Effective Multi-Level Governance for Improved Development Results

IDG News - May 20, 2013: The 8th annual meeting of  Development Partners Working Group on Decentralization and Local Governance (DeLoG) was held on June 4-6, 2013, in New York City under the theme "Effective Multi-Level-Governance for Improved Development Results." A focus of the meetings was on the role of decentralization and local governance in the post-2015 development agenda and how improved decentralization and local governance can contribute to effective development cooperation. Although DeLoG is a working group of bilateral and multilateral development organizations, the Urban Institute's Center on International Development and Governance is regularly invited to join its annual meetings as a leading representative of the research community focused on decentralization and local governance.

The topic of this year's DeLoG's annual meeting closely reflects the policy focus of the Urban Institute Center on International Development and Governance (IDG), which recognizes that improving governance is a critical ingredient in strengthening the delivery of key public services, ranging from security and law enforcement to clean water and education. The Urban Institute works in developing, transitioning and fragile countries to support transformative development interventions and to engage in evidence-based research that informs how the public sector becomes strong enough to achieve economic growth and to sustainably provide key public services while ensuring that the public sector behaves within constraints that assure voice and rights to citizens.

As part of its IDG's research agenda, UI's Local Public Sector Initiative (LPSI) supports the more efficient delivery of public services, promotes inclusive development, and empowers people over their public sector by advancing the development community's understanding of the local public sector. LPSI's initial research efforts ("The role of Local Public Sector in achieving sustainable development: What have we learned so far?") include the observations that (i) successful development results are driven by effective multi-level governance and financing systems, rather than achieved through the efforts of any single government level; (ii) the size and composition of local public sector expenditures (and the institutions that guide these expenditures) seem to have an important impact of the effectiveness of the public sector, with higher levels of local public sector spending being associated with greater government effectiveness; and (iii) the absence of good governance (weak political contestability and civil liberties at the national level) appears to be an important factor in suppressing the size and effectiveness of the local public sector.

This ongoing research at the Urban Institute -as well as the theme of DeLoG's annual meeting this year- connects closely to two recent publications (one from the OECD and one by the World Bank) that help shed light on the importance of the local level, and the interactions between different levels of government, in achieving successful development results.

First, in Governance of Public Policies in Decentralised Contexts - The Multi-Level Approach, Claire Charbit (OECD, 2011) argues that the ability of subnational governments to identify relevant paths for effective delivery of public services is largely defined by their institutional context. Rather than isolated actors, Charbit sees subnational authorities and central governments as mutually dependent. As such, the key underlying question is not whether to "decentralize or not" or even opt for a specific decentralization model, but to look at ways to improve capacity and co-ordination among public stakeholders at different levels of government to increase the efficiency, equity and sustainability of public spending.

Second, in Localizing Development: Does Participation Work? , Ghazala Mansuri and Vijayendra Rao focus on the World Bank's efforts over the past ten years to support to local participatory development through community development and decentralization initiatives. While the World Bank's efforts in this area are driven by the underlying belief that a more engaged citizenry should be able to achieve a higher level of cooperation and make government more accountable, the authors acknowledge that in practice, little is known about how best to foster such engagement. The report focuses on the "demand-side" aspects of participatory, and reviews almost 500 (mostly empirical) studies on participatory development and decentralization in order to draw nuanced conclusions about (i) the importance of capture in localized development; (ii) whether participation improves development outcomes; and (iii) whether participation strengthen civil society.

Although the authors are broadly supportive of the need to focus development interventions at the local level, the review of the literature by Mansuri and Rao finds that localized development interventions are not a panacea: effective civic engagement does not develop within a predictable trajectory; outcomes from localized interventions are highly variable across communities; and a variety of factors limit the potential impact of localized development interventions. As such, one of the main findings of the World Bank report is that induced participatory interventions work best when they are supported by a responsive state, while parachuting funds into local communities without adequate monitoring by a supportive state can result in the capture of decision making by local elites who control the local cooperative infrastructure.