Tools to Analyze Political and Management Capacities for Local Governance and Decentralization

0 Regional Centre LAC

Basic User´s Guide

Tools to Analyze Political and Management Capacities for Local Governance and Decentralization

Regional Centre LAC

Basic User´s Guide: Tools to Analyze Political and Management Capacities for Local Governance and Decentralization UNDP REGIONAL CENTRE FOR LATIN AMERICA AND THE CARIBBEAN

For more information about this User´s Guide and/or the work of the Regional Centre for Latin America and the Caribbean, please contact us at: UNDP Regional Centre LAC Building 128, City of Knowledge, Clayton Panama City, Panama P.O. Box, 0816-1914 Telephone: (507) 302-4500 Fax: (507) 302-4551 rcpanama@undp.org gerardo.berthin@undp.org

www.regionalcentrelac-undp.org

Basic Userﾂｴs Guide: Tools to Analyze Political and Management Capacities for Local Governance and Decentralization UNDP REGIONAL CENTRE FOR LATIN AMERICA AND THE CARIBBEAN ﾂｩ UNDP PANAMA CITY, PANAMA MARCH 2010

UNDP REGIONAL CENTRE FOR LATIN AMERICA AND THE CARIBBEAN, PANAMA BEAT ROHR Deputy Regional Director and Director of the Regional Centre for Latin America and the Caribbean FREDDY JUSTINIANO Coordinator of Operations and Project Implementation, Regional Centre for Latin America and the Caribbean GERARDO BERTHIN Local Governance and Decentralization Regional Policy Advisor, Regional Centre for Latin America and the Caribbean

TECHNICAL TEAM GERARDO BERTHIN, CAROLINA CHICA, CLARA INES LUNA, SONIA DURAN SMELA, LEONARDO GARZON, MARIO ANDRES VELASCO, MANUEL CALDERON PEER REVIEW VLADIMIR AMELLER, OSCAR YUJNOVSKY PARTICIPANTS IN PEER REVIEW VLADIMIR AMELLER, OSCAR YUJNOVSKY, LENNI MONTIEL, GERARDO BERTHIN, FREDDY JUSTINIANO, CAROLINA CHICA, RICARDO USATEGUI, CLARA INES LUNA, CHRISTIANNA PANGALOS, GUILLERMINA MARTIN, GLORIA MANZOTTI, OCTAVIO AGUIRRE, IVAN BAZTAN, SONIA DURAN SMELA

COMMENTS AND RECOMMENDATIONS JORGE RICARDO PANAY (MEF PANAMA), TATIANA SOUSA (MEF PANAMA), JUAN MANUEL SALAZAR (UNDP), JORGE BAQUERO (UNDP), KARIME HASSAN (UNDP), JAIRO MATALLANA (UNDP), NORMA PENA (UNDP), ALAN AGUIA (UNDP), MARIBEL LANDAU (UNDP), ALBERTO PARANHOS (UN-HABITAT), CARLOS SANDOVAL (ILPES/ECLAC), JESUS EDUARDO CORONADO (GTZ), ANGEL QUINILLA (GTZ), FELIX ALDERETE (IADB)

WEB APPLICATION JESUS EDUARDO CORONADO, JUAN GABRIEL SUAREZ

ACKNOWLEDGEMENTS LENNI MONTIEL, SONIA DURAN SMELA, MARIBEL LANDAU, JORGE RICARDO PANAY, DAYRA BURGOS, TATIANA SOUSA, ALEJANDRO BECKER, VIVIANA BARBERENA, CARLOS AUGUSTO CABRERA, JAIME IDROVO, DAVID SOTO, UNIVERSIDAD EXTERNADO DE COLOMBIA, AND RED DE INICIATIVAS PARA LA GOBERNABILIDAD, LA DEMOCRACIA Y EL DESARROLLO TERRITORIAL COLOMBIA -RINDE

STATISTICS MODULE EDUARDO ALFONSO

DESIGN MIGUEL ANGEL NOVA, LUIS FELIPE SUAREZ, REVES DISEﾃ前

TRANSLATION CRISTINA COSTA BRAVO

5 Table of Contents Presentation ___________________________________________________________ 7 1.

Introduction _______________________________________________________ 9 1.1 Why develop Tools to Analyze Political and Management Capacities for Local Governance and Decentralization?_____________________________________________ 10 1.2

What are the Tools for? _______________________________________________ 10

1.3

How can these Tools be applied? _______________________________________ 12

2. Features of the assessment methodology_________________________________ 16 2.1

What is an assessment? _______________________________________________ 16

2.2

What is the methodology proposed? ____________________________________ 16

2.3 How are the Dimensions, Areas and Indicators/Variables used in these tools defined? __________________________________________________________________ 17

3.

2.4

What does it mean that the assessment tools are modular? __________________ 17

2.5

What is generated from the application of the assessment? __________________ 18

Tool for the Analysis of Political Capacities and Intergovernmental Relationships _________________________________________________________________ 20 3.1

What is this tool for? _________________________________________________ 20

3.2 What is the structure of the Tool for the Analysis of Political Capacities and Intergovernmental Relationships? _____________________________________________ 21 3.2.1 3.2.2 3.2.3 3.2.4

4.

