Local Governance Programs

Policies for decentralization and devolution havebeen instituted to some degree in most countriesacross Asia with the expectation that subnationalgovernments are best positioned to connect withand respond to constituents. In principle, proxim-ity to the population also provides advantages tothe government in managing local finances anddeveloping locally appropriate initiatives, especial-ly those intended to serve marginalized groupsand communities in remote areas. However, theactual outcomes of decentralization policies aredecidedly mixed, and heavily country- and con-text-specific. Many factors influence decentraliza-tion outcomes, including political dynamics,resource advantages, and patterns of engagementbetween citizens and government.

The Asia Foundation recognizes the importanceof these factors in relation to the potential successof decentralization policies. As a long-time part-ner of both government and civil society in Asia,the Foundation pursues a range of tailored strate-gies to improve local governance across differentcountry contexts. Moreover, the Foundation’slongstanding presence in the region and its deepunderstanding of the local context of each Asian

country provide a comparative advantage foreffective program design and implementation.

To reinforce efforts of Asian countries in decen-tralization policy reform and implementation, theFoundation supports analysis and dialogue to bol-ster the policymaking-making process, and devel-ops innovative programs to strengthen and engagelocal government. The Foundation’s work in localgovernance stems from the evidence that giventhe proper incentives, resources, and authority,local governments can effectively address some ofthe most pressing current development issues.

Diagnosing the challenges facing local govern-ment requires a holistic look at the complex set ofinter-governmental relationships, existing incen-tives and resources, national and local policies andpolitics, and competing demands of constituents.To account for varying contextual factors and thediverse reform efforts and priorities of differentstakeholders, the Foundation facilitates discussionand coalition-building among relevant authorities,non-governmental organizations, and the businesscommunity. A careful analysis of the context,coupled with evidence from empirical research, isthe starting point for the Foundation’s assistanceon local governance and decentralization.

The promotion of decentralization – or devolution of authority and/or resources from the central govern-ment to local government – is widespread throughout the developing world. Indeed, decentralization isone of the most popular policy experiments among governments, donors, and civil society organizations(CSOs) alike, largely because it is seen as a means to reduce inefficiencies inherent in concentrated,overly bureaucratic government. Since the 1990s, decentralization has been increasingly viewed as com-plementary to democratization, based on the assumption that it is easier to bring about positive andmeaningful citizen engagement with government at the local rather than national level, where powerful,long-established elites tend to tightly control political and fiscal processes.

The Foundation’s

longstanding engage-

ment in the region pro-

vides a comparative

advantage for effective

program design and

implementation related

to decentralization and

local governance.

The Asia Foundation

pursues a range of

tailored strategies to

improve local gover-

nance across different

country contexts.

LOCAL GOVERNANCE

The Foundation supports

analysis and dialogue to

bolster the policymaking

process, and develops

innovative programs to

strengthen and engage

local government.

THE ASIA FOUNDATION’S APPROACH TO SUPPORT

DECENTRALIZATION AND LOCAL GOVERNANCE

Decentralization policy alone is rarely sufficient to pro-mote effective devolution of funds, authority, and/or func-tions. Such aims must be supported by adequate capacitybuilding, financial resources, and mechanisms for citizenengagement to ensure accountability and transparency.The Foundation’s programs support policy implementa-tion and local government strengthening in these andother cross-cutting areas, including environmental management, women’s empowerment, and economicdevelopment. The Foundation engages local governmentwith civil society groups, business associations, academicinstitutions, government agencies, associations of localgovernments, and others.

The Foundation’s approach to local governance pro-grams broadly includes:

• Facilitating local officials, civil society organizations,and national governments to engage stakeholders anddevolve resources to support local government leader-ship in innovation and performance at the local level;

• Providing support to business associations, commu-nity leaders and organizations, academic institutions,and others to strengthen engagement with local gov-ernment to foster economic growth; and

• Developing analytical tools and convening dialogueto facilitate appropriate reform of decentralizationpolicies.

SUPPORTING LOCAL GOVERNMENT LEADERSHIP IN

INNOVATION AND PERFORMANCE

Local governments are increasingly at the forefront ofdeveloping innovative approaches to address the complexchallenges of climate change and natural resource manage-ment; maintaining crucial services and infrastructure; andmeeting the needs of marginalized, remote, or conflict-affected communities. The Asia Foundation believes thatcoalitions of local organizations and individuals with theability to engage with powerful national actors make animportant contribution to improving government perfor-mance by demanding and ensuring transparency andaccountability.

The Foundation advances skill-building for civil societygroups in assessing local government performance and inunderstanding and engaging in government processes,including increasing their engagement in local planningand budgeting processes and advocating for improved ser-vices for vulnerable groups. The Foundation also supportscapacity-building for local authorities in developmentplanning, financial management, and service delivery. TheFoundation designs and implements programs to facilitate

dialogue on innovative responses for improving gover-nance at the local level among civil society groups, localgovernment officials, academic institutions, and businessassociations. The Foundation also promotes the work ofthe media to provide balanced and informative coverageof local governance issues.

