Reforming
of the policy environment in which the decisions are
made is key to providing energy services that promote
sustainable rural development. First step is the creating
of an enabling policy framework in which, on the one
hand the private initiative is involved and a variety
of enterprises are encouraged to provide sustainable
energy services to communities, and on the other hand
local communities are involved in the planning, implementation
and further project management process. This is often
known as the bottom-up approach, as against the top-down
conventional energy supply, which has dominated for
a long time and still dominating. This is bound to happen,
as the local governments do not have resources to generate
enough revenue through cess and taxes. It is the first
two tiers of the government who have the opportunity
to generate revenues through taxation. Hence, the highest
level of the government has the financial power and
can easily dictate its term. Thus there is a need for
the top level government to have proper understanding
of need for decentralization and empowering the local
governments and rural communities to take plan, implement
and manage the rural energy and rural development show.
Most of the countries have three-tier government structure
with defined powers in terms of fiscal, political, administrative
and institutional. These are mostly vested with top
two rungs of governments leaving very little or no fiscal
and administrative powers for the local governments.
In fact, the local governments hardly have any powers
but they have all the responsibilities. There are no
doubts that normally the fiscal powers are more with
the highest level as that only can help in equitable
distribution of revenue for the development and benefits
of have-nots. However, there is a need to leave the
planning of rural programs to local level with the given
funding.
However, this environment cannot be created overnight.
There are many challenges to the creation of this environment,
which fall in the following categories: (i)
Institutional, legislative, policy and regulatory environments,
(ii) Capacity building, (iii)
Funding and Finance mechanisms — defining the
role of different actors, and (iv)
Information and technology choice.
Decentralization and empowerment of local governments
and communities, as well as community participation
in the development process are crucial in the process
growth and poverty eradication. The involvement of local
village leaders is often crucial to a participatory
process in all development project or program cycle.
This support should be obtained through meetings and
project initiation workshops aimed at convincing local
traditional and administrative leaders that the project
is in their own short- and long-term interest.
An evaluation found that the rural development efforts
have failed to deliver on their promises. In fact more
than half of rural development projects are outright
failures. What has gone wrong? In practice, conventional
projects usually target medium to large-scale “progressive”
producers, supporting them with technology, credit and
extension advice in the hope that improvements will
gradually extend to more “backward” strata
of rural society. In many cases, however, the channeling
of development assistance to the better off has led
to concentration of land and capital, marginalization
of small farmers and alarming growth in the number of
landless laborers.
The
basic fault in the conventional approach is that the
rural poor are rarely consulted in development planning
and usually have no active role in development activities.
This is because the vast majority of the poor have no
organizational structure to represent their interests.
Isolated, undereducated and often dependent on rural
elites, they lack the means to win greater access to
resources and markets, and to prevent the imposition
of unworkable programs or technologies. The lesson is
clear: unless the rural poor are given the means to
participate in their own development, they will continue
to be excluded from its benefits. This reality is provoking
new interest in an alternative rural development process
– rural people’s participation through organizations
controlled and co-financed by them.
People’s
participation in rural development was formulated in
the mid-1970s, amid growing awareness that development
efforts were having little impact on poverty. At the
World Conference on Agrarian Reform and Rural Development
(WCARRD), held in Rome in 1979, the international community
identified the reason for this failure - the lack of
active participation of the poor in programs designed,
supposedly, to assist them.
WCARRD
declared that participation by rural people in the institutions
that govern their lives is a basic human right. If rural
development was to realize its potential, the Conference
said, disadvantaged rural people had to be organized
and actively involved in designing policies and programs
and in controlling social and economic institutions.
WCARRD saw a close link between participation and voluntary,
autonomous and democratic organizations representing
the poor. It called on development agencies to work
in close cooperation with organizations of intended
beneficiaries, and proposed that assistance be channeled
through small farmer and peasant groups.
In addition, the rural programs including rural electrification
have been and still are focused to cater to the basic
needs of the rural population. Such efforts have very
rarely been sustainable and in fact most of the times
the impacts of the programs have vanished for want of
a mechanism for its sustainability. This is because
the planners doubt that rural consumer could in any
way contribute to the success of rural programs. The
utilities traditionally see the RE simply as a technical
matter of stringing lines to grateful consumers and
are often oblivious to the importance of local community
involvement.