Democratic Dimension _____________________________________________________ Policy and Public Management Dimension _____________________________________ Fiscal Dimension __________________________________________________________ Administrative Dimension ___________________________________________________

23 24 25 26

Tool for the Analysis of Sub-National Government Management Capacity ____ 30 4.1

What is this tool for? _________________________________________________ 30

4.2 What is the structure of the Tool for the Analysis of Sub-National Government Management Capacity? _____________________________________________________ 31 4.2.1 4.2.2 4.2.3 4.2.4

Democratic Dimension _____________________________________________________ Policy and Public Management Dimension _____________________________________ Fiscal Dimension __________________________________________________________ Administrative Dimension ___________________________________________________

33 34 36 37

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7 Presentation It has been a number of years already, since local governance and decentralization have been recognized as key elements of democratic governance, and means to achieve the Millennium Development Goals and expand human development. This is one of the reasons local governance and decentralization have been prioritized as strategic areas of action in the UNDP Strategic Plan for 2008-2011.

Significant progress has been registered in many countries in the region, particularly in transferring responsibilities, resources and decisionmaking power to sub-national governments. Nonetheless, the tasks ahead are enormous for sub-national governments to assume a leading role in expanding human development.

Local governance and decentralization imply strengthening democratic institutions and the public policy cycle These Tools to Analyze Political and Management Capacities for Local Governance and Decentralization presented here are important means to continue strengthening sub-national governments. They are the product of a collaborative effort by the Regional Centre for Latin America and the

Caribbean, the Democratic Governance Practice Area of the Regional Bureau for Latin America and the Caribbean (RBLAC), and the Bureau for Development Policy (BDP). They have been developed to support the work of UNDP Country Offices in the region, and through them, strengthen sub-national governments.

This initiative seeks to disseminate these tools as an experience promoted by the Regional Centre, which were tested in several municipalities in Panama, and systematized and validated by a peer review and a selected group of experts. We hope that this knowledge could be useful for those in the region, as well as outside de region.

We also hope that this Basic User´s Guide can help adapt and replicate the tools, and contribute to strengthening sub-national governments.

Beat Rohr Deputy Director of the Regional Bureau for Latin America and the Caribbean and Director of the Regional Centre for Latin America and the Caribbean

8

9 1. Introduction Created in 2008, the Regional Service Centre for Latin America and the Caribbean of the United Nations Development Programme (UNDP) has since been working as of its key areas, on the design of Knowledge Management Tools. These tools are meant to accompany the technical support to strengthen Local Governance and Decentralization processes that is provided not only to UNDP Country Offices in the region, but also to other agencies of the United Nations System.

In brief, the Regional Service Centre offers instruments that contribute to the formulation, implementation and assessment of public policies that seek to expand human development achievements.

As part of the Democratic Governance Practice Area, the Regional Service Centre provides support in issues related to the strengthening sub-

national governments (municipalities, provinces, departments, counties, cantons, among others) and decentralization processes. The main purpose of these efforts is to continue to improve conditions at sub-national levels to promote governance practices that are: transparent, abide to the rule of law, and foster citizen participation in the decision-making and accountability process.

Although a number of approaches have been developed to assess the conditions for sub-national governance in the region, most of them have been focused on economic aspects and have paid little attention to political and management capacity dimensions, which are equally essential to improve the living conditions, the freedoms and the opportunities of the people.

The Tools to Analyze Political and Management Capacities for Local

“For most of the countries in the region, decentralization has been seen as a means to enhance state presence within their territories, strengthen links between citizens and their governments, bridge interregional development gaps and, generally, to increase the credibility and effectiveness of public entities.�

UNDP - Universidad Externado of Colombia (2007).

Orientation Manual. Basic Guidelines for Administrative and Fiscal Decentralization, Bogota, p. 16.

10 Governance and Decentralization deal with these two strategic areas, and at the same time, are the result of a process that emphasized research, dialogue and discussion among experts and local stakeholders. This process also included the pilot application of the tools, a thorough peer review, and feedback from a selected group of experts in local governance and

decentralization. This process has encouraged feedback and improvement, so that they can be applied to different contexts and realities within the Human Development conceptual framework and the Democratic Governance Principles that UNDP adopted two decades ago.

1.1 Why develop Tools to Analyze Political and Management Capacities for Local Governance and Decentralization?

The application of these tools to analyze political and management capacities for local governance and decentralization, makes possible the review and assessment of the context, systems and structures of sub-national entities (municipalities, provinces, departments, counties, cantons, among others), and their relation with other territorial levels of government. It is a means to gauge a sub-national government in terms of its possibility of action and the effectiveness of its political, administrative and institutional procedures and arrangements.

To that end, it is necessary to undertake a data-gathering process, followed by the assessment of the potential risks and deficiencies that may affect the achievement of sub-national government´s goals. These types of assessments can be considered an operational tool to identify: the results of the administration; what generates good or bad results; and, what can be done to improve government performance and effectiveness.

