22752 AGRICULTURE & NATURAL RESOURCES DEPARTMENT DISSEMINATION NOTES TOWARD SUSTAINABLE PRODUCTION SYSTEMS AND RURAL POVERTY REDUCTION Number 3 August 1995 Decentralization Can Work: Experience from Colombia During the 1980s, Colombia embarked on an ambitious program to decentralize respon- sibilities for planning, financing and delivering public goods and services. Despite con- cerns that municipal governments did not have the capacity to undertake these functions, initial findings suggest that municipal governments had substantial latent capacity. In many cases, they were able to improve significantly the volume and quality of services delivered. Colombia's wide-ranging local govern- lombian National Planning Department ment reforms in the 1980s included the conducted case studies in 16 municipali- institution of elected mayors to handle ties. These included two large, urbanized decentralized responsibility for local proj- municipalities - Manizales and Valledu- ects in municipalitiest -the lowest level of par, and six small, rural ones with popu- subnational government in Colombia, lations below 20,000. The case studies more than two-thirds of which have a were chosen on the basis of efforts to de- population below 20,000 and are essen- velop capacity, so were not necessarily tially rural in character. The municipalities representative of all municipalities. Evi- were given new fiscal powers and greater dence is too limited to constitute an revenue transfers from the central gov- authoritative review of the outcome of de- ernment. They were made responsible for centralization. But it highlights the possi- local roads, water supply, sanitation, agri- bilities revealed so far, and suggests how cultural extension, primary education, to build on these strengths. health clinics and hospitals, and natural resource management. Principal Results Skeptics feared that decentralization would lead to a collapse of services, since Public Approval Rating of Municipali- the municipalities lacked technical exper- ties Was High tise. However, decentralization disclosed Opinion polls and surveys were con- a substantial, hitherto hidden capacity of ducted to measure the public assessment municipalities to plan and execute pro- of municipalities. The approval rate was grams, often far better than the earlier around three-quarters for the two largest centralized administration. But perform- municipalities, but slipped to less than ance was uneven and not all municipali- one-third in the worst case. An over- ties worked well. whelming majority of people-ranging To review the experience so far and from 60 to 90 percent across municipali- draw lessons, the World Bank and Co- ties-said they trusted local governments m more than the national government. t Municipalities in Colombia typically Workshops and surveys revealed few include one or more urban centers as well as complaints of gross inefficiency or cor- outlying rural areas. This definition differs . of g i e o from some other countries where a municipal- ruption. However, those surveyed cor- ity usually includes only specified urban areas. plained of poor performance in some sec- AGR Dissemination Notes are an output of the Agriculture and Natural Resources Departmnent of the World Bank. Further information and additional copies may be obtained by contacting Dean Housden, ext. 36637. tors-20 percent of people in one munici- Local Resource Mobilization Increased pality, Zipaquira, thought the roads were Nine of the 16 municipalities enjoyed a better before decentralization, significant increase in per capita local Service Coverage Was Expanded government revenues in 1989-93-by as This was most evident in water supply much as 231 percent in Piedecuesta. How- Thls~ ~ ~ ~ ~ ~~~~~ee some small rural muic awitie suf-l and road projects. Twelve of the 16 mu- ever, some small, rural municipalities suf- nicpaltis iproedwater supply. In one fered a decline, up to 62 percent in Cucu- nicipalities improved watersucnoI one nuba. Where municipalities functioned municipality, San Juan Nepomuceno, onlyvel oa omnte eemr iln 5.5 km of a 32 km aqueduct was com- well, localcommunitieswere morewilling pleted between 1984 and 1988. An elected to pay additional taxes for improved mayor then took charge, with water ar- services. riving in the municipality in 1990, and by For the country as a whole, local reve- 1993 90 percent of rural and all urban nues rose from 2.0 percent of GDP in 1980 dwellings had water connections. to 3.5 percent in 1995. Transfers from the Hundreds of kilometers of new roads national government also rose, so total were built in the rural municipalities, and local resources increased from 2.6 to 5.5 road maintenance improved too. The pro- percent of GDP in the same period. In- portion of good roadsdoubled in the larg- creased funding was vital for the success est municipality, and in another case of municipalities in improving capacity. maintenance coverage expanded from 40 How Was Capacity Created? km to 170 km. However, problems with the quality Elections Were Vital and continuity of service in one sector or Earlier, technical and professional skills another persisted in most municipalities, were believed to be the key components of Community Participation Made Projects capacity. But decentralization showed that Cost-Effective motivation and innovation mattered much The public participated in choosing proj- more. Newly elected mayors brought a ects, and also contributed free labor and sense of mission and creativeness that materials, mainly for roads but also for previous municipal administrations water and education projects. This helped cut road construction costs by half in Ver- and transparency, and helped erode old salles and Cucunuba. There were no patronage networks that previously