& URBAN SERVICES FOR THE POOR Number 86 /July 2004 Community-Driven Development in Local Government Capacity Building Projects: Emerging Approaches in Africa This note is part of a series that considers the linkages between CDD and urban operations. We would welcome your feedback. Introduction Box 1. What is CDD? CDD is broadly defined as giving control of decisions and This note discusses the interface between community- resources to community groups. With a view to driven development (CDD) and decentralization. In sustainable and wide-ranging impacts, CDD operations particular, it focuses on the aspects of decentralization and regional strategies have increasingly embraced two programs related to local government capacity building, important pillars of sustainability and scale: linking where the practical application of CDD principles communities to the private sector and to local becomes meaningful. The note considers how the governments. The Africa region's vision of effective CDD principles of CDD are being incorporated into local encompasses five pillars: government capacity building projects, particularly those · empowerment of communities by providing them falling within the World Bank's Urban Development with fungible resources · empowerment of local government portfolio, and examines where potential limitations may · re-alignment of central ministries and service delivery exist. It does not intend to be a comprehensive review of · accountability either CDD or decentralization but rather to use a few · learning-by-doing examples, especially in projects under preparation or implementation in Africa, as illustrative of this emerging approach. Box 2. What is Decentralization? Decentralization encompasses a wide range of elements Background: The Interface of CDD and but evidence suggests that three conditions must be met to Decentralization effectively improve governance: · significant responsibilities and powers for local The World Bank together with client countries service delivery should be devolved to democratically elected local authorities (local governments) in line promotes CDD as the empowerment of with their capacities and potential, based on a communities and local governments, often principle of subsidiarity (political decentralization) phasing in empowerment by starting with · Resources, through own revenues (especially local communities. Decentralization is also aimed at taxes) and grants from higher-level governments, promoting empowerment at a local level, but is sufficient to meet these responsibilities should be generally focused on empowerment of the local devolved to local governments (fiscal government structure through devolution of decentralization) · Proper channels to encourage strong accountability between elected representatives and local bureaucrats and between elected representatives and their electorates (institutional decentralization) [Manor, 1999] political, administrative and financial authority. form of decentralization, local governments Both CDD and decentralization programs argue control less than 5% of public expenditure (versus that local rather than national decision-making in approximately 14% in other developing respect to resource allocation results in greater countries). Fiscal decentralization lags allocative efficiency and productive efficiency significantly behind political and administrative through the better matching of local preferences decentralization. (Ndegwa, 2002). Lessons to service delivery and offers greater potential for learned from analysis and experience to date accountabilityi. clearly show that effective decentralization requires a conducive broader institutional CDD and decentralization can have an important environment as well as effective channels for mutually reinforcing tendency. On the one hand, local accountability and oversight. (PREM Note successful decentralization requires some degree No. 55). of local participation. On the other hand, the process of decentralization itself can enhance Even where all these elements are present, opportunities for participation. In countries such however, local government capacity building is a as Cambodia, Malawi and Zambia, capacity long process and the ability of local governments building and resource devolution to communities to rapidly address local needs can be limited. in the form of Social Fund Projects, have Policy makers therefore must recognize the contributed to laying foundations for more challenge of meeting immediate demand while effective and rapid political devolution. In others, simultaneously building, rather than weakening, such as Uganda, Mozambique and Rwanda, the sustainable organizations and institutions to governments have chosen local government deliver services into the future. Finding flexible capacity building as their basis for further and innovative approaches to integrating CDD functional and budgetary devolution, and possibly and decentralization is one path that various even political devolution in the case of World Bank projects are now pursuing. This is Mozambique's yet to be elected rural authorities. done within the clear understanding that development impact requires sustained and While there is much synergy inherent in the embedded organizations and institutions of local objectives of decentralization and CDD programs, "governance". in practice there are often divergent tendencies. The World Bank has supported CDD in many Bringing CDD into Decentralization Projects: forms but it is often associated with Social Funds Implications for Design and other Rural Development programs. These have, however, frequently resulted in structures Earlier CDD projects generally required outside of local government that, while responsive community control and management of to community demands, have had limited (or investment funds (Malawi Social Fund I, Zambia negative) influence on the capacity building of Social Fund I, Mauritania Community Based local government to support sustainable service Rural Development Project I, NE Brazil Rural delivery in the future, within the local space. Poverty Alleviation Program). The approach to local planning was limited, usually focusing on a On the other hand, decentralization has had mixed community's selection of projects from a menu effects on public service delivery. Decentra- supported by each fund. In Malawi and Zambia, lization reforms are generally gradual and erratic, for example, about 3/4 of funds were allocated to often with political or functional devolution of