ECONOMIC AND SOCIAL COMMISSION FOR WESTERN ASIA (ESCWA) INSTITUTIONAL DEVELOPMENT AND TRANSITION: DECENTRALIZATION IN THE COURSE OF POLITICAL TRANSFORMATION United Nations Distr. GENERAL E/ESCWA/ECRI/2013/3 22 October 2013 ORIGINAL: ENGLISH ECONOMIC AND SOCIAL COMMISSION FOR WESTERN ASIA (ESCWA) INSTITUTIONAL DEVELOPMENT AND TRANSITION: DECENTRALIZATION IN THE COURSE OF POLITICAL TRANSFORMATION United Nations New York, 2013 13-0256 Acknowledgements This study was authored by Asya El-Meehy based on primary research. Mohamed Nada at UN-Habitat Cairo drafted the analysis of Egypt’s local administration system (chapter III). Excellent research and writing support were provided by Rabi Bashour, Neige Pointet, Maria Ortiz Perez and Asima Ghazi-Boullion. Youssef Chaitani’s input at various stages of the research as well as discussions with Adib Nemeh enriched this work. Last, but not least, valuable feedback by members of the publications committee benefited the study. iii iv CONTENTS Page Acknowledgements .............................................................................................................................. iii Executive summary .............................................................................................................................. vii Introduction .......................................................................................................................................... 1 Chapter I. REVISITING THE DECENTRALIZING DEBATE POST ARAB UPRISINGS 3 A. The “local” in Arab uprisings............................................................................................. 3 B. Decentralization reform agenda.......................................................................................... 5 C. Defining decentralization ................................................................................................... 8 D. Varieties and dimensions of decentralization..................................................................... 9 E. Decentralization in post-conflict settings ........................................................................... 10 F. Democratization and decentralization................................................................................ 12 G. Decentralization post Arab uprisings ................................................................................. 14 II. LOCAL GOVERNMENT STRUCTURES IN ARAB TRANSITION COUNTRIES 16 A. Overview of decentralization patterns in Arab countries ................................................... 16 B. Taking stock of local government structures in transition.................................................. 18 III. LOCAL GOVERNMENT STRUCTURE IN EGYPT: AN IN-DEPTH LOOK 25 A. The Egyptian constitution and the local administration system ......................................... 25 B. Local administrative units and economic regions in Egypt................................................ 27 IV. EGYPT POST 25 JANUARY: CONTINUITY AND CHANGE IN LOCAL GOVERNANCE 37 A. Mahliyat social movement.................................................................................................. 37 B. Local popular committees .................................................................................................. 39 C. Political elite....................................................................................................................... 43 V. MOVING FORWARD 47 A. Potential strategies for reform: The French model............................................................. 47 B. Steps towards successful decentralization.......................................................................... 51 Bibliography ......................................................................................................................................... 56 Annex . Funds allocated to decentralization in Egypt, Tunisia and Yemen.......................................... 62 LIST OF TABLES 1. Local spending to total public expenditure, July 2008 to October 2011.................................... 34 2. Party platforms and decentralization strategies.......................................................................... 44 3. Sequence and effects of decentralization on the intergovernmental balance of power.............. 53 v CONTENTS ( continued ) Page LIST OF FIGURES I. Total aid flows compared to donor funding for local governance projects, 1984-2009 and post 2010 ............................................................................................................................. 7 II. Classification of ministries in Egypt according to their relationship with local administrative units.................................................................................................................... 30 III. Current role of ministries and central agencies in Egypt ........................................................... 31 IV. Land ownership: Governorates versus the state and central ministries and organizations ........ 35 V. The main entities with power to dispense public land ............................................................... 35 VI. Decentralization and deconcentration ........................................................................................ 50 LIST OF BOXES 1. Decentralization in Spain ........................................................................................................... 11 2. Local government reform in Tunisia’s draft constitution of June 2013..................................... 21 3. Vertical allocation of resources and local expenditures in Egypt .............................................. 32 4. The role of local executive councils (LECs) at the governorate level........................................ 33 5. Decentralization reforms in France ............................................................................................ 48 vi Executive summary Have Arab uprisings opened space for deeper, grassroots-driven decentralization reforms in the region? Do newly emergent political elites perceive reforms in this area as a priority? What are the optimum designs, sequencing and models of decentralization for Arab countries in political transition? Drawing on findings from field research as well as recent analyses, this study argues that uprisings have created a stronger momentum for revisiting the question of decentralization reforms in Libya and Yemen, compared to the cases of Egypt and Tunisia. In the latter cases, there is evidence that, while new advocacy movements focused on reforming local government structures have emerged, they have thus far remained elite-led. Grassroots activism at local community levels has served to empower new actors, who, in some cases, were successful at extracting concessions from local authorities. These efforts, however, focus predominantly on improving access to public services within the existing context of centralized state structures, and seem to have often failed to gain the trust of local community members as potential partners in local governance. In addition, looking closely at the experience of Egypt, the region’s most populous country, reveals several emerging trends. Indeed, focus group discussions in three working class neighbourhoods within Greater Cairo reveal sceptical views on decentralization of powers, responsibilities and resources among both male and female participants. In contrast, youths were more likely to demand deeper reforms across all three dimensions of decentralization (administrative, fiscal and political). This finding is also confirmed by recent surveys. Interviews among political elites from various ideological backgrounds reveal wide divergence of opinions on which particular dimension(s) of decentralization reforms need to be implemented. In addition, there is no consensus over prioritizing decentralization reforms during early phases of political transformation. While recognizing the need for local reform, many political leaders seem to be concerned about undermining state capacity, as well as potential capture by traditional elites due to the weakness of newly minted political parties and limited capacity of local level institutions. On these bases, the study argues that there seems to be a critical gap between youths’ expectations in Egypt, on the one hand, and the political elite’s envisioned plans, on the other. The study concludes by drawing lessons from France’s contract-based record of decentralization, as a case of a centralized state that has successfully devolved powers to subnational government tiers, while maintaining monitoring and supervisory roles for central government representatives. In addition, policy recommendations are proposed for countries that have emerged from the Arab uprisings with relatively strong centralized state structures and cohesive national identities. vii Introduction Uprisings that lead to the downfall of long-ruling regimes typically constitute “critical junctures” in the long-term institutional development of governance systems. 1 Such historically rare moments provide unique windows of opportunity for policymakers to exercise agency in crafting new institutions while being less bound by structural constraints. 2 Aside from providing space for institutional restructuring at the macro level, recent popular mobilizations from below in the Arab region have given rise to new forms of locally rooted activism. Following the initial weakening of state institutions and disappearance of police forces, neighbourhood