Decentralization

Decentralization

Organizational Reform in Health System • Marketizing Reform • Non-marketizing Reform

Policy Maker Governor Strategic Manager Administrative Manager Sensors Actors

Policy Maker Governor Strategic Manager Administrative Manager Sensors Actors Problems Needs Requirements Interventions

Administrative Decisions Administrative Decisions Administrative Decisions Administrative Decisions Administrative Decisions Administrative Decisions

Holistic Realistic Characteristics of Administrative Decisions

Policy Maker Governor Strategic Manager Administrative Decisions Sensors Actors Problems Needs Requirements

Policy Maker Governor Strategic Manager Administrative Decisions Sensors Actors Problems Needs Requirements Interventions • Internal Sclerosis • Irrelevance of Decisions • Administrative Work Overload in HML • Sacrifice of Strategic Functions at HML

Policy Maker Governor Strategic Manager Administrative Decisions Sensors Actors Problems Needs Requirements Interventions • Incoherence in Operations • Disintegration of Policies from Functions

Policy Maker Governor Strategic Manager Administrative Decisions Sensors Actors Problems Needs Requirements Interventions • Policy-Framed Problem-Relevant Decisions

Policy Maker Governor Strategic Manager Administrative Decisions Sensors Actors Critical Level of Inflection or Critical Inflectional Level • System Wide Scope • Policy Informed • Extra Authorities • Hinge of Organization The level at which main administrative decisions are made

What is Decentralization? • Decentralization is the transfer of authority and responsibility for public functions from a country’s central government to sub-national levels of government or autonomous institutions (Rondinelli et al. 1983).

Key Areas of Change under Decentralization • Decentralization seeks to improve health system performance by • Changing the authorityand responsibility among key actors • Improving informationflows for decision making and performance evaluation • Establishing accountabilitymechanisms and incentives to hold all actors in the health sector accountable for fulfilling their responsibilities. • Developing the organizational and technical capacityto carry out new functions associated with reduced or increased authority.

Authority • The role of the central government in ensuring and monitoring effective and efficient decentralization is especially critical when the main concern is to enhance service delivery such as health and education that are important not only for national development but for poverty alleviation and welfare in general. • Decentralization does not mean that the central government no longer has any responsibility in these areas. What it means is that the nature of this responsibility has changed from direct service delivery to one of regulating and monitoring the efficiency and equity of services delivered by others – usually local governments”

Accountability • A key component to the success of decentralization efforts is the putting in place of mechanisms to hold all actors in the health sector – from the health minister down to outreach workers in the village – accountable for their decisions and actions. Brinkerhoff (2003) identifies three primary purposes of accountability: • To control the misuse and abuse of public resources and/or authority; • To provide assurance that resources are used and authority is exercised according to appropriate and legal procedures, professional standards, and societal values; • To support improved service delivery and management through feedback and learning (performance accountability).

Information • A key objective of decentralization is the generation of information– information for decision making and for holding officials, decision makers, planners, and health workers accountable for performance. • Decentralization can create new flows of information so that decisions can be informed and performance can be evaluated. • Proximity of stakeholders – e.g., health officials, clinic managers, patients – may increase the potential for information to be correct and to be used by decision makers (authority) and system monitors (accountability).

Capacity • According to Goodman et al. (1998) capacity is the ability to carry out stated objectives. It is integral to performance and particularly to sustained performance in the health sector. • Decentralization places high demands on local and national organizations to improve their capacity to handle new functions such as planning and budgeting, stakeholder consultation and consensus building, and managing information. • It is not enough to devolve responsibilities or develop systems of accountancy without providing the necessary resources, skills, and guidance to perform that function effectively.

Types of Decentralization • A common taxonomy classifies decentralization by three categories of devolved responsibilities: • Political • Administrative • Fiscal

Political Decentralization • Politicaldecentralization involves providing citizens or their representatives with additional public decision-making power, in particular through democratic processes (World Bank 2000). • Decisions made with greater participation will be better informed and more relevant to diverse interests in society than those made only by national political authorities. • Successful political decentralization generally depends upon several key components, including constitutional or statutory reforms, pluralistic political parties, strengthening of legislatures, and local political units.

Administrative Decentralization • Administrativedecentralization “is the transfer of responsibility for planning, financing, and managing certain public functions from the central government and its agencies, subordinate units or levels of government, semi-autonomous public authorities or corporations, or are-awide, regional, or functional authorities” (Rondinelli 1999).

