1. Sub-National Monitoring and Impact Evaluation Kai Kaiser PREM Public Sector & Governance DPWG 6 th Annual Meeting Brussels May 2011

2. The World Bank Page 2 Public Sector & Governance Motivation With Decentralization, Sub-National Governments Increasingly Responsible/Pivotal for Sectoral Outcomes Higher levels of government provide bulk of SN finance – Own source mobilization important for revenue mobilization & accountability effects Concerns about SN Outcomes – Monitoring – Influencing

3. The World Bank Page 3 Public Sector & Governance Decentralization – A Many Splendored Thing Devolution, Delegation, Deconcentration Fiscal, Administrative, Political Decentralization Different Motivations & Drivers – Decentralization Theorem/Subsidiarity – Nation Building (Glue versus Solvent?) – Political Economy Design and implementation of system Accountability for performance

4. The World Bank Page 4 Public Sector & Governance Promoting Results – Diagnostic Frameworks & Instruments Recognizing Political Economy of Decentralization Service Delivery Accountability Results Chains – SNGs & Public Expenditure Tracking – Tensions Country Donor Motivations & Drivers Donor Donor Motivations & Drivers Vertical Results versus Horizontal-Downward Accountability Institution Building – Illustration: Intergovernmental Performance Grants – Selected Resources

5. The World Bank Page 5 Public Sector & Governance A Results Framework

6. Unbundling Decentralization Dimensions Policy MakingWho sets the main policy guidelines for a service (e.g., free primary education as a national policy)? Standards Setting Who sets the standards (e.g., national tests versus local building standards)? Administration/contractingWho is the primary government authority that administers services on a day to day basis? FinancingWho provides the financing for services? Capital investments, wages, O&M? Service delivery Who actually produces/delivers the service (e.g., this can often be private)? Regulation Who regulates a service (e.g., professional accreditation in health)? Monitoring & Evaluation Who monitors and evaluate a service (e.g., how can local citizens provide feedback)?

7. The World Bank Page 7 Public Sector & Governance What Gets Measured Gets Done? Central Government (Cross-Cutting/ Sectoral Agencies, Intermediate) ….. (Average) SNG i 500++ Heterogeneity Ranking (e.g., systems, human, fiscal capacity, baseline performance ) SNGi #1 ….. Observed Performance Indicators

8. The World Bank Page 8 Public Sector & Governance Indonesia Decentralization Results?

9. The World Bank Page 9 Public Sector & Governance Bosnia-Herzegovina Municipal PFM and Service Delivery Benchmarking Citizen Satisfaction Survey & PFM PEFA Type Benchmarking in 20 Pilot Municipalities (of 142) in 2007 Source: From Stability to Performance: Local Governance and Service Delivery in Bosnia and Herzegovina (draft report)

10. Having the ideal counterfactual…… Intervention 10

11. allows us to estimate the true impact 11 Source: Skoufias

12. The World Bank Page 12 Public Sector & Governance Strategies in Practice Pure Randomization Challenging – Political Economy of Decentralization Matching, Difference in Difference, Discontinuity Layering Interventions Natural Experiments Commit of Baseline Platforms – Across SNG Engagements – Across Time

13. The World Bank Page 13 Public Sector & Governance Can higher levels of government leverage specific transfers to sub-national governments to enhance local performance and results? What link of results chain to target? – PFM Process versus Outcome? – Compliance versus Stretch Reform Instruments & Interventions – Prevailing country flows & systems – WBG instruments/policies (e.g., new P4R OPs) Application: Performance Grants

14. The World Bank Page 14 Public Sector & Governance Selected References Bird, Richard, (2010), Taxation and Decentralization, Economic Premise Note, No. 38 Eaton, Kent, Kaiser, Kai, and Smoke, Paul (2010), 'The Political-Economy of Decentralization Reforms: A Development Partner Perspective', Washington, DC, pp. 114 Dumas, Victor and Kai Kaiser, (2010), Sub-National Performance Monitoring Issues and Options for Higher Levels of Government, Washington, DC: Public Sector Group, June pp. 51 World Bank, (2004), World Development Report: Making Services Work for Poor People, Washington, DC, pp. 271 World Bank, (2009), Implementing Public Expenditure Tracking Surveys for Results: Lessons from a Decade of Global Experience, Washington, DC, pp. 16 Q & A