1. 1 Supporting Decentralization as an Entry Point for Governance Reform in Sierra Leone Yongmei Zhou (AFTPR) Governance and Anti-corruption Core Course (Apr 23, 2007)

2. 2 Governance in CAS: Perspective of a Governance Specialist Why and how did we choose a few entry points when governance shortcomings were pervasive? What’s the role of a governance specialist in the Country Team? How to generate support among country team colleagues and development partners for a multi-sectoral agenda? This presentation focuses on the accountability and empowerment story, not the growth story

3. 3 Sierra Leone: a poor post-conflict country 5 million population Civil war (1991-2002) displaced half of population, caused 20,000 death, and destroyed infrastructure and social capital 176 th out of 177 in UN HDI ranking Infant mortality: 166 out of 1000; SSA average: 101; world average 57. Under-5 mortality: 284 out of 1000; SSA average: 171; world average 86. Life expectancy 37; SSA average: 46; world average: 67. Adult literacy: 36%; SSA average: 71%; world average 80%

4. 4 Extreme poverty and regional inequality

5. 5 Causes of conflict Post-independence deterioration in governance Local councils dissolved in 1972 Centralization of power, resources and corruption in Freetown Rural population deprived of economic opportunities, education, political participation Marginalization of youth from decision-making

6. 6 Numerous studies identified pervasive governance shortcomings Studies: Governance and Anti-Corruption Survey (2003), ESW “Strategic Options for Public Sector Reform” (2004), CFAA (2002), HIPC AAP (2004), Legal and Judicial Sector Assessment (2003) Findings  Overly centralized control of resources and lack of checks and balance  Rampant informality and corruption in public sector  Very limited capacity in public sector  Lack of citizen/business confidence in state institutions

7. 7 Political Accountability Political competition, broad-based political parties Transparency & regulation of party financing Disclosure of parliamentary votes Formal Oversight Institutions Independent, effective judiciary Legislative oversight (PACs, PECs) Independent oversight institutions (SAI) Global initiatives: UN, OECD Convention, anti-money laundering Citizens/Firms Decentralization and Local Participation Decentralization with accountability Community Driven Development (CDD) Oversight by parent-teacher associations & user groups Beneficiary participation in projects Civil Society & Media Freedom of press, FOI Civil society watchdogs Report cards, client surveys Private Sector Interface Streamlined regulation Public-private dialogue Extractive Industry Transparency Corporate governance Collective business associations Effective Public Sector Management Ethical leadership: asset declaration, conflict of interest rules Cross-cutting public management systems: meritocracy, public finance, procurement Service delivery and regulatory agencies in sectors Good Governance has many entry points – the broad view today

8. 8 What to bet on – back in 2003? Decentralization and Empowerment? Human Resource Management Reform? Public Financial Management Reform? Judicial Reform?

9. 9 IDA made a high-stake bet on devolution and empowerment 2004, IDA $25m Institutional Reform and Capacity Building Project 2005, JSDF $2m for strengthening community collective action & engagement with local councils 2005, PHRD grant $900,000 for strengthening leadership of the decentralization process Existing social action project (NSAP, 2003-2008, $35m) adopts a strategy to support decentralization and strengthen local council capacity 2006, DfID and EU gave a $25m trust fund to the World Bank to top up IRCBP 2006: JSDF $900,000 for an NGO providing primary justice service to rural people 2007: Accelerated Child Survival Project ($35m) to strengthen gov health grant system and LGs capacity to deliver

10. 10 Citizen and business engagement open and accountable local political process, civil society and media oversight, public-private partnership Local government capacity and governance practice Central government enabling conditions allowing fiscal and administrative autonomy, adequate & predictable transfers, refrain from political interference, domestic accountability mechanisms Community collective action Create enabling conditions for effective local governance

11. 11 IDA also supports sustained PFM reform PFM reform history (attached) IRCBP and Budget Support operations supports  Legal and regulatory reform  IFMIS  Procurement reform  Local government financial management capacity building  Budget reform This new phase of PFM reform is driven by the decentralization process

12. 12 What did we choose NOT to invest in? Civil service reform: no champion Legal and judicial reform: proposal too expensive and not convincing

13. 13 Why betting on a decentralization-driven governance reform program?

14. 14 Some criteria for a good entry point for governance reform A good thing to do A good time to do it Some influential people lose sleep over it Can lead to visible and quick enough improvement in something that people care about Can generate further momentum and expand constituency for longer-term governance transformation Q: Was devolution a good entry point in the Sierra Leone context?

