Decentralization inDecentralization inRuralRural RussiaRussia

research results and recommendations for research results and recommendations for discussiondiscussion

The World BankThe World BankMaria AmelinaMaria Amelina

Research motivationResearch motivation2006 – change in the paradigm of government in Russia’s

rural districts-decentralization, which affects all aspects of public life

n Political decentralization – elections of district and settlement level authorities, creation of deputy councils down to the settlement level

n Administrative – creation<10 000 new settlements, doubling the number of rural settlements up to>20 000

n Fiscal – settlements received for the first time formal revenue sources and re-enforced responsibilities to provide services to the population

Poverty in Rural Russia

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10.0

20.0

30.0

40.0

50.0

60.0

70.0

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90.0

100.0

2002 2003 2004 2005 2006 2007 1h

Share Urban among Poor Share Rural among PoorShare Urban in Population Share Rural in Population

Unknown ContinentUnknown Continentn Surveys based on available national financial-fiscal statistics and

qualitative observations (Institute of Urban Economics, Institute of Transition, Institute of Strategic Research)

n There is no quantitative data on the effects of the reform on the life of rural population, change in the relationship with the authorities, change in citizen participation mechanisms, change in the level of satisfaction with service provision)

n There is no research on the quality of services in villages, relationship between local government and the population, which makes it difficult to evaluate the effects and effectiveness of the reform

n There is no understanding of the demand for reform at the settlement level

DataData2 2 survey wavessurvey waves inin 3 3 Russian regionsRussian regionsHousehold surveyHousehold survey –– 2006, 2007, 2006, 2007, approxapprox. .

2000 2000 respondentsrespondents, 109 , 109 settlementssettlementsSurvey Survey ofof settlement, settlement, district officialsdistrict officials ––

600 600 respondentsrespondents, 273 , 273 settlementssettlementsStatistical dataStatistical data –– settlement passportsettlement passportHistorical dataHistorical data –– zemstvo zemstvo statisticsstatisticsQualitative dataQualitative data -- more thanmore than 200 200 openopen--

endedended interviewsinterviews, 2 , 2 waveswaves

Research designResearch design

RandomizedRandomized intervention at the intervention at the settlement and district levelsettlement and district level

The effect of training and consultationsThe effect of training and consultationsII11–– information+traininginformation+trainingII22–– trainingtraining ++consultationsconsultationsCC –– controlcontrolSeparateSeparate control districtscontrol districts ((protection protection

against informal sharing of against informal sharing of information)information)

Regions included in the project

Penza oblast

Perm Krai

Adygeya Republic

ТТheoretical expectations from heoretical expectations from decentralizationdecentralization

++Closeness to the population, effect of elections- opportunity to adapt services to population’s priorities (Оates, Bardhan)

+ Transparency and accountability (Khemani, Shah)

- Government capture by local elites, growth of corruption (Proudhomme,Тreisman)

- Incapacity of small administrative units to provide good quality services(Тreisman)

Political decentralizationPolitical decentralization--participation in electionsparticipation in elections

The increase in participation in settlement level elections iThe increase in participation in settlement level elections is s significant.significant. In the region (Adygeya) with the most In the region (Adygeya) with the most significant institutional changes and the greatest number of significant institutional changes and the greatest number of recent elections therecent elections the increase is the most significant: from increase is the most significant: from 7575%% toto 85% 85% of the of the populationpopulation

Percentage of HHs 2005 2007Presidential Elections 89% 93%Regional Elections 77% 80%District Elections 76% 73%Settlement Elections 60% 63%

Participation in elections

0%20%40%60%80%

100%

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Settlem

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20052007

Political decentralization:Political decentralization:importance of elected governmentimportance of elected government

HouseholdsHouseholds’’ OpinionOpinion

Public OfficialsPublic Officials’’ OpinionOpinion

Percentage of HHs 2005 2007Elections are necessary 72.9 74.2 Should be Appointed 11.9 10.3 Does Not Matter 15.2 15.5

Percentage of POs 2007Should be appointed 37.4Should be elected by representatives 13.4Should be elected by the people 49.2

HouseholdsHouseholds’’ preferencespreferences

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HouseholdsHouseholds’’ Preferences as Perceived Preferences as Perceived by Public Officialsby Public Officials

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HouseholdsHouseholds’’ Preferences vs. Preferences vs. Public OfficialsPublic Officials’’ PerceptionsPerceptions

2005 (2005 (r=0,82)r=0,82) 20072007 (r=0,76)(r=0,76)

