Aid effectiveness

Grassroots governance

Donor assistance to local-government institutions in developing countries shows the relevance of policy dialogue at many levels. The aid effectiveness debate cannot be reduced to the one on budget support – though that instrument can serve to promote the meaningful devolution of state powers.

[ By Nina Helm ]

Various donor agencies want to support institutions of local government in developing countries and promote processes of decentralising state powers. In order to do so effectively, these agencies must coordinate their efforts. Otherwise, they risk incoherence, confusion and fragmentation.

Goals such as ownership of the target country, harmonisation of donors and mutual accountability are stressed in recent development-policy discourse. Of course, these principles apply to the support of local governments too, but living up to them requires some thought. After all, decentralisation of state powers involves many different actors and cuts across many important sectors (such as health, education, rule of law or public finance).

An important way to avoid disarray is to undertake joint situation analyses, involving all donors as well as the developing country itself. Five crucial pillars must be considered because the success of decentralisation depends on
- an adequate legal framework that spells out the duties of different layers of government,
- sufficient funding for each layer of government,
- adequate human resources,
- effective mechanisms for local-level accountability, and
- institutional support from the central government.

A shared assessment of these aspects serves several purposes. Most important, it engages all relevant parties in substantial dialogue, thus helping to detect obstacles and draft strategies to overcome them. At the same time, shared assessments contribute to designing an adequate division of labour among donors.

The greatest challenge, perhaps, is to promote local ownership. Elected mayors and councils are important, but local interest groups and the media matter too. In the rural areas and small towns of poor countries, however, civil society does not tend to be very strong, and often there are no independent broadcasters or daily papers. Whereas English, French or Portu­guese will do to engage in meaningful discourse in many African capitals, an understanding of at ­least one vernacular language will be necessary in remoter areas of the same countries.

The relevance of local-level interaction cannot be overestimated. Tangible achievements in crosscutting issues such as environmental protection, gender relations or the fight against corruption are urgently needed at the grassroots level. All told, donor agencies need competent sub-­national representation, and it makes sense for them to coordinate such efforts. Joint missions and funding are desirable in the long run. In the short run, common roadmaps defining concrete steps to­wards better harmonisation are indispensable.

These insights are based on experience, and they are spelled out in the “General Guiding Principles for Enhancing Alignment and Harmonisation on Local Governance and Decentralisation”. This consensus paper was adopted by the informal Development Partners Working Group on Local Governance and Decentralisation (DPWG-LGD) in November last year (see box on preceding page). Currently, the Working Group is considering options to train donor staff jointly and to better support capacity building in the target countries.

The DPWG-LGD was first established in Frankfurt three years ago, based on an initiative of KfW Entwicklungsbank, the European Commission and the African Development Bank. It enjoys the support of a secretariat, which is funded by Germany’s Development Ministry (BMZ) and was set up at the InWEnt-headquarters in Bonn a year ago.

According to Eugen Kaiser, the head of InWEnt’s local-governance team, “boost­ing coordination and harmonisation among donors is a permanent and worthy challenge and that is why InWEnt has been playing an active role in the working group since the beginning.” He is aware of partners often lamenting the fragmentation of German development agencies into four major players (InWEnt, GTZ, DED and KfW) and considers the secretariat a “milestone”, as it helps to coordinate action at the international as well as the German level.

The DPWG-LGD’s Guiding Prinicples prove that aid effectiveness is about much more than budget support, a topic that normally attracts particular attention. On the other hand, the Guiding Principles stress that decentralisation programmes must be in line with negotiations on budget support, wherever that instrument is in use. Budget support, after all, helps to harmonise and align donor action to developing countries’ needs, and one of its great advantages is that it allows debate on all aspects of governance.

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