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THERE HAS BEEN GROWING INTERNATIONAL interest in using incentives to promote local government reform and fi scal performance. In Indonesia, the use of performance incentives is increasingly seen by the government and donor agencies as... more
THERE HAS BEEN GROWING INTERNATIONAL interest in using incentives to promote local government reform and fi scal performance. In Indonesia, the use of performance incentives is increasingly seen by the government and donor agencies as being a potentially valuable way of supporting an unevenly and erratically evolving decentralization process that is nearly a decade old. The need for national performance incentives in a decentralized system may not seem obvious. The dominant view of decentralization essentially portrays local autonomy as a right enshrined in a constitution, laws, or regulations.1 In this view, the role of the center is largely to develop an intergovernmental framework. If structured properly (e.g., it devolves appropriate functions, establishes a hard budget constraint, provides for redressing inter-jurisdictional fi scal disparities, etc.), local government behavior is supposed to be primarily driven at the local level by subnational elections. A more expansive view...
In early 2020, once the severity was recognized on a global scale, the COVID-19 pandemic quickly became the most immediately pressing crisis. In addition to the general demands the pandemic created for strong and competent national and... more
In early 2020, once the severity was recognized on a global scale, the COVID-19 pandemic quickly became the most immediately pressing crisis. In addition to the general demands the pandemic created for strong and competent national and international response, it also raised numerous issues and generated tensions around the sharing of responsibilities and resources among levels of governments in many countries around the world. A number of comparable health and economic issues have emerged fairly universally, but they have manifested in different ways and the responses and results have been diverse across and within countries. This monograph summarizes available information about how the pandemic has affected fiscal decentralization around the world, focusing on five Latin American countries: Argentina, Brazil, Colombia, Mexico, and Peru. It briefly characterizes the intergovernmental fiscal systems in these countries, provides an overview of the known impacts of the pandemic and sum...
Kenya's 39 county councils are the only form of rural local government in the country.' They are in almost every case geographically identical with districts, the administrative subdivisions of the central government. The... more
Kenya's 39 county councils are the only form of rural local government in the country.' They are in almost every case geographically identical with districts, the administrative subdivisions of the central government. The service area of a county council is all parts of a district not ...
It is increasingly difficult to find developing countries whose leaders have not debated or implemented some type of decentralization reform. But has decentralization worked? Does it actually help a country to deepen democratic... more
It is increasingly difficult to find developing countries whose leaders have not debated or implemented some type of decentralization reform. But has decentralization worked? Does it actually help a country to deepen democratic governance, promote economic development, or ...
Developing countries face considerable challenges in the design and operation of local infrastructure planning systems in decentralized or decentralizing countries. Many of these are well documented, but the complex political economy... more
Developing countries face considerable challenges in the design and operation of local infrastructure planning systems in decentralized or decentralizing countries. Many of these are well documented, but the complex political economy environment in which planning evolves has received insufficient attention. The forces driving decentralization and other public sector reforms shape how planning emerges, functions and performs. Local planning involves a range of differentially empowered and variously motivated actors at multiple levels and in diverse ways. The dynamics among them can support or undermine authentic local planning, with potentially significant implications for results. This paper reviews the evolution of local infrastructure planning with a focus on least developed countries, outlining the key expected and observed relationships among decentralization, planning systems and infrastructure development. The main goal is to create greater awareness of political economy issue...
of the material protected by this copyright notice may be reproduced or utilized in any form or by any means without prior written permission from the copyright owner. International Center for Public Policy Working Paper 14-17
much has been written about decentralisation and its potential for improving public accountability in service delivery. On the one hand, basic linkages and debates in the mainstream literature are clear – advocates/ believers argue that... more
much has been written about decentralisation and its potential for improving public accountability in service delivery. On the one hand, basic linkages and debates in the mainstream literature are clear – advocates/ believers argue that decentralisation promotes greater accountability and better services, while opponents/doubters raise concerns about local government technical and governance capacity. The reality is mixed – both sides of this divide can find empirical evidence that supports what they believe, but there is no real consensus beyond some very broad generalisations about the factors that matter most.1
Reading packs are commissioned by the UK Government’s Department for International Development (DFID) for independent study and professional development use. They are intended to be thought-provoking introductions to emerging issues and... more
Reading packs are commissioned by the UK Government’s Department for International Development (DFID) for independent study and professional development use. They are intended to be thought-provoking introductions to emerging issues and debates within the subject areas they cover. The views expressed are those of the author, and do not necessarily reflect the opinions of GSDRC, its partner agencies or DFID. © DFID Crown Copyright 2015. Licensed under the Open Government Licence: www.nationalarchives.gov.uk/doc/open-government-licence
Preface Part I: Introduction Part II: The Broad Comparative Picture Part III: Asia Experiences Part IV: Latin America Experiences Part V: Conclusion Index.
