This book provides an overview of the principles underlying participatory budgeting. It analyzes the merits and demerits of participatory budgeting practices around the world with a view to guiding policy makers and practitioners on improving such practices in the interest of inclusive governance.
... See More + This publication includes five regional surveys, and seven country case studies can be found on the accompanying CD ROM. The study explains that participatory budgeting has been advanced by budget practitioners and academics as an important tool for inclusive and accountable governance and has been implemented in various forms in many developing countries around the globe. It adds that through participatory budgeting, citizens have the opportunity to gain firsthand knowledge of government operations, influence government policies, and hold government to account. However, participatory processes also run the risk of capture by interest groups. Captured processes may continue to promote elitism in government decision making. This book examines the potential and perils of participatory budgeting, as observed from practices around the globe. It is divided into three parts. Part I presents the nuts and bolts of participatory budgeting. Part II surveys experiences with participatory budgeting in various regions of the world. Part III (Vol. 2) is on the CD ROM accompanying this book, and it examines case studies of practices in seven countries.
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The almost unanimous passage of a landmark consensus constitutional amendment "the 18th Constitutional Amendment" restored Pakistan's constitution to its original intent of a decentralized federation of four provinces as envisaged in the 1956 and 1973 constitutions.
... See More + This amendment was hailed by policy makers and academics alike as a major step forward in reforming the multi-order governance in Pakistan. This paper takes a closer look at the provisions of this amendment and highlights both the potentials and pitfalls of the new constitutional order for good governance in Pakistan. The paper concludes that the amendment must be seen as a first yet small and incomplete step in reforming multi-order governance in Pakistan. A large unfinished reform agenda remains to be charted.
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Working Paper (Numbered Series) 87102 NOV 01, 2012
This paper is intended to provide an assessment of the impact of the silent revolution of the last three decades on moving governments closer to people to establish fair, accountable, incorruptible and responsive governance.
... See More + To accomplish this, a unique data set is constructed for 182 countries by compiling data from a wide variety of sources to examine success toward decentralized decision making across the globe. An important feature of this data set is that, for comparative purposes, it measures government decision making at the local level rather than at the sub-national levels used in the existing literature. The data are used to rank countries on political, fiscal and administrative dimensions of decentralization and localization. These sub-indexes are aggregated and adjusted for heterogeneity to develop an overall ranking of countries on the closeness of their government to the people. The resulting rankings provide a useful explanation of the Arab Spring and other recent political movements and waves of dissatisfaction with governance around the world.
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Policy Research Working Paper WPS6138 JUL 01, 2012
Indonesia has come a long way from centralized governance to decentralized local governance, and today Indonesia ranks among the most decentralized developing countries.
... See More + The Government of Indonesia is revisiting all aspects of local governance to make appropriate legal and institutional adjustments based on lessons leaarned during the past decade. An important area of this re-examination and possible reform is the central financing of subnational expenditures. The system of intergovernmental finance represents one of the most complex systems ever implemented by any government in the world. The system is primarily focused on a gap-filling approach to provincial-local finance in an objective manner to ensure revenue adequacy and local autonomy but without accountability to local residents for service delivery performance. This paper takes a closer look at Dana Alokasi Umum -- the most dominant program of unconditional central transfers to finance provincial-local government expenditures in Indonesia. The paper also presents illustrative simulations of alternative programs and compares these with the existing Dana Alokasi Umum allocations. The paper concludes that super complexity leads to lack of transparency, inequity, and uncertainty in allocation. Simpler alternatives are available that have the potential to address autonomy and equity objectives while also enhancing efficiency and citizen-based accountability. Such alternatives would represent a move away from the complex gap-filling approach to simple output-based transfers to finance operating expenditures. Capital grants would deal with infrastructure deficiencies. And the alternatives would institute fiscal capacity equalization as a residual program with an explicit standard to ensure that all local jurisdictions have adequate means to deliver reasonably comparable levels of public services at reasonably comparable levels of tax burdens across the country.
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Policy Research Working Paper WPS6075 JUN 01, 2012
In the new information age in the globalized and interconnected world, metropolitan areas hold the key to the future prosperity and growth of nations.