However, recently, there has been an effort to decentralize
the process of rural energy access and integrate it
with other rural development programs for poverty alleviation.
In other words, the efforts have now focused to provide
for “basic needs plus” to rural population.
The “basic needs plus” approach has been
based on the interaction with local consumers and local
NGOs. The planners realized that the sustainability
could be achieved only when the rural consumers can
at least meet the cost of operation, maintenance and
replacement of energy services equipment. This is possible
only when the rural programs aim at poverty alleviation.
The local resources and skills must be utilized for
income generation. This can be achieved successfully
by involving local communities in designing, planning,
implementing, and managing of the rural programs. The
examples from many countries
world over clearly show that the rural electrification
programs can benefit greatly from the involvement of
local communities, or they may suffer because of its
absence. These examples show that the rural energy programs
have always been successful where the rural population
was also involved primarily in income generation activities.
The increased income helps the rural consumers in being
able to afford the cost of energy service.
Decentralization of power and empowerment of local governments
and communities are important components of democratic
functioning and extension of democracy to the grass-root
level. Community participation in the development process
at the local level directs the bias of development towards
local problems and the local poor. There are two aspects
of empowerment. One is political power delegated to
local bodies through appropriate legislation. The other
and an equally important aspect of empowerment is the
devolution of financial resources to these bodies. Without
these financial powers, their ability to initiate development
projects for growth and poverty eradication would remain
just on paper.
RE programs and projects are more likely to be viable
and sustainable if local stakeholders are involved in
their design and implementation. One way to approach
this is to set up a Rural Electrification Committee
to help assess level of demand, educate consumers, and
promote the wider use of electricity. In some cases
the community may make contributions of capital or labor,
thereby helping to defray the costs of the program.
The establishment of appropriate institutional and organizational
procedures for project planning, financing, procurement
of goods and construction services is very important
for the successful implementation of RE projects involving
small communities. An adopted version of US Rural Electricity
Cooperatives - a distribution system based on member-owned
rural electric cooperatives - has been successfully
used (e.g. in Bangladesh).
Involving communities from the beginning in decisions
about rural electrification will reap rewards. The community
must define the end-uses that are most important for
them, decide what they are willing to pay for different
levels of service, and, based on a wide range of choices,
plan for future needs. Offering communities choices
and educating them about the implications of those choices
will lead to informed decision- making and energy use.
In Bangladesh consumer meetings are held before the
arrival of the electricity supply, helping to avoid
costly and time- consuming disputes over rights of way
and construction damage. Community contributions, in
cash or kind, were often the decisive factor in bringing
areas within the scope of the rural electrification
program in Thailand. The efforts to recruit customers
made by parish rural electrification committees in Ireland
ensured that the utility received an adequate return
on its investment and contributed to the rapid implementation
of the country’s rural electrification program.
There is a need to understand the decentralization in
depth and complexities involved in centralization versus
decentralization. There have been countries where the
process of decentralization was initiated, however due
to various reasons, this process was reversed in the
midst. It is believed that the decentralization is core
to the sustainable rural electrification process with
an objective of poverty alleviation. As pointed earlier,
without the local participation, the aspirations of
the rural population can’t be fulfilled. Therefore,
a detailed treatment is given to the decentralization
below.
| 2.
POTENTIAL ADVANTAGES OF DECENTRALIZATION
|
There
are many potential advantages of decentralization. Most
of them can be broadly captured under the classifications
of improved efficiency, better governance, and improved
equity.
The
local governments are closer to the people, have good
access to local information, and understand the local
context well. Therefore, they can better identify the
mix and level of services that their particular constituents
need than can higher- level governments, thus improving
the efficiency of the services. Some of the services
local people want may best be provided at greater scale
by higher-level government, and some local services
may affect other jurisdictions and should not be left
to the control of a single local government.
The
local rural populace has a better say in their local
governments, which leads to decisions about local public
services in consonance with their wishes than decisions
made by those at higher levels. The local community
will have a sense of belongingness to the programs/projects
as they would see that they are able to influence the
decisions of local governments in at least some small
way that directly affect them. This gives them the feeling
of empowerment, a sense of control and autonomy. However,
empowerment of local people through empowerment of local
government does not necessarily help them to have everything
that they want. It is because each and every project
requires financing and local governments would always
be dependent on national government. The national government
has to give precedence to the important national goals
over the local needs. Further, with limited resources,
the national government can’t meet the aspirations
of all the local governments and they would have to
use necessary discretion and they would meet all the
demands of local governments. Thus the governance and
collective action are not purely local.
