Module B Local Government Organization and Management (half day module)

1. Module B Local Government Organization and Management (half day module) Module B: Local Government Organization and Management

2. 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 Module B: Local Government Organization and Management

3. 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 Module B: Local Government Organization and Management

4. 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 Module B: Local Government Organization and Management

5. 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 Module B: Local Government Organization and Management

6. 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 Module B: Local Government Organization and Management

7. 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 Module B: Local Government Organization and Management

8. 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 Module B: Local Government Organization and Management

9. 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 Module B: Local Government Organization and Management

10. 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 Module B: Local Government Organization and Management

11. 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) Module B: Local Government Organization and Management

12. 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 Module B: Local Government Organization and Management

13. Reforming central local finance The challenge is to design: • Robust mechanisms for central-local transfers • Systems that do not allow for political interference Module B: Local Government Organization and Management

14. 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 Module B: Local Government Organization and Management

15. 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?) Module B: Local Government Organization and Management

16. 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 Module B: Local Government Organization and Management

17. 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 Module B: Local Government Organization and Management

18. 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) Module B: Local Government Organization and Management

19. 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 Module B: Local Government Organization and Management

20. 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 Module B: Local Government Organization and Management

21. 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 Module B: Local Government Organization and Management

22. 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 Module B: Local Government Organization and Management

23. 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 Module B: Local Government Organization and Management

24. 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 Module B: Local Government Organization and Management

25. 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!! Module B: Local Government Organization and Management

26. 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 Module B: Local Government Organization and Management

27. 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 Module B: Local Government Organization and Management

28. 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 Module B: Local Government Organization and Management

29. A caveat Source: Adapted from Schick, Look before you leap Module B: Local Government Organization and Management

30. 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 Module B: Local Government Organization and Management

31. 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 Module B: Local Government Organization and Management

32. 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 Module B: Local Government Organization and Management

33. 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 Module B: Local Government Organization and Management

34. 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! Module B: Local Government Organization and Management