GOLD Report I - UCLG

Decentralizationand local democracyin the worldFirst Global Report byUnited Cities and Local Governments2008

Decentralization and local democracy in the worldFirst UCLG Global Report

UCLG wishes to acknowledge the Support of:Generalitatde Catalunya

Decentralizationand local democracyin the world2008FirstGlobalReportA co-publication of the World Bank and United Cities and Local GovermentsUnited Cities and Local GovernmentsCités et Gouvernements Locaux UnisCiudades y Gobiernos Locales Unidos

© 2008 United Cities and Local GovernmentsAvinyó 1508002 Barcelona - SpainTelephone: +34 933 428 750Internet: www.cities-localgovernments.orgE-mail: info@cities-localgovernments.orgAll rights reserved1 2 3 4 5 11 09 08 07This volume is a product of an international network of experts associated with UnitedCities and Local Governments initiative. The findings, interpretations, and conclusionsexpressed in this volume do not necessarily reflect the views of the Executive Directors ofThe World Bank, nor all the members of United Cities and Local Governments.The World Bank and United Cities and Local Governments do not guarantee the accuracyof the data included in this work. The boundaries, colors, denominations, and otherinformation shown on any map in this work do not imply any judgment on the part of TheWorld Bank and United Cities and Local Governments concerning the legal status of anyterritory or the endorsement or acceptance of such boundaries.Rights and PermissionsThe material in this publication is copyrighted. Copying and/or transmitting portions or allof this work without permission may be a violation of applicable law. The World Bank andUnited Cities and Local Governments encourage dissemination of its work and willnormally grant permission to reproduce portions of the work promptly.For permission to photocopy or reprint any part of this work, or queries on rights andlicenses, please send a request with complete information to the to the CopyrightClearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com.All other queries on rights and licenses, including subsidiary rights, should be addressedto the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433,USA; fax: 202-522-2422; e-mail: pubrights@worldbank.org.ISBN-13: 978-0-8213-7734-5eISBN: 978-0-8213-7735-2Design and LayoutProofreadersPhotosMIS ProductionsWilliam Bank & Judith Fiorilli-ConnettUCLG archives and Rafael Escudé, Antonio Lajusticia& Francisco OntañónLibrary of Congress Cataloging-in-Publication DataDecentralization and local democracy in the world : first global report by United Cities andLocal Governments, 2008.p. cm.Includes bibliographical references and index.ISBN 978-0-8213-7734-5 -- ISBN 978-0-8213-7735-2 (electronic)1. Decentralization in government. 2. Local government. I. United Cities and LocalGovernments.JS113.D426 2008320.8--dc22Printed in the U.S.A.Coordinated by the Research Networkon Local Government in Europe (GRALE)Under the scientific direction of Gérard Marcou,Professor at the University Paris 1 Panthéon-Sorbonne, Director of GRALE

7CONTENTSForeword 8Preface 10Editorial project 12Acknowledgments 14Introduction 18Africa 22Asia-Pacific 50Eurasia 94Europe 128Latin America 166Middle East and Western Asia 202North America 232Metropolitan Governance 254Conclusion 282Postface 306Bibliography 316

FOREWORD8 United Cities and Local Governments

91st UCLG World Report on Decentralizationand Local Democracy in the WorldForewordThis publication of the UCLG on Decentralizationand Local Democracy comes at atimely moment. The world has just passed asignificant threshold: it is now more urbanthan rural, with a greater number of peopleliving in cities than at any time in history.Furthermore, over the next 30 years mostworld population growth will be in developingcountry cities. Highly visible megacitieswill continue to grow, but more slowlyon the whole, while cities under 1 million insize are projected to absorb a populationincrease of nearly one half billion in the next15 years.This demographic shift constitutes thematuration of the urbanization process andposes a tremendous challenge for poor andmiddle income countries. The challenge is toprovide the services that are essential to thehealth, education, prosperity, and wellbeingof people living in cities, and to do sosustainably in the face of global challengessuch as climate change.Many developing countries seeking to respondto the challenge posed by thesedemographic shifts will choose decentralizationand local democracy in variousforms as one tool to achieve basic socialends. Regardless of the degree of decentralization,in an increasingly urbanizedworld governance and management incities and towns will take on heightenedimportance. The World Bank applauds thework of the UCLG in underscoring thesekey functions and we welcome this Reportas input to our collective thinking on thesubject.While many of the problems facing citiesand towns may be global, the solutions will,in large measure, be local and unique to thespecific circumstances on the ground. Goodsolutions will result from a smooth collaborationamongst various levels of governmentthat is crafted pragmatically to getresults. We look forward to a strong partnershipwith UCLG.Katherine SierraVice President, Sustainable DevelopmentThe World Bank

PREFACE10 United Cities and Local Governments

11PrefaceIt is my great pleasure, as President of theWorld Organization of Local and RegionalAuthorities, to present the first WorldReport on Decentralization and LocalDemocracy, published in cooperation withthe World Bank and Cities Alliance.I hope that this Report, which is the first ofits kind, will contribute to deepen andstrengthen knowledge about the role oflocal governments in the contemporaryworld, and to enrich national and internationaldiscussions on the relationship betweendecentralization and development.The present Report clearly shows that theworld is undergoing a quiet democraticrevolution. Therefore, even if importantaspects of this process have yet to beaccomplished, especially in countries in conflict(in the Middle East, Asia and Africa)local democracy is gaining momentum allover the world: from the African savannavillages, the highlands of Latin America tothe barangay in the Philippines.In a world where more than half of humanitynow lives in cities, local authorities arealso the key to the solution of major contemporarychallenges of all kinds: democratic,as it is in the local sphere that the senseof citizenship is reinforced and identities areconstructed to deal with globalization; environmental,since the preservation of ourplanet and the fight against global warmingdepends to a great extent on finding sustainablesolutions to transform current modelsof production and consumption, particularlyin the urban areas; economic, given thatlarge amounts of wealth and opportunities,as well as extreme inequities are generatedwithin the cities and in their surroundings;and, social, as it is at the local level wherethe grounds need to be set for creatingsocial inclusion, managing cultural diversityand ensuring human security.This publication follows the adoption byMember States of the UN Habitat GoverningCouncil of the International Guidelines onDecentralization and Strengthening of LocalAuthorities: the first international cornerstonereference to “outline the main principlesunderlying democratic, constitutional,legal and administrative aspects of localgovernance and decentralization 1 ”.Both the guidelines and this Report are thefruition of longstanding efforts by localgovernments and their partners which Ihope will complement each other promotingthe ownership and implementation of theGuidelines by States and local authorities allover the world. The Report constitutes thefirst stage of the World Observatory ofDecentralization and Local Democracyproject launched by United Cities and LocalGovernments and supported by the UNHabitat Governing Council.I am convinced that this publication –thefirst of regular triennial reports– will enableUnited Cities and Local Governments tobecome “a major world source of informationand intelligence on local government”as anticipated by its members.Betrand DelanoëMayor of ParisFrancePresident of CGLU1. UN Habitat, 21stGoverning Council,Decisions andResolutions, Nairobi,16-20 April 2007:Resolution 21/3.

EDITORIAL PROJECT12 United Cities and Local Governments

13EDITORIAL PROJECTUCLG Steering Committee• Jean Pierre Elong Mbassi, Secretary General, UCLG Africa• Christopher Hoene, National League of Cities, USA• Béchir Odeimi, Director of UCLG Lebanon and Jordan, Lebanon• Josep Roig, Secretary General, Metropolis• Rashik Sagitov, Secretary General, UCLG Eurasia• Jeremy Smith, Secretary General, Council of European Municipalities and Regions(CEMR)• Guillermo Tapia, Secretary General of FLACMA, Latin America• Peter Woods, Secretary General, UCLG Asia Pacific• Selahatim Yildirim, Secretary General, UCLG Middle East & Western AsiaResponsibility for the publication• Director : Elisabeth Gateau, Secretary General, UCLG• Overall Coordination: Edgardo Bilsky, Director for Programs and Research, UCLG• Advisor: Emilia Saiz, Director for Statutory Issues and Institutional Relations, UCLG• Support team from UCLG: Hélène Abet, Dominique Arrestat, Mohamed Boussraoui,Orla de Díez, Sara Hoeflich de Duque, Grégoire Husson, Thomas Meekel, Olivia Paton,Marie Laure Roa, Virginia Molina, Marcus Mayr, Renske SteenbergenScientific Direction• Gérard Marcou, Professor at the University Paris 1 Panthéon-Sorbonne, Director ofGRALE, FranceEditorial Committee• Mustapha Adib, Professor at the Lebanese University and at the French-Lebanese UniversityCenter of Technology, Director of the Center for Strategic Studies in the MiddleEast (CESMO), Lebanon• Alex B. Brillantes, Professor and Dean of the University of the Philippines, EasternRegional Organization for Public Administration (EROPA), Philippines• Adrian Campbell, Senior Lecturer at the University of Birmingham, School of PublicPolicy, United Kingdom• Vincent Hoffmann-Martinot, Research Director of the CNRS, Director of SPIRIT(CNRS), Institute of Political Studies of Bordeaux, France• Talia Iaroulovna Khabrieva, Professor, Director of the Institute of Legislation and ComparativeLaw of the Government of the Russian Federation• Biram Owens Ndiaye, Director, Municipal Development Partnership, Benin• Jefferey Sellers, Professor at the University of Southern California, USA• Salvador Valencia Carmona, Professor at the Nacional Autonomous University of Mexico(UNAM), Director of the Center of Legal Research, Mexico

ACKNOWLEDGMENTS14 United Cities and Local Governments

15ACKNOWLEDGMENTSMain authors 1 by chapters:Africa:• Mustapha Ben Letaief, Professor at theUniversity of Tunis 1, Faculty of Law,Director of the Public Law Department,Tunis• Charles Nach Mback, Expert, MunicipalDevelopment Partnership, Benin• Jean-Pierre Elong Mbassi, SecretaryGeneral, UCLGA• Biram Owens Ndiaye, Director, MunicipalDevelopment Partnership, BeninAsia-Pacific:• Andrew Nickson, Lecturer, School ofPublic Policy, University of Birmingham,United Kingdom• Alex B. Brillantes, Professor and Deanof the University of the Philippines, EasternRegional Organization for PublicAdministration (EROPA), Philippines• Wilhelmina L. Cabo, EROPA, Professorat the University of the Philippines• Alice Celestino, EROPA, University ofthe Philippines• Nick Devas, Lecturer, School of PublicPolicy, Director of the InternationalDevelopment Department, Universityof Birmingham, United KingdomEurasia:• L.V.Andrichenko, PhD, Institute ofLegislation and Comparative Law of theGovernment of the Russian Federation• Talia Ia. Khabrieva, Professor, Directorof the Institute of Legislation and ComparativeLaw of the Government of theRussian Federation, Team leader• V.I.Lafitsky, Professor at the Institute ofLegislation and Comparative Law of theGovernment of the Russian Federation• A.V. Pavlushkin, PhD, Institute of Legislationand Comparative Law of theGovernment of the Russian Federation• A.E.Postnikov, Professor at the Instituteof Legislation and Comparative Law ofthe Government of the Russian Federation• N.V.Putilo, PhD, Institute of Legislationand Comparative Law of the Governmentof the Russian Federation• Y.A.Tikhomirov, Professor and Vice-Director of the Institute of Legislationand Comparative Law of the Governmentof the Russian Federation• V.A.Vasiliev, Professor at the Institute ofLegislation and Comparative Law of theGovernment of the Russian FederationEurope :• Gérard Marcou, Professor at the UniversityParis 1 Panthéon-Sorbonne, Directorof GRALE, France• Hellmut Wollmann, Professor emeritusat the Humboldt-Universitaet Berlin,GermanyLatin America :• Mario Rosales, Director of Studies, Associationof Municipalities of Chile• Salvador Valencia Carmona, Professor atthe Nacional Autonomous University ofMexico (UNAM), Director of the Center ofLegal Research, MexicoMiddle East & West Asia:• Mustapha Adib, Professor at the LebaneseUniversity and at the French-LebaneseUniversity Center of Technology,Director of the Center for StrategicStudies in the Middle East (CESMO),Lebanon1. Alphabetic list. If aperson is quotedseveral times, titlesand functions arementioned only withthe first quotation.

ACKNOWLEDGMENTS16 United Cities and Local Governments3. The majority of thecontributorsmentioned belowcompiled the UCLGCountry Profiles(2007). Theseprofiles are availableat:http://www.citieslocalgovernments.org/gold/North America• Jefferey Sellers, Professor at the Universityof Southern California, USAMetropolitan governance:• Vincent Hoffmann-Martinot, ResearchDirector of the CNRS, Director of SPIRIT(CNRS), Institute of Political Studies ofBordeaux, France• Jefferey SellersConclusions• Tim Campbell, PhD, Urban Age Institute,USAPostface• Gérard MarcouOther contributors 3 :Africa :Chabane Benakezouh (Algeria), MustaphaBen Letaief (Tunisia), Hassan OuazzaniChahdi (Morocco), Jose Chivava (Mozambique),Lilian Dodzo (Zimbabwe), ElogneKadja (Côte d’Ivoire), Georges Kasumba(Uganda), Sylvana Rudith King (Ghana),Djenabou Kone (Guinea), Nadjombe GbeouKpayile (Togo), Aliou Maguiraga (Mali),Albert Malama (Zambia), Jossy Materu(Kenya & Tanzania), Charles Nach Mback(Rwanda), Issa Moko (Benin), MahamadouNdriandy (Madagascar), Nneka UdummaNkpa (Nigeria), Jean Charles Simobang(Gabon), Enone Théodore (Cameroon),Ibrahima Thioye (Senegal), Khaled Zaki(Egypt)Bureau d’études & d’ingénierie ConseilCERDDEA (Niger), Cabinet Rammble Consultancy– Leola Rammble (South Africa)Asia Pacific:Andy Asquith (New Zealand), Chris Aulich(Australia), Bambang P.S. Brodjonegoro(Indonesia), Alice Celestino (Philippines),Chandra-nuj Mahakanjana (Thailand),Musharraf R. Cyan (Pakistan), Gao XiaoPing (China), Mathew John (India), NguyenNgoc Hien (Vietnam), Park In-soo(Republic of Korea), Qiao Jingjing (China),Yasuhiro Sagawa (Japan), ArkajaSingh (India), Fauziah Swasono (Indonesia),Mike Tumanot (Philippines), RogerWettenhall (Australia), Ahmad JailaniMuhamed Yunus (Malaysia)Eurasia:L.V. Andrichenko (Russia), Alexander V.Batanov (Ukraine), N.A. Ignatyuk (Russia),Leïla T. Januzakova (Kazakhstan), Artur G.Kazinian (Armenia), A.V. Pavlushkin (Russia),A.E. Postnikov (Russia), N.V. Putilo(Russia), Vage V. Rafaelian (Armenia),Nizami Safarov (Azerbaijan), Akmal Kh.Saidov (Kirghizstan, Tajikistan, Turkmenistan,Uzbekistan), Kiamran Shafiev (Azerbaijan),Edgar E. Shatirian (Armenia), V.A.Sivitsky (Russia), Paata Tzinovadze (Georgia),Grigorij A. Vasilevitch (Belarus), V.A.Vasiliev (Russia)Europe:Yves Cabannes (United Kingdom), AdrianCampbell (United Kingdom), Carlo Iannello(Italy), Gerardo Ruiz-Rico Ruiz (Spain),Mayte Salvador Crespo (Spain)Latin America:Luciana Albuquerque Lima (Brazil), PinoAlonso (Cuba), Paola Arjona (Colombia),Michel Azcueta (Peru), Felix Barrios (Guatemala),Juan Carlos Benalcazar Guerrón(Ecuador), Antonio Cararello (Uruguay),Salvador Valencia Carmona (Mexico), FernandoCarrión (Ecuador), Jesús MaríaCasals Hernández (Venezuela), RokaelCardona Recinos (Costa Rica, El Salvador,Guatemala, Honduras, Nicaragua, Panama),Daniel Cravacuore (Argentina),Ramón de la Cruz Ochoa (Cuba), RubenHernández Valle (Costa Rica), CarlosEduardo Higa Matsumoto (Brazil), Eduardo

17Klinger (Dominican Republic), AntonioMoreira Maués (Brazil), Dalia MorenoLópez (Mexico), Andrew Nickson (Bolivia &Paraguay), Martha Prieto Valdés (Cuba),Mario Rosales (Chile), Alejandro Socorro(Cuba), Néstor Vega (Ecuador), AliciaVeneziano (Uruguay), José Luis VillegasMoreno (Venezuela)Metropolis:Philip Amis (United Kingdom)Special acknowledgments forfinancial and advisory support:Generalitat de CatalunyaDiputación de BarcelonaPays de la LoireMiddle East & West Asia:Mustapha Adib (Lebanon), Najem Al Ahmad(Syria), Mohammad Djalali (Iran), YeserenElicin (Turkey), Mohammad Hachemi(Iran), Adnan M. Hayajneh (Jordan), AudeSignoles (Palestine)North America:Jean-Pierre Collin (Canada), Jefferey Sellers(United States)

INTRODUCTION18 United Cities and Local Governments

19INTRODUCTION“Local self-government denotes the right andthe ability of local authorities, within the limitsof the law, to regulate and manage asubstantial share of public affairs under theirown responsibility and in the interests of thelocal population”.(European Charter of Local Self Government,Part I, Art. 3)One of the goals of United Cities and LocalGovernments since its creation in2004 has been to create a Global Observatoryon Local Democracy and Decentralization“in order to analyze on a regular basisthe advances and possible reverses to localdemocracy and decentralization aroundthe world, to anticipate potential changesand to analyze the obstacles faced and thesolutions required to overcome them” (UCLGExecutive Bureau, June 2005).This First Global Report, as we present ittoday, is one of the results of that initiative.It is also the first global attempt tooffer a comparative analysis of the situationof local authorities in every region inthe world. The local elected representativeswho are members of the governingbodies of UCLG share certain core valuesregarding local governance issues and supportthe principle of subsidiarity, wherebydecisions should be made at the level ofgovernment closest to the citizens. ThisReport will contribute to deepening reflectionof these values.The Report, drawn up by a network of expertsand university academics on every continent,under the scientific direction of GRALE (ResearchGroup on Local Administration in Europe)1 , is not intended to be exhaustive,although a majority of states around theworld are examined. Among the countriesthat were not included in the Report were thosewith insufficient information sourcesand/or failed states lacking local institutionsor affected by armed conflict. The Reportfocuses strictly on the municipal level (orequivalent), or the intermediate tier of governmentwhen it is the main level responsiblefor local government. Relations betweenthe local level and other levels of territorialadministration are also taken into account.The Report takes readers through the sevenregions of the world, defined in accordancewith the continental sections thatmake up the structure of UCLG. Each chapterdeals with three main themes:a) the evolution and development of territorialstructures;b) powers, management and finance;c) local democracy.An eighth chapter examines the forms ofgovernance of the metropolises, whererapid growth presents significant challenges,particularly in countries of the globalSouth and above all in Asia. This chapter isof particular interest to the metropolitansection of UCLG.1. GRALE is an international scientific network attached to the Centre National de la Recherche Scientifique (French National Science Research Center)in Paris. It was set up in accordance with an agreement between the following French universities and other bodies: the Paris 1 Pantheon-SorbonneUniversity, the University of Reims-Champagne-Ardenne, l’Institut d’Etudes Politiques (the Institute of Political Studies) at Aix-en-Provence, theFrench Ministry of the Interior, the French National Assembly, the Inter-Ministerial Delegation on Regional Development and Competitiveness andthe Compagnie Générale des Eaux. Dozens of research centres in France and abroad are members of the network. The eight specialist academiccentres that are GRALE partners are: CESMO (Centre d’Etudes Stratégiques du Moyen Orient – Center for Middle-East Strategic Studies) in Lebanon,the Institute of Comparative Law and Legislation in Moscow, Russia, the Institute of Political Sciences in Bordeaux, France, the EROPA (EasternRegional Organization for Public Administration) in the Philippines, the Partnership for Municipal Development in Benin, the Autonomous University ofMexico, the University of Birmingham in the United Kingdom, and the University of Southern California in the United States.

INTRODUCTION20 United Cities and Local GovernmentsDrafting the Report raised numerous methodologicaland practical difficulties. In thecomparative work, the terms used and aboveall the concepts they express often concealdifferent meanings and connotations thatsimple translation does not uncover. In-depthanalyses are required, notably of the essentialnotions: “The Global Report calls for, andat the same time makes possible, an effort toclarify the essential notions,” as expressed byGérard Marcou, the scientific co-ordinator,who raises the key question as to “What dowe understand by decentralization, local democracyor even local self-government?” Anattempt to clarify these matters is given inthe postface to the Report.As the Report clearly shows, in the last 20years decentralization has established itselfas a political and institutional phenomenonin most countries around the world. Thesecountries have local authorities, consisting oflocal assemblies elected by universal suffrageand an executive, both of which areexpected, to different degrees, to respond totheir citizens. As is shown by widespreadlegislative or constitutional reform, the globalprocess has resulted in wider recognitionof the role and position of local authorities aswell as a significant increase in their powersand financing, notwithstanding the manydifferences between countries. The emergenceof new political leadership at the locallevel is reflected almost everywhere in thecreation of associations of elected membersor local authorities in more than 130 countries(virtually all members of UCLG).“The notions of ‘autonomía local’, ‘local selfgovernment’,‘Selbstverwaltung’ and ‘libre administration’have gradually become the normin territorial administration in every region.However, the picture that emerges fromthe research contains sharp contrasts. Inmany countries, these reforms are eithervery recent or are facing difficulties in theirimplementation. Two issues come into viewof particular concern for local authorities,especially in countries of the South: financingand staff.Hence, the fundamental issues and questionsof the growing debate are: What happensto local autonomy when the level offinancial autonomy is deficient or non-existent,given the tendency of central governmentsto absorb a larger share of theresources? What is the adequate proportionof local authorities’ own resources andstate transfers? What happens when interventionsby higher tiers of governmentwithin the state weaken the ability of localauthorities to freely choose the ways theymanage their services and administrativestructures? More broadly, to what extentdo decentralization and subsidiarity enablelocal authorities and their communities toimprove access to services and to worktowards development? Moreover, how canwe guarantee good quality services expectedby citizens?These debates explain the rising interestamong local authorities and internationalorganizations in the definition of the universalprinciples that serve as a referenceon a worldwide scale. The approval by UN-HABITAT of the Guidelines on Decentralizationand the Strengthening of LocalAuthorities in April 2007 was a major stepforward in this direction, for which UCLGhas worked very hard.The Guidelines recognize that sustainabledevelopment is made possible by “theeffective decentralization of responsibilities,policy management, decision-makingauthority and sufficient resources, includingrevenue collection authority, to localauthorities, closest to, and most representativeof, their constituencies.” The Guidelinesare conceived as guidance on reformsbut do not impose a uniform, rigid model.The guidelines integrate notions of governanceand democracy, representativedemocracy and participative democracy;they define the principles that govern themandate of locally elected authorities andthe powers and responsibilities of localauthorities, based on subsidiarity. The Guidelinesalso call for the introduction ofconstitutional and legislative guarantees to

21protect local autonomy and to ensure thatlocal authorities have sufficient human andfinancial resources to meet their responsibilities.The Guidelines draw their inspirationfrom the European Charter of LocalSelf Government, to which the Europeansection of UCLG contributed. The Charter,adopted in 1985 by the Council of Europeand today ratified by 46 countries, is thefirst document of a legal nature at an internationallevel concerning the status andrights of local authorities 2 .The Global Report will allow the readerto consider the problems that may arisein the implementation of these principlesand the way in which these difficultiesmay be surmounted. We thereforeinvite local authorities and their national,regional and international associationsto engage in action with UCLG inorder to:• Circulate this Report and to press aheadwith the dialogue with states on theimplementation of the Guidelines on Decentralizationand the Strengthening ofLocal Authorities.• Ask national governments to supportthe adoption of the Guidelines on Decentralizationand the Strengtheningof Local Authorities by the GeneralAssembly of the United Nations.• Ensure that the principles of the Guidelinesare supported by the regional institutionsin every continent, therebycontributing to their implementation bymember states.• Contribute to furthering global reflectionon local government systems of financingand management of human resources,which UCLG intends to pursue.We would like to thank the experts anduniversity academics who have contributedto this Report, in particular GRALE, whichhas co-ordinated the work and ensured thescientific quality of the project as a whole.Mention must also be made of the supportgiven by UCLG’s regional and metropolitansections, which, through their secretariats,have constantly defended the direction andapproach of the project.We would also like to express our gratitudeto those institutions and local authoritiesthat have contributed to the production ofthis Report, in particular the Generalitat deCatalunya, for their continued supportthroughout the project, the Diputació deBarcelona, the Conseil Régional du Pays dela Loire and the Groupe DEXIA.Without the commitment and collaborationof all these partners, the Report would nothave been possible.World SecretariatUnited Cities andLocal Governments2. The European Charter of Local Self-Government focuses mainly on the following principles:· Regulation and management of a substantial share of public affairs by local authorities, through local elected representatives andcitizen participation;· Right of local authorities to exercise their initiatives with regard to any matter included in their powers and responsibilities and notassigned to any other authority;· Selection and recruitment of local government staff according to merit and competence;· Conditions of office of local elected representatives to allow free exercise of their functions;· Local authorities' financial resources to correspond to the responsibilities determined by the constitution and law, of which they maydispose freely within the framework of their powers;· Administrative supervision of local authorities only to be carried out according to procedures determined by the constitution or by statute;· Entitlement of local authorities to belong to an association for the protection and promotion of their common interests;· Legal protection of local self-government

AFRI C AMUSTAPHA BEN LETAIEFCHARLES NACH MBACKJE AN-P IERRE ELONG MBA S SIBIRAM OWENS NDIAYE

AFRICA22 United Cities and Local Governments

23I. IntroductionAfrica encompasses some 31 millionsquare kilometers and, according to recentestimates, houses a population of morethan 933 million. 1 This rapidly growingpopulation (2.5% per year), characterizedby its extreme youth (median age: 20), isa mosaic of peoples speaking many languages.Moreover, the region is subject torapid urban development; the rate of urbanizationin African countries ranges from40% to 70%. There are thirty-four metropoliseswith more than one million inhabitants;most are beset by the rapid growthof impoverished suburbs, as well as deficienciesin infrastructure, public transportationand basic urban services. Literacyrates on average range from 40% to 60%.Civil disorder and military conflict are commonplacein a few regions, and in somecountries a sizeable percentage of the populationsuffers from pandemics such asHIV/AIDS, malaria and tuberculosis.In economic terms, after some 20 yearsof implementing structural adjustmentpolicies, African countries are becomingfinancially sound again, achieving anaverage annual growth rate between 4%and slightly more than 6% in 2005. Despitethese positive signs, Africa is stilleconomically underdeveloped. With nearly15% of the world population, Africaaccounts for only 2% of world trade, andreceives only 3% of direct foreign investment.(China received about 22% offoreign investment). Of the world’s 47least developed countries, as identifiedby the United Nations, 18 are in sub-Saharan Africa. The New Partnership forAfrican Development (NEPAD) has notyet been able to attract significant aidand investment to the continent, or tomobilize African savings of which 40%,according to experts, is invested outsideAfrica. Nevertheless, some of the measurestaken by the international community,especially the enhanced HeavilyIndebted Poor Countries Initiative(HIPC), should help to increase the financialand policy capacity of public authoritiesand local governments in certaincountries, especially in combating poverty,providing access to services and improvingliving conditions.There has been a substantial rise in thenumber of democratic political systemssince the 1990s, in marked contrast to the1950s and 1960s, the two decades followingAfrican independence. During thattime, one-party political systems predominated,and access to state power wasoften gained by means of coups d’etat.In some areas, political and institutionalsystems remain fragile. Considerable tensionstill exists in parts of Central Africa(Democratic Republic of Congo, CentralAfrican Republic and Chad), West Africa(Côte d’Ivoire, Liberia, Guinea Bissau,Sierra Leone and Togo) and East Africa(Ethiopia/Eritrea, Somalia and Sudan).Most political systems are now multiparty,and leaders are chosen by universalsuffrage. Some categories of local officials(regional governors, walis in Algeria, Moroccoand Tunisia, mouhafidhs in ArabRepublic of Egypt, and government representativesin Cameroon) are still appointed.Over the past five years, Africa hasseen 35 electoral contests, including 20presidential elections, five parliamentaryelections, four constitutional referendums 2and six local elections. 3 The majority ofstates are unitary republics; three of these,Ethiopia, Nigeria, and South Africahave federal systems. Lesotho, Moroccoand Swaziland are kingdoms. Comparisonsof constitutional systems reveal thepredominance of presidential systems.South Africa has a mixed parliamentaryand presidential system, Niger has a semipresidentialsystem and Morocco has aconstitutional monarchy.The table below provides baseline data onthe geographic, political and economic position,and territorial organization of Africancountries.The majority ofstates are unitaryrepublics, but thereare also threestates with federalsystems (Ethiopia,Nigeria and SouthAfrica) and threekingdoms(Lesotho, Moroccoand Swaziland)1. Internet world statshttp://www.internetworldstats.com/stats1.htm.2. Algeria, Egypt,Kenya, Mauritania,Tunisia.3. Data current at 20thDecember 2006.

AFRICA24 United Cities and Local GovernmentsTable 1 Geographic, political and economic position and territorial organization of each countryCountry Political Type of state Regional level Provincial level Supra communal level Municipality/Metropolitan levelPopulation / land area systemAlgeria Presidential Unitary 48 Wilaya 1541 municipalities33.4 m /2,381,741 km 2Benin Presidential Unitary 77 municipalities8.2 m / 112.622 km 2Cameroon Presidential Unitary 10 regions 2 metropolis 11 urban municipalities16.3 m / 475,412 km 2 11 districts 316 rural municipalitiesArab Republic of Egypt Presidential Unitary 26 Mouhafasats 217 cities and Luxor 4617 towns76.7 m / 1,001,450 km 2 (both decentralized and (Special Status)deconcentred structures)Gabon Presidential Unitary 47 departments 50 municipalities1.4 m / 267,670 km 2Ghana Presidential Unitary 166 district21.1 m / 238,540 km 2 assembliesGuinea Presidential Unitary 38 urban municipalities9.5 m / 245,860 km 2 303 rural municipalities (CRD)/ 1 city (Conakry)Côte d’Ivoire Presidential Unitary 19 regions 58 departments 197 municipalities and 2 cities: Abidjan with 10 municipalities17.9 m / 322,463 km 2 and Yamoussokro with town councilsKenya Presidential Unitary 8 provinces including 175 Local Authorities (municipal councils, town councils and35.1 m / 580,370 km 2 the City of Nairobi county councils) and 3 cities: Nairobi, Mombasa and KisumiMadagascar Presidential Unitary 22 regions 1557 municipalities, including 45 urban municipalities,18.6 m / 587,051 km 2 (Faritany) 3 cities with special status:Antananarivo with six districts- Nosy Bé - Sainte MarieMali Presidential Unitary 8 regions 49 cercles 703 municipalities13.9 m / 1,267,000 km 2 Bamako district (with sixtown councils) governedby special regulations

25CCountry Political Type of state Regional level Provincial level Supra communal level Municipality/Metropolitan levelPopulation / land area systemMorocco Constitutional Unitary 16 regions 49 provinces 1497 municipalities32.2 m / 446,550 km 2 Monarchy 13 prefectures (urban areas)Mozambique Presidential Unitary 10 provinces 33 urban municipalities19.8 m / 801,590 km 2 1042 localities (rural municipalities)Niger Semi Presidential Unitary 8 regions* 36 departments* 4 urban communities 265 municipalities, including 213 rural and 52 urban13.2 m / 1,267,000 km 2 (with Niamey) and 5 sedentarized nomadic groupingsNigeria Presidential Federal 36 Federated 774 municipalities131.5 m / 923,770 km 2 StatesSenegal Presidential Unitary 11 regions 67 municipalities, 43 innercity municipalities (in 4 cities),11.4 m / 196,722 km 2 2 metropolitan point authority, 321 rural municipalitiesSouth Africa Mixed parliamentary Federal 9 regions 47 municipal district councils 231 including 6 metropolitan municipalities47.4 m / 1,221,041 km 2 and presidentialTanzania Presidential Unitary A self-governing unit 92 rural district councils 1) 22 urban councils, 92 rural councils, 3 townships,38.8 m / 945,090 km 2 that is not federated, Zanzibar 2) within the districts: 10,075 registered villagesTogo Presidential Unitary 6 regions* 30 préfectures* 30 urban municipalities6.15 m / 56,790 km 2Tunisia Presidential Unitary 24 governorates 264 municipalities10.100 m / 163,610 km 2 (Wilaya, (both decentralizedand deconcentred structures)Uganda Presidential Unitary 79 districts 1 city council , 13 municipalities in urban areas -34.2 m / 241,040 km 2 87 town councilsZambia Presidential Unitary 54 rural district councils 1) urban areas: 4 city councils, 14 urban district councils10.6 m /752,614 km 2 2) rural areas: noneZimbabwe Presidential Unitary 58 rural district councils 1) urban areas: 6 city councils, 28 urban councils, 10 municipal13.01 m / 390,760 km 2 councils, 8 town councils, 4 board councils2) rural areas: noneRegarding territorial organization, this table highlights only local governments in these countries and not the administrative jurisdictions.* Provided by the law, regions, departments or prefectures, as well as rural municipalities in Niger, have not been established by norm.

AFRICA26 United Cities and Local GovernmentsIn practice, decentralization in Africahas most often been conceived andimplemented as an administrativetechniqueThe view of decentralization in Africangovernments seems to fluctuate betweenregarding it as a technique of administrativeorganization and –more rarely– as a genuinelong-term policy. If decentralization is apolicy, it can help to change the operationof existing political systems. If, on theother hand, it is thought of primarily as anadministrative technique, it is likely to leadonly to rationalization of administrativestructures and their effectiveness.In practice, decentralization in Africa hasmost often been conceived and implementedas an administrativetechnique. Indeed, whencolonial powers controlledmost of Africa,they often sought todisrupt traditional tiesin order to consolidatetheir centralized power.In some cases acolonial power did try to preserve an existingadministrative model, but this approachtoo was adopted primarily tostrengthen colonial power, rather than fosterself-governance. Predictably, local populationsperceived the few decentralizedstructures set up by colonizers as tools forreinforcing the colonial presence. In allcountries in the region, this colonial legacyof an ad hoc and often contradictory combinationof centralization and decentralizationformed the foundation of post-colonialterritorial administration. Following independence,embryonic national administrationsrelied on the familiar centralizedmodel as they confronted urgent problemsof resources, administrative managementand the establishment of state structures.The continuation of centralized power wasseen as expedient not only to control dataand policy orientation, but also to deal withthe shortcomings and failures of newgovernments struggling to establish nationalauthority.This explains why, particularly in francophoneAfrican countries, the centralizingmodel inherited from the colonial powerwas adopted. For internal territorial administration,however, the preferred approachtended more toward decentralization,though not to an extent that could underminean overarching philosophy of centralization.Decentralization was still fearedand deliberately avoided if it threatened tomove beyond administrative techniquetoward political substance and any democraticcontent. The concern of the newgoverning elites was to consolidate theirpower. From this perspective, the quest fornational unity –seen as a way of combatingpotentially damaging tribal, local orregional affinities– was given a high profile.Modernization, economic developmentand national unity became the favouredslogans.In African countries, the concepts of politicaland administrative decentralizationdeveloped along the lines of the Frenchdéconcentration –state representativesat the local level rather than locally electedbodies. From the outset they werestrategic instruments intended primarilyto ensure uniform administration of theterritory by the central government. Theideal of centralization predominated for along time, relegating the more democraticmodel of decentralization to the backburner.The constraints on putting decentralizationinto practice have been apparent fora long time, though such restrictions haveoccasionally undergone nominal modificationsto disarm critics. For the mostpart, such superficial alterations, howeverhighly approved or formally enshrinedin the legal system, amounted tolittle more than cosmetic palliatives.Today, the legal status of decentralizationpolicies in most African countries is stipulatedin one of two ways: explicitly in aconstitution, or by lower-level laws andregulations. To date, less than 40% ofAfrican constitutions mention localgovernments as a specific level of governance.In countries where decentralization

27and local governments are defined instatutes of a lower rank than the constitution,three main tendencies can beseen. Some countries have relativelyelaborate legislation with many regulations,decrees and ordinances for implementation.This model is found primarilyin francophone countries. The profusionof statutes complicates the implementationof decentralization and slows thingsdown, causing substantial delays betweenconfirmation of legality, and actualenforcement; delays of 10 years are notunusual. The second legislative tendencyinvolves a relatively small number oflaws and regulations on decentralization.Typically, only about half a dozen statutescover the various aspects of implementingdecentralization. The majorityof countries in this category are formerBritish colonies. Somewhere between theFrench and British models is North Africa,where there has never really been amajor break in the decentralizationpolicy. The process there seems to havetaken root in the colonial era, and hasprogressed to this day with a kind ofslow, sometimes imperceptible, continuity.Some of the earliest North Africanstatutes date back to the middle of the19th century (Tunisia, 1858). However,there have been major territorial reforms,including the 1984 Algerian law, andMorocco’s 1996 constitutional reform and1997 law on regions. Despite the longexperience of North African countries withdecentralization, the autonomy of localgovernment there is still restricted overallin relation to the central state.A complex picture thus emerges of multiplehistoric, sociological, cultural, economic,political and legal influences inAfrican governments. Nevertheless, movementtoward decentralization and localdemocracy can be discerned.The first major tendency, if not an actualtrend, is quantitative. Since independence,in nearly every part of the continentthere has been noticeable, continuousgrowth in the number of local governmentsand in the territory they administer.This growth is especially noticeable inthe African urban environment. Diversificationand a more refined and complexhierarchy of structures and territorialtiers of decentralization can also be seen.The table below compares population figures,rates of urbanization and the numberof local governments by African region.Table 2Local governments: Demography and urbanizationRegions Population (millions) Rate of urbanization (%) Municipalities (number)North Africa 154 62 4200West Africa 264 40 3000Central Africa 98 47 1000East Africa 245 31 1900Southern Africa 148 36 1300Africa as a whole 909 38 11400Source: PDM, 2006.