The
local governments are aware of local conditions and
are in the best position to distribute public resources
more equitably and target poverty. However, they are
constrained by their internal resources, so that redistribution
from richer to poorer areas must be the responsibility
of national or central governments.
| 3.
FUNDAMENTAL ASPECTS OF DECENTRALIZATION |
The
three fundamental aspects of decentralization are: fiscal,
political, and institutional (including local and intergovernmental),
which individually and collectively affect its success.
| 3.1
Fiscal Decentralization |
The
fiscal decentralization has a limit to decentralization
and per say there can never be complete financial decentralization.
It is because, the local governments have limited avenues
for generating revenues through taxation. As mentioned
earlier, it is the higher two tiers of the governments
who have more avenues for generating revenues. It remains
incumbent upon the higher-level
governments to redistribute the revenue generating among
the lower level of governments in an equitable manner.
Any of the following process may be adopted by central
or national governments to redistribute the finances.
i.
The central government provides all finances to next
level of governments for onward distribution to local
governments.
ii. The central government provides
part finance to next level and part directly to the
local governments. The local governments also get some
finances from mid-level governments. However, this method
proper synchronization in the financing of programs
from the two sources.
iii. The central governments provide
all the finances directly to the local governments and
mid-level government does not provide any finances or
provides such finances, which do not require synchronization
with central assistance.
The
first option is likely to be more successful than other
two. This option would help in holistic planning for
rural programs. However, it may be left to the country
to decide its course of action depending on the local
political conditions.
There
is always an imbalance of own source revenues and expenditure
requirements of lower two levels of governments. The
intergovernmental transfers play a critical role in
closing this fiscal gap, as well as in alleviating interregional
resource disparities. This requires properly defined
expenditure authority and adequate resources. Improperly
defined roles and resource deficiencies can cripple
lower two levels of governments especially the local
governments and they would not be able to perform effectively.
Further, if local people, who participate in decision-making
processes of local governments, see that the local governments
have inadequate finances resources to deliver services,
they loose interest and faith in the system of the local
governments and decentralization process. Therefore,
to keep the local participation in the rural development
process, the central governments have to be judicious
enough to release the finances directly to the local
governments with proper checks and balances so that
the funds are not misused and they provide desired results.
| 3.2
Political Decentralization |
Although
fiscal and institutional decentralization are critical,
they are unlikely to bring about the major goals of
decentralization unless there is adequate political
reform. The political decentralization is the backbone
of the decentralization. It is because there could be
different parties in power at different level of governments.
Further, even if same political parties are in power
at all the level of governments, the more powerful politicians
can corner the financial resources to their constituencies
level others high and dry. This requires a well-developed
political process without narrow thinking. The politicians
have to be nationalistic in attitude rather than localistic.
Only then the fiscal and the institutional decentralization
can meet their intended goals. Thus the fiscal and institutional
decentralization imply the balancing of the accountability
of sub-national governments and local governments to
the central governments.
| 3.3.Institutional
Decentralization |
Institutional
decentralization involves autonomy of the administrative
bodies, systems, and mechanisms of government, both
local arrangements and the intergovernmental mechanisms
that help to manage and support decentralization. It
also includes mechanisms and procedures that link formal
government bodies to other key local actors, for example,
traditional authorities, non-governmental organizations,
private sector partners. This is the critical institutional
architecture on which decentralization is built. Interaction
among levels of government must be smooth and should
facilitate local service delivery rather than hinders
it. Without appropriately designed and implemented structures
and processes, as well as adequate institutional capacity
to manage and deliver the political and fiscal functions
of sub-national governments, decentralization will fail.
| 4.
DECENTRALIZATION VERSUS CENTRALIZATION |
Currently
a majority of developing countries are decentralizing
to various degrees. However, there have been debates
on
i.
Extent of the decentralization;
ii. Decentralization is necessary;
iii. Centralization must stay.
