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Local Development & Decentralization

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The investments that social funds finance as well as the institutional changes they promote at the local level require the involvement of multiple, inter-related, actors. For social funds to be effective instruments in the fight against poverty, their strategies must be designed in the context of an integrated approach to local development.  All three main actors – communities, local governments, and decentralized sector agencies – must be engaged.  Experience shows that social fund-sponsored small scale infrastructure projects have a better chance of increasing sustainability when all three players are involved in local planning, cost sharing of capital and recurrent costs, and accountable management of services.

Local Government and Decentralization

Decentralization transfers authority and responsibility of government functions from central to sub-national governments, including local governments, civil society, and the private sector. Political, administrative and fiscal decentralization are complementary to each other and are important for creating an effective environment for CDD. Successful decentralization requires genuine local autonomy, appropriate legal frameworks for local governments, and significant devolving of responsibilities based on the principle of subsidiarity (i.e., matters must be handled by the smallest, or lowest competent authority).

Social funds have become aware that local governments are their main allies to scale up and mainstream the community driven development approach into the public sector.  After an initial phase in which many times social funds tended to bypass local governments in favor of a more expedite service delivery, local governments have now become the main instrument to implement the community driven development (CDD) vision of partnerships between empowered local governments and communities. This can only be achieved if local governments can count on the genuine autonomy and resources to provide adequate service delivery and create working communication channels with communities and other actors.

Strengthening Local Government

Community engagement can improve local government’s performance on multiple levels.  Elements of local government capacity building include designing local government decision-making processes to reduce capture and build transparency and accountability, involving other stakeholders including civil society, and forging partnerships between community-based organizations and local governments.

Partnering can help community-based organizations promote external linkages, enhance effectiveness and reduce costs, while local governments can gain through expanding service delivery and deepening the participation of citizens in local activities.  Effective partnering requires addressing flaws in local government design that impinge on its accountability or capacity.  In addition, local government must create an enabling environment for community-based organizations and civil society.

Related Reading

Linking Community Empowerment, Decentralized Governance, and Public Service Provision through a Local Development Framework (616KB PDF)
Social Protection Discussion Paper No. 0535; Publication Date: 09/05
by Louis Helling, Rodrigo Serrano, David Warren

Exploring Partnerships between Communities and Local Governments in Community Driven Development: A Framework (852kb pdf)
Report No. 32709-GLB, June 2005
by Keith McLean, Rodrigo Serrano, Louis Helling and Jana Orac

Social Funds: A Review of Public Sector Management and Institutional Issues (1MB PDF)
Social Protection Discussion Paper No. 0508; May 2005
by Mukhmeet Bhatia

Partnerships between Elected Local Governments and Community-Based Organizations: Exploring the Scope for Synergy (160kb pdf)
Social Development Papers - Community Driven Development No. 52, February 2004
by Anirudh Krishna

Promoting Good Local Governance through Social Funds and Decentralization (379kb pdf)
Social Protection Discussion Paper No. 0022, September 2000
by Andrew Parker and Rodrigo Serrano

Country Cases

Integrating Social Funds into Local Development Strategies: Five Stories from Latin America Social Funds Innovations Note Vol. 3 No. 1, September 2005
by Rodrigo Serrano

Who Has the Yam, and Who Has the Knife? Social Action Funds and Decentralization in Malawi, Tanzania, and Uganda (930KB PDF)
Social Protection Discussion Paper No. 0518; Publication Date:5/05
by N. Mungai Lenneiye

Community-Driven Development in Local Government Capacity Building Projects: Emerging Approaches in Africa (84kb pdf)
Social Development Note No. 86, July 2004
by Kate Kuper

Re-engineering Social Funds for Local Governance: The Central American Experience (65kb pdf)
from "Volatility, Risk, and Innovation: Social Protection in Latin America and the Caribbean," SPectrum Magazine, Fall 2003
by Rodrigo Serrano and David Warren

Community-Driven Development: Decentralization’s Accountability Challenge (154kb pdf)
Chapter 12 of "East Asia Decentralizes: Making Local Government Work" (above)
by Susan Wong and Scott Guggenheim

Coordinating Poverty Alleviation Programs with Regional and Local Governments:The Experience of the Chilean Social Fund (FOSIS) (73KB PDF)
Social Protection Discussion Paper No. 9933; Publication Date: 12/99
by Jorge C. Barrientos

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