У статті розглянуто особливості фінансової децентралізації в Україні. Досліджено повноваження отримані органами місцевого самоврядування для надання якісних та доступних суспільних послуг громадянам. Також, охарактеризовано відповідальність органів місцевого самоврядування перед виборцями – за ефективність своєї роботи, а перед державою – за її законність. Крім того, досліджено основні джерела ресурсів об’єднаних територіальних громад та проведено групування за критеріями їх сутності та ролі у формуванні конкурентних переваг. Проаналізовано фінансову спроможність громад. Визначено, інші інструменти забезпечення економічного розвитку громади, зокрема, здійснення зовнішніх запозичень, самостійне обрання установ з обслуговування коштів місцевих бюджетів відносно розвитку та власних надходжень бюджетних установ, сформовано теоретико-методологічні положення, які можуть бути покладені в основу сучасної системи управління ресурсоефективністю територіальних громад. Доведено, що добровільно об’єднані територіальні громади мають усі можливості й ресурси для повноцінного функціонування та розвитку. Сьогодні органи місцевої влади беруть на себе цілковиту відповідальність за всі сфери життя на власних територіях, що і є показником успішної й доцільної діяльності ОТГ. Визначено, що за умови добросовісного виконання зобов’язань, підвищується ефективність використання бюджетних коштів, а це – прямий і правильний шлях до стабілізації соціально-економічної ситуації в усій країні. Визначено проблеми з якими стикаються місцеві органи влади на шляху до децентралізації. Проведено аналіз видаткових повноважень органів місцевого самоврядування у сучасних реаліях.
Devolution of the healthcare function from the national government in Kenya to county governments is influenced by various socio-economic and political factors. In particular, the provision of health infrastructure for healthcare under the management of county governments presents various challenges to these devolved units of governance. This study investigated the influence of financing of health infrastructure on implementation of healthcare projects in Meru County. The study is hinged on one theory; Theory of Fiscal Decentralization. The study adopted Descriptive survey research design. Target population was composed of 703 respondents; 23 Department of Health Non-medical staff, 670 Medical Personnel and 10 Health Civil Society Organizations’ Managers. For this study, a sample size of 249 participants was used and subjects selected making uses of Stratified and Simple random sampling. Two questionnaires were used to collect primary data from the sampled respondents. Quantitative data was analyzed through the application of descriptive statistics while qualitative data was outlined in narratives modeled on themes under research. The study established that funding disbursed from central governments, budgetary constraints and revenue through local all influenced the financing of health infrastructure. The study concluded that adequate financial resources disbursed in good time are key drivers of the financing of health infrastructure that influenced the implementation of healthcare projects by in Meru County. The study recommends that, The Ministry of Health should advocate that the Ministry of Finance should devolve more financial resources for the purchase and implementation of health infrastructure at county government levels for implementation of healthcare projects.
Despite a world awash with liquidity, \n large infrastructure supply gaps exist across developing and \n emerging markets. Infrastructure has been largely \n decentralized to subnational governments in many countries, \n and many policymakers are keenly interested in developing \n subnational bond markets to give subnational governments \n access to private financing for infrastructure. Despite \n this, the transaction costs of bond issuance are still \n prohibitive for many subnational governments to access \n financing. Pooled financing, through regional infrastructure \n funds, municipal funds, or bond banks, has become a \n sought-after solution for helping subnational governments \n access private financing for infrastructure. In the United \n States, municipal bond banks that were established since the \n 1970s have become a cost-effective and stable model for \n expanding subnational financing for many small \n municipalities, while maintaining strong credit ratings with \n virtually no defaults from sub-borrowers. The municipal bond \n banks have been successful in lowering financing costs for \n many small, unrated local governments, with loan sizes as \n low as less than $50,000. This paper examines the policies \n and structures that have made pooled financing successful in \n the United States, including regulatory frameworks, \n governance and managerial systems, the role of project \n appraisal, operations and pricing, and managing the default \n risks of borrowers. The paper also explores broader lessons \n for developing countries that are interested in establishing \n pooled financing for subnational infrastructure.