Administrative Decentralization • Different levels of administrative decentralization are: • Deconcentration is defined as shifting power from the central offices to peripheral offices of the same administrative structure (e.g. Ministry of Health and its district offices). • Delegation shifts responsibility and authority to semi-autonomous agencies, (e.g. a Board of Health, a separate regulatory commission or an accreditation commission). • Devolution shifts responsibility and authority from the central offices of the Ministry of Health to separate administrative structures still within the public administration (e.g. local governments of provinces, states, municipalities). • Privatization transfers operational responsibilities and, in some cases ownership, to private providers, usually with a contract to define what is expected in exchange for public funding. (e.g. the conversion of public hospitals to private ownership, contracting out specific services)

National Level Provincial Level MOH Deconcentration Provincial Offices of MOH Transfer of authority to peripheral offices of the same administrative structure

National Level Provincial Level MOHME Delegation UMSHS Transfer of authority to peripheral semi-autonomous organizations

National Level Provincial Level Government Ministry of Interior Ministry of Health Devolution Provincial Government Provincial Health Board Transfer of authority to separate administrative structures still within the public administration

National Level Provincial Level Government Ministry of Health Devolution Private Health Organizations Transfers of authority and in some cases ownership, to private providers

FiscalDecentralization • Fiscaldecentralization refers to developing local government control over financial resources, either in terms of expenditure assignments or revenue generation. • Much of the literature on fiscal decentralization focuses on the nature of intergovernmental transfers, and on addressing differences in revenue-generating capacity across jurisdictions of different income levels. • Within the health sector, however, local governments are likely to have limited revenue-generating powers and are generally restricted to local cost-sharing mechanisms or local health insurance schemes. • Decentralized health systems therefore generally remain dependent upon transfers from the central government

Objectives of Decentralization Rationale Pros Cons Efficacy Local leaders are better informed about local problems and can make better decisions Little empirical support and reason to believe that central authorities have better technical information on efficacy Equity Local leaders can better target resources to vulnerable groups On a national level, decentralization may limit the ability to redistribute resources from richer to poorer localities Efficiency Local leaders can make more efficient decisions because they have better information about local conditions Local leaders may be subject to pressures, such as patronage or keeping inefficient facilities open. Quality Greater accountability may lead local leaders to improve quality Consumers may not necessarily express quality concerns to local leaders Financial Soundness Local leaders may be more aware of tradeoffs and fiscal constraints. Local leaders may be subject to pressures increasing inefficiency and may pass deficits on to higher levels Local Choice & Priorities In democratic localities, decentralization can allow more local choice and priority setting A local elite may dominate local decision Making and make choices that are not in the public's interest.

Policy Impressions Managerial Capacities Level Incentives Decisions Field Requirements

Policy Impressions Governance Managerial Capacities Level Incentives Decisions Capacity Building Inc. Mismatch Inf. Sys. Field Requirements

Rewards, Motivations, and Externalities at each Level Leads to Default Intentions and Behaviors at that Level If these are the same you can Decentralize power even with a weak Governance If there is a wide mismatch between these Externalities you need strong Governance for Decentralization Policy Impressions Governance Managerial Capacities Level Incentives Decisions Capacity Building Inc. Mismatch Inf. Sys. Field Requirements

Decentralization Impose New Managerial Competencies in Both Levels A General Recommendation is that don’t Defer Decentralization for Capacity Building Policy Impressions Governance Managerial Capacities Level Incentives Decisions Capacity Building Inc. Mismatch Inf. Sys. Field Requirements

Processes Input Outputs • Legal/Political • Stewardship • Policy-making • Enforcing regulations • & laws • Strategic planning • Fiscal • Budgeting • Revenue generation • Transfers • Organizational • Consensus building • Communicating • Stakeholder involving • Operations/maintenance • Learning • Implementing • Supervising • Evaluating/Reporting • Legal/Political • Laws • Regulations • Standards • Policies • Fiscal • Financial resources • and rules governing • use • Organizational • Leadership • Human Resources • Drugs, supplies & • equipment • Infrastructure • Organizational structure • Organizational • performance • Strategies/policies that • meet local needs • Formal & informal coalitions • Accountable to stakeholders • Equitable distribution of • resources • Regulations enforced • Standards met • Use of information for • planning and learning • Timely analysis /dissemination • of national health information Outcomes • Health system • performance • Access • Quality • Efficiency • Utilization • Responsiveness • Equity Impact • Incidence • Survival • Quality of Life • Equity Conceptual Framework for Evaluating Decentralization

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Decentralization