AFRICA28 United Cities and Local GovernmentsThe second major tendency is qualitative,an increasing acceptance of the substanceof decentralization as a policy.Although in most African states decentralizationhas long been regarded primarily asan organizational and administrativemanagement technique, it now seems tobe gaining true political substance in manycountries. However slowly and gradually,decentralization is gaining recognition asan effective way to give increasingly robustindependent decision-making powers tolocal governments. This gradual consolidationof local electoral legitimacy alsoenhances the credibility of the decentralizedauthorities. This trend is by no meansdominant; in some areas decentralizingactivities seem to be mixed with traditionalsystems and, as in Algeria, challenged tothe point where it is virtually non-existent.In East and Southern Africa, the history of decentralization isclosely related to the end of social and political crisesMany countries, especially Niger, Senegal,South Africa and Uganda, have alreadyundertaken decentralizing reforms in theorganization of state and public life. Thesecountries have organized local elections, andhave seen local authorities emerging as newpublic authority figures alongside nationalauthorities. Admittedly, in most of thesecountries, the division of public authority hascaused problems. In part, this may simplybe because such a major institutional changecan be absorbed only slowly by manyincumbent national authorities.Implicitly, implementation of the decentralizationprocess has rarely been properlyplanned. While North African countries havea longstanding policy of decentralization,the pace of implementation there is notaltogether uniform. In West and CentralAfrica, apart from Senegal and BurkinaFaso, there is no real plan to implementdecentralization. Rather, moves to decentralizein this region seem to rest on policyannouncements made in the speeches byheads of state. In East and Southern Africa,the history of decentralization is closelyrelated to the end of recent social and politicalcrises. There, implementation of decentralizationhas a high priority ingovernment action plans and seems to besubject to a pre-established, regularlyassessed timetable. The most exemplarycase is South Africa, where the end of theapartheid policy imposed a new approach togovernance that involves the entire populationin public management at all levels. Thispolicy of transformation is enshrined in theReconstruction and Development Program(RDP) whose entire philosophy can be summedup in the slogan "A better life for all."With the Local Government Transition Act(1993), adopted to govern the transitionalperiod, the Municipal System Act (2000)and the Municipal Property Rating Act(2004), the South African government gaveitself 11 years to set up a system of localgovernance that is almost revolutionarycompared with previous practice.Apart from South Africa, African governmentshave not relied on rigorous planningto implement decentralization policies. It isnot surprising, therefore, that most ofthem have no mechanisms to assess theconduct and establishment of such policies.This is why United Cities and LocalGovernment of Africa (UCLGA) is askingthat local governance be included in thegood governance criteria selected by thePeer Review Mechanism of NEPAD.Despite resistance, decentralization ismoving forward in the region. More substantialprogress may be expected as thenumber of local governments increases,and their capacities are enhanced. Understandably,the various decentralizationpolicies have not developed in the samefashion, or in accord with the same timetable.Implementation as well as the contentof policies is strongly influenced by the his-

29torical context from which they emerged,and the administrative tradition inheritedfrom the colonial era.The third tendency consists of a relativeincrease in the responsibilities of local governmentsin many countries. In principle,this increase bears witness to greater decentralization,and fits within the logic of disengagementof the state and centraladministration. In practice, however, it hasproved problematic and even counterproductivein the absence of any real transfer ofpowers and financial resources. In virtuallyall cases, the central government retainscontrol of local funds and taxation, as well asits monopoly on foreign aid and financing.The fourth tendency, which is still at anembryonic stage, looks to enlist local andforeign private-sector resources to provideand manage a certain number of urban services,such as the collection of household orindustrial waste (Tunisia, Benin, Burkina Fasoand South Africa), drinking water (Morocco),or urban transport and sanitation.The fifth tendency, which is graduallytaking shape, involves setting up networksof local authorities to foster decentralizedco-operation. The creation of nationalassociations of local governments, includingthe UCLGA, and the reinforcement oftheir role at the national level, reflects thistendency. Such associations provide toolsto enhance the credibility of local authoritiesas relevant actors in the dialogue ondevelopment and co-operation in Africa. InSouth Africa, the association of localgovernment authorities, SALGA, is recognizedas a public institution. Elsewhere,national associations of local governmentshave the status of associations under privatelaw, although some, such as the Associationof Municipalities in Burkina Faso(AMBF), may be acknowledged as actingon behalf of public interest.The sixth tendency now emerging and certainlyvarying from one country to another,is a modest relaxation of the control exertedover local governments. There is a discernibleretreat from practices reminiscentof the exercise of power from the topdown, and a move toward restricting oversightto strictly legal aspects, allowing greaterlocal autonomy. However, it is alsotrue that, in a few African countries, thesituation is less fluid, and there have in factbeen some setbacks.These various movements, obvious and tangibleto varying degrees, and often very gradualwith pauses, checks and less frequently,qualitative leaps, can be seen (i) at thestructural level, (ii) at the material and functionallevels of responsibility and management,and (iii), more globally andsubstantially, in the progress and limits oflocal democracy.II. Changes at structural levelsMunicipal structures emerged in the 19thcentury, particularly in Senegal, Egyptand Tunisia. In the 20th century, municipalitieswere established and gainedground in all colonial territories. Far fromrespecting principles of local participation,the system was designed to ensurethe colonizers' control over the territory,and their ability to oversee the localpopulation. Before independence, municipaladministration in African coloniesdiffered somewhat, depending on themodel preferred by the controlling Europeannation: the French system of "communes,"the British local governmentsystem, and Portuguese "municipios." Inall cases, decentralization tended to bepurely administrative. Few local bodieswere elected; local executives wereusually appointed and had only limited orconsultative powers. Such decentralizationalso enabled administrators andcolonists in rural areas to be governed bythe same arrangements as their compatriotsin colonial capitals and in Europe.Overall, two systems, direct and indirectrule, predominated in sub-Saharan Africa.Direct rule was favored in countries coloni-

AFRICA30 United Cities and Local Governmentszed by France, Belgium and Portugal.Direct rule meant administrative oversightof colonial territory organized into “cercles,”subdivisions and cantons under theresponsibility of the colonial administrators.Local authorities played only a consultativerole.In fact, changes in administrative structure went hand-in-handwith moves towards decentralization, which formed the coreof all endeavors to modernize the State and with it publicpolicy in Africa, supposedly leading to "local democracy" asa key pillar of the entire territorial administrative organizationIndirect rule, established primarily in Britishcolonies, allowed local people somefreedom to manage their own affairs, suchas the administration of justice or thecollection of taxes –to be shared with thecolonial government. Indigenous customsand authority were more or less ignored aslong as local leaders protected the interestsof the colonial power. This systemsowed the seeds of future decentralizationin these countries.In North Africa, the colonial administrativeprocess was more complex. In this region,18th and 19th century colonial powersencountered many established state structures.For the most part, colonial municipaladministration under European nationsrested on old, indigenous structures, albeitheavily influenced by the recent, Europeanoccupying power. Both the British in Egyptand Sudan, and the French in Algeria,Morocco and Tunisia sought such accommodation.When African countries achieved independence,the new governments chose toretain the structure inherited from thecolonial power, rather than move immediatelytoward decentralization. From theoutset, the old systems were seen as instrumentsfor extending central powerover local communities. It was not untilthe 1980s and the ensuing wave ofdemocratization in the 1990s that a newdirection gained momentum. CentralizedAfrican governments showed renewedinterest in decentralization. Gradually,local governments began taking chargeof more local matters. In fact, changes inadministrative structure went hand-inhandwith moves toward decentralizationin all endeavors to modernize the state.This widespread change in public policy inAfrica was expected to lead to acceptanceof "local democracy" as a key pillar ofterritorial administrative organizations.Since the mid-1980s, several factorshave pushed African governments towardeconomic liberalization and adjustmentpolicies. These factors include: budgetdifficulties generated by shrinking resources,challenges to interventionistpublic administration systems, the resurgenceof liberal ideas advocating therehabilitation of market mechanisms, thedisengagement of the state, and thechanging roles of the public sector andprivate initiative. These new considerationsimplied taking part in globalizationand international competition requiredgenuine policies of reform and restructuring,and this rationale affected all subsequentreforms relating to local governmentand urban policy.However, not all African countries chosethe same route in adopting and implementingdecentralization policies. In the majorityof countries, decentralization policieswere adopted following citizens’ demandsfor increased participation. This wasstrongly expressed by local communities inpro-democracy movements during the1990s. Because of the connection betweendemocratization and decentralization,some people saw the adoption of decentralizationreforms as a corollary to the democratizationand liberalization that somefinancial partners of African governmentswere imposing as a condition for providing

31aid. In some cases, central governmentsmade the adoption of decentralization policiesappear to be the result of donor conditions.In Mali and Niger, decentralizationwas a response to local demands, includingsome violent demonstrations and threatsof secession. In other countries, decentralizationprovided an opportunity to overcomeor even eliminate the stigma of aprevious political and administrative organization,as in the case of South Africanapartheid.In North Africa, changes in local governmentstructures seem to have come aboutmore slowly, and the reforms to have beenless thorough. In all countries in this region,the territorial administrative structureseems to be fixed, tied to the structureof the governorate (Wilaya in Algeria, Tunisiaand Morocco, Mouhafadha in Egypt),which is more a tier of administrative decentralization.Nevertheless, almost everywhere thedecentralization option is perceived as progressand is expected to:• Mobilize communities to work for sustainablelocal development and improvedliving conditions;• Help democracy to take root and spreadat the local level;• Reform the state and rebuild the legitimacyof public institutions from the bottomup;• Constitute the starting point for regionalintegration genuinely rooted in Africanrealities.To achieve this, local governments are beinggiven general notional authority over theterritory for which they are responsible.Some have exclusive powers as well aspowers they share with other levels of publicgovernance. In North Africa, the powers oflocal governments must compete with thecentral administration and various nationalpublic enterprises for service delivery (education,health, transport, sanitation, drinkingwater and electricity).The theory and content of decentralizationpolicies tends to be different in federal statesand unitary countries. The decentralizationconcept also varies in accordance with theadministrative tradition inherited from thecolonial period. In federal states, localgovernments come under the remit offederated states; these federated statesdefine the content of the local governmentsystem and its administration. This canlead to a wide range of methods of organizinglocal government –a circumstancewhich does not facilitate a comparativeinterpretation of local governance. In unitarystates, the organization of local governmentsis usually the same throughoutthe national territory. However, the actualpowers granted to local officials are, again,influenced by the administrative traditioninherited from the colonial era.In francophone countries, the organizationof local governments corresponds in principleto a division of powers between centraland local authorities, the latter being representedby an elected deliberative body andan elected or appointed executive body.Municipal terms of office are usually similarto those of national institutions (four or fiveyears) and re-election is allowed. In thesecountries, the municipal executive, mayoror top administrator typically has real decision-makingpower in local management,the powers of this office being defined bylaw. However, this nominal decision-makingpower is often restricted by the practice ofpooling funds; that is, all public resourcesare held in the Treasury under the controlof the Minister of Finance. Thus, the representativesof the Ministry of Finance, suchas the comptroller and municipal tax collector,have effective power over local governments.Many mayors consider such fiscalpower excessive because ministry representativescan block expenditure even if ithas been committed in accordance with alllaws and regulations. It is therefore a claimof national associations of local governmentsto relinquish or even suppress theprinciple of unified treasury. However inSenegal the law makes it possible to devia-

AFRICA32 United Cities and Local GovernmentsMore generally, African decentralizationsystems classify lower-tier localauthorities according to their level ofdevelopment or urbanizationte from this rule: local governments may beauthorized to deposit all or only part oftheir available funds with the Treasury.In countries with a British administrativetradition, local governments also haveelected deliberative bodies; executivebodies are either elected or appointed. Theterms of office of deliberative bodies aresimilar to those infrancophone countries,but those of the executivebody –one tothree years– are shorter.Furthermore, reelectionis not alwayspermitted. Mayors generallyhave a ceremonialrather than executiverole. Real executive poweris actually held by another public official,the Town Clerk or Chief ExecutiveOfficer, who more often than not is appointedat the national level by the Minister forLocal Government. As they do in francophonecountries, national associations supportinglocal governments seek furtherdecentralizing reforms in anglophonecountries, including the establishment oftrue executive powers for mayors, and anextension of mayors' terms of office.Governance of Major CitiesMost countries on the African continent areexperiencing a marked trend toward urbanization,the gradual movement of ruralpopulations into the cities. This phenomenonis considered a vector of modernizationand competitiveness, not only forcities, but also for the surrounding territories.In most parts of Africa, the organization ofmajor metropolises –particularly capitalcities– tends to display specific features.Such features can be identified in politicalcapitals such as Rabat (Morocco), Lusaka(Zambia), Dakar (Senegal), Tswane (SouthAfrica), Yaoundé (Cameroon), Accra (Ghana)and Algiers (Algeria). Common elementsare also apparent in big cities whoseimportance is determined by demographicor economic weight, such as Johannesburg(South Africa), Douala (Cameroon), Kumasiand Shama-Ahanta (Ghana). All suchmajor cities are governed by distinct legalarrangements that constitute importantorganizational and managerial exceptionsto the more common laws of municipalities.In Morocco, the new commune charterof October 3, 2002 made specialarrangements for cities with morethan 500,000 inhabitants. Thesecities are managed by a single communewith arrondissements that arenot legal entities. Morocco modeledits system on the French politicalconfiguration of Paris, Lyon and Marseille(known as PLM Law).The Moroccan charter also decreedspecial status for the urban communeof Rabat, the capital, and the Mechouarcommunes where the royalpalaces are situated.Typically, major African cities are dividedinto sub-urban administrative units, whichmay be separate legal entities. The latter isthe case for the urban arrondissementcommunes in Douala and Yaoundé inCameroon. Sub-metropolitan communescreated in this way are governed by thecommon law of municipalities. Conversely,in some countries sub-metropolitan unitsremain sub-municipal bodies withoutadministrative autonomy; this occurs inAccra and Kumasi in Ghana, and Cotonouin Benin.Elections also differ somewhat in majormetropolises; the deliberative body is electedby direct universal suffrage, as forexample in Algeria, Nigeria, Gabon andMadagascar. Those elected then appointone of their fellow representatives asmunicipal executive. Another method ofselection is appointment by indirect universal

33suffrage. Metropolitan councillors are electedby the deliberative bodies of the submetropolitanunits; most candidates aremembers of that deliberative body, as isthe case in Cameroon. As for the distributionof powers, sub-urban units are responsiblefor local community services, andare forums for participatory democracy.Federative services of importance to theentire city are provided by the larger, centralgovernment of the city.Many African decentralization systemsclassify lower-tier local authorities accordingto their level of development or urbanization.For example, in decreasing rankof urbanization Cameroon has urban communities,urban communes under a specialscheme, urban communes and rural communes.In South Africa, classification takes theform of an alphabetical hierarchy with categoryA, B and C municipalities. Such differentiationmakes it easier to identify the mostdisadvantaged authorities and, through aprocess sometimes called equalization, tofocus on their development with specific supportpolicies.The governmental variations observed inmajor cities point up the need to define theminimum common content of over-archingAfrican decentralization policies. In fact, anAfrican local government charter thataddresses this need for more standardizationis currently being mooted. The debateis being driven in particular by the UnitedCities and Local Governments of Africa(UCLGA) and the African Conference onDecentralization and Local Development(CADDEL).III. Responsibilities, managementand financeUndeniably, there is a trend toward strengtheningthe responsibilities of local governments.However, the transfer ofresponsibility may not be accompanied bya transfer of the money or other resourcesrequired to fulfill the added duties. MostAfrican local governments continue toexperience very serious financial constraintson their resources and powers.The administrative capabilities of localgovernments are also restricted by a shortageof qualified personnel and the wherewithalto train employees properly. In part,it is this dearth of skilled officials that haslead to inefficient and ineffective localmanagement, particularly in the areas ofstrategic planning, urban development,economics and social development. Lackingqualified personnel, some local andurban governments have turned to the privatesector for help in the management oflocal affairs, public services and property.Recently, several African cities have alsosought private assistance with moderninformation and communications technology.III.1. ResponsibilitiesOne of the most important aims of decentralizationis to provide an effective, appropriateresponse to the needs of local communitiesfor public services. The density and efficiencyof public services are among the most importantindicators of the vigor of decentralization,and provide a vital source of legitimacyfor local governments. Unfortunately, suchservices seem unsatisfactory in virtually allcountries. The prerogatives of local governmentsalso vary from country to country,with two notable tendencies:• Increased responsibilities of localauthorities for local services and urbanmanagement.• More private-sector management of localpublic services by means of various formsof devolution, such as delegation, licensingand partnerships.Table 3 shows that a majority of countriesgrant many important powers to local governments.The scope of responsibility coverssocial investment –infrastructure andsocial facilities, health, education, leisure–

AFRICA34 United Cities and Local Governmentsand the provision of goods and services foreducation, health, culture, leisure, transport,water and sanitation. Local responsibilitiesalso cover administration, urbanplanning and management, and local development.Successful decentralization depends on themanner in which power is transferred tolocal governments. Invariably, transfer ofauthority provokes resistance from managerswithin larger regional and nationalministries. In North Africa, transfer ofpower may be considered only nominal. Inthis region, national ministries typicallyThe ministries concerned tend to bypass local governmentsin implementing sectoral policies. They are encouragedto a greater or lesser extent in this by the practicesof development partners who are often in ignorance of theconsequences of applying such policiesretain control of local services, or delegatethem to the private sector. Sectors such aseducation and health are managed directlyby the corresponding ministries, whiledrinking water, sanitation and energy areeither state monopolies, or are provided byprivate concerns. In virtually all cases, theprivate providers are under contract to thestate, rather than to local authorities. Thistendency can also be observed in West andCentral Africa, although basic services therefor education, health, water, sanitationand transportation are generally acknowledgedas local concerns. Even so, theministries in this region also tend to bypasslocal governments in implementing longrangesectoral policies. The ministries areoften encouraged by their private partnersto minimize larger policy discussions withlocal authorities. It appears to be of smallconcern to private developers how theirpressure for increased central controlmight affect a national momentum towarddecentralization.Nevertheless, there are promising developmentsin several eastern and southernAfrican countries, as well as a few anglophonecountries in West Africa. In thesecountries, sectoral ministries are graduallydisengaging from the implementation phasesof their programs. The result: localgovernments are taking over the localdepartments that previously came underthe territorial jurisdiction of sectoral ministries.This transfer of authority, seen inGhana, South Africa and Uganda, necessitateschanges in staff, budget resources,assets, and decision-making power. In thesecountries, central government definesstrategic guidelines for sectoral policiesregarding health, water and education.Local governments, however, are responsiblefor implementation. Wherever suchterritory-wide measures have been undertaken,as in the case of water andHIV/AIDS policy in Uganda, the effectivenessof these policies has increased substantially.However, the decentralizationprocess is often hindered by national sector-basedpolicies that tend to privilegedeconcentration (limited transfer of responsibilities).One of the recurrent claimsof African local authorities is that sectorbasedpolicies should be territorialized andthus more decentralized, as in Ghana,Uganda or South Africa, and that localauthorities should be fully responsible fortheir implementation.While public assertion of the new nominalpowers of local governments is widespread,the actual transfer of real executive and operationalpowers is still rare. The challengeremains to resolve the problem of effectivelytransferring the real financial and managerialpowers from the centralized ministries tolocal authorities. Financial management is,of course, the crucial factor.III.2. Financial managementLocal government finance comes from twomain sources –local taxes and state grants.In some places, local governments sharelocal tax revenues with the central government.The state also makes financial transfersto local governments in the form of

35Table 3 Responsibilities of local authoritiesCOUNTRY POWERS OF LOCAL GOVERNMENTS (COMMUNES/MUNICIPALITIES)Planning and support to Drinking water, Security (administrative Town planning Basic services (health, Sport Culture Energy Transportthe local economy waste, sanitation police and CID) and habitat basic education) and leisure and tourismAlgeria X X X X X X XBenin X X X X X X X XCameroon X X X X X X XEgypt, Arab Rep. of X X X X X X X XGabon X X X X X X X XGhana X X X X X X X X XGuinea X X X X X X X XCôte d’Ivoire X X X X X XKenya X X X XMadagascar X X X X X XMali X X X X X X X X XMorocco X X X X X X X X XMozambique X X X X X XNiger X X X X X X X XNigeria X X X X X X X XSenegal X X X X X X X XSouth Africa X X X X X X X X XTogo X X XTunisia X X (waste only) X X X X XUganda X X X X X X X XZambia X X X X

AFRICA36 United Cities and Local Governmentsconditional or unconditional grants, and othertypes of state financial contributions. Thespecific method of funding local developmentvaries from country to country. The capacityto mobilize “own revenues” is one of the fundamentalprinciples of decentralization.III.2.1. Local resource mobilizationLegislation allows African local governmentsto raise a panoply of resources intheir own territory from direct or indirectlocal tax revenues, service tax, feescollected from the operation of services,economic activities or municipal assetmanagement. Unfortunately, the lawdoes not always list the necessary localgovernment taxing powers to alter thevolume of their revenues; which meansthat municipal incomes generally regardedas “own resources” are in fact controlledby central government.This imbalance can be seen most clearly inthe numerous countries that apply theFrench administrative model, where, intheory, there is a more diversified localtaxation system, yet in practice, localgovernments remain devoid of taxingpowers, as tax rates are set out in the lawor imposed by central government. Localgovernments do not administer local taxationsystems as such, rather they dependon taxes transferred from the state, whichin some cases have become state-sharedtaxes (e.g. Côte d’Ivoire, Cameroon). Thetaxing powers of local governments inGabon, Niger and Togo are the exceptionto this tendency. Except for local governmentsin Senegal, local governments arealso not empowered to set service fees andtariffs. Only in exceptional instances canlocal governments collect duties on certainlocal services or activities (as in Togo, forexample) with the prior approval of theoverseeing state authority.Local governments in anglophone countriesgenerally enjoy broader taxing powers andgreater freedom to set service rates andother indirect local tariffs; such as real estatetax in Ghana, South Africa, Tanzania,Zambia and Zimbabwe, and service fees inthe afore-mentioned countries and Nigeria.Nonetheless, local taxation in some countriesis negligible (e.g. Nigeria and Uganda,where tax revenue as a percentage of totalrevenue dropped from 30% to 11% in fiveyears after the removal of the more productive“graduated tax”). Local governmentpowers to create indirect duties or tariffs onlocal activities are also exceptional (e.g. inZambia and Mozambique). It is however,necessary to relativize the importance ofthese local taxing powers, bearing in mindthe decisive control of central governmentsover revenue mobilization (such as the priorapproval required for rates and tariffs inZambia), the low levels of own source revenues(see the case of Ghana in Graph 1) andthe percentage of own revenues making upa small share of the whole budget (30% onaverage, except in Zambia –77%– andSouth Africa -90%-).The level of government responsible forcollecting the revenues also varies betweencountries: in some locations themunicipalities ensure the collection oftaxes, while in others the state collectsthe taxes and later distributes the revenuesamong local governments. Africanfrancophone tax revenue systems aregenerally centralized, although someduties may be collected locally (e.g. Mali,Morocco, Senegal) and some countriesmay present certain exceptions to thisrule (as is the case in Tunisia for thecollection of certain taxes). However,regardless of the system in place the taxcollection rates remain low in all thecountries: approximately 50% in Kenya;lower still in Nigeria; 20% of real estatetaxes in Tunisia (collected at the locallevel); and between 45-50% on averagein Côte d’Ivoire or Níger (where the stateensures the collection of revenues).The use of a shared tax system is slowlyspreading as the main source of localgovernment budget funding. Value AddedTax (VAT) is a major component of shared

37taxation. VAT has been established inalmost all countries, and is divided betweenthe state and local governments inproportions that vary from one country toanother. In Morocco, for example, localgovernments have been receiving 30% ofthe revenue since 1986, and about 25%in Nigeria. In Mozambique, 75% of thevehicle tax and 30% of the tourist taxgoes to the local governments. In CapeVerde, there is a set of unallocated taxes,and local governments receive 7% of thatrevenue.The principles of intergovernmentaltransfers are sometimes listed in theConstitution (including procedures andcalculating criteria). For instance, theGhanaian Constitution envisages theexistence of the District Assemblies CommonFund, which should receive 5% ofthe total national revenue, to be distributedamong the districts through a formulaThe two most pressing problems arisingfrom this tax system management arethe terms of the division, which are oftenvery unfavorable to local governments,and the regularity of payments. The mannerin which the share allocated to localgovernments is distributed varies considerably.In some countries, there arelegal rules about the timing and amountof fund transfers. However, in most countriesthe central administration has discretionarydecision-making power; thestate may take years to pay the agreeduponshare to the local governments.Typically, the local authorities have nolegal recourse to counter such delays.Over and above these difficulties, sharedtax systems cannot be considered to beown revenues, as local governments holdno power over setting the tax base andrate; these resources, from both a politicaland economic point of view, are similarto general transfers.III.2.2. State financial transfersto local governmentsGrants are organized in many ways, andalso vary from country to country. Similarly,the process of transferring grantfunds varies. In general, transfers can beunconditional (local governments are givenfree use of revenues), or conditional, inwhich case central government transfersare either based on pre-established objectivecriteria or have a certain margin of discretion(for local spending).However, in most countries the central administrationhas discretionary decision-making power;the state may take years to pay the agreed-uponshare to the local governmentsapproved by Parliament (art. 252). This isa unique case. Apart from practical difficulties,this system has increased thefinancial dependency of local governmentson central government. The 1999Constitution in Nigeria provides that atleast 13% of the country’s revenueaccruing to the Federation Account derivedfrom natural resources should be distributedamong the states, based on asharing formula that takes the principleof origin into account (in relation to thevolume of production of each state). It isup to each state legislature to determinethe amount of resources that will be distributedamong local governments, andto institute a joint account between theFederation and the state where Federationand state contributions for localgovernment transfers are deposited (art.162). With no direct constitutional safeguardsover the volume of revenues earmarkedfor local government transfers,the Federation decided to make directtransfers to local governments and allocateda portion of VAT for this purpose.

AFRICA38 United Cities and Local GovernmentsGraph 1Local Resources/GDP1.401.201.000.800.600.400.200.00BeninBurkina FasoCôte d’IvoireMaliNigerSenegalTogoGhanaSouth AfricaUgandaZimbabweSource: (i) Regard sur les finances locales dans les pays de l’UEMOA (2001-2004) ;( ii) NALAD, Fiscal Decentralization and Sub-National Government Finance;(iii) Fiscal decentralization in South Africa, Ismail Momaniat.The graph shows that, in most countries, local government finance represents less than 1% ofGDP and 5% of state-level (sub-national) expenditure.Sometimes the law provides a formula forgrant allocation. One of the best examplesis that of South Africa governed by articles213 and 214 of the Constitution. All moneyreceived by national government is paid intothe National Revenue Fund (art. 213). TheDivision of Revenues Act provides annuallyfor the equitable distribution of revenueamongst national, provincial and local spheresof government, and balanced division oftasks to be financed. The Act also definesthe distribution of revenues amongst theprovinces (regions), and finally, sets theamount of conditional purpose-specificgrants for provinces and local governments,financed through the fund. The division ofthese grants are regulated by formulas thatare also defined by law. Paragraph 2 of Article214 in the Constitution contains the criteriato be applied to the revenue-sharingformula amongst local governments andprovinces (in principle, the structure isdetermined every five years). While provincefinances depend essentially on transfers,local government finances mainly rely onown-source revenues (taxes, tariffs andservice charges).The situation in other countries is a lot lessfavourable. The guarantees offered to localgovernments to access revenues also varyfrom country to country. Sectoral grants areroutine in some countries, usually conditionalor purpose specific. These grants areeasily controlled but involve central governmentmonitoring of local governments. Thisis the case in Uganda and Zimbabwe. InTanzania the government is likely to introducecalculation of grant amounts on thebasis of fixed formulas. In Zambia, centralgovernment also transfers funds throughsectoral grants that are not calculatedthrough a set formula; these transfersrepresent only 3% of local budgets. In asecond group of countries, central governmenttransfers mainly consist of general

39disbursements to local governments foroperations or transferred functions, whileinvestments are covered by occasionalgrants. Global transfers offer local governmentsmore freedom over spending, thoughthe allocation criteria are usually vague, asin the case of Algeria, Tunisia, Gabon, Guinea,Côte d’Ivoire, Senegal and also in Kenya(where the global transfers are combinedwith a sectoral grant for road works). InAlgeria, the allocation of the solidarity fundgrant (95% of the resources from this fund)is managed with clear eligibility criteria: forcommunities where wealth indices are lowerthan the national average. Finally, there arecountries that do not have an organizedsystem of transfers: in Niger and Togo,intergovernmental transfers are intermittentand dependent on the political situation.Similarly, particularly in UEMOA (WestAfrica Economic and Monetary Union) andCEMAC (Economic and Monetary Communityof Central Africa) countries, governmentsare often resistent to decentralizingthe financial resources in keeping with thesectoral policies that absorb, even so, largeflows of aid and public investment.III.2.3. The financial weightof local governmentsTwo indicators usefully measure the financialsignificance of local government: theshare of the nation’s Gross Domestic Product(GDP) allotted for local authorities, andthe actual amount of money that comesunder the control of local governments.Graph 1 (p. 38) shows the actual financialweight of local governments. The sample issmall because reliable data were availableonly for certain years in certain countries.Even so, this sample of countries at differentlevels of development is quite representative.In the UEMOA countries (West Africa Economicand Monetary Union), total municipalexpenditure of the area amounted to FCFA150 billion (€228 million) in 2004, i.e. 4.8%of State expenditure of around FCFA 3103billion (€4.7 billion). A World Bank study onthe experience of decentralization in 30 Africancountries revealed that expenditurecontrolled by local governments is around10% in South Africa, between 5 and 10% inNigeria, Uganda and Zimbabwe and between3 and 5% in Kenya, Ghana, Senegal,Mozambique and Zambia. Generally speaking,the average ratio between localexpenditure and national budget resourcesexcluding donations is below 5% and theratio between local expenditure and grossdomestic product (GDP) less than 1%.In addition, with the exception of South Africaand North Africa, local governments’resort to borrowing in other countries is at avery early stage.In view of the weakness of their own income(the insufficient flow of intergovernmentaltransfers is further exacerbated bythe allocation modalities and constraintson access to loan markets), it cannot bedenied that African local governments willhave trouble in meeting on their own thecosts of their ordinary activities and thetransferred powers, not to mention theirresponsibilities in local development andcombating poverty.One of the explicative factors is that own taxrevenue and local finance depend on themacroeconomic framework –and centralgovernments in sub-Saharan Africa facesevere financial constraints. The povertyaffecting large segments of the populationplaces limits on the tax take. On top of thiscomes the frequent lack of political will toredistribute the tax to ensure a better supportto local governments and more effectivemanagement of the fiscal chainparticularly in the collection of taxes. One ofthe top priority claims of elected bodies is abetter distribution of resources, with theaim of taking the share of own tax revenuesin relation to GDP to 2% and increasingfinancial transfers by 5 to 10%, which wouldmake it possible to double or even triplelocal resources, the current level of whichjeopardizes the positive fallout expectedfrom decentralization.

AFRICA40 United Cities and Local GovernmentsThe weak financial capacity is exacerbatedby persistent limitations and failings inadministrative capacities and human resources.III.3. Administrative capacityIII.3.1. Human resourcesThe advent of decentralization has revealeda shortage of trained personnel in Africancountries, all of which lack qualified staff inlocal administrations. This dearth of trainedpersonnel makes it all the more difficult forlocal governments to handle additionalpowers transferred to or granted them.Some countries such as Morocco and Malihave opted to establish a territorial civil service,with the aim of making local jobs look more attractiveand of conferring on local government staff allthe advantages granted to state civil servants.A lack of information about the qualificationsof local government staff membersprecludes a comprehensive accounting ofstaff numbers and skills. Still, data providedby several countries provide an instructivesample. Data from Benin, Côte d’Ivoire,Morocco, Senegal and Tunisia show a verylow percentage of the population holdingstaff positions in local government. In thesecountries, the percentage of citizens in alllevels of government ranges from 0.49% to3.11%. At the local level it varies from0.012% to 0.46%: below one staff memberper 100 inhabitants. For the countries providingdata the percentages are:• Benin: 0.49% at the national level,0.012% at the local level.• Côte d’Ivoire: 0.69% at the nationallevel, 0.029% at the local level.• Senegal: 0.73% at the national level,0.06% at the local level.• Morocco: 1.7% at the national level,about 0.46% at the local level.• Tunisia: 3.86% at the national level,0.2% at the local level.Remedies proposed to date fall into one oftwo categories: capacity-building withinlocal governments themselves, and transferringstate personnel to local governments.Table 4 illustrates the position.III.3.2. Existence and level of trainingof the principal municipal officialsMost local governments need a minimumteam to assist the mayor with his or herfunctions. This administrative core is madeup of the secretary-general for generaladministrative and personnel management,the director of technical services, and thedirector of financial services. Municipalitiesin the major urban centers typically havesuch a team, or the means to recruit it.The financial weakness of municipalitiesresults in weaknesses in human resourcesand management skills in local government.This is a severe drawback for the implementationof decentralization policies. Strengtheningproject management capacities of localgovernment should be a crucial part of alldecentralization support programs.III.3.3. Status of local governmentpersonnelThe most common method for addressingthis shortfall of personnel is to transfer statesenior civil servants to local governmentsby secondment or by granting leaveof absence. Consequently, in many countriesthe mayor's technical team is comprisedof senior officials drawn from the state.Some countries, such as Morocco and Mali,have established a territorial civil service withthe aim of making local jobs look more attractive,and of conferring on local governmentstaff all the advantages granted to state civilservants. This strategy is designed to stimulateinterest in local jobs that are perceived assecond-rate positions. In many countries,state civil servants regard appointment tolocal jobs as a punishment or a disgrace.

41Table 4 Human resource situationCOUNTRY Number of State Number of Local Level of qualification Legal system (public or private Recruitment procedure Existing TrainingCivil servants Government staff law, or mixed system)/ Career (especially for higher positions) programmesjob positionsBenin32,882 (1995)4000 from which 94% aresupport staff and 6% belongto management.7% qualified for conceptual andsupervisory work. The remainderat average level.Mixed legal systemFormer employees of the prefecturesredirected to communesThere is no specialist institution fortraining local officialsCôte d’Ivoire112,707 (1994)47,325Category A4(engineers, administrators)Category B3(administrative secretaries,senior technicians, bookkeepers)Mixed system. Governed by theservice regulations for publicemployees and the law establishingservice regulations for territorialauthority staff in the case of publicemployees and the labour code plusthe law establishing serviceregulations for territorial authoritystaff in the case of other officials.The line ministry appoints publicemployees. For other officials, eachcommune follows its own recruitmentpolicy depending on analysis of thefunction and needs expressed.Training is organized by developmentpartners. Moreover, each communeorganizes its own training plan. Thereis no training initiated by the lineministry.Morocco537,166145,736Senior management: 12,109Middle management: 25,020Junior staff: 31,382Manual workers: 76,982Other: 223Public and private law (employmentcontracts)Competitive examination –secondment - automaticappointment by Ministryof the InteriorRegional training centres/Trainingdivision of the Ministry of theInterior/Elected local officials'initiativesSenegal71,694 (2004)6846Approx. 3% senior officials /4% middle management+ 90% backup and support staffPublic law for seconded Stateemployees and private law for staffrecruited by local governmentsCommune staff recruited at thediscretion of the local authoritiesAd hoc training programmesdepending on support fromdevelopment partnersTunisia Public- initial training at training centres390,000 including80,000 manualworkers25,000 including18,000 manual workers54 % managerial staff, including 70%male and 30% female26% junior staffCompetitive examinationor applications or qualifications- graduates of approvedtraining centresapproved by the administration- further training- ongoing training to achievepromotion- advanced training courses- missions abroad

AFRICA42 United Cities and Local GovernmentsVariousmechanisms havebeen tried to bringlocalpeople andcommunityorganizations intolocal publicmanagement,ranging frompublicizing themeetingsof localgovernmentbodies, required bylaw in manycountries, tovarious types ofdebates andconsultationbetween thosebodies and localpeople4. For instance, withthe exception of Mali,where elections havebeen postponed, theelectoral timetablehas been respectedover the last threeyears in BurkinaFaso, Niger, Guinea,South Africa andMozambique.Even secondment and other stop-gapstrategies must be considered partial,short-term solutions. The essential issueis the lack of financial resources to payfor qualified, high-level staff in localgovernments.The financial weakness of local governmentsleads inevitably to weak humanresources and limited management capacity—both are grave handicaps in implementingdecentralization policies inAfrica. Building local government projectmanagement capacity should thereforebe one of the priorities in all measuressupporting decentralization and betterlocal government in Africa.IV. Local democracyThe following table gives a picture of localdemocracy in each country.IV.1. Local political systemWhen putting democracy into practice atthe community level, local governmentsoften face the same difficulties as modernstate systems —a variety of local, tribaland family loyalties and traditions thatinfluence civic behavior. For example,there may be a tendency to reject thenotion that "people from outside" mighthave a right to stand for election locally"when they are not from around here". Inother places, such as Senegal, electorallaw requires candidates to have partyaffiliation in local elections. This affiliationwith established parties increasesthe risk that standing for election willhave more to do with national party politicsthan with the needs and preferencesof local voters. Despite such difficulties,local democracy has made undeniableprogress. In many countries, one sign ofincreased vitality is an increase in turnoverof municipal teams from one localelection to another. This turnover isapparent even in countries where changein political power is rare at parliamentary,presidential or central government levels.And indeed, the lively turnover of powerincreasingly seen in local elections remainsalmost unthinkable at top governmentlevels in the majority of Africannations.Participatory democracy can be fosteredonly if the cultural bedrock already favorsconsultation, debate and participation incollective decision-making. In this regardthe picture in Africa is mixed, with substantialprogress in many countries but nomovement in others, the latter includingEgypt, Togo, Tunisia, Central AfricanRepublic and Chad. Overall gains intransparency and accountability remainfragile.The first indicator of progress is the consensusregarding universal suffrage. Notonly has the principle of election becomewidely accepted for local offices, but Africanlocal elections are also being heldwith a regularity unprecedented in thehistory of Africa 4 .Another indicator regards the possibilityof holding several local mandates at thesame time, or holding a local mandatealongside a national one. This is highlyrestricted and may even be entirely forbidden.In most countries political partiescontinue to monopolize local and nationalpolitics, but many countries do allowindependent candidates in local elections.Those nations include Mozambique, Benin,South Africa and Mauritania. In Ghanapolitical parties are excluded fromlocal elections entirely; the list is openonly to independent candidates.IV.2. Citizen participationSigns of progress toward representativedemocracy include publicizing officialmeetings and encouraging local peopleand community organizations to take partin open discussion of local issues. Forexample, in Zambia, residents are involvedin the implementation of certain

43Table 5 Portrait of local democracy in each countryCountry MUNICIPAL COUNCIL LOCAL EXECUTIVE DIRECTVoting system Term of Rounds of Method of Terms of Mayor Collegiate Rounds of Vote of no DEMOCRACY(Majority/ office voting appointment office Voting confidenceProportional /removalor Mixed) from officeBenin Mixed (majority 5 years 2 rounds Indirect 5 years No Yes Several Yes Noand proportional)Cameroon Mixed (majority 5 years 1 round Indirect 5 years No Yes 2 for the Mayor Yes Noand proportional) and 1 for deputiesEgypt, Arab Rep. of Relative Majority 4 years 1 round Nomination No NoGabon Proportional 5 years 1 round Indirect 5 years No Yes Yes NoGhana Majority 4 years 1 round Indirect 4 years No YesGuinea Majority 5 years 1 round Indirect 5 years Yes NoCôte d’Ivoire Majority 5 years 2 rounds Indirect 5 years No Yes Yes NoKenya 5 years 1 round IndirectMadagascar 4 years Direct 4 yearsMali Majority Indirect No Yes Yes NoMorocco Majority 6 years 1 round Indirect 6 years No Yes Yes NoMozambique Proportional 5 years 2 rounds Direct 5 years Yes 2 rounds No NoNiger Proportional 5 years 1 round Indirect 5 years No Yes Yes NoNigeria Majority 3 years 1 round Direct 4 years No Yes NoSenegal Mixed (Majority/Proportional or mixed) 5 years 1 round Indirect 5 years Yes No Yes NoSouth Africa Proportional 6 years 1 round Indirect 6 years No Yes 1 round NoTanzania 5 years Indirect 5 years No YesTunisia Mixed 5 years 1 round Indirect Yes Yes 1 round No No(predominantly majority)Uganda 4 years 1 round Direct 4 years Yes Yes 1 roundZambia Mixed 5 years 1 round Direct 5 years Yes No 1 round No

