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USAID Tiry LGSP a Gauge for Good Governance

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USAID Tiry LGSP a Gauge for Good Governance 51 t ar USAID tirY LGSP FROM THE AMERICAN PEOPLE GOVERNMENT • COMMUNITY • CITIZENS LOCAL GOVERNANCE SUPPORT PROGRAM A Gauge for Good Governance Local Governance Support Program March 2008 USAID SP 4;4 041. FROM THE AMERICAN PEOPLE GOVERNMENT • COMMUNITY • CITIZENS AID LOCAL GOVERNANCE SUPPORT PROGRAM Local Governance Assessment Tool: A Gauge for Good Governance March 2008 ERTI INTERNATIONAL RTI International In collaboration with: International City/County Management Association Computer Assisted Development Incorporated Democracy International Table of Contents I. Introduction I II. Description of the Local Governance Assessment Tool 2 III. Local Governance Performance: Findings on the Five Good Governance Principles 5 Accountability Participation Effectiveness Equity Transparency IV. Conclusions and Recommendations 10 Annex I. LGAT Principles, Indicators and Operational Questions I 3 Annex 2. LGAT Scores - Local Governments by Province I 5 Annex 3. LGAT Scores - Local Governments by Ranking I 6 LGAT Graphics Graph I. Graphic Representations of LGAT results 5 Graph 2. Composite Local Government Scores 6 Graph 3. Scores for Accountability 7 Graph 4. Scores for Participation 7 Graph 5. Scores for Effectiveness 8 Graph 6. Scores for Equity 9 Graph 7. Scores for Transparency 10 i Local Governance Assessment Tool: A Gauge for Good Governance' I. Introduction Improving governance is now widely regarded as an essential part of a comprehensive development strategy. Empirical measurements of governance have become key develop- ment indicators at the national level in the past decade. In the context of decentralized Indonesia, an effective measurement of governance at the level of local government would not only highlight underperforming local governments but also help identify constraints to good governance within governments. Good governance is strongly correlated with economic development. Studies show that improving the quality of institutions raises per capita income and promotes growth in the long term. While higher income is also correlated with better governance, the causal relationship is stronger from governance to income. Recent World Bank research2 esti- mates that even modest improvements in governance can lead to significant increases in income. As is the case in many developing countries, Indonesia needs to improve its governance practices. Past weaknesses have significantly contributed to the problems faced by the country since the onset of the Asian financial crisis.3 Considering the growing recognition of the link between good governance and successful development, it is important to devise a tool that can be used to assess and monitor the practice of good governance by local governments. However, there is no widely accepted tool that is utilized to monitor or evaluate the practice of good governance at local level. Recent efforts at evaluating governance in Indonesia have included an opinion survey on good governance conducted by the University of Gajah Mada and a survey conducted by the World Bank across Indonesia.4 As its inception, the Local Governance Support Program (LGSP) initiated the Local Governance Assessment Tool (LGAT) which applied the tool in some of its initial partner local governments in Indonesia. The purpose of LGAT was to understand how local governments apply common principles of good governance and thereby to assess the strengths and weaknesses of current governance practices at the local level. It is hoped that LGAT can evolve into a practical tool that is widely accepted and used by national and local governments, as well as by individuals and groups who are interested in monitoring the effectiveness of local level governance practices. This paper was prepared by Luce Bulosan, LGSP Performance Monitoring Adviser (October 2005—May 2007), with contri- butions by Peter Rooney, LGSP Performance Monitoring Adviser,Trias Utomo, Senior Monitoring and Evaluation Specialist, and Judith Edstrom, LGSP Chief of Party. 2 A Decade of Measuring the Quality of Governance,World Bank, 2007. 3 Penerapan Tata Kepemerintahan yang Baik (Good Public Governance in Brief), Bappenas, 2006. 