels of government

• Privatization -- to private firms

Messages:gkerr

Decentralization is here to stay

• globalization -- changing role of the state

• growth of local democracy -- power sharing

• professionalization of local capacity

• it is now a country strategy rather than a donor strategy

Messages:gkerr

BUT there are pitfalls

• Decentralization has often failed

• -- often not even really started -- de jure vs. de facto

• it matters how it is done

• Soufflé theory -- three dimensions of decentralization

Messages:gkerr

Three dimensions of decentralization

• Administrative decentralization transfers substantial authority and responsibility for managing services to local government, local communities and the private sector

• Political decentralization transfers policy and legislative

powers from central government to elected sub-national and local councils.

• Fiscal Decentralization transfers authority and responsibility for raising and spending revenues from

central to local governments and communities.

Our Soufflé Theory

• Rural Impacts -- the long-term results• Service Delivery System Results --

reformed institutions• Service Delivery System Outcomes --

medium term changes in the system• Decentralization choices -- three

dimensions• Institutional endowments -- the environment

Fiscal•Fiscal Reso urces•Fiscal Auto nomy•Fiscal Decisio n-making

Political•Civil Liberties•Polit ical Rights•Democratic Pluralism

System Outcomes

•Resource Mobil izat ion•Resource Allocation•Fiscal Capacity

Administrative Ad ministrativ e Structures and Systems•Participation

•Polit ical Acco untabil ity•Polit ical Tran sparen cy•Polit ical Representation

•Adminis trative Cap acity•Admin. Accountab ility•Admin. Transp arency

•Respons ive Services•Effective Services•Efficient Services•Sustainable Services

System Results Rural Impact

•Increased Incomes•Increased Productivity•Increased Li teracy•Decreased Mo rtality•Growth of Civ il Society•etc.

EN

DO

WM

EN

TS

AN

D O

TH

ER

SL

OW

LY

-C

HA

NG

ING

FA

CT

OR

S

TIME

Decentralization Choices

The Soufflé Theory

Source: Adapted from Parker, Andrew N. 199 5 Decentralization: The Wa y Forward fo r Rura l Development? Policy Research Working Paper 1475. T he Wo rldBank , Washington, DC.

Decentralization: Multiple Levels

• National Decentralization Framework and concerns

• Local Service Institutions and concerns

Our Characterization Study

• Describes decentralization choices made in 19 countries in early 1990s

• Data collected by local consultants and interviews with Bank staff

• Measures of three dimensions on 10 point scales -- 10 points to those which are devolved

National Decentralization in 15 Countries, 1990-95

0

1

2

3

4

5

6

7

8

9

10

Burkin

a Fas

o

Zambia

Bangla

desh

Cote D

'Ivoir

e

Tunisi

a

Seneg

al

Tanza

nia

Punjab

(Pak

istan

)

Bahia

(Bra

zil)

Hidalg

o (M

exico

)

Karnata

ka (I

ndia

)

Poland

Chile

Philipp

ines

Colombia

Survey Countries

Dec

entr

aliz

atio

n S

core

National Political, Administrative, and Fiscal Decentralization in 15 Countries, 1990-95

0

1

2

3

4

5

6

7

8

9

10

Survey Countries

Dec

entr

aliz

atio

n S

core

s

Political Score

Administrative Score

Fiscal Score

Rural Service Decentralization in 19 Countries, in the 1990s

0

1

2

3

4

5

6

7

8

9

10

Imo (N

igeria

)

Cote D

'Ivoir

e

Burkin

a Fas

o

Seneg

al

Bangla

desh

Egypt

Tanza

nia

Punjab

(Pak

istan

)

Hidalg

o (M

exico

)

Tunisi

a

Karnata

ka (I

ndia

)

Zambia

Chile

Bahia

(Bra

zil)

NTT (Ind

onesia

)

Poland

Philipp

ines

Colombia

Jiang

xi (C

hina)