Due to decentralization policy in Malawi, district government water offices responsible for providing\ndirect support for water service delivery find themselves with an increase in devolved responsibilities but\nwithout the corresponding funds to carry them out. EWB has been implementing a strategy to advocate\nfor a realistic devolution of funds to district level government to carry out the minimum direct support\nnecessary to improve water point functionality. This approach is focused on the generation of specific\nevidence, as well as mapping and coordination of sector stakeholders to generate a feasible plan for an\nincrease in devolved funds. This case study highlights the key lessons learned in advocating for more\nresources to an underfunded sector in a competitive resource constrained context where most sectors\nremain severely underfunded.
Taiwan, like many other countries, often incentivizes private investors to participate in the construction of infrastructures for environmental protection. The build-operate-transfer (BOT) or build-operate-own (BOO) model of financing public infrastructure was introduced to Taiwan in the 1990s. Among them, the construction of incinerators to treat the municipal solid waste using the BOT/BOO model was quite a success in the beginning. With the socio-technical change of lifestyle and waste generation, the amount of amount of trash dropped dramatically. The policy failed eventually, however, because the government over-estimated the trash quantity and refrained from inter-municipality cooperation to treat trash efficiently. This failure triggered a rash of intense debates and legal disputes. In the case of the Taitung incinerator, the 26th incinerator located in southeastern Taiwan, the arbitration resulted in the government making significant compensation payments to the private sector. The finished construction was consequently converted into a “mothballed and pensioned off” facility. This study applies in-depth interviews and literature review to discuss aspects contributing to the policy failure and proposes some possible remedial measures. Five aspects are summarized, namely, the administrative organization’s rigid attitude, the irrationality of the BOT/BOO contracts, the loss of the spirit of BOO partnerships, the heavy financial burden on local government, and the abandonment of inter-municipality cooperation. The remedial measures for the policy failure are presented in the form of thorough policy evaluation, room for contract adjustments under the BOT/BOO model, encouragement of cross-boundary cooperation, and revision of the legal framework for implementing decentralization.
With the implementation of devolution in Kenya where county governments are responsible for development projects in decentralized regions in Kenya, urban infrastructure projects and their financing mode is of importance in academic discussions, government policies and public sector financial management. Various county governments have initiated PPP projects for infrastructure development to suffice their mandate; however, there is scanty academic information on the factors that determine the success of attracting funding for such projects as well as the factors for the success of the projects themselves. The constraints identified to hinder the success include financial constraints, government constraints and economic constraints. This descriptive study therefore sought to establish the determinants of success of urban infrastructure projects financed by public private parternerships in Kenyan counties. Primary data was collected using a semistructured questionnaire targeting 47 county employees responsible for PPP projects implementation. 41 questionnaires were returned providing a response rate of 87.23%. The study finds that all the counties have PPP units which is in line with the national governments initiative to encourage PPP funding for projects for improving infrastructure levels across the counties. It also found that 70.73% of the counties have in place PPP implementation guidelines which are instrumental in guiding the process. The study finds that 26.2 % of variations in the proportion of urban infrastructure projects funded within the PPP framework are explained by changes in macro economic conditions, government guarantees, project implementability and procurement process. The findings show a statistically significant positive relationship between government guarantess and success of the projects. There is also a statistically significant negative relationship between macro-economic conditions and success of the projects. The study also notes a positive relationship between project implementability and sucess as well as a negative relatioship between procurement process and project success. The relationships are not statistically significant. The study recommends that government should support infrastructural development by providing project guarantees and ensuring the macro-economic environment is sound for private investments. Further, counties should address the concerns on procurement transparency and they should enhance their capacity for project feasibility inquiries, design and implementation. The study recommends further investigations on why various proposed projects are not financed and the studies should consider the other possible control variables outside the scope of the current study that may explain the variations in the success of the projects
Luis Andrés, S. A. Dan Biller, Matías Herrera Dappe
If the South Asia region hopes to meet its development goals and not risk slowing down or even halting growth, poverty alleviation, and shared prosperity, it is essential to make closing its huge infrastructure gap a priority. Identifying and addressing gaps in the data on expenditure, access, and quality are crucial to ensuring that governments make efficient, practical, and effective infrastructure development choices. This study addresses this knowledge gap by focusing on the current status of infrastructure sectors and geographical disparities, real levels of investment and private sector participation, deficits and proper targets for the future, and bottlenecks to expansion. The findings show that the South Asia region needs to invest between US$1.7 trillion and US$2.5 trillion (at current prices) to close its infrastructure gap. If investments are spread evenly over the years until 2020, the region needs to invest between 6.6 and 9.9 percent of 2010 gross domestic product per year, an estimated increase of up to 3 percentage points from the 6.9 percent of gross domestic product invested in infrastructure by countries in the region in 2009. Given the enormous size of the region's infrastructure deficiencies, it will need a mix of investment in infrastructure stock and supportive reforms to close its infrastructure gap. One major challenge will be prioritizing investment needs. Another will be choosing optimal forms of service provision, including the private sector's role, and the decentralization of administrative functions and powers.
