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 being studied. FGDs were also utilized to support the information gathered through the in-depth interviews.
To triangulate primary data collected through interviews and FGDs, secondary data was also necessary to verify the information provided in the interviews. The secondary data included local regulations, published reports, written guidelines, minutes of meetings and local news reports. Within an institution, more than one person may have provided answers for one set of indicators in the questionnaire.
Data Analysis and Reporting. Local research partners submitted a detailed report within two weeks of the fieldwork. The report includes a narrative on the findings that details all supporting documents used to substantiate the governance score for each of the indicators. LGSP's database is updated by uploading the completed LGAT applications submitted by the researchers. The good governance results are shown in a table and also graphically as a table, a dashboard, a bar chart and a radar chart. Users are able to copy and paste the graphs.
4 Local Governance Support Program Local Governance Assessment Tool
Graph I: Graphic Representations of LGAT results
Score Principles Score Calculated (%) al Low 'IA c Low o LOA Effectiveress 1.02 3.00 64 .Medium Menium Medium Equity 2.54 4.00 63 • Fligh Equity • High • High Participation 0.63 3.00 63 Effectiveress 64% 63% Participation 21% Accountability 2.09 4.00 52 Transparency 1.37 3.00 46
Total 8.54 17.00 50 e Low at Low e I ow Criteria Medium medium Medium Low 0-50 Red • High • High • High Medium 51 - 65 Yellow Accountability 52% Transparency 46% Total 50% High 66 - 100 Green
Good Governance Index - Kab. Enrekang
100
1-110 80
Medium 60
40
Low 20
Effectlyeress Primly Participation Accountability Transparency Total
LGAT Reliability. The LGAT was subjected to a reliability test called Cronbach's alpha,8 resulting in a reliability score of 0.82. In most social science research situations, a reliability coefficient of 0.70 or higher is considered acceptable.
III. Local Governance Performance: Findings on the Five Good Governance Principles
Graph 2 below provides the findings for 25 local governments in the Good Governance Index, reflecting a composite of the five good governance principles selected for LGAT. The ratings were highest in the area of accountability, followed by participation, effectiveness, equity and transparency. While ratings in the weakest local governments tend to be uniformly low, with Binjai and Sibolga the weakest performers in nearly every category, there is a wide variation between some of the scores within a single local government. For example, Kota Malang is among the top five performers in two areas, yet has the lowest score of all 25 local governments for accountability. Only one, Semarang, is among the top five performers for more than two of the five aspects, and eight governments are in the top five for two aspects.
8 Cronbach's alpha test was applied by the International Development Group at RTI International, North Carjlina.
Local Governance Support Program 5
Local Governance Assessment Tool
Graph 2: Composite Local Government Scores*
Good Governance Index No Kabupaten/Kota Score Good Governance Index 1 Kota Semarang 81 2 Kota Sukabumi 74 100 3 Kab. Malang 73 4 Kab. Cianjur 73 Migh 5 Kab.3epara 72 80 6 Kab. Lebak 71 7 Kab. Gowa 71 Medium 8 Kab. Kudus 70 60-- 9 Kab. leneponto 70 10 Kota Bandung 70 11 Kab. Karanganyar 65 40 12 Kab. Bandung 63
13 Kab. Tebing Tinggi 60 Low 14 Kota Malang 60 20 15 Kota Mojokerto 59 16 Kota Batu 58 17 Kab. Kediri 57 I I I 1 r-- I I I I I I = „I• de,. — IL L 18 Kota Palopo 56 i a -Z 11' Rr , a 1, e, , I" ,5 ="'' I t.ff I 1 I I 19 Kab. Klaten 55 .. - -ci .-. _.: .... .7" -.:7 ,gf „, ..,,, - ff r .5 .E. ... e I! ..., E. 20 Kab. Soppeng 54 ... 1 1 ,2, _4' .; 4 , . -E ... / Ar ' ir Jg i n,' .,? ,., ,e; ..-1 ai . Y. • - .. 21 Kab. Simalungun 53 ac' .1 X. 4e .2' 22 Kab. Enrekang 50 Y ...- 23 Kota Pangkajene Kepulauan 41 ... 24 Kota Sibolga 35 25 Kota Binjai 32
* LGSP partner jurisdictions are called kabupaten, meaning district, or kota, meaning city.
Despite the wide variations in overall scores between the highest and lowest districts and in scores across the five aspects in any single district, it is noteworthy that the average scores for accountability, participation, effectiveness and equity are all within a few points of one another, ranging from 61 to 65 per cent. Transparency is the outlier, with an average score of 51 per cent (see Annex 2 for details). That this area of governance is relatively weak supports LGSP's emphasis on transparency, particularly in planning and budgeting processes, whilst at the same time working to strengthen other core aspects of governance.
Findings related to each of the five governance aspects are described below.
Accountability. The principle of accountability denotes the obligation on the part of public officials to report on the use of public resources and to be held accountable for failing to meet stated objectives. This aspect obtained the highest score on average. However, good accountability is weakened by poor transparency. In some districts the score for accountability remains low. For example, in Kota Binjai of North Sumatra, accountability scores only 43 per cent. This low score is due to the absence of a code of conduct for civil servants, a lack of transparency in the publication of tender documents, and a misperception among government employees about the meaning of confidentiality of financial documents for public review. Local government officials are reluctant to disclose public financial documents, including the district's annual budget. They perceive, erroneously, that only specific institutions, such as government auditors, have the right to examine such financial documents.