AFRICA44 United Cities and Local Governmentsdevelopment projects in basic servicesectors, such as health and education.In Uganda, participation sometimesextends as far as cooperation agreementsbetween the municipality and civil societyassociations; the latter are givenresponsibility for running a project or formonitoring and evaluating such projects.In some municipalities of Benin, BurkinaFaso, Mali and Mozambique, elected officialsincreasingly use community radio tokeep in touch with the local populationand continue exchanging views with themabout local development issues. Theseexchanges provide an opportunity forcommunity and religious leaders, teachersand civil society activists to play arole in guiding local people, and in improvingcommunication between officials andresidents. To make local governmentbodies more representative, countriessuch as Ghana and Niger, Uganda andSouth Africa have been developing instrumentsto bring social, economic, or culturalforces into local councils, ensuring thatall sociological components of the localcommunity are involved in the localgovernance system.To ensure the representation of women,several countries have set quotas by law.In Niger, at least 10% of seats on localcouncils are reserved by law for femalecandidates. In Mozambique, the representationof women within local bodies hasrisen from 23% after the 1999 elections to28% in 2004. South African legislationfavors a minimum of 50% female candidateson competing lists. In Uganda, the lawrequires that at least one third of localcouncil seats should be occupied bywomen. Women are not, however, the onlydemographic group whose specific representationis promoted by decentralization.IV.3. Relationship between centraland decentralized governmentauthoritiesIn the majority of African countries, decentralizationwas imposed from the top down,making it more a tool used by centralgovernment to control territory andurban populations and ensure the continuityof its own structures and policythan a framework for teaching andempowering residents with the goal ofstrengthening independent local governments.Consequently, despite constitutional orlegislative provisions and safeguards,the autonomy of local governments isrestricted by central government oversightof local government bodies andtheir actions. However, positive developmentscan be seen in many countriestowards slackening controls and refocusingthem on legal aspects.Local administration in Africa restsessentially on two political pillars: a deliberativebody, the council, and an executivebody comprised of a mayor assistedby one or more deputies. Such localbodies exercise their functions under thecontrol of the state. These features arethe norm in all African countries wheredecentralization is on the agenda. Thedifferences lie in the way local bodies areappointed, and the degree of freedomallowed by the state, which controls localgovernment bodies and their actions. InWest and Central Africa, state oversightof local governments is being relaxed.However, in North Africa central controlover all the activities of local governmentspersists with little change. Formercolonial systems of centralized controlare giving way to models modified byindependent governments. This is a positivedevelopment in principle eventhough important matters such as budgetsand land allocation are still subjectto old, colonial-style control. Neither isjurisdictional control properly organized.Regarding the transparency of local managementand accountability, manycountries have enshrined classic controlmechanisms in formal statutes. In suchcases, councils adopt budgets and re-

45view and approve executive bodies' administrativeand management accounts.These accounts must also be approvedby supervisory authorities. In somecountries, specialist institutions, such asthe Committee on Local Government andChiefs' Affairs in Zambia, monitor andoversee local government management.In Uganda, the amounts of financialtransfers from central to local government,as well as the local developmentsectors for which the funds are intended,are made public. The government thenencourages local people to ensure thatthe transferred amounts are used properly.More than that, the web site of theministry for local government provides apublic forum for discussion; citizens areencouraged to state their opinions onany aspect of local authority management.However, in some countries, there is alarge gap between legal procedures andmethods of operation in practice.IV.4. Role of local governmentassociationsEstablishing associations of elected localbodies, often called Local GovernmentAssociations, (LGAs) has become themethod of choice for advancing the mutualinterests of local governments in Africa.Such associations exist in almost all countrieson the continent. Membership may berestricted to mayors and deputy mayors,the municipal executive, or the local authorityas an institution.LGAs may sometimes be set up in accordwith categories of local government (communesand cities, regions, rural communities)and typically have a three-foldcharge:• Representing member authorities speakingwith a united voice,• Providing capacity-building services tolocal governments,• Defending and promoting the interestsof their members.LGAs provide a platform for exchangingviews and discovering opportunities formembers. Their aim is to promote decentralizationby lobbying the state as well asinternational development partners. Inmany countries, they help to implementdecentralization by bringing the point ofview of local officials to the attention ofhigher government in reports and proposals.However, LGAs also experience resourceconstraints in many countries. They haveto rely on contributions from their membersto cover costs. The uncertainty ofsuch resources necessarily limits the scopeof the LGA’s efforts.In eastern and southern Africa, LGAs aregenuine administrative bodies, but some inWest Africa and Central Africa have no officeor permanent staff. Where resourcesare minimal, LGAs are less effective inimplementing decentralization.Regional LGAs have also been set up inCentral, East and Southern Africa. Some ofthese regional organizations are moreeffective than others. For example, TheAssociation of Central African Mayors(AMAC) presently exists in name only, butthe association of East African localgovernments is comparatively dynamic,offering a regional platform for exchangesbetween elected officials from membercountries. 5IV.4.1. United Cities and LocalGovernments of Africa (UCLGA)The organization known as United Citiesand Local Governments of Africa (UCLGA)is the Pan-African local government organization.The UCLGA represents a combinationof three African local governmentorganizations previously divided along linguisticlines: the African Union of LocalAuthorities (AULA) for local governments5. The East Africarepresentative onthe UCLGA executivecommittee wasappointed during anextraordinarymeeting of thatassociation, held inKigali (Rwanda).

AFRICA46 United Cities and Local GovernmentsThe UCLGA represents all local governments inAfrica and seeks recognition from the African Unionas the voice of African local governments withinthe Pan-African organizationfrom anglophone countries, the Union desVilles Africaines (UVA) for francophonecountries and the União dos ciudades y CapitaesLusofono Africana (UCCLA) for Portuguese-speakingcountries.This initiative reflects a recognition of increasingglobalization, a comparativelynew phenomenon that cannot fail to affectlocal governments. 6 The UCLGA foundingcongress took place in Tshwane in May2005, marking the starting point of theunified African municipal movement. TheUCLGA represents all local governments inAfrica and seeks recognition from the AfricanUnion as the voice of African localgovernments within the Pan-African organization.IV.4.2. African Conference onDecentralization and LocalDevelopment (CADDEL)In the spirit of African unity, African ministersset up a Pan-African platform for discussionand sharing experience ondecentralization and local development inAfrica.Meeting in Windhoek, Namibia, at the secondAfricités summit in May 2000, AfricanMinisters for Decentralization and financeministers decided to move the decentralizationprocess forward in Africa by settingup a political body at continental levelknown as the African Conference on Decentralizationand Local Development(CADDEL).At that meeting, proponents of decentralizationexpressed the wish that the AfricanUnion should be the reference body for thenew platform.They set CADDEL the following objectives:• Persuade governments to list decentralizationamong their priorities and pushfor greater awareness on the part ofboth leaders and citizens of the centralrole played by decentralization in theeconomic development process;• Keep decentralization and local developmenton the national policy agendasof member states, and at continentallevel within the African Union;• Make sure that African states maintaintheir commitment to the decentralizationprocess;• Act as liaison between the organizationof African local government associationsand their central governments forall issues involving decentralization andlocal development;• Mobilize resources from developmentpartners in order to implement decentralizationand local development programmes.6. The first Pan-African summit “Africities” took place in Abidjan (Côte d’Ivoire) in 1998, gathering togethervarious African municipal unions. During the 2nd Africities summit organized in Windhoek (Namibia) in2000, the three main municipal organizations agreed upon the creation of an African Union of Cities. In2003 a first founding assembly took place, during the 3rd Africities summit, in Yaoundé (Cameroon). Thecommon declaration of Yaoundé was adopted with the following principles:· to promote to local authorities of Africa the founding congress of the association “United Cities and LocalGovernments”· to set up the statutes of the new Pan-African organization· to decide on the definitive name of the organization and prepare its founding congress.

47V. ConclusionThis overall picture of decentralization andlocal democracy in African countries showssignificant progress at the strictly institutionallevel. No country now publicly opposesthe implementation of decentralizationpolicies. Local governments exist in allcountries, and elections are held to electlocal authoritiesNot only are there more local governmentscovering ever-increasing areas, but thequalitative development of decentralizationcan also be observed in the form of moreself-government and progress toward localdemocracy in more African nations. Thistrend is accompanied by an unprecedentedincrease in the responsibilities of localgovernments throughout most of the continent.The extent of such progress must, however,be set against a number of persistentobstacles that continue to hinder a realprogression of decentralization in Africa.Difficulties remain within states concerningthe transfer of financial resources neededto match the devolved responsibilities.Local governments also face difficulties inincreasing their own resources (aside fromstate-transfers and grants) at a fasterpace. Ensuring the availability of qualifiedhuman resources at the local level andimproving public access to local servicesare also fundamental issues of concern.Tangible progress needs to be made in twokey areas: the transfer of responsibilities,with adequate human and financial resources,and entrenching a culture of citizenparticipation, transparency and accountability.These areas of complicated yet indispensablereform are crucial for progress tobe sustained, and for its inherent democratizingideas to take root. To this end it isessential that all involved parties continueto mobilize high-level political commitmentat both national and Pan-African levels.

A SIA-PACIFICAND RE W NICK SONNICK DE VA SALE X B. B RILL ANTE SWILHELMINA L. C AB OALICE CELESTINO 1

ASIA-PACIFIC50 United Cities and Local Governments1. The final draft has been worked out by Andrew Nickson. The authors gratefullyacknowledge the valuable research assistance provided by Mr. Jose Tiu Sanco,Ms. Frances Fatima Cabana and Mr. Prejean Prieto, research staff at theNational College of Public Administration and Governance, University of thePhilippines.

51I. IntroductionThe Asia-Pacific region comprises anenormous variety in the size of nationstates. This ranges from the two demographicgiants of the world, China and India,which together account for one-thirdof global population, to the many islandstates of the Pacific that have less than100,000 inhabitants. The region also displaysa great variety in living standards,ranging from the high-income OECDcountries of Australia, Japan, Republic ofKorea and New Zealand to a number ofthe least-developed countries of theworld, including Bangladesh and Nepal. Italso includes some of the currently fastestgrowing economies in the world,notably China, India and Vietnam, aswell as the country – Korea – that hasexperienced the most dramatic growth inliving standards in the world during theperiod 1950-2000.The Asia-Pacific region also embodies greatdiversity of historical experience. Manyof the countries incorporated colonialmodels of governance to a greater or lesserextent - British, in the case of Australia,New Zealand, India, Pakistan, SriLanka, Malaysia and some of the Pacificislands, French in the case of Vietnam,Cambodia and Laos (but largely supersededby communist models in these countries),Dutch in the case of Indonesia andUS in the case of the Philippines. Recentlaws in Pakistan also reflect US, Germanand Japanese influences. The single-partycommunist system adopted by China,Laos, North Korea and Vietnam owesmuch to the Marxist-Leninist ideology ofthe former Soviet Union.Table 1 Basic Development Indicators in the Asia-Pacific Region, 2004Country Population Density People % Urban GNP per HDI(millions) per sq. km Population* head (US$) RankingAustralia 20.1 3 88.2 26,900 3China 1,296.5 139 40.4 1,290 81India 1,079.7 363 28.7 620 126Indonesia 217.6 120 48.1 1,140 108Japan 127.8 351 65.8 37,180 7Malaysia 25.2 77 67.3 4,650 61New Zealand 4.1 15 86.2 20,310 20Pakistan 152.1 197 34.9 600 134Philippines 83.0 278 62.7 1,170 84Korea, Rep. of 48.1 488 80.8 13,980 26Thailand 62.4 122 32.3 2,540 74Vietnam 82.2 252 26.4 550 109Source: World Bank 2006; UNDESA 2006; UNDP 2006a.* Data is for 2005.

ASIA-PACIFIC52United Cities and Local GovernmentsThe term ‘localgovernment’ isgenerically usedin all countriesto refer tosub-state/sub-provincialunitsThis chapter reviews the results of twelvecountry case studies of decentralizationand local democracy from the region:Australia, China, India, Indonesia,Japan, Malaysia, New Zealand, Pakistan,Philippines, Korea, Thailand and Vietnam(Table 1). The sample reflects themore developed and faster growing nationsof the region but also those wherethere is a more active program of decentralization,albeit of widely varying patterns.The chapter draws on otherpublished material on these countries aswell as the authors' own knowledge of theregion.The Asia-Pacific region embraces themost highly developed features of globalurbanization and already contains 23 ofthe 40 largest metropolitan areas in theworld (Table 2). Of the top 100 metropolitanareas, China has 15 (with a combinedpopulation of 96.2m), India has 9 (with acombined population of 80.1m) andJapan has 3 (with a combined populationof 49.1m).With such a diversity of population size,per capita income, historical experienceand political system, it is not surprisingthat models of decentralization and subnationalgovernance should also varyconsiderably. As a result of this lack ofhomogeneity, it is both difficult and questionableto make sweeping generalizationsabout the Asia-Pacific region as a whole. Infact, the recent experience of decentralizationand local democracy in the region hasbeen quite diverse. Nevertheless, there aresome common themes and issues acrossthe region, which are addressed in thischapter. Four of the sample countries–Australia, India, Malaysia and Pakistan–have federal systems of government thataccord states a greater or lesser degree ofautonomy. Since, within a federal system,local government is generally a state matter,this can produce a wide diversity ofpractice within a country with regard tolocal governance. This is certainly true inAustralia and India but less so in Malaysiaand Pakistan. The enormous size of Chinameans that, although it is a unitary state,there is a considerable diversity of practiceamong provinces. To a lesser extent, this isalso true in Indonesia.II. Territorial organizationII.1. Delineating Local GovernmentsWhile local governments are generally understoodas units of government responsiblefor providing direct services toinhabitants in a given territorial jurisdiction,their classification and location in thesub-national government vary across theAsia-Pacific countries. The term ‘local government’is generically used in all countriesto refer to these sub-state/sub-provincialunits. In a few countries, other terms areused such as ‘councils’ in Australia andNew Zealand, and district administrationin Malaysia. In Japan, the preferred termis ‘local autonomy’ to indicate freedomfrom central control in making decisionsand self-responsibility in managing localaffairs. Depending on population size,income and location, local governments inthe region are variously categorized aswards, districts, communes, shires, counties,municipalities, cities, prefectures andprovinces. And although all these forms aregenerally considered local governments,their classification also varies such that amunicipal unit in one country (Indonesia)may be much bigger than an intermediatelocal government unit in another one(for example a province in the Philippinesor Vietnam).In federal countries like Australia, India,Malaysia and Pakistan, local governmentsin general comprise the lowest level ofgovernment. In these countries, local governmentsare a function of the intermediatelevel of government such as thestates in Australia, India and Malaysia andprovinces in Pakistan. While there may besome general provisions in federal constitutionsconcerning local governments, as

53Table 2Global Ranking of Metropolitan Areas in the Asia-Pacific RegionRank Name English Name Country Population Remarks1 Tokyo Tokyo Japan 33,600,000 (Greater Tokyo Area) incl. Yokohama, Kawasaki, Saitama2 Seoul (Soul) Seoul Korea 23,400,000 incl. Bucheon, Goyang, Incheon, Seongnam, Suweon5 Mumbai Bombay India 21,600,000 incl. Bhiwandi, Kalyan, Thane, Ulhasnagar6 Delhi Delhi India 21,500,000 (National Capital Territory) incl. Faridabad, Ghaziabad9 Shanghai Shanghai China 17,500,00010 Osaka Osaka Japan 16,700,000 (Osaka Metropolitan Area) incl. Kobe, Kyoto12 Kolkata Calcutta India 15,700,000 (Kolkata Metropolitan Area) incl. Haora13 Manila Manila Philippines 15,600,000 (Metro Manila) incl. Kalookan, Quezon City14 Jakarta Jakarta Indonesia 15,100,000 (Jabotabek Metropolitan Area) incl. Tangerang15 Karachi Karachi Pakistan 15,100,00016 Guangzhou Canton China 14,700,000 incl. Foshan19 Beijing Beijing China 12,800,00020 Dhaka Dacca Bangladesh 12,600,00028 Shenzhen Shenzhen China 9,150,00029 Krung Thep Bangkok Thailand 8,650,00030 Wuhan Wuhan China 8,650,00033 Nagoya Nagoya Japan 8,250,00036 Tianjin Tiensin China 8,000,00037 Lahore Lahore Pakistan 7,950,00038 Chennai Madras India 7,850,000 (Chennai Metropolitan Area)40 Bangalore Bangalore India 7,350,000 (BMRDA)41 Hyderabad Hyderabad India 7,150,00043 Hong Kong (Xianggang) Hong Kong China 7,100,000 (S.A.R.) incl. Kowloon, Victoria44 Taipei (T’ai-pei) Taipei Taiwan 6,700,000 (Taipei-Keelung Metropolitan Area)46 Chongqing Chungking China 6,200,000Source: The principal agglomerations of the World (2007-09-03).City population, http://citypopulation.de/World.html.

ASIA-PACIFIC54United Cities and Local GovernmentsEach country of theregion has madesignificant stridesover the pastseveral decades inthe creation of astrengthenedinstitutionalframeworkin support ofdecentralizationin the case of India and Malaysia, it is generallyleft to the state or provincialgovernment to determine the scope oflocal government in these countries. Thus,it is not surprising that perceptible differencesin local government practices existacross the federated states within thesame country. The system of election forlocal councils in Australia, for example,varies from state to state. In India, fiscaland administrative decentralization is unevenlyimplemented across the states comparedwith political decentralization, whilelocal democracy is also at varying levels ofdevelopment across the Indian states. Incontrast, local government variation in Malaysiaand Pakistan is slight.Local governments in unitary states comprisethe only sub-national layers of government,thus putting local governmentdirectly under central government oversight.Theoretically speaking, unitary governmentsmay incline towards centralismand constrain local autonomy. The experiencein the region shows that this is notnecessarily so. Robust local governmentsand local democracy exist in unitary systemslike Japan, New Zealand and Philippines,as is also the case in federal Australia.China, though unitary, exhibits a variety oflocal government practices between provincesowing to the sheer size of thecountry. This is true to a lesser extent inIndonesia.Local governments in all countries exercisepowers by virtue of ultra vires. The powers,roles and responsibilities are set outin specific legislation or acts promulgatedby national or state level government, withsome countries having more or fewer localpowers and functions assigned to them.Japan is markedly different on this as localgovernments in this country operate on thebasis of the general competence principle.But as reforms continue to characterizeintergovernmental relations in the Asia-Pacific countries, the political and functionalbases of local government continue tobe redefined. Australia, for instance, ismoving to a less prescriptive approach inregard to the councils’ roles and functions,albeit subject to greater public accountabilityand stricter requirements for corporateplanning and reporting. The recent localgovernment reforms, particularly the LocalGovernment Act 2002, undertaken by NewZealand have broadened the responsibilitiesof local councils practically giving themthe power of general competence. Philippinelocal governments have their powersand responsibilities specifically defined inthe Local Government Code. Significantly,the general welfare clause in the Codeallows local governments to do practicallywhatever they think will promote the wellbeingof people and community, limitedonly by expressed prohibition of law. Inany case, the scope of powers and functionsassumed by local governments in theregion varies from country to country, andeven among local governments within thesame country. These practices had beenshaped by the respective country’s historicaltraditions, and increasingly by political,economic and fiscal considerations as evidencedby the decentralization programsbeing implemented by countries in the region.In most countries, local governmentsperform wide-ranging functions to addresslocal needs and promote economic and socialwell-being of citizens and local areas.The functions of local governments in theregion will be discussed at length in SectionIII.1.II.2. Legal Frameworkfor Local GovernmentThe legal framework for local government inthe Asia-Pacific region is contained either innational constitutions or in separate laws.Major local government legislation in theselected countries is shown in Annex 1.Most countries recognize local governmentin their constitutions as well as having separatelaws for local government. However,local government in Australia is recognizednot in the Commonwealth Constitution butin comprehensive Local Government Actspassed by individual state parliaments and

55in a few cases, references are also made instate constitutions. In New Zealand, whichhas no consolidated constitution, local governmentwas greatly strengthened bynational legislation in 2002 granting itgeneral competence power in marked contrastto previous restrictions imposed byultra vires. Despite not offering constitutionalprotection, local governments in bothcountries enjoy substantial powers andresponsibilities that are not observed inseveral countries in the region that do provideconstitutionally for local governmentautonomy.Each country of the region has made significantstrides over the past several decadesin the creation of a strengthened institutionalframework in support of decentralization.The framework is established variouslyin the basic law of the land and in separatenational and state statutes and laws. This isthe case whether a nation is a multi-partydemocracy, socialist country or military regime.Even when local self-governance ispromoted as a national objective, centralgovernment still intervenes to introduceand sustain these reforms. Such was thecase in India where the 1950 Constitution(Article 40) requires that “…states shalltake steps to organize village panchayatsand endow them with such powers andauthority as may be necessary to enablethem to function as units of local selfgovernment,”but left the legislation oflocal self-government to the states. Becausethe implementation of panchayats wasuneven across the states, decentralizationreforms were promoted by the 73rd and74th constitutional amendments in 1992.These require states to hold elections forlocal bodies and to transfer fiscal andadministrative responsibility for certainservices and functions to local governmentin both rural and urban areas. As a resultthere has been a dramatic improvement inlocal democracy in many parts of India butthe constitutional requirements for administrativeand fiscal decentralization arestill not complied with to the same extentby all states. This is also the case in Japanwith article 92 of the constitution of 1946,followed by several instances of legislationto decentralize (namely 1947, 1995-1999).Recent constitutions in the Philippines (1987,Article 10), the Republic of Korea (1987, Articles117 and 118) and Thailand (1997, Article78) all provide for local governmentautonomy, but the constitutions of Chinaand Vietnam (see on the contrary: China,art.110; Vietnam: art.6). In the Philippines, the1991 Republic Act (Law 7160)–also knownas the Local Government Code– fleshedout the constitutional provisions concerningthe principle of decentralization and localautonomy, transferring responsibility forthe delivery of many basic services to localgovernment and thereby fundamentallyaltering central-local relations. In Koreathe 1987 constitution (Article 117) states thatlocal governments "shall deal with matterspertaining to the well-being of local residents,shall manage properties, and mayestablish their own rules and regulationsregarding local autonomy as delegated bynational laws and decrees.” However, thisconstitutional provision remained unfulfilleduntil July 1995 when the nation electedlocal government mayors for the firsttime in more than 30 years. Until thenlocal governments were no more than localadministrative districts of the centralgovernment. The heads of local governments(in effect, solely administrativeauthorities) were appointed by the centralgovernment, and their capacity for autonomousdecision-making was virtually nonexistent.In Thailand the 1997 constitutionrequires the promotion of decentralizationas a basic policy of the government and thiswas followed by basic legislation in 1999 inthe form of the Decentralization Plan andProcedures Act. As of June 2003, eight enablinglaws had been proposed in support ofdecentralization goals, four of which hadbeen promulgated. More generally, moretasks does not mean more responsibility; inIndia the two higher tiers of local governmentare considered to be “implementingagencies of state government”, alsoafter the 1994 constitutional amendments 2 .2. G. Rao / N. Singh(2000), How to thinkabout localgovernment reformin India? Incentivesand institutions,Berkeley, p.9; adde:G. Sethi (ed.)(2004), Fiscaldecentralization torural governments inIndia, World Bank,p.19

ASIA-PACIFIC56United Cities and Local GovernmentsWithin theAsia-Pacific region,there has been awide rangeof driversof decentralizationand of obstacles tosuch changes, butdecentralizationhas generally beendriven from the topIndonesia provides the most dramaticexample of major legislative reform forenhanced local government autonomy. The‘big bang’ decentralization took place on thebasis of Regional Government Law 22 of1999, which eliminated the hierarchical relationshipbetween provincial and municipalgovernments. This significantly shifted resourcesand responsibilities from the centraland provincial levels to urban (kotamadya)and rural (kabupaten) municipalities.Under Regional Autonomy Law 32 of 2004these district governments were assigned 11obligatory functions while provincial governmentswere given a secondary role. In linewith these expanded responsibilities a majorshift of staff resources (about 2.5 million civilservants, of whom about three-quarterswere teachers or health workers) took placefrom the central and provincial governmentsto the districts during a short transitionperiod (2000-2001). Law 33 on Fiscal Balancebetween Central and Regional Governmentin 1999 (later amended by Law 25 of 2004)provided a new intergovernmental fiscalframework for general allocation grants (DAU),which represent block grants to finance theadministrative and other costs associatedwith newly decentralized functions (ratherthan the earmarked grants of the past).Under the previous centralized system,social and public service indicators of somemajor resource-producing regions wereweak, and to redress this imbalance, theseregions were now provided with a share ofthe revenues generated. Local governmentswere also granted the power to levy theirown taxes supported by regulations on thetype of taxes and service charges permissibleand maximum tariffs (ADB 2006b).However, to date the legal framework anddivision of responsibilities among levels ofgovernment remains unclear.II.3. Evolution of Local GovernmentStructuresA great variety of historical experience hasinfluenced the evolution of local governmentstructures in the Asia-Pacific region, rangingfrom the intermarriage of longstanding localtraditions of self-governance to organizationalforms imported through the colonialexperience and Marxist-Leninism. Traditionsof community or grassroots self-governancehave long existed in the region, though notnecessarily in the more sophisticated organizationalforms of local government thatexist today. For example, in Korea, localgovernment was founded on the basis ofinformal, voluntary organizations for thepurpose of promoting mutual assistanceamong citizens as well as the strengtheningof community ethics (Sproats 2003). InJapan traditional customary institutions arestill functioning today in the form of anextensive network of voluntary neighborhoodassociations that in practice operate assubcontractors of local government. In thosecountries that came under foreign rule,these old systems underwent a process ofcolonization that subsequently shaped theforms of local administration that are in operationtoday. However, national independenceencouraged countries such as India and thePhilippines to restore their traditional systemsof governance, respectively known aspanchayats and barangays, and to integratethem into the formal system of localgovernment. During the immediate post-independenceperiod in many countries, centralizationwas considered to be the mostefficient way of achieving the goals of rebuildingnational identity and attaining rapideconomic growth. Notwithstanding, most ofthese countries subsequently initiated localgovernment reforms as part of wider processesof improving public sector efficiency anddemocratization (Sproats 2003).Within the Asia-Pacific region, there hasbeen a wide range of drivers of decentralizationand of obstacles to such changes. Insome parts of the world, notably in LatinAmerica during the 1980s and 1990s and inCentral and Eastern Europe following thecollapse of the Soviet Union, there was awidespread demand from citizens for localdemocracy and for greater citizen controlover local affairs. This has not generallybeen the case in Asia, where decentralizationhas more often been driven from the

57top. In the case of China, decentralizationhas primarily been about economic reform,as part of the shift towards a market-basedeconomy, and liberating the economicpotential of regions and localities, ratherthan political engagement and local accountability.In Vietnam, the massive Doi Moi(renovation) process initiated in the late1990s was also primarily about economicand administrative reform, including the devolutionof management responsibilities.One feature of Doi Moi was to encourage andlegitimize citizen participation in local decision-makingas well as to strengthen transparencyand accountability mechanisms atthe commune level. In this sense, the creationof decentralized structures and processesis a manifestation of a wider movementtowards democratization in the region as itprovides the enabling context for broadercitizen participation in local governance.By contrast, the recent and quite radicalprograms of decentralization in the Philippinesand Indonesia have been more overtlylinked to ‘bottom-up’ processes of democratization.In the Philippines, the substantialdevolution of responsibilities and resourcesto elected local governments was part ofthe radical reform agenda of deepeningpolitical participation and bringing politicaldecision-making closer to citizens followingthe 1986 overthrow of the Marcos regime.Indonesia experienced one of the most radicaldecentralization programs in the worldfrom 1999, shifting major functional responsibilities,resources and staff to localgovernments. This was partly a response tothe highly centralized state under Suharto,which was blamed for many of the ills of thecountry. Whilst this program built on anexisting structure of local government, thereforms devolved substantial decisionmakingpowers to what had previouslybeen little more than a system of deconcentratedlocal administration (albeit referredto in earlier legislation as ‘localautonomy’). Nevertheless, the ‘big-bang’decentralization was also strongly driven bythe urgent need to satisfy the interests ofthe resource-rich outer islands of Indonesia,which had long felt marginalized andwere threatening to secede.In some countries of the region there hasbeen a noticeable cyclical movement toand fro between periods of centralizationand decentralization. This has especiallybeen the case in Pakistan, where localgovernment reforms were introduced in1960, 1979 and 2001. The main objectiveof the 2001 reform was an attempt by themilitary government at the center to reinforceits legitimacy and gain popularityacross the country. But the institutionalizationof local (non-party) political accountabilityhas been thwarted to a significantdegree by the continuing provincial controlover local government and the difficulty ofimplementing the provisions for recall ofofficials (Cheema et al 2006). This wasalso, to some extent, the case with earlierfailed attempts at decentralization in Bangladesh.In Thailand, communist insurgencyduring the 1970s and 1980sreinforced commitment to strong centralcontrol. Only since the 1990s, and despitestrong opposition from the Ministry of Interior,have governments supported decentralization.By contrast, in Bangladesh andMalaysia there has been resistance fromthe center to any substantial decentralizationthat would strengthen the political roleof local government. Thus local governmentin these countries may be regardedas more akin to local administration.Decentralization is never a smooth processas there are many competing interestsat play, some of which resistdecentralization. Strong resistance can comefrom a central ministry that perceives thatdecentralization erodes its powers andresources. For similar reasons, central civilservants may resist decentralization,especially when it involves their reassignmentto a sub-national level of government,as was the case for large numbersof civil servants in Indonesia and Thailand.Party political rivalry can also be a majorobstacle, where parties position themselvesby opposing proposals for decen-By contrast, therecent and quiteradical programsof decentralizationin the Philippinesand Indonesia havebeen more overtlylinked to‘bottom-up’processesof democratization

ASIA-PACIFIC58United Cities and Local GovernmentsThere is aconsiderablevariation in theAsia-Pacific regionin both the numberof tiers of localgovernment and inthe averagepopulation sizecovered by localgovernmenttralization. This is compounded by politicalcompetition at sub-national levels: rulingparties at the national level may get coldfeet about decentralization if they perceivethat the opposition may gain control oflarge numbers of the decentralized units.Three-way political conflicts among union,state and local governments in India wereone of the main reasons for the 1992constitutional amendments designed toprotect the interests of local governmentsfrom excessive state interference. Suchpolitical conflicts continue to hampereffective decentralization in some Indianstates.Finally, the OECD countries in the region,Australia, Japan, the Republic of Korea andNew Zealand, also emphasize decentralizationas part of their ongoing administrativereform process. Australia, Japan and NewZealand have a long history of local government;so, recent experience here hasbeen of relatively modest reform to dealwith particular problems or changed circumstances.A series of reforms to localgovernment acts in all the states of Australiaexpanded the general powers of localgovernment during the 1990s. An Inter-Governmental Agreement in 2006 expandedlocal government responsibilities inthe fields of planning, health, environmentalprotection and cultural activities. InNew Zealand, the Local Government Act of2002 granted local and regional governmentbroad general powers.In Japan, House and Diet Resolutions ondecentralization were passed in 1993 basedon the premise that the centralized administrativesystem was unable to cope withrapid developments at the local level. In1995 a Law for the Promotion of Decentralizationwas passed, in 1998 a DecentralizationPromotion Plan was initiated and in2004 the Local Government Law of 1947was amended to strengthen the administrativeauthority of cities.In the Republic of Korea, a series of decentralizationlaws and policies were introducedin the 1990s that increasingly recognizedthe importance of local autonomy,including the introduction of direct electionfor local government executives. As inJapan, they were largely driven from thecenter. One writer has described the actualpractice of decentralization in Korea as a“curious mixture of deconcentration anddevolution” (Seong 1998:13). A uniquefeature of the process was the SaemaulUndong, a community-based movementestablished during the rule of PresidentPark Chung Lee in the 1970s. Althoughthese were mobilized ‘top-down’ by centralgovernment, they eventually laid the foundationfor a variant of ‘citizen participation’that made a significant contribution to Koreanrural development.II.4. Tiers and sizeof local governmentsThere is a considerable variation in theAsia-Pacific region in both the number oftiers of local government and in the averagepopulation size covered by local government.The territorial organization of localgovernment in selected countries is presentedin Table 3. Two of the four federalnations in the case study countries have asingle tier of local government below thestate level (Australia and Malaysia) whilePakistan has a triple tier and India has asingle tier in urban areas and a single, doubleor triple tier in rural areas, dependingon the state. Of the eight unitary nations inthe sample, four have a two tier system oflocal government (Indonesia, Japan, Thailandand New Zealand), while three othershave a three tier system (Philippines, Koreaand Vietnam) and China has four subnationalgovernment layers. Furthermore,what is a local government tier is notalways clear, especially when there is acombination of modern local governmentstructures and of traditional or customaryinstitutions, as is usual in a lot of countriesof the region at the village level. Even thematerial evidence of such basic criteria asthe exercise of public and budgetary powermay be uncertain.

59Table 3Territorial Organization of Local Government in the Asia-Pacific RegionCountry Type of Type of Federated units, Regional / Upper level Lower levelGovernment State regions or territories provincial level of local of localwith special rights government governmentAustralia Costitutional and parliamentary Federal 6 states and 2 territories Single Tier: 703 councils variously described as cities,democracy (Governor generalmunicipalities, shires or districts with 7 differents localrepresenting the Queen asauthority systems. The Australian Capital Territory (ACT) ofhead of State, Prime Minister asCanberra has its own local government systemchief of government)China Communist state (President Unitary Not applicable 1) Provincial level: District level: Township level:(2006) 2 as chief of state, Premier 34 units 2,860 units 41,040 unitsas head of government) -23 Provinces, -1,463 districts (xian) -14,119 townships (xiang)- 4 large cities directly -369 cities with district right -19,369 boroughs (zhen)under central government -856 inner city districts -10 joint township boards- 5 autonomous* regions: in larger cities (qu gong suo)Inner Mongolia, Guangxi -117 autonomous* districts -6,355 inner city wardsZhuang, Tibet, Ningxia (zi zhi xian) -1,088 ethnic townshipsHui, Xinjiang Uygur -49 ethnic banners (qi) (min zu xiang)-2 special administrative -3 autonomous* banners -98 tribes (sumu)regions: Hong-Kong, Macao (zi zhi qi) -1 ethnic tribe-2 special zones2) Regional level: 333 units: -1 forest zone -644,000 village committees-283 cities of regional level (85% of villages) and-17 regions (diqu) 71,375 urban neighborhood-30 autonomous prefectures committees (70% of(zi zhi zhou) neighborhood communities --3 unions (meng) 2004) are not local authoritiesIndia Parliamentary Democracy Federal 28 states and *Urban areas: Single Tier: 3,694 urban municipalities(President as chief of state, 7 union territories *Rural areas: Single, dual, or triple tiers depending on state,Prime Minister as head246,977 rural councils comprising of:of government)- 459 zilla panchayats (district: third tier),- 5,930 panchayat samitis (block: second tier)- 240,588 gram panchayats (village: first tier)Indonesia Republic, presidential government Unitary 2 special districts: 33 provinces Single Tier: 450 units (2006)(President is both the chief of state Aceh, Papua (including special districts) - municipalities (urban): Kotamadya (2004:91)and head of government) Capital district Jakarta - regencies (rural): Kabupaten (2004:349)- Villages (Desa): (pop. approx. 70,000). Their organizationand functioning are the responsability of theprovincial authorities (law nº 22/1999).Japan Constitutional Monarchy with a Unitary Not applicable 47 prefectures 1,820 municipalities.Parliamentary Government779 city councils,(Emperor as chief of state, Prime844 town councils and 197 village councilsMinister as head of government)Malaysia Constitutional Monarchy Federal 13 states 144 local government units (depending on population):(Paramount Ruler as chief of state, 3 federal territories - 10 city councils,Prime Minister as head of government)- 36 municipal councils for large towns- 98 district councils (areas with small urban centers)2. Data on China from: Quio Jing (2005). La réforme de l’administration chinesse face aux rites confucéens,Thesis, University Paris 1, Panthéon-Sorbonne. (P. 125) (unpublished). Updated by Dr. Qiao.

ASIA-PACIFIC60 United Cities and Local GovernmentsTable 3Territorial Organization of Local Government in the Asia-Pacific Region (cont.)Country Type of Type Federated units, Regional / Upper level Lower levelGovernment of regions or territories provincial of local of localState with special rights level government governmentNew Costitutional and parliamentary Unitary Not applicable 12 Regional Councils 74 Territorial Local Authorities (TLA) including among which:Zealand democracy (Governor general 4 unitary district councils - 4 unitary district councils),representing the Queen as head- 15 city councils,of State, Prime Minister as chief- 54 district councils,head of government)Chatham Islands Council Community boards: created by TLA attheir discretion: 150 in 2006 in 50% of TLAPakistan Republic, presidential Federal 4 provinces 111 district units 396 sub-district units: 6,125 union administrationsgovernment (President as including: - Tehsil in districtschief of state, Prime Minister - City districts: - Town Municipalas head of government) - Large metropolitan areas Administration (TMA)- Federal capital district in city districts(no self-government)Philippines Republic, presidential government, Unitary Autonomous region 83 provinces 120 cities 41,982 villages (barangays)(President is both the chief of of Mindanao 1501 municipalitiesstate and head of government)Korea, Rep. of Republic, presidential government Unitary Special autonomous 9 provinces 230 municipal units: Lower municipal units (wards):(President is both the chief of province of Jeju 6 metropolitan cities Seoul: 25 Dong (urban), Erp/Myeonstate and head of government Seoul (special Metropolitan cities: 49 (rural) differentiated accordingmetropolitan city) Provinces: to population: Eup = larger unit75 cities in rural areas (over 50,000, Eup81 rural districts may become a city)Seoul: 522 DongMetropolitan cities: 689 Dong;10 Eup / 36 MyeonProvinces (incl. Jeju):942 Dong, 213 Eup, 1,112 MyeonThailand Constitutional monarchy Unitary 75 Provincial Administrative 1,129 municipalities (cities and boroughs)(King as chief of state, Prime organizations Pattaya City CouncilMinister as head of government, Bangkok Metropolitan 6,744 Sub-district (tambon) Administrative Organizations (rural)at present provisional militaryAdministrationgovernment)Vietnam Communist government Unitary Not applicable 59 provinces 662 district units, among 10,776 municipalities:(President as chief of state, 5 centrally controlled cities which: 25 provincial towns, 1,181 wards (urban areas)Prime Minister as head of government) (including the capital city) 42 urban districts (in 583 district towns (ruralcentrally controlled cities), district centres)9,012 communes (lower unitsin urban and rural areas)Source: UCLG Country Profiles (2007).* Autonomous areas means a special administrative regime based on the recognition of special rights for ethnic groups.

