Note No. 28 August 1996 Participation and Local Government Citizen participation in the decisionmaking and development activities of local governments can produce more efficient and effective delivery of services by the public sector. In order to foster participation, some responsibility must be devolved from the central to local government. However, the assignment of responsibilities to local governments cannot, by itself, ensure partici- pation. Accountable local governments are key actors in any attempt to create an enabling environment for effective participa- tion in public sector activities. Background be considered in terms of priorities and trade-offs on a case-by-case basis. Initiatives by central governments to decentralize significant responsibilities to local government are While the formal structure of authority within growing worldwide. As a result, local governments are governments can influence the type and degree of playing an increasingly important role in the lives of participation, other factors can be more important. their citizens in such areas as health, education and Among these are incentives for central and local public works. They are also becoming more active in government decisionmakers and staff, for private sector promoting local economic growth. entrepreneurs, for formal and informal citizens groups and for individuals. In addition, local governments differ Responsibilities that can be most successfully greatly in responsibilities, capacity and operations, not devolved from central to local governments are those only across countries and regions, but also within requiring location-specific decisionmaking and quick countries. For these reasons, the extent and kind of response times, and which have low economies of scale. participation are especially sensitive to local Other criteria include activities which: do not circumstances. significantly impact the priority objectives of the entire country; need close integration of cross-sector activities Participation can also be impeded if the composition within the area of established local jurisdictions; do of local governments is nonrepresentative or when local not require significant support from other government elites hijack benefits intended for others, particularly the agencies; and can be contracted to the private sector for poor. The inability of the poor to bear the opportunity technical design, implementation and operation. costs of their participation can also be an obstacle. As central government responsibilities are devolved Role of Local Government to local authorities, new opportunities are created for citizens, NGOs and the private sector to participate in The skills required within the public sector at all lev- local government activities. As a result, efficiency can els are primarily those of political decisionmaking, plan- be improved in the allocation of resources by better ning and financing. While local governments can be matching services and investments to the needs of assigned responsibility for provision of infrastructure stakeholders and their willingness to pay. Delivery of and services, the private sector is often better able to public services also can be improved. Other benefits carry out, manage and deliver these goods and services. include broadening accountability (as citizens are By contracting the private sector, NGOs or community involved, mechanisms for accountability external to organizations to take on specific responsibilities, the need government are developed), improving equity (in this, for multiple technical functions within local government central governments can play an important role by is reduced. providing local governments with guidelines, financial support and quality control related to redistribution In encouraging participation, local governments can objectives) and sustaining benefits (participation can act in one of three roles: as intermediary, creator of an generate commitment to finance the recurrent costs of enabling environment, or direct provider. Unfortunately, locally-provided goods and services). Because tensions many development practitioners limit their expectations often exist among these multiple objectives, they must of local governments to only that of direct provider. This note is based on the draft paper written by Jerry M. Silverman and David Gow with the assistance of John Frankenhoff, "Participation and Local Government," 1995, The World Bank. For more information contact Jerry M. Silverman at 62-21-252-0606. Role 1: Intermediary is facilitated. In addition, the demonstration effect of Local governments can play an important role as providing services on a timely and adequate basis intermediary between citizens and central government. appears to encourage further community participation. Acting as intermediary, local governments can facilitate citizen access to information, resources and Mechanisms for Encouraging Participation power controlled by the state, bilateral and multilateral donors, and others. This, in turn, should facilitate the The effective facilitation of participation by local flow of information on social, political or economic governments requires a context of good governance. matters which can help local people make more There are at least four broad interrelated mechanisms informed decisions. through which citizens can enhance the accountability of local governments. In response to citizen demands, local authorities can pressure central governments to provide resources Public Involvement in the Legislative Process to implement development activities. Local Citizen participation in legislative functions governments are also more likely to hear groups and provides the greatest potential for citizens to influence individuals which "voice" demands and can help the development decisions of local governments. Just translate that voice so that it can be heard and as policy making is a legislative function, so too is understood by higher levels of government. deciding how, and how much, public revenue to collect and choosing how to spend it. Role 2: Creator of an Enabling Environment For local citizens to participate in local government Citizens can influence local governments' legislative requires that there be an enabling environment -- a processes either indirectly - through elections or the social and political context that encourages, supports pressure of interest groups - or directly, by being and facilitates such participation. An appropriate involved in decisions about specific applications of social and political environment creates expanded policies established by local governments. opportunities for initiative to