com- "white-elephant" projects, unlike previ- mandeered resources. ously. Community Participation Improved Municipalities Reversed "Urban Bias" Capacity It was feared earlier that local elites might Mayors consulted neighborhoods and capture municipal govermnents and focus community organizations before choosing spending on town centers, but in fact the projects and priorities. This improved greatest improvement in services took project identification and implementation, place in underdeveloped rural areas, and as well as willingness to pay taxes. the gap between them and rich munici- Local Leadership Was Important palities shrank. Water supply improved The enthusiasm of dynamic mayors dramatically, new roads were built and spread to municipal staff. The best mu- education expanded. In Valledupar, social nicipalities tended to attract the best pro- programs were targeted at the poor so fessionals, who further improved the mu- successfully that it stemmed migration .. ... from the countryside to urban areas. 2 Skills Were Rapidly Upgraded While there were failures as well as All municipalitie hired additional profesuccesses, the fact that decentralization All municipalities hired additional profes- ucvrdhde oa aaiy hc sionals-up from 29 to 118 in 1988-94 in uncovered hidden local capacity, which Valledupar. The ratio of professional to essn s non-professional employees rose every- lessons. where, most sharply where it was initially Main Lessons for Enhancing Capacity low. Training institutes and courses were . Local capacity will be sustained only started to upgrade skills, and the Munici- if there is a continuous demand for it pal Training Institute of Manizales opened from the local community and adminis- in 1994.frmtelclcmuiyada ins innovative Programs Improved Skills trators. A top-down approach to skill creation will often fail, since local people The smallest municipalities had difficulty may not place a high priority on the new in attracting and paying good profession- skills. Centralized bureaucracies can de- als. Some banded together in associations generate into patronage networks that to share the services of professionals. Oth- have no interest in absorbing new skills, ers hired professionals for limited periods explaining why many technical training for specific jobs. La Mesa, which is close to programs failed in the past. Elections are Bogota, was able to get professionals from an effective way of increasing political the capital to help. Most municipalities and civic competition, giving rise to made greater use of the private sector and greater demand and new ideas for im- NGOs, maximizing the use of local skills proving services and skills. and improving employment too. In one case, employees of the public works de- * Technical assistance should be de- partment were encouraged to form a co- mand-driven, not supply-driven as in the operative that was given a contract for past. Local communities and authorities road maintenance. They did the job more should first decide what their priorities efficiently than when they were govern- are and then assess the complementary m.nent employees. Municipalities experi- skills needed. Technical assistance should mentemployees. Municssfullywitis eper- in each case be tailored to local conditions. modes of organization and planning to This will help create capacity that is rele- cope with the challenge of their increased vant and will be utilized fully. responsibilities. * Systematic dissemination of best- Capital Utilization Was Improved practice in various sectors and of stories of successes and failures is needed to The expansion of responsibilities meant speed up the diffusion of skills through municipalities needed more buildings and the country. This will greatly improve lo- equipment. Some reduced capital costs by cal knowledge, and enable municipalities leasing out underutilized equipment. As- to learn from the mistakes and innova- sociations of municipalities sometimes tions of others instead of "reinventing the shared equipment with each other, and wheel." Standardized tender documents with the private sector. can help streamline procurement. News- Focusing Resources letters, television and prizes for the best municipalities can be used to promote The successful municipalities tended to aw arenes and t doe awareness of what works and what does focus their limited financial and human not. resources on one or two sectors, develop- ing excellence in these areas. Spreading * National governments should play a limited resources thinly over all sectors supportive role in strengthening munici- would have been unwise. palities. In strategic terms, governments need to enhance local possibilities, not 3 create centralized blueprints. Some gray areas still remain in Colombia regarding the exact powers and responsibilities of local governments, as the decentralization process is not yet complete. National gov- ernments should clarify the legal frame- work, remove obstacles and ensure de- centralization processes are fully imple- mented. They can launch public cam- paigns to improve public participation by making people aware of their rights and civic responsibilities. Finally, they can give special grants to the smallest, weak- est municipalities to upgrade capacity to certain minimum standards. Suggested Reading World Bank. 1995. Colombia - Local Gov- ernment Capacity: Beyond Technical As- sistance Report No. 14085-CO (Wash- ington DC: World Bank) This Dissemination Note is based on the findings of a World Bank report on local government capacity in Colombia prepared by Ariel Fiszbein and others. It has been written by Swaminathan Aiyar, Andrew Parker and Johan van Zyl under the supervision of Hans Binswanger, Senior Agricultural Policy Adviser, Office of the Director. 4