1. European Union Regional Seminar on Decentralisation and Local Governance Nairobi 12 November 2011 Session 2.3: The Political Economy of Decentralisation Empowering Local Governments: Autonomy and Accountability Paul Smoke New York University

2.  I. Overview of Autonomy and Accountability  II. National Challenges to More Autonomy/Accountability Shifts under Decentralisation  III. Subnational Systems, Dynamics and Accountability  IV. Developing Empowered Local Governments: Strategic Approach Outline

3.  Autonomy is the power granted to local governments (LGs) to make decisions about generating and using public resources  Autonomy serves at least three key roles in decentralisation, allowing LGs to:  Act in a way that generates the expected efficiency enhancing benefits of locally made decisions (certain public functions)  Think/act in a more integrated manner about the delivery of public functions (territorial vs. sectoral)  Realize their general mandate to provide for the development and welfare of their jurisdiction (beyond performing “offloaded” functions) I. Overview of Autonomy and Accountability

4.  Despite its importance, autonomy is never total and absolute under decentralisation:  Central governments must establish a framework for autonomy that ensures adherence to certain standards of LG behaviour (legality control)  Central governments have critical national responsibilities—national integrity and security, macroeconomic stabilization, redistribution, etc.— that may sometimes conflict with LG autonomy  Central governments make legitimate decisions about national priorities (e.g. national standards of basic service delivery) that should apply to LGs  One view is that autonomy should at least in part be earned rather than automatic Autonomy: Critical but Not Absolute

5.  Accountability channels/mechanisms are critical to hold LGs responsible for their actions and establish their legitimacy:  Downward accountability to citizen voters through elections and other means  Horizontal accountability between elected LG councilors and LG staff  Upward accountability to higher levels of government  The nature of accountability relationships changes and evolves under decentralization and the necessary shifts are often challenging  Issues of LG scale/level: fiscal viability vs. political connectivity/relationships in multi-level systems Purpose and Levels of Accountability

6.  Under decentralisation (devolution):  There is a shift in the balance between upward and downward accountability towards the latter  LGs need some autonomy for true downward accountability (reduced/modified upward)  Horizontally, elected LG councils need greater autonomous control over LG staff  A core decentralisation challenge is getting the right balance between central control (more upward accountability) and LG autonomy (greater downward accountability)  This balance can/should/does change as decentralisation evolves Relationship between Autonomy and Accountability

7.  “Political will” often used to signal commitment of a unified center to traditional decentralisation goals and policies, including autonomy and accountability shifts, but this involves some voluntary loss of central power Politicians & bureaucrats in fact support decentralisation when it serves their interests (i.e. electoral, security of tenure, career trajectories, support coalitions, etc.) Strong political commitment may be insufficient; robust frameworks often not fully designed/implemented or are undermined by various types of interference Intergovernmental politics: influential LGs may demand power or the CG may seek to please or neglect some LGs II. Challenges to More Autonomy/ Accountability Shifts: National/Intergovernmental Political Dynamics

8.  Most responsibility for detailed design/implementation falls to administrators working in complex and poorly coordinated bureaucratic environments  Agencies often have different opinions regarding decentralization and their role in designing/managing it  Individual agencies may fail to comply with mandates of decentralization when their power is reduced or reform is led by an agency perceived as a rival  Such behavior can weaken subnational government autonomy and incentives to perform  International development agencies can reinforce such dynamics, especially in aid dependent countries The Central Government Bureaucratic Environment

9.  Decentralisation usually involves at least three assumptions regarding local political behavior:  A well conceived overall system with an appropriate degree of upward accountability and incentives reduce inappropriate behavior (patronage/clientelism/other non-democratic behavior)  Well designed local elections and other mechanisms create downward accountability of LG councils to constituents  Local councils have appropriate horizontal accountability relationships with local administration (sufficient autonomy)  How LGs use authority depends, among others, on:  The distribution/concentration of local power— elites, ethnic groups, political parties, unions, civil society movements, etc.  Electoral rules: open/closed lists, area or sub-area seats, etc.  Proactive engagement by adequately informed citizens  Councilor-administrator relationships and capacities  Resulting incentives faced by local politicians, bureaucrats and citizens (perceptions/level of trust in LGs influence voting behavior, civic engagement, tax compliance, etc.) III. Subnational Systems, Political Dynamics and Accountability