primary schools. While this reflected a clear powers, but without the necessary fiscal demand within communities, the process did not devolution and capacity building to enable local substitute for local planning that would elucidate governments to effectively carry out their new the range of community development needs and mandates. In a recent study of decentralization in establish the basis both for government budgeting Africa, the degree of fiscal decentralization across and for leveraging other sources of funding in a the continent is revealed by the fact that in 19 of coherent and complementary way. the 30 countries analyzed to be undergoing some 2 Local governments should be able to prepare their own plans, often called District Development Box 3. Areas where community control and Plans (DDPs), in a strategic, participatory and management have higher success rates for coordinated fashion, across multiple sectors and goods and services that are small in scale and geographically distinct communities, and within a not complex capital constraint. This generally implies limitations in the control over resources by · where public goods do not span many communities and an emphasis on strengthening communities and do not require complex local government procedures and capacity to plan, systems that are often better provided by budget and manage funds effectively. Despite the local or central government or the private sector complexity of the task, local governments are learning from social funds on how to interact with · where there are strong, socially inclusive communities in the processes of planning, community-based organizations with budgeting and accountable plan implementationii. linkages with formal institutions · demand-based planning to articulate There are also lessons being learned in respect to priorities defined by the people themselves what types of projects and contexts are more · financial viability through community appropriate for community control, those more contributions and/or local and central appropriate for strong partnerships between local budget inscription government, the private sector and communities, · effective communication programs to and those which require higher levels of ensure transparency, voice and government involvementiii. There is therefore a accountability trajectory of control that ranges from community control over development funds to government projects, local governments are eligible to receive control, with a number of emerging combinations funding up to a ceiling by district or per capita, depending on the scope and nature of the sometimes with poverty incidence included. Over investments concerned. (See Box 3) time, performance-based criteria determine ceilings. Most financial and contract management A number of more recent projects are trying to is done by civil servants strengthened by technical take a more hybrid approach, learning from assistance, in order to promote learning-by-doing, earlier experiences (particularly in-country) and but in many poorer areas, community groups may attempting to strengthen local governance in a also have financial management responsibilities more holistic way. Projects that are taking this for sub-projects, often supported by NGOs. approach include the Uganda Local Government Development project, the Zimbabwe Local In the Mozambique Decentralized Finance and Capital Development Projectiv, the Rwanda Planning Program, based on a pilot financed by Decentralization and Community Development UNCDF, the Government is rolling out a hybrid Project and Mozambique Decentralized Planning approach in the four central provinces. At the and Finance Project. heart of the program is the establishment of institutions and mechanisms to support districts in Operational Experience: An Emerging developing comprehensive DDPs and annual Approach in Decentralization Projects in investment plans. The plans are multi-sectoral and Africa require alignment with the various sector directorates at sub-national levels to ensure that In the local government development projects in recurrent costs and sector standards are Uganda, Mozambique, Zimbabwe and Rwanda accommodated. The plans are the basis for (among others), the World Bank's points of entry mobilizing funds through the governments are mainly in financing fiscal transfers, providing budgeting process as well as from other possible advice on intergovernmental relations and partners, including donors, NGOs and providing technical assistance for local communities themselves. Most notable, however, government capacity building. Under most is that the Government has published guidelines 3 on participation in district planning, setting out government, local communities and identification "the rules of the game" for community of the most appropriate, affordable and cost- involvement and representation at a district level effective solutions taking into account both (districts tend to cover a large number of capital and maintenance costs, proper design, communities). These guidelines promote the effective oversight and realistic provisions for establishment of "local consultative councils" or operations and maintenance. forums of local governance where community representatives and local administrations debate Under the first project in Uganda, approximately and approve priorities for the DDP and its Ush. 30 billion was spent in over 4,500 projects in consequent annual investment plansv. The the areas of education (30%), roads (25%), health formation or strengthening of such local forums is (10%), sanitation/drainage (10%) and water supported under the project. (14%). Of Tranche 1 projects, 77% were rated satisfactory or highly satisfactory and this rose to Under the World Bank supported project, there 92% in Tranche 2. LGDP II, in the process of are two windows of financing that require being finalized, is now multi-donor and different types of CDD. For larger scale encompasses over $140 million. infrastructure investments (covering a number of communities and which are more complex), the In Rwanda, where the National Assembly emphasis is on strengthening the government's approved a fiscal decentralization policy in May capacity to plan, budget, finance, procure and 2001, a national Common Development Fund was manage contracts (most often with local private established to provide grant support for the local contractors). Planning, oversight and monitoring development budgets of districts, towns and the functions, however, are to be undertaken