February 26, 2009Doug Hadden
Decentralization has become an important worldwide theme. Better service delivery. Decisions closer to the problem. Proper cultural context. Rapid response.
Yet, decentralization initiatives have mixed results, as I learned last year at an InterAmerican Development Bank conference. It comes as no surprise that important stakeholders like the World Bank want to develop a more effective method for evaluating local governance. This was the subject of a seminar presented by the Good Governance Peer Learning Network at the World Bank on Thursday.
The presentation from Serdar Yilmaz previewed the update to a working paper on local governance. Decentralization is one of the entry points for good governance.
There was a spirited discussion about the balance between providing local governments with discretion and making local governments accountable. Jamie Boex, or the Urban Institute, and Kai Kaiser, or the World Bank provided additional input and ideas.
There was a lot of interest in the group attending the seminar about sequencing governance reform for local governments. The following diagrams were of most interest. The tentative conclusion is that sequencing is necessary because of capacity and other issues. However, the path to governance should be based on the country context.
These are critical issues for the “second generation of fiscal federalism”. Good practices and empirical evidence is beginning to emerge. The updated working paper will have numerous case studies and go a long way to providing a framework for PFM reform for local governments.
This initiative is partly due to an internal audit that found that there is too much of a silo approach to local governance at the World Bank. It is a complex undertaking. Most countries have multiple levels of government. There are different dimensions of accountability: fiscal, political and social. And, there are numerous sectors like health, education, and sanitation to consider.
The presentation identified “public financial management tools” as important for supply-side public accountability approaches.
The Right to Information legislation in India was described as a successful method for improving service delivery.
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