A4.1 Position of transfers in the government’s budget
appropriation system 120
A4.2 Disbursement modalities used to get committed funding to
local authorities 120
A4.3 Payment systems used by local authorities to manage their
fiscal transfers 121
Annex 5: Key ingredients of smart projects 123
A5.1 A clear vision of the need to empower local authorities as development actors by enhancing their autonomy and
enlarging their operating space 123
A5.2 Search for linkages with the various actors and levels of
the system 124
A5.3 Flexible and process-oriented implementation linked to
national systems and procedures 125
Annex 6: Case studies 127
A6.1 Benin: the move from decentralisation to territorial
development 127 A6.2 Brazil and Ecuador: creatively using the support measures
of the CSO-LA Thematic Programme for promoting a TALD 130 A6.3 Dominican Republic: strengthening the developmental role
of local authorities through multi-actor policy dialogue
and a sound monitoring system at the local level 133 A6.4 Ethiopia: widening the democratic space for local
authorities in restricted political environments 136 A6.5 Pakistan: empowering communities through accountable
local authorities acting as catalysts for local development 139 A6.6 Peru: addressing territorial inequalities by regionalising
budget support and localising indicator measurement 142 A6.7 Tunisia: gradually putting regional and local authorities
at the centre of territorial development 145 A6.8 Uganda: using a territorial approach to re-frame a planned
integrated development programme 148
A N N E X 1 : Glossary
Administrative decentralisation. Comprises the systems, processes and policies that transfer administration of public functions to sub-national governments. Administrative decentralisation does not necessarily involve autonomous authority over revenues and expenditures or formal mechanisms of accountability to local citizens.
Autonomy. Ability of local authorities to adopt policies, implement programmes and issue regulations on their own initiative (i.e. without being directed by any other authority), limited only by the legality of their actions.
Blending. An instrument for achieving external policy objectives of the European Union (EU), complementary to other aid modalities and pursuing the relevant regional, national and overarching policy priorities. Blending enables the strategic use of a limited amount of grants to mobilise financing from partner financial institutions and the private sector to enhance the development impact of investment projects. The grant element can take different forms, including interest rate subsidies, technical assistance, risk capital and guarantees.
Budget support. An aid modality that involves dialogue, financial transfers, performance assessment and capacity development. Transfers are made to the national treasury of the partner country, in accordance with agreed conditions for payment. The resources received become part of the global resources of the partner country, to be used with its public finan-cial management system.
Civil society organisation (CSO). The concept of CSOs embraces a wide range of actors with different roles and mandates. Definitions vary over time and across institutions and countries. The European Union (EU) considers CSOs to include all non-state, not-for-profit structures, non-partisan and non–violent, through which people organise to pursue shared objectives and ideals, whether political, cultural, social or economic. Operating from the local to the national, regional and international levels, they comprise urban and rural, formal and informal organisations. The EU values CSOs’ diversity and specificities; it engages with accountable and transparent CSOs which share its commitment to social progress and to the fundamental values of peace, freedom, equal rights and human dignity. For more details, refer to the 2012 communication, ‘The roots of democracy and sustainable development:
Europe’s engagement with civil society in external relations’ (EC, 2012).
Competence. Legally mandated responsibility/power of local government in a particular area of activity. Competences may encompass both provision and production responsibilities, including regulating, delivering, financing, monitoring and evaluating, sanctioning or other-wise intervening in the way in which functions are carried out. General competence refers to a constitutionally or legally recognised general mandate for the welfare of the constituen-cies of local authorities. Specific competences are those related to specific service delivery and other functions which might be devolved or delegated to local authorities by national governments.
Decentralised cooperation. There is no unique definition for decentralised cooperation.
The World Bank refers to it as a formal partnership between local authorities in different countries which engage in a programme of exchange and collaboration aimed at improving the social and economic circumstances of their respective communities and enhancing the skills and competence of the partners involved. The European Union defines decentralised cooperation as publicly and privately funded aid provided by and through local authorities, networks and other local actors (EC, 2008). The Organisation for Economic Co-operation and Development measures decentralised cooperation through the contribution of local author-ities to Development Assistance Committee member countries’ foreign assistance. Common denominators of decentralised cooperation are (i) the lead actors (local authorities), (ii) an overarching objective (e.g. sustainable local development) and (iii) the nature of the activities carried out (e.g. exchanges and support).