In 2001, Indonesia enacted one of the most ambitiousdecentralization policies in the world. Building on its longhistory of partnership with both government and civilsociety, the Foundation has developed diagnostic toolsthat enable civil society to benchmark local governmentperformance on indicators of participation, transparency,equitable allocation of funding to social sectors, and thebusiness enabling environment. The Foundation’sapproaches to gender-budgeting and pro-poor budgetingfocus on improving the delivery of health and educationservices to women and the poor, while analytical toolsfacilitate critical dialogue about decentralization policy.Unique among other international players, theFoundation has engaged Muslim mass-based organizationsto apply their enormous credibility and political influenceto strengthen civil society oversight of government innova-tion and performance.

In Nepal, a Foundation project has strengthened advocacyand local government accountability in four districts byfocusing on local coalitions and federations that wouldpartner with authorities as well as engage in watchdogactivities. This has resulted in changes to policies andpractices related to: natural resource management;increased citizen awareness of rights, responsibilities andlocal government functions; and more sustainable mecha-nisms for citizen-led reform and collaboration.

In Cambodia, where the vast majority of the populationdepends on natural resources for their livelihoods, theFoundation has worked to boost citizen participationin local policy and planning decisions that determinehow natural resources are used and protected. In collabo-ration with dozens of local partners, the project hasmobilized over 1,000 community-based organizationsand built their capacity to engage effectively with localgovernment on key issues of concern. Furthermore, theproject has established and strengthened linkages betweencommunity-level interests and provincial and nationalpolicies and regulations.

In Afghanistan, after years of neglect, donors and thecentral government recognized the fundamental impor-tance of subnational governance and in 2007 created theIndependent Directorate General for Local Governance(IDLG). The Foundation was instrumental in supporting

the IDLG, which reports directly to the President, in itsearly years, and also played a key role in the developmentof the new Sub-National Governance Policy, approvedby the Council of Ministers in March 2010. A primarychallenge is to sufficiently empower the local level by pro-viding the financial and human resources they need.Currently the Foundation is playing a lead role in imple-menting the Performance Based Governors Fund (PBGF)with the IDLG. PBGF is an innovative provincial-levelinitiative to improve management capacity and enhancerelationships between Governors and citizens. It providesoperational resources and incentives to improve planning,budgeting, and auditing capacity and forms the basis for along-term performance-based program for ProvincialGovernors.

In the Philippines, the Foundation has, for many years,supported customized technical assistance to local govern-ments to enable greater financial responsibility andimproved service delivery. Through trainings of localofficials, the Foundation promotes a culture of serviceexcellence, the use of performance standards, and thevalues of transparency and accountability in public servicewithin local governments. To encourage broader citizenparticipation in decision making and local governanceprocesses, the Foundation fosters opportunities for closeinteraction among local governments, civil society organi-zations, and business associations.

In China, the Foundation has supported initiatives tobuild innovative and effective mechanisms for public par-ticipation in government decision making at provincial,municipal, and community levels by encouraging dia-logue and collaboration between government agencies,universities, and NGOs. In addition, the Foundation issupporting provincial governments and university part-ners to formulate local rules on open government infor-mation and administrative procedure reform. Throughthese initiatives, the Foundation is providing technicalexpertise and training to enhance local government capac-ity to disclose information and conduct open policymak-ing. At the same time, the Foundation is supporting legalaid services to improve access to information by citizens.

STRENGTHENING ENGAGEMENT WITH LOCAL

GOVERNMENT TO FOSTER ECONOMIC GROWTH

One objective of the Foundation’s programs is to improvelocal economic governance to enhance and accelerate sus-tained, broad-based economic growth. Businesses oftenface burdensome licensing and opaque registrationrequirements, endemic rent-seeking behavior and corrup-tion, and insecurity in the enforcement of contracts.Within this environment, small businesses, which have

more limited access to capital and political connections,tend to carry a disproportionately heavy burden.Facilitating a level playing field that allows small busi-nesses to prosper is important for generating employ-ment, increasing opportunities for women and the poor,and ensuring globally competitive exports and supplychains. Based on decades of experience, the Foundation’sprograms promote improvements in planning for eco-nomic development at the local level and reforms in thelocal regulatory environment to promote small and medi-um-scale businesses and strengthen the responsiveness oflocal governance to the needs of the business sector.

In Bangladesh and Sri Lanka, the Foundation’s localeconomic governance programs have enhanced the capac-ity of business associations (samities in Bangladesh;regional chambers of commerce and trade associations inSri Lanka) to represent member interests and strengthenthe enabling environment for private sector-led growthand investment. The Bangladesh program focuses onrural areas; in Sri Lanka the focus has been on post-con-flict and lagging regions. The programs have built thecapacity of the associations to more effectively advocatetheir interests with local government agencies and officialsat higher levels.

In India, the Foundation initiated a pilot project in 2008 to support in-country efforts to develop effectivemodels of district planning and help rural and urban gov-ernment agencies improve coordination to better servelocal communities. The project developed a state-of-the-art data template of infrastructure and social indicators tofacilitate informed debate and action by the DistrictPlanning Committees (DPC) regarding long-term eco-nomic development strategies. The Foundation’s partnerorganizations assisted the DPCs to advocate with statelevel departments to be more responsive to DPC-devel-oped district plans.