by the City of Kigali. The Government of Rwanda Local Consultative Councils. There is, however, requested support from the World Bank through a another window of funds for smaller investments second Decentralization and Community in communities where local artisans and other Development Project. The project supports better community contractors will be implementing organization of development planning through a agencies. In neither case is a community bottom-up approach which involves communities committee managing the funds, but rather making throughout the project cycle from identification decisions as to which activities to include in and evaluation of sub-project feasibility, to annual plans and to monitor plan implementation. decisions on financing. Consultants will be While many lessons have been learned from the employed to inform and mobilize local past, the program is relatively new in populations and districts regarding projects and Mozambique and entrenching a process of help districts formulate DDPs and action plans. learning-by-doing will be a key determinant of However, financial management for larger sub- success. projects will be done by the district administrations, with considerable institutional In Uganda, lessons from a variety of previous and capacity building at local levels to reinforce projects were incorporated into project design for the functional framework of decentralization. This the Local Government Development Project I is consistent with the Government's anti-poverty (LGDP I). A thorough Community Participation strategy to empower local government to provide Review showed that previous failures had resulted economic and social services to local from "top-down" or "parallel" structures, a lack communities, while at the same time empowering of community consultation and ownership, communities to demand such services from their unsustainable investments and inadequate government. capacity of the government to manage investment contracts. In the LGDP I Project, therefore, the "model" provided unconditional grants to local governments that promote downward accountability. Successful implementation depends on the strong ownership of both the 4 Conclusions and Emerging Approaches: was the claim to centralization as a preferred organizational model made or implied, nor was There are clear lessons emerging indicating where decentralization considered undesirable, only CDD principles can be applied to increase the difficult to effect and sustain." (Ndegwa 2002). It effectiveness of decentralization programs, and therefore comes down to a combination of even accelerate them. Recommendations for national government, local government and design largely target components related to the community commitment to implementing and national policy and institutional environment as incrementally improving the "rules of the well as capacity building for both community game"/regulatory framework for as long as it organizations and local government. The key is to takes to build sustainable service delivery at a assist governments in establishing appropriate local level. "rules of the game" for effective participation and accountable plan implementation at a local level. These "rules of the game" include: Selected References: · establishing an enabling environment through relevant institutional and policy Andrews, Matthew and Shah, Anwar, "Voice and reforms (devolution of functions and local governance in the developing world. What is finances), sound sector policies and clear done, to what effect and why?" 2003 institutional arrangements at all levels of government Hicks, James, " Mozambique DPFP : Review of · ensuring that investments are responsive World Bank Operational Modalities", 2001 to informed demand · allocating financial management Manor, James, "The Political Economy of responsibility according to the scale and Decentralization". World Bank 1999 nature of the investments and requirements for sustainability McLean, Keith, Presentation to Bank-wide CDD · establishing participatory mechanisms for learning event entitled "CDD and community control (ranging from control Decentralization: overview of Links and of funds to oversight linked to Institutional Options", 2002 disbursement) · promoting social and gender inclusion Mozambique Decentralized Planning and Finance · supporting capacity building of CBOs as Project Appraisal Document well as local governments · facilitating community access to Mozambique Municipal Development Project information Appraisal Document · instituting rules and strong incentives that are well known and supported by M&E Ndegwa, Stephen, "Decentralization in Africa: A · maintaining flexibility in design of Stocktaking Survey", World Bank 2002 arrangements and learning-by-doing · PREM note 55, " Decentralization and designing for scaling up within the Governance: Does decentralization improve national intergovernmental fiscal system service delivery?" 2001 The World Bank and its clients are increasingly PREM note 51, "Promoting good governance finding innovative and flexible approaches to with social funds and decentralization" 2001 improving the effectiveness of decentralization. Integrating the lessons learned from CDD Rwanda Decentralization and Community programs has been increasingly important in this Development Project Concept Document, 2003 process of learning-by-doing. In the study on Africa, it is significant to note that " in no country 5 Serrano, Rodrigo, Presentation at World Bank Workshop entitled "Lessons on Participatory Municipal Planning" 2002 Uganda LGDP I and II Project Appraisal Document This note was prepared by Kate Kuper. You can contact the author via e-mail: kkuper@worldbank.org Additional copies can also be requested via e- mail: socialdev@worldbank.org i There is also some evidence that corruption is less pronounced at local than at higher levels. (e.g. Uganda and Philippines) ii At the same time there is also increasing convergence with local government procedures and budgets being achieved through improvements in design of some social funds e.g. Zambia Social Fund, Mauritania Community Based Rural Development Project, Madhya Pradesh District Poverty Initiative Program. iiiSee a good discussion of the conditions for voice and influence by Andrews and Shah. iv The project was prepared but never obtained Board Approval as Zimbabwe was suspended due to arrears to the IMF and the World Bank. v Social and gender inclusion representation required in guidelines for establishing Councils 6