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GOLD II

Page 94

0w2010 01 RESUM EJECUTIVO 04 DEFcarta ang

26/10/10

19:45

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Second Global Report on Decentralization and Local Democracy. GOLD 2010 EXECUTIVE SUMMARY

their programs that at least partially bypass normal decision making and resource allocation procedures of local governments. The latter measure is generally intended to compensate for real and perceived problems, such as weak local government capacity, corruption, and ineffective and bureaucratic central government agencies. Parallel mechanisms can help to deliver services and may be appropriate in some form at early stages of decentralization when local governments are very weak, but ultimately they undermine the legitimacy and effectiveness of local governments. Neither of these donor approaches is consistent with current thinking on aid effectiveness, as reflected in the Paris Declaration (2005), Accra Agenda for Action (2008) and the upcoming 4th highlevel symposium on aid effectiveness agenda in Seoul (2011), which highlights the harmonization of development assistance with national policy and stresses the importance of using national systems to deliver services, thereby reinforcing both national and subnational governments’ capacity development and their accountability to citizens. Ensuring that external development partners follow national policies is ideally the role of the national government. In countries with weak capacity and significant need for assistance, however, this may be difficult. Under such circumstances, the development partners themselves need to take steps to ensure that they align with national priorities. Ideally parallel institutions should not be used. If it is necessary to use them for reasons noted above, they must be framed as temporary arrangements with a clear plan for phasing them out in favor of greater reliance on local mechanisms as they become institutionalized. When local mechanisms are sufficiently credible, external agencies should foresee budget support that empowers local decision making.

International agencies need to ensure that budget support programs contribute to the strengthening of local governments and the development of their autonomy. Likewise, sector-wide approaches are often a centralizing force in practice, but they can be instrumental in strengthening and implementing the specific local powers and responsibilities as defined in the legal frameworks for decentralization. Create a regular and systematic dialogue between local governments and the central government on intergovernmental and local financial policy. Although this has not been previously discussed in an extensive way, this report clearly leads to the conclusion that local governments in many countries are not sufficiently consulted on policy national policies of great consequence for them. Local governments could be consulted annually during the national budget process on all questions that directly or indirectly affect their financing. This would require a mechanism created to bring together the national actors (legislature and executive) and local governments. For such an approach to be effective, it would be important to ensure access to appropriate information on public finances, both in general and specifically regarding local government matters.

The Way Forward Local governments have become more important and more autonomous in many countries around the world and higher expectations have been placed on them. Because this has happened in a challenging global environment of substantial urbanization, demographic shifts (aging population), climate change, and increasing risk, more attention needs to be given to developing the basic fiscal architecture that serves as a foundation for good local government performance. As highlighted throughout the report, there has been good progress on many fronts in many countries, but there are still major deficiencies

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