61The average population size of local governmentsin the region is shown in Table4. The relevance of this ratio dependsvery much on whether the lower tier is devisedas a rather large jurisdiction adequateto perform a number of functions, or whetherit is closer to settlements and has tomaintain a link with the people. Both mayexist in the same countries; then, the significanceof the ratio depends on the distributionof functions. We have indeed to take into account that some countries have a twotier local level (most Indian states, Pakistan,Philippines, Korea, Vietnam), whereasothers have only a single tier local level(Australia, Indonesia, Japan, Malaysia),and exceptionally three tiers in some Indianstates and in China. To make a comparison,we have to take in to account the functionsof these levels. Indeed, major local governmentfunctions are usually exercised at theupper local level in countries with a two tierlocal level. Therefore, the upper level has tobe taken for the comparison with countrieshaving a single tier local level. Conventionally,we call it a district whatever its namein the respective countries.This table is probably misleading in somerespects. It overlooks the role of the provincialstate administration, with its localbranches in Thailand, which allows a higherdegree of fragmentation. It underestimatesthe role for the people of lower levelmunicipal administrations, and its value interms of local democracy (for example inIndia or the Philippines). However, the highranking of the ratio suggests decentralizationat the meso level rather than at thelocal level (for example in Indonesia,Pakistan and Korea), and a low profile atthe municipal level.Table 4Average population size of local governmentsin the Asia-Pacific RegionCountry Population (m) Number of local Average size ofgovernmentslocal governmentAustralia 20.1 703 28,592China 1,296.5 2,860 453,147India 1,079.7 9,624 112,115Indonesia 217.6 450 483,556Japan 127.8 1,820 70,220Malaysia 25.2 144 175,000New Zealand 4.1 73 54,931Pakistan 152.1 396 384,091Philippines 83.0 1,621 51,300Korea, Rep. of 48.1 230 209,010Thailand 62.4 7,874 7,924Vietnam 82.2 662 124,169Source: Table 1 and Table 3.

ASIA-PACIFIC62United Cities and Local GovernmentsThe changing ‘shape’ of territorial organizationin the region reflects two very dissimilarprocesses under way. In thehigh-income OECD case study countries,the number of local governments has fallenin recent years as a result of amalgamationpromoted by central government in pursuitof economies of scale in service delivery. InAustralia, as a result of state policies, thenumber of local authorities diminished by200 in the last 30 years. In Japan, anamalgamation policy from 2001, encouragedby the central government to capturethese scale economies, reduced the numberof local governments from 3,229 to1,820. In New Zealand, a major territorialreform in 1989 dramatically reduced thenumber of local governments from 830 bycreating an upper tier of 12 regions inaddition to 74 lower-tier local governments.In Korea, the central government’sefforts to consolidate local governments inIn lower income countries, in order to supportthe development of democracy and the legitimacy of politicalleaders, local councils or authorities elected by the residentshave been restored, but at the same time major functionshave been devolved upon the intermediate level1994 and 1995 was undertaken not onlyto realize economies of scale but also tocorrect the much-criticized manner ofdemarcating the boundaries of localgovernments. As a result of this reform,the number of local governments wasreduced from 265 to 241 (including autonomousdistricts and rural districts in Seouland metropolitan cities). The boundaries ofrural districts and secondary cities wereredefined to form urban-rural integratedcities separated from newly created urbandistricts.In lower income countries, the picture ismuch more contrasted. In order to supportthe development of democracy and thelegitimacy of political leaders, local councilsor authorities elected by the residentshave been restored, but at the same timemajor functions have been devolved uponthe intermediate level. This is typical forChinese reforms: village committees aredirectly elected in more than 644,000 Chinesevillages every three years. The committeesdeal with the lease of land and themanagement of local affairs; however,main responsibilities are carried out at theprovince and county levels. The samemovement can be seen in Vietnam. Thenumber of communes has increased by265 units between 2000 and 2004. Thevitality of traditional village institutions issupported by the government and someadministrative tasks can be delegated tothem by the people’s committee of thecommune. Even so, the key levels of localgovernment are provinces and districts.Similar trends can be observed in the noncommunistcountries. For example, theIndonesian reform of 1999 resulted in thetransfer of important responsibilities tolocal governments, but in the form of verylarge municipal units (on average near450,000 inhabitants), whereas villages arethe framework of citizen participation. Inthe Philippines, there is less concentrationof local government functions at the upperlevel; nevertheless, the municipal governmentsare still relatively large, with morethan 50,000 inhabitants on average. Thebarangays, communities of pre-colonialorigin reshuffled by law at the time of theSpanish colonization, constitute an avenueof participation and of access to someadministrative service rather than a governmentlevel.In several other lower income countries,there has been a process of municipalizationwith more tasks transferred to alocal level closer to the inhabitants whilenevertheless endowed with some administrativecapacity. The major example isIndia, although the situation may varyconsiderably from one state to another:the lowest level, the gram panshayat, hasto manage pre-school and primary education,provide some local services (libraries)and amenities (sport, leisure) and supportlocal agricultural and economic develop-

63ment. In Pakistan, too, although the subdistrictlevel is crucial, union administrationsare local government units of a fairsize and some capacity. In Thailand, thereforms of 1999 and 2003 resulted inmunicipal-level consolidation in cities andboroughs and in the upgrading of sub-districtadministrative organizations into unitsof local self government. These units subsumedthe headmen that until that timehad been elected by the people but subordinatedto the provincial administration.These reforms represent an important steptowards the generalization of municipalgovernment in Thailand – although thegovernment system as a whole remainsrather centralized.The very rapid pace of urbanization in Asia– a seven-fold increase in urban populationsince 1950 (ADB 2006a) – presents hugechallenges for urban governance. At thesame time, decentralization policies inmany countries are increasingly puttingthese challenges into the hands of localgovernments (ibid. p.4). Although city andurban municipal governments are oftensome of the longest-established localgovernments in these countries (somegoing back over a century) they havegenerally been unable to keep pace withthe demands of urbanization. A city ormunicipal government often covers onlythe historic core that spawned a vastmetropolitan area. Although its boundariesmay, in some cases, have been enlarged,this has very rarely been sufficient to keeppace with the rapid urban expansion.As a result, the urban periphery is oftengoverned by a multiplicity of smaller municipalities,town and village councils,without any overall system of metropolitan-widemanagement. The available fiscalresources are often concentrated in thecore city, while the poorly served periphery(where many of the poorest live) is governedby various municipal and village councilsthat have access to minimal resources.This fragmentation of urban governancepresents huge problems in the financingand management of infrastructure and servicesacross the city.A few metropolitan areas (Metro Manila,Bangkok, Tokyo) have a functioning metropolitanlevel of government and in Chinastrong municipal governments thatencompass large rural hinterlands havealways governed the largest cities. In Australia,most of the metropolitan populationslive outside central cities and informalcooperation about planning has served asa means of metropolitan governance. Uniquely,the city government of Brisbaneencompasses the whole metropolitan area(ADB 2006a). In New Zealand, 12 localgovernments representing the largestcities and peripheral districts in the six biggestmetropolitan regions have joined withlocal government associations to developjoint strategies to address governanceissues.Elsewhere, there may only be some formof coordinating mechanism between thevarious municipal governments. But itrarely has the power or resources to tacklemetropolitan-wide infrastructure and serviceneeds. For example, in Jakarta, theremit of the city government (DKI) coversonly what was the metropolitan area untilaround the 1970s. In recent years fouradditional city governments have beencreated in the adjoining areas where mostnew development has taken place.Although there is a planning framework forthe whole metropolitan region (Jabodetabek),this has to operate on the basis ofconsensus among the constituent authorities.A further complication is the multiplicity ofagencies involved in urban development,infrastructure and service provision. Thishas been a particular issue in India wherethere has been a long tradition of specialpurpose agencies (SPAs). Thus, in a citysuch as Bangalore, there is a plethora ofSPAs in addition to the state government,the municipal government and the municipaland village governments in the sur-

ASIA-PACIFIC64United Cities and Local Governmentsrounding area. The SPAs include the BangaloreDevelopment Authority, the BangaloreWater and Sewerage Board and theKarnataka Slum Clearance Board (Devas2005). This leads to overlaps, gaps and thelack of a coordinated response to theneeds of the rapidly growing population. Inmany large cities of the region, endemicpolitical conflict between the various levelsof government –municipal, state and central–make metropolitan coordination evenmore problematic.III. Powers and responsibilities,management and financesIII.1. Functions of local governmentAs in other parts of the world, localgovernments in the selected countries ofthe Asia-Pacific region have multiple rolesEducation is the most notable service delivered by localgovernment in the region. The only exceptions are Australia,New Zealand and Malaysia, where basic education remainsa state or central government responsibilityto perform: service delivery, governance,planning and community development,and regulation and supervision. Table 5provides a profile of the functions that arethe responsibility of local government.Generally speaking, all countries havedecentralized some basic services to thislevel, including planning, education, provisionof social and health services, watersupply, public transport and businessdevelopment support. In Indonesia, the2004 decentralization legislation (Law 32)devolved a comprehensive list of 16 obligatoryfunctions to local government.Education is the most notable service deliveredby local government in the region.Local governments in China, Japan, India,Indonesia, Pakistan, Vietnam and the Philippinesare involved in the delivery of basiceducation, ranging from pre-school tosecondary school. The only exceptions areAustralia, New Zealand and Malaysia,where basic education remains a state orcentral government responsibility. Someaspects of health and welfare services aredelivered by local government in mostcountries in the region except for Australiaand New Zealand, where these functionsremain with the state and central governmentrespectively. In Korea, health andsocial welfare accounted for 31% of totallocal expenditure in the consolidated localgovernment budget for 2007. In the Philippines,health and welfare services havebeen fully devolved since 1992. Watersupply is primarily a local government responsibilityin several countries of theregion (e.g. Australia, Japan, Indonesia,Pakistan and Vietnam). By contrast, electricitysupply remains a central governmentresponsibility throughout the regionexcept in China where it is a municipalresponsibility.In New Zealand, under the influence ofNew Public Management (NPM), there hasbeen a dramatic increase in private sectorparticipation in local service delivery. The1989 Local Government Act requires localauthorities to “give due consideration tothe advantages and disadvantages of differentdelivery options” in the provision oflocal services. This led to a large increasein contracting out and by the mid-1990s75% of all services were delivered by privatecontractors (Boston 1996). In India,the pressure on recruitment, together withthe spread of NPM initiatives at the statelevel, has also encouraged many localgovernments take up new activities andservice provision arrangements throughpublic-private partnerships, but correspondingsystems of contract supervisionand ‘public service comparators’ are stillnot very well developed.In addition to the functions listed in Table5, many local governments in the regionalso perform some public works functionssuch as road construction (e.g. Australia,

65Table 5Services delivered by the local governments in the Asia-Pacific RegionCountry Planning Basic Basic social Basic health Water Electricity Public Businesseducation welfare services supply supply transport developmentsupportAustralia Yes No No No Yes No Yes YesChina Yes Yes Yes Yes Yes Yes No YesIndia Yes Yes No Yes Yes No Yes YesIndonesia Yes Yes Yes Yes Yes No Yes YesJapan Yes Yes Yes Yes Yes No Yes YesMalaysia Yes No No No Yes No Yes YesNew Zealand Yes No No No Yes No Yes YesPakistan Yes Yes Yes Yes Yes No Yes YesPhilippines Yes No Yes Yes Yes No No YesKorea, Rep. of Yes Yes Yes Yes Yes No Yes YesThailand Yes Yes Yes No Yes No Yes YesVietnam Yes Yes Yes Yes Yes No Yes YesSource: UCLG Country Profiles (2007).India, Pakistan and Philippines) and evenairports (Australia). In most countries ofthe region local government also has aresponsibility for environmental protectionalthough its powers of enforcement tendto be severely limited. China is the onlycountry where local governments in autonomousregions perform functions normallyreserved for central government(e.g. judicial administration, scientific research,unemployment benefits and pensions).A number of local governments in the regionengage directly in business activities.This is especially so in China and Vietnam,where local governments are major producersof industrial goods. In New Zealand,the 2002 Local Government Actenabled local governments to create aLocal Authority Trading Enterprise (LATE).These companies, in which the localgovernments may hold 50% or more ofthe equity, employ their own staff and aresubject to company taxation. They operatein activities such as public transport,shopping malls, cinemas and car parks aswell as water utilities, property managementand quarrying. Some provinces inthe Philippines own major facilities such asconvention centers and shopping centersthat are managed as ‘profit centers’ toprovide additional sources of local revenue.Elsewhere, at the very least, localgovernments provide support services forbusiness development activities. The mostcommon commercial activity of municipalitiesis the operation of local public enterprisessuch as markets, slaughterhouses,bus terminals and car parks.

ASIA-PACIFIC66 United Cities and Local GovernmentsTable 6Relative Size of Local Government Expenditure and Income in the Asia-Pacific RegionCountry Total public Local public Ratio Ratio local public Tax shares + general Local tax revenuesexpenditure expenditure Local Public investment exp/ grants as % of the (= tax revenuesa) as % of GDP (local and meso Expenses/Total total civil public total LG Income subject to ab) € per capita level only) Public investment local tax power)a)% GDP Expenses expenditure as % of total LGb)€ per capitaincomeAustralia a) 37% a) 2% 7% 6% 52% 38%(2005) b) €11,486 b) €276China a) 27% a) 22% 81% n/a 32% 29%(2004) b) €291 b) €235India a) 19.1% a) Karnataka: 2.9% Karnataka: 18.5% n/a Rural panchayat: Urban local bodies: 60% of90% (all India revenues from property tax(2002) b) n/a b) n/a average) (all India average)Indonesia a) 19% a) 6% 33% 36% 70%

67III.2. Local Government FinancesThe relative economic size of local governmentvaries widely across the region, asshown in Table 6. In China, the different tiersof local government play a major role in serviceprovision and local economic development.Local governments manage some80% of state-owned enterprises. As a result,they account for 81% of public expenditureand 22% of GDP. In Japan, local governmentshave wide functional responsibilitiesand account for over half of total publicexpenditure and 10% of GDP. In Indonesia,as a result of the recent ‘big bang’ decentralization,local governments now account forone-third of total public expenditure. By contrast,despite their long-established traditions,local governments in Australia andNew Zealand have quite limited responsibilitiesand account for less than 10% of publicexpenditure and around 2-4% of GDP. Thesize of local government in Vietnam has risenrapidly in recent years – more than doublingin absolute size and increasing from 40% to48% as a share of total public expenditurefrom 1997-2002. Nevertheless, until it implementedthe 2004 State Budget Law, Vietnamwas formally one of the least decentralizedcountries in the world, with local governmentsessentially carrying out deconcentratedfunctions at the behest of the centralgovernment (World Bank 2005:87). For thebiggest countries of the region, global datahide enormous disparities between regionsand between local governments.Local governments of the selected countriesin the Asia-Pacific region are all equippedwith powers of taxation, as shown in Table 7.Table 7CountryAustraliaChinaIndiaIndonesiaJapanMalaysiaNew ZealandPakistanPhilippinesKorea, Rep. ofThailandVietnamThe Scope of Local Tax Powers in the Asia-Pacific RegionMajor local taxesPropertyCollective enterprise, agricultural and real estateProperty, octroi (tax on goods entering the municipality)Hotel and restaurant, entertainment, advertisement, electricity (street lighting), non-strategic and non-vital mining, parking, groundwater and environment. In addition,proceeds from taxes on land and property, motorized vehicles, vehicle transfer and fuel are shared with provinces.Individual inhabitant, business, local consumption and automobile, property tax, city planning tax, local tobacco taxPropertyPropertyDistrict/city: education, health, vehicles (excluding motor vehicles) Tehsil: services, property and sale of propertyProperty, business, amusement, sand and gravel, printing and publication, franchise and communityProperty, business, acquisition, registration, license, inhabitant, farmland, butchery, leisure, tobacco consumption, urban planning, regional development, motor fuel andlocal educationProperty, land and building, land development, signboard, slaughter duties, swallow nest duties, tobacco, petroleum and hotelLand and house, natural resources (excluding those on petroleum activities), license, land use rights transfer and land rent.Sources: UCLG Country Profiles (2007).National Tax Service of the Republic of Korea (2006).Weist (2001).

ASIA-PACIFIC68United Cities and Local GovernmentsProperty taxation is by far the major sourceof local taxation; in Japan it accounts for46.2% of own tax revenues (before the“Trinity Reform”); in Australia thisaccounts for 100% of own-revenue and inNew Zealand for 91% of own-revenue. Inboth countries, as well as in China, localgovernments also have discretion overthe rate of property taxation whereaselsewhere this tends to be determined bycentral or state government. In somecountries, business (or enterprise) taxationis also a major source of own-revenue.Municipalities throughout the regionalso collect taxes on hotels, restaurantsand places of entertainment. Some localtaxes are peculiar to a specific country.For example, city governments in Japanimpose an urban planning tax, Pakistanimunicipalities impose health and educationtaxes and Chinese municipalitiesIdeally, the financial resources at the disposal of a localgovernment – whether from its own sources 3 or from grantsand transfers– should be sufficient to cover all servicesthat it is mandated to deliverimpose collective enterprise and agriculturaltaxes. In Indonesia since 2004, municipalitiesmay impose a tax on surfacewater. Together with the existing local taxon groundwater, this authority is part ofthe government’s effort to curb environmentaldamage from over-exploitation ofwater resources.In China, Indonesia and Vietnam, theproceeds of some locally collected taxesare shared with higher tiers of government.In China, revenue from personalincome tax, product tax, business taxand joint enterprise tax are all sharedbetween central and local government. InVietnam, local governments have notaxing powers at all. Instead, they sharewith central government the proceedsfrom VAT, corporate income tax, incometax on high-income earners, special consumptiontax on domestic goods and services,and gasoline and oil tax. Other taxrevenues are exclusively assigned tothem, namely land and housing taxes,natural resource taxes (excluding petroleum),license tax and land use rightstransfer tax. In Indonesia, local governmentsshare the proceeds of taxes onland and property, and on motorizedvehicles and fuel with provincial government.Many municipalities also levy userfees and charges that comprise a minorpart, typically less than 10%, of theirtotal own-source revenues.While local governments all have their owntax sources, the degree of fiscal autonomyalso varies considerably between countries.The more developed countries, suchas New Zealand and Australia generate asubstantial share of their revenues locallyand are hence less reliant on intergovernmentalfiscal transfers. The share of grantsin total local government revenue hasfallen in both Australia and New Zealand inrecent years - from 23% in the 1980s to16% in the late 1990s in Australia andfrom 18% to 10% over the same period inNew Zealand (OECD 2001). In Japan thelocal finance reform (“Trinity Reform”)2005-2007 replaces targeted subsidies bytax revenues (transfer from the nationalpersonal income tax upon the individualinhabitant tax, however for a lower expectedyield) and the global tax grant, untilnow a major equalizing transfer from centralbudget, is being reduced drastically.By contrast, in lower-income countries ofthe region such as India, Indonesia, Pakistanand Thailand, local governments (outsidethe major urban centers) generate amuch smaller share of their total revenuesfrom local tax sources (typically 10-30%)and hence are heavily reliant on centraltransfers and grants. In Thailand, accordingto the 1999 Decentralization Plan andProcedures Act, local governments were tobe allocated at least 20% of the nationalgovernment budget by fiscal year 2001

69and at least 35% by fiscal year 2006. Thelatter goal has not yet been reached andthese targets have been the subject ofheated debate. However, the degree oflocal fiscal autonomy is not necessarily afunction of the overall income level of thecountry. For example, Japanese local governmentonly raises 34,4% of its totalincome from own-taxes while local governmentsin China receive only 32% of theirincomes from grants and shared taxes ofcentral government. This disparity reflectsthe very strong role that local governmentin Japan plays as an ‘agent’ of centralgovernment in the delivery of services,especially education and social welfare,which are financed by earmarked intergovernmentalfiscal transfers. In contrast,the much stronger practice of fiscal decentralizationin China through the mechanismof revenue sharing is counterbalanced byextreme political centralization.Ideally, the financial resources at the disposalof a local government –whether fromits own sources 3 or from grants and transfers-should be sufficient to cover all servicesthat it is mandated to deliver. This isnot the case in India, Pakistan and the Philippines.In these countries own-source revenuesof local governments plus transfersreceived are together insufficient to fundthe delivery of local services, suggestingthe need for the devolution of extra taxpowers in order to correct this imbalance.By contrast, the strength of municipalassociations in the OECD countries of theregion has ensured that the correspondingextra revenues required to comply withnew mandates have accompanied thedevolution of new responsibilities to localgovernment. In Australia, such ‘cost shifting’to local government was a centralpoint of a 2006 Inter-Governmental Agreementbetween the Local Government Associationand the federal government. InNew Zealand, it has been one of the majorissues that contributed to successivewaves of local government reform from1989 onwards. Complicating this problemis the issue of ‘unfunded mandates,’namely the predilection of central governmentto legislate further responsibilitiesthat involve an additional fiscal burden onlocal government. This is so in the Philippines,where local government is required to payadditional incentives and allowances todevolved health sector employees andallowances to national government publicservants (e.g. judges and police) whoseoffices lie within its jurisdiction. Theseunfunded mandates have put a strain onthe finances of local government and are aburning issue in the discourse on centrallocalrelations in many other countries inthe region.Borrowing is another source of localgovernment funding. In the past, centralgovernments in most countries of theregion have limited the access by localgovernment to capital markets because ofthe inherent risk that over-borrowing maylead to macro-economic instability. InKorea the size of local government outstandingdebts from bond issues hardlychanged during 2000-2006 because ofthe strong control exercised over localborrowing by central government. InChina, the central government placedstrict limits on the power of local governmentsto borrow, but the latter oftenfound ways to avoid these controls byobtaining loans through their municipallyowned enterprises. Today some centralgovernments in the region are increasinglyencouraging larger municipalitiesto borrow. In Japan, loans are no longersubject to authorization, but only anunderstanding with central government,since April 2006. In India, several of thelarger cities have issued municipal bondsand in the state of Tamil Nadu arrangementshave been made for smaller municipalitiesto join together to issue bonds.Of course, municipal borrowing dependson a functioning capital market as well asthe repayment capacity of municipalities.In the Philippines local governments arelegally enabled and encouraged to tapfinancial markets and other non-traditionalsources of finance in order to make3. Own sources:resources levieddirectly by localauthorities.

ASIA-PACIFIC70United Cities and Local GovernmentsThe degreeof influenceby higher tiersof government inthe selection oflocal governmentstaff remainsconsiderable inthe regionthem less reliant on central grants. However,very few have yet attempted to tapprivate capital markets. Some localgovernments have used variants of thebuild-operate-transfer (BOT) schemesand other forms of private sector participationin order to fund major investmentprojects, although interest in these haswaned somewhat following the East Asianfinancial crisis.Borrowing from commercial banks hasbeen minimal because of the lack of collateralor guarantees. Loans from governmentfinancial institutions (GFIs) havebeen far more common because theseGFIs serve as the depository banks for thelocal governments for their intergovernmentaltransfers. Hence GFIs can alwayswithhold these central transfers in theevent of default on loan repayment by thelocal governments. A drawback, though,is that such arrangements can encourageirresponsible lending. In Indonesia, mostborrowing by local governments has beenfrom the central government, often involvingon-lending of donor funds. In NewZealand, a 1996 reform eased the processof loan approval but also placed new legalrestrictions on it. In place of centralgovernment approval, localities were requiredto specify explicitly the purposeand beneficiaries of a borrowing measureand to budget accordingly so as to coveroperating expenses. In Australia, localgovernment borrowing is coordinated by anational Loan Council that allocates andregulates debt among the states. In Korea,the size of outstanding local governmentdebt from bond issues hardlychanged during 2000-2006 because ofthe strong control exercised over local borrowingby the central government.III.3. Administrative Capacityof Local GovernmentData on the share of local level personnelin total public sector employment for selectedAsia-Pacific countries is shown inTable 8. The share ranges from highs of92% and 77% in China and Indonesia respectivelyto lows of only 7% and 10% inMalaysia and New Zealand. Most localgovernment personnel in the region havepermanent positions with tenure protectedby law although chief executive officersin New Zealand are recruited onseven-year renewable contracts.The institutional and policy frameworks forrecruitment, as well as the organizationalresponsibilities in undertaking recruitmentprocesses at the local level, are shown inTable 9. Specific laws govern local publicservice in most countries of the region. InJapan, the Local Public Service Law definesthe criteria for recruitment of local governmentpersonnel as well as a position classificationsystem, remuneration and benefits,hours of work, disciplinary matters andtraining. In the Philippines, local governmentpersonnel are covered by civil service lawsand by the rules and regulations of theCivil Service Commission (CSC), the centralagency for public sector personnel. Inaddition, the 1991 Local Government Codehas provisions regarding personnel administration.The Code mandates all localgovernments to design and implementtheir own organizational structure andstaffing pattern, taking into account theirservice requirements and financial capacity.It also provides for the mandatoryappointment of certain posts at every tierof local government and the creation of aPersonnel Selection Board in each localgovernment unit to assist the local chiefexecutive in the fair selection of personnelfor employment and promotion. Notwithstandingthese safeguards, problems suchas nepotism and associated non-compliancewith the merit principle in recruitmentand promotion are endemic in the localpublic service system in many countries ofthe region.The degree of influence by higher tiers ofgovernment in the selection of local governmentstaff remains considerable inthe region. In China, the committees ofthe Chinese Communist Party choose,

71Table 8Size of Local Government Personnel in the Asia-Pacific RegionCountry Local government personnel Total public sector personnel Share of local government personnelin total public sector employmentAustralia 147,500 1,357,600 11%China 5,000,000 (est.) n/a 92%India n/a n/a n/aIndonesia (2006) 2,781,476 3,635,816 77%Japan 1,432,494 2,311,920 62%Malaysia 58,000 829,000 7%New Zealand 21,680 227,220 10%Pakistan n/a n/a n/aPhilippines (1999) 390,561 1,445,498 27%Korea, Rep. of (2006) 345,989 611,219 56%Thailand n/a n/a 20%Vietnam n/a n/a 60%Source: UCLG Country Profiles (2007): Figure 7.1.manage, discipline and dismiss civil servants,including those in local government.The recruiting body is likewiseresponsible for the discipline and dismissalof appointees. At the other end of thespectrum, in Australia and New Zealand,local councils appoint the Chief ExecutiveOfficer (CEO) but all other staff areemployees of the CEO. In Pakistan, provincialauthorities largely determine theappointment of senior local governmentpersonnel, with district and city establishmentscomposed basically of secondedfederal and provincial civil servants. InIndonesia, despite a radical decentralizationreform, the central government stillexercises substantial control over localgovernment staff appointments. In India,selection and recruitment of local governmentstaff is done by either the localauthorities themselves or by a state levelbody concerned with recruitment. Localgovernment in Malaysia can recruit, train,promote and discipline their personneland even manage pensions but all theseactions require approval by state government.Local budgets are also subject tostate supervision.In Thailand, the strong vertical connectionsbetween local officials and officialsof the central government (especially inthe Department of Local Administration ofthe Ministry of Interior), who handed outjobs, have been dismantled and personneldecisions are now largely under the powerof the local executives. Bureaucrats residentin Bangkok often resist transfer tothe provinces, which involves moving andpossibly less authority and lower pay.However, transfers to local governmentsare more attractive for provincial officialsgiven that provincial offices and districtoffices have lost authority as a result ofdecentralization and the transfer does notrequire a change in residence.

ASIA-PACIFIC72 United Cities and Local GovernmentsTable 9Institutional and Policy Frameworks for Recruitment Processes and Human ResourceDevelopment at the Local Level in the Asia-Pacific RegionCountry Staffing regime (public or private Recruitment procedure, especially Institutional arrangements for traininglaw, career or job positions) for high-level positions of local government staffAustralia Public law Recruitment by individual local government unit Organized and funded by individual local government unitsChina Civil servant law Annual competitive exam at national and local levels Organized and funded by local governmentIndia Largely by public law Central and state level staff, selected by Not mandated by law but organized by central and stateexamination, are assigned to senior LG posts. governmentsIndonesia Public law with career positions Central government still exercises control over Implicitly mandated by law and organized by central andrecruitment, which is generally by competitive local governmentexam with senior LG posts filled by promotionof career-based officers.Japan Local public service law for full-time positions, Competitive exams for all local governments Regulated by local public service law and implemented bycareer positionseach local governmentMalaysia Local councils have recruitment boards, By local government subject to approval of National Institute for Public Administration (INTAN) acts assupervised by Public Service Commission. state level government training arm of the Public Service Commission.New Zealand Fixed-term seven year contracts for Chief Staffing levels determined by each CEO who Local Government New Zealand provides limitedExecutive Officer (CEO) and tenure for recruits and acts as legal employer of all other staff professional trainingother personnelPakistan Federal, provincial and local civil service Centralized recruitment by merit through Public Various public sector training institutionscadres under civil service actsService Commission with provincial cadresassigned to senior posts in local governmentPhilippines Civil service law and rules, 1991 local By individual local government Local Government Academy, Dept of Interior and Localgovernment code and civil service rulesGovernment and Centre for Local and Regional Governance,and regulationsUP-NCPAGKorea, Rep. of Local public service law for full-time positions Central government staff assigned to local Local Administrator Formation Institutes (LATI);government. Other staff recruited by competitive Other public sector training institutionsexamination or on contract basisThailand Strong central government control relaxed with Central government sets broad national standards Central government and provincial responsibilityrecent rapid devolution of personnelfor hiring, firing, recruiting, and setting salaries andresponsibility to local governmentbenefits in local governments. Personnel decisionsare now largely under the power of local executives.Vietnam Regulated by 2003 Ordinance on Cadres Central government staff assigned to local National Academy of Public Administration and Provincialand Civil Servants government. Other staff recruited by competitive and District-level Political Schoolsexamination or on contract basisSource: UCLG Country Profiles (2007) and Brillantes 2006.

73The most far-reaching management reformsaffecting local government in theregion have been in New Zealand wherethe 2002 Local Government Act requiresboth annual and long-term plans as wellas systematic consideration of outcomesfor local communities. It also prescribesprinciples for public consultation includingtransparent presentation of proposals,options and procedures. MostAustralian states have introducedsystems of performance managementfor local government, including performanceindicators and other benchmarkingstrategies. In particular, theintroduction of accrual accounting hashad a major impact on local governmentmanagement because of the requirementto value assets and make adequateprovision for depreciation. Elsewherein some countries of the region, significantdecentralization programs havecreated severe strains on the managementcapacity of local governments asthey try to cope with the administrativechallenges caused by the rapid transferof central government responsibilitiesand personnel.The challenges of limited capacity andresources that all local governmentsface are amplified in urban areas. Theproblems of urban management are morecomplex and the potential for disaster(natural and man-made) is greater.Environmental problems are particularlysevere, with inadequate capacity to treathuman and industrial waste, severecontamination of water sources andserious air pollution from both industrialactivity and the rapid growth of motorvehicles. Although city governmentsmay be better able to recruit qualifiedstaff compared to rural local governments,their capacity to regulate developmentand to effectively controlenvironmental risks remains quite limited.Similarly, although city governmentsmay have access to much greaterfiscal resources than rural governments,their need for resources is also muchgreater, since infrastructure and servicesare likely to be much more expensive.In turn, inadequate physicalinfrastructure is often a major impedimentto industrial development and urbaneconomic growth, on which nationaleconomic development depends.In its report on urbanization and sustainabilityin Asia (ADB 2006a), the AsianDevelopment Bank identified a numberof examples of good urban governancein 12 countries in the region. Theseinclude: innovative approaches to revenuemobilization and capital financing;improved administration and performance-orientedmanagement; increasedavailability of information and transparencyof decision-making; greater citizenparticipation in decision-making;collaboration between municipalitieswithin the metropolitan area or economicsub-region; serious attempts to tackleenvironmental problems andeffectively enforce pollution controls;significant programs to address urbanpoverty, and support to communitybasedservice improvements. However,such initiatives have been the exception.In all such cases, local leadership hasbeen the critical factor: leadership thatis committed to reform and to improvingmunicipal conditions, is effective inmobilizing support for such initiativesand is responsive and accountable tolocal citizens. Developing such civicleadership across the region remains amajor challenge.Decentralization reforms and associated greaterlocal level autonomy require major capacitybuilding and training interventions forlocal government personnel in the Asia-Pacificregion (Brillantes 2006). As shown in Table 9,such training and capacity-building programsin the selected countries of the region oftenform part of each country’s overall civil serviceand policy frameworks. It is noteworthythat Korea, a country that has emphasizedknowledge management as a core element ofthe development process, is pursuing capa-Decentralizationreforms andassociated greaterlocal levelautonomy requiremajor capacitybuilding andtraininginterventions forlocal governmentpersonnel in theAsia-Pacific region

ASIA-PACIFIC74United Cities and Local GovernmentsCorruption in thepublic sector,including localgovernment, is aglobal concerncity building in the public sector through theestablishment of separate specialized traininginstitutes for central and local governmentpersonnel, respectively the Central OfficialsTraining Institute (OTI) and the Local AdministratorsTraining Institute (LATI).In the context of the current decentralizationreforms in the region, attitudinal changeamong central government officials is necessaryto mitigate the new challenges and difficultiesfaced by local government personnel.In Japan, this process is encouraged by intergovernmentalpersonnel exchanges, wherebycentral government personnel from theMinistry of Home Affairs are regularly secondedto local government, a practice that is notat all common in New Zealand. Apart fromenabling these officials to appreciate the perspectivesof the ‘locals’ and hence decentralizetheir own ways of thinking, this is also a wayof building the capacity of local governmentthrough the expertise that is shared withthem. In this respect, there is growing interestin encouraging joint training institutes ofpublic administration for both local and centralgovernment personnel in order to promotecross fertilization and collaborationbetween the different tiers of government.Given the continued thrust towards decentralizationin the region, the relative merits ofseparate training institutions for national andlocal government employees (as in the caseof Korea and the Philippines) and joint traininginstitutions deserve attention.III.4. Integrity and CorruptionCorruption in the public sector, including localgovernment, is a global concern. Developedand developing countries alike are bedeviledwith corruption issues. The annual CorruptionPerception Index (CPI) published by TransparencyInternational reveals that some of thecase study countries in the region (Indonesia,Pakistan, Philippines and Vietnam) are nearthe bottom of the ladder and strongly suggestthat corruption in these countries is perceivedas a major problem. On the other hand, NewZealand is ranked as the least corrupt countryin the world while Australia is ranked ninth(Transparency International 2006). Althoughthe CPI does not directly pertain to corruptionat the local level, local governments are notexempted from this negative perception. Infact, there is a widespread perception in bothChina and Indonesia that decentralization hasincreased corruption. Indeed decentralizationcan increase the problem of corruption, or atleast spread it around much more widely,making it more difficult to manage. On theother hand, democratization and the strengtheningof civil society may simply exposecorruption to more public view, so that citizensperceive that the problem has increasedeven when it has not.Many developing countries of the Asia-Pacificregion have serious problems with corruption.This is much less significant in the richercountries such as Japan, Australia and NewZealand, because of both the much higherrates of staff remuneration and the well establishedarrangements for public scrutiny andcontrol in these countries. In New Zealand,the State Services Commission has since1988 elaborated and monitored a Code ofConduct for public ethics and conflicts of interestin local as well as central government.The national Auditor-General enforces theserules and criminal charges can be brought inthe event of breaches. Elsewhere, corruptioncan seriously erode the availability of resourcesfor local service delivery and can preventcitizens, particularly the poor, from gainingaccess to these services.Several countries in the region have introducednew mechanisms to curb corruption,including greater transparency of decisionmaking. In Malaysia, improvements in localgovernment recruitment procedures andremuneration, together with e-governanceinitiatives, have been designed to improveethical standards and the transparency oflocal service delivery. In the Philippines, theTransparent Accountable Governance Projectinvolves a ‘conduct of lifestyle’ check on publicofficials and procedural reforms in localgovernment transactions (procurement, administrationof local public enterprises, pro-

75perty tax administration and business permittingand licensing). In India, many stateshave appointed a Lokayukta (ombudsman)to combat corruption and malpractice ingovernment, including local government. InJapan, there were a reported 92 cases ofcorruption in 2004 at the municipal level.Measures to combat corruption includestrengthening the external audit system andcheck up and reform of the accounting process.But elsewhere (e.g. Pakistan, Philippinesand Indonesia) the capacity of centralgovernment to monitor and audit localgovernments remains a major concern. Forexample, reports from the Philippine Centerfor Investigative Journalism point out that upto 70% of local health funds disappear as aresult of corruption.III.5. Central-Local RelationsLocal governments in the selected countriesoperate under a legal framework that is definedby higher levels of government. In unitarynations such as China, Indonesia, Japan,Korea, New Zealand, Philippines, Thailand andVietnam, central governments prescribe thepowers and functions of local government. Infederal systems such as Australia, India,Malaysia and Pakistan local governments areanswerable to the state or provincial government.In Australia, state and territory ministersfor local government may dissolve localcouncils and appoint administrators to carryout all local government functions. When thishappens, the ministers usually have to holdpublic inquires into the alleged failings of theconcerned council that justified the intervention.Even state constitutional provisionsthat restrict these powers can be amendedrelatively easily (CLGF 2005:29). In New Zealandthe 2002 Local Government Act gives theminister for local government the power toinitiate review of local governments for mismanagementor deficiencies in council decisionmaking. In India there are no specialavenues for intergovernmental relations andthere is no formal representation of local governmentin the state structures (CLGF2005:106).Generally speaking, local governments as selfgoverninginstitutions are both accountable totheir citizens and to the higher levels of governmentof which they are agents. In Pakistan,local political accountability remainsproblematic because of the control functionsthat the provincial government continues toexercise over local government on matterssuch as local personnel management and localfinances. Local governments are also helplessin influencing grant-aided programs in theirjurisdiction because these are usually determinedby provincial and national legislators.By contrast, in Indonesia, decentralizationfundamentally altered the direction ofaccountability. Prior to the 1999 reforms, localgovernment was answerable primarily to thecentral government, but after the introductionof direct elections of provincial and localgovernment executives and legislatures, thedirection of accountability shifted markedly towardsthe local electorates.In most of the selected countries, national orstate level agencies perform general oversightof local government with regard to audit andprobity. Nevertheless, the extent of this‘upward’ accountability of local government tohigher levels of government differs markedlyamong countries in the region. In China andVietnam, local governments have a dual subordination,both sectorally (to central governmentministries and agencies) and territorially(to the people’s councils). The people’s councilsare themselves subject both to supervisionand operational guidance from the nationallevel and to guidance and inspection from sectorministries and agencies of central government.In India, state sectoral agencies oftenperform functions that overlap with localgovernment functions and preempt localgovernment responsibility 4 .In contrast to many countries in the region,central government ministries and agencies inJapan do not have direct control or supervisionover local governments but may only provideinformation and suggestions. However, theMinistry of Home Affairs exercises de factocentral fiscal supervision and control by way ofthe model budget that it presents to the localLocal governmentsin the selectedcountries operateunder a legalframework that isdefined by higherlevels ofgovernment4. Sethi (ed.), 2004,(pp.15-16.)