Roads

Unemployment

Former collective farmsHealth

Housing fund

Small-scale farming

Communal services

Private farmers

Waste Removal

Pre-school educationPublic transportation

General education

Recreational areasSmall business

Law and orderCemeteries

Cultural monuments

0%

10%

20%

30%

40%

50%

60%

0% 5% 10% 15% 20% 25% 30% 35%

Roads

Unemployment

Former collective farmsHealth

Housing fund

Small-scale farming

Communal services

Private farmers

Waste Removal

Pre-school education

Public transportation

General education

Recreational areas

Small business

Law and orderCemeteries

Cultural monuments0%

10%

20%

30%

40%

50%

60%

70%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Whose priorities are more important?Whose priorities are more important?

nn Of the richerOf the richernn Of those more involved in community Of those more involved in community

lifelifenn But not of relativesBut not of relatives((no correlation no correlation

with family connectionswith family connections) )

Which public officialsWhich public officials better understand better understand householdshouseholds’’ preferences?preferences?

nn ElectedElected officialsofficials((especially during the first especially during the first year after being electedyear after being elected))

nn MembersMembers of the of the settlement levelsettlement leveladministrationadministration((more than of districtsmore than of districts))

nn Members of the administrationMembers of the administration, , who have who have undergone undergone capacity buildingcapacity building throughthroughtraining and training and consultationsconsultations

Administrative decentralizationAdministrative decentralization--who who came to power in settlementscame to power in settlements??

Characteristics of the new members of Characteristics of the new members of the administrationthe administration

((inin ААdygeyadygeya andand PermPerm 25 % 25 % of rural of rural public officialspublic officials–– elected for the first time orelected for the first time or appointedappointed))

nn More educatedMore educatednn YoungerYoungernn Have lived fewer years in the settlementHave lived fewer years in the settlement

Performance Evaluations of Settlement Officials

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Adygeya Penza Perm

Performance Evaluations of Settlement Officials

1st Wave 2nd Wave

Relations with higher authoritiesRelations with higher authorities are are perceived as more formal and collegialperceived as more formal and collegial

Collegiality andCollegiality and meritocracymeritocracy after after the reformthe reform

nn Openness: the belief that members of the Openness: the belief that members of the administration are hired through meritocratic administration are hired through meritocratic processes increases by 30% when higher processes increases by 30% when higher authorities view settlement officialsauthorities view settlement officials’’ opinions as opinions as important.important.

nn Public officialsPublic officials, , which were surveyed in the second which were surveyed in the second wavewave, , are 22 percentage points more likely to are 22 percentage points more likely to consider that it is necessary to fight against consider that it is necessary to fight against corruption corruption compared tocompared to those surveyed in the first those surveyed in the first wave (with full set of controls).wave (with full set of controls).

Attitude towards corruptionAttitude towards corruption

nn Appointed officials Appointed officials are more likely are more likely considerconsider that corruption is that corruption is widespreadwidespread thanthan elected officialselected officials

butbutnn Elected officials Elected officials are more likely to are more likely to

considerconsider thatthat it is necessary to fight it is necessary to fight against corruptionagainst corruption

FiscalFiscal decentralizationdecentralizationnn Settlement taxes are badly collected and Settlement taxes are badly collected and

increasingincreasing the collection of these taxes is not a the collection of these taxes is not a priority for tax administration institutionspriority for tax administration institutions

nn Tax collectionTax collection, , understanding fiscal autonomyunderstanding fiscal autonomy, , recognition of the fact that there is a delay in recognition of the fact that there is a delay in receiving fundsreceiving funds is more is more correlated with the correlated with the characteristics of settlement leaders than characteristics of settlement leaders than with settlement characteristicswith settlement characteristics

nn Training and consultations are badly needed Training and consultations are badly needed for increasing the efficiency of settlement for increasing the efficiency of settlement level budgetary worklevel budgetary work

Services for the populationServices for the populationnn Change in satisfaction with basic servicesChange in satisfaction with basic services ––

housing and utilitieshousing and utilities, , maintenance of public roadsmaintenance of public roads, , lightinglighting, , waste collectionwaste collection -- is more noticeableis more noticeable in in regionsregions, , wherewhere formal government was established formal government was established for the first timefor the first time –– ААdygeyadygeya and Permand Perm, , but not for but not for the entire set of services;the entire set of services;

nn Poorer Poorer residentsresidents’’ satisfaction with services satisfaction with services decreases, which corresponds to the theory that decreases, which corresponds to the theory that elected officials cater to the median voterelected officials cater to the median voter((programs that fight poverty should take this programs that fight poverty should take this finding into account and be established at a higher finding into account and be established at a higher administrative level).administrative level).