This paper will review the key elements required for effective decentralized implementation of rural roads programs. It will review the range of options available and the evidence for successful implementation where it exists. Section 2 makes the case for the importance of rural roads and sets out the evidence for the socio-economic benefits. Section 3 addresses the responsibilities for implementation and critical importance of having clarity over network ownership. Section 4 highlights the difficulties of finance, particularly for longer term maintenance, and sets out options for improving allocations and the reliability of receipt for those allocations. Section 5 sets out the project cycle from planning, design, implementation, maintenance and subsequent evaluation. Section 6 summarizes the key issues and highlights the main policy considerations.
The subnational dimension of infrastructure emerges as one of the greatest challenges in contemporary public finance policy and management. Given the localized nature of most infrastructures, ensuring its efficient provision represents a challenge for all countries irrespective of their level of centralization or decentralization. This paper introduces the fundamental questions surrounding the provision of infrastructure in decentralized settings and summarizes the findings from a collection of original essays prepared for this volume by a set of worldwide experts on this subject with the objective of advancing our understanding of the interplay between decentralization and infrastructure. More specifically, the paper discusses the extent of infrastructure gaps and the quality of subnational spending; inquires how functional responsibilities, financing and equalization can be designed; discusses sector-specific arrangements; drills down to the key steps of the public investment cycle and management aspects; and analyzes the political economy and corruption challenges that typically accompany decentralized infrastructure projects. The paper also presents avenues for the strengthening of decentralized public investment and infrastructure provision processes, concluding that they need to be country-, sector- and place-specific. While it is clear that institutional arrangements for infrastructure management will vary across countries, in all cases several decision-making steps need to be coordinated across levels of government in order to ensure efficiency in delivery, equity in spending, and accountability over final results.
Jackson O Otieno, Paul A. Odundo, Charles M. Rambo
The Local Authorities Transfer Fund (LATF) is an intergovernmental transfer system, supplementing the financing of service delivery within the framework of fisc0al decentralization. LATF’s objectives are to improve service delivery, enhance financial management and accountability as well as reduce debts accumulated by local authorities. The purpose of this study was to establish the influence of LATF on service delivery by local authorities, focusing on Siaya Municipal Council. We gauged residents’ perspectives about improvement of water supply, garbage collection, and sewerage services. We sourced primary data from 188 household heads and 202 market traders. The study found that 63.2% of the participants believed that there was no change in water supply consistency, while 69.5% reported the same about adequacy of water provided by the Council. Besides, 55.6% of the participants indicated that garbage collection had deteriorated, while 63.8% said the same about sewerage services. The findings suggest that access to LATF resources over the preceding decade had not improved service delivery in Siaya Municipality. Delivery of services was constrained by political interference (57.4%), procurement malpractices (44.1%), weak revenue base (38.7%), and understaffing (33.1%), among other factors. In view of this, local authorities should shape up to meet the current service demand, as well as gear up to address the needs of urban population, which is set to grow over the coming years.
This paper’s purpose is to analyse the financial situation of the local authorities in the EU countries and to consider alternative funding through public-private partnership. Both because of the economic and financial crises that has affected the earned income but also because of the decentralization process that has enlarged the responsibilities, local authorities are put into difficulty in providing public services at a higher quality level and starting new public investments. Empirical research on this track will reveal the public role that the public-private partnership can play at a local level, but also various obstacles that inhibit its usage in some of the EU countries. In this article we also aim to determine certain methods to overcome the obstacles that stand in the way of increasing public-private use at a local level. Thus, we emphasize the context in which public-private partnership is a local solution and that is sustainable on a long term. To achieve this objective we will make a foray into the literature and the specialty studies in the field and we will analyse the factual situation that exists at the level of local communities in EU countries.