... See More + This paper takes a closer look at grant-financing regimes faced by metropolitan areas and their role in facilitating or hindering improvements in economic and social outcomes of residents of metropolitan areas. A review of 42 large metropolitan areas worldwide shows that, with a few notable exceptions, metropolitan areas in general are hamstrung from playing their potential role in economic advancement. Metro areas have large economic bases and therefore little a priori needs for grant financing, yet they have strong dependence on central transfers. This is because of the highly constrained fiscal autonomy given to these areas, especially in developing countries, with the singular exception of metro areas in China. Such a strong reliance on transfers undermines local autonomy and local accountability. General purpose transfers are formula based , transparent and predictable yet they discriminate against metropolitan areas as they utilize a one size fit all (common formula) for all local governments -- large or small. Such formula typically incorporate equal per jurisdiction component that discriminates against large metropolitan areas. Compactness is rarely rewarded and the greater needs of metro areas for transportation, education, health, culture and welfare go unrecognized. Overall the emphasis in grant financing of metro areas deals with vertical fiscal gaps or project based specific purpose grants. To ensure that metropolitan areas can play their dual roles in improving economic and social outcomes for residents, it is important to strengthen their fiscal autonomy while at the same time enhancing their accountability to local residents. The paper argues that results based grant financing of social and transportation services and tournament based approaches to encourage inter-jurisdictional competition need to be given serious consideration to ensure metropolitan autonomy while strengthening citizen based accountability.
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Policy Research Working Paper WPS6002 MAR 01, 2012
During the past decade, Indonesia has transformed itself from centralized governance to decentralized local governance. Local governments were given extensive expenditure responsibilities while keeping the tax system centralized.
... See More + To finance decentralized provincial-local expenditures, Indonesia implemented a new system of intergovernmental finance. This paper provides a review of the equity and efficiency implications of the current system of central-provincial-local transfers. It finds that the system of intergovernmental finance represents one of the most complex systems ever implemented by any government in the world. The system is primarily focused on a gap-filling approach to provincial-local finance to ensure revenue adequacy and local autonomy but without accountability to local residents for service delivery performance. This is done through a great degree of academic rigor using highly complex procedures. The complexity leads to a lack of transparency, inequity and uncertainty in allocation as well as creating incentives for jurisdictional fragmentation and reducing own-tax effort. Simpler alternatives are available that have the potential to address equity objectives while also enhancing efficiency and citizen-based accountability. Such alternatives would represent a move away from complex gap filling and special allocation approaches to simple, output based transfers to finance operating expenditures. These would be complemented by capital grants to deal with infrastructure deficiencies, and fiscal capacity equalization as a residual program with an explicit standard to ensure that all local jurisdictions have adequate means to deliver reasonably comparable levels of public services at reasonably comparable levels of tax burdens across the country. The paper argues that such an alternative system of intergoveernmental finance would preserve autonomy, while enhancing equity, simplicity, objectivity, transparency and accountability.
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Policy Research Working Paper WPS6004 MAR 01, 2012
This paper reviews the conceptual challenges as well as lessons from worldwide experiences in implementing public services and expenditure need compensation in fiscal equalization transfers with a view to developing guidance for practitioners.
... See More + The paper concludes that while in theory a strong case for a comprehensive fiscal equalization can be made, in practice fiscal need equalization as part of a comprehensive equalization program introduces significant complexity. This works against the simplicity, transparency and general acceptability of the program. This does not imply that fiscal need equalization should be abandoned in the interest of simplicity and transparency. Instead simplicity, transparency and local autonomy are preserved by having fiscal need equalization through public service oriented (specific purpose block transfers) output based fiscal transfers that impose no spending requirements for any functions or objects of expenditures. Such transfers contrast with traditional earmarked transfers, which impose conditions on spending for specific purposes or objects of expenditure and subsequent verification/certification of such expenditures. Such output-based block transfers would further enhance citizen based accountability for results and thereby offer potential for enhancing public confidence and trust in government operations.
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Policy Research Working Paper WPS6006 MAR 01, 2012
This paper attempts to improve the understanding and measurement of decentralization and its relationship with corruption in a worldwide context.
... See More + This is done by presenting the conceptual underpinnings of such relationship as well as using superior and more defensible measures of both decentralization in its various dimensions as well as corruption for a sample of 182 countries. It is the first paper that treats various tiers of local governments (below the inter-mediate order of government) as the unit of comparative analysis. In contrast, previous analyses erroneously focused on subnational governments as the unit of analysis which yields invalid cross-country comparisons. By pursuing rigorous econometric analysis, the paper demonstrates that decentralization, when properly measured to mean moving government closer to people by empowering local governments, is shown to have significant negative effect on the incidence of corruption regardless of the choice of the estimation procedures or the measures of corruption used. In terms of various dimensions of decentralized local governance, political decentralization matters even when we control for fiscal decentralization. Further voice (political accountability) is empirically shown to be more important in combating corruption than exit options made available through competition among jurisdictions.