4.1.Extent of Decentralization
The central control and decentralization must be balanced
to sustain the RE efforts. The decentralization effort
must take into account the following ground realities:
i. The local governments of rural areas
do not have opportunity for revenue generation on their
own.
ii. Some local rural governments may
have more revenue generation than others. But never
sufficient to meet their requirements.
iii. Only the central and state level
governments can generate revenues and distribute them
to needy local rural governments.
iv. The local rural governments do
not have expertise to plan, implement, and manage the
rural electrification and rural development programs.
v. However, the higher-level governments
do not have feel of aspirations, needs, and local resources.
Thus
there is a need for balancing the role of higher-level
governments and local governments. All levels of governments
have to play their role in planning, implementing, and
managing the rural programs. There should be a conscious
effort for building capacity of local governments to
take up more and more of the responsibilities. Just
decentralization or only centralization would not serve
the purpose.
Box
1: Decentralized Rural Energy Planning in Nepal
— Rural Energy Development Program (REDP)
The
traditional approach to energy development is
characterized by external agencies determining
the suitability of selected technologies to
the beneficiary population in rural areas. Therefore
the typical rural energy planning begins with
the assessment of availa ble energy technologies
and then proceeds to implement these technologies.
This gives little or no flexibility to adjust
the program according to the local situation,
the users’ needs and preferences. Furthermore,
the beneficiary community members do not participate
in the planning and implementation phases of
the project. Therefore, the beneficiaries are
neither able to build up their capability to
operate and manage the system nor do they develop
a sense of ownership towards the scheme. Consequently,
technological successes are limited, with most
technologies being rejected by the users. Furthermore,
because of insufficient follow-ups the project
is abandoned once the ‘project targets’
are met.
REDP has adopted a different approach for effective
rural energy planning. In this approach:
Community mobilization is the basis for sensitizing
and mobilizing the community for planning, implementing,
operating and managing rural energy systems.
The community mobilization process is based
on six basic principles, viz. organization development,
skill enhancement, capital formation, technology
promotion, women’ empowerment and environment
management.
Planning is based on what the communities feel
they need.
Project identification is done through a local
participatory approach.
The rural energy needs are met by matching energy
resources (technically, socially, economically
and environmentally) with energy technologies.
REDP has implemented this approach when supporting
the DDCs in the program districts to formulate
their district energy development plans and
program. This energy planning process forms
an integral and important part of the DDC’s
district planning process.
|
Box
2: Decentralization in Uganda
Before 1990s neither officials nor citizens
had any experience of participation in decision
making in ganda. Uganda was determined to build
a new democratic and decentralized system of
governance. Authority and responsibility to
plan, budget, and deliver services were devolved
to districts and their sub-units. Implementation
of the decentralized system of governance progressed
rapidly and the amount of financial resources
expended by local governments increased rapidly
from an initial figure of Shs. 63 billion (FY
1994/95) to the present figure of Shs. 476 billion
(FY 2000/01). The number of districts also grew
from 39 at the start of the decentralization
process to 56 at present. With these rapid increases
in the size of financial transfers to local
governments, in the scope of local government
functions and in the number of local governments,
glaring gaps in local government functional
capacity have become evident.
USAID’s support to decentralization in
Uganda began with a pilot activity in Gulu and
Kamuli Districts focusing on capacity building
for the elected and appointed officials and
representatives of civil society. The aim was
to increase local government capacity to deliver
services and to expand civil society involvement
in decision-making and governmental oversight.
USAID’s approach in building the capacities
of both the demand and supply sides of the service
delivery partnership was both unique and strategic.
During the pilot program , 524 elected, appointed
and civil society representatives were trained
in the three thematic areas of local governance
and leadership, financial management and budgeting,
and gender mainstreaming. The same audience
was also the target of a separate but connected
mentoring effort designed principally to enhance
the understanding and applicability of the training
in the trainees’ workplaces.