1.2 What are the Tools for?

The imperative of improving government performance and effectiveness has revealed the necessity to have suitable tools to measure and

monitor public sector management. In this context, efforts have been made during the last twenty five years to measure the quality of democratic

11 governance at different levels and, in particular, at the national level. National governments, with support from bilateral and multilateral Cooperation Organizations, have invested significant resources to measure, monitor and assess government performance and effectiveness, using a set of indicators that allow a broad analysis of democratic governance. Even though, efforts have also been made in the subnational sphere, due to the complexity and diversity of these territorial structures the measurement of local democratic governance brings along more challenges.

The tools described in this User´s Guide are intended to show how to analyze not only the existing institutional, regulatory and intergovernmental arrangements that promote the strengthening of local governance and decentralization, but also the fiscal,

administrative, political and public policy management capacities of subnational governments. The structure of these tools allows us to focus on key areas of government management and generate guidelines to improve processes, intergovernmental relations, and government’s systems and structures. Similarly, it helps to systematize and develop comparative analyses between sub-national governments, particularly by facilitating the grouping of territorial entities that share similarities in population or in other comparative criteria. Finally, it also allows time-series queries to monitor the evolution of a territory (country, intermediate level or municipality).

The application of this kind of tools contributes to monitoring the results and effectiveness of governmental actions and enables time series and risk

Although local governance is different from decentralization processes, the latter one can be part of the dynamics of local governance. Local governance covers a wider range of issues and stakeholders that influence planning and decision-making processes in the political, economic and social realms. Local governance is driven by the quality of the interaction and relationship existing between government and governed, the capacity to identify and achieve collective goals, the ability to ensure individual rights and to articulate collective rights and obligations, and the articulation of multidimensional processes that involve institutions, structures, systems, resources, regulations, practices, actors and relationships. At the same time, local governance also incorporates typically local elements such as political patterns, territorial planning, institutional arrangements, decentralization levels, accountability and citizen participation mechanisms, and the capacity for resource generation and management.

Regional Centre LAC, Local Governance and Decentralization (2009)

12 management analysis, as well tracking progress of processes, systems and structures at the sub-national level. As such, the assessment becomes a strategic management tool to improve public policy design and implementation at the sub-national levels. This also allows the orientation of public management and policy towards expanding Human Development and achieving the Millennium Development Goals.

In this sense, the tools that are presented here are means that can help design and implement public policies to strengthen conditions to enhance sub-

national governance and decentralization processes. Each tool enables to: a) assess the elements that affect the autonomy of sub-national governments; b) identify strengths and weaknesses in sub-national management and make recommendations to strengthen subnational governments; c) elaborate comparative analysis about sub-national governance and decentralization processes; d) provide a tailored-made assessment approach applicable to diverse contexts and easily adaptable; and, f) process historic information not only to construct base lines, but also to conduct monitoring exercises.

1.3 How can these Tools be applied?

This Basic User´s Guide provides suggestions for the application of the tools. First, the main features of the assessment methodology in terms of its nature and structures are described.

This is followed by illustrative examples of the type of elements that could be part of the Intergovernmental Relations and the Sub-national Government Management Capacity assessments, respectively.

This guide also presents three additional modules describing alternative uses of the Tools. The first module presents a

quantitative score card approach that can be used in measurement activities.

This approach is intended to establish rankings and comparisons between territories.

The second module describes the Web application. The third module outlines the elements of the statistical analysis component, which is aimed at providing technical tools to those responsible for interpreting data and generating conclusions and recommendations.

13

Description of the basic features of the tool

14

15

Features of the assessment methodology

16 2. Features of the assessment methodology 2.1 What is an assessment?

An assessment is the review and evaluation of the most important causes and manifestations of a situation or a problem. The purpose of the assessment is to generate actions that contribute to the strengthening of the positive aspects identified in the analysis, and to change an undesirable situation. In this sense, the application of an appropriate assessment would

comprise: i) the study of a phenomenon within a particular theoretical/conceptual framework as a predetermined reference; ii) the precise identification of elements that, in practice, are close or far from the theoretical/conceptual framework; and, iii) the construction of inputs to formulate concrete actions that enhance the studied reality.

2.2 What is the methodology proposed?

The assessment methodology designed by the UNDP Regional Service Centre for Latin America and the Caribbean (RSCLAC) for both of the tools, is based on an aggregate data processing scheme that gathers the information available on a particular area, in thematic modules. Its approach is from a general

to a specific/particular analysis.

Accordingly, the essential elements included in the tools are displayed in different levels called: dimensions, areas, and variables or indicators. The assessment approach is modular (see section 2.4) and is articulated as shown in the following graph:

This graph illustrates the structure of an assessment.

Assessments can comprise as many dimensions, areas and indicators as necessary to capture appropriately a reality.

17 2.3 How are the Dimensions, Areas and Indicators/Variables used in these tools defined?

Dimensions: Dimensions are the broad thematic topics that frame the description of the target phenomenon that is going to be analyzed. There is no restriction concerning the number of dimensions that can be linked to a particular assessment exercise. In fact, as many priority dimensions could be created, depending on the context and issue.