The role of settlement administrations The role of settlement administrations in view of small budgetsin view of small budgets

nn In the short term we do not observe any correlation between In the short term we do not observe any correlation between the size of the budget and citizen the size of the budget and citizen satisfactionsatisfaction

nn Given small budgets, what is the significance of large Given small budgets, what is the significance of large administrative and service expenses?administrative and service expenses?

Qualitative research:Qualitative research:Settlement administrations are almost playing the role of a Settlement administrations are almost playing the role of a

““one one stopstop--shopshop””Assistance with pensionsAssistance with pensionsCadastral issuesCadastral issuesPreparing householdsPreparing households’’ documents for connection to the gas documents for connection to the gas

systemsystemCollecting payments for water, heatingCollecting payments for water, heatingRecording civil statusRecording civil status ((even if formally the service is assigned even if formally the service is assigned

to the district levelto the district level))++Mobilization of extraMobilization of extra--budgetary resources for celebrating budgetary resources for celebrating

public holidays, aid to veteranspublic holidays, aid to veterans+ + ССollection of a large amount of statistical dataollection of a large amount of statistical data,,most of whichmost of which, ,

is not recordedis not recorded, , aggregatedaggregated or publishedor published

How to conduct training andHow to conduct training andconsultations of local government consultations of local government institutions and how much time is institutions and how much time is

necessary to obtain resultsnecessary to obtain results??

TrainingTraining oror Consultations?Consultations?

Very little is known about the role that the administrative potential of recently elected leaders plays in service provision

We evaluate whether training and consultations lead to an improvement in the provision of public services in the context of decentralization

For this purpose we use the results of a randomized intervention, which was carried out in three rural areas in the Republic of Adygeya, Penza oblast and Perm Krai.

InterventionInterventionnn Settlements were Settlements were administered,administered, after after

randomized randomized selection,selection, two types of two types of treatments:treatments:•• InformationInformation--training(T1)training(T1) –– elected leadership elected leadership

received materialsreceived materials, , explainingexplaining several several techniques of public involvement in budgetary techniques of public involvement in budgetary decisiondecision--makingmaking, , settingsetting sociosocio--economiceconomicprioritiespriorities, , legallegal mechanismsmechanisms, , which affect which affect public service provisionpublic service provision. . In addition, externalIn addition, externalconsultants conductedconsultants conducted short practical short practical seminarsseminars..

•• InformationInformation--trainingtraining + consultations+ consultations (T2)(T2) –– the the same as for T1same as for T1,, plus permanent rural plus permanent rural municipal consultantsmunicipal consultants((RMCsRMCs) ) and rural legal and rural legal consultantsconsultants ((RLCsRLCs)). .

IdentifyingIdentifying prioritiespriorities, , ZalesnoeZalesnoesettlementsettlement, , Perm KraiPerm Krai

Relationship with citizensRelationship with citizens’’ prioritiesprioritiesnn In the case of Penza the average effect of the programs In the case of Penza the average effect of the programs

was more significant in the field of serviceswas more significant in the field of services,, which are which are considered to be priorities by the populationconsidered to be priorities by the population

nn At the baseline, citizens were asked the following At the baseline, citizens were asked the following questionquestion: : ««Imagine that you are allocating the Imagine that you are allocating the settlementsettlement’’s budget. What issues would you spend s budget. What issues would you spend money on first?money on first?»»

Public Service Percentage of HHs Administered by Significant Impacts?Roads 32.16% Settlement T2 (+) / T1 (+)Medical treatment 18.00% District -Pre-school education 12.18% District -Improvement of the condition of the housing fund 8.01% Settlement T2 (+) / T1 (+)Collection, removal and utilization of waste 7.35% Settlement T2 (+)Condition of cultural institutions and recreational areas 5.71% Settlement T2 (+)General education 5.60% District -Public transportation 5.49% District -Law and order 2.63% District -Maintenance of cemeteries 1.76% Settlement NoPreservation of natural and cultural monuments 1.10% Settlement No

Table 6: Summary of Estimated Impacts and Citizens' Priorities - Penza Region

Which intervention is Which intervention is effective?effective?

nn The effect of the The effect of the ““typicaltypical”” training and advising training and advising programprogram on the on the perceived quality of public services is perceived quality of public services is weakweak

nn More intensiveMore intensive programs with the participation of consultantsprograms with the participation of consultants at at the local level have a positive effect on the populationthe local level have a positive effect on the population’’s s satisfactionsatisfaction

nn Significant effectsSignificant effects can be observed mainly in those cases where can be observed mainly in those cases where capacity building is carried out capacity building is carried out after many years of experience after many years of experience with local selfwith local self--governmentgovernment or where there is a high initial level or where there is a high initial level of accountabilityof accountability

nn It appears that training and advisingIt appears that training and advising represents a represents a longlong--term term processprocess and evenand even intensive capacity building programs for intensive capacity building programs for municipalities that have recently experienced demunicipalities that have recently experienced de--centralization centralization might not lead to an increase in citizensmight not lead to an increase in citizens’’ satisfaction in the satisfaction in the short term.short term.

