Training for Development train 4 dev MTEF AND

Training for Development train 4 dev MTEF AND DECENTRALISATION April-June 2006 SWAP Joint Learning Event 1

Training for Development train 4 dev Unresolved Issues &/or Items for Agenda Convergences/consensus: • Need for greater consultation between central and local governments/ Clarify relation between central and local level planning/ Clarify linkages between central and district level processes (+ agencies) for MTEF preparation and follow-up/ Quality assurance (of LG MTEFs) by CG • Lack of capacity at central and local levels/ Need to deepend understanding/ Need to keep everybody on board (commitment) • Relation between ceilings and needs/ Information about available funding (comprehensiveness of MTEF? Information about district ceilings at central level? ) • Clarify fiscal decentralisation framework April-June 2006 SWAP Joint Learning Event 2

Training for Development train 4 dev Unresolved Issues &/or Items for Agenda Questions: • Is MTEF appropriate for decentralisation? • How should the consultation/quality assurance process be designed (On sectoral basis as proposed by health? On « overall » basis as proposed by NRM? ) April-June 2006 SWAP Joint Learning Event 3

Training for Development train 4 dev What this reflects Fundamental tensions in decentralisation: • « Autonomy » (greater decision-making) of local level « Control » by CG • Accountability: downward first upward first (where are service delivery objectives « fixed » ? ) • Fiscal decentralisation only one dimension: it must « match » administrative decentralisation • But decentralisation is also political and about empowering government closer to community and empowering community… • Need for strong LGs but also need for a strong centre April-June 2006 SWAP Joint Learning Event 4

Training for Development train 4 dev International experience • « Autonomy » and downward accountability: difficult without a degree of fiscal autonomy (own revenue at LG level) • No matter how great is the autonomy, some form of upward accountability is always present • But design of system of fiscal transfers (address vertical and horizontal imbalances) matters too and is shaping/shaped by decisions on how upward accountability is « organised » (sectoral versus overall) • Funds must accompany functions (functional assignment…) April-June 2006 SWAP Joint Learning Event 5

Training for Development train 4 dev Two cases: • Uganda: sector « follow-up » (QA/consultation) is « dominant » ; largest proportion of LG funding is (multiple) conditional grants Issues: • No meaningful downward accountability ( « targets » centrally fixed) • No coherence at district level (sectoral drive) • South Africa: « overall » follow-up (QA/consultation) prevails; fiscal transfer = mainly un-conditional grant; provinces decide on inter-sectoral allocations but formulae … guidelines … Issues: • Time consuming consensus building process throughout MTEF/budget preparation cycle • But it seems to work… and there are (small) conditional grants to ensure national priorities are taken care off See two additional handouts… April-June 2006 SWAP Joint Learning Event 6

Training for Development train 4 dev « Hints » and more questions • Things change in Uganda • SA Provinces are much larger and better capacitated than even strongest districts in Uganda • Sector ministries not all convinced in SA (or also Ethiopia) • Unclear whether SA or Uganda does better re: equity between different geographical areas • « Contracts » : what are they? Between who and who? Return to this topic during/after discussions in Modules 4 (capacity development) and 5 (accountability and performance monitoring) April-June 2006 SWAP Joint Learning Event 7