be taken by previously marginalized or excluded groups, and provides them In order for citizens to make informed decisions and with the opportunity to express their opinions, take effectively influence local government decisions, local responsibility for decisionmaking, implementation and government decisionmaking must be transparent and operations, and make their voices heard. formal channels need to exist for interest groups to influence policy in a transparent manner. An example Local governments are increasingly called upon to of such transparency is the established requirement that enact and enforce legislation in the form of local communities have access to the financial accounts of ordinances and bylaws. Participation can influence irrigation projects in the Philippines and Indonesia. this process in two ways: first, by lobbying for changes Public hearings at the local level, especially as part of in existing legislation and second, by pressuring local planning and budget processes, are another mechanism governments to comply with such laws. Equally for facilitating transparent decisionmaking (Box 1). important is the authority vested in local governments to decide who may or may not participate in specified Public Involvement in Executive Functions development activities. While the creation of an It is more common for citizen groups to be directly enabling environment can potentially contribute to the involved in executive functions than it is for them to be achievement of many development objectives, it has involved in legislative matters. Executive functions most relevance in fostering greater equity and involve implementation of policies and other accountability of local government actions. It enables operational decisions which have already been citizen demands for transparent decision making and legislated. Typically, these include activities such as operations to have an impact. providing labor and other resources in kind for the implementation of already-determined government Role 3: Direct Provider subprojects at the community level. But direct citizen The greatest potential for participation by local involvement in executive functions can involve more citizens occurs when local governments provide significant roles, such as the right to approve the work services directly. This is increasingly the case when of contractors or executing agencies before final some specified responsibilities assigned to local payments are made. governments can be contracted out to the private sector, NGOs, or community organizations. When such Judicial Processes to Resolve Conflicts services are provided and produced locally, the In some countries, the judicial systems can be used geographicalproximityofproviderandconsumermake by citizens to hold local governments accountable. In participation that much easier. The adaptation and such systems, citizens can bring a lawsuit or complaint modification of services to local needs and conditions that localgovernmentshaveoperated illegallytoformal Box 1 Public Hearings in Chile and Venezuela In the early years of the civilian government in Chile, municipalities continued to be headed by mayors appointed by central authorities. Nevertheless, in Conchali, an area of 140,000 low income residents in north-central Santiago, the mayor, as one of her first official activities, held a long series of community hearings involving municipal government staff, organized neighborhood groups and local residents. Based on these hearings, the mayor completely revised the city's recurrent and investment budgets. As a result, far greater resources were put into community services, particularly those assisting working women with families. Programs were expanded or created to provide assistance to the aged and teenagers, support child care, establish multi-purpose community centers and encourage primary health and nutrition. In Venezuela, a 1989 law requires local governments to hold open meetings every three months, provided that a minimum of 10 citizens request such a meeting in writing. City councils are required to answer questions put to them in advance, and citizens are free to present their opinions, demands and proposals during the course of the meeting. courts or arbitration and mediation commissions. For potential services to be provided; and citizens can such systems to operate effectively, the legal framework formalize their participation through the formation of within which local governments are supposed to groups to present their interests over the long term operate must be clearly articulated and understood by (Box 2). citizens. Key Issues Determining Participation Consumers as Financial Participants The degree of citizen participation in local While financial transfers from central to local government decisionmaking and activity is affected by governments continue to play an important role in a range of factors. Several of these are generic; they enabling the provision of goods and services at the local arise in most settings. However, the manner in which level, local governments increasingly need to generate they manifest themselves in a particular country or more of their own revenues. Thus, local governments sectoral setting are unique. are increasingly requiring some payment by users for investment and services. When that happens, the role Importance of the Non-formal Sector of citizens is transformed from passive beneficiaries to Among the factors affecting the level of participa- that of key decisionmakers -- if the consumer does not tion in local government are the economic and politi- participate by paying in one form or another, the flow cal importance of a country's non-formal sector, and of services will cease. how it is perceived by government. While the economic and political importance of the non-formal sector var- If citizen consumers are not provided with a role ies substantially among countries, it is likely to be stron- during the identification of potential investment in ger with respect to local government functions than services, local governments run the risk that citizens those of the central government. Thus the effectiveness will disengage following completion of the project of the institutional arrangements which link citizens investment phase. Citizen participation is best and local government must also be assessed. encouraged by identifying the groups that will need to be involved in financing and managing the post-project Central-Local Government Linkages flow of benefits and working back from that perspective inordertoinvolvethosesame stakeholdersintheproject The comprehensive term "decentralization" has design and