1. 1 Decentralization & Sub-national Regional Economics Ongoing Activities & Engagement in the MNA Region MNA Regional Team Decentralization and Sub-national Regional Economics Thematic Group Informal Open House March 8, 2007

2. 2 Issues: Structural Hierarchies Urban & Land Use Planning Still Highly Centralized Many services still planned/managed at the central level

3. 3 Issues: Intergovernmental Fiscal Relations  High fiscal centralization - limited local expenditure autonomy; low local own source revenue; unpredictable transfer pool, distribution and low equalization effect

4. 4 Issues: Lack of LG Policy Space

5. 5 Issues: Weak Accountability

6. 6 Government Responses  A “managed” process of decentralization with incremental improvements  Responding to political pressures from well- organized and financed socio-religious groups  Increasing political decentralization: local elections in Lebanon (1998), Yemen (2000), WBG (2004-5), Jordan (forthcoming)  Rethinking Institutional Arrangements: The Role of Intermediate-Level Governorates  Increasing central transfers for approved investments (off budget)  But the institutions for fiscal/admin decentralization remain weak

7. 7 Government Responses Jordan  Devolved property tax collection in Amman has yielded avg annual increase of 20% in revenue  Amman issuing first municipal bond  Government adopts new performance based grants (RLDP)  Leveraging cultural heritage assets Egypt  Converting land value: city public land sales converted to local infrastructure investments (AGPP)  Increasing access to services in underserved areas of upper Egypt (UEIGDP) Yemen  Urban planning devolved to (PCDP) cities on pilot basis  Investment approvals granted at local level  Aden institutes new citizen services center 24 hour hotline; PPP Fund; Investor Advisory Council Morocco  Joint central-local decision making on local investments WB&G  Creation of new MDF – performance based grants  Unified municipal chart of accounts and budget reporting system adopted

8. 8 MNA Regional Strategies/Interventions  Financial Systems Approach: Municipal Development Funds (performance-based grant incentives introduced) -- Tunisia, WBG, Jordan *Working with IFC Subnatl Finance Dept  Lagging Regions: Analytical & Operational – Iran, Egypt and Jordan (poverty driven)  CDD/Participatory Approaches: Focusing on access to services -- Morocco, WBG (poverty driven)  Competitive Cities: Egypt (Alex), Yemen Ports (PCDP) (growth driven) * Working with IFC-PEPMNA & Cities Alliance  Land & Municipal Asset Management: Yemen & Egypt  Cultural Heritage Assets: Jordan, Morocco (growth driven)  Fiscal Decentralization & Governance Issues: Joint work with Urban/PREM on MNA Governance website and joint efforts on PERs  Regional Stocktaking & Knowledge Dissemination: Data collection and analysis & Service Delivery Surveys (cost- effective tools to gauge end-user perception of services)

9. 9 MNA Service Delivery Survey (2006) Introducing cost effective tools to gauge end-user satisfaction.  Focus Group methods were originally developed for market research in the 1970s but are now used for exploratory policy-oriented research.

10. 10 Service Delivery Survey: Citizen Participation in Local Decision-Making