Responsive Local Government Operations, Downwards Accountability, and LG Capacity Presentation at the National Workshop, Local Governance Capacity Development tproject Jakarta, August 18, 2011 1
The Objective of the Workshop Discuss lesson learned of GoI, local government (LG) and donor projects to improve community LG linkages, community level service delivery and downward accountability Provide inputs to policy and program recommendations on these themes Provide inputs to finalize the stocktaking exercise and other studies 2
Subnational Governments and Service Delivery Poverty rates have fallen from 17.4 percent of the population in 2004 to 13.3 percent in 2010 but there are stilllarge large segments ofnear poor Decentralization has radically shifted functions, staff and resources to subnational governments (district and municipalities) while strengthening local political processes and autonomy District and cities are today responsible for around 35 percent ofpublic spending, but increased transfers hasnot correlated with improvements of service delivery or poverty reduction Community level lservice delivery dli remains generally of low quality Indonesia is lagging behind in several MDG and HDI indicators The development challenge: making LG operations more accountable and responsive to beneficiary needs 3
Combine Supply and Demand side Interventions If the aim is to foster the responsiveness and accountability of local lgovernment to community level needs, interventions must take place at both the supply and demand side, supporting Robust community level organizations and institutions that are empowered to carry out integrated, participatory development planning, implementation and oversight Responsive service providers who can provide quality services, engage communities, and are held to account for their hiperformance 4
Legal Framework for Community Empowerment and Service Delivery RPJMN 2009 2014 reform direction Focus on improved public service delivery at all levels Rural development, not village capacity Law 25/2004 on Development Planning But Permendagri 54/2010 on district planning and Permendagri 66/2007 on village planning are not synchronized Draft Law on Villages (formalizing PP 72/2005) Introducing village information system and regular town hall meetings Greater service roles for villages through delegation Village officials are to be salaried by district budgets Possible new village allocations from national budget Law 25/2009 on Public Service and Law 14/2008 on Openness of Information provide a good legal framework but are slow in being implemented Ongoing review and revision of intergovernmental fiscal transfers, including transfers from LGs to non SKPD entities 5
Challenges for Pro poor and More Responsive Policies i on the Demand side Communities do not have enough funds to meet their own development needs. Instead, they are dependent on higher authorities for funding Villages continue to be characterized by economic, social and political inequalities and lack of good governance PNPM has had only limited impact on formal institutions Limited participation in the decision making process by poor communities, still dominated dby elites and interest groups Village Development Plans (RPJM Desa) are of highly varied quality Communities on their own can only do as much. Even though they can identify problems restricting access to services, they soon run into supply-side constraints 6
Challenges for Pro poor and More Responsive Policies i on the Supply side Entrenched organizational culture of the Indonesian bureaucracy and the persistence of patronage networks make it difficult to open up old state structures The needs articulated by citizens have not influenced development planning community planning processes remains disconnected from district planning SKPD allocations are seldom explicitly pro poor or targeted to meet MDGs, HDIs, minimum service standards and other development indices, leading to low quality of services Efficiency of LG spending is constrained by perverse incentives, limited financing and an over engineered system, such as late approvals of DIPA and lack of capacity to disburse Upward and downward daccountability, bl technical support, training, and supervision etc, do not work optimally Poor service delivery is not thus primarily a result of lack of capacity, authority or resources. Rather, local government staff are not subject to the incentives and oversight instruments that would reward good or sanction bad performance 7
But Positive Changes are Happening Islands of reform are emerging difficult to keep track When CDD reforms happen, triggers for performance are commonly a combination of public entrepreneurship, civil society activism andtweaking of the incentive structure Demand side governance is starting to take root but needs to be linked with more upstream supply sideside reforms to create real effects on poverty and governance Performance is more about incentives than capacity Communities and villages are receiving much political attention, both nationally and locally (including RUU Desa) But does it all add up? 8
PNPM and Local Government Integration PNPM Mandiri is a national community development and empowerment program implemented through central government instruments, including community block grants, access to micro credit and facilitation of community groups Studies have shown that PNPM projects are of higher quality and are better governed than similar projects executed by government agencies PNPM fills in gaps gp that are not addressed in the current decentralization framework, in particular with regard to respect for community priority setting, transfer of resources, accountability and empowerment PNPM cannot be held to account to improve local government operations, but the programs community level development and demand side interventions have the potential to make district and village government more responsive to beneficiary needs 9
The Potentials of PNPM PNPM can be used as a testing ground for improved planning, to stimulate community demand dfor service and incentivize service provider performance To achieve this, clarity is needed on: The regulatory and incentive framework and institutional capacity How to ensure that there is systematic learning from PNPM (and other) experiences to improve the decentralization framework This knowledge and learning could then be translated into better mainstreaming of PNPM by encouraging progressive andsequenced handover offinancing financing andimplementationof of PNPM responsibilities to LG with sufficient capacity (e.g. fiscal base, incentive structure, accountability structures and governance) 10
Limited Impact outside of PNPM Source: PNPM Impact Evaluation 2010 11
Next Generation Questions What are the constraints to downward accountability: which factors are reducing impact of PNPM on development planning and activities outside the project? If government performance is primarily a matter of incentives and not a lack of capacity, how do we get at incentive reforms that are not dependent upon a single leader? What are the lessons learned from ongoing g donor, LG, NGO and/or GOI current initiatives to build linkages and improve the handshake between communities and districts governments? What is the sequence and preconditions to mainstream PNPM and gradually hand over responsibility to LGs? What are the incentives for LGs to mainstream and take ownership of PNPM practices? 12
Local Governance Capacity Development Project (LGCD) The LGCD project was launched at PSF in 2010 with the aim to improve pro poor planning and budgeting, build better linkages between communities and LG line agency service delivery, and ensure the replication and sustainability of PNPM s CDD approaches in regular LG operations Present options for how to replicate and mainstream PNPM Mandiri, and consolidate community driven development within LGs Address existing supply side constraints in local government development planning and basic service delivery Test how the social capital PNPM creates can be mobilized to create stronger incentives and accountability for more pro poor local governments 13
Analytical Studies under Phase One Stocktaking study in 8 districts taking stock of current initiatives either already collaborating with PNPM or working with communities and local government on improved pro poor planning and servicedelivery Capacity of local government officials in key competency areas The link between community needs and planning processes The barriers and impediments to local governments delivery of good quality public services to communities The interaction of PNPM with regular development planning. Two lessons learned studies on development planning in P2SPP and SPADA, in 6 and 10 districts, respectively More in depth study of the impact of these two programs both with the objective to improve development planning on Musrenbang, constraints and good practices Assessment of previous training and TA on Pro poor Planning and Budgeting (P3B) Tentative results study to be completed in September These studies will be presented today. Draft final reports have been produced that will be completed based on input from the workshop during the next 6 weeks 14
Agenda 18 August 15
Agenda 19 August 16