ASIA-PACIFIC76United Cities and Local GovernmentsEven when majordecentralizationreforms have takenplace, the power ofcentral governmentmay still prevailover localgovernment5. Member states of theFederation(Translator’s note).6. Gathering togetherthe different levels oflocal representatives(Translator’s note).governments every year. When the centralgovernment disapproves of their decisions orpolicies, local governments can appeal to theDispute Settlement Commission; however,authorities almost always prefer further discussions.A similar situation exists in Korea,where, despite their significant size, localgovernments have far less autonomy in practicethan suggested by legislation. The lack ofclarity over the division of responsibilities withcentral and provincial governments –twothirdsof enacted local government responsibilitiesare exercised jointly with provincialgovernment– is especially true in the case ofeducation, where local governments deliverservices as agencies of central government.Provinces and metropolitan city governmentsenjoy considerable supervisory authority overlocal government (cities, rural districts andautonomous urban districts).Even when major decentralization reformshave taken place, the power of central governmentmay still prevail over local government.In India the state-level Local GovernmentMinister may dissolve elected bodies and governthem directly for up to six months. Howeverelections must be held within six monthsin order to reconstitute the municipality.By contrast, in the case of the Philippines thedissolution of local elected bodies is prohibited,even by the highest level of government. Sucha process can only be carried out ‘from below,’either through regular elections or through therecall process, whereby the voters themselvesdecide on the fate of the elected officials. Theprinciple here is that elected officials are solelyaccountable to the citizens who elected them.In Thailand, the Ministry of the Interior is perceivedas the strongest opponent of decentralization.By pointing to local weaknesses inadministrative capacity and personnel, theministry has attempted to stem the loss of itsauthority. The ministry argues that it needs toretain the extensive supervisory powers that itexercises over local governments through theprovincial administration under its control. Localgovernments are subjected to auditing bythe ministry once a year. The ministry can alsointervene to terminate or modify local policiesif it believes they contradict or threaten nationalpolicies or interests. As a result, provincialgovernors and district officers still retain considerableauthority over local government.III.6. Local Government AssociationsThe development of local governmentsundoubtedly depends to a large extent on the“local hands” that mind these communities.Yet there are situations when local governmentsneed to look beyond their parochialconcerns and be more forward-looking andpro-active in their orientation. Oftentimes,local governments would need some kind ofmechanism that can work for their mutualinterests and more significantly, to representtheir collective interest in dealing with higherlevels of government and external institutionssuch as donor agencies. In this respect, localgovernment associations have become theinstrument that local governments in theregion adopt to advance their mutual interests.These associations perform diversefunctions for local governments.One significant role that these associationsperform is to act as representative and advocateof local government interests in higherlevels of government. Australia has perhapsone of the longest existing national local governmentassociations in the region. Establishedin 1947, the Australian Local GovernmentAssociation (ALGA) sits as member in the PremiersConference 5 and Council of AustralianGovernment and various ministerial councils,intergovernmental committees 6 and specialistadvisory bodies. The association has helpedshape the reform agenda in 1990s such asNational Competition Policy and reviews ofintergovernmental relations. At the state levelare also found local government associationsthat link the councils in intergovernmentalforums, negotiations, and cooperative effortsin general and specific areas of activity. As inAustralia, local governments in New Zealandhave formed the Local Government Associationof New Zealand representing the interestsof 86 member local authorities. Since 2000when the central government-local governmentforum was initiated, the association has

77consistently represented local government indiscussing common issues and coordination ofpublic services. Membership in Australian andNew Zealand local government associations isvoluntary but councils in the two countrieshave chosen to be members because of theactual and potential contributions that theassociations give to the councils. The seniorlocal authority officers in this country have alsoformed themselves into a national professionalbody called Society of Local GovernmentManagers. Other associations in the subregion,recently created, are the Fiji LocalGovernment Association and the PapuasiaNew Guinea Urban Local Level Association.In the Philippines, the Union of Local Authoritiesin the Philippines (ULAP) is a nationalbody, established in 1997, that is composed ofvarious leagues at the provincial, city, municipaland barangay (village) levels. These leaguesrepresent their respective interests andserve as mechanisms to articulate issues thatdirectly concern them and to secure solutions.The ULAP seeks to unite members to pursuegenuine autonomy for all local governmentunits. Various groups of elected local officials(such as vice mayors, women mayors andyoung legislators) and professional localgovernment staff (such as treasurers, assessorsand planners) also have their respectivenational associations. In Indonesia, six independentassociations representing specificlevels of local government were created in2001, following the Local Government Law1999/22: the Association of Indonesian MunicipalCouncils (ADEKSI), the Association of AllIndonesian Regency Legislative Councils(ADKASI), the Association of Indonesian ProvincialCouncils (ADPSI), the Association ofIndonesian Municipalities (APEKSI), the Associationof Indonesian District Governments(formerly APKASI – now BKKSI) and the Associationof Indonesian Provincial Governments(APPSI). They lobby the National Parliamentand the central government to advocate localissues and interests. The associations also serveas a forum for discussing common interestsand forging partnerships among local governments.Local government associationsare more closely linked with the central governmentin Malaysia, (the Malaysian Associationof Local Authorities or MALA), Vietnam(the Association of Provincial Cities of Vietnam,renamed the Association of Cities ofVietnam or ACVN) and Thailand (the NationalMunicipal League of Thailand or NMLT). Theyoungest associations are the Provincial Associationof Commune/Sangkat Council (PAC/S)and the National League of Communes andSangkat (NLC/S) established in August 2006in Cambodia.India has several local government associationsincluding the All India Council of Mayors,representing the municipal corporations, andthe Nagar Palik Pramukh Sangthen, representingthe other urban municipalities. UnlikeAustralia, New Zealand and the Philippines,these associations are not recognized in law. ManyIndian states have City Manager Associationsfor urban local government officials. Despitethe existence of these associations, local governmentshave no formal representation instate government structures; meetings anddialogues with state level institutions happenon an ad hoc basis and by specific localgovernment. After several years of effort, anAssociation of Local Governments was establishedin India in 2006. In Bangladesh,Nepal and Sri Lanka national associations oflocal governments were created in the mid-1990s 7 . By contrast, there is no local governmentassociation in Pakistan.Local governmentassociations workfor the mutualinterests of localgovernments andrepresent theirinterests in dealingwith higher levelsof government aswell as externalinstitutions such asdonor agencies7. There is ADDC/N, the Nepalese Association of District Development Committees (founded in 1995); MuAN, the Municipal Association ofNepal (established in 1995) and NAVIN, the National Association of Village Development Committees. Following the establishment ofADDC/N, a new impetus was given to the collective strength of DDCs and decentralization supporters for speeding up the processtoward decentralization. After four years of hard struggle, a new Local Self-Government Act was enacted in 1999, which can beregarded as a milestone in the gradual but steady movement toward decentralization. Sri Lanka has the National Chapter of Mayors(NCM) created in 1997, the United Urban Councils Association (UCA) and the Pradeshiya Sabhas Association (PSA) created in 2002.Bangladesh gained local government associations in 2003 when both the Municipal Association of Bangladesh (MAB) and the NationalUnion Parishad Forum (NUPF) were established.

ASIA-PACIFIC78United Cities and Local GovernmentsBeyondrepresentation tohigher levels ofgovernment, localgovernmentassociationsadvance theirrespectiveconcernsand interestsinternationallyIn Japan, there are no formal associationsof local governments that represent localgovernment interests. But there exist anumber of elective position-based associationssuch as Japan Association of CityMayors, Association of Town and VillageMayors, National Association of Chairpersonsof City Councils and the NationalAssociation of Chairmen of Town and VillageAssemblies. These organizations cooperatewith the National Governors’ Associationand the National Association ofChairpersons of Prefectural Assemblies inpresenting and negotiating policy alternativeswith central government. In China,local governments are represented by theChina Association of Mayors, created in1991. In the Republic of Korea, the newcourse in favor of decentralization hasbeen accompanied by the creation of nationalassociations: the National Associationof Mayors (1996) and the GovernorsAssociation of Korea, based on article154, paragraph 2 of the Local GovernmentAct (1999).Another area where associations haveplayed an important role is training andcapacity-building for councils and localstaff. In Australia, the state associationsalso act as employer bodies for councils inindustrial relations. They also providetraining and capacity-building projects forcouncils and deliver a number of specialistservices such as general insurance, workers’compensation insurance and retirementincome schemes for their membercouncils. The documentation and disseminationof local government best practicesare increasingly becoming an importantfunction that these associations fulfill fortheir members.Beyond representation to higher levels ofgovernment, local government associationsadvance their respective concernsand interests internationally. This is especiallytrue in Australia and New Zealand.Local government associations in thesecountries are members of regional and internationalorganizations such as the CommonwealthLocal Government Forum andthe Asia-Pacific Regional Section of UnitedCities and Local Government Organizations.Additionally, several countries have developedlocal government organizations aimedat developing international cooperation withlocal governments abroad: in China, theChinese International Friendship Cities Association;in Japan, the Council of Local Authoritiesfor International Relations (CLAIR)and in the Republic of Korea the KoreanLocal Authorities Foundation for InternationalRelations.IV. Local democracyThroughout much of the Asia-Pacificregion, multi-party democracy is thrivingat the local level. The mayor-councilsystem is the norm across the regionalthough local electoral practices vary considerably,including whether mayors aredirectly or indirectly elected (UNDP2006b). In most countries citizens directlyelect their local government legislatures(councils) as well as their executives(mayors), as shown in Tables 10 and 11below. The major exception is Malaysia,where the state government appoints localcouncils and executives –although thoseappointed are intended to act as representativesof the local community. In Pakistan,an electoral college of lower tiercouncil members selects the higher tier oflocal administration. In China and Vietnam,local communities elect their respectivecongresses or councils but thecandidates are subjected to a priorscreening process. These local councils inturn nominate representatives to higherlevel bodies at the town, county, city andprovincial levels. In Vietnam, althoughcandidates for council elections are usuallymembers of the ruling Communist Party,there have been recent efforts to attractnon-party members or self-nominatedcandidates to stand in local elections. Inthe 2004 local elections, non-party candidateswon 312 seats compared to 25 inprevious elections, spread among morethan 10,000 municipalities.

79IV.1. Electoral Systemsfor Local CouncilsIt is generally believed that proportionalrepresentation (PR) electoral systems arethe most representative because theytend to produce electoral results that aremore reflective of actual voting patterns,whereas plurality-majority or ‘First PastThe Post’ (FPTP) systems are thought toenhance accountability because they givevoters a specific representative withwhom to identify. However, this may notalways be true. PR systems can concentratepower in parties rather than voters’hands, and having an identifiable representativein a FPTP system may not necessarilytranslate into greater accountabilityfrom this person to the electorate (UNDP2006b).Table 10Electoral Systems for Local Councils in the Asia-Pacific RegionCountry Electoral system for directly Electoral system for directly Terms of mandate and Electoral turnout and trendelected lower tier LG councils elected upper tier LG councils number of termsAustralia Mixed system – PR and FPTP 2 years (2 states), three years Compulsory voting in 4 states.(3 states), 4 years (1 state) and Elsewhere turnout is generally low,1-4 years in Northern Territory except where there is postal votingChina Mixed system throughout. Mixed system 5 years DecliningIndia All LG councils (rural and urban, all tiers) have FPTP, single-member ward constituencies 5 years Figures unavailableIndonesia All LG councils have PR ‘open List’ system 5 years with no limit on number Complete figures unavailable.of termsJapan All LG councils have PR list system 4 years with no limit on number Declining, 56.23% (2003)of termsMalaysia*Not applicableNew Zealand Mostly FPTP but STV in a few cases 3 years 2001 – 50%2004 – 52%Pakistan Union councils have FPTP Not applicable 4 years Figures unavailable+ multi-member constituenciesPhilippines Barangay councils have FPTP Municipal and city councils, and provincial 3 years and maximum 3 terms Approx. 80%with block vote. arrangementboards have FPTP.Korea, Rep. of Korea: Direct council election by single round majority vote in the electoral 4 yearsdistricts, and by PR lists in local authority territories with unitary wards.Thailand All LG councils have FPTP system. 4 years 35.39% (Bangkok Met. Admin. Council)District (Council elections)Vietnam People’s councils (commune, district and province) have FPTP and multi-member 5 years 98.7% (2004)constituenciesSource: UCLG Country Profiles (2007) and UNDP (2006b) .Note: FPTP = First-Past-The-Post; PR = Proportional Representation; STV = Single Transferable Vote.* There is no electoral system for local government in Malaysia.

ASIA-PACIFIC80United Cities and Local Governments8. The unionadministrationscouncil is theinstitution whichbrings togethervillages orneighborhoods whichhave their ownelected organs. InPakistan there are6,125 unionadministrations thateach form the basicmunicipaladministration for anaverage populationof 15.000.The major features of the electoral systemfor local councils in selected Asia-Pacificcountries are presented in Table 10. In mostcountries council members are directly electedaccording to the FPTP system via singlememberconstituencies, i.e. geographicalareas at the sub-municipal level, known as‘wards’ in Australia and Pakistan and as ‘districts’in the Philippines. The only exceptionsare Pakistan and Vietnam where the FPTPsystem is applied to multi-member constituencies.The Block Vote system is used forlocal elections in the case of barangays inthe Philippines under which electoral districtsare multi-member and voters are given asmany votes as there are open seats in alegislative chamber. They can cast the fullnumber of votes or as few votes as they likeand the candidates with the most votes overallwin the election. Uniquely, New Zealandconducts local elections exclusively by mailand in four states of Australia voting in localgovernment elections is compulsory.Only Indonesia and Japan rely exclusively onPR for local elections, a system that has tendedto strengthen the power of national politicalparties over local political life. In 2004,Indonesia moved from a ‘closed’ to an ‘open’list PR system, in order to reduce the powerof national party executives to select localcandidates. This electoral reform sought toprovide voters with more ‘voice’ in decidingwhich individuals (as opposed to which parties)represent them in local government.New Zealand and Australia have a mixture ofsystems for electing council members, whichincludes FPTP, PR and single transferablevoting.IV.2. Electoral systems for localexecutivesThe method of election of the local executivealso varies from country to countrywithin the region, but in many cases it alsovaries between the different tiers of localgovernment within a country. The major featuresof the electoral system for the localexecutive in selected Asia-Pacific countriesare presented in Table 11. Typically the localexecutive (or mayor) is directly elected (e.g.Japan, New Zealand and Philippines). Indonesia’stwo-round electoral system (ballotage)for local executives is designed to ensurethat they have at least received a majority(i.e. more than 50%) of the votes. This aimsto overcome one of the disadvantages of theFPTP electoral system, namely the likelihoodof ‘wasted’ votes. In Indonesia and Pakistan,the heads and deputy heads of lower tiercouncils are directly elected, but on the basisof a joint ticket. In Indonesia this is on aparty basis, while in Pakistan it is on a nonpartybasis. In India, the form of election ofpanchayat and municipal leaders varies fromstate to state, depending on state legislation.Hence, in a few states council membersbelonging to the party with an elected majority,indirectly elect the local executive. Australiahas a mixed system –in three statesthe local executive is directly elected, inthree states the council chooses betweendirect and indirect election and in one statecitizens choose.Where upper tier councils are themselvesdirectly elected by voters (and not byelectoral colleges), their local executives areinvariably also directly elected by voters(e.g. India, Indonesia, Philippines and Vietnam).Similarly, where upper tier councilsare indirectly elected, local executives aregenerally also indirectly elected. This is thecase in Pakistan, which has a hybrid systemof indirect elections for local executives. Theleader (nazim) of any town (tehsil), districtor city is indirectly elected by an electoralcollege consisting of all the union councilors 8in their respective constituencies. They arethus indirectly elected by all union councilors(including the union council leaders (nazims)and deputy leaders (naib nazims) in theirrespective jurisdictions. However, naib nazimsat the tehsil or district tiers are indirectlyelected by their respective councils(from amongst themselves) and not by awider electoral college.The term of office of the local executivevaries within the region –from a minimumof three years (e.g. New Zealand and Phi-

81lippines) to a maximum of five years (e.g.Australia, China, India, Indonesia and Vietnam).Several countries place restrictionson the number of executive office terms –two in Indonesia and Thailand and three inthe Philippines.Table 11Electoral system for local executives in the Asia-Pacific RegionCountry Directly Mayors elected by council Mayor appointed Term of Maximum Provision forelected by higher tier office number citizen recallMayors of mayor of terms of mayorAustralia In 3 states In 3 states No 4 years No limit In some statesChina No No Yes 5 years No limit NoIndia In most cases In case of samiti and zilla No 5 years No limit NochairpersonsIndonesia Yes No No 5 years 2 terms NoJapan Yes No No 5 years No limit YesMalaysia No No Yes n/a n/a NoNew Zealand In all cases Only in cases of regional No 3 years No limit NochairpersonsPakistan Union nazim and naib Tehsil/district nazims elected by all UC No 4 years No limit Nonazim - on a joint ticket members in their respective jurisdictions.Naib nazims at tehsil and district tierschosen by their respective councilsPhilippines Yes No No 3 years 3 terms YesKorea, Rep. of Yes No No 4 years 3 terms Yes, with effectfrom July 2007Thailand Yes No No 4 years 2 terms YesVietnam No Chair of People’s Councils’ Standing No 5 years No limit NoCommittees indirectly elected by People’sCouncils. Chairs of People’s Committees(Commune, District and Provincial)elected by People’s CouncilsSource: UCLG Country Profiles (2007).

ASIA-PACIFIC82United Cities and Local Governments9. Gunter Schubert(2003), «Democracyunder one-partyrule?», Chinaperspectives n°46,March-April; LaiHairong (2004),“Semi-competitiveelections at townshiplevel in Sichuanprovince”, ChinaPerspectives n°51,January-February.IV.3. The role of political partiesPartisan local elections are the norm in theAsia-Pacific region. The only significantexceptions are New Zealand and Australiawhere non-partisan or independent affiliationis the norm except in large cities.Attempts to ‘de-politicize’ local governmenthave occurred in Pakistan and the Philippines,two countries where politicalparties are a vital part of political life at thenational level. In Pakistan, political partiesare banned from contesting local electionsand in the Philippines they are banned frombarangay elections but are allowed at allother tiers of local government. However,in practice political parties play a majorrole in local government elections in Pakistanby supporting candidates who are closelyidentified with one party or another.In China and Vietnam, the only politicalparty allowed to contest local elections isthe ruling Communist Party. Independentcandidates may stand for election in Vietnambut all candidates (whether Party onnon-Party) must initially be screened by arange of institutions, such as the FatherlandFront, that are closely linked to theCommunist Party of Vietnam. Thiseffectively ensures that all candidates speakmore or less the same ‘political language’(that of the Party) and thus implies alimitation on any variation in the politicalprograms of candidates. In China, free anddirect elections of village committees havebeen introduced since 1987, and have becomecompulsory nation wide since 1997(15th Communist Party Congress); in 2004there were committees elected in 85% ofvillages and 75% of neighborhood communitiesin urban areas. From 1995 (firstexperience), township leading positions(governor, deputy-governor and sometimesthe Party secretary) have been subjectto a semi-competitive electionprocedure in the province of Sichuan andin some counties elsewhere. This semicompetitiveprocedure includes as a rule akind of primary election among self-nominatedcandidates by a broad selectorate(150 – 300 people), before approval by theparty leadership at county level, and finaldirect election by the citizens among selectedcandidates. Although under Party control,these elections have already changedthe relationships between villages andlower local government levels in favour ofvillages 9 .Local government elections throughout theregion are hotly contested but are oftenmarred by manipulation and cheating bycompeting parties. In most countries, localpolitical parties are branches of nationalpolitical parties. Independent candidatesare prohibited in Indonesia but are allowedin the Philippines. Local and national electionsare often synchronized, with local partybranches receiving funds from their nationalheadquarters to promote the electoralcampaigns of candidates for national office.Throughout the region, politicians viewlocal government as a stepping stone tonational political office. However, as aresult of decentralization reforms, issuebasedlocal elections are increasinglytransforming local politics.IV.4. Citizen Participationin Local GovernanceLocal government is the closest tier ofgovernment to the citizens. As such it is thefirst entry point for people to gain access toand influence decision-making in government.In all the selected countries, citizenparticipation in local governance is increasinglygaining importance. The most commonform of participation is through theelectoral system. All countries allow localcitizens to select to varying degrees theleaders who manage the affairs of thecommunity, ranging from the consultativepeople’s congress in Vietnam and China tothe directly elected councils and mayors ofAustralia, India, Indonesia, Japan, Korea,New Zealand, Pakistan, Philippines andThailand. The level of participation in localgovernment elections varies considerablythroughout the selected countries. The

83turnout is extremely high under the onepartycommunist government in Vietnam(98.7% in 2004) and China (80% in villageelections in rural areas). Voting is compulsoryin four states of Australia but in therest of the country turnout in local governmentelections is generally low at around30-40%, even where postal voting hasbeen introduced. Elsewhere in the regionthe turnout ranges from a high of around80% in the Philippines to 56% (2003),52% (2004) and 47% (2005) in Japan,New Zealand and Pakistan respectively,and a low of 35% in Thailand’s BangkokMetropolitan Administration.However, citizen participation in local governanceis not merely confined to votingin local government elections. The presenceof decentralized structures and processeshas been considered one manifestationof a wider movement in the region towardsdemocratization because it provides theenabling context for broader citizen participationand active civil society engagementin the democratic discourse. Ensuring theparticipation of civil society groups (NGOsand non-profit organizations), and businessand the private sector in the localgovernance process is a continuing concernin the region. Such participation is asine-qua-non for successful decentralization.How to overcome the so-called ‘psychologicaldivide’ between government andcivil society is a challenge that is beingaddressed in various ways by the selectedcountries of the region.Japanese citizens have extensive powers todemand a local referendum – for example,on important issues such as US militaryrelocation, nuclear sites and construction ofindustrial waste disposal facilities. They candemand formulation, improvement or eliminationof ordinances, audits and even dissolutionof the local assembly, as well as thedismissal of the mayor, council members orofficials. In Korea, citizen participation hasbeen greatly strengthened by three legislativereforms in the very recent past: the2005 Local Referendum Act, confirming thepower of councils to hold referendums; the2006 Act on the Local Ombudsman Regimeand Local Petition against the abuse of localfinance, and the 2007 Local Recall system,by which elected mayors and councilorsmay be removed from office by a local vote.In New Zealand around half of all municipalitieshave introduced some form of communityboard structure as a strategy for linkingcommunities with the local council. Althoughthese structures are authorized inthe 2002 Local Government Act, the boardslack formal government authority or independentfinancial resources.In the Philippines there has been a noticeableincrease in citizen participation in local governancein recent years. The 1991 LocalGovernment Code established new mechanismsof consultation and participation. Localreferendums and recall of officials havebeen introduced and there were 29 recordedlocal recall elections between 1993and 1997 (Teehankee 2002). The Coderequires all municipalities to establish a localdevelopment council (LDC), with at leastone-quarter of its members being representativesof non-governmental and civilsociety organizations. The LDC draws up acomprehensive development plan for approvalby the council.Attempts at promoting citizen participationoften challenge powerful vested interestsand are not always successful. The GramSabha (or assembly of all registered votersin a panchayat) is a key feature of rurallocal government in India, and it is mandatoryfor rural local bodies to hold GramSabha meetings where important decisionshave to be approved. There is also anincreasing emphasis on setting up usergroups to take decisions and to participatein the management of public services. Thisis more controversial as it is often seen asa dilution of the institutional role of electedlocal bodies. Currently, urban local governmentin India does not have a correspondinginstitution to the Gram Sabha and doesnot offer any institutionalized role for citizensbeyond voting at election timeThe presenceof decentralizedstructures andprocesses hasbeen consideredone manifestationof a widermovement in theregion towardsdemocratization

ASIA-PACIFIC84United Cities and Local GovernmentsIn severalcountries muchattention has beengiven to thevillages, becauseof their rootsin traditionalpatterns of socialrelations and as alegitimate basis,owned by the localpeople, for localdevelopment–although there are calls to build a wardlevelplatform for citizen engagement. As astep towards greater public accountability,India has recently enacted a Right to Informationlaw, overriding earlier laws thatprotected government policies and decision-makingfrom public scrutiny. Localgovernment laws in some states containtheir own Right to Information provisions,mandating what information must be placedin the public domain.In Pakistan, a major objective of the2001 decentralization reform was to institutionalizecommunity participation inlocal governance. To support this objective,one-quarter of the local developmentbudget is mandated for community organizations.Despite this, neither communityorganizations nor participation hasincreased significantly. Resource allocationfor community organizations hasbecome highly politicized within the localcouncils. Local government laws havealso enshrined traditional dispute resolutionwithin the formal system to facilitatecitizen participation. But these mechanismshave proved ineffective in defendingthe interests of weaker and poorermembers in the community.In several countries much attention hasbeen given to the villages, because of theirroots in traditional patterns of social relationsand as a legitimate basis, owned bythe local people, for local development.Therefore barangays are promoted in thelocal government system of the Philippines.In Indonesia, the military governmentreorganized the villages in 1979 in order tointegrate them in its ruling system. Thedecentralization reform of 1999 reversedthis decision in order to revive villages inrural areas as a social structure, based oncustomary institutions and rules, that canhelp to integrate local people in the managementof local government affairs. Surveyshave shown that the village can play arole in local dispute settlement instead ofofficial police and justice – unless formalauthorities are involved in the conflict(World Bank: 2004). However, other surveysshow that, despite reforms, local peopledo not see much opportunity toparticipate in decision-making or evenoffer input in the decision-making process.(Alatas, Pritchett, Wetterberg: 2002). Perhapsbetter results will come in time.Large city governments face particularchallenges of representation and accountability.Their large size can mean remotenessfrom citizens and voters. In terms ofresponsiveness, much depends on the prevailinginstitutional and electoral arrangements.(Rakodi 2004). One way in whichcities can retain a degree of responsiveness,particularly to the poor, is through alower tier of government at the communitylevel, such as the barangays in the Philippines,which have access to resources for localservice and infrastructure needs (Devas etal 2004). However, with the exception ofthe OECD countries Australia, Japan, Koreaand New Zealand, which have much greaterresources and longer established traditionsof local democracy, the cities ofAsia-Pacific demonstrate huge problems oflack of responsiveness to the needs of theircitizens, particularly the poor, and a woefullack of accountability. Their lack of responsivenesscan in large part be attributed totheir inadequate resources, both humanand financial. But it can also be attributedto weak, unaccountable and opaque administrativesystems, political systems thatare unrepresentative and repressive, andhigh levels of corruption. In addressingthese problems, demands from civil societyare increasingly forcing municipalgovernments to practice greater transparencyand accountability (ibid).IV.5. The political representationof disadvantaged and minoritygroupsElite representation has tended to dominatethe electoral systems in the Asia-Pacific region, even where PR has beenthe norm, and especially where upper tierlocal governments are indirectly elected.

85For this reason, many countries havetaken affirmative action in order to promotethe political representation ofdisadvantaged and minority groups at thelocal level. In principle, the democraticelection of local government representativesgives all citizens a voice. But inpractice, some electoral arrangementsare more inclusive –particularly of womenbut also of minority groups and thepoor– and so can produce outcomes thatare more representative. To date thereis no legislation in any of the selectedcountries in the region requiring thatpolitical parties ensure that a given percentageof their candidates for localelection are representative of minorityor disadvantaged groups. However, inVietnam, the law states that the CommunistParty should, when selectingcandidates to stand for election, ensurethat an appropriate number of womenand ethnic minority people are electedto the People’s Councils.India, Pakistan and the Philippines haveadopted electoral arrangements with quotasystems and reserved seats for womenand for disadvantaged and minoritygroups. India offers the most strikingexample in terms of the positive outcomeof affirmative action in favor of women’sand minority representation. Not lessthan one-third (including seats reservedfor Scheduled Castes (SC) and ScheduledTribes (ST), of seats and chairs on all localgovernment councils in all states arereserved for women. As a result, over onemillion women are serving as local governmentcouncilors in India. SCs and STsalso have reserved council seats – in thesame proportion as the population of SCsand STs bear to the total population. Therequirement that a proportion of seniorpositions must be reserved for womenand minority groups has also had anempowering effect although the evidenceof the impact is mixed, with states suchas Kerala and West Bengal making muchgreater strides on this front than others(Blair 2000).In Pakistan on directly elected village orneighborhood councils one seat is reservedfor women and one seat is reserved forpeasants and workers, while on directlyelected union councils four seats are reservedfor Muslim women, six seats (of whichtwo are for women) for workers and peasants,and one seat for minority communities.For the indirectly elected zilla, tehsiland town councils, women must represent33% of all members while peasants andworkers must represent 5% and membersof minority communities in the respectivelocal government unions must represent afurther 5%. The electoral college for fillingthese seats consists of the members of theunion councils in each local government.However, a large number of the reservedseats remain unfilled or are simply notcontested. Following the 2000-2001 elections,17% of councilors at the union councillevel were women, 15% at the tehsillevel and 11% at the district and city level(CLGF 2005:1183).Strong traditions of local elite dominationin many of the countries in the regionmean that the achievement of more inclusiverepresentation is a long-term process,although the growth of the civil societymovement and its engagement with localgovernment is helping. This has been particularlythe case in the Philippines, whereNGOs and civil society organizations enjoyquite a high degree of legal protection andrights within the local government system.The 1991 Local Government Code statesthat there must be three sectoral representativesin local councils at all tiers, i.e.one woman, one agricultural or industrialworker and one representative for theurban poor, indigenous cultural communities,disabled persons, or any other sectoras may be determined by the council concerned.In addition, the Philippines has oneof the most overtly ‘pro-youth’ local representationalsystems in the world. The LocalGovernment Code provides for the establishmentof youth councils, whose membersare elected by persons between 15 and21 years of age, in every barangay. The pre-Strong traditionsof local elitedominationin many of thecountries in theregion mean thatthe achievement ofmore inclusiverepresentation is along-term process,although thegrowth of the civilsociety movementand itsengagement withlocal governmentis helping

ASIA-PACIFIC86United Cities and Local Governmentssidents of these youth councils and of theirfederations represent the youth as ex-officiomembers at every tier of the localgovernment system.In Australia and New Zealand the rights ofindigenous peoples to local self-governmentis a political issue, and one that ismore about self-determination than aboutinclusion (Sproats 2003). In Australia,there is a long-standing difficulty in incorporatingthe aboriginal population withinthe formal governmental structures. Insome regions, there are special localgovernment areas to serve the needs ofthe aboriginal population in order toachieve a greater degree of representationfor them. Although the Maori populationin New Zealand makes up 15% of thetotal population, it accounted for only 6%of council members in 1998-2001. Despitethe absence of affirmative action inboth countries, female representation atthe local political level is considerable. In2000, 26% of council members in Australiawere women and only 10% of councilshad no women councilors. Some 15% ofcouncils had a woman mayor, more inmetropolitan areas (21%) than in ruralcouncils (11%) (UNESCAP 2005a). InNew Zealand, women accounted for 34%of city council members and 28% of districtcouncil members in 2004. In thesame year four of the 16 city mayors and12% of district mayors were women(UNESCAP 2005b).

87V. ConclusionIn considering the impact of decentralizationand democratic local governance on servicedelivery, citizen voice, accountability andpoverty reduction, it is important to bear inmind that, while some countries in the Asia-Pacific region have undergone significantdecentralization of government functions(notably Indonesia, Philippines and somestates in India, as well as some sectors inChina, and to a lesser extent, Korea, Thailandand Vietnam), in other countries therehave been more modest reforms to the existingsystem of local government (Australia,Japan – but significant on local financesystem – and New Zealand). Decentralizationand local governance alsoshow widely differing degrees of local democraticcontrol and accountability across theregion. As such, it is difficult to make generalizationsabout such a wide range of experience,especially where decentralization is acomparatively recent phenomenon in comparisonto other parts of the world. Nevertheless,two broad conclusions can be madeabout the impact of decentralization andlocal democratic reform in the region.First, in terms of the impact of democraticdecentralization on service delivery, thereis a degree of support from within theregion (e.g. Indonesia, Korea, Philippinesand some Indian states) for the positiveview that service performance improveswhen elections are introduced for localdecision-makers, who are then obliged tobecome more responsive and accountableto local citizens. Decentralization should inprinciple open up political space for citizenparticipation and voice, and so create thepotential for greater accountability of decisionmakers. In India, Indonesia, Pakistanand the Philippines, decentralization has indeedgreatly increased the number of electedpositions, thereby increasing the scope fordemocratic accountability. But traditions ofpatron-client relationships between localelites and citizens, which are strong inmany countries in the region, can seriouslyundermine local democratic accountability.Decentralization can open the door for‘money politics,’ as is the case in Indonesia,where it is often money rather thanaccountability that counts (Hofman andKaiser 2006). In China and Vietnam, localdemocratic choice of community leaders isbeginning to be implemented at the villagelevel, and citizens are increasingly willingto challenge and demand accountabilityfrom local officials. In Malaysia, wherethere is no direct line of accountabilitybecause local government councilors areappointed not elected, nevertheless strikinginnovations in terms of greater publicaccess to information are under way thatare intended to enhance local accountability.In many countries, particularly in thePhilippines and some Indian states, localcivil society organizations are increasinglyready to use that information to demandaccountability. Meanwhile, in countrieswith well-established local administrativesystems, such as Australia, Japan andNew Zealand, much effort over the pasttwo decades has gone into improving themanagement and efficiency of local servicedelivery, including the adoption of performancemanagement and facilitation ofcitizen access to information through e-governance initiatives. These should havehad a positive impact on local service deliveryoutcomes.Second, the available data is insufficient todraw any firm conclusions yet with regardto the impact of decentralization on povertyreduction. In principle, in combination withan effective and equitable resource distributionsystem, decentralization shouldspread the benefits of growth around morewidely and so help to reduce poverty. Onthe other hand, without such an equitablesystem for resource distribution decentralizationcan lead to an increase in interregionalinequality. This is typified by Chinawhere economic reform generally, includingeconomic decentralization, has greatlyincreased living standards and substantiallyreduced the numbers living in absolutepoverty but at the same time has substantiallyincreased inter-personal and inter-Decentralizationand localgovernance alsoshow widelydiffering degreesof local democraticcontrol andaccountabilityacross the region

ASIA-PACIFIC88United Cities and Local Governmentsregional inequality. In Indonesia, decentralizationhas increased the resourcesgoing to the local level, but this increasehas been much greater in the resourcerichregions than elsewhere. While thismay help to redress historic differencesin the levels of development betweenregions, it may not do so in a mannerthat systematically addresses eitherpoverty or inter-regional inequality.In conclusion, it is clear that decentralizationhas become a major theme ofgovernance reform throughout the Asia-Pacific region over the past decade andthat decentralization has for the mostpart been accompanied by enhancedlocal democracy. But the forms and patternsof local governance have variedwidely, as have the outcomes, reflectingthe diversity of country contexts. Whilethere are clearly a great many weaknessesin the current arrangements fordecentralized governance in the casestudy countries, and further reforms willundoubtedly be required, it is hard toimagine that any wholesale return to acentralized system of governance wouldbe either appropriate or politicallyacceptable.

89Annex 1CountryMajor Local Government Legislation in Selected Asia-Pacific CountriesYearAustralia 1989 Victoria: Local Government Act1993 New South Wales: Local Government Act1993 Northern Territory: Local Government Act1993 Queensland: Local Government Act1993 Tasmania: Local Government Act1995 Local Government (Financial Assistance) Act1995 Western Australia: Local Government Act1999 South Australia: Local Government ActChinaNo constitutional or dedicated legal basis exists for local government. The following laws are relevant for the role of sub-national governments:Comprehensive Fiscal Reform (1994), Budget Law (1995) and Tax Sharing System (1994)India 1950 Constitution (Article 40)1992 73rd and 74th Constitutional AmendmentsIndonesia 1974 Law 5 on Local Autonomy1975 Law on Decentralization (decentralisatiewet) that established autonomous regions1999 Law 22 on Regional Government and Law 25 on Fiscal Balance between Central and Regional Government2000 Constitutional Amendment strengthening basis for decentralization2004 Law 32 on Regional Government (amended Law 22) and Law 33 on Fiscal Balance between Central and Regional Government(amended Law 25)Japan 1947 Local Government Law1993 House and Diet Resolutions on Decentralization1995 Law for the Promotion of Decentralization1999 Global Decentralization Law2004 Revision of 1947 Local Government Law2005-2007 “Trinity Reform” of local financeKorea, Rep. of 1949 Local Autonomy Act, amended in 1956, 1958, 1960 and 19611986 Local Autonomy Law1987 Constitution: Title V111 (Articles 117 and 118) on Local Autonomy1990 Revised Local Autonomy Law

ASIA-PACIFIC90 United Cities and Local GovernmentsAnnex 1Major Local Government Legislation in Selected Asia-Pacific Countries (Cont.)CountryYearMalaysia 1950 Local Authorities Elections Ordinance1952 Local Councils Ordinance1976 Local Government Act2003 Smart Local Government Governance AgendaNew Zealand 1989 Local Government Amendment Acts No. 1 and No. 21991 Resource Management Act2001 Local Electoral Act2002 Local Government Act2002 Local Government (Rating) ActPakistan 1959 Basic Democracies Order1960 Municipal Administration Ordinance1972 Local Government Ordinance1979 Local Government Ordinances passed in each Province2001 Local Government Ordinances passed in each Province2005 Amendment to 2001 Local Government OrdinancesPhilippines 1959 Local Autonomy Act1960 Barrio Charter Act1963 Revised Barrio Charter Act1967 Decentralization Act1983 Local Government Code (Batas Pambansa)1987 Constitution: Article 10 provides for local autonomy1991 Republic Act (known as Local Government Code)Thailand 1933 Municipal Administration Act1985 Bangkok Metropolitan Administration Act1991 National Administrative Organization Act1997 Constitution: Article 78 provides for local autonomy1997 Provincial Administration Organization Act1999 Decentralization Plan and Procedures Act

91Annex 1CountryMajor Local Government Legislation in Selected Asia-Pacific Countries (Cont.)YearVietnam 1958 Law on Local Governments1994 Law on Organization of the People's Council and the Administrative Committees at All Levels of government1996 Ordinance on Concrete Tasks1998 Budget Law2004 Revised State Budget LawSource: UCLG Country Profiles (2007) and Brillantes 2006; CLGF 2005; World Bank 2005.

EURASIAT. Y. K HABRIE VA(C HIEF RESE AR CH GROUP)L.V. A ND RI CHENKOV.A . VA SILIE V 1

EURASIA94United Cities and Local Governments1. The authors thank professors A. Campbell and G. Marcou for their inputs in thediscussion of this chapter.

