Decentralized Service Delivery Decentralization and Intergovernmental Fiscal Reform Course Dana Weist Lead Public Sec

1. Decentralized Service Delivery Decentralization and Intergovernmental Fiscal Reform CourseDana WeistLead Public Sector SpecialistPRMPS 31 March 2004

2. Key Service Delivery Questions • Who is doing what? • How is it being financed? Answers to these questions often determine the equity, efficiency, and accountabilities of service delivery

3. Who is Responsible for What? • Public versus private sectors? • Which tier of the public sector? • Central or local government production • Contracting with other governments, private sector, community groups • Who • determines policy? • produces and provides services? • finances? • regulates, enforces, monitors, and evaluates?

4. How is it Being Financed? • Budget allocations • Government transfers/grants • Local taxes/charges/fees • Community charges/fees

5. Dilemma: Clinics Lack Medicine or Schools Lack Textbooks • What does the intergovernmental system have to do with it? • Discrepancy between responsibility and financing: local government responsible for providing services without resources • Insufficient funds: weak central or local revenue mobilization • Cash flow: Central Government slow to release needed funds • Weak budgeting: inability to forecast realistic costs • Leakage: corruption/malfeasance

6. Why Decentralize Education? Source: Luis Crouch

7. What does “decentralizing education” mean? • Diversity: communities have different needs, teachers have different capabilities, etc. • Over half of educational outcomes not associated with what goes on in classrooms • Delivering good education services requires information: • What pupils want and need • Which teachers are good and bad • What needs to be fixed in schools • Information is expensive and gets diluted and merged when it goes up management chain • Push decisions down to those who can easily get information • Make them want to get and use information (incentives, accountability)

8. Centralized vs. decentralized • What if whatever one region does causes problems or benefits for another region? • What if educated kids migrate? • What if everyone decides to use their own weights and measures? Their own tests, their own diplomas? • What if some areas are really poor?

9. Lack of Clarity in Who Does What • Functions too broad: “education” or “teacher management” decentralized • Instead: analyze each function in detail • Technical issues to balance (often unaddressed): • Information incentives, loss, dilution • Accountability pressure • Economies of scale • Capacity • Spillovers • Homogeneity of information (weights and measures) Decentralize Centralize

10. Decentralize Education Management or Governance? • Decentralize management: give goals, give block grants, let lower levels decide how to “produce,” make own decisions (hiring, firing, buying, norming) but accountability (for goals) still upward • Decentralize governance: horizontal accountability • Can do both, carefully • How deep should decentralization go: school autonomy, or just district decentralization (USA vs. other cases, Chile vs. Nicaragua examples)

11. What does “decentralizing education” mean? • Focus on: incentives (accountability) and information • Incentives to get and use information • Make information cheaper • Lower costs of transactions and decision-making

12. Decentralization of Functions • Organization • Planning • Personnel • Infrastructure • Resources • Regulation

13. Changing Central Roles and Functions • Change role from “command and control” to policy guidance and facilitation • Establish government’s policy framework • Structure proper incentives for local governments • Stop delivering most public services • Central government plays a central role • Legal and regulatory frameworks • Setting standards • Coordination mechanisms • Accurate, timely and comprehensive information • Capacity building programs

14. Building Capacity • Build capacity concurrently with devolving responsibility • “Learn by doing” • Establish professional networks and other modes for peer learning and sharing experience • Central government capacity must be strengthened too