implementation phase. In particular, it is been used to encompass a variety of alternative institu- important to ascertain the extent to which citizens are tional structures. One type of decentralization --devo- willing to pay some or all of the costs involved in a lution--holds the most promise for participation. In proposed service up front. Commitment to supporting devolved systems, responsibilities for a range of opera- theongoingcostsofoperationsandmaintenance(O&M) tions encompassing more than one sector are assigned is an important factor for ensuring sustainability. by the central authority to local governments. Evidence indicates that local citizens are increasingly prepared to finance O&M when they are able to To the extent that local governments have discre- associate the costs with improved services. In the tionary authority, they can act as they see fit, bound Philippines, for example, market vendors agreed to a only by broad national policy guidelines, their own tripling of public market rental rates provided that local capacities and the local physical environment. governments proceeded with the renovation and reconstruction of old, dilapidated markets. An essential characteristic of discretionary author- ity is that the oversight role of central government is Attempts to hold local governments and citizens limited to ensuring that local governments operate mutually accountable for investment decisions are most within very broad national policy guidelines. likely to succeed where: demands for services are initiated locally; local governments present citizens Nevertheless, for devolution to create a favorable with alternative cost and technology options for context for participation, strong linkages and a Box 2 Mutual Accountability in Brazil, Chile and Ghana To address consumer preferences for sewage disposal systems in Recife, Brazil, local government offers families three choices: continue with their current system; connect to a conventional waterborne system; or connect to a condominial system which reduces construction costs by 75 percent and monthly tariffs by 65 percent. While availability of technology options has made a major contribution to citizen choice, community participation and organization have been crucial for sustaining citizen support. Beginning in the early 1980s, responsibility for education in Chile was devolved to municipalities. The central government adopted an innovative method for spurring competition by subsidizing both municipal and private schools based on the number of students enrolled. This made parents into indirect decisionmakers with respect to the financing of education by virtue of their choice of schools for their children. The results were streamlined school budgets and more private schools in low income areas. Municipalities were thus pressured by parents to improve the quality of public schools and the mix of services provided. In Kumasi, Ghana, the initial design of sanitation systems did not address the needs and preferences of local communities. Not surprisingly, these systems largely failed to sustain the intended benefits of two early Bank-financed projects. A new approach was adopted for the design of a third follow-on project: a survey was taken of potential users to estimate household willingness to pay for improvements of existing sanitation systems in the form of ventilated pit latrines or water closets connected to a sewer system. Based on the survey, it was found that while most households were willing to pay more for the improvements, they were only willing to pay as much for water closets as for pit latrines -- despite the fact that the former are considerably more expensive to construct. negotiated sharing of responsibility between central combination of economic, political and cultural and local governments is required. Thus, such systems interests. Nevertheless, without appropriate incentives are likely to be complex and often lack clarity (Box 3). and organizational support, it is unlikely that Many public sector economic management functions government staff will respond favorably to citizen need to be performed at both central and local levels. participation, particularly if local government elites and Participation, therefore, is only partially affected by senior staff regard citizen participation and lower- mechanisms under the internal control of local ranking staff as potentially threatening. government. Other, higher levels of government, might be necessary to create an environment supportive of There are two key generic incentive areas which in local participation. large measure affect the way a decentralized system actually works: finance and personnel management. Incentives and Commitments Theexerciseofeffectivediscretionbylocalgovernments, Incentives are an important determinant for and hence the citizens to whom they should be operational performance. The incentive issue accountable, depends largely on the ability of the substantially complicates attempts at effective government to generate its own financial and staff participation because incentives derive from a resources to implement its own decisions. Box 3 Fostering Local Participation in China China's economic reform program explicitly links economic liberalization to decentralization. Significant respon- sibilities in education, agriculture and health have been devolved to the discretion of provincial administrations and on to prefectures, districts and counties. An important feature of the Chinese system is that most government revenues are collected by local and provin- cial governments which retain control over a large percentage of them. Local governments have also been given authority to experiment with various reforms, the results of which are reviewed before they are extended to the country as a whole. However, citizen participation is also hampered by several significant deficiencies in the Chinese model. Foremost among these is the absence of consistent and clearly established guidelines governing the interaction of the various public and private sector actors and functions. Central government authorities interact with local authorities through provincial governments as intermediaries on some issues; on other functions, the central government deals directly with local authorities, completely bypassing the provincial level. This note is produced by ENVSP as part of a series on Participation including Local and Community Driven Development (LCDD) under the overall supervision of Deepa Narayan. For programmatic information contact Miranda Munro at 202-458-9016, to request notes send an email to Fana Abraha@worldbank or use ENVSP PUB@worldbank.