Areas: To make dimensions easier to understand, they can be divided into two or more sub-topics called areas of analysis. Areas ensure that every element explaining positive and negative results in a dimension does not get blurred when analyzing a broad topic. One single dimension may

comprise as many areas as it may need to be depicted it accurately.

Indicators/variables: Indicators or variables are the third element in the basic structure of the assessment. They can be expressed by numeric data and or as qualitative ranges. Indicators and variables are the main element of the methodology, since they constitute the basis for the data processing and analysis scheme. As in the case of dimensions and areas, the number of indicators is unrestricted. However, it is recommended to be prudent in the selection of variables, since a higher number does not necessarily entail a higher level of quality and accuracy.

2.4 What does it mean that the assessment tools are modular?

Every indicator or variable, as well as

the areas and dimensions, comprised in

Important: The selection of the group of dimensions, areas and variables/indicators that will compose the assessment tools, is a key task given to the team that will be conducting the exercise. Similarly, it is also recommended that the stakeholders that are going to be subject of the exercise get involved in this part of the process.

Their participation will not only help identify real needs for the assessment, but also it can generate ownership and credibility to the results of the assessment and its respective policy recommendations.

18 the assessment can be modified and/or adapted to the needs and context of application (reality). That makes the tools to have a unique modular structure, and allows the tools to be flexible and easy to adapt not only to the political, bureaucratic and institutional features of the context of each country or entity to which the tool is to be applied, but also to the degree of detail intended by each assessment.

The structure of the Tools for the Analysis of Political Capacities and Intergovernmental Relationships and the Sub-national Government Management Capacity described in this Basic User’s Guide are merely presented as examples and reference of how the basic menu of strategic options provided by these tools can be adjusted and/or adapted to each context and reality.

2.5 What is generated from the application of the assessment? capacities; c) generate a regular data flow to monitor sub-national performance; d) compare territorial entities in order to identify lessons learned; and e) have access to a data storage, processing and display system, which increases the usefulness and potential impact of the information. 1

After applying the assessment, it can provide information for public and programmatic policy decision-making, since the exercise helps in the identification and prioritization of subnational governments’ needs. Towards that end, the methodology allows for quantitative and/or qualitative analysis or a combination of both, using the different elements (dimensions, areas, indicators) related to the political capacities and intergovernmental relations, as well as the sub-national management capacity aspects.

Similarly, the results obtained from the application of the assessment can: a) depict the most relevant elements of sub-national management in a given institutional context; b) identify the initial situation of a territorial entity in terms of management and political

1

The assessment methodology designed by the Regional Centre not only facilitates the qualitative analysis, but also the quantitative analysis of political and management capacity. The assessment approach includes a score allocation scheme for each variable/indicator. Then, weights are assigned to each variable, depending on their relative relevance.

19

Illustrative Structure for the Assessment of Political Capacities and Intergovernmental Relationships

20 3. Tool for the Analysis of Political Capacities and Intergovernmental Relationships 3.1 What is this tool for?

As mentioned in the introduction to this Basic User’s Guide, sub-national governance and decentralization processes involve public management practices that are transparent, participative, and efficient, aimed to positively impact on the development of a particular community. In synthesis, these practices are public management approaches that seek to bring the State closer to citizens in order to enhance public decision-making, increase government legitimacy and public budgeting effectiveness, and improve the quality of life of citizens.

The Tool for the Analysis of Political Capacities and Intergovernmental Relationships constitutes a means to analyze the regulatory and institutional context that rules sub-national governments’ proceedings in a

particular country. It can be used to analyze the structure of power distribution among the different territorial levels within a State, as well as to assess de degree of political, administrative and fiscal decentralization. The results of the assessment allow the formulation of long-term recommendations to guide State policy reforms, as well as to evaluate and define public policies.

The structure of the assessment proposed by this tool explores principally the following elements: •

The quality of the political agreements that are part of the democratic system, at every level of government, and the capacity to incorporate different stakeholders in public affairs and decision-making

According to the specialized literature, decentralization processes should be oriented to: i) promote the equitable distribution of resources among individuals and territories; ii) bridge the gaps related to public service provision in the country; iii) increase efficiency and effectiveness in public expenditure; and, iv) promote the democratization of political life in local communities so as to achieve higher levels of institutional legitimacy and governance.

Regional Centre LAC, Local Governance and Decentralization (2009)

21 •

•

processes.

The existence of institutions that bring stability to the distribution of political, administrative and fiscal power among the various levels of government.

The territorial financing scheme, the composition of public expenditures

•

and sub-national autonomy in fiscal management.

The distribution of competencies and existing mechanisms to distribute competencies and responsibilities, respecting territorial heterogeneity and sub-national autonomy in public policy decisionmaking.

3.2 What is the structure of the Tool for the Analysis of Political Capacities and Intergovernmental Relationships?

In the context of decentralization and sub-national governance, political capacities and intergovernmental relations are typically multi-dimensional as they can simultaneously influence the fiscal, the administrative, the political, the regulatory and the institutional structures that rule the relations among the different levels of government in a country.

