Local Government Discretion and Accountability: Application of a Local Governance Framework
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Report No: 49059-GLB Local Government Discretion and Accountability: Application of a Local Governance Framework Social Development Department June 2009 Report No. 49059-GLB Local Government Discretion and Accountability: Application of a Local Governance Framework THE WORLD BANK Social Development Department June 2009 ©2009 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail [email protected]. Printed on Recycled Paper Acknowledgements This report was prepared by a team led by Serdar Yilmaz (SDV). Core team members were: Serdar Yilmaz (SDV), Ghazia Aslam (SDV), Asli Gurkan (SDV), Sylvie Mahieu (SDV), Varsha Venugopal (SDV), Mariana Felicio (MNSSD). The education sector study was prepared by Erika Boak (CfBT Education Trust), and the health sector study was prepared by Thomas Bossert and Andrew Mitchel (Harvard School of Public Health). Guidance throughout report preparation was provided by Cyprian Fisiy (Sector Director, SDV) and Andy Norton (Acting Sector Manager, SDV). The team appreciates the useful comments that were provided by Anand Rajaram (Sector Manager AFTPR) with inputs from AFTPR team members Kjetil Hansen, Helene Grandvoinnet, Immanuel Steinhilper, Lorena Vinuela, Motoky Hayakawa. We would like to thank Danielle Christophe (SDV) for formatting the report. The peer reviewers for this report are: Meike van Ginneken (Senior Water and Sanitation Specialist, World Bank), Vivian Y. N. Hon (Senior Economist, FEU), Rodrigo Serrano-Berthet (Senior Social Development Specialist, LACSD), Robert D. Ebel (Deputy Chief Financial Officer and Chief Economist, CFO, DC Government & Chairman of the Steering Committee of the Local Government and Public Sector Service Initiative, Open Society Institute), Luis A. Crouch (Vice President, International Development Group, RTI International), Tewodaj Mogues (Research Fellow, International Food Policy Research Institute), Jesse Ribot (Associate Professor, Department of Geography, University of Illinois). i Table of Contents Acknowledgements ..................................................................................................................................................... i Abbreviations and Acronyms ................................................................................................................................. iv Executive Summary .................................................................................................................................................... v 1. Local Government Discretion and Accountability: Linking Theory and Practice of Decentralization ..... 1 1.1. Introduction ..................................................................................................................................................... 1 1.2. Objective, relevance and audience................................................................................................................ 1 1.3. Diagnostic framework: discretion and accountability at political, administrative and fiscal level ... 2 1.4. Methodology ................................................................................................................................................... 6 1.5. Plan of the report and primary conclusions ................................................................................................ 7 2. Setting the Rules of the Game: The Local Political Discretion and Accountability ................................... 12 2.1. Components of political discretion and accountability ........................................................................... 12 2.2. Making local politics downwardly accountable ....................................................................................... 23 2.3. Conclusion ..................................................................................................................................................... 29 3. Local Administrative Discretion and Accountability ...................................................................................... 33 3.1. Factors affecting local administrative discretion ...................................................................................... 33 3.2. Making Local Administration Downwardly Accountable ...................................................................... 39 3.3. Conclusion ..................................................................................................................................................... 45 4. Fiscal Discretion and Accountability ................................................................................................................ 50 4.1. Determinants of local fiscal discretion: fiscal decentralization ............................................................... 50 4.2. Making Local Finances Downwardly Accountable ................................................................................. 55 4.3. Conclusion: .................................................................................................................................................... 59 5. Conclusions, recommendations and moving forward .................................................................................... 64 5.1 MAIN Findings .............................................................................................................................................. 64 5.2 Recommendations.......................................................................................................................................... 67 5.3 Moving forward ............................................................................................................................................. 69 Annex I: Discretion and Accountability in Education Sector ............................................................................. 72 Discretion at local levels ...................................................................................................................................... 72 School-based management ................................................................................................................................. 73 Nomination of local education authorities, district councils and PTAs ...................................................... 74 Social accountability mechanisms at local levels ............................................................................................. 74 Annex II: Discretion and Accountability in Health Sectors ................................................................................ 78 Policies on: Who Gets More Choice................................................................................................................... 79 Policies on: How Much Choice Over Which Functions .................................................................................. 79 Policy options on: Capacities .............................................................................................................................. 80 Policy options on: Accountability ...................................................................................................................... 81 Conclusion ............................................................................................................................................................ 83 References .................................................................................................................................................................. 84 Tables: Table 1.1: Commitment to Decentralization ........................................................................................................... 9 Table 1.2: Deconcentration and Decentralization Systems ................................................................................. 10 Table 1.2: Deconcentration and Decentralization Systems (continued) ...........................................................