Poverty Reduction Strategy in Decentralized Contexts: Comparative Lessons in Local Planning and...
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Transcript of Poverty Reduction Strategy in Decentralized Contexts: Comparative Lessons in Local Planning and...
Poverty Reduction Strategy in Decentralized Contexts:
Comparative Lessons in Local Planning and Fiscal Dimensions in the Philippines and Indonesia
Outline for Philippine and Indonesian presentation Decentralization experience Processes for integrating planning and
budgeting Lessons for PRSP Suggested policy and institutional responses
Lessons on Local Planning and Fiscal Dimensions
Decentralization in the Philippines
Decentralization Experience: Political Context Pre-’86: centralist government;
authoritarian government; strong control orientation (Marcosian approach was to control power at the center)
Post-’86: era of democratization and ‘people empowerment’; approach was to “de-center” and to share powers
Decentralization Experience: Legal Context 1987 Constitution: “The state shall ensure
the autonomy of local governments.” Local Government Code of 1991:
devolution of national government powers and increase in the share of local governments in national taxes, including the power to tax
Decentralization Experience: Tiers of Government (Political)
National Government
City Province
Municipality
Barangay (village) Barangay (village)
Decentralization Experience: Tiers of Government (Administrative)
National Government
City Province
Municipality
Barangay (village) Barangay (village)
Regional Administration
Decentralization Experience: Approach gradual approach: sequential and transition-
sensitive; oversight committee created to monitor implementation of the Devolution Masterplan
3 phases of decentralization: changeover phase (1992-93); transition phase (1994-96); and stabilization phase (1997 onwards)
Decentralization Experience: Approach--continued Decentralization in two forms:
- devolution (political decentralization of powers from national government to local government units [LGUs], including the power to tax)
- deconcentration (administrative delegation from national to regional agencies)
Decentralization Experience: Approach--continued Devolution of national government powers
includes public works, health, agriculture, social welfare, certain tourism functions, and construction of school buildings and facilities
Expansion of revenue generation powers of LGUs
Processes for Integrating P&B: Top-Down Exercise P&B linkage through the MTPDP and
MTPIP, as well as their regional components
- sectoral priorities and policies in the MTPDP are translated into discrete programs, projects and activities (PPAs) through the MTPIP, which are expected to be funded in the budgeting exercise; regional priorities compete for funding at the national level
Processes for Integrating P&B: Top-Down Exercise--continued MTEF provides a 3-year rolling
prioritization of PAPs through- Sector Efficiency and Effectiveness
Reviews (SEER): outcomes and outputs become bases for prioritizing and endorsing PAPs for funding in the budget; tool for strategic planning
- SEER has not been piloted at the regional level
Processes for Integrating P&B: Top-Down Exercise--continued Organizational Performance Indicators
Framework (OPIF): budget reform to strengthen performance-based budgeting; OPIF as a tool for operational planning
OPIF is hampered by methodological difficulty
OPIF has not been piloted yet at the regional level
MTPDP MTPIP
National Agency Plans and Programs
RDP RDIP
ProvincialPlans and Programs
PDP/CDP PDIP/CDIP
BarangayPlans and Programs
MDP LDIP
MunicipalPlans and Programs
National
Regional
Provincial/City
Municipal
Socio-EconomicDevelopment Plans
InvestmentPrograms
Regional Agency Plans and Programs
Barangay
Processes for Integrating P&B: Bottom-Up Exercise De-link in the bottom-up process:
barangaymunicipality/cityprovince region
There is no incentive for lower LGUs to submit upwards their plans and programs, as aggregation at the higher LGU does not mean funding support or inter-LGU collaboration
Processes for Integrating P&B: Bottom-Up Exercise--continued The greatest constraint for vertical
aggregation is that most LGUs do not prepare plans at all, such that budget priorities are political decisions of the local chief executive
Constraints in linking local P&B: capacity, resources and incentives, quality of vertical supervision and inter-LGU collaboration, role of local chief executives (LCEs)
Lessons for PRSP: Local Poverty Planning and Budgeting Anti-poverty programs (e.g., social reforma
agenda, KALAHI) are centrally driven Localizing anti-poverty programs remains a
challenge, specifically in getting the commitment of LGUs to address poverty (which is considered a long-term goal, in contrast with the 3-year tenure of local chief executives)
Lessons for PRSP: Local Poverty P & B--continued Local P&B are heavily inclined towards
“legacy projects”, usually infra National methodology/approach for poverty
targeting could not be replicated at the local level: issues of capacity, resources, differing political priorities at the national and local levels, differing expectations from constituents and measurements of performance accountability
Lessons for PRSP: Issues and Concerns Need to articulate clearly the objectives of
the development plan and their operationalization in relation with core public administration functions
Vertical integration of plans may not be desirable given (a) different levels of admin and technical proficiency for P&B, (b) timing constraints and (c) sheer volume of plans for aggregation
Lessons for PRSP: Issues and Concerns To tighten linkage between P&B, there is a need
to prepare sector plans to guide annual programming and budgeting
Need for closer coordination between the national government and LGUs for poverty reduction measures, e.g., delivery of social reform initiatives, implementation arrangements, etc.
