Can rural local governments deliver useful public goods and services? What local government innovations are likely to benefit the rural poor? This report from the United Nations Capital Development Fund (UNCDF) was prepared for a 2004 Regional Seminar and Learning Event on Local Governance and Pro-Poor Service Delivery in Manila and analyses UNCDF supported innovations by local governments (LGs) in Nepal, Bangladesh, Cambodia and Uganda.
Some of the innovations in service delivery introduced in the countries studied were use of block grants calibrated to relative poverty and fiscal need; linking planning to budgeting; adapting procurement procedures to local context; use of local oversight committees; capacity building and increased participation and access to information for local citizens. Outcomes of these innovations included: wider consultation; an increase in infrastructure and service delivery investments likely to benefit the poor; greater cost effectiveness and more local government accountability. The most important lessons learned were:
- The planning process can only be meaningful with pre-determined and predictable allocations. Giving LGs discretionary powers over capital expenditure use is not a recipe for disaster if rules and incentives are clear.
- This type of funding can switch the efforts of local politicians away from unhealthy lobbying of central politicians towards a focus on local resource mobilisation.
- Community based planning procedures tend to be biased towards very small local initiatives rather than more strategic activities. The politics of LG resource distribution tends towards equal shares for each councillor or village.
- Good planning alone will not lead to better infrastructure and service delivery, implementation is key, aided by flexible procurement. Outsourcing is problematic in rural sectors because of a weak and uncompetitive private sector, politics and corruption.
- The implementation of downward accountability, such as consultative planning, has shown some advances, but horizontal accountability is more difficult. The initiatives described have also focused on upward accountability.
The challenges of providing more effective infrastructure and service delivery through local governments are much greater in rural areas than in urban ones. With the right circumstances and appropriate support, rural local governments can deliver useful public goods and services and contribute to poverty reduction. Specific policy recommendations to achieve these goals are:
- Rural LGs are best able to deliver effectively where the user community is small and clearly defined and where vertical management issues are minimal i.e when there is little need for input from higher levels of government.
- Many key pro-poor functions must be retained at central level. Improving infrastructure and service delivery through LGs can be only one component of a much broader strategy for rural poverty reduction.
- The ‘weak local capacity’ mantra often used to argue against decentralisation is exaggerated. Real time capacity building (learning by doing) within an enabling policy and systems framework can greatly improve local capacity.
- Levels of participation and quality of service delivery achieved by LGs should not be compared against ideal standards, but against the real alternatives.
- Increasing participation is not just about tools or techniques, but also the LG institutional framework. Care must be taken that the participatory techniques that are introduced are cost effective and sustainable.