EvaluationEvaluation of local of local selfself--government performancegovernment performance

nn Settlement Performance IndexSettlement Performance Index ((SPISPI).).CitizensCitizens’’ evaluation of local selfevaluation of local self--government institutions in rural government institutions in rural RussiaRussia

Using the SPIUsing the SPIComplex instrumentComplex instrument, , which can be used for:which can be used for:

•• Monitoring and evaluation of programs and Monitoring and evaluation of programs and projects aimed at improving government projects aimed at improving government performanceperformance

•• Establishment of control indicators, goals, Establishment of control indicators, goals, parameters and tasks for future developmentparameters and tasks for future development

•• Included in the evaluation of local government Included in the evaluation of local government performance for giving development grantsperformance for giving development grants

Thematic Performance by RegionsThematic Performance by Regions

Change in Index Score 2006Change in Index Score 2006--0707AdygeyaAdygeya PenzaPenza PermPerm

Effective Effective ServiceServiceDeliveryDeliveryAccountability/Accountability/ParticipationParticipation

CorruptionCorruption

Overall EfficiencyOverall Efficiency

Social CapitalSocial Capital

Settlement Performance Index: Outcome

Which are the results of the first Which are the results of the first years of reform?years of reform?

nn Political decentralizationPolitical decentralization hadhadpositive results: positive results: our researchour research records records aa demand for decentralized elected demand for decentralized elected governmentgovernment, , elected officials better elected officials better understand citizensunderstand citizens’’ needs; the new needs; the new officials who came to power are more officials who came to power are more energetic, educated and youngerenergetic, educated and younger

Which are the results of the first Which are the results of the first years of reform?years of reform?

Administrative decentralizationAdministrative decentralizationAlso relatively successful; settlement Also relatively successful; settlement

administrations are more considerate administrations are more considerate aboutabout citizenscitizens’’ needsneeds, , the the relationship between district and relationship between district and settlement administrations is on settlement administrations is on average more formal and collegialaverage more formal and collegial

Which are the results of the first Which are the results of the first years of reform?years of reform?

Fiscal and financial decentralizationFiscal and financial decentralization is is complicated by the low level of complicated by the low level of understanding of budgetary understanding of budgetary processes among settlement officials.processes among settlement officials.

What is to be done?What is to be done?

Training is effectiveTraining is effective when it is when it is supplemented with consultationssupplemented with consultations,,adapted to local conditionsadapted to local conditions

As a result, the institution of local As a result, the institution of local consultants, who can share consultants, who can share information about Russian and information about Russian and international best practices, adapted international best practices, adapted to local conditions, should be to local conditions, should be established.established.

What is to be done?What is to be done?Establish a monitoring systemEstablish a monitoring system that includes that includes

citizenscitizens’’ evaluationsevaluationsTie monitoringTie monitoring to development grantsto development grants, ,

which stimulate interwhich stimulate inter--settlement settlement cooperationcooperation

Grants for local initiativesGrants for local initiatives should encourageshould encourageinterinter--settlement cooperation in order to settlement cooperation in order to achieve economies of scaleachieve economies of scale,, while at the while at the same timesame time, , maintaining the voluntary maintaining the voluntary character of character of such asuch a union and union and the the proximityproximity to to the populationthe population

What should be remembered?What should be remembered?nn The establishment of local selfThe establishment of local self--government is a government is a

lengthy processlengthy process.. Using Penza as an example, we Using Penza as an example, we see that citizens that have more see that citizens that have more maturematureinstitutions of local selfinstitutions of local self--government evaluate government evaluate what can be achieved by local governments more what can be achieved by local governments more realistically. They are also significantly more realistically. They are also significantly more receptive to programs that include training and receptive to programs that include training and consultations. consultations.

nn The improvement of life in the countryThe improvement of life in the country--side and side and the mobilization of resources should be linked to the mobilization of resources should be linked to the establishment of competent local the establishment of competent local government, which government, which representsrepresents the interests of the interests of the population.the population.