95I. IntroductionThis chapter analyzes the formation, developmentand recent trends of local selfgovernmentin the states of the Eurasianregion that were formerly member statesof the Soviet Union: Azerbaijan, Armenia,Belarus, Georgia, Kazakhstan, KyrgyzRepublic, Moldova, Russia, Tajikistan, Turkmenistan,Ukraine and Uzbekistan.Until the fall of the Soviet Union in 1991,all these countries shared a unified systemof local government. The main characteristicsof that system were that 1) localsoviets (councils) were part of the state, 2)soviets at each level were subordinate tosoviets at all higher levels, and 3) the executiveat each level of government wasnominally accountable to a representativecouncil but in practice both representativeand executive powers at each level weresubordinated to the ruling party organizationat that level.Taken together these attributes of theSoviet system of sub-national governmentform a legacy that continues to influencethe evolution of sub-national governmentin the successor states. In the early yearsof post-soviet transition this legacy wasevident in terms of the practical difficultiescaused by the collapse of the previoussystem. After 1991 there were difficultiesdue to overlapping functions and sharedcompetencies, as well as the lack of a clearrelationship between functions, responsibilitiesand resources, whether generatedlocally or transferred from higher levels.The removal of party control over the executiveand representative powers opened apower struggle between the two branchesin those countries in the region wheregenuine democratic elections were appliedat sub-national levels.However, it is at the level of ideas –the ideasthat have informed the debate aroundlocal government reform in Eurasian countries–that the Soviet legacy can be seen tohave enduring influence. The legacy ismost clearly evident in regard to the relationshipbetween local government and thestate. On one hand, Soviet-era centralistideas continue to color the ruling elite’sview of local autonomy. On the other, theadvocates of local autonomy and decentralizationoften adopt excessively idealisticviews of local government in their zeal tobreak with the institutional legacy of theSoviet period. The first group sees localgovernment as an integral part of the stateand entirely subordinate to higher-standingstate bodies. The second group typicallyregards local government as a socialinstitution created by the people of thelocal community and entirely separatefrom the state.The ‘social’ or ‘society’ view has provided abasis for defending municipalities againstexcessive intervention from above. It wasthis view that inspired Article 12 of theRussian Federal Constitution, which declaresthat local self-government is not part ofthe state; this has been a central referencepoint in all debates on local government inthe Russian Federation. At the same time itcan be argued that the social view itselflimits the role of local government byemphasizing its role in community representationat the expense of delivering services.The social view can encouragefragmentation into small municipal unitsthat are powerful on paper, but not in practice(as occurred in several of the countriesof Central and Eastern Europe after 1989).However, as long as the ‘state’ view of localgovernment remains influential in governmentalcircles, the social view is necessaryas a countervailing force. The debate betweenthese opposing views of localgovernment tends to coalesce around thekey issue of whether mayors are appointedor elected –or, in a non-mayoral system,whether the elected council has power overthe executive. This matter is effectively theworking litmus test of local autonomy. Thiscan be seen in the recurrent debate withinthe Russian Federation regarding appointmentof mayors. On several occasions inAfter the removal ofparty control overlocal governmentbodies, localgovernmentreforms have beendriven by thestruggle betweenSoviet eracentralist ideasand advocates ofdecentralizationbased on theprinciple that localself-governmentis not partof the state

EURASIA96United Cities and Local GovernmentsThree groups ofcountries can bedistinguished:1) where localgovernment hasbeenestablished asseparate fromthe state power;2) where the reformprocess is stillnot concluded;3) where localissues are still inthe handsof localstate bodies,whereas localself-governmentexists only atthe very lowestlevelrecent years, draft legislation that wouldhave introduced appointment rather thanelection of mayors has come close to adoption,only to be withdrawn at the final stage.This reflects the fact that proponents ofboth views of local government can befound at the highest levels of government.In the post-Soviet context the principle oflocal autonomy has often come into collisionwith that of regional autonomy.Nowhere more than in the Russian Federationfrom the early 1990s onwards hasconflict between regional governors andmayors of regional capital cities shapedlocal politics and development, sometimesover many years. In this case regionalgovernors have frequently supported thestate view of local government, wherebylocal authorities would be subordinate toregional state bodies. Advocates of thesocial or non-state view of local governmentmay, paradoxically, be found at thehigher national or federal levels.Most Eurasian countries have inherited insome form the Soviet territorial unit, theraion, consisting of a number of differentsettlements over a particular territory(much like a UK district). In most countriesin the region this is where most localfunctions and services are performed.Initially much criticized as a legacy of theprevious regime, the raion has proved difficultto replace. In Ukraine perhaps themost important of the reforms designed in2005 (but not adopted, due to that year’ssplit in the Orange coalition) was thatwhich would have made the raions intogenuine local authorities, with the executivereporting to the council; councilscurrently have no executive reporting tothem. In Russia the reform of 1995emphasized settlements rather than districts.As a consequence, many local functionswere exercised by the state. The2003 reform ended this anomaly, creatinga two-tier system with raions as the uppertier to carry out those local functions thatrequired economies of scale (in addition tocertain delegated state functions, as in theGerman/Austrian model) and leaving settlement-basedmunicipalities to do therest. In Georgia the municipal reform hastransformed the districts (raiony) inmunicipalities and cities without subordinationto any raion into self-governingcities. Raiony continue to provide the basisfor central Asian local governmentsystems, although local self-government(in the sense of local autonomy) is confinedto the sub-raion level where there arefew functions. In cases such as the localmakhallas in Uzbekistan, services are providedat this level, but genuine autonomyis restricted.Local self-government in the states of theEurasian region has attained differentlevels of institutional development. Inseveral states it exists as an independentinstitution; in others it is a structure combinedwith the institutions of state power.In this respect it is possible to distinguishthree groups of countries.In the first group are Russia, Armenia andAzerbaijan. In these countries local selfgovernmentis legally autonomous and institutionallyseparate from the structures ofstate power, and local government is seenas an institution through which the localcommunity decides on local issues.In the second group –Georgia, KyrgyzRepublic, Moldova and Ukraine– the processof the formation of local self-governmentis still not concluded. Reforms havebarely been implemented, or simply havenot been achieved up to now. The aforesaidtrend in the development of local selfgovernmenthas been changed neither inthe course of the Ukrainian “orange revolution,”nor in the course of the “revolution ofroses” in Georgia.The third group is composed of the statesof Central Asia: Kazakhstan, Tajikistan,Turkmenistan and Uzbekistan. Local selfgovernmentthere functions only on thelowest level, in small villages. In the main,local issues in this region are vested inlocal state organs subordinate to central

97Table 1General Information and Territorial StructureCountries Territory Population Administrative territorial Local units and tiers Form of government(1000 sq. km) (m) division (intermediate level)Armenia 29.74 3.21 (census 10 regions 930 municipal units Unitary state with mixedof 2001) City of Erevan presidential-parliamentarygovernmentAzerbaijan 86.6 8.4 Nakhichevan Autonomous Republic 59 districts Unitary state with presidential(Nagorno-Karabakh) 11 district cities governmentde facto secessionist republic2,757 municipalitiesBelarus 207.6 9.75 6 regions 1.665 municipal units: Unitary state with presidentialCity of Minsk 1) district (basic) government2) primaryGeorgia 69.7 4.661 9 districts, 1,017 municipal units Unitary state with presidential9 cities, Abkhaz and Adjar governmentAutonomous republicsKazakhstan 2. 724 15.074 14 regions 1) 159 districts and 36 district cities Unitary state with presidential3 cities 2) 45 cities, 241 boroughs, government2,042 rural circuitsKyrgyz Rep. 198. 5 4.823 (census 7 regions 1) 40 districts and 10 district cities Unitary state with presidentialof 1999) City of Bishkek 2) 11 cities and 465 rural municipalities governmentMoldova 33.8 4,466 1 autonomous territorial 1) 32 districts and Unitary state withentity – Gagauz Eri 3 cities parliamentary government1 territorial unit – Stinga Nistrului 2) 907 municipalities and communities“Prednestrovye Moldavian” de factoRepublic struggling for secessionRussia 17,075.2 142.893 84 Federation subjects. Russia is a federation 22.972 municipal units (at 01/01/2007) Federative state withcomprised of 86 “subjects”. These subjects 1) 1,802 municipal districts, and 522 district cities presidential governmenthave equal federal rights and an equal 2) 19,892 rural municipalities andrepresentation (two delegates each) in the 1,756 urban municipalitiescouncil of the Federation, but with varyingdegrees of autonomy. For the compositionof legal units see Table 1 (p 97)(member states at 01/03/2008)21 republics, 47 oblast, 8 kraj1 autonomous oblast6 autonomous okrugsTajikistan 143.1 7.32 2 regions 1) 58 districts and 23 cities Unitary state with presidential1 autonomous region Nagorno-Badakhshan 2) 47 towns, 256 settlements and 2,803 villages governmentTurkmenistan 491.2 5.37 (census 5 regions 1) 50 districts Unitary state with presidentialof 2001) 2) Several hundred cities, settlements and villages governmentUkraine 603.7 48 24 regions 1) 490 districts and 176 cities with district status Unitary state with mixedAutonomous Republic of Crimea 2) 279 cities of district subordination, 884 urban presidential-parliamentary2 cities with the status of Regions municipalities and 28,573 rural settlements government(Kiev and Sevastopol)(however 10,227 councils)Uzbekistan 448.9 26 12 regions, 233 urban municipalities Unitary state with presidentialCity of Tashkent 164 rural municipalities governmentAutonomous Republic of Karakalpakstan About 10,000 local communities (makhalyas)Sources: UCLG Country Profiles (2007).

EURASIA98United Cities and Local GovernmentsSeveralconstitutionsprohibit thedissolution ofrepresentativebodies of localself-government(municipalcouncils)government. Nevertheless, first steps ofreform are in progress, aiming to increasethe role of local self-government and toenlarge its functions.Another model of local self-governmenthas developed in Belarus with a peculiarcombination of different elements of centralstate government, local state governmentand local self-government.Table 1 describes the territorial structuresof the countries of the region in relationwith geographic and demographic data. Itdistinguishes the intermediate level ofgovernment (meso level) from the separatelocal (municipal) level; the latter may beorganized with a single tier or two tiers(see below, section 1).II. Evolution of structuresTerritorial and institutional structures reflectboth the introduction of new politicaland legal principles, and the legacy of thepast.II.1. The Renaissance of Local Self-Government and its Constitutional BasisThe first time the term ‘local self-government’was used in the law of the USSR wasin the “General Fundamentals of Local Self-Government and Local Economies,” enactedon the wave of democratization at the endof the 1980s and the beginning of the1990s.After the collapse of the Soviet Union, eachof the states has been independently developingits own model of local government.Nevertheless, the common heritage of thepast is manifest in many current legalnotions including: local self-government,local state government, local state administration,own and delegated powers, municipalbudgets, municipal property, programsof economic and social development ofmunicipal entities, local public service, prematuretermination of powers of representativebodies of local self-government anddismissal of heads of municipalities.The constitutions of all states of the regioncontain separate articles, sections ornorms devoted to local self-governmentand to guarantees of its realization. Theyproclaim that the rights of citizens to localself-government may not be restricted.The constitutions of several states, includingRussia and Ukraine, stipulate that therights of citizens to local self-governmentmay be suspended only in the time of waror emergency. Constitutions regulate relationshipsbetween central and local governingbodies on such principles as:separation of state powers and powers oflocal self-government, organizational andfunctional independence of local selfgovernmentin the sphere of its competence,unity and integrity of state territory,combination of centralization and decentralizationin the execution of state power,balanced social and economic developmentof territories, and responsibility of bodiesand employees of local self-government tothe state. Some constitutions, includingthat of Uzbekistan, prescribe that relationsbetween central and local governmentsshall be built on the basis of subordinationand mutual cooperation.With the exception of Kazakhstan, all constitutionsprescribe the principal powers oflocal authorities. Transfer of such powersto other entities and persons is not permitted.The constitutions of Russia and Kazakhstanproclaim the principle of separationof state and local governments.Several constitutions, including Armenia’s,prohibit the dissolution of representativebodies of local self-government (municipalcouncils). This serves as an important guaranteeof their independence. In a number ofstates there are procedures for revocationand suspension of acts of local state entitiesand local self-government, and for the rightof citizens to lodge complaints in courtsagainst their decisions. Belarus and Uzbekistanprovide examples of this system.

99The constitutions of several states proclaimguarantees for the integrity of theboundaries of local territories; in particulara local referendum is required to changethe boundaries of municipal units (Armenia).Although virtually all constitutionshave detailed norms providing for thedevelopment of local self-government, inpractice they have been implemented atdifferent degrees.Stages of developmentLocal self-government in the states ofEurasia has achieved different stages ofdevelopment. In several states it is functioningas an independent institution, inothers as a structure combined with, orsubordinated to state power. Again, thecountries fall into three groups.In the first group of countries, includingRussia, Armenia and Azerbaijan, local selfgovernmentis independent: it is separatefrom the system of state-level governmentbodies; local representative bodies independentlydecide local issues.In Russia the system of local self-governmentwas launched in 1991 by the law “OnLocal Self-government in the RSFSR.”Later the Constitution of the Russian Federationof 1993 guaranteed local selfgovernmentby providing that localself-government bodies shall be separatedfrom the system of state power (article12). In 1995 the federal law “On GeneralPrinciples of Organization of Local Self-Government” was enacted. It proclaimeddemocratic fundamentals of local selfgovernment,though they have not beenfully implemented. Therefore in 2003 anew law was enacted “On General Principlesof Organization of Local Self-Government”(Federal Law No. 131), whichenlarged, in accordance with the requirementsof the European Charter of LocalSelf-Government, the functions of municipalentities, and transferred some functionsfrom member states to federal statebodies.In Armenia, the present system of local selfgovernmentwas formed on the basis of theConstitution of 1995. Between 1995 and1997 the Parliament enacted laws “On Electionsof Organs of Local Self-government,”“On Local Self-Government,” “TransitionalProvisions for Regulating Relationships ofOrgans of Local Self-Government,” “Organsof Territorial Government” and some otheracts. This was the period of formation of thelegal and institutional basis of the systemsof state territorial government and localself-government. Local self-governmentwas defined as the right and ability of communitiesto decide upon and take responsibilityfor local issues deemed to be in theinterests of local populations.In Azerbaijan the Constitution of 1995 containeda separate section devoted to localself-government. The constitutional requirementswere implemented in 1999 in thelaws “On the Status of Municipalities” and“On Elections to Municipalities,” which laiddown the basis of the system of local selfgovernmentin the republic. Later about 20other laws were enacted, including “OnTransfer of Property to Municipal Property,”“On Municipal Service,” “On the Status ofMembers of Municipalities,” “On Fundamentalsof Municipal Finances,” “On Managementof Municipal Lands” and “OnAdministrative Supervision Over Activitiesof Municipalities.” All of these laws reinforcedthe organizational, legal and economicbasis of local self-government.In the second group of states –Georgia,Kyrgyz Republic, Moldova and Ukraine– theprocess of the formation of local selfgovernmentis still in progress.The Constitution of Georgia of 1995 proclaimedthe general principle that localissues have to be the responsibility of localself-governments, subject to an obligationto respect the sovereignty of the state. Theprocedure of formation and the powers oflocal self-governments and their relationshipswith state entities were regulated bythe “Organic Law” of 1997. During theThe constitutionsof several statesproclaimguarantees for theintegrity of theboundaries of localterritories; inparticular a localreferendum isrequired to changethe boundaries ofmunicipal units(Armenia)

EURASIA100United Cities and Local GovernmentsThe constitutionsof the states ofCentral Asiaacknowledge andguarantee localself-government.But on the whole,local matters arenot the businessof localself-govermentbodiesmunicipal reform of 2000–2001, thepowers of local self-government were significantlyenlarged, but were not adequatelysupported by necessary materialresources. This divergence was one of themain themes of debates in the last localelections held on October 5th, 2006.In Kyrgyz Republic the basis for local selfgovernmentwas established by the Constitutionand laws “On Local Self-Governmentand Local State Administration,” “On theFinancial and Economic Basis of Local Self-Government,” “On Municipal Property” and“On Municipal Service.” The new stage ofthe reforms has been initiated by the“National Strategy On Decentralization ofState Government and the Development ofLocal Self-Government in the KyrgyzRepublic for the Period till 2010.” Nevertheless,local issues are still under the controlof the state’s local administrativeentity.In Moldova the democratic fundamentals oflocal self-government were laid down bythe Constitution of 1994. In fact, the processwas launched four years later with theadoption of the laws “On Local Public Administration”and “On Territorial-AdministrativeOrganization.” The division of theterritory at the intermediate level has beenchanged twice: from districts (raion) toprovinces (judete), and back to districts.The next stage of municipal reform startedin 2003, when the Parliament amended thelegislation by significantly enlarging thepowers of local self-government. Nevertheless,many problems were not resolved.The material basis of local self-governmentis still not sufficient and its independencefrom state powers is not duly ensured.In Ukraine the fundamentals of local selfgovernmentwere shaped by the Constitutionof 1996 and by the law “On LocalSelf-Government in Ukraine” (May the 21st.1997). They proclaimed the principles ofdecentralization of public powers and thepriority of territorial units or communitiesknown as gromada. But these principleshave not been fully realized. Currently amixed system exists, combining local stategovernment and local self-government onthe levels of districts (raion) and regions(oblast). On one side are provincial anddistrict councils as elements of local selfgovernment,representing the interests ofterritorial gromadas. On the other arestate administrations of provinces and districts–local organs of state executive powervested with the executive functions ofthese councils. Such a combination ofmunicipal and state structures actually derogatesprinciples of local self-government,leaving it in the domain of state rule. Reformprojects have faltered because of politicaldivisions and are still pending.The third group is composed of the countriesof Central Asia –Kazakhstan, Tajikistan,Turkmenistan and Uzbekistan. In thesenations local self-government functionsonly on the lowest level, in small villagesvariously called jamoaty, shakhrak anddekhot in Tajikistan, and makhalya inUzbekistan. It is nevertheless necessary tonote that these states are in the process ofimplementing reforms to increase the roleof local self-governments and to enlargetheir functions. In Kazakhstan, for example,recently approved legislation will introduceelections for municipal heads(mayors).The constitutions of the states of CentralAsia acknowledge and guarantee local selfgovernment.Some laws of these republicscontain original definitions of the notion oflocal self-government. Thus, the “Law ofUzbekistan On Organs of Self-Governmentof Citizens” defines local self-governmentas an independent activity of citizens in thesolution of local issues in accord with theirinterests, historical development, nationaland spiritual values, local customs and traditions.But on the whole, local matters in thesecountries are not the business of local selfgovernment,an autonomous or quasiindependentbody elected by local popular

101vote. Rather, control of local matters moreoften falls to what is termed “local stategovernment” (Kazakhstan), “state poweron local level” (Tajikistan and Uzbekistan)and “local state executive power” (Turkmenistan).Another model of local self-governmenthas been developed in Belarus. The “LawOn Local Government and Self-Governmentin the Republic of Belarus” establisheda peculiar combination of differentelements of central state government,local state government and local selfgovernment.Local self-government—asopposed to the notion of a state-controlledlocal body –is defined as the organizationand activities of citizens for independentsolution of local issues, directly or throughelected entities. This definition takes in toaccount the interests of the population, thedevelopment of administrative territorialunits and the basis of own material andfinancial resources local government cangenerate or attract. But at each of the threelevels (province, district or city with districtrights, rural or urban municipality) executivepowers are integrated in the system ofthe state executive power, even thoughthey are, at the same time, bodies of localgovernment. Local councils therefore donot have their own executive powers.II.2. Territorial organizationand territorial reformsThe countries of the region have differentforms of territorial organization of publicpower. As a rule, these forms are highlydiversified, but not all countries have a clearhierarchy of territorial units with localself-government organs, as reflected abovein Table 1.Most countries have introduced or allowedautonomous territorial units in recognitionof ethnic or regional peculiarities, sometimeswith a dimension of conflict: Azerbaijan(Nakhichevan and Nagorno-Karabakh),Georgia (Abkhaz and Adjar republics),Moldova (Gagauz Eri, “PredniestrovyeRepublic”), Ukraine (Crimea), Tajikistan(Nagorno-Badakhstan) and Uzbekistan(Karakalpakstan).Russia is the only federal country in thisregion. However, several countries have anintermediate level of government on arather broad scale, distinct from the localor municipal level of government. It isgenerally called oblast, here translated as“region” and it is found in Armenia, Belarus,Kazakhstan, Kyrgyz Republic, Tajikistan,Turkmenistan, Ukraine andUzbekistan. Georgia also has such a territoriallevel (mkhare). The capital city andother main cities may have the status ofprovince; that is, they are directly subjectto the central government.Usually the local government level (municipallevel) is organized on two tiers, asreflected in Table 1. The most important isthe district level, which is a rather smallconstituency, embracing a lot of villagesbut also some cities. Many municipal functionsfor small and mid-size cities are therealm of district-level powers; large citiesare independent of the district-level authorities.Usually, the lower municipal level ismuch less significant with respect to itsfunctions. This pattern can be comparedwith the German municipal organization(Kreis-district, and cities independent froma district) or to English districts; it was alsoused in the Soviet era. Now, such a twolevelmunicipal organization can be seen inAzerbaijan, Belarus, Kazakhstan, KyrgyzRepublic, Moldova, Russia, Tajikistan andUkraine. Only one municipal level, althoughit may be differentiated, exists inArmenia, Georgia and Uzbekistan. In Turkmenistan,local government institutionsexist only at the district level. The level oflocal government autonomy varies considerably,even among similar countries.In further detail, Russia, as a federativestate, is composed of such member states(called “‘subjects”) as republics, lands(krai), regions (oblast), federal cities, auto-Most countries haveintroduced orallowedautonomousterritorial units inrecognition ofethnic or regionalpeculiarities,sometimes witha dimensionof conflict

EURASIA102United Cities and Local GovernmentsUsually the locallevel is two tier, withthe raion being stillthe keynomous regions and autonomous circuits(okrug). All member states of the RussianFederation have equal status. Local selfgovernmentin the Russian Federation isexercised in urban settlements and ruralsettlements formed as municipalities (poselenie),municipal districts (municipalnij rayon),district cities (gorodskoï okrug) andthe territories of federal cities (Moscow andSt. Petersburg).In Ukraine the administrative-territorial organizationhas a three-tier structure: thehighest level includes the Autonomous Republicof Crimea, regions (oblast) and twocities, Kiev and Sevastopol that have aspecial status. The next level, the uppermunicipal level, embraces districts and districtcities. The lowest level includes citydistricts, cities of district subordination,towns, settlements and villages.The territory of Tajikistan is divided in a descendinghierarchy into provinces (veloyats),districts (nohiyas), towns of republican significance,towns of provincial significance,towns of district significance, settlementsand villages (qyshloqs).In the countries of Central Asia (Kazakhstan,Tajikistan, Turkmenistan and Uzbekistan),local self-government plays a limitedrole. Organs of local state governmentexercise the principal functions. In Russia,Azerbaijan, Armenia, Georgia, KyrgyzRepublic and Moldova, local self-governmenthas greater autonomy and is separatedfrom state government.In the majority of countries of the regionthe majority of the population resides incities and towns. Statistics show that, onJanuary 1, 2006, 73% of the population ofthe Russian Federation resided in urbansettlements and 27% resided in ruralregions. Urban population slightly exceeds70% of the population in Belarus, 68% inUkraine and nearly 60% in Kazakhstan. Bycontrast, in Uzbekistan, at the beginning of2006, 36% of the population resided incities and 64% in rural regions. Ruralpopulation prevails also in other states ofCentral Asia. The legislation of Kazakhstan(law of December 8th, 1993) distinguishesthe administration of territories and ofpopulated areas. Territories are provinces,districts and rural circuits; populated areasare cities, settlements and villages. Thismeans that the municipal area is usuallylimited to the settlements, whereas areasbetween populated areas are administeredby the upper level of government. The newlaw on local government of the RussianFederation is backing away from this conception,and the territory of each subject ofthe Federation is divided into municipalities;only in areas of low density may the territorybetween municipalities be administeredby the district government (law 131: article11, paragraph 1).A number of countries have implementedterritorial reforms after the political change,aimed, inter alia, at improving state government(Belarus, Georgia, Kazakhstan, Moldova,Russia, Ukraine and Uzbekistan). Majorgoals and trends of territorial reforms weredifferent. In a number of states they resultedin the enlargement of regional territorialunits (Kazakhstan, Ukraine). In other statesterritorial reform was called upon to movethe processes of public power closer to thegeneral population (Azerbaijan, Armenia,Russia, Uzbekistan).In the Russian Federation, territorial reformhas been in the process of implementationsince 2003. According to the Law of2003, the subjects of the Federation havefixed boundaries of municipal entities, andhave defined the status of appropriate localentities as urban or rural settlements,municipal districts (municipalniï rayon) anddistrict cities (gorodskoï okrug). The year2005 was decisive in the establishment ofthe two-tier model of local self-governmentin Russia. The member states of theRussian Federation have fixed the boundariesof 23,972 local entities, including19,892 rural municipalities, 1,756 urbanmunicipalities, 1,802 municipal districtsand 522 district cities (January 1st 2007).

103Capitals and Metropolitan AreasTable 2Capital Cities and Main CitiesIn the majority of countries, capital citieshave separate legal status as provided byconstitutions and laws (Belarus, Kazakhstan,Russia and Ukraine –see Table 1). In theRussian Federation the separate regime ofMoscow is laid down by the Constitution andthe law “On the Status of the Capital City ofthe Russian Federation.” In Uzbekistan theseparate legal regime of the capital city isprovided only by the Constitution. By contrast,Baku, the capital of Azerbaijan, doesnot have any special regime.Several states have metropolitan areas withspecial governance status. Under the Constitutionof the Russian Federation two metropolitanareas –Moscow and St. Petersburg–have the status of the member states of thefederation. Law provides for specific legalregulation of their local self-governmentforms. According to the charters of Moscowand St. Petersburg, local self-government isexercised by institutions of local self-governmentformed in appropriate city territories.The enumeration of local issues and sourcesof revenues of the local budgets of the municipalunits are determined by the laws ofMoscow and St. Petersburg, taking intoaccount the necessity of preserving the unityof the cities’ economic systems.In Georgia, similar special forms of governanceare applied to Tbilisi and Poti, in Belarusfor Minsk, and in Kazakhstan for thecities of Astana and Alma-Ata. Expendituresof the capital cities are singled out in eachrepublic’s budget; the cities receive grantsand subventions, transfers of property andstate guarantees for investments. In Kazakhstan,separate governance rules areprovided for Alma-Ata to support the developmentof the city as the region’s internationalfinancial center. In Georgia, specificstatus is accorded Poti with the aim to createa free economic zone.The following table lists the capitals andmain cities of the countries of the region(2006).Countries Capitals and metropolitan cities Population (thousand)Armenia Erevan 1,104Azerbaijan Baku 1,874Belarus Minsk 1,781Georgia Tbilisi 1,103Kazakhstan Astana 550Kazakhstan Almaaty 1,248Kyrgyz Republic Bishkek 799Moldova Chisinau 660Russia Moscow 10,425Russia St. Petersburg 4,581Russia Novosibirsk 1,397Russia Nizhni Novgorod 1,284Russia Ekaterinburg 1,308Russia Samara 1,143Russia Omsk 1,139Russia Kazan 1,113Russia Chelyabinsk 1,093Russia Rostov-on-Don 1,055Russia Ufa 1,030Tajikistan Dushanbe 647Turkmenistan Ashkhabad 828Ukraine Kiev 2,693Ukraine Kharkov 1,463Ukraine Dnepropetrovsk 1,047Ukraine Donetsk 994Ukraine Odessa 1,002Uzbekistan Tashkent 2,141Source: Inter-State Committee of Statistics of the Commonwealth of Independent States.

EURASIA104United Cities and Local GovernmentsIn theory,resources have tobe sufficient forfunctions(connexityprinciple); inpractice functionsare adjusted toresources, andadequacy dependson the financialcapacity of thepublic budgetsII.3. Evolution of Relationships BetweenCentral and Local GovernmentsRelationships between central governmentand local self-government are complex. Asa rule, they cooperate closely. For instance,in Russia federal state institutions and thoseof local self-government have agreements ofcooperation, and jointly participate in therealization of special programs.Different state structures are responsiblefor local government matters. In the RussianFederation, a decree of the Presidentestablished a specialized ministry –the Ministryof Regional Development of the RussianFederation– which is vested, interalia, with the powers to determine andimplement the policy of the state in thesphere of local self-government. In Moldova,the Agency of Regional Developmentperforms such functions.In other states, matters of local governmentlie mainly in the province of sectoraldepartments of appropriate state bodies.Thus, in Azerbaijan the Administration ofthe President has a division responsible forwork with municipalities; the Ministry ofJustice has formed a specialized center onmatters of local self-government; in theParliament there is a standing committeeon regional issues.III. Functions, managementand financesIn theory, resources have to be sufficientfor functions (connexity principle); in practicefunctions are adjusted to resources,and adequacy depends on the financialcapacity of the public budgets. However,much has still to be done to improve thefinancial system and the management inorder to use scarce resources more effectively.III.1. Financial ManagementThe most acute problem of local governmentis the shortage of financial resources. This lackof funds inevitably impedes the execution oflocal-government functions.Local taxes. The principal indicator of financialpower of local self-government is the rightto impose taxes. In most countries of theregion, the share of local taxes in the totalrevenue of local government is extremely low.Azerbaijan is an exception, with the share oflocal taxes and duties in municipal budgetsreaching 24.5% (of this, 22.6% is attributedto local taxes).In Armenia, local communities may levy onlylocal fees and payments. Rates of local fees,within the frameworks prescribed by law, areset by municipal councils at the initiatives ofheads of municipalities prior to the adoption ofannual budgets. Rates of local duties are definedby municipal councils on the proposals ofheads of municipalities in the sums necessaryfor exercising appropriate actions. On November27, 2005, constitutional amendmentswere adopted permitting the imposition oflocal taxes.The Constitution of Belarus (article 121) andannual laws on the republic’s budget enumeratelocal taxes and duties that may be establishedby local councils of deputies. Forinstance, the law “On the Budget of the Republicof Belarus for 2006” prescribes the followinglocal taxes and duties for the 2006financial year: tax on retail sale, tax on services,special purpose duties, duties from users,duties from purveyors, and health-resortduties. The share of local taxes and duties instate revenues is about 2.1%.The Russian Federation has only two localtaxes: the land tax and the tax on physicalpersonal property. Representative bodies oflocal self-government define, within the frameworkprovided by the Tax Code of the RussianFederation, tax rates and the procedureand terms for paying taxes. Other elements oflocal taxation are prescribed by the Tax Code.According to preliminary data for 2005, localtaxes comprise only 4.29% of revenues oflocal budgets. Local self-governments in theRussian Federation have been constantly

105losing their local, own sources of revenues.The Law of December 21, 1991 “On Fundamentalsof the Tax System” provided for 23kinds of local taxes and duties. Even so, in1998 they yielded on average 12% of the totalmunicipal revenues. Furthermore, local authoritiescould vary the rates within narrow limitsfor only eight of the 23. The same number oflocal taxes and payments was preserved bythe initial version of the Tax Code of the RussianFederation enacted on July 31, 1998.Later this list was reduced to five in 2000. Withthe amendments of 2004 to the budget code,proposals to transfer the tax on vehicles tomunicipal budgets and to establish a local taxon retail sales were rejected, and two localtaxes remain –the land tax and the tax on personalproperty.In Ukraine, bodies of local self-governmentmay establish, in accordance with law, localtaxes and duties, which are allocated to appropriatebudgets. Meetings of citizens may introducelocal duties on the principles of voluntaryself-taxation. In 2005, local taxes and dutiescomprised 2.4% of the general revenues oflocal budgets.Local bodies in the states of Central Asia arenot permitted independence in the tax andbudget spheres. They are not able to definetax rates or other elements of local taxation.Tax rates and other elements of taxation areprescribed by central bodies for all taxes,including local levies. In Uzbekistan, the Cabinetof Ministers establishes local taxes andtheir rates. In Kyrgyz Republic, local taxes andduties may be introduced only by the Parliament.On the whole, local taxes account for aninsignificant share in the revenues of localbudgets.Tax shares. In all countries of the region, taxshares accrued to local government on therevenue from national taxes are the mainsource of revenue for local budgets. This isgenerally a share of the local yield of the nationaltaxes.In Kazakhstan, law does not provide for a divisionof taxes between the republic and localgovernments. Local budgets receive 50% ofthe income tax on corporate entities, and 50%of the excises levied on certain specifiedgoods. Income tax on personal property,social, land and transport taxes, and paymentsfor the use of water and forest resourcesare wholly directed to local budgets.Certain kinds of duties are also considered taxrevenues.Reinforcement of the revenue base of localbudgets is exercised by increasing the share oftaxes left to local budgets at the expense ofstate taxes; such is the case in Uzbekistan andKazakhstan, for instance. In Belarus, the shareof state taxes and duties makes up morethan 14% of local budget revenue. In Ukraine,since the adoptions of a new budget code in2001, the personal income tax is fully devotedto local budgets of the respective levels (province,district, municipality) in proportionsfixed by the law.Since Russia is a federal country, the bulk oflocal budgets depends on the budget and thepolicy choices of the subjects of the Federation,within the framework designed by theBudget Code. The tax base of the subjects ofthe Federation has been strengthened in 2004and 2005 with the transfer of the transportationtax and of the tax on assets of legal persons.Part of the current revenues of thesubject has to be reallocated to local budgets.Laws of the subjects of the Federation grantadditional assignments of tax revenues fromregional budgets. As a rule, such assignmentsare to be made at uniform rates, except thatdifferential assignments may be established incases provided by law for the period from2006 to 2008. In 2005, assignments of taxescomprised 36.7% of local budget revenues.The share of local budget revenues of the totalbudgetary funds of the Russian Federation(including regional and local) comprises 10%.Budgetary transfer. Transfers have twomain functions:· bring revenues in line with spending requirementsto accommodate disparities in therevenue base and in needs,· compensate the costs of duties assigned toLocal bodies in thestates of CentralAsia are notpermittedindependence inthe tax and budgetspheres

EURASIA106United Cities and Local GovernmentsTo provide subsidiesfor shared financingof investmentprograms anddevelopmentof the publicinfrastructure ofmunicipal units,the subjects of theRussian Federationmay establish fundsfor municipaldevelopment2. Editor's note:according todefinitions given bythe Budgetary Codeof the RussianFederation (art.6),grants are budgetarytransfers to covercurrentexpenditures;subventions arebudgetary transfersaimed at financingspecific expenditures(delegatedfunctions), andsubsidies arebudgetary transfersas participation inthe financing ofspecificexpenditures.local government by central or regionalgovernments. Subsidies are specifically usedfor the latter purpose. Efficiency and equityrequire transparency and objectivity inresource allocation. Budgetary reforms inRussia, Ukraine and several other majorcountries in the region are oriented in thatdirection. However, in a number of countries,the grant allocation formula does notexist, or is too complicated and cannot besupported by appropriated data.In Ukraine, the equalization grant for some700 main local budgets is calculated by the differencebetween spending needs establishedfrom a formula devised by the central government,and the revenues from tax sharing. Thisalso includes a coefficient determining thelevel of equalization. The only needs that aretaken into account are those listed in the budgetcode, such as education, social care, andprimary health care. Other functions (housing,basic service delivery, infrastructure, publictransport) have to be funded on the basis ofown resources; that is, local taxes and fees.Although the system is sound in its basic principles,it has been biased by modifications bythe government and by multiple decisionsaffecting the resources and tasks of localgovernments. Nevertheless, a similar equalizationscheme has been introduced at the districtlevel for municipalities. In brief, theinsufficiency of own resources leads to underfinancingof functions not taken into account inthe distribution of resources between differentlocal governments.In Russia, more discretion is left to the subjectsof the Federation than is permitted forUkrainian regions in the matter of resourceallocation to the local budgets. Basic resourcesare tax shares from personal income tax andshares of regional taxes as determined bylaws of the subjects of the Federation. But theprinciple of equalization is similar: there is anestimate of needs based on expenditure standards,and an equalization grant to cover thegap between the revenues and the level ofequalization required by the law. Part of theincome tax is also involved in equalization.Grants are paid by the subjects of the Federationthrough district funds for the support ofmunicipalities, and through regional funds forthe support of municipal districts and city districts.There is also a regional support fund formunicipalities receiving contributions from thedistrict funds. Grants are distributed amongmunicipal units in accordance with themethods approved by laws of the subjects ofthe Federation, and in conformity with therequirements of the Budget Code of the RussianFederation. The provisions of the BudgetCode exclude arbitrary distribution of grants.They have to be distributed among municipalunits in an “automatic way.” The situationvaries considerably from one subject to another,and not only for geographic reasons, butalso due to the mechanisms and levels ofredistribution of resources between localgovernments, and whether the transfers arebased on spending or needs estimates. Onone hand the spending power is centralized,leaving only the management to local authorities(e.g. the regions of Novosibirsk and Tiumen),or on the other hand the expenditureresponsibility is delegated (e.g.in the region ofLipetsk). However, the consequences of thereduction of social privileges by federal law122 of 2004, and continuous shifts in the allocationof tasks since 2004 make any evaluationof the transfer and equalization systemprohibitively complex.To provide subsidies for shared financing ofinvestment programs and development of thepublic infrastructure of municipal units, thesubjects of the Russian Federation may establishfunds for municipal development. Fundsfor mutual financing of high priority socialexpenditures may also be included in subjectbudgets. Municipal units may receive otherforms of financial aid from the federal budgetand from budgets of the subjects. The mainrequirement is the transparency of distributionof financial resources.According to data from the Ministry of Finances,in 2005 budgetary transfers to localbudgets totaled 52.5% of local budget expenditures.In the total volume of transfers 54%were subventions, 32% grants and 14% subsidies2 .