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Policy Research Working Paper WPS5299 MAY 01, 2010
Governance indicators are now widely used as tools for conducting development dialogue, allocating external assistance, and influencing foreign direct investment.
... See More + This paper argues that available governance indicators are not suitable for these purposes as they do not conceptualize governance and fail to capture how citizens perceive the governance environment and outcomes in their countries. The paper attempts to fill this void by conceptualizing governance and implementing a uniform and consistent framework for measuring governance quality across countries and over time based on citizens' evaluations. Using data from the World Values Survey (and other sources) we implement this framework into practice and build citizen-centric governance indicators for 120 countries over the period 1994 to 2005.
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Policy Research Working Paper WPS5181 JAN 01, 2010
Intergovernmental finance is a significant source of sub-national finance in most countries. In both industrial and developing countries, formula based "manna from heaven" general purpose transfers dominate but co-exist with highly intrusive micro-managed "command and control" specific purpose transfers.
... See More + Both these types of transfers undermine political and fiscal accountability. Reforms to bring in design elements that incorporate incentives for results-based accountability are resisted by both donors and recipients alike. This is because the donors perceive such reforms as attempts at chipping away at their powers and recipients fear such programs will be intrusive. This paper presents conceptual and practical underpinnings of grant designs that could further simplicity, objectivity, and local autonomy objectives while furthering citizen-centric results-based accountability. The paper further highlights a few notable recent initiatives in both industrial and developing countries that embrace such directions for reform. The paper concludes that results-based intergovernmental finance offers significant potential to minimize tradeoffs between local autonomy and accountability while furthering access to merit goods.
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Policy Research Working Paper WPS5172 JAN 01, 2010
Regional disparities present an ever present development challenge in most countries, especially those with large geographic areas under their jurisdiction.
... See More + A neglect of these inequities may create the potential for disunity and, in extreme cases, for disintegration. In view of this, most countries actively pursue policies with a view to helping lagging regions catch up with faster growing regions. These policies have at best a mixed record of success. It is therefore useful to discern what type of policies work and why? In this context learning from the experience of the European Union (EU) may be particularly instructive as, over the years, it has provided significant support to assist poorer regions achieve convergence with the richer regions. This paper reviews the impact of EU policies for regional development to draw lessons of interest to other countries pursuing similar goals. The paper concludes that policies that serve to create an internal common market by creating a level playing field that enables poorer regions to integrate with the broader national and global economies have the best potential to advance regional income convergence. In this context, removal of barriers to trade and factor mobility and providing enhanced access to information and technology to the lagging regions should be main policy priorities for regional development.
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Policy Research Working Paper WPS4977 JUN 01, 2009
The design of intergovernmental fiscal transfers has a strong bearing on efficiency and equity of public service provision and accountable local governance.
... See More + This book provides a comprehensive one-stop window/source of materials to guide practitioners and scholars on design and worldwide practices in intergovernmental fiscal transfers and their implications for efficiency, and equity in public services provision as well as accountable governance.
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Publication 38077 MAR 02, 2009
Boadway, Robin [editor]; Shah, Anwar [editor]EnglishDisclosed
The book is divided into two parts. The first part macro federalism provides a fresh look at emerging constitutional challenges arising from globalization and the information revolution, as well as the dynamic-efficiency and growth implications of existing federal constitutions.
... See More + Several aspects of these systems are examined: (a) institutional design to achieve internal economic union; (b) policies for regional development; (c) conduct of monetary policy; (d) coordination of fiscal policies, with a special emphasis on tax harmonization; and (e) management of risks of insolvency from sub-national borrowing. The second part of the book local finance provides a comparative perspective on local finances and measures the progress of decentralized governance reforms in developing countries.
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This paper presents an overview of the constitutional-legal provisions on access to services in developing countries and shows that rights to public services are not justice-able.
... See More + It further documents the performance record to show that governments' response to such a weak accountability framework has been predictable - poor performance in service delivery with little accountability. The paper also shows that while there has not been a shortage of ideas on how to deal with this problem, most approaches have failed because they could not diagnose and deal with the underlying causes of government dysfunction. The paper presents an analytical perspective on understanding the causes of dysfunctional governance and the incentives and accountability regimes that have the potential to overcome this dysfunction. The paper also documents practices that have shown some promise in improving access. The paper then integrates ideas from successful practices with conceptual underpinnings for good governance and presents a citizen-centric (rights based) governance approach to access. It further explores how such a citizen empowerment and government accountability framework can be implemented in practice, especially in the context of developing countries, where most governments still operate in a command and control environment with little or no orientation to serve their people. It also presents ideas on how to overcome resistance to such reforms.