10.  Elections are increasingly recognized to be a blunt downward accountability instrument  Other mechanisms can promote public knowledge of how funds are generated/used and improve linkages between local revenues and services: information/education, public consultations, participatory planning & budgeting, complaint bureaus, social auditing, etc.  But such approaches can be pro forma and also subject to elite capture, corruption, weak capacity, etc.  Effectiveness requires awareness/interest/capacity:  Do residents know about/understand/accept these mechanisms?  Can they access these mechanisms and use them well?  Are they willing to use them (or do they see no point or are intimidated from doing so)?  Do they ultimately affect LG/citizen perceptions/behavior? Other Local Accountability Requirements/Mechanisms

11.  Subnational governments may not be the only public sector (supported) actors in the local landscape  Devolved governments may exist in parallel with deconcentrated administrations, both with offices in the same sectors/jurisdictions without clearly distinguished responsibilities  Other service delivery mechanisms with dedicated funding, e.g. constituency and community development funds, can further challenge the role of LGs  LG performance/governance can suffer if murky lines of accountability confuse citizens about what to expect from LGs and reduce willingness to pay LG revenues The Broader Subnational Accountability Landscape

12. Former Intergovernmental System in Kenya: A Cautionary Tale for Local Accountability Main GoK Players: Office of President Prime Minister Parliament Provincial/District Administration/ Development Committees Sectoral Ministries (>25) Ministry of Local Government (ODPM) Ministry of Finance Ministry of State for Planning and National Development (OPM) Community Development Trust Fund (CDTF) Local Authority Service Delivery Action Plans (LASDAP) PDP/DDP Sectoral Plans and Programs Provincial and District Development Plans (PDP/DDP) CDTF and Various CBO Plans Parliamentary Constituencies Parliamentary Constituencies Constituency Development Fund (CDF) and Plans Constituency Development Fund (CDF) and Plans

13.  Developing local autonomy and appropriate accountability channels—and the behavioural changes they require at all levels—is a daunting task  Challenges arise from a weak or problematic underlying decentralization strategy—often implemented too quickly or slowly with relative inattention to embedded political/institutional incentives that affect performance  Recently interest is growing in how central governments can more strategically implement and sequence decentralization to reconfigure accountability channels and enhance LG autonomy  LGs can also behave strategically under decentralization (in accordance with their “general mandate” for local development) IV. Developing Empowered Local Governments: Strategic Orientation

14.  National framework adoption approach: center sets the framework and assumes all actors/levels comply  Heavily managed gradualist approach: central government manages each step and makes decisions  Strategic asymmetric approach: overall reforms rolled out through use of, for example: consultative mechanisms; asymmetric treatment of LG with different characteristics and capacities; negotiated reform trajectories; and performance based approaches to create incentives for adopting reforms; after initial steps, more advanced reforms can be progressively undertaken  Each approach has benefits and risks, but the first two have dominated and often failed to meet expectations Implementation Strategy: The National Perspective

15.  Local governments should be pro-active and do what they can within the constraints of the national framework  Starting point: begin reforms with a locally developed vision and with a base of more contextually suitable and politically acceptable reforms that maximize chances of success and begin a foundation for further progress  Raising awareness: appropriate use of citizen information and education campaigns  Engaging citizens/voters/taxpayers: Appropriate use (depending on local conditions) of participation/oversight mechanisms, user committees, partnerships, etc.; better link revenue payments to service delivery  Risks of political capture of the local strategy, but reformers can try to be aware of these, and transparency and broad-based local engagement can help Implementation Strategy: The Local Perspective