In an effort to explain the sub-national governance and decentralization processes, this guide identifies four broad dimensions that explain the areas

of influence: i) Democratic Dimension; ii) Policy and Public Management Dimension; iii) Fiscal Dimension; and iv) Administrative Dimension.

These dimensions are, in fact, the ones where change is mostly concentrated when initiatives to reforms the distribution of power among the different levels of government are implemented.

A description of the four dimensions is provided bellow, followed by the illustrative description of some of the possible areas that each dimension may comprise.

22 Dimensions

Democratic Dimension

Policy and Pubic Management Dimension

Fiscal Dimension

Administrative Dimension

Areas

Area 1

Democratic system and political representation

Area 2

Administrative and political control over public management at each level of government

Area 3

Level of citizen political empowerment

Area 4

Normative framework of intergovernmental relations

Area 5

Authorities for the promotion and strengthening of local governance and decentralization processes

Area 6

Sub-national government management monitoring

Area 7

Structure of the sub-national public revenue

Area 8

Structure of the sub-national public expenditure

Area 9

Autonomy in fiscal management

Area 10

Nature of the competencies assigned to sub-national governments

Area 11

Distribution of sub-national competencies

Area 12

Autonomy in administrative management

Each of the assessment tools present a modular structure since the indicators or variables, as well as the areas and dimensions that are part of them, can be modified and/or adapted according to the needs and contexts of application. This asset makes the tool flexible and adaptable to the special elements of the political, bureaucratic and institutional context of a particular country/entity, or, simply, to the degree of detail required in the analysis.

23 3.2.1 Democratic Dimension Sub-national governance and decentralization processes are intricately linked to different aspects of the democratic system.

One fundamental aspect is promoting citizen participation, to monitor sub-national administrations, and facilitate the engagement of the community in public management in setting priorities as well as in the decision making process. As such, these processes promote citizen democracies.

The purpose of this dimension is to analyze the degree of development and deepening of democratic governance at the sub-national level and of the

Areas

political decentralization process. The following variables can be taken as a starting point to explore this dimension: mechanisms for the election/selection of public authorities at each subnational level of government (intermediate or mid-level, municipal, community, etc.); the features of the political regime; the type of control exerted over sub-national administrations; and, the influence of stakeholders in the design and implementation of public policies.

The structure of these dimensions could comprise the following areas:

Description

Area 1: Democratic system and political representation

The aim of this area is to investigate how sub-national authorities (governors, mayors, and other local leaders, as well as councils and other local governing bodies) are elected, in order to assess the level of responsibility towards their constituencies. Therefore, it focuses in some key aspects of electoral systems to establish whether sub-national election processes meet minimum internationally accepted standards.

Area 2: Administrative and political control over public management at each level of government

This area seeks to analyze the type of responsibilities assigned to subnational governments in political and administrative management matters. In other words, it explores the type of control that local assemblies and/or councils have over sub-national leaders. This approach allows to determine the degree of political and administrative autonomy of public authorities at each sub-national level of government.

24 Area 3: Level of citizen political empowerment

This area is intended to analyze the capacity of citizens and civil society organizations to participate and to exert political oversight over subnational authorities. For this purpose, it analyzes the existing mechanisms for citizen participation and civil society organizations at each level, how they are used to exercise social control, and determine whether these mechanisms have a consultative or decision making status, as well as the type of issues they focus on.

3.2.2 Policy and Public Management Dimension Strengthening processes of sub-national governance and decentralization focus on a set of rules and institutions so these can help to articulate at the subnational level comprehensive and coherent public policies.

When assessing the weaknesses and strengths of a model of government in which power is distributed among different territorial levels, it is important to pay attention to the quality of public policy formulation and management, as well as to the mechanisms for public policy impact and performance monitoring.

Similarly, the degree of decentralization is important. That is, whether there is delegation (which gives some administrative control to sub-national units), deconcentration (when the central government creates subnational units to implement programs

and services, financed with resources assigned at the central level), and/or devolution (when there is a formal and legal transfer of power from the central government to sub-national governments).

The purpose of this dimension is to analyze those aspects related to the normative framework that regulates political action, intergovernmental relations and the range of institutional spaces for promoting and strengthening processes of public policy management at the sub-national level. Finally, it analyzes the existence and application of mechanisms to monitor public management results and performance at the sub-national level.

The structure of this dimension may include the following areas:

25 Areas

Description

Area 4: Normative framework of intergovernmental relations

This area focuses on the normative system that governs and defines the relationship among the different levels of government, and seeks to determine their relative degree of autonomy, and types of political relationship and interaction. Toward that end, indicators will attempt to measure the existence and degree of application of laws that rule these issues. When appropriate, it is recommended to investigate the subnational capacity to exercise administrative rights, and to analyze the quality and dynamics of the political and administrative relations among the different levels of government.

Area 5: Authorities for the promotion and strengthening of local governance and decentralization processes

This area explores the existence of formal and informal bodies, both at the national and the sub-national level, that promote coordination of intergovernmental actions, consensus-building on public policy, and deepening in sub-national governance and decentralization processes.