This paper summarizes the results of a Global Development Network study, carried on by sixteen multidisciplinary research teams and covering thirty developing countries, under the authors general direction, on the effects of different governance structures on the quality and equity of access in three public services: basic education, drinking water supply and roads. Governance reforms analyzed referred mostly to decentralization, formal processes of citizen’s participation and alternative modes of delivery and, within each of them, emphasis was placed on the effects of accountability systems, informational flows and incentive structures. Case studies used both econometric techniques and qualitative analysis based on surveys and structured interviews of policy makers, service providers and users. The impact of governance reforms and alternatives was found to vary significantly with country context, but three major conclusions emerged: 1) Political culture and legacy are the deeper determinants of effective accountability and results. Thus, countries with a history of highly centralized and authoritarian regimes find it harder to make decentralization, participation and competitive modes of delivery work effectively. However, a culture of accountability can be built overtime when adequate institutions and incentives are introduced and maintained overtime; 2) Adequate information flows are not only a necessary condition, but they often promote effective accountability and better results, as they lead citizens and clients to demand accountability and agents to be more responsive to user needs; 3) Self-financing schemes also promote more accountability and better results, as users demand better services when they pay for them and citizens are more demanding (and local authorities are more responsive to their needs) when local taxes finance local services.
New Public Management (NPM) is considered as a global paradigm emerging in response to economic, institutional, political, and ideological changes.Many attempts to define the New Public Management have been made and there are several definitions of this notion, referring to the implementation of management ideas from business and private sector into the public services.Over the past few years, Romania has been facing a great challenge as it has to enhance its public management for achieving the European standards and values of transparency, predictability, accountability, adaptability and efficiency. The necessity of a modern administration at European standards exists both at the level of the citizen, and at the level of institutions delivering public services.According to the provisions of its last stand-by arrangement with IMF, Romania placed emphasis on restoring medium- and long-term sustainability and paved the way for future growth. Structural reforms were a large component of the program, including tax administration, pensions, public wages and employment, and social benefits, improving public sector efficiency, as well as enhancing the business environment. Since 2009 a public financial management structure was introduced for multi-year budgeting while limiting intra-year budget revisions. Fiscal rules were introduced on spending, public debt and primary deficit, and a framework for managing guarantees and other contingent liabilities was approved. Local public finance law was amended to bolster fiscal discipline and limit risks from local governments.Thus, presently, the legal framework envisages the use of new instruments and structures to support local administration authorities to increase their administrative capacity in order to perform in accordance with their new authority and thereby increases the quality of the already decentralized public services.The Common Assessment Framework (CAF) ' the total quality management tool was introduced in Romania, public institutions acknowledging the need for change and improvement, the importance of people'(tm)s involvement within the organization'(tm)s self-assessment process, the importance of measuring the results, objectives prioritization, the need to assume responsibility for the identified improvement actions, as well as the need to share knowledge and experience.Most of the Romanian public institutions apply the diagnosis obtained through CAF implementation as a solid ground to develop and implement their Multi-annual Modernizing Strategies, thus assuring the sustainability of the results accomplished so far.Concluding, we consider that the changes incurred and the significant transformation of Romanian public services include important elements of NPM.
The history of the Chicago Skyway in Illinois, from its inception in 1953 to its 99-year lease in 2005, is examined in this paper. As one of the last U.S. toll roads to be built before the Federal-Aid Highway Act of 1956, the skyway's administration reflects the decentralized and relatively flexible institutions of highway administration that prevailed at the time. Chicago officials were able to finance the skyway with revenue bonds to address an anticipated traffic crisis resulting from uncoordinated planning for the Indiana Toll Road. However, Chicago's independent initiative came with a lack of oversight and resulted in questionable design parameters, traffic projections, and financing. Skyway bonds went into default in 1963, and decades of financial shortfalls and deferred maintenance followed. In the 1990s, improved traffic and revenue allowed for debt retirement and physical rehabilitation. Its lease to an investment group led by Australia's Macquarie Bank indicated a new paradigm of decentralized highway administration that included an important private-sector role. The $1.83 billion deal was hailed as a triumph for Chicago and a model for future transactions, but once again, its value for investors was questionable. A half-century of skyway history reveals some of the advantages and risks of a decentralized and relatively unregulated system of highway financing and administration.
