public policy 1 module b: local government organization and management module b local government...

Public Policy 1Module B: Local Government Organization and Management

Module B

Local Government Organization and

Management

(half day module)


Overview of the module

Decentralization and local government Basic functions Central local relations: the context for

local government General systemic improvements Specific reforms (internal reform,

strategic planning, effective budgeting) New challenges facing local

government


Key concepts Efficiency

Relationship between inputs (resources) and outputs (services provided). Efficiency is achieved by either increasing outputs for a given level of inputs: or reducing inputs for the same outputs

Effectiveness Relationships between outputs and

outcomes: to what extent are policy objectives achieved. Issue of intended and unintended outputs


Key concepts (2) Accountability

Is concerned with systems that are designed to ensure that the public service does respond its citizens.

Upward accountability Officials account for their behavior

upwards to their senior officers/politicians Downward accountability

Officials account for their behavior to their citizenry


Objectives of the module To understand the roles and

responsibilities of local government To appreciate the concrete conditions

and the nature of central-local relationship for local government

To familiarize participants with the strategies and tools with which to improve local govt organization and management


Objectives of the module (2)

Specific reforms Strategic planning Internal reform and Effective budgeting

To understand the options and challenges faced by decentralized local government


Decentralization/Local government

Almost universal move to decentralization and democracy

In 1974 less than a third of the countries in the South were democratic while today (2002) two thirds are

In 1980 only 10 of the 48 larger countries had elected sub-national government while now there are 34


Local government functions Town and country –including

land use- planning Water and sanitation Solid waste management Primary health and education Informal sector and

employment creation


Role of the private sector?

There are increasing moves to involve the private sector in the provision of services

Solid waste management is the most common

Evidence is not completely clear but suggests that there are efficiency gains but the poor may not always benefit


Regulation as well as service delivery

Local government is not just about service delivery but also about regulation

One of the most important is the regulation of the informal sector

The challenge is to be able to do this without major employment loss

Remember it is much easier to destroy jobs than create them


Central-local context Local government operates in an

environment that is determined by central government’s framework

“ a prerequisite of good governance is a clear national framework of intergovernmental relations, one which determined incentives and the accountability of each level of government” (Freire,2001, pxxv)


Assessing central-local transfers

A balance between funds and responsibilities

An equalization of needs and resources

Funds should be allocated by a formula

The system should be transparent and understandable

Funds should be predictable and timely

The system should not undermine the incentives for local revenue collection


Reforming central local finance

The challenge is to design: Robust mechanisms for

central-local transfers Systems that do not allow for

political interference


New innovations Central local transfers in Uganda are

now published in the national press to empower local individuals viz. a via their local government officers

Kenya has designed a new central local funding mechanism that is controlled by a committee/board which has independent individuals with a private sector representative in the chair


Fiscal characteristics of local govt institutions

Central governments hold on to the best taxes

Local taxes are difficult: property tax Administration problems Highly political Central control of local tax rates

Central-local transfers (but are they regular, transparent and formula driven?)


But structural tendency toward fiscal weakness

Scissors in service delivery: Elastic demand fast increases with

population, inflation and growth But service delivery (Education, SWM

and Health) have few economies of scale Limits to urban infrastructure in SAP

Lumpy, capital intensive, non revenue and forex earning


General improvements Research suggests the following

are important for successful urban management

Boundaries that include both the core and the growing periphery

Function coherence: functions that “hang together”

A buoyant revenue base (local or through a formula)

Qualified professional staffing


Comprehensive boundaries

Important that the municipal boundary includes all the built up area –this is a problem in fast growing urban areas

Ideal solution is an automatic trigger to increase urban boundaries (with a formula) as population increases (usually via the census)


Functional coherence Local government is more

efficient if it has control on the services that fit together and have mutually reinforcing benefits

These include Planning and development control,

water supply and sewerage, roads, drainage, regulation of public transport and environmental health


Functional coherence (2) This coherence is particularly important

in capital development and in services to new settlements

Two challenges Private providers are sometimes harder to

coordinate as you have less control Central funds can be earmarked which

makes it difficult sometimes to coordinate


A buoyant revenue base A buoyant revenue base (one that increases

automatically with growth and inflation) is important

Either from your own revenues or more likely via some central local formula

These are system wide reforms but local government has power to collect its own revenues

There is often a large difference between the good and poor performers


Collecting your taxes-Steps to take

A political commitment to collect A political culture that rewards collection

by rewarding those that deliver Officials that are “on top” of the collection A focus on the most important revenue

streams A process of frequently slow incremental

increases


Well qualified staff Influence of the UN classification of

systems into Separate; Unified or Integrated

But research suggest the importance of Personal status and influence Financial reward and other benefits Intrinsic satisfaction of the work Awareness of being of importance in

the organization


Internal reform Political processes often result in local

governments having A shortage of qualified staff at the top of

the system An excess of unskilled and/or manual

jobs at the bottom of the systems

Rebalancing this is a major challenge but a major political challenge


Internal reform (2)

Internal reforms are usually centered on three processes:

An exercise to determine who is employed by the local government –seems straightforward but often is not

Determine individual’s job description

Retrench those that are not necessary!!


Strategic planning Strategic planning has often become

more important because of the pressures of globalization

Involves a process where stakeholders and the local government decide on values, priorities and sectors

Designing a system to implement and monitor


Effective budgeting Effective Budgeting is the most

important tool in management and organization of local government –often they are produced only for the central ministry and not for local use

Reforms The production of realistic revenue

projections Make the budget reflect real resource flows


Effective budgeting (2) Reforms seem simply but require

politically leadership

New innovation is to try and incorporate the public more in the budget process –stimulated from the experience of participatory budgeting in Brazil


A caveat

Source: Adapted from Schick, Look before you leap


New challenges Despite all the problems and

difficulties there are new challenges for local local government in the following fields

Poverty Provision of basic infrastructure Supporting industry Social capital


Poverty is a local concern Primary health and education are

local govt concerns

Often only in terms of implementation but because of the fungibility becomes de facto determined by local politics

But accountability to local users also matters in ensuring delivery


Service delivery matters!

The poor suffer most from the non deliver of basic service (e.g. water, health) by being forced to more expensive private sources

On unit cost basis the poor pay more than the better off

Industrial development suffers by having to provide own sources (power and water)

tendency to encourage capital intensive development


Support social capital Social capital helps strengthens the poor’s

survival and enterprise development

Violence and a lack of security destroy social capital: law and order are important for development as well as security

Importance of constructive engagement with NGOs De facto important local players Engagement rather than control/undermining


Watch bad governance The strongest levers local government

has on negative ones –it is much easier to destroy jobs, livelihoods and communities than to build

This is mainly through resettlement and harassment of the informal sector

The policy conclusion is that it is more important not to be bad than it is to be good!

public policy 1 module b: local government organization and management module b local government...

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