The Foundation’s Mongolia office began a three-yearprogram in 2010 to encourage responsible resource useand environmental conservation that follows on theFoundation’s groundbreaking ‘Securing Our Future’ pro-gram, which promoted responsibility within the miningsector for the long-term benefit of all Mongolians. Byengaging multiple stake-holders, including local commu-nities, government officials, and mining companies, theFoundation is building local and national consensus andunderstanding regarding the environmental effects ofmining, and possible mitigation methodologies. TheFoundation employs approaches that incorporate diverseinterests, facilitate common understanding and knowl-edge, and contribute to a body of empirical research thatfurther informs environmental and economic decisionmaking within the country.

In Indonesia, Vietnam, Cambodia and SriLanka, the Foundation’s Economic GovernanceIndex (EGI) serves to identify those aspects ofgovernance that determine the investment andenterprise competitiveness of different localities.The results of the EGI feed into collaborativeprocesses among government, business, and civilsociety, to reform regulations and reduce barriersthat constrain investment and the growth of private enterprise.

FACILITATING DIALOGUE AND ANALYSIS

FOR APPROPRIATE DECENTRALIZATION

POLICY REFORM

Governments and ruling parties most often adoptdecentralization policies to address national politi-cal interests, and these policies are usually formu-lated and implemented from above. Even aftersuch policies are adopted, the central governmenthas a strong influence on decentralized institutionsthrough budget allocations, policymaking andpolitical pressure. In addition, devolution ofauthority and finances is often inadequate for localauthorities to effectively meet their mandates toimprove services and respond to citizen demands.In some cases, national governments justify thispractice by arguing that the skills of local govern-ment authorities are not sufficient to meet policymandates. This perspective not only underesti-mates the capacities of local governments, but alsonarrowly focuses assistance on increasing technicalskills rather than on pursuing the devolutionrequired for local governments to leverage neces-sary decision making capacities and resources.

The Foundation’s programs on local governancepromote efforts to formulate decentralization poli-cies and practices through support to both nationaland local government in developing a reform agen-da and strengthening alliances among governmentreformers, business associations, and citizen groups.For example, local government performance scalesprovide comparative data on the capacity of localgovernments to achieve mandates and developinsights into the obstacles and challenges that hin-der their success. The Foundation supports pro-grams that link local government initiatives tonational decentralization policy reform by high-lighting successful practices and providing relevantground-level data.

In Timor-Leste, the Foundation is implementing alocal government performance scale that providesfeedback to central government regarding the

national decentralization policy. The scale also doc-uments the increasing competencies of the suco(local) councils over time, demonstrating that withadequate capacity-building even village-level coun-cils can play a more effective role in governance.

When the Local Government Ordinance inPakistan lapsed in August 2009, leaving the futureof local government institutions unclear and thenewly elected national government uncertainwhether or not to continue with the previous sys-tem, the Foundation supported the Free and FairElection Network (FAFEN) to conduct a survey in34 districts to determine citizens’ perceptions onlocal governance. The survey established that amajority of citizens were in favor of maintainingthe local government system introduced in 2001,and opposed efforts by the political parties to endthe system.

In Sri Lanka, the Foundation supported theMinistry of Local Government and ProvincialCouncils to formulate a new National Policy onLocal Government. The Policy, among otherthings, broadens the scope of local governmentcouncils and endows them with additional func-tions, powers, and resources. It proposes toimprove the planning and managerial capabilitiesof local government, to give them a stronger rolein socio-economic development planning for theirareas, and to strengthen coordination between localgovernment and central government officials whoare present at the local level. The Ministry’s policyreform initiative also includes an effort to amendand reform the major laws governing the role oflocal councils.

In China, building on longstanding local gover-nance programs focusing on public participationand open government information, theFoundation recently launched a major newresearch initiative — the Chinese GovernanceAssessment Project (C-GAP). This study examineschanges in public participation, transparency, andaccountability across provinces and assesseswhether these changes correlate with key gover-nance outcomes such as improved legal compliance,reduced corruption, and better public service deliv-ery. The project will produce fine-grained measuresof governance in China over time by quantitativelyand qualitatively analyzing variance across localesand documenting the origins and impacts of gover-nance reforms.

HEADQUARTERS465 California Street, 9th FloorSan Francisco, CA 94104 USATel: (415) 982-4640Fax: (415) 392-8863info@asiafound.org

WASHINGTON, DC1779 Massachusetts Ave., NWSuite 815Washington, D.C. 20036 USATel: (202) 588-9420Fax: (202) 588-9409info@asiafound-dc.org

www.asiafoundation.org

11/2010

The Asia Foundation is

a private, non-profit,

non-governmental

organization. Through

its programs, the

Foundation builds

leadership, improves

policies, and strengthens

institutions to foster

greater openness and

shared prosperity in the

Asia-Pacific region. It is

funded by contributions

from corporations,

foundations, individuals,

and governmental

organizations in the

U.S., Europe, Canada,

Australia, and Asia, and

an annual appropriation

from the U.S. Congress.