From early independence negotiations, Kenyans have debated how to organize the public sector in their ethnically diverse country. A brief early experiment with federalism was supplanted by a centralized system that dominated for five... more
From early independence negotiations, Kenyans have debated how to organize the public sector in their ethnically diverse country. A brief early experiment with federalism was supplanted by a centralized system that dominated for five decades. When political economy dynamics led to the adoption of a new constitution in 2010, Kenya undertook a transformative devolution to a single tier of subnational government at the county level. A foundational element of the new system is a significant intergovernmental fiscal transfer system intended both to empower the new county governments and to redress historical geographic and ethnic inequities in the distribution of public resources. The initial largely unconditional transfer system has generated positive effects, but it has also faced consequential challenges. This chapter reviews experience with intergovernmental transfers to date as well as some of the ongoing debates and potential options for improving the evolving transfer system and other interrelated elements of fiscal decentralization in Kenya.
There is increasing interest in the question of whether decentralisation promotes inclusive and equitable development. Evidence is limited and the results are highly variable. The premise of the chapter is that a first step in addressing... more
There is increasing interest in the question of whether decentralisation promotes inclusive and equitable development. Evidence is limited and the results are highly variable. The premise of the chapter is that a first step in addressing this question is to document how decentralisation works. Although an important public sector reform in Asia, decentralisation is organized and operates in diverse ways that reflect differences in country characteristics, histories and political economy forces. This chapter briefly examines key aspects of decentralisation in selected Asian countries—the intergovernmental system structure and decentralisation framework, the degree of fiscal empowerment and decision-making autonomy, and the level of accountability reflected in the local political system, among others. Each of these features has potential implications for inclusive development, although how they interact, the results they generate, and their dependence on other public policies may differ across countries.  Given the diversity, complexity and information gaps involved, few policy generalisations beyond relatively broad statements can be made. More work is needed to establish an evidence base on the role that fiscal decentralisation—supported by other institutional and political reforms—can potentially play in inclusive development in Asia.
Local and regional governments (LGS) will be important actors in ensuring that the UN’s Sustainable Development Goals (SDGs) are translated into action that is tailored to the most pressing needs of their communities. Despite broad... more
Local and regional governments (LGS) will be important actors in ensuring that the UN’s Sustainable Development Goals (SDGs) are translated into action that is tailored to the most pressing needs of their communities. Despite broad recognition of the subnational dimension of the SDGs, the specific roles that LRGs can and should play and the capacities and resources they require have received insufficient official consideration to date. If LRGs are to maximise their developmental impact, countries require robust intergovernmental frameworks and policies that empower, finance, motivate and support local and regional governments and citizens. The paper examines the requirements and options for subnational government finance and provides suggestions for strategic implementation, concluding by linking fiscal decentralisation reforms to the SDGs.
Indonesian policymakers are convinced that a number of perverse incentives are embedded in their system of intergovernmental transfers. Officials in countries throughout the developing world have similar views about their own... more
Indonesian policymakers are convinced that a number of perverse incentives are embedded in their system of intergovernmental transfers. Officials in countries throughout the developing world have similar views about their own intergovernmental frameworks. In Indonesia, perverse incentives are thought to negatively influence a wide range of local government fiscal behaviours, including as regards own-source revenues, spending and savings. An empirical analysis of the local government response to transfers, however, offers only mixed support for the existence and strength of the presumed incentives. Overall, the findings in this paper highlight the benefits to central governments of rigorously examining assumed perverse incentives in their intergovernmental frameworks before embarking on attempts to expunge them.
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