Survey Countries

Dec

entr

aliz

atio

n S

core

Rural Service Political, Administrative, and Fiscal Decentralization in 19 Countries, 1990-95

0

1

2

3

4

5

6

7

8

9

10

Imo (N

igeria

)

Cote D

'Ivoir

e

Burkin

a Fas

o

Seneg

al

Bangla

desh

Egypt

Tanza

nia

Punjab

(Pak

istan

)

Hidalg

o (M

exico

)

Tunisi

a

Karnata

ka (I

ndia

)

Zambia

Chile

Bahia

(Bra

zil)

NTT (Ind

onesia

)

Poland

Philipp

ines

Colombia

Jiang

xi (C

hina)

Survey Countries

Dec

entr

aliz

atio

n S

core

Political Score

Administrative Score

Fiscal Score

Messages:gkerr

Conclusions of Characterization Study

• Rural services still largely in the hands of higher levels of government

• Decentralized systems still in their infancy• The real benefits and problems of

decentralization may only be fully appreciated when the systems have matured and additional powers devolved to local governments and communities

Messages:gkerr

How can we improve the impact of decentralization?

• Ensure a balanced approach -- address all three dimensions

• Focus on key system outcomes and results– accountability– transparency– representation– local resource mobilization– local institutional capacity– local voice– sustainability

Fiscal•Fiscal Reso urces•Fiscal Auto nomy•Fiscal Decisio n-making

Political•Civil Liberties•Polit ical Rights•Democratic Pluralism

System Outcomes

•Resource Mobil izat ion•Resource Allocation•Fiscal Capacity

Administrative Ad ministrativ e Structures and Systems•Participation

•Polit ical Acco untabil ity•Polit ical Tran sparen cy•Polit ical Representation

•Adminis trative Cap acity•Admin. Accountab ility•Admin. Transp arency

•Respons ive Services•Effective Services•Efficient Services•Sustainable Services

System Results Rural Impact

•Increased Incomes•Increased Productivity•Increased Li teracy•Decreased Mo rtality•Growth of Civ il Society•etc.

EN

DO

WM

EN

TS

AN

D O

TH

ER

SL

OW

LY

-C

HA

NG

ING

FA

CT

OR

S

TIME

Decentralization Choices

The Soufflé Theory

Source: Adapted from Parker, Andrew N. 199 5 Decentralization: The Wa y Forward fo r Rura l Development? Policy Research Working Paper 1475. T he Wo rldBank , Washington, DC.

Messages:gkerr

Political Representation?

• Develop policies to – encourage local competitive political

system– ensure that local politicians represent local

groups– enable local NGOs for disadvantaged

groups

Messages:gkerr

Political Accountability?

• Design programs so that –service providers are accountable

to local elected councils and their local clients

–local elected councils are accountable to their constituents

Messages:gkerr

Fiscal Devolution?

• Policy dialogue to ensure– central government devolves appropriate fiscal

authority – fiscal policies and procedures in place for each

level of government– local governments assume authority and enact

appropriate, responsible policies– fiscal discipline -- checks and balances are built

into the system

Messages:gkerr

Fiscal Capacity and Accountability?

• Design programs so that – fiscal transfer schemes are transparent,

predictable, and local units have appropriate level of autonomy

– local units build their capacity to implement their fiscal responsibilities

– systems to mobilize local resources are enhanced

Messages:gkerr

Administrative Decentralization?

• Deconcentration is only the first stage of administrative decentralization and may hinder further progress

• Delegation of administration to civil society is important

Administrative Capacity?

• Design programs so that:

– local managerial and technical expertise is recognized and used

– local knowledge is incorporated into program -- voice

Messages:gkerr

Administrative Accountability and Transparency?

• Design programs so that – planning, budgeting and spending are public and

open– contract laws and procedures are adequate– information systems are built into the program– local press is included in the project process

Final Messages

• Decentralization has potential

• Decentralization is not happening with rural services

• Focus on increasing accountability to local clients, increasing responsiveness, building political, fiscal and administrative capacity

Thankyou