The USAID program brought about significant
improvements in the levels of compliance with
the Local Government Act of 1997 in the two
pilot districts. After only one year, Gulu and
Kamuli so improved their capacities in planning,
budgeting and financial management that they
qualified for the Local Government Development
Program (LGDP) Grant. The LGDP is a World Bank
funded grant to local governments awarded to
districts that are able to demonstrate certain
minimum capacities in planning, budgeting and
financial management. The two districts had
once before tried to qualify for the LGDP grant
but without success. There was also a significant
increase in wom en’s
participation in local government processes
and increased awareness of and sensitivity to
gender concerns. In Gulu district council, two
women were elevated to positions of leadership
through promotion and recruitment. Kamuli district
council reported that the district NGO forum
was invited to sit on and participate in the
deliberations of the district technical planning
committee. The district planner was also co-opted
onto the Board of the NGO forum.
To build upon the success of this pilot effort,
the Ministry of Local Government implored USAID
to replicate the program in other districts.
Additional districts were selected using a proactive
and transparent strategy and training activities
have been refined and broadened, based on lessons
learned from the pilot phase.
|
| 4.2
Conditions for Decentralization |
Some
recent policy literature about decentralization argues
that there are certain individual or collective prerequisites
to decentralization: such as strong enabling frameworks,
effective local political systems, substantial locally
derived resources, and strong local capacity. Much has
been discussed about the critical need for an adequate
enabling framework in the form of constitutional recognition
of local governments and strong laws outlining their
roles and responsibilities.
There
are, however, examples from around the world in which
some local governments have performed reasonably well
in the absence of this requirement, as well as cases
where central governments have undermined
decentralization even when there was an apparently strong
framework in place. In terms of the broader list, if
all of these requirements were truly prerequisites,
no developing country would ever be able to decentralize.
Part of the definition of a less-developed country is
precisely that there is a lack of institutional, political,
and fiscal development. While it is true that these
mechanisms must eventually be in place to sustain effective
decentralization it will take considerable time in most
cases to develop them.
Thus,
these so called decentralization prerequisites can be
more productively characterized as the basic elements
of a sensible program for building decentralization.
Approaching the problem from this perspective, the key
policy questions become: Which elements are already
partially in place to build on? Are there already some
existing local capacities that can be productively used?
What priority elements need to be developed? What is
the most appropriate sequence of reforms that will lead
towards collectively developing these elements in a
sustainable way?
| 4.3
The Primacy of Political Will |
One
of the claims about decentralization is that lack of
political will is the greatest impediment to progress
and the principal requirement for success. Although
it is evident that political will, which may come from
the central government or be forced on it by the people
in times when pressures for democratization are great,
is important for decentralization to succeed, it is
not sufficient by itself. We have seen several cases
in recent years in which dramatically changing political
situations have led to major constitutional and legal
reforms and genuine attempts to decentralize. Brazil’s
post-military government constitution gave a powerful
role to decentralized governments, as did South Africa’
s progressive post-apartheid constitution.
When
Ethiopia developed its new constitution after the fall
of the Mengistu regime, they created a strong federal
system, hoping that, after the secession of Eritrea,
they could keep the country together by relaxing central
control of the largely ethnic-based states and giving
them substantial resources. Uganda under Museveni, hoping
to develop democracy for its long deprived people and
to undermine armed anti government movements operating
in parts of the country, passed a constitution and a
local government Act that involved dramatic shifts of
power and finances to local governments. Other heavily
centralized systems undergoing major political changes,
such as Indonesia and Cambodia, are moving in the same
direction, but through legislation rather than
constitutional reform. All of these cases had great
political will to create decentralized systems, and
most have made progress. But none has attained the system
they imagined creating when they passed their new constitutions
and laws. A few have even re-centralized certain powers
after taking significant actions to give local governments
more resources and autonomy. Why? They have often been
trying to do too much too quickly. Some overwhelmed
the capacity of weak local governments. Some created
opportunities for poor use of resources by freeing local
officials from central control without developing their
accountability to local constituents. Some severely
tested the bureaucratic resolve of the central ministries
who were losing power and resources more rapidly than
they could accept.
This
brings us to the final point. What most decentralization
efforts lack, even those which involve an appropriately
defined and well-coordinated system backed by strong
political will, is a pragmatic implementation strategy.
Decentralization is not a once-and- for-all act. It
is a complex process that involves fundamental changes
in attitudes about the way that the public sector works.