African countries confront vast economic, social, and environmental challenges. Although urban issues bear upon many of these challenges, they have remained a secondary priority for governments and the international community. The growing gap between infrastructure and services already built and those needed demands a drastic change in the scale of urban financing. This book aims to begin that reexamination. It offers a broad methodological perspective and several operational avenues to bolster and modernize the financing that cities urgently require. The financing of urban investments involves several aspects of local government fiscal matters: public finance, administrative law, taxation, monitoring and controlling of subsovereign debt, urban administration and governance, and so on. It also involves other sectors, such as land management, land development, and housing. This book defines its geographic scope as two concentric circles within Africa, as described below. It also draws on other regions: the most developed or emerging countries outside the African continent that can furnish examples illuminating or adaptable to, the African context. This volume is organized into five chapters and an appendix containing eight case studies. Chapter one addresses the fundamentals. Chapter two analyzes urbanization and sectoral policies across the African continent. Chapter three is dedicated to Africa's decentralization, basic services provision, and local governance issues. Chapter four examines local governments' investment financing frameworks currently in use in Africa and new, recently emerged sources of financing. Chapter five addresses strategic and operational ideas for infrastructure and local investment financing, anticipating Africa's exceptional urban growth in the coming decades.
François Guerquin, A. Hammad Tarek, Mi Hua, Tetsuya Ikeda · 6 authors
Competition for freshwater resources is increasing because of increased demand, a greater variety of uses and users, and depletion of some resources and loss of others because of pollution. However, the view expressed in World Water Vision: Making Water Everybody&s;s Business (Cosgrove and Rijsberman 2000) is that all uses could be served in the future, without depleting the Earth&s;s natural capital, if everybody committed to improving water management. Politicians and decision-makers must be the ones to initiate change. This should start with a management environment that enables the emergence of new tools, institutions, and capacities. Many countries have already started to adjust their approaches to water, introducing decentralization and participation and empowering communities and user groups. Water management requires clear definitions of water ownership and use and of responsibilities regarding water pollution. It requires transparent and participatory decision-making on investments, cost recovery, and service delivery. Above all it requires effective accountability and enforcement mechanisms that give voice and choice to users and societies. More and more countries are reforming their water management. However, financial issues often remain unresolved, approaches remain sectoral, and investment is often inadequate. The challenge of improving water management is especially daunting in countries with weak institutions and endemic corruption. Countries that lack a good educational system are also severely disadvantaged. In all countries reform will take time and so needs to begin now. Dialogue, debate, and exchange of experience at all levels will help to steer the process in the right direction and to keep it going.
This research examines the efforts of the Public Private Comparator (PPC) at the decentralized level in the Netherlands. The PPC is a financial-economic assessment tool that can be used before a tender to determine whether there is a surplus value for a specific project (real estate or infrastructure) in the form of a Public Private Partnership based on a DBFM(O)-contract compared to a traditional form of contract. At state level, this assessment tool has been successfully implemented for a few years now whereas at the decentralized level there is still little experience with this tool and there are mainly pitfalls. Recently the Ministry of Finance launched a pilot for local authorities to examine the need for knowledge and experience regarding DBFM(O)-contracts, after an advice of the Commission on Private Financing of Infrastructure, also known as the Ruding Committee. The main question that will be answered by means of this research is: Under which conditions, with regard to content and process, is it possible to use the PPC within the municipality? This study shows which conditions are needed at State level and how these can be translated to a municipal situation and organization. The result of these findings is converted in a report and a step-by-step plan with regard to content and process for the implementation of the PPC at municipal level. This research has been conducted within, and focuses specifically on the municipality of Rotterdam. Particularly for the theoretical part, the practical part (case studies) and most of the conclusions it is possible to see the results in a broader context, so that this research also applies to local authorities more generally.