Deconcentration. Refers to decentralising central agencies and adoption arrangements by which local actors perform functions as central agents. These actors may have the authority to make some independent decisions, but usually within central guidelines and subject to considerable central control/oversight.
Delegation. An arrangement by which local governmental or non-governmental entities deliver services which are formally central government responsibilities. Specific arrange-ments vary, but the entity always acts on behalf of the centre.
Devolution. An arrangement by which fully or partially independent and typically elected local authorities are legally responsible for specific functions and empowered to receive or raise certain revenues. Under genuine devolution, local authorities have a general mandate to develop their territories and promote citizen well-being.
European Union trust funds. Recent addition to the European Union’s (EU’s) external action instruments, development tools that pool resources from different donors to enable a quick, flexible, collective EU response to the various dimensions of an emergency/post-emergency situation or of a thematic action. Trust funds allow contributions from Member States (and other private and public donors) to be leveraged and to pool large amounts of funds. They are designed to increase the EU’s global political visibility and to enhance control over risks and disbursements. Trust funds are to be directly managed by the European Commission, or in the case of emergency trust funds, through delegated cooperation to third parties such as partner countries, international organisations or EU development agencies.
Fiscal decentralisation. Formal assignment of expenditure functions and revenues (includ-ing intergovernmental transfers and own tax and non-tax sources) to local authorities. Fiscal decentralisation does not in and of itself entail formal mechanisms of accountability to local citizens.
International organisation. Public sector entity established by intergovernmental agree-ments, and specialised agencies set up by such organisations. These organisations may have worldwide (e.g. the United Nations, the World Trade Organisation) or regional/sub-regional scope (e.g. the African Union, the European Union, MERCOSUR, the Association of Southeast Asian Nations, the Southern African Development Community, the West African Economic and Monetary Union). (Implementing Rules of the European Union Financial Regulation, Article 43) Local authority (LA). Public institution with a legal identity; component of the state struc-ture below the level of the central government and accountable to its citizens. LAs are usually
composed of a deliberative or policymaking body (council or assembly) and an executive body (mayor or other executive officer), directly or indirectly elected or selected at the local level.
Official development assistance (ODA). According to the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD),
‘flows to countries and territories on the DAC List of ODA recipients and to multilateral insti-tutions which are provided by official agencies, including state and local governments, or by their executive agencies; and each transation of which: a) is administered with the promtion of the economic development and welfare of developing countries as its main objective; and b) is concessional in character and conveys a grant element of at least 25 per cent (calculated at a rate of discount of 10 per cent)’. (http://www.oecd.org/dac/stats/officialdevelopmentas-sistancedefinitionandcoverage.htm)
Place-based policy. ‘Long-term strategy aimed at tackling persistent underutilization of potential and reducing persistent social exclusion in specific places through external inter-ventions and multi-level governance. It promotes the supply of integrated goods and services tailored to contexts, and it triggers institutional changes’ (Barca, 2009, p. vii). The concept, originally advanced to help reform the European Union’s cohesion policy, is equally relevant in developing countries as it underpins an approach to reducing territorial and social disparities (and the associated risks of social tension and political unrest) through inclusive growth and enhanced productivity of territories rather than state redistributive policies.
Policy and institutional innovation facility (PIIF). A management unit which, unlike a traditional project implementation unit, can actually accompany and facilitate the search for innovative solutions, rather than implement blueprint models. A PIIF has the ability to provide direct financial support to participating local authorities.
Political decentralisation. Set of provisions designed to devolve political authority to local authorities and enhance their accountability to the residents of their jurisdictions.
Examples include the popular election of mayors and councils, which previously may have been appointed or did not exist. In effect, political decentralisation adds democratisation to the more technical mechanisms of administrative and fiscal decentralisation.
Public-private partnership (PPP). The Organisation for Economic Co-operation and Development defines a PPP as a long-term agreement between the government and a pri-vate partner whereby the latter delivers and funds public services using a capital asset, shar-ing the associated risks. PPPs may deliver public services with regard to both infrastructure assets (e.g. bridges, roads) and social assets (e.g. hospitals, utilities, prisons).
Special treasury account. Legally established fund distinct from the regular national budget. It is used in fiscal transfers from the central to the local level to prevent the funds from being used for another purpose or changed by the central government during the fiscal year.
Territorial development. Development that is endogenous and spatially integrated, lever-ages the contribution of actors operating at multiple scales and brings incremental value to national development efforts.