15. 15 A good thing to do, at least in theory Addressing a root cause of the civil war – centralization of power and resources and resultant inequality and rampant corruption. Opening space for political participation More transparent and equitable resource allocation across districts Bringing resource closer to frontline providers and hopefully better delivery Bringing the state closer to citizens and hopefully building state legitimacy Risk of local capture and corruption to be explicitly addressed

16. 16 Window of opportunity & just-in-time support IRCBP preparation phase coincided with GoSL preparation for LG legislation and elections Immediate engagement with newly elected LGs Start a virtuous cycle

17. 17 MoF counting on fiscal decentralization to improve effectiveness of public spending Sustained efforts to improve effectiveness of public spending in the past decade (see PFM reform history) MoF frustrated with pervasive leakages of resources  PETS 2002: less than 10% of all essential drugs could be accounted for by District Medical Officers; less than 5% of all essential drugs were accounted for by periphery health units.  PETS 2002: only 72% teaching and learning materials reached the intended schools from District Edu Offices, arriving 170 days later than contracted.  PETS 2003: Receipt of seed rice: 8% before planting season; 35% during planting season; 57% after planting season Establish Local Gov Finance Department to focus on fiscal decentralization

18. 18 Early results and effective communication are the key to expand constituency and open more doors for reform

19. 19 Building constituency for decentralization through LC Rapid Results Initiatives Immediately after LC elections, central government challenged and supported each LC to identify, design, and implement one Rapid Result Initiative that was  Urgent and compelling  Visible – people will notice the difference  Can be translated into real impact in 100 days MLGCD Decentralization Secretariat provided coaches MoF disbursed Local Government Development Grant four months after elections

20. 20 LCs did not disappoint LCs RRIs tackled diverse development issues: water, sanitation, feeder roads, bridges, traffic, rice production, post-harvest loss. Examples of results:  Travel time between Sewafe and Peya of Nimiyama Chiefdom of Kono District reduced from 1hr to 15 minutes and transportation cost reduced from Le 5,000 ($1.75) to Le 2,000 (70 cents).  Increase the availability of high-yield quick-harvest Inner Valley Swamp Rice seeds in Pujehun District by 4,000 bushels within 90 days  Ensure the availability of safe and portable drinking water in the mains and laterals and 25 public taps in the Moyamba township within 90 days.  Total volume of Garbage in two lorry parks and two markets in Kenema Township reduced by 90% within 95 days. Cheaper and faster than MDA projects

21. 21 LCs RRIs to generate a virtuous cycle Central Government and donors willing to transfer resources to LGs with good track record. Citizens and firms perceive relevance of LGs and engage in collective action (express demand for public service, participate in co-production, hold LGs accountable, pay taxes). LGs exercise authority and accumulate capacity. LGs adopt inclusive accountable practices. Given opportunity to learn- by-doing, Progressive LGs establish track record, develop capacity and motivate other LGs to catch up.

22. 22 And preventing a vicious cycle of deteriorating local governance Inadequate and/or unpredictable transfers; limited autonomy & authority; Weak monitoring Low impact of LG spending Citizens and firms discount LGs relevance and do not participate in LGs decision process and do not pressure for performance. LGs: capacity low, Some corrupt

23. 23 Sector RRIs to give credibility to sector devolution Sector staff performing functions related to primary health, crops/livestock, DEC schools received orientation of the Rapid Results Approach. RRIs developed by sector teams Local council sector committees would monitor the progress of the sector RRIs: accountability and partnership between politicians and professionals. Each RRI team would include members from beneficiary communities

24. 24 Central Government and donors willing to transfer resources to LGs with good track record. Citizens perceive relevance of LGs and engage in collective action (express demand for public service, participate in co-production, hold LGs accountable, pay taxes). LGs exercise authority and accumulate capacity. LGs adopt inclusive accountable practices. Given opportunity to learn- by-doing, Progressive LGs establish track record, develop capacity and motivate other LGs to catch up. Are purse- holders aware of LG achievement and willing to further empower progressive LGs?

25. 25 Negotiation with MoF: improving LG budget predictability and autonomy Increasing share of budget as grants to LGs: 4.4% non-salary non-interest recurrent budget in 2005; 8.7% in 2006; 13.2% budgeted in 2007. Treating grants to LGs as priority budget items Reduce cumbersome bureaucracy in grant transfer process  237 signatures per grant per quarter * 14 grants * 4 quarterly payments/grant = 13,272 signatures a year!  Recently consolidated grants and forms

26. 26 Field trips to build understanding and confidence in LGs and communicate management support Field trip in every supervision mission (joint with DfID/EC/UNDP): make both progress and challenges transparent Feb 2006 Country Program Portfolio Retreat: participation by sector colleagues and sector managers 2005 MD/CD visit; Jul 2006 PW visit Mid-term review: invite sector colleagues

27. 27 Set standards for accessing LGDG: results from 1 st Comprehensive LG Assessment Source: Comprehensive Local Government Performance Assessment (Nov 2006) Legend 5 minimum conditions 4 minimum conditions 3 minimum conditions 2 minimum conditions 0-1 minimum conditions 7 Minimum conditions 1. Financial management 2. Development planning 3. Budgeting and accounting 4. Procurement 5. Transparency and accountability 6. Project implementation 7. Functional capacity of LG