All major actors involved are typically starting from
positions inconsistent with decentralization. First,
central government officials, both political and appointed,
are often accustomed to making major decisions and controlling
local authorities extensively. Second, local officials
are often comfortable with heavy central subsidization
and control, and they may not be accustomed to feeling
accountable to local residents. Finally, local people
are often unaccustomed to paying for services or expecting
much responsiveness from local governments. These long-held
attitudes and behavior patterns would require years
and patient consultation to change. Even highly developed
countries that have undertaken decentralization, such
as France, have suffered through a slow and sometimes
difficult process. What are the elements of a good decentralization
implementation strategy? This requires a debate within
the country before and during the process of decentralization
on the following ideas:
Developing a process for defining decentralization in
a way that is appropriate for a particular country.
This may involve some experimentation with different
approaches to see what works best. Equally important
is the need to develop appropriate processes and mechanisms
for coordination and building linkages between the various
levels of governments and institutions;
Reform process should phase steps in a logical way.
It is not necessary to immediately turn over all constitutionally
or legally mandated responsibilities to all local governments.
Reforms with the greatest possibility of working effectively
in a relatively short time frame should be undertaken
first. This requires prioritizing reforms, focusing
on simple sectors, tasks, and revenue sources that don’t
immediately threaten in a significant way the tolerance
of the central power base or overwhelm local capacity.
Strategically differentiating among local
governments on the basis of capacity and performance
rather than size or official classification can also
foster
success and improve resource use. Some local governments
are likely to be relatively capable and can be given
greater responsibility, while others will require significant
training and technical assistance;
Information, education, and incentives for behavioral
change are critical. All actors must understand how
the situation is to evolve and what is expected of them
at each step. Central officials need to support and
monitor decentralization in a coordinated way. Local
officials must learn to work with elected representatives
and other local actors. Perhaps most critically, local
people themselves must learn how to hold local officials
responsible for
meeting their needs more fully. Often, alienated local
residents have to be gradually convinced that their
local governments can and will respond to them, and
this requires concrete results in the form of improved
performance. If some services are improved, people will
be more willing to pay local taxes. Participation is
not required for all local government decisions, but
it is certainly appropriate for some, and heavier participation
early on may help to raise the interest of citizens
in public affairs and their confidence in holding their
local officials accountable.
In applying these broad principles, the linkages among
the several aspects of decentralization and the need
to build various capacities must be taken explicitly
into account. Gradual, for example, does not mean focusing
exclusively on one dimension of decentralization first
and ignoring others, such as holding elections in year
one and then devolving powers and resources later. This
will raise public expectations that local governments
will be unable to deliver on. Rather, it is preferable
to sequence decentralization to incorporate the various
dimensions discussed earlier throughout the process.
In early stages where local institutions and capacity
are weak, for example, modest funding (central grants
with some local contribution) to support small-scale
projects/activities with carefully targeted technical
assistance would be a logical starting point. Conditions
could be attached to receiving the central resources
and technical assistance. If a local government meets
the conditions and successfully plans and implements
the project, it can move on to progressively more substantial
and rewarding activities requiring increasingly stringent
conditions in subsequent years. More advanced local
governments meeting certain conditions could be treated
in a more sophisticated way from the beginning. This
may involve some experimentation with different approaches
to see what works best. Equally important is the need
to develop appropriate processes and mechanisms for
coordination and building linkages; process, local governments
will have concrete incentives to gradually and simultaneously
improve their fiscal, managerial and political performance,
thereby progressively earning their autonomy and realizing
some of the potential benefits of decentralization.
Attempts to publicize good local government performance
and cases where sanctions were
imposed for poor performance may help to stimulate improvements
in other places.
Thus
the decentralization is by no means easy or straightforward.
But it is a complex process. It is also true that there
is no particular type of process, which will work in
every case. Systems have evolved in different ways and
are at different stages in various countries attempting
the decentralization. Despite differences, there are
general requirements for effective decentralization,
which are universal:
A vision for what the decentralized system should be
and what it is expected to accomplish;
Some basic framework that defines- in an adequate and
enforceable way-the key components of the system and
their linkages;
A carefully defined strategy for how to bring the system
into existence and to support its evolution over time.
This latter component is neglected almost everywhere,
even though it is in many ways the most critical element
of effective decentralization. The key challenge for
any country is to search for informed and creative ways
to define and implement their vision of decentralization
both gradually and strategically.
