0w2010 01 RESUM EJECUTIVO 03 DEFcarta ang
26/10/10
19:49
PĂĄgina 60
EXECUTIVE SUMMARY 60
United Cities and Local Governments
In reforming local government systems, the most challenging task for the governments in the region would be restructuring the overall revenue system in a manner that provides local governments “fiscal space� to strengthen own revenue and expenditure arrangements. The governments should first make sure that adequate steps are taken to establish accountability mechanisms, then boost revenue autonomy by giving local governments adequate decision-making powers on tax rates and the determination of some tax bases in order to improve budgetary predictability. They should gradually lift central government controls on local fees and taxes after making sure that local revenue generation is maintained. The governments in the region should consider establishing a multilevel government coordinating body that would operate across the different tiers of government to launch fiscal decentralization reforms. This coordinating body would be a mechanism for the central government to improve the design and gauge the direction, pace, and extent of decentralization, as well as to disseminate information, provide training and directly engage municipal governments in the decentralization process. This body would be instrumental in developing institutions for intergovernmental cooperation and dialogue. It will be especially central to increasing local public expenditure efficiency in areas of concurrent expenditure responsibilities, and creating strong incentives (financial and legal) to promote cooperative arrangements among local governments for service delivery. In public service delivery, the governments could explore the participation of the private sector in both financing and delivery of public services to improve the overall efficiency of local government expenditures. Inter-municipal cooperation and collaboration with the private sector might be means towards overcoming inefficiencies associated with small size municipalities. However, the choice of management model must remain a local one to ensure the public appropriation and approval of the chosen methods.
Governments should study their transfer systems so as to make them more effective instruments for the implementation of policies of national interest at the local level, and in the reduction of spatial fiscal disparities. This would include an examination of both conditional and unconditional transfer systems. They should establish transparent rule-based transfer systems with explicit formulas for equalization. They should explore ideas for a combination of unconditional and matching grants that would to encourage municipal governments to exploit their revenue bases and improve the efficiency of tax collection. Another important element in the implementation of a decentralization strategy is capacity building through investment in both staff capacity and information technology. The region needs more capacity building initiatives supported by domestic and international funds and agencies. Central governments in the region should also credibly commit to the strengthening of local government management capacity both in terms of long-term budget planning and the sustainability of debt. This will mean on the one hand enforcing hard budget constraints for local governments, and on the other, ensuring that local governments receive the funds they are assigned under law and that these income sources are sufficient to allow them to provide their mandated services. This process will be important in particularly for local government borrowing as for many local governments in MEWA unsustainable debt has become one of the only options for continuing to provide service. Finally, a critical issue in the MEWA region is the role of conflicts in centralization. It seems external conflicts set a major obstacle to the decentralization process and are often a key impetus for recentralization movements. Regional conflict prevention should be seen as a regional or international public good of which the collective provision would ease the burden on central and local governments of individual countries.