MTEF to provide operational linkage between P&B
Suggested Policy and Institutional Responses On planning- no need to replicate national planning processes at
the local level, given the diversity of LGUs in terms of preparedness and resources
- Bottom-up integration may only be relevant up to the tier where supervision is relevant; programs/projects not funded in lower level LGUs may be submitted upwards for consideration by the supervising LGU
Suggested Policy and Institutional Responses On expenditure programming- ideally, P&B should reside in one
institution- Weak linkage of P&B is traced to poor
revenue forecasting; MTEF should be responsive in terms of revenue forecasting
- Local level: not an issue of weak linkage between P&B, but the lack of plans
Suggested Policy and Institutional Responses On monitoring- unclear monitoring systems under a
decentralized government- Performance monitoring not done at the
local level, except in locales where civil society is strong (e.g., Cebu City)
Lessons on Local Planning and Fiscal Dimensions
Decentralization in Indonesia
Decentralization Experience: Political Context highly centralist government; strong control
orientation (Soeharto approach was to control power at the center)
2001: decentralization policy was adopted
Decentralization Experience: Legal Context Law No. 22/1999 on Regional Governance Law No. 25/1999 on Financial Balance
between Central and Regional Governments
Decentralization Experience: Approach “big bang” approach: service delivery is the
responsibility of sub-national units; financing the cost of sub-national service delivery remains to be a key issue
Decentralization Experience: Approach--continued Decentralization covers:
- service delivery
- inter-governmental transfers and the power to tax
Decentralization Experience: Structures of Local Governments Autonomous provinces Districts located in rural areas Municipalities/cities (located in urban
areas) Sub-districts within municipalities and
cities Villages in rural and urban areas
Processes for Integrating P&B: Top-Down Exercise institutional: role of Bappenas (National
Development Planning Board) Issuance of the Propenas containing the
development priorities Convening of development coordination meetings
to thresh out central and regional government issues
Preparation of 5-year national and regional plans and the annual “implementation” plans
Processes for Integrating P&B: Top-Down Exercise--continued The most important planning document at
the national and regional levels is the annual plan, which is approved by the Legislature
Formulation of the Propeda, Renstrada and Repetada provides linkage between planning and budgeting, and the national and regional governments
Processes for Integrating P&B: Bottom-Up Exercise Formulation of the annual budget follows
the bottom-up approach Repetada is drawn from the aspirations and
priorities of people at the village, district and city levels, which are prioritized by the Bappeda across local governments
Decentralization Opportunities at the Transition Stage Capability-building for local officials re
participatory planning Adopting a holistic approach to planning to
include, revenue generation and M&E simplifying planning processes, including
the modules for training Incorporating poverty targeting in future
planning exercises
Decentralization Opportunities at the Transition Stage--continued Improving coordination mechanisms
between the central and local government units
Lessons for PRSP: Local Poverty Planning and Budgeting Budgeting is still highly centralized, with
local budgeting still being set at the central level through the MoHA
Need for transparency in budget allocation, including the prioritization process (MTEF is not implemented yet)
Lessons for PRSP: Local Poverty P & B--continued In the transition from a centralized to a
decentralized government, institutional responsibilities across government ministries and government levels should be defined
Local P&B need to be reviewed in consonance with the requirements of genuine decentralization and autonomy
Lessons for PRSP: Local Poverty P & B--continued P&B linkage in Indonesia should consider:
(a) prioritization process at each level, (b) performance-based budgeting, (c) adoption of the MTEF
Suggested Policy and Institutional Responses On planning- bottom-up integration may only be relevant
up to the tier where supervision is relevant - At lower government tiers, projects which
they cannot fund, may be raised to higher government tiers
- Capacity building on planning approaches needs to be holistic
Suggested Policy and Institutional Responses On expenditure programming- Need to address institutional fragmentation;
BAPPENAS can be invited to sit in the Budget Committee
- Greater attention needed on agency/ ministry plans and the listing of priority programs and projects for inclusion into the expenditure program
- Weak P&B linkage may also be attributed to poor revenue forecasting
- Unconditional grants (IRA and DAU) should be allocated at the discretion of lower level LGUs, with minimal conditions at the center
Suggested Policy and Institutional Responses On monitoring- unclear monitoring systems under a
decentralized government- Need to heighten civil society engagement
on local performance monitoring
End of Presentation
Thank you.