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Decentralization & Sub-national Regional

Economics

Ongoing Activities & Engagement in the MNA

Region

MNA Regional Team

Decentralization and Sub-national Regional Economics Thematic Group

Informal Open HouseMarch 8, 2007

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Issues: Structural Hierarchies

Chart 4.1 Models of Subnational Sector in MENA8

Central Government F

un

cti

on

al

deco

ncen

tra

ted

un

its

agen

cie

s o

f m

inis

trie

s +

sta

te s

ervic

e f

irm

s

Intermediate governments Governor + Appointed executive council

Appointed Council

Elected Council

Appointed Executive

Elected Council

Elected Mayor Elected Council

• Urban & Land Use Planning Still Highly Centralized

• Many services still planned/managed at the central level

3

Issues: Intergovernmental Fiscal Relations High fiscal centralization - limited local expenditure

autonomy; low local own source revenue; unpredictable transfer pool, distribution and low equalization effect

0% 10% 20% 30% 40%

% of total public expenditures

J ordan

Tunisia

Lebanon

Iran

WBG

Morocco

Egypt

EU accession countries

Worldwide (unitary)

EU countries

Wordwide (federal)

C hart: M N A Local Gove rnme n t Expe n ditu re s

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Issues: Lack of LG Policy Space

Decision Making – LG Administrative I ssues E I J L M T W Y Hiring / firing of LG employees C a C C L C, L Approval of LG salary structure C C C C C L C Approval of the LG by-laws C C C C Approval of LG partnerships C C C, L Approval of individual expenditure items and/or local procurement decisions

C C C C, L C C, L C

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Issues: Weak Accountability

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Government Responses A “managed” process of decentralization with

incremental improvements Responding to political pressures from well-

organized and financed socio-religious groups Increasing political decentralization: local

elections in Lebanon (1998), Yemen (2000), WBG (2004-5), Jordan (forthcoming)

Rethinking Institutional Arrangements: The Role of Intermediate-Level Governorates

Increasing central transfers for approved investments (off budget)

But the institutions for fiscal/admin decentralization remain weak

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Government ResponsesJordan Devolved property tax collection in Amman has yielded avg

annual increase of 20% in revenue Amman issuing first municipal bond Government adopts new performance based grants (RLDP) Leveraging cultural heritage assets

Egypt Converting land value: city public land sales converted to local infrastructure investments (AGPP) Increasing access to services in underserved areas of upper Egypt (UEIGDP)

Yemen Urban planning devolved to (PCDP) cities on pilot basis Investment approvals granted at local level Aden institutes new citizen services center 24 hour hotline; PPP Fund; Investor Advisory Council

Morocco Joint central-local decision making on local investments

WB&G Creation of new MDF – performance based grants Unified municipal chart of accounts and budget reporting system adopted

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MNA Regional Strategies/Interventions Financial Systems Approach: Municipal Development Funds

(performance-based grant incentives introduced) -- Tunisia, WBG, Jordan *Working with IFC Subnatl Finance Dept

Lagging Regions: Analytical & Operational – Iran, Egypt and Jordan (poverty driven)

CDD/Participatory Approaches: Focusing on access to services -- Morocco, WBG (poverty driven)

Competitive Cities: Egypt (Alex), Yemen Ports (PCDP) (growth driven) * Working with IFC-PEPMNA & Cities Alliance

Land & Municipal Asset Management: Yemen & Egypt Cultural Heritage Assets: Jordan, Morocco (growth driven) Fiscal Decentralization & Governance Issues: Joint work

with Urban/PREM on MNA Governance website and joint efforts on PERs

Regional Stocktaking & Knowledge Dissemination: Data collection and analysis & Service Delivery Surveys (cost-effective tools to gauge end-user perception of services)

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MNA Service Delivery Survey (2006)

Satisfaction with services, by type of service and cityPercent of respondents who are very or somewhat satisfied with service

West Bank

0 %

20 %

40 %

60 %

80 %

100 %

Sewerage

Water

Garbage

Electricity

Transport

Road maintenance

Slaughter&Market

Parks

Documents

PostRamallah

Bethlehem

Egypt

0 %

20 %

40 %

60 %

80 %

100 %

Sewerage

Water

Garbage

Electricity

Transport

Road maintenance

Slaughter&Market

Parks

Documents

PostCairo

Zagazig

Morocco

0 %

20 %

40 %

60 %

80 %

100 %

Sewerage

Water

Garbage

Electricity

Transport

Road maintenance

Slaughter&Market

Parks

Documents

PostRabat

Oued Zem

Yemen

0 %

20 %

40 %

60 %

80 %

100 %

Sewerage

Water

Garbage

Electricity

Transport

Road maintenance

Slaughter&Market

Parks

Documents

PostSana'a

Dhamar

Introducing cost effective tools to gauge end-user satisfaction.

Focus Group methods were originally developed for market research in the 1970s but are now used for exploratory policy-oriented research.

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Service Delivery Survey: Citizen Participation in Local Decision-Making

Effectiveness of Participation Methods

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CityUse of Media Voluntary Work in organization Personael Contact

Attending discussion meetings Participation in public protests