107Table 3Local Finance Indicators (Various Years)Country Total public Local public Ratio of local on Tax shares and Local taxexpenditure expenditure general public budgetary transfers as revenues(% GDP) (% GDP) expenditures % of the total income as % of total incomeArmenia (2003) 20.6% 1.3% N/A N/A N/AAzerbaijan (2003) 17.8% 0.2% 27.5% (1999) Subsidies: 10.4% 22.6%Belarus (2004) 48% 19.3 % 40.1 % Basic level budget transfers: 45.6% Local taxes and payments: 2,1%Georgia 13.9% (2003) 4.6% (2005) N/A N/A N/AKazakhstan (2004) 22.1% 10.8% 48% Transfers: 37.1% Local gvt bodies may not establish taxesKyrgyz Rep. (2005) 28.7% 3.4% 12% N/A N/AMoldova (2003) 25% 7.2% 29% N/A N/ARussia (2005) 18% 5.3 % 18% Transfers to local budgets: 52.5% 4.29 %Ukraine (2005) 45.2% 11% N/A N/A 2.4 %Uzbekistan (2005) 32.5% 23% 55% Subsidies covering budget deficits: 16.2% N/A(estimations)Sources: Domestic sources, UNDP, World Bank as compiled by authors; data on Tajikistan and Turkmenistan are insufficient or not available. It couldnot be verified whether all data are calculated on the same basis, in particular due to extra-budgetary funds.The study of the dynamics of the correlationof expenditures of local budgets toGDP shows a downward trend. Thus, in theRussian Federation the share of GDP allocatedto local budget expenditures was6.5% in 2003, 6.2% in 2004, and 5.3% in2005.On January 1, 2006, the share of local expendituresin the general volume of publicservices consumed 18% of the consolidatedbudget of the Russian Federation, and40% of the consolidated budgets of memberstates of the Russian Federation.In other countries, too, transfers are animportant part of local budgets. For instance,in Belarus the share of transfers in thegeneral volume of revenues reaches 58%,depending on the kind of territorial unitsand the relationships between state localgovernment and local self-government. InUzbekistan, where law proclaims the principleof balanced local budgets, grants areused to cover deficits. In Kazakhstan, theshare of grants is high and has a tendencyto grow: in 2004 by 19.81%, in 2005 by25.28% and in 2006 by 37.1%. A similartendency can be observed in several countries,such as Ukraine and Georgia. Thisreflects the low buoyancy of tax sharescompared to expenditure needs that aregrowing faster.Financial provisions for certain state functionsdelegated to local self-governmentare made with the help of subventionstransferred to local budgets from federal orregional budgets. Bodies of local selfgovernmentare responsible for the use ofmaterial and financial resources receivedby them for the execution of certain statepowers.Aggregate data on the local finances of thestates of Eurasia is provided in Table 3. Butsuch data have to be used with care. Due tothe unstable economic situation of many of

EURASIA108United Cities and Local GovernmentsIn Russia and mostof the Europeanpart of theregion,main localgovernmentfunctions areeducation, publichealth, socialsecurity, culture,local economy,sport and physicaltraining and youthpolicy. In most ofCentral Asia, suchfunctions areexercised by stateexecutive entitiesintegrated in ahierarchicallycentralized systemthe countries of the region, economic indicatorsare volatile; important differences interms of GDP, and percentage of GDP mayoccur from one year to the next. Furthermore,changes in proportions may have differentmeanings, depending on othercharacteristics of the situation. For example,a diminution of the share of local governmentexpenditure may be due to the centralizationof expenditure, or to a sharpincrease of GDP caused, for example, by anincrease in oil prices.Functions. The functions of local authoritiesare not clearly defined by law. Suchambiguity is explained primarily by anongoing process of redistribution of powersamong different levels of government.Nevertheless, it is possible to distinguishseveral models of function allocation.Main functions. The main functions of localself-government in Russia and Armeniaare to: provide participation of the populationin local matters, ensure effectivedevelopment of territories, provide publicservices, represent and protect the rightsand interests of local self-government,manage municipal property and finances,protect public order and organize publictransportation.In Russia, in the course of the reform oflocal self-government, the functions ofmunicipal units were enlarged, thus limitingregulation by subjects of the Federation.The law has reshaped the functions ofmunicipal units, taking into account theirnature and status. Law has also prescribedmore clearly the economic basis of localself-government and specified the responsibilitiesof bodies and officials. Further, thelaw has introduced new schemes of economicinter-municipal cooperation and regulatedmore precisely the procedures fortransferring certain state functions to localself-government. Today, the main responsibilitiesof local self-government are education,public health, social security,culture, local economy, sport and physicaltraining and youth policy.The same functions are transferred to thelocal level in several other states of theregion. For instance, in Ukraine, healthservices, education and social protectionrepresent more than 80% of local publicexpenditures. Furthermore, Ukrainian localauthorities manage communal propertyand local finances, ensure development ofappropriate territories, provide services tothe population, ensure participation of thepopulation in civic life, and protect publicorder.In the majority of the states of CentralAsia, such functions are exercised by stateexecutive entities integrated in a hierarchicallycentralized system. Accordingly, statefunctions are distributed between differentlevels of the vertical structure. Regulatoryfunctions belong to central administrations.The execution of laws is reserved forlocal authorities. As an example, inKazakhstan the role of local government inhealth care and social aid remains significant.Kazakhstan local government expendituresin 2004 were: administrativefunctions 4%, defense 2%, police 4%,education 31%, health care 20%, socialaid 7%, local economy 12%, transportation6% and 14% for other lesser functions.In Uzbekistan, regional and citybudgets represent 64.4% of all socialspending, including 69.6% of all spendingon education and 61.4% of all healthcarespending.III.2. Main trends in selected competencesPlanning. Planning is an important endeavorin all the states of the region. In Russia,it serves as a basis for federal, regionaland municipal programs aimed at thedevelopment of municipal units. Instead ofthe former strictly centralized methods ofgovernance that were characteristic of theSoviet period, Armenia and Russia applynew approaches to planning that excludeadministrative mandates. The states ofCentral Asia retain, as a rule, centralizedsystems of planning for economic and socialdevelopment.

109Education. In the majority of states, responsibilityfor public education is divided betweenlocal state government and localself-government. The latter, as a rule, is entitledto deal with pre-school and basiceducation. Nevertheless, central stategovernment establishes general legal normsin this sphere, and local self-governmentsput these norms into practice.In Uzbekistan, education is centralized. Forpre-school and basic education, centralstate organs approve standards, provideresources and supervise the execution oflaws, while other levels are engaged inproviding services and deploying resources.In Tajikistan, local self-government isresponsible for pre-school and elementaryschool institutions, while cities and districtshandle secondary schools and colleges. InUkraine, there is no strict separation offunctions in education, which results in aconfusion of powers between local stategovernment and local self-government.In Armenia, according to the law “On StateNon-Commercial Organizations,” the statereserves the role of founder of educationalinstitutions. At the same time, as providedby the law “On Local Self-Government,” allfacilities of pre-school education were givento municipalities and became municipalproperty.Provision of social services. In the majorityof the states of Eurasia local self-governmenthas fairly broad functions in theprovision of social services. For instance,Russian law prescribes that local self-governmentis responsible for organizing socialprotection of the population, providingsocial assistance, establishing different socialservices and assisting institutions thatprovide social services.In Armenia, social services administrationis assigned to the state. But even there,local self-government has been empoweredto provide social services through theirown social programs. The same situationprevails in Tajikistan, where providing socialservices is handled on three levels:that of the republic, the region and thelocale. Regional and local authorities areentitled to maintain the institutions thatprovide assistance at home.In Kazakhstan, local state organs pay allowancesand benefits to the unemployed,large families, orphans and single mothers.They also subsidize childbirth, housing andfuneral expenses. Ukraine has made a clearseparation of responsibilities in the sphereof social services. The law “On Social Services”(2003) establishes two spheres of stateand community services financed by differentbudgets.Provision of public health services.Nearly all states of the region have dividedthe responsibility for public health betweenstate (national and provincial) governmentand local self-government. The exception isUkraine where powers of local self-governmentare not clearly defined. In Russia anda number of other states, local authoritiesare responsible for providing medical firstaid,organizing medical aid in the “zone offirst contact” with patients in hospitals,ambulances and medical posts, and organizingpreventive medical services.According to laws of Armenia, heads ofmunicipalities are responsible for organizingand managing municipal health-careinstitutions. They promote improvement ofsanitation and implement sanitary, hygienic,anti-epidemic and quarantine measures.In Kazakhstan, local state authoritiesadminister public health. They assist localhospitals and general polyclinics, specializedclinics, tuberculosis hospitals, diagnostic centersand rural medical posts. They are alsoresponsible for the prevention and treatmentof dangerous infections. In Uzbekistan, publichealth is handled mainly by the state. Localself-government is responsible for organizingand maintaining medical posts.The majority of states have a multi-levelsystem for financing social services. As a

EURASIA110United Cities and Local Governmentsrule, local state authorities and local selfgovernmentsdo not have adequate financialresources for maintaining publicservices in the fields of education, publichealth and social aid, though total budgetsgrow constantly.In Tajikistan, public health and social servicesare not handled by local governments.However, local budgets finance 7%and 8% of expenditure on social aid andeducation. Another model exists in Uzbekistan:100% of expenditure on socialinsurance is covered by local budgets.Meanwhile, social aid, public health andeducation costs are financed as follows:about 20% by the state, approximately50% by regional budgets, and 20% to 30%by district budgets. In 2005, Russian Federationlocal budgets financed 22% of expenditureon public health, 16% on socialpolicy and 43% on education.Water, energy and public transportation.In Russia, responsibility for publictransportation, and for providing water,energy, gas and heat falls to local selfgovernment.Organs of self-governmenthave received broad powers and may haveappropriate objects in municipal property,which permit them to implement thesefunctions. In Armenia, infrastructures ofgas, energy and water supplies used formunicipal needs may be transferred,according to the Law “On Local Selfgovernment,”to municipal property.In Belarus, Ukraine and in the states ofCentral Asia, the functions of water andenergy supplies and public transport arewithin the province of local state administrations.They are obligated to provide forthe management and maintenance of localservices, and to grant subsidies to users.Nevertheless, it is necessary to note thatlocal budgets are not always able to provideadequately for the management andmaintenance of these functions due toshabby condition and a shortage of financialmeans.Business development support. InAzerbaijan, Armenia, Russia and Ukraine,support to business development may beprovided at all levels: by central, regionaland local state bodies, as well as by localself-government. Several countries, includingRussia, not only affirm the right of localself-government to support businessdevelopment, they also provide necessaryfinancial resources.In the states of Central Asia, support forbusiness development comes primarilyfrom central state entities. Nevertheless,the role of local state authorities is alsoconsiderable. Local governing bodies areresponsible for licensing economic activitiesat the local level, granting permissionfor construction of community nets andbuildings, organizing tenders for the provisionof social services, and managing thesale of community property.A summary table on functions of local authoritiesis presented below (see table 4).III.3. Administrative capacityEfficient execution of powers by localauthorities is determined not only by adequatefinancing, but also by a well-organizedprofessional municipal or state localservice.Municipal service. The notion of municipalservice in the nations of Eurasia isapplied to the level of local self-government.Unlike many other countries, theEurasian countries generally do not includeemployees engaged in the sphere of education.Municipal service is regarded as aprofessional activity that has to be exercisedindependently of state bodies, regardlessof political forces and results of localelections.In all countries of the region, the executivebodies of city municipalities function on amore professional level. Rural territorialcommunities have far fewer municipalemployees, and their knowledge of munici-

111Table 4Functions of Local Government (Intermediate and Local Levels)Country Planning Education Social Public Water Energy Public Support ofservices health supply supply transport businessArmenia Yes No (with the No (with the exception Yes Yes Yes Yes Yesexception ofof voluntarypre-school institutions) implementation of ownmunicipal social programs)Azerbaijan Yes No Yes (in the spheres not Yes Yes. No Yes Yesoccupied by the state).Belarus Yes Yes Yes Yes Yes Yes Yes YesGeorgia Yes Yes Yes Yes Yes Yes Yes YesKazakhstan Yes Yes (elementary, Yes Yes Yes Yes Yes Yessecondary andprofessionalsecondary education)Kyrgyz Republic Yes Yes Yes Yes Yes Yes Yes YesMoldova Yes Yes Yes Yes Yes Yes Yes YesRussia Yes Yes Yes Yes Yes Yes Yes YesTajikistan Yes Yes (pre-school and No No (though local Yes Yes Yes Yesbasic educationalbudgets financeinstitutions) public health - 8%)Turkmenistan Yes N/A N/A Yes Yes Yes Yes YesUkraine Yes Yes Yes Yes Yes Yes Yes YesUzbekistan Yes Yes Yes Yes Yes Yes Yes YesSource: UCLG Country Profiles (2007).pal management and marketing is low. Theimprovement of the professional level ofmunicipal employees is still an acute problemin the development of local self-government.In Russia, there were in 2006 about280,000 employees (on average, onemunicipal employee for every 500 citizens)(see table 5). According to Russianlaw, the municipal service is exclusivelycomprised of persons working in localself-government. Municipal institutions,such as schools and healthcare facilitiesare not regarded as bodies of local selfgovernmentand, as a result, their employeesare excluded from municipalservice. The legal status of municipalemployees is established by federal laws,laws of member states of the federation andcharters of municipal entities. The status ofmunicipal employees and the guaranteesof their employment are based in themain on general principles, applied to thestate public service. Evaluation of thework of municipal employees is exercisedon the basis of qualification exams andattestations. For non-execution or undue

EURASIA112 United Cities and Local GovernmentsTable 5Staff of local governmentCountries Staff Regime (public Status (law Recruitment procedure Trainingor private law, carrier or contract) especially in higheror job positions)positionsArmenia N/A Public law; carrier and contract Legal status is defined by Municipal employees are The law provides forprofessional municipal service the law “On Municipal Service” appointed by heads of organization of trainingmunicipalitiescoursesAzerbaijan 25,000 (average Public law; carrier and contract Legal status is regulated by Chairmen of municipalities appoint N/A1 municipal employee professional municipal service. the law “On Municipal Service” heads of branch departmentsfor 300 citizens) dated November 30, 1999 on the basis of the decisions ofmunicipalities; other municipalemployees are appointeddirectly by heads of municipalitiesBelarus 22,000 at the Public law; contract Legal status is defined by Municipal employees are Training coursesend of 2005 state service the law “On State Public appointed by heads of localService in the Republic government bodies on theof Belarus”basis of examsKazakhstan 46,546 Public law; Activity of local bodies is Akims and heads of staff of N/Acontract service regulated by legislation of regions, capital and city of Almatystate public serviceare political, appointed stateemployees. The majority ofemployees of representativeand executive bodies are carrieremployees (according to resultsof contests and attestations).Kyrgyz Republic N/A Public law; contract Legal status is defined by the Municipal employees are N/Aand carrier service law “On Municipal Service” engaged according to resultsof contests and attestationsMoldova N/A Public law; contract Application of the law on Appointment and dismissal N/Athe state civil serviceby the mayor or district headRussia Approximately Public law; Legal status is defined by Heads of municipal units may be Training courses280,000 (average 1 contract service federal laws, laws of elected directly by population ormunicipal employee member states of the appointed by representativefor 500 residents) Russian Federation and bodies of municipalities. Otherby chartersemployees are appointed byof municipal unitsheads of municipal unitsTajikistan N/A Public law; Legislation regulating Employees of local bodies are N/Acontract service state public service appointed by heads of localadministrationsTurkmenistan N/A Public law; Legislation regulating state Employees of local bodies are N/Acontract service public service appointed by heads of localadministrationsUkraine 91,925 municipal employees Public law; Legislation regulating state Election and appointment of Staff reserves foras on September 1, 2006 contract service public service municipal employees appointment andpromotion of municipalemployeesUzbekistan N/A Public law; Legislation regulating state Appointment by higher bodies N/Acontract service public service and heads of local gvt bodiesSources: UCLG Country Profiles (2007).

113execution of their duties municipal employeesmay by subjected to disciplinarypunishments. The new federal frameworklaw number 25 of March 2, 2007, establishesa new unified legal basis for themunicipal public service. It is linked tothe state public service, but clearly differentiatedfrom the elected officials; it isaimed at professionalizing and stabilizingthe corps of municipal public servants.The new law took effect on June 1, 2007,and has to be developed by laws of thesubjects of the Federation.Presently in Azerbaijan there are about25,000 municipal employees: on average,one for every 300 citizens. In Belarus,state employees function on the locallevel. Their numbers comprise approximately22,000 persons: on average, onefor every 450 citizens.Integrity of elected officials and employees;prevention of corruption. Municipalauthorities face the same danger ofcorruption as authorities do at otherlevels of public power. Mass media informthe public about criminal prosecution ofmunicipal employees for bribes, theftsand other misuses of public functions.Sociological inquiries conducted in one ofthe regions (oblasts) of Ukraine showthat annually 60% of respondents witnessat least one incident of corruption(15.69 % reported ‘numerous,’ 28.55%‘several’ incidents of corruption).A number of countries have adopted legalremedies to aid the struggle with corruption.For instance, the government ofArmenia enacted the decree “On Anti-Corruption Strategy and Program ofImplementation.” It provides measuresstrengthening public control over bodiesof local self-government, creating transparentprocedures for forming local budgetsand spending local funds. Itemphasizes the necessity of holding localself-government officials personally liablefor misdeeds.Several states of Eurasia have ratified theUN “Convention against Corruption” and theEuropean “Criminal Law Convention on Corruption.”Management reforms. A number ofcountries, including Russia and Ukraine,have launched administrative reforms toimprove the functioning of all chains ofpublic management. The emphasis forlocal self-government is recruiting professionaladministrators with sufficient knowledgeand experience to resolve most localissues. In recent years, the percentage ofsuch employees in the system of local selfgovernmenthas visibly increased. Thesechanges were directly caused by replenishmentand intensive education of municipalemployees. The states of the regionalso adopted measures for the introductionof modern management technologies. Emphasisis placed on the importance of strictregistration procedures and rapid responsesto the requests of citizens.The improvement of the quality of localservices is also connected with furtherprivatization of municipal property, inparticular in the sphere of residentialcommunity economy.IV.Local democracyA certain indicator of progress for localdemocracy is the increasing competitivenessof local elections at the levels wherethey are organized, even though thisoccurs only at the lowest level of governancein some countries. Electoral participationremains low in some countries,but is comparable to European countriesin others. It is useful at this point to précisthe legal status of local governmentbodies because this factor can have animpact on the relationships between electedbodies and the local administration.The following table summarizes the basicinstitutional features of local democracyin the countries of the region.Mass mediainform the publicabout criminalprosecutionof municipalemployeesfor bribes, theftsand other misusesof public functions

EURASIA114 United Cities and Local GovernmentsTable 6: Local democracyState Formation of local Local executive bodies General features of electoral Number of deputies Term of powersrepresentative bodies systems (minimum and maximum)ArmeniaAzerbaijanElections of councils ofmunicipalitiesElections of members ofmunicipalitiesBig administrative territorial units are governedby bodies of local state government.Municipalities (villages, settlements, cities andquarter communities of Erevan) are managedexclusively by organs of local self-government.Heads of municipalities are elected.Heads of executive power of cities and districts(state local government) are appointed by thePresident and are responsible to him.Chairmen of municipalities (local selfgovernmentbodies) are elected; they directactivities of executive staff of municipalities.In elections of bodies of local self-government,candidates are appointed exclusively at their owninitiative, but most candidates are affiliated withdifferent parties providing them appropriate support.In the elections of heads and councils ofmunicipalities, majority electoral system applies.In 2005 elections, bodies of local self-governmentwere formed in 829 out of 930 communities ofArmenia.Majority electoral system.In the 2004 elections 2,731 municipal bodies wereelected composed of 21,613 members ofmunicipalities.On October 6, 2006, by-elections were held with theaim to fill 1.941 vacancies in 604 municipalitiesDepending on the quantityof population, 5 to 15members of municipalcouncils (5 members formunicipalities notexceeding 1,000 residentsand 15 members formunicipalities totalingmore than 20,000residents)The number of members ofmunicipalities is determinedby law, dependingon the quantity ofpopulation ofmunicipalitiesLocal self-governmentbodies are elected for a4-year term.Members ofmunicipalities areelected for a term of 5yearsBelarus Elections of local councils. There are 3 territorial levels of local councils: primary, basic and regionalChairmen of regional executive committeesare appointed by the President of theRepublic with consent of regional councils(by majority of votes of elected deputies).Appointment of chairmen of district (city)executive committees is by chairmen ofregional executive committees withconsent of appropriate district (city)councils. Chairmen of district (city)committees may be appointed directly bychairmen of regional committees when hiscandidates have been twice rejected byappropriate district (city) councilsMajority electoral system. In the elections held onJanuary 14, 2007, 1,581 local councils were electedcomprising 22,639 deputies. Absolute majority ofdeputies were not affiliated with any partyLocal council membersare elected for terms of 4years.

115State Formation of local Local executive bodies General features of electoral Number of deputies Term of powersrepresentative bodies systems (minimum and maximum)Georgia1,017 local councils(sakrebulo) are electedLocal councils elect mayors. Local council of thecity of Tbilisi elects the mayor from among itsmembers for a term of 4 years.In Georgia at the local elections of 2006, 69 local councilswere elected in 4 self-governing cities, 60 municipalities,4 communities in zones of conflict and one in the capitalcity, Tbilisi. A proportional electoral system was used inTbilisi and a mixed electoral system in otherconstituencies. 1,733 councilors were elected under thenew mixed electoral systemThe council of city of Tbilisi is composedof 37 members: 25 membersare elected in 10 multi-membermajority election districts. Remaining12 seats are distributedproportionally among the parties thatgained 4 % of the votes in all 10 ofTbilisi’s 10 districtsLocal councils areelected for a term of fouryears.KazakhstanKyrgyz Rep.Local self-governmentbodies are provided only atthe lowest level, but theyare still not formed.Elections to state localrepresentative bodies ofprovinces, districts andcities of republican anddistrict significanceLocal self-governmentfunctions only at the lowerlevel in small settlements.Bodies of representativeand executive power areheaded by hokims.Executive bodies of state local government (akims) havebeen until now appointed by the President of the upperakim. But they may be elected according to the proceduredetermined by the President. In 2005–2007, elections ofakims have been gradually introduced in rural circuits,villages and settlements and as an experiment in severaldistricts and city districts of Astana and AlmatyExecutive bodies of local self-government are elected.Hokims (heads of state administrations) of districts areappointed and removed by the President with consent ofappropriate local council, and after consultations with thePrime MinisterMajority electoral system is used for elections of statelocal representative bodies. Second round of elections isheld when no candidate has received 50% of votes.Elections of lower akims in administrative units withpopulation less than 5, 000 are held directly, withpopulation exceeding 5, 000, indirectly through electors.Proportional electoral system is used for elections of localcouncils. 6,737 members of local councils were elected atthe elections of 2004.Majority electoral system is used for elections of heads ofadministrations of administrative circuits. In 2006, electionswere held in 34 circuits with populations not exceeding9,000 residents.The number of deputies of localstate representative bodies isdetermined with account ofpopulation of appropriate units inthe procedure as specified by theLaw On Local State Government.Representative bodies of Astanaand Alma-Ata are composed ofnot more than 50 (city, 30,district, 25) deputies.Local representativebodies and akims areelected for a term of 4years.Hokims of stateadministrations ofdistricts are appointedfor terms of 4 years.Moldova Councilors and mayorsLocal councils and mayorsof local communities areelected.In the elections held on June 3, 2007, 899 mayors ofmunicipalities, towns, communes and villages.11,967 members of local councils were elected in 2007.A proportional electoral system was used for the elections ofcouncilors, and a majority electoral system with a run offbetween the two top-scoring candidates for the elections ofmayors. Second round of elections of 473 mayors was heldon June 17, 2007.The number of councilorsdepends on the size of thepopulation.are elected for 4-yearterms.

EURASIA116 United Cities and Local GovernmentsTable 6: Local democracy (Cont.)State Formation of local Local executive bodies General features of electoral Number of deputies Term of powersrepresentative bodies systems (minimum and maximum)RussiaTajikistanRepresentative bodies oflocal self-government areformed in units withpopulations exceeding 100voters. When there arefewer than 100 voters, thepowers of representativebodies are exerciseddirectly by meetings ofcitizens.However the rights of amunicipal authority can beexercised only for a unit of1,000 inhabitants as awhole (3,000 in areas ofhigher density).Local self-governmentfunctions only at the lowerlevel in small settlements.Local state representativebodies (councils of people’sdeputies) are formed inprovinces and districts.Turkmenistan Local councilsSystem of local self-governmentis formed by directlyelected local councils (Gengeshi)of settlements andterritorial public self-governmentbodies.Heads of municipal units according to their chartersare elected by voters or appropriate representativebodies.Local administrations are headed by heads ofmunicipal units or by persons employed on acontractual basis and with account of the results ofcontests for filling the aforesaid positionsHeads of local state executive power are appointedby the President with consent of appropriate localcouncils of people’s deputies. They also act aschairmen of these councils.Local state executive power is exercised by hakimsappointed and removed from their posts by, andresponsible to, the President.Local councils (Gengeshi) elect from theirmembers chairmen (archyns).Law provides for the use of both majority andproportional electoral systems. In fact, majorityelectoral system prevails.Majority electoral system is used.The number of members of representativebodies of settlements, includingurban circuits, is determined by chartersof municipal units and may not beless than:7 for populations less than 1,000;10 for populations over 1,000 and lessthan 10,000;15 for populations of more than10,000 and less than 30,000 ;20 for populations more than 30,000and less than 100,000;25 for populations over 100,000 andless than 500,000; 35 for populationsexceeding 500,000.The number of deputies of districtrepresentative bodies is determinedby charters of municipal units, andmay not be less than 15The number of deputies of representativebodies of inner-city territories thatare of federal significance are definedby charters of municipal units andmay not be less than 10 .The terms of powers oflocal self-governmentbodies are defined bycharters ofmunicipalities(Gengeshi) are electedfor 5-year terms.

117State Formation of local Local executive bodies General features of electoral Number of deputies Term of powersrepresentative bodies systems (minimum and maximum)UkraineThere are two models oforganization of local selfgovernment.The first modelat the level of villages,settlements and townsdoes not provide for localstate administrations. Thesecond model in Regionsand districts provides forthe mixed model, includingestablishment of districtand Regional councils asorgans of local selfgovernmentand Regionalstate administrations aslocal state organs.The law provides for the election of heads ofsettlements, villages and towns (heads ofterritorial gromadas). Local councils form localexecutive bodies upon proposal of heads ofsettlements, villages and towns. Districts andprovinces, Kiev and Sevastopol have local stateadministrations functioning as agents of thestate and excluded from the system of local selfgovernment.Heads of local state administrationsare appointed and removed from their posts bythe President upon proposal of the Cabinet ofMinisters of Ukraine.Majority electoral system is used for the elections of rural andsettlement councils and heads of settlements, villages andtowns. In other elections (city, district, Regional councils,Parliament of the Autonomous Republic of Crimea)proportional electoral system is applied4 yearsUzbekistan The term of powers ofCouncils (Kengeshi) ofpeople’s deputies arerepresentative bodies oflocal state governmentelected at the level ofprovinces, districts andcities. Local selfgovernmentbodies areformed at the level ofsettlements, villages, aulsand in makhalya of cities.Bodies of representative and executive power inprovinces, districts and cities are headed by hokimsof appropriate territorial unitsMajority electoral system on multi-party basis is used in theelections of provincial, district and city councils of people’sdeputiescouncils of people’sdeputies and hokims is 5years.Chairmen (aksakaks) ofcouncils and members ofcouncils of local selfgovernmentare electedfor term of 2 or 5 years.Sources: UCLG Country Profiles (2007).

EURASIA118United Cities and Local GovernmentsIn the countrieswhere manyelements of localself-governmentexist only at thelowest level ofgovernance, theparticipation ofpolitical parties isless significantIV.1. Local government bodiesAll states of Eurasia have diversified modelsof local self-government organization.At the lowest (grass root) territorial levelthere are no permanent bodies. Local mattersare resolved, as a rule, by means ofdirect democracy. Appropriate organsappear at higher levels of local self-government.The organizational structure of higher municipalunits in the Russian Federation, Armenia,Azerbaijan, Georgia and Moldova iscomposed of representative bodies, headsof municipal units, local administrationsand other organs and elected officials oflocal self-government as stipulated by lawsand charters of municipal units. The structureof local administrations is establishedby the representative bodies upon proposalsof heads of local administrations.As a rule, municipal units in the states ofEurasia do not have the rights of corporatepersons. Nevertheless, they take part incivil law relations on an equal basis with otherparticipants both physical and corporate(in particular, in Russia, Belarus, Kazakhstan,Tajikistan). The rights of corporatepersons are granted to organs of municipalunits acting on their behalf. They mayobtain and exercise property and non-propertyrights and obligations and representmunicipal units in courts. On the whole thestatus of corporate persons is held by localrepresentative bodies and local administrations.In a number of municipal units (forinstance, in Vologod oblast of the RussianFederation) this status is also granted tocertain executive bodies or structural divisionsof local administrations. Organs oflocal self-government as corporate personsare subject to obligatory state registrationin the form of institutions.Another model exists in Azerbaijan andMoldova. According to the Law of theRepublic of Moldova “On Local Public Administration,”administrative-territorial unitshave the rights of corporate persons inpublic law. They may obtain and dispose ofproperty and enter contractual obligationsthrough their own organs, acting within thepowers as provided by normative acts andcharters of municipal units.The same powers are exercised by respectivebodies of municipal units of Azerbaijan.Unlike similar bodies in othercountries, such as Kyrgyz Republic, Ukraineand Uzbekistan, those in Azerbaijan donot have the rights of corporate persons.IV.2. Local political systemsThe role of political parties varies considerablyaccording to the level of developmentand the extent of self-government.Role of political parties. Local representativebodies exist in all states of Eurasia.For instance, in Georgia there are 1,017 localcouncils (sakrebulo).In Russia there are 252,000 elected membersof local representative bodies; mostmembers serve on a voluntary basis. Localcouncils are composed of not less thanseven members for municipal units withpopulations above 1,000, and not less than35 members for municipal units with populationexceeding 500,000 persons.Political parties in the countries in theregion participate in local elections in differentways and to different degrees. Inthe countries with developed forms of localself-government, including Azerbaijan,Armenia, Georgia, Kyrgyz Republic, Russiaand Ukraine, major political parties takepart in all elections. In most of these countries,the creation of independent local partiesis prohibited by law.The main function of political parties is tosupport their own candidates (Belarus,Russia, Ukraine), or candidates who haveproposed themselves (Armenia). For instance,in Russia 9% to 17% of candidatesin municipal elections are put forward bypolitical parties.

119On the whole, local elections in these countriestake place in a highly competitiveatmosphere. Thus, in Azerbaijan candidatesof 26 political parties took part in themunicipal elections of 1999. In Georgia, 21political parties and blocks took part in theelections of the Tbilisi municipal governmentheld in 2002. In local elections in2006, seven political parties participated;two of them presented joint lists of candidates.In Moldova, 22 political parties tookpart in the local elections of 2007.In many municipalities in Russia, Armenia,Azerbaijan and Georgia, more than tencandidates compete for each vacant position.In the countries where many elements oflocal self-government exist only at thelowest level of governance (Uzbekistan,Kyrgyz Republic and Tajikistan), the participationof political parties is less significant,though such participation is providedfor by law. As a rule, elections for local governmentoffices are non-partisan. Uzbekistanis an exception: five political partiesrecently participated in the elections oflocal representatives. Legislation in KyrgyzRepublic stipulates that candidates forelected municipal posts may be proposedby voters at their place of work, service orresidence or education; by groups of votersat conferences of political parties; orby the candidates themselves.In the states providing for separation of representativeand executive branches (Armenia,Kyrgyz Republic, Moldova,Uzbekistan and Ukraine in district cities),candidates to the executive are directlyelected by the population.In Russia there are two procedures forelecting local-level executive officials.Under the first procedure, the heads of theexecutive branch, who are also the headsof municipal administration, are chosen bydirect popular election. Under the otherprocedure, they are appointed by councilthrough a contract on the basis of a competitiveexamination. In the municipalelections of 2005, more than 30% of theheads of municipal entities were directlyelected.In Azerbaijan, each municipality has itsown executive branch and executive staff,including the chairman of the municipality,heads of agencies and departments, specialistsand other employees.Representation of women is increasing inlocal governments in Russia, Belarus, Moldova,Ukraine and some other states. Inthe Russian Federation, women compriseabout 30% of municipal leaders and 47%of local council members. In the local electionsof 2007 in Belarus, women took45.7% of the posts in representativebodies. In Ukraine, 40.2% of local councilmembers are women. In Georgia’s 2006elections, women managed to take only11.4% of local council seats, and in KyrgyzRepublic after the elections of 2004, representationof women in local councils wasonly 19.1%.IV.3. Electoral systemsElection by majority vote is the rule for mostlocal governments. In Ukraine, a proportionalelectoral system has been used broadlysince 2004. In particular, this system is usedfor the election of deputies of city councils.At times it has caused excessive politicizationof local government and inappropriatetransfers to the local level of debates onregional, linguistic and foreign policy. It hasalso increased the number of inter-partyclashes in some regions.In Russia the law permits the use of bothproportional and majority electoral systemsfor local elections. The system ofchoice is established by the charter of amunicipal entity; most use the voter-majoritysystem.In Georgia’s local elections of 2002 and2006, a proportional electoral system wasapplied in Tbilisi. In other regions of thatRepresentationof womenis increasing inlocal governmentsin Russia, Belarus,Moldova, Ukraineand some otherstates

EURASIA120United Cities and Local GovernmentsLocal referendumsare only practisedin Russia on theestablishment orstructure of localgovernments,although they areprovided for alllegislations. Formsof citizenparticipation at thesub-municipal levelare still mostpopularcountry, a majority electoral system wasused in 2002, and a mixed electoral systemin 2006.In Uzbekistan and Tajikistan, the majorityelectoral system is used for local elections.IV.4. Citizen participationCitizens demonstrate different attitudestoward local political life. As a rule, they stillprefer to turn to the central state for resolutionof their problems, although this ischanging. In communities where local governmentshave sufficient resources, candecide local issues efficiently, and defendthe interests of the local population, theauthority and status of local government ishigh, sometimes rivaling state authorities.For instance, in Russia mayors of severalcities are more popular than governors ofthe subjects of the Federation. In countriessuch as Armenia, Georgia and Moldova,where local resources are limited, the populationtypically regards local government assimply the lowest level of state power.Overall, throughout the Eurasian region,voter participation in local elections is lowerthan the turnout for national elections.In Russia, voter participation in electionsfor rural representative bodies and executiveleaders was 56.43% and 54.81% respectively.In municipal districts, voterturnout for comparable elections was50.46% for the representative body andagain 54.81% for executive posts.According to official data for the 2004 electionsin Azerbaijan, 46% of registeredvoters took part in municipal electionsthere. In Belarus, local elections in 2003saw 73% voter participation, and in Georgiathe turnout for elections in 2005 wasmore than 40%.In all countries of the region, legislation providesfor different forms of direct democracy.In practice, these forms are employed withdifferent levels of energy and consistency.In Russia, law establishes such proceduresas local referendum, recall of local electedofficials, voting on changes of the boundariesof municipal entities and on theirreform, rulemaking initiatives, public hearings,meetings and conferences of citizens,and other civic activities. In2004–2005, some 400 local referendumswere held in 22 of the 89 subjects –districts–that comprise the Russian Federation;most of the referendums concernedthe establishment or structure of local governments.Belarus’ Constitution and Electoral Codeprovides for local referendums and recalls ofdeputies of local soviets (councils) of deputies.However, there were no local referendums,and recalls of deputies were rare. Atthe same time, local meetings are broadlyused in accordance with the Law of 2000.In Ukraine, the law provides for elections,referendums, general meetings at the placeof residence, local initiatives, public hearings,and recall of deputies and local electedofficials. Forms most often used in practiceinclude general meetings at the place ofresidence, local initiatives and public hearingson different issues, including taxation.Referendums are held only rarely.Legislation of the countries of Central Asiadoes provide for elections and referendums.But in the main, only state-widereferendums are held. In Uzbekistan, localgovernment takes the form of assembliesof citizens convened in settlements, villages,kishlaks, auls and makhalyas. Managingbodies of local government structuresare elected by, and are responsible to votersresiding in the respective territories.The Constitution of Armenia establishestwo main forms of direct democracy: electionsand referendums. No referendum hasyet been held.In several countries, there are forms ofdemocratic participation below the municipallevel, including groups representing a

121neighborhood, part of a residential area ora common interest.In Russia, this sub-municipal level mayinclude groups speaking for an apartmentbuilding, part of an apartment building, aresidential unit or a rural settlement. Publicsentiments may be expressed in meetingsand conferences of citizens, as well as bymeans of local elections. This civic sublevelis responsible for such issues asmaintenance of residential buildings andadjacent territories and the resolution oflocal problems.Azerbaijan enacted in 2001 the law “On theModel Rules of Block Committees of Municipalities,”which serves as a basis for establishingnew organizations to assistmunicipalities with governance at the submunicipallevel of apartment buildings andcity blocks. Block committees composed offrom five to 11 people are elected at civicmeetings.In Belarus, territorial government functionsnot only at the level of residentialunits – apartment complexes and cityblocks – but also in settlements as well. Inall, Belarus counts 43,758 such microunitsof governance.In Uzbekistan, there are more than 10,000local communities (makhalyas). Membersof these communities are united by placeof residence, traditions and customs,forms of communication, legal, economicand family relations. For centuries theyserved as a means for elaborating andregulating principles and rules of communitylife, for shaping ideological and philosophicalviews, forming morals, honoringtraditions and expressing public opinion.In Ukraine, citizens may on their owninitiative create committees to representapartment buildings, the residents on onestreet, block committees and other groupswith the consent of appropriate local councils.Such self-organizing groups are morepopular in some parts of the country thanin others. For instance, in Faustov (population:50,000) about 200 self-organizedcommittees were created, yet in Kiev(population: 2,660,000) there are only 80.Typically, citizens receive information aboutthe activities of local committees andgovernments through traditional forms,such as mass media, posted announcementsand word of mouth. But increasingly,electronic means of civic participation arebeing developed, especially in Russia andUkraine. Electronic communication networksof local governments disseminateinformation to the public, albeit mostly officialinformation and announcements. Informationpertaining to citizen participation inlocal governmental affairs is still somethingof a rarity.IV.5. Central-local relationshipsIn all countries of the region, there is asystem of state supervision over local agenciesof state government as well as localself-governments. Such central supervisionis exercised through executive powers, prosecutionoffices and courts. In several countries,these controlling agencies cooperatewith each other; in other countries theyfunction without noticeable coordination.The President and the government of Russiaand heads of subjects of the Federationmay consider citizen grievances concerningthe actions or inaction of municipalemployees and officials. Federal ministriesmay also assist citizens seeking redress ofgrievances.In Azerbaijan, supervision of local selfgovernmentis exercised by the Ministry ofJustice. This ministry is not only responsiblefor ensuring that local governments act in alawful manner, but also for controllingexpenditure of public means and supervisingobservance of human rights. TheMinistry of Justice provides an annual reporton these issues. In 2005, some 240 localgovernment actions were revoked and 70acts of municipalities were amended.Typically, citizensreceive informationabout the activitiesof local committeesand governmentsthrough traditionalforms, such asmass media, postedannouncementsand word of mouth.But increasingly,electronic meansof civicparticipation arebeing developed,especially in Russiaand Ukraine