Accordingly, this area is aimed at providing analysis of the existence and operation of public and technical institutions (both governmental and nongovernmental) at different levels of government, as well as of the authorities that facilitate coordination, consensus-building, design, implementation and evaluation of public policy in sub-national governance and decentralization processes.

Area 6: Sub-national government management monitoring

This area analyzes the authority and the capacity of sub-national governments to define their performance goals and to measure their management. This entails the analysis of existing institutional and interinstitutional tools and the technical capacity to monitor and measure subnational management and performance in a reliable, timely and systematic way.

3.2.3 Fiscal Dimension Sub-national governance and decentralization processes demand the transferring of fiscal competencies (public revenue and expenditure) from higher/central levels to lower/subnational levels. These processes are, in general, driven by the central level.

Therefore, this dimension seeks to analyze the main features of the fiscal aspects of intergovernmental relations, such as, the relative weight of the different financing/revenue sources and the level of autonomy regarding the use/expenditure of resources. Finally, it tries to analyze the degree of autonomy conferred to sub-national territorial

26 governments in management.

terms

of

fiscal

The structure suggested for this dimension may include the following areas:

Areas

Description

Area 7: Structure of the subnational public revenue

This area assesses the composition of sub-national revenue sources. Thus, it focuses not only in the relative levels of financial autonomy deriving from the capacity for fiscal revenue generation at each level of government, but also the relevance and use of intergovernmental transfers and other financing mechanisms and resources.

Area 8: Structure of the subnational public expenditure

This area focuses on the participation of each level of government in the overall public expenditure, in order to establish the impact of each level on the total national investment. For this purpose, indicators in this area explore the structure of public expenditure (amount of current expenditure, amount of capital expenditure).

Area 9: Autonomy in fiscal management

This area explores the margin of action or room for maneuvering that subnational governments have to define issues related to the management of their resources and finances. Therefore, indicators in this area focus on the primary responsibility of sub-national governments in relation to taxes, rates and other revenue entitlements. In other words, it analyzes fiscal power, authority and competence. Similarly, it reveals the sub-national capacity to define expenditure fiscal restrictions and to contract public debt as an alternative source of financing.

3.2.4 Administrative Dimension In strengthening the conditions for subnational governance and decentralization, the distribution of competencies and responsibilities among the different levels of government determines the level of discretionarily and/or autonomy of territorial entities for decision-making

and for adopting initiatives that will improve the quality of life of citizens.

The purpose of this dimension is to assess the nature of competencies assigned to sub-national governments in order to determine their capacity for action and the level of territorial autonomy to implement public policies.

27 Similarly, this dimension examines whether sub-national administrations can decide on the size and composition of their administrative structures.

A possible configuration for this dimension may comprise the following areas:

Areas

Description

Area 10: Nature of the competencies assigned to sub-national governments

This area seeks to investigate the scope and depth of decentralization and sub-national governance processes, by enabling the analysis of variables related to the presence of delegated, deconcentrated and/or decentralized competencies at the different levels of government. When required, it can also assess whether the attributions assigned to subnational governments involve the design as well as the implementation of public policies.

Area 11: Distribution of sub-national competencies

This area focuses on the existing institutional mechanisms to assign competencies to sub-national governments. For this reason, it analyses the degree of formality of the normative framework, as well as its main features.

Area 12: Autonomy in administrative management

This area explores the margin of action or room for maneuvering that subnational governments have to define administrative actions. As such, the focus is to determine the level of tutoring from national-central authorities and institutions to sub-national entities and actors. It also focuses on the capacity of territorial administrations to implement their own systems of staff administration, contracting and budgeting.

28

29

Illustrative Structure for the Assessment of Sub-National Government Management Capacity

30 4. Tool for the Analysis of Sub-National Government Management Capacity 4.1 What is this tool for?

The Tool for the Analysis of SubNational Government Management Capacity is conceived as a means to analyze the political, fiscal and administrative elements that are managed by sub-national governments.

In particular, elements that have an impact on territorial management capacities and on public policy results.

The tool highlights the elements that contribute to the quality and efficiency of public services and to the generation of favorable conditions to promote the expansion of local development.

However, it also helps to measure the existing limitations of sub-national administrations in relation to their responsibilities and functions that have been assigned.

This tool is not intended to provide an analysis of the impact of public initiatives on local revenue generation

nor of the transformation of socioeconomic risk factors. Rather, it focuses on the management capacities of subnational governments in financial, administrative, technical and technological matters, and in basic service provision. Similarly, it also analyzes the existing normative framework that influences public policy design, management and implementation at the sub-national level.

In short, this tool should support any integrated analysis of sub-national government management and administrative performance. It aims to get the most out of the existing subnational information and to provide a data processing and analysis method to identify the strengths and weaknesses of the major elements involved in management.

In order to achieve their responsibilities, sub-national governments are provided with legal, institutional, fiscal and administrative competencies for the design, implementation, and evaluation of public policies.

