EXECUTIVE SUMMARY
mean that local governments can act effectively in a multilevel governance framework. By contrast, in low- and middle-income countries where basic service provision is still lacking, local governments typically have limited powers and resources. They lack professional staff and revenue raising capacity. Their budgets are small in both absolute and relative terms, (for instance, less than 8% of central government expenditure in Sub-Saharan Africa).13 In many of these countries, central governments give a low priority to basic service provision and necessary institutional and legal reforms, particularly local government empowerment. The concept of multi-level governance may be difficult to apply in contexts where effective governance has still not been consolidated. However, it can still serve to highlight problematic relationships between levels of government, and between government and other stakeholders, as well as to flag up the negative consequences of its absence on service provision.
13
UCLG (2011).
This issue was highlighted in the OECD multi-level diagnosis approach to the water sector in high- income countries and Latin America. OECD (2011). See also: Akhmouch (2012). 14
Also see: Institut de Gestion Délégué (IGD), Contractual Governance of Basic Network Services, Working Group chaired by Jean-Pierre Elong Mbassi, 2012 15
One of the main challenges to effective multi-level governance is the unclear distribution of responsibilities and frequent overlapping of roles due to weak institutional frameworks and poorly-implemented decentralization processes. Ineffective multi-level governance can result in weak planning processes, backlogs in budget executions, higher transaction costs, economic inefficiencies and the recentralization of decision-making.14 Numerous and constantly changing rules and regulations contribute to the confusion. The promotion of sector-wide approaches by international donors and central governments that often fail to include local levels undermines multilevel governance. This failure diminishes local autonomy and accountability to residents. All these dimensions have serious consequences for both the quality of multi-level governance and for service provision. Given
the growing complexity in the distribution of powers and the incorporation of new stakeholders into the field of basic services, there is a need to clarify and regularly review the relationships between institutions. Local governments are also responsible for cooperating at local level to improve horizontal governance. Inter-municipal cooperation reduces institutional fragmentation, enhances the potential of agglomeration economies and fosters coherence and coordination locally as well as with other levels of government. Inter-municipal cooperation is well entrenched in much of Europe and increasingly in other regions, as noted in the chapters on Asia and Latin America. In order to be effective, multilevel governance should be rooted in the principle of subsidiarity, respect for local autonomy and genuine partnership. GOLD III features examples of successful national policies implemented with strong involvement from local governments, as well as examples of failures where local governments have been excluded from policy-making and implementation.
On governance and management15 At least four clear definitions are necessary to clarify roles in the governance of basic services: a) the identification of the ‘organizing authority’, b) its institutional powers and human and financial resources, c) the management model and how it is chosen, d) the combination of financing sources. This section analyses three of these four issues (financing is explored in the next section), and explains the governance constraints on local authorities in different regions. A clear role for the ‘organizing authority’ in ensuring the delivery of basic local services The ‘organizing authority’ is the public authority legally and politically responsible for