EURASIA122United Cities and Local GovernmentsIn all countries ofthe region, there isa system of statesupervision overlocal agencies ofstate governmentas well as localself-governments.Such centralsupervision isexercised throughexecutive powers,prosecution officesand courtsIn the Russian Federation, the Ministryof Justice does not have such functions.Supervision of local self-government isexercised by prosecution units (prokuratura).In Ukraine, control over local self-governmentis exercised by committees of theParliament and by local offices of stateadministrations, and the prosecution office(prokuratura). Financial control is exercisedby agencies such as the AccountingChamber, State Control and Revision Service,or Fund of State Property.Financial control, as a rule, is held byministries of finance in Armenia, Belarus,Russia and Ukraine, and by the Ministriesof Internal Revenue in Belarus. Branchoversight is carried out by appropriatedepartments of ministries and state agencies.Prosecution units (prokuratura) in allcountries exercise control over strict anduniform execution of laws.There are also forms of popular controlover local self-government. In Russia,charters of municipal entities may providefor recall of local elected officials.In Armenia, Russia and Ukraine, acts oflocal self-government entities may bequashed by courts or by the entity thatissued the acts.In other Eurasian countries, local acts maybe revoked or suspended by the head ofthe state (Belarus), the supreme legislativebody (Council of the Republic in Belarus,Parliament in Uzbekistan), or by offices ofstate power, which is the way in the countriesof Central Asia.The functions of bodies of local self-governmentmay be terminated ahead oftime on their own initiative (self-dissolution),by court decision (Armenia, Russia),or by decision of the Parliament (Kazakhstan,Kyrgyz Republic). In Azerbaijan, thedissolution of local self-government bodiesis not provided for in law.In the countries of Central Asia, the RussianFederation and Armenia appointedemployees of local governing bodies maybe dismissed by the higher officials whoappointed them. Grounds for dismissal ofmunicipal employees in Russia and Armeniaoften include: court decisions prohibitingthe occupation of a particular positionin municipal government bodies, expirationof contracts or reaching a specifiedage limit.In the majority of the countries of CentralAsia, there are systems of central-governmentexecutive branches that ensure theconduct of uniform state policy in appropriatespheres of activities. These centralgovernmentauthorities cooperate withlocal governments on matters pertaining toexecution of the functions of a localgovernment, adopt within their competencenormative legal acts and give instructionsand recommendations on dueexercise of powers on the local level. Ministriesmay exercise functions of coordinationand control, with the exception of localorgans of internal affairs (police), whichhave dual subordination, similar to the formersoviet system of government.In Armenia, Belarus, Russia and Ukraine,the impact of branch offices of executivepower (central and regional) on the activitiesof local government and local selfgovernmentis demonstrated in the controlover the execution of delegated state functions.In the event of violations, appropriatestate officials may give in written formmandatory instructions for eliminating violations.In Russia, such instructions maybe appealed in the courts.In all countries of Eurasia, bodies of localself-government may sue a state authorityor state officials for actions or decisionsinfringing local rights. Citizens also havethe right to file a suit if they believegovernment at any level has violated theirright to self-government. In several countries,conflicts between local self-governmentbodies and private (individual and

123corporate) persons may be resolved only inthe courts, unless by mutual consent thedispute is relegated for resolution to someother body or procedure. In a number ofcountries as well, acts, local self-governmentbodies and officials can also be revokedby courts, as is the case in Armenia,Kazakhstan and Russia. According to legislationin Ukraine, implementation of localself-government actions may be suspendedas provided by law with a simultaneousfiling of a judicial suit. Disputesconcerning local self-government in Ukraineare heard by administrative courts. At present,only the Supreme AdministrativeCourt has been established. The functionsof local administrative courts are still performedby courts of general jurisdiction. Inseveral countries, including Russia andUkraine, matters of local self-governmentare heard in economic courts (“arbitrationcourts”). These primarily consider disputesbetween local self-government bodies andcitizens or corporate entities.IV.6. National associations of localself-governmentIn the countries of Eurasia with more developedforms of local self-government, thereare national institutions representing interestsof local self-government. In the countriesof Central Asia there are as yet onlyplans to establish such institutions.In a majority of countries, there are unionsof municipal units. For example, the RussianFederation has the Congress of MunicipalUnits established by 46 associations andunions of municipal units, the Union of RussianCities, and the Union of Small Cities ofRussia, to name but a few. In Kyrgyz Republic,local self-government is represented bythe Association of Cities and Association ofLocal Self-government of Villages and Settlements.In Ukraine, there is a Congress ofLocal and Regional Governments. In Armenia,there are about 20 municipal associationsand unions. Azerbaijan establishesregional associations of municipalities onthe basis of the Law of May 3, 2005: “OnModel Charter of Regional Associations ofMunicipalities.” Several countries have associationsof different groups of municipalunits, such as rural and urban units. Manycountries, including Kazakhstan and Russia,also have associations of different divisionsor departments of local self-government.Associations and unions of municipal unitspursue the following goals: establishingand developing local self-government as apolitical institution and a basis for civilsociety, creating favorable conditions forcomplex social and economic developmentof municipal entities, coordinatingcooperation of municipal entities and theirassociations with state authorities in theinterests of local self-government and thedevelopment of inter-municipal cooperation.Associations of councilors of representativebodies of local self-government are directedto increase the authority of the representativebranches of local self-government,develop civic activity in the population, takepart in campaigns before elections, and discusswith the central government draft lawson matters of local state government andlocal self-government, as well as any policyissue regarding local government. Their opinionis usually requested formally on thedrafting of laws.In severalcountries,including Russiaand Ukraine,matters of localself-governmentare heard ineconomic courts(“arbitrationcourts”). Theseprimarily considerdisputes betweenlocal selfgovernmentbodiesand citizens orcorporate entities

EURASIA124United Cities and Local GovernmentsV. ConclusionThe countries of Eurasia have achieved differentstages in the development of localself-government. But despite all differences,they share several general tendencies andfeatures.First, the legal framework of local selfgovernmenthas been established in all thecountries in this region. The constitutions ofall states contain articles, sections andnorms devoted to local self-government andguarantees of its realization. The constitutionsproclaim that the rights of citizens tohave local self-government may not be restricted.The constitutions of all countries exceptKazakhstan, enshrine important powersof local authorities. Transfer of such powersto other persons or governing bodies is notpermitted.Beyond this fundamental and ubiquitousacceptance of the importance of local selfgovernance,broad themes of a commonheritage give rise to a similarity in the problemsthat are being addressed throughoutthe region.In all of these countries, there is an increasingaspiration among local communitiesto decide social issues locally andindependently through their own representativebodies. This movement is,however, constrained by long-standingtraditions; in some countries decentralizationis prevented by unstable politicaland economic conditions. The generalprocess of decentralization and reinforcementof local self-government is alsohindered by the chronic shortage of resources,including those needed toexercise real power by local governments.In Kazakhstan and some other states,local self-government is only proclaimedby the Constitution. In practice, it is rare;in some states citizens are still wary oflocal power structures. It is possible tospeak only of the gradual rapprochementof local communities and public institutions.In this regard, in all countries of theregion a special role must be attributed toelections of representative bodies, providedtheir democratic fundamentals areconstantly strengthened.In all of these countries, the developmentof local self-government is undermined bya weak financial base. To remedy this it isnecessary to reinforce local taxes, developinter-budgetary relations and provide fair andobjective procedures for raising and allocatinglocal revenues and expenditures.The development and strengthening oflocal self-government as a rule takes placewithin the framework of the larger, generaladministrative reform aiming to separateand distinguish clearly the powers of alllevels of government, as well as workableprinciples of subsidiarity. Progress, however,is slow and some reforms are quite

125fragile, in part due to complicated economicconditions in several countries and frequentpolitical changes.All Eurasian countries are strongly influencedin matters of local self-governmentand general democratic principles by thestandards of the Council of Europe, especiallythose that are members of the Commonwealthof Independent States and theEurasian Economic Community. Such sharedinfluences permit the prediction of a highdegree of accord in future legal regulationof local self-government.

EUROPEGÉRARD MAR COUHELLMUT WOLLMAN

EUROPE128 United Cities and Local Governments

129I. IntroductionThe Europe under study in this chapter coversmore than the European Union (EU)and less than Europe the geographical entitybecause the area discussed here ends atthe eastern border of the European Union.The states that make up this region (35) are morediverse than ever, yet they share two intrinsiccharacteristics that distinguish themfrom all other geo-political regions: 1) Everypart of their territories is administered by amunicipal government; 2) All of these statesrecognize a discrete set of fundamentalprinciples on which local democracy is based.These principles, drawn up and implementedwith the participation of localauthorities and their organizations, wereenshrined in the 1985 European Charter ofLocal Self-Government, which has sincebeen ratified by several states outside theregion defined here. Moreover, local selfgovernmenthas been recognized as a governingprinciple by the EU.However, behind this broad agreement onbasic principles lies a striking variety ofinstitutions and practices, and quite distinctivenational exigencies. The traditionaldiversity typical of the western states hasnow been increased by the central andeastern new member states of the EuropeanUnion, in which the principle of localself-government has only been translatedsince the 1990s into institution-building.Also joining in the process are other statesin South-eastern Europe, where reformsare even more recent and fragile. Despiteall this diversity, a number of major trendsin common can be identified.The first such trend concerns territorial organization.The European countries seemto be entering a new phase of territorial reformthat is significantly different fromthose of the 1960s and 1970s. Not all statesare similarly affected by this development;some in fact remain outside of it. Inessence, the new territorial reforms areconcerned with strengthening the municipaland inter-municipal frameworks, thetrend toward regionalization, and problemsrelated to organizing urban areas.The reforms of the 1960s and 1970s setthe scene for two contrasting approachesto local government: the council as providerof public services (epitomized by theUnited Kingdom), and the council as publicbody based on a community of local people(epitomized by France). The countries thatfollowed the second approach did not undergoterritorial reforms at the time, butsince the late 1990s these reforms areback on the agenda because of the nowinescapable need to rationalize local governmentstructures. Such reforms alwaysaim at getting first-tier local governments 1to take on greater responsibilities, directlyor indirectly, by giving them adequate capacityto do so. What has sometimes workedagainst this approach, however, hasbeen an avowed policy of bringing localgovernment closer to local people; afterregime changes in Eastern Europe, thislocalizing trend led to the break-up ofmany councils in the Czech Republic, Hungary,Slovak Republic, and the states thatonce comprised Yugoslavia, Serbia andMontenegro excepted for the moment.The other important development in termsof territorial organization has been regionalization.Contrary to many assumptions,regionalization is much more a functionalissue than an institutional one. Far morethan a question of the number and characterof institutions, regionalization concernsterritorial policies adopted in response toproblems that are neither strictly local nornational. Regionalization manifests itselfvery differently depending on the constitutionalframework of each state, and on howit cuts across issues peculiar to that country.While it concerns urban organization inthe Netherlands or institutional regionalismin Spain, regionalization takes many otherforms as well. Sometimes it is a layer addedto traditional intermediary authorities,without undermining them, as is the casewith the French département. These examplesalso serve to draw attention to theEvery part of theirterritories isadministered by amunicipalgovernment and allof these statesrecognizea discrete setof fundamentalprinciples on whichlocal democracy isbased1. The “first-tier” orpremier degré isthat of basiccommunity-levellocal government,however they aredefined within thenational context.

EUROPE130United Cities and Local GovernmentsFor all the Europeancountries theorganization oflarge urban areas,and capital cities,is a key issue2. We distinguishbetween regionalself-governmentand regionalautonomy: thelatter is a muchstronger form,closer to federalismthan to classicallocal selfgovernment,andaffecting theconstitutionalstructure of thestate.potential impact of regionalization at themunicipal level.The organization of large urban areas, includingtheir capital cities, is a key issue forall the European countries. Nor is this aparticularly new issue. It has, however, comeback under the spotlight in the past 10years. The problem remains one of how tostructure and connect the different levelsof urban organization while allowing forfunctional needs as well as the demands ofdemocracy. Responses have varied, suchas between adapting common law andapplying specific regulations, between integrationwithin a metropolitan authorityand focusing on the city as a centre.The second major identifiable trend concernsthe management of local authorities,and their powers and responsibilities.Summarized, the powers and responsibilitiesdevolved to local authorities are increasing,though states are tending tostrengthen their control over local finance.Combined with this general trend are avariety of issues specific to each state. Thepowers and responsibilities of local authoritieshave suffered from the establishmentof regional autonomies 2 , although someremedies have been put forward (e.g. the2001 constitutional amendments in Italyand their implementation) or are beingdebated (e.g. the “local autonomy pacts”in Spain).The powers and responsibilitiesof local authorities have suffered from theestablishment of regional forms of selfgovernment.Some measures to remedythis, such as the 2001 constitutional reviewin Italy, have already been taken;others are being debated, including Spain’s“local self-government pacts.”With regard to powers and responsibilitiesin a strictly technical sense, local authoritieshave been affected by sector-specificdevelopments as well as more generalones. Under the latter category, it shouldbe noted how the general competenceclause on their powers and responsibilitieshas found widespread application despitesome resistance. The Charter’s legal situationremains uncertain in Italy, Portugal,Spain and the United Kingdom, and thereis an increasing tendency among localauthorities to turn to the private sector todeliver public services; privatization hasbeen less significant in countries with along record of such outsourcing, includingBelgium, France, Greece, Italy and Spain.Some countries have developed a systemof delegated powers and responsibilities, inparticular Austria, the Czech Republic, Germany,Hungary, Italy and Slovenia. Thispractice allows local councils to executeadministrative tasks under state responsibility.Among the sector-specific developments,it is evident that local authoritiesare becoming increasingly involved in educationas well as in public safety, thoughhere central control is being reinforced incountries where the local councils andmayors already exercised broad powers.Progress in public-sector management isevident throughout the European region,even in the newly democratized anddecentralized countries that have benefitedfrom various programs developed by internationalorganizations, and through bilateralcooperation projects. The precepts ofthe “new public management” have beendifferently received among European countries,depending on individual public servicetraditions, but the increase inresponsibilities and the accompanyingrationing of resources intensified pressureon local authorities to find ways to rationalizetheir management in order to givethemselves maneuvering room. “Performanceculture” has advanced and spread,as has its peculiar lexicon: defining objectives,indicators for evaluating results andbenchmarking tools.Another major development affecting Europeanlocal authorities concerns the dynamicsof institutions and local democracy. Alongwith the steady progress made by localdemocracy, local government is further differentiating,regarding the relationship betweenan assembly and the executive body,

131between the design of the executive, theforms of election in use (e.g. increasingpractice of direct election of mayors) and theplace given to citizen participation. Despitethe wide variety of processes and reformsinvolved, a common tendency can be identified:that of seeking to establish a politicalleadership that is clearly accountable to itscitizens. Promoting local executive power, asdistinct from the assembly, is widely regardedas a necessary means for strengtheningpolitical leadership and accountability, evenwhere there is no direct election of a mayor,which is the case in the United Kingdom andthe Netherlands.A presentation of the condition of local democracyin Europe, however generalized,must account for both common tendenciesand the diversity of institutions and practices.The split between shared and distinctelements underlies territorial organization,powers and responsibilities, managementand finance and local democracy.II. Territorial organizationThe municipal level has to be distinguishedfrom the intermediate levels, but we willfocus here on the municipal level, includinginter-municipal institutions. Any comparativepresentation of the territorial structuresof the European states must take intoaccount all the reforms that have beencarried out over the past thirty years, aswell as their many structural offspring.Such a presentation presupposes definingthe different levels of territorial organization.II.1. Definition of jurisdictionsand government levelsTraditional presentations are based on theidea that the local authorities within a stateare usually organized into two levels –alocal council and a higher level covering amore or less vast constituency. Powers andresponsibilities are usually divided betweenthese two levels according to functionalcriteria. (Marcou / Verebelyi: 1993; Norton:1993). Even so, in the following countriescertain councils can take on thepowers and responsibilities of both governmentlevels:• Germany: municipality and district(Kreis), with larger urban municipalitieshaving the status of a district anddistrict-level concomitant powers andresponsibilities. A similar system is nowused in Hungary and Poland;• England: district and county. Before the1972 reforms, certain boroughs had theattributes of a county. Since the reformsof 1986 and 1996, some areashave only a single-tier local authority–the district in metropolitan areas, theunitary council in others;• Belgium, France, Italy and Spain: themunicipality and province, or département.This applied in Belgium, Italy andSpain before regions with constitutionalstatus were set up 3 .This standard depiction more or less leftout countries like Finland, Greece andPortugal, which traditionally had just onelevel of decentralization. Nor do thesestandard criteria take into account differencesin size that can affect meaning at ahigher level 4 . The traditional presentationalso failed to account for administrativedivisions existing exclusively to meet theneeds of the central government, andexcluded federal entities like those in Austriaand Germany. Such shortcomings aside,the traditional form of presentationdid offer a certain conceptual unity for theconcept of local government based on oneor two levels.These days, the picture is far more complicated.For one thing, regions havebeen created in several countries butaccording to very different concepts that,moreover, have changed over time. Belgiumbecame a federal state; in Italy andSpain, the development of regional autonomiesput an end to the unitary state.3. In Italy, the regionswith ordinary statuswere not set up until1970, although theywere provided forunder the 1947Constitution.4. For example, thedifference betweenthe German Kreis,considered to beboth a single localauthority and aconsortia ofmunicipalities, andthe British county,covering a muchlargeradministrativedivision – the usualtranslation of Kreiswith county blurredthis significantdifference.

EUROPE132United Cities and Local GovernmentsNational capitalssometimes have aparticular statuspositioning them ina direct relationshipwith their country’scentral authority5. E.g with thepurpose to fulfilspecific functions.6. This means that itaims at answeringdemands related tothe implementationof competences.The United Kingdom has moved to anasymmetrical organization with regionalautonomies for Scotland, and NorthernIreland, a unitary regime for England andto a lesser extent for Wales. (Wales hasno proper legislative power after theWales Act 2006). Meanwhile, in Francethe region is a third-tier local authority–a model that Poland has followed. Furthermore,those countries that did notundergo territorial reforms developedinstitutions for inter-municipal cooperationto take on the tasks that small localcouncils could not manage. This hasresulted in further differentiation of themunicipal level (the first tier). At thesame time the new institutions havebecome closer to the second tier, andhave begun to compete with traditionallocal authorities at that level. Analyzingauthorities in terms of two-tier localgovernment is thus no longer enough togive a proper account of the current reality.Asymmetric patterns are more frequentand the number and the nature oflocal governments may vary from onepart of the country to another one. Thisnew complexity means that we have toconsider on the one hand, the differentgovernment levels of the territorial organizationof the state as a whole and onthe other the differences in the status ofthe institutions that we find at each ofthese levels.In an effort to present territorial structuresin simplified form while still accountingfor the new complexity, the tablebelow classifies states by the number oflevels of territorial organization for whichlocal governments have been established,and also according to whether theyare unitary or composite states. Here theterm composite states follows the definitionprovided by the Spanish ConstitutionalCourt: federal states and states withregional self-government, which sharethe following features:1) a plurality of legislative authority atthe center, with the constituent membersas a major expression of theirpolitical autonomy;2) the constitution sets out and guaranteesthe division of powers and responsibilitiesbetween the competenceof the central authority and the competenceof the constituent members.By convention, two of the table’s cellsshow those states that have an asymmetricstructure; that is, regional autonomyin only part of the territory, or local councilsnot included in second-tier administrativedivisions, or disappearance of theprovince when the region merges with itsadministrative area. Inter- or supramunicipalstructures (including those ofhighly integrated inter-municipalities,such as in France or Hungary) will be treatedas being part of the municipal level,as will infra-municipal bodies (e.g., thefreguesias in Portugal or the “town councils”in Bulgaria).Note that territorial reform is once againon the agenda, though this time based moreon functional criteria 5 . Also, there is ageneral trend toward strengthening politicallylocal governments at the basic levelof the community as well as the guaranteesfor their self-governance; the intermediatelevels typically show a tendency toregionalization, although only a minority ofstates is establishing strong politicalregions. Setting up such regions can haveundermining effects on municipalities.National capitals sometimes have a particularstatus positioning them in a directrelationship with their country’s centralauthority (i.e., Berlin, Bucharest, Budapest,Paris, Prague and Vienna).II.2. Basic community-level localgovernment (the local council)In all countries, it is at the level of the localcouncil that the issue of trying to balancepolitical space with functional 6 space becomesparticularly critical, especially in the

133Table 1Levels of local governments by countryLevels Unitary States Composite States3 levels: local council; département/province/county/district; region or federal body2 levels:- 1) local council; province / département /county/district- 2) local council, region or federal body1 level: local councils and consortia of local councilsFrance, Poland1) Croatia, Greece, Hungary, Ireland, Latvia, Netherlands,Norway, Poland (cities with district status), Romania2) Albania, Czech Republic, Denmark (at 01/01/2007),France (Paris), Serbia (Vojvodine), Slovak Republic,Sweden, United Kingdom (England, Wales)1) Bulgaria, Cyprus, Estonia, Finland, Iceland, Lithuania,Luxembourg, FYR Macedonia, Malta, Montenegro,Portugal (continental), Republika Srpska, Serbia,Slovenia, United Kingdom (England: unitary councilsand metropolitan districts)2) certain capitals: Bucharest, Budapest, Prague, ZagrebBelgium, Germany, Italy, Spain1) none2) Austria, Belgium (Brussels-capital), Bosnia-Herzegovinia, German Federation (kreisfreieStädte), Portugal (island regions), Spain (certainuni-provincial autonomous communities),Switzerland, United Kingdom (Scotland)Germany (city States: Berlin, Bremen, Hamburg);Austria (Vienna)urban areas (Bennett:1989; Kersting /Vetter: 2003; Baldersheim / Illner / Wollmann:2003).Here it is useful to divide countries accordingto two criteria of the territorial patternof municipalities:• Countries with a highly fragmented municipalpattern (Austria, the Czech Republic,France, Hungary, Italy, Spainand Switzerland) compared with countriesthat have undergone municipalreorganization aimed at the establishmentof larger units (Belgium, EasternEuropean countries from the 1950s tothe 1970s, Germany, Greece, Lithuaniatoday, Nordic countries and the UnitedKingdom);• Countries with a uniform status of municipalities(Western and NorthernEurope, except the United Kingdom),compared with countries operating adistinct status for cities (Central andEastern Europe, starting from Germanyand the United Kingdom).The growing pressures of increased urbanizationexplain this last distinction inthe case of England long before the reformsof the 1970s; in the other countries,it is a consequence of socialstructures that for a long time made itdifficult to expand municipal self-governmentin the countryside.Today, territorial reform is back on theagenda in many countries, but from a differentperspective. The reforms of the1950s, 1960s and 1970s were aimed atestablishing minimal or optimal sizes tomatch the powers and responsibilities tobe exercised. The reforms of recent yearshave instead been driven more by functionalconcerns, and can therefore take moreforms than the simple merging of municipalities;they also cover more of the civic

EUROPE134 United Cities and Local GovernmentsTerritorial reform and functional reformThe great territorial reforms of the past did meet objectives of functional reform 7 .In Greece for example, the municipal reform of 1912 allowed for any built-uparea with a population of more than 300 and a primary school to constitute itselfas a municipality. In Sweden, the territorial reforms of 1952 and 1970 were devisedmainly in order to help implement state education reforms at the municipallevel. In Germany, the municipal reforms of 1965-1975 were based on the theoryof central places, whereby a whole range of services and material resourceswould be provided from these for a given population. These reforms also aimed atgiving municipalities a territorial basis for their powers and responsibilities to beexpanded later through further functional reforms (Germany, Sweden). This hasbeen the case over the last few years in Germany where the governments of certainLänder have transferred new responsibilities to the districts and cities withdistrict status: Baden-Württemberg has undergone the most radical reform, asmost tasks of the field services 8 of the Land government have been transferredto it.7. Functional reforms:reforms concerningthe attribution ofcertain powers andresponsibilities andhaving the aim ofimproving the waysin which these areexercised.8. Field services areadministrativeservices withcompetence for aterritorialjurisdiction that aresubordinated tocentral governmentdepartments. Insome countries theyare referred to as“peripheraladministrations”.The Greek reforms of 1997 illustrate the dramatic shift that took place. This was aradical reform, decreasing the numbers of municipalities (demes and rural councils)from nearly 6,000 to 1,033. But the real innovative aspect of the reform wasthat it was not just an amalgamation plan; it involved also a development andinvestment program, and the territorial reform was a necessary step to implementthat program. The aim was to set up local authorities able to implement it, whichmeant equipping them with the necessary institutions, staff and financial resources.A five-year program (1997-2001) financed by the state was thus the supportframework within which the new municipalities would operate and which wouldhelp finance a capital investment program. The five-year program was also aimedat facilitating the recruitment of managers for the new municipalities and to givethem the necessary human resources for exercising a greater administrative andfinancial autonomy. Another innovative aspect of the reform was to keep a representationof the old local councils in the new local authorities, and secure theirparticipation in the debates of the new municipal council, which doubtless helpedto get the mergers accepted by the local communities.In the new German Länder on the other hand, the transfer of the territorial reformrealized in the west proved at first to be a half-failure. Regrouping smaller municipalitieswas seen as working against the aim of restoring democracy, and intermunicipalbodies (the Verwaltungsgemeinschaft) were set up in order to try andresolve this problem. However, the territorial reforms were successfully completedat the level of the districts. More recently, territorial reform has taken a newturn: the Brandenburg Land has removed many small municipalities by means ofmergers, reducing at the same time the number of inter-municipal bodies, and theMecklemburg-Vorpommern Land has carried out a radical reform of districts, bringingtheir average population to 350,000.

135and democratic dimension of the municipalorganization, rather than being concernedwith just technical and managementissues. Integrated forms of inter-municipalcooperation have then appeared asan alternative to amalgamation.In the other countries of Central andEastern Europe where post-war territorialreforms have endured, a form ofrepresentation for the old local authoritieswas maintained in the expandedlocal councils (Poland, Bulgaria). Thiswas also the strategy adopted by Lithuaniafor its 1995 territorial reforms, whichdivided the country into only 60 districtmunicipalities.However, highly urbanized countriesthat underwent major amalgamation ofmunicipalities are now seeking to reestablishlocal community institutions atthe infra-community level (Sweden, UnitedKingdom). These various developmentsand experiences should serve todraw attention to the importance of“minor local entities,” as these are termedunder Spanish law (in Castilla-LaMancha), for giving voice to local democracy,and in particular to the experiencesof countries like Portugal andBulgaria, where large municipalitieswork by relying on strong infra-municipalinstitutions.By contrast, the concentration of localgovernments that came into effect inDenmark on January 1, 2007, reducedthe number of local councils from 271 to98, and the number of “administrativemunicipalities” (counties) from 14 to 5“regions.” This effort was driven by aconcern for economies of scale, takinginto account the predictable rise insocial expenditure, particularly for olderpeople. While the local municipalitiesrun nearly all the public services, it isplanned to run the health service at thelevel of the expanded counties(regions). The counties will also takeresponsibility for public transportation,regional development and planning, aswell as some social services.But in many other countries where municipalfunctions are certainly less extensive, itis mainly by developing a second level ofmunicipal government that a solution hasbeen sought for difficulties municipalitiesencounter in performing certain functionswithout undermining the pre-existing municipalities.France and Hungary provideillustrative examples of this approach,which encourages political vitality in localcommunity institutions rather than workingagainst them. But, the expansion ofthe functions performed at the inter-municipallevel raises the problem of the democraticlegitimacy of inter-municipal institutions,which are at present formed by the municipalcouncils.It seems that instituting a second level ofmunicipal government is probably a usefuloption in organizing large urban zones becauseurban development does not follow municipaland administrative boundaries(Hoffmann-Martinot: 1999; Hoffmann-Martinot/ Sellers: 2005; Le Galès: 2002). In thisrespect, French law provides for the status of“urban community” for the biggest metropolitanareas (excepting Paris); fourteen havebeen created. The law also provides for thestatus of “agglomeration community” for smallerurban areas (164 established to date). Inthe Netherlands, a “cooperative framework”approach has been adopted following the failureof an attempt through a 1994 law to createurban regions for the seven biggestmetropolitan areas of the country. The “cooperativeframework” is based on an inter-municipalpublic corporation –though without owntaxing powers. This formula has been revisedby the law of December 2005 (law known as“Regio Plus”) with the purpose of extending itto other urban areas. In Germany, Länderlaws have on occasion instituted similar typesof urban area bodies, for example for Frankfurt,Munich and Stuttgart. In the case of Italyhowever, the Città Metropolitana, introducedby the law no. 142 of 1990, has still failed tomaterialize properly, even though it was ens-Highly urbanizedcountries thatunderwent majoramalgamationof municipalitiesare now seeking tore-establish localcommunityinstitutions at theinfra-communitylevel

EUROPE136United Cities and Local GovernmentsTerritorial reform through cooperationIn France, a country of 36,000 municipalities, cooperation has long been themeans to run the public services that single municipalities on their own cannotprovide. But since the introduction of a law in 1999, supported by a strong commitmentfrom the central government and financial incentives, inter-municipalpublic corporations with own tax powers have developed rapidly. These intermunicipalcorporations are vested by the law with various strategic functions (e.g.planning, economic development, major capital investments etc.) and have owntax powers independent of those of member municipalities. At the beginning of2007, 33,414 municipalities and 54.2 million people had been reorganized under2,588 intercommunalités (inter-municipalities), as they have been called.In Hungary, a law from November 2004 provided for the development of intermunicipalcooperation within 166 micro-regions in order to meet local developmentobjectives, the main one of which was to ensure that the management ofpublic schools would be taken on by these inter-municipal corporations. At thebeginning of 2006, such consortia had been set up in 118 micro-regions, and in 90of these, all municipalities have joined the consortium.This was also the approach followed by Italy, with its unions of municipalities, andin Spain, with the bill on local government reform following the 2005 White Paper,which aims at encouraging inter-municipal cooperation 9 .However, the French intercommunalités will keep the distinction of having theirown tax-levying powers and a wide range of functions provided for by law.9. Whitebook for thereform of LocalGovernments,Madrid, Ministryfor PublicAdministration.hrined in the Constitution by amendment(new article 114) in 2001. Only three perimetershave been drawn up (Bologna, Genoa andVenice), but these only constitute rather looseframeworks for voluntary cooperation. Insome regions, including Campania and Piedmont,the provinces of the regional capitalswould like to turn themselves into Città Metropolitana,but it seems uncertain that this willactually happen. Consequences on localdemocracy are not one-sided; they depend onthe selected institutional setting.In the United Kingdom, first- and second-tierreforms are linked. The White Paper publishedin October 2006 (Strong and ProsperousCommunities, Cm 6939) provides for a furtherround of unitary council formation inthose regions where there is still a two-tiersystem. The government announced on the25th July 2007 the formation of nine newunitary councils, and the Law of 30th October2007 created the legal conditions for therealization and the continuation of the process(Local Government and Public Involvementin Health Act 2007, c.28).II.3. Intermediate levelsIt is at the intermediate level that the mostimportant changes in the territorial organizationof states have taken place over thepast two or three decades. Moreover, thesechanges have been both institutional andfunctional (Marcou: 2000 and 2002).Historically, the intermediate level is closelylinked to the creation and augmentationof the state. More specifically, it isessential for what has been called “terri-

137torial penetration,” the political and institutionalprocess by which centralizedpowers were able to establish authorityover all of their territory and the peoplewithin it. This has been illustrated in verydifferent ways by France, Prussia and theUnited Kingdom. Not all the Europeancountries brought this process to completion;sometimes it was completed verylate or challenged by later transformationsof the political scene. Moreover,national boundaries have shifted considerably,even in the past century. Someonce-powerful European nation-stateshave disappeared altogether, includingAustria-Hungary, the Habsburg Empire,Prussia, and Yugoslavia. But territorialpenetration proved decisive in the formationof certain enduring territorial frameworks,including the département inFrance and the provinces of neighboringcountries on which the Napoleonic modelleft its mark. Also it was decisive in formingthe county in England and Sweden;the district (Kreis, powiat, okres) in mostCentral European countries; and the“government district” or primary divisionof a Land –Regierungsbezirk– in Germany.Similarly, this organizational processaffected such typical institutions as thepréfet or regional governor; in Germany itwas the Landrat. This functionary, whocame to be known by several differenttitles, was appointed a senior civil servantin 1872 by the King of Prussia. At aboutthis time, the Kreis acquired the characteristicsof a local self-government –evenas it continued to serve as the frameworkfor an administrative authority of the state.Thus, the original role of the intermediatetier was to represent and relay theauthority of the central power, eitherreliant on local aristocracy, as in England,Hungary and Germany, or against them,as in France.Since the end of the 19th Century, however,under the influence of liberalism anddemocracy, the intermediate tier evolved.Partly to accommodate the social andeconomic tasks that the modern state wasincreasingly responsible for, the intermediatetier underwent two forms of institutionaland functional development. Theywere, broadly speaking: 1) the establishmentof a local authority evolving to becomemore like a municipality, both as aninstitution and in terms of the services itperformed; 2) the differentiation and reductionof the administrative tasks of thestate. Since the end of the 20th Century,regionalization has been making its markas a practical response to new socio-economicand political developments. Thetransformation sometimes manifests itselfin the emergence of new territorial frameworksand institutions, but it is also apparentin changes and reforms withinexisting institutions.Gradually the original consolidating andcentralizing mission of the intermediatetier of government gave way to incipientdemocratization. The election of a representativeassembly gradually became therule in all the countries. Election of provincialcouncils in Belgium was based onthe 1831 Constitution; that same yearFrance introduced elections for the departement;the Netherlands followed in 1853with elections in provincial states; Prussiasaw district elections in 1872; and in 1888Great Britain allowed elections for countycouncils. The intermediate level localauthority institutions later became morelike municipal institutions, particularly inthe election of executive officers. Theexceptions are Belgium and the Netherlandswhere these offices remain appointedposts at both the municipal andsecond-tier level, despite the law havingbeen able to introduce an elective element.(see section III). These localauthorities progressively took on tasksdesignated by law to address experimentallytwo needs: 1) providing primary orsupplemental services in sectors, such ashealth, roads and schools, which did notnormally come within the remit of municipalservices; 2) promoting communitysolidarity and equalization of social servicesand support for small municipalities.Graduallythe originalconsolidating andcentralizingmission of theintermediate tierof governmentgave wayto incipientdemocratization

EUROPE138United Cities and Local Governments10. The management ofthe health system isnot part of the localgovernments’functions.Today these kinds of tasks are carried outby second-tier local authorities in Centraland Eastern Europe, particularly in Croatia(Z v upanije), Hungary (megyiei), Poland(powiat) and Romania (judet). They arealso part of the responsibilities delegatedto the Czech and Slovak “regions” (kraj).Three factors differentiate these secondtierlocal authorities: size, urban administrationsystem, and the presence orabsence of competing sector-specificauthorities.In countries that were significantly affectedby the late arrival of local self-governmentin rural areas, or were heavilyinfluenced by Germany or Austria, second-tierlocal authorities are apt to besmall (German Kreis and Polish powiat inparticular). Other countries have largerauthorities, including France with itsdépartement, England and Sweden withcounties, and Hungary with its megyei.This applies as well to provinces in Belgium,Italy, the Netherlands and Spain,nomos in Greece, and Czech and Slovak“regions.” Except for the Czech Republicand Slovak Republic, these territorial divisionshave ancient origins and are connectedto the administrative divisions ofthe state authorities that preceded thecreation of local authorities. But differencesin size do not necessarily correspondto differences in responsibilities. The responsibilitiesdelegated to this tier ofgovernance depend more on the extentand nature of powers and responsibilitiesexercised at the municipal level, the roleof state authorities, and the presence ofsector-specific authorities.Cities in several countries are not includedin the territorial framework of second-tierauthorities, though they mayhave similar responsibilities. This correspondsto an institutional differentiationbetween city and countryside with respectto the local authority system, the significanceof which has been emphasised. Incountries where cities assume much second-tierresponsibility, they benefit froma reinforced status within the administrativesystem. This was the situation in theUnited Kingdom between 1888 and 1972(the borough-counties), and again afterthe removal in 1986 of county councils inmetropolitan areas. A decade later theUnited Kingdom saw the constitution ofunitary councils. A similar ascendancy ofthe city occurs in Hungary where 22towns have the status of megyei, in Germanywith 116 kreisfreie Städte, and inPoland which accords to 65 towns the statusof powiat. A similar system existed inDenmark before that country’s 1970 territorialreforms.The presence of specialized sector-specificauthorities, such as hospitals, affectsthe powers and responsibilities at theintermediate level. Public hospitals are incorporatedat the intermediate level localgovernment in Denmark, Sweden andHungary, whereas they are part of anational organization in the United Kingdom(the National Health Service), inFrance with the regional hospital careagencies (though hospitals have kepttheir legal status as local public corporations)and in Italy though the regionsfinance “local health units.” Similar arrangementsalso characterize the educationsector in many countries.In federal states and states with regionalautonomies, it is the federated states orautonomous regions which have taken onresponsibility for these services, directlyor indirectly. In Germany, the Länder areresponsible for education and for the statutoryregulation of hospitals, and also forinvestment in public hospitals. However,management in these areas is devolved tothe districts. In Spain, public hospitalswere transferred to the autonomous communitiesin 2002. In the United Kingdom,the national health system is under thesupervisory control of regional authoritiesin Scotland and Wales, but is nonethelessorganized according to sector-based principles10 . In Belgium, health and education

139are designated as “personalizable” areaspertaining to the powers and responsibilitiesof the communautés 11 .The preceding examples indicate, that theorganization of the intermediate levels nowtends to be associated with developmentstowards regionalization. In functional terms,it is a response to the new importancegiven to territories with respect to economicdevelopment. In institutional terms, itis a formal recognition of the changes inresponsibilities at the intermediate levels.However, regionalization manifests itself instates whose size, constitutions and territorialinstitutions are extremely varied, andwhich fulfil other tasks than those connectedto regional development. If we also takeinto account the political factors, thenthe very great institutional diversitythrough which regionalization can manifestitself is hardly surprising. In many countries,it is limited to an administrativeregionalization, i.e. it is based on institutionssubordinated to the central authorities(e.g. England –as opposed to otherparts of the UK–, Greece, continental Portugal,Bulgaria and Hungary). By contrast,it gave rise to autonomous regions in somecountries (e.g. Italy, Spain, the status ofScotland). In many countries, regionalizationis reflected in the kind of powers andresponsibilities devolved to the localauthorities or to the institutions whichdepend on them (e.g. Finland, Ireland, Netherlandsand Romania). Finally, othercountries have simply extended their systemof local self-government to the regionallevel or have invested their intermediatelevel authorities with functions of regionalscope, without impinging on the unitarynature of the State (Denmark since 1January 2007, France, Poland, Czech Republic,Slovak Republic).III. Powers and responsibilities,management and financesLocal governments operate within a systemthat requires interaction with the state,and more generally with higher authorities.Managing such a system has becomean ever more complex business, as thepowers and responsibilities of local authoritieshave expanded to cover tasks importantenough to merit regional or nationallegislation and policies. The challenges tobe met include how to apportion and sharepowers and responsibilities, how to financelocal budgets and how to decide whatadministrative capacities local authoritiesshould and can have.In theory, it is the powers and responsibilitiesto be exercised which determine thelevel of resources necessary to cover thecorresponding costs. The European Charterof Local Self-Government puts it thisway: The financial resources of localauthorities should be commensurate withthe powers and responsibilities they mustexercise as provided for by the law, andthese resources must be sufficientlydiversified and progressive to allow themto keep pace with the real changes incosts (Art. 9, paras. 2 and 4). In practice,local finances are the product of eachnation’s complex history of public finance,as well as its particular administrative history.More than any others, these factorsexplain the various characteristics of localfinance, as well as the size, in budgetaryterms, of local powers and responsibilities.These same factors pertain to countriesthat only recently introduced localself-government institutions, or are in theprocess of doing so. Setting up an efficienttax system and reorganizing financialnetworks takes more time thanchanging the law does. Therefore, considerthe financial systems of local governmentbefore moving on to comparisons ofpowers, responsibilities