28. 28 LCs adopting good governance practices, many not yet adopted by ministries Source: Comprehensive Local Government Performance Assessment (Nov 2006) Legend 70 - 88 points 60 - 69 points 50 - 59 points 30 - 49 points Performance measures 1. Management, organization and institutional structures 2. Transparency, openness, participation and accountability 3. Planning systems and project implementation, M&E 4. Human resource management 5. Financial management, budgeting and accounting 6. Fiscal capacity and local revenue mobilization 7. Procurement and contract management

29. 29 Expanded support for LGs and investment in grant system GoSL & IDA/DfID/EC co-finance discretionary Local Gov Dev Grant: allow LCs discretions and build in incentive in grant allocation formula. IDA social fund (NSAP)  Feeder road component has been adjusted to provide direct financing to LGs and strengthen LGs capacity to manage public works projects

30. 30 District Medical Officers embraced decentralization Primary health service delivery responsibilities devolved to LCs in 2005, along with tried grants DMO is part of LC Management Team and a co-signatory of LC health grant account DMO enjoys operational autonomy “Decentralization has stopped the tide of brain drain among medical professionals because we now have interesting work to do.” “Decentralization allows us to quickly respond to disease outbreaks. We don’t have to wait for the ministry.” “Decentralization means if I have a problem I can knock on the doors of our council rather than sitting on a long bench in Youyi Building for a week and waiting for an audience with a ministry official.”

31. 31 Health Care Services at PHUs did not deteriorate after devolution in 2005 Source: IRCBP Health Clinics Surveys 2005-2006

32. 32 Health Care Services at PHUs did not deteriorate after devolution in 2005 (continued) Source: IRCBP Health Clinics Surveys 2005-2006

33. 33 IDA & DfID to transfer sector investment funds to LGs through grants system World Bank and DfID health sector support: provide financing through GoSL LC grants system, improving M&E, supporting district health management teams to implement their sector plans and budget DfID water sector support to follow similar approach

34. 34 Need to continue expanding constituency for decentralization: scope for more CT synergy

35. 35 Stimulating citizen demand for good governance is an area that greatly benefits from collaboration with development partners

36. 36 Do citizens know what LGs are doing? Do they care? Does consent translate into voluntary tax compliance and civic activism?

37. 37 Does performance comparison lead to political competition? Hypothesis: with a good communication program, comparative performance data can serve as  Stimulant for peer learning and performance improvement  Trigger for political competition and civic activism Whether disseminating comparative performance information among electorates will affect political fortune of councilors remain to be seen.

38. 38 Good-practice LCs get award from MLGCD and bonus grants from MoF, but are people asking their laggard LCs tough questions? Legend 70 - 88 points 60 - 69 points 50 - 59 points 30 - 49 points Performance measures 1. Management, organization and institutional structures 2. Transparency, openness, participation and accountability 3. Planning systems and project implementation, M&E 4. Human resource management 5. Financial management, budgeting and accounting 6. Fiscal capacity and local revenue mobilization 7. Procurement and contract management

39. 39 Are people wondering why councils are paying such different prices for similar furniture?

40. 40 Rural people start knowing their councilors but they are far more familiar with their chiefs

41. 41 Gender and age gaps in political awareness, activism and confidence Source: GoBifo/IRCBP/ENCISS joint household survey in Bombali District and Bonthe District (Dec 2005)

42. 42 Collaborating with other projects to stimulate demand for good governance DfID-sponsored Enhancing Civil Society and State Interface Project: “Meet the LG” Program UN: weekly radio programs on LGs USAID: strengthen sub-district Ward Development Committees and citizen engagement with LGs JSDF project GoBifo: strengthen community participation in LGs and ward development planning process JSDF grant for Timap for Justice: help rural population seek justice and change expectation of authorities DfID/USAID/EC: voter education for 2008 LG Elections

43. 43 How will we know whether devolution process is a good entry point for governance reform?

44. 44 The goodness test Is devolution bringing the state closer to people? Are LGs more responsive and accountable than central government? Does devolution improve access to and quality of services? Does improvement in public services increase citizens’ trust in government? Will high-performing councilors have more promising political career? Will more competent and committed people stand for LG elections in 2008?

45. 45 The sustainability test Will the project momentum be maintained? (tension between civil servants and contract staff) Will local politicians fight against recentralization attempts? Will competition among local governments give pressure for performance improvement? Will local political markets allow for more credible alternatives to emerge for future national elections? Can culture of inclusion and accountability be built from below?

46. 46 The Role of Governance Specialists in CAS Process Help CT identify development outcomes that can benefit from governance improvement Assess likelihood of success of each proposed intervention and advise a bet Continuously reassess the bet and add wager or diversify bets as appropriate If you want sector colleagues to make governance their business, you have to make their work your business: cross support, peer review, QER, keep them updated Make sure you have CD/CM support! They will encourage sector colleagues to work with you