4 The Governance and Decentralization Survey,World Bank, 2007. Local Governance Support Program 1 Local Governance Assessment Tool This paper presents the experience of LGSP in applying the LGAT in order to illustrate the utility of the tool for establishing benchmarks in good governance, monitoring changes over time, and identifying institutional needs that can help to strengthen capacity development programs. I. Description of the Local Governance AssessmentTool Overview of the Questionnaire. The good governance index utilized for the LGSP assessment was adopted from the Global Campaign on Urban Governance initiated by UN—Habitat.5 Five of the original ten principles of good governance were adopted for LGAT. The complete framework was not fully adopted because a more concise tool was needed that was easy to facilitate at the local level. The five core aspects of governance adopted in LGAT are: effectiveness, equity, participation, accountability, and transparency. These five principles are supported by 20 specific indicators which are operationalized into 70 questions that are verifiable through secondary documents and interviews.6 A categorical answer 'yes' or 'no' is provided to each question. An answer that favored a good governance outcome is assigned a value of one (I) and a zero (0) value is given to an answer that does not reflect a positive governance answer. A Good Local Governance Index is derived from the total percentage score obtained. The questionnaire was pre-tested in one district and resulted in a revision to the framework. The aim is to develop a self-assessment tool for local governments and a simpler tool is considered more appropriate. For each of the five principles a list of indicators is provided. The selection of indicators was based on: (a) relevance for governance principles; (b) ease and cost of data collection, including availability and time required to obtain data; (c) measurability and universality of use for the general population and diverse populations. The LGAT Conceptual Framework 5 Principles 70 20 Specific Good Local of Good p Operational Indicators Governance Governance Questions s The Global Campaign on Urban Governance, UN-HABITAT, 2002. 6 A full list of indicators and survey questions is provided in Annex I. 2 Local Governance Support Program Local Governance Assessment Tool The Software Application. To facilitate data analysis, LGSP developed a PC-based application to ensure a standard system for data entry and analysis. The system automatically calculates the score for each of the principles and the composite Good Governance Index. The figures below show examples from the LGAT software application package that is available at LGSP's online databank.? Examples from LGAT Software Application Package Questionnaire Responden Responder 1,2.3,4 Dinar Pendalikan Effectiveness Equity Participation Accountability Tramper. 1- Major Sources of income 2 Predictability of transform 3 - Con or Satisfaction Principle 2.1 Is the amount of fund transfers from n, i•rial government known in advance of the local budgeting process Tab • Yes O No • NA 2.2 If No, How many months were the national tablished) IM month (al 2.3 How information on the amount of fund transfe Information on the amount of fund bansfers was Obta,ned 2.4 Do you know the "baste employed to determine, 0 Yes • No • NA 2.5 If yes, please specify the basic of transfer: a. Population b. Area • Yes 0 No • NA c, CROP per capita 0 Yes • No • NA d. Human Development index • Yes 0 No 0 NA e. Contraction cost Index 0 Yes • No • NA I. Other, Please specify other basic Toot, ,,, , USA1D LOCAL GOVERNANCE ASSESSMENT 1' LGSP Policy and Performance Measurement ..... GOOD GOVERNANCE INDEX PRINCIPLE I: EFFECTIVENESS Indicator I: Major sources of income 1.1 Budget predictability 2002 2903 2004 a Total local governance budget (plan)/expected) - in million rupiah 10,120.0 12.000.0 14,000,0 b. Total local government budget (actualx) - in million rupiah 12,500.0 12,000.0 15,000.0 c. Proportion of actuals and expected local government budget 123.5 % 100.0 % 107.1 1.2 Local government total revenue per capita 2002 2003 2004 A. Local government revenue per capita - in million rupiah 12,500.0 12,000.0 l 50,000.0 h. Total population - in thousand rupiah 11)0.0 150.0 200.0 c. Consumer price index 11)0.0 1115,0 109.2 d. Local government revenue per capita at constant price (in Rp_000) 125 0 762 606.0 7 See www.lgdatabank.or.id. Local Governance Support Program 3 Local Governance Assessment Tool Data Collection. To implement the tool, LGSP commissioned local research institutions operating within the project's target jurisdictions. Service providers were chosen based on their research experience, particularly in the locality. All researchers participated in an intensive training workshop to ensure a common understanding of the indicators and methodologies utilized to measure the indicators. In each district, an evaluation team was established, composed of a senior social scientist, two field researchers and a data encoder. Data collection took approximately five days and was carried out between April and June 2006 in all districts. Key informant interviews and Focus Group Discussions (FGD) were the main data collection methods. Using a semi-structured questionnaire, key informant interviews were conducted to capture information on the indicators
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