These competencies not only determine the degree of autonomy for decision-making, but also the exercise of practices to achieve the fiscal and administrative sustainability of sub-national entities.

31 4.2 What is the structure of the Tool for the Analysis of Sub-National Government Management Capacity?

As already mentioned, the sphere of action of sub-national governments is multidimensional.

As such, it encompasses the formulation of strategies, resource management and adoption of public policies.

•

Thus, an assessment of sub-national capacities requires focus on those elements that affect the sub-national management cycle, principally:

In an effort to describe sub-national management, the above-mentioned elements have been synthesized in four broad dimensions that explain the sphere of action of public administrations: i) Democratic Dimension; ii) Policy and Public Management Dimension; iii) Fiscal Dimension; and iv) Administrative Dimension.

• • •

•

The design of public policies (planning).

The economic evaluation and the budgeting for these policies.

The implementation of selected actions by using the financial, human and technical resources available for the administration.

The monitoring and follow-up of public policies and measuring their impact.

•

The presentation of results and accountability to the citizens.

The evaluation of public policies, to provide feedback to the decisionmaking process, and initiating a new planning stage.

These four dimensions are described in the next sections, together with illustrative examples of some of the areas that each dimension may comprise.

32 Dimensions

Areas

Area 1 Operations and functioning of the Executive and legislative entities at the sub-national sphere

Democratic Dimension

Area 2 Citizen participation in public management and social control Area 3 Information, transparency and accountability

Policy and Public Management Dimension

Fiscal Dimension

Area 4

Local planning and result-oriented processes and systems

Area 5

Basic service provision

Area 6

Basic infrastructure and sustainable development

Area 7

Culture and leisure policies

Area 8

Equity, gender and social inclusion policies

Area 9

Structure of local public revenue

Area 10 Structure of local public expenditure Area 11 Budgeting and financial management Area 12 Internal organization and institutional structure

Administrative Dimension

Area 13 Staff performance in local management Area 14 Technical equipment and ICT tools for local management

Each of the assessment tools present a modular structure since the indicators or variables, as well as the areas and dimensions that are part of them, can be modified and/or adapted according to the needs and contexts of application. This asset makes the tool flexible and adaptable to the special elements of the political, bureaucratic and institutional context of a particular country/entity, or, simply, to the degree of detail required in the analysis.

33 4.2.1 Democratic Dimension The purpose of this dimension is to analyze the performance of institutions with elected representation at the subnational level; the relationship between the sub-national government and different governmental and nongovernmental stakeholders (including the private sector); the level of citizen participation in decision-

making and in public policy evaluation; and, the creation of spaces that promote the access and dissemination of information, transparency and accountability. This dimension considers the active role that citizens can have, as key actors of democratic processes.

This dimension could be composed of the following areas:

Areas

Description

Area 1 Operations and functioning of the Executive and legislative entities at the sub-national sphere

This area focuses on the use of coordination, consensus and negotiation mechanisms between the sub-national executive power and the subnational legislative power (the power arrangements may be different in each country depending if it is federal or unitarian). For this purpose, it assesses: the type of interaction and links between and or among powers; the capacity for executive veto, the capacity to generate sub-national legislation; the capacity for horizontal interaction (i.e., with other subnational entities); and, the capacity to create strategic partnerships, within the administration as well as with different sectors of society.

Area 2 Citizen participation in public management and social control

This area focuses on the existing sub-national spaces and mechanisms aimed at the promotion of citizen participation in public policy design, implementation and evaluation. Similarly, it looks into the capacity of subnational governments to receive and provide solution to citizen demands.

It also explores the initiatives, projects, processes or programs promoted by sub-national governments to strengthen citizen participation. Finally, it tries to assess the use and degree of ownership related to community participation mechanisms (links, relationships and partnerships with social, political and economic stakeholders for local development).

Area 3 Information, transparency and accountability

This area analyses the access to and the flow of information on subnational public management. It also assesses the diversity, use and effectiveness of the existing mechanisms to access and disseminate public management results to citizens.

34 4.2.2 Policy and Public Management Dimension This dimension measures both the capacity of sub-national administrations to formulate and plan public policies, and their performance regarding the provision of territorial public services. It also focuses on citizens participation in these processes.

In general terms, the purpose of this dimension is to analyze those aspects related to institutional planning and result-oriented sub-national management practices. Similarly, the dimension also focuses on specific sectoral public policies, such as land use management and environmental protection; the coverage and quality of solid waste-related services; and, the existing urban equipment to promote development. Other areas included in

Areas

Area 4 Local planning and resultoriented processes and systems

this dimension are linked to public policy initiatives for human development, such as poverty mitigation and improvement of vulnerable communities’ living conditions.

Sectoral policies may vary depending on the political and institutional context of each particular country. Thus, sectors can be included or deleted according to specific needs. As an example of this, areas 5 to 8 from this Basic User’s Guide are illustrative but not prescriptive and, in turn, other complementary areas not included in this Guide may be incorporated.