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Policy Research Working Paper WPS4643 JUN 01, 2008
This book provides tools of analysis for discovering equity in tax burdens and in public spending and for judging government performance to safeguard the interests of the poor, disadvantaged members of society like women, children, and minorities.
... See More + The book further concerns a framework for a rights-based approach to citizen empowerment; in other words, creating an institutional design with appropriate rules, restraints, and incentives to make the public sector responsive and accountable to an average voter. Various chapters in this book provide tools of analysis for addressing a public burden test, a poverty reduction test, a social protection test, a gender safeguard test, a responsiveness test, and an accountability test.
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This publication contains the results of the 3-year project Local Governance and Civic Engagement in Rural Russia sponsored by the World Bank between 2004-2007 and implemented by the Russian branch of the charity Charities Aid Foundation (UK) in 3 regions of Russia: Perm, Penza, and the Republic of Adygeya.
... See More + Above all, the project contributed to the development of civil society in villages and better cooperation between local government and rural residents, furthered the creation of the institutional environment needed for the vigorous implementation of the federal law No.131 On the General Principles of Local Self- Governance in the Russian Federation, and ultimately contributed to improving the quality of life in rural Russia.
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This publication contains the results of the 3-year project Local Governance and Civic Engagement in Rural Russia sponsored by the World Bank between 2004-2007 and implemented by the Russian branch of the charity Charities Aid Foundation (UK) in 3 regions of Russia: Perm, Penza, and the Republic of Adygeya.
... See More + Above all, the project contributed to the development of civil society in villages and better cooperation between local government and rural residents, furthered the creation of the institutional environment needed for the vigorous implementation of the federal law No.131 On the General Principles of Local Self- Governance in the Russian Federation, and ultimately contributed to improving the quality of life in rural Russia.
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This volume provides an overview of local government financial accounting and reporting and where better practices in cash management are documented.
... See More + The use of transparent procurement processes to mitigate corruption is also elaborated on while practical guidance is imparted on how and when to use debt, how to assess debt affordability, what debt to use, how to issue debt, and how to manage debt. The use of internal controls and audits to ensure efficiency and integrity is highlighted in this volume with particular emphasis on the role of external audit in combating corruption. Audit methods to detect corruption are also presented and discussed. The volume represents a collaborative effort of the Swedish International Development Cooperation Agency and the World Bank Institute to support reform of the public expenditure management and financial accountability systems in developing countries, especially in Africa.
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This book provides an overview of the principles underlying participatory budgeting. It analyzes the merits and demerits of participatory budgeting practices around the world with a view to guiding policy makers and practitioners on improving such practices in the interest of inclusive governance.
... See More + This publication includes five regional surveys, and seven country case studies can be found on the accompanying CD ROM. The study explains that participatory budgeting has been advanced by budget practitioners and academics as an important tool for inclusive and accountable governance and has been implemented in various forms in many developing countries around the globe. It adds that through participatory budgeting, citizens have the opportunity to gain firsthand knowledge of government operations, influence government policies, and hold government to account. However, participatory processes also run the risk of capture by interest groups. Captured processes may continue to promote elitism in government decision making. This book examines the potential and perils of participatory budgeting, as observed from practices around the globe. It is divided into three parts. Part I presents the nuts and bolts of participatory budgeting. Part II surveys experiences with participatory budgeting in various regions of the world. Part III (Vol. 2) is on the CD ROM accompanying this book, and it examines case studies of practices in seven countries.
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This book provides an overview of the principles underlying participatory budgeting. It analyzes the merits and demerits of participatory budgeting practices around the world with a view to guiding policy makers and practitioners on improving such practices in the interest of inclusive governance.
... See More + This publication includes five regional surveys, and seven country case studies can be found on the accompanying CD ROM. The study explains that participatory budgeting has been advanced by budget practitioners and academics as an important tool for inclusive and accountable governance and has been implemented in various forms in many developing countries around the globe. It adds that through participatory budgeting, citizens have the opportunity to gain firsthand knowledge of government operations, influence government policies, and hold government to account. However, participatory processes also run the risk of capture by interest groups. Captured processes may continue to promote elitism in government decision making. This book examines the potential and perils of participatory budgeting, as observed from practices around the globe. It is divided into three parts. Part I presents the nuts and bolts of participatory budgeting. Part II surveys experiences with participatory budgeting in various regions of the world. Part III (Vol. 2) is on the CD ROM accompanying this book, and it examines case studies of practices in seven countries.
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