1. Community Based Rural Development Advisor
DECENTRALIZATION AND RURAL SERVICES: MESSAGES FROM RECENT RESEARCH AND PRACTICE
Graham B. Kerr
Community Based Rural Development Advisor
The World Bank
Regional Seminar on
“Decentralization and Participation for Sustainable Rural Development in Southern Africa”
October 26-30, 1998

2. The Challenges for US
1.3 billion still living in poverty million in rural areas
Significant growth in number of mouths to be fed

3. Why is rural development not happening?
Rural poor have little political power
Urban bias in the policy environment
Agriculture seen as a declining sector
Falling food prices
Aid fatigue in the agriculture sector
Integrated rural development programs have failed
Geographically dispersed and lacking communications and transportation infrastructure, rural people have difficulty organizing the rural poor and women in particular have little political voice.
For 20 years real cereal prices have declined reducing returns to irrigation and other investments. Much of decline due to better technologies and practices -- the result of investment in agricultural research.
The upward trend in food supplies and decline in real grain prices induce a false perception that global food supplies are assured -- perception persists despite grain stocks in 1996 being lowest since 1940s.

4. Why Decentralize? improve access to and quality of services
give local communities control of resources to invest in projects they care about -- often education, health, infrastructure and other growth enhancing services
create conditions for bargaining, increase information flows, increase efficiency
empower under-represented groups, such as local entrepreneurs to be politically active

5. What is decentralization ?
The transfer of authority and responsibility for some government functions from central government to intermediate and local governments, and often to communities and the private sector
Messages:gkerr 2

6. Decentralization: A Dynamic Institution
Deconcentration -- central staff to localities
Delegation -- to parastatals
Devolution -- to lower levels of government
Privatization -- to private firms

7. Decentralization is here to stay
globalization -- changing role of the state
growth of local democracy -- power sharing
professionalization of local capacity
it is now a country strategy rather than a donor strategy
Messages:gkerr 4

8. BUT there are pitfalls Decentralization has often failed
-- often not even really started -- de jure vs. de facto
it matters how it is done
Soufflé theory -- three dimensions of decentralization
Messages:gkerr 6

9. Three dimensions of decentralization
Administrative decentralization transfers substantial authority and responsibility for managing services to local government, local communities and the private sector
Political decentralization transfers policy and legislative powers from central government to elected sub-national and local councils.
Fiscal Decentralization transfers authority and responsibility for raising and spending revenues from central to local governments and communities.
Messages:gkerr 7

10. Our Soufflé Theory Rural Impacts -- the long-term results
Service Delivery System Results -- reformed institutions
Service Delivery System Outcomes -- medium term changes in the system
Decentralization choices -- three dimensions
Institutional endowments -- the environment

11. 1

12. Decentralization: Multiple Levels
National Decentralization Framework and concerns
Local Service Institutions and concerns
Institurional reform on several levels
-- Macro issues -- national democratic instiutions
urban bias
-- We need to balance the reform strategy -- focus on local organizations and institutions.
-- we come back to this several times during the week.

13. Our Characterization Study
Describes decentralization choices made in 19 countries in early 1990s
Data collected by local consultants and interviews with Bank staff
Measures of three dimensions on 10 point scales points to those which are devolved

14. Only 15 countries because we do not have data sets in 15 countries
-- four of the states in federal countries included.
This is the early nineties -- remember that when looking at
Colombia and Poland -- recent changes show up in the score.
Several AFR countries had not started in the early 90s. Interesting contrast between Punjab and Karnataka.
Now lets look at the three dimensions

15. You have often heard it said that decentralization is essentially a political process -- Suzanne has noted in her recent paper -- decentralization without democratization will fail.
In the nineties the political aspects of decentralization is making substantial progress
the other dimensions less so -- but no Soufflé
fiscal authority seems to slowest.
Now lets look at one dimension over time

16. Generally speaking the level of decentralization is low and not very encouraging -- even for these most basic of services
Rural services are still controlled by higher levels of government
The least decentralized are still primarily in Africa -- with the exception of Bangladesh
Who dropped from the national rank Senegal 7-4,and Bangladesh 10-5, Karnataka 14-11
Up -- Zambia, Punjab, Hidalgo, and Bahia
Top end similar

17. Political dimension less pronounced her than the national level -- certainly does not seem to be taking the lead -- in spite of laws being place in several countries -- Egypt since the late 70s.
Lower half -- little decentralization --
Top half administrative dimension most advanced -- still not soufflé -- but all are rising
Now lets look briefly across the sectors

18. Conclusions of Characterization Study
Rural services still largely in the hands of higher levels of government
Decentralized systems still in their infancy
The real benefits and problems of decentralization may only be fully appreciated when the systems have matured and additional powers devolved to local governments and communities
Messages:gkerr 12

19. How can we improve the impact of decentralization?
Ensure a balanced approach -- address all three dimensions
Focus on key system outcomes and results
accountability
transparency
representation
local resource mobilization
local institutional capacity
local voice
sustainability
Messages:gkerr 13

20. 1

21. Political Representation?
Develop policies to
encourage local competitive political system
ensure that local politicians represent local groups
enable local NGOs for disadvantaged groups
Political Decentralization???
Decentralization is first and foremost a political process
Devolution is an essential ingredient
Local participation -- voice -- is an essential ingredient
Messages:gkerr 15

22. Political Accountability?
Design programs so that
service providers are accountable to local elected councils and their local clients
local elected councils are accountable to their constituents
Messages:gkerr 16

23. Fiscal Devolution? Policy dialogue to ensure
central government devolves appropriate fiscal authority
fiscal policies and procedures in place for each level of government
local governments assume authority and enact appropriate, responsible policies
fiscal discipline -- checks and balances are built into the system
Fiscal Decentralization????
Positively related to sound economic management and good governance
Effect on mobilizing local resources mixed
Decentralized allocation decisions can be more efficient -- project unit costs drop.
Often lags other dimensions -- distorting implementation of decentralization and its impacts
inter-governmental transfers continue to be important
Messages:gkerr 19

24. Fiscal Capacity and Accountability?
Design programs so that
fiscal transfer schemes are transparent, predictable, and local units have appropriate level of autonomy
local units build their capacity to implement their fiscal responsibilities
systems to mobilize local resources are enhanced
Messages:gkerr 20

25. Administrative Decentralization?
Deconcentration is only the first stage of administrative decentralization and may hinder further progress
Delegation of administration to civil society is important
Messages:gkerr 21

26. Administrative Capacity?
Design programs so that:
local managerial and technical expertise is recognized and used
local knowledge is incorporated into program -- voice

27. Administrative Accountability and Transparency?
Design programs so that
planning, budgeting and spending are public and open
contract laws and procedures are adequate
information systems are built into the program
local press is included in the project process
Messages:gkerr 17

28. Final Messages Decentralization has potential
Decentralization is not happening with rural services
Focus on increasing accountability to local clients, increasing responsiveness, building political, fiscal and administrative capacity

29. Thank
you