The following is an example of a possible structure for this dimension:

Description

This area looks into the capacity of sub-national governments to manage development and territorial strategies, taking into account the existence and use of tools for public policy planning, follow-up, monitoring and evaluation. For this purpose, this area underscores the type of administrative resources available to carry out this kind of activities. Long and middle-term planning practices are also considered, as well as the capacity to reach agreements for inter-local and inter-regional initiatives towards territorial development.

35 Areas

Description

Area 5 Basic service provision

This area is intended to focus on sub-national entities’ performance with regard to the provision of basic services (water and sanitation, urban infrastructure and the provision of public spaces that encourage community life). The main characteristic of the services included in this area is that they generate sine qua non conditions for the improvement of the population’s quality of life and the promotion of territorial development.

Area 6 Basic infrastructure and sustainable development

In general, sub-national governments are responsible for ensuring the existence and quality of basic infrastructure, generating the appropriate conditions for public spaces and designing environmental policies. If this was the case, this area seeks to assess the quality of those services and the availability of equipment to produce a positive impact in the transformation of the sub-national conditions related to local economic development. When necessary, other aspects may be included, such as those concerning public space availability, basic infrastructure for the development of productive activities and environmental risk prevention and mitigation planning.

Area 7 Culture and leisure policies

In sub-national spaces, sports and culture facilities are part of the physical infrastructure for leisure and for the promotion of citizen coexistence.

They also foster artistic expression, recreation and popular cultural practices. This area analyses the role of sub-national administrations in ensuring and promoting the existence of basic infrastructures and policies for the development of sport and cultural activities.

Area 8 Equity, gender and social inclusion policies

Increasingly, sub-national administrations play a key role in the design and implementation of public action oriented towards the promotion of human development and the reduction of poverty. This area explores the existence and implementation of sub-national policies related to social inequity reduction, gender equality strategies and initiatives to achieve higher levels of social inclusion.

36 4.2.3 Fiscal Dimension This dimension addresses two of the major aspects of sub-national financial administration. On the one hand, it covers indicators for fiscal performance such as, revenue generation of subnational entities, the importance of intergovernmental transfers, their financing capacity, and the composition and sustainability of investment and functional public spending. On the other

Areas

hand, this dimension deals with issues related to fiscal management, such as the quality and availability of tools for financial planning, the soundness of budgeting institutions and the administration of information in a transparent and systematic way.

The structure of this dimension may comprise the following areas:

Description

Area 9 Structure of local public revenue

The aim of this area is to examine the structure of local revenue and the capacity for self-source revenue generation, as well as the relative importance of transfers. To do so, different variables can be established for this analysis, such as per-capita tax charge and the participation of both national transfers and own revenues in the total sub-national revenue.

Area 10 Structure of local public expenditure

This area analyzes the structure of sub-national public consumption and investment spending, as well as the sustainability of current and capital expenditures. For this reason, suggested indicators are connected to the capacity for current expenditure self-financing, the participation of personnel costs in the consolidated expenditure, and the relative importance of investment as percentage of total expenditure.

Area 11 Budgeting and financial management

Analyzing the indicators comprised in this area allows determining the capacity of sub-national governments to undertake financial programming and estimate future public revenue and expenditure flows. This area seeks to assess the existence of regulatory and institutional parameters aimed at preventing financial behaviors that may have a negative impact on subnational public finance sustainability. Finally, it helps to analyze the technical and institutional capacities of sub-national governments to undertake financial administration practices in fiscal information management and economic resource management.

37 4.2.4 Administrative Dimension This dimension underscores the incorporation of local management practices and tools that support the conditions required for the appropriate accomplishment of the functions and responsibilities assigned to sub-national entities. Therefore, it emphasizes the organizational and institutional structure of the administration, the quality and performance of human Areas

resources, and the availability of technical and technological resources to help the operational tasks of the subnational entities.

The areas and variables to be included in this dimension will depend on the size and actual functions assigned of subnational governments. Nevertheless, the following are some of the areas that could be included in this dimension: Description

Area 12 Internal organization and institutional structure

This area is designed to analyze the existence and quality of the organizational conditions that contribute to the stability of operational procedures and to improve administrative performance. Therefore, the variables of this area include the appropriateness of the sub-national administration organic structure in terms of size and functions, the use of a manual of functions, and the establishment of administrative career policies. Other administrative elements are analyzed, such as the current salary scale, the existence of a records filing systems and the availability of physical space per employee.

Area 13 Staff performance in local management

This area reviews the efficiency, quality and stability of the administrative staff. Consequently, variables in this area emphasize the main characteristics of the staff, and include, among others, the seniority and education of technical and managerial positions, and proportion of contingent staff appointed for more than one year. On the other hand, it is also recommended to consider the inclusion of specific indicators to identify the use of criteria in selection processes and the existence of performance assessment mechanisms for employees.

Area 14 Technical equipment and ICT tools for local management

The use of technological instruments helps improve the storage, processing and display of the available information, contributing to public decision-making as well as to transparency and accountability. For this reason, the aim of this area is to investigate the availability of technical equipment and ICT tools to provide operational support to sub-national management. It also analyzes the efforts of the administration dedicated to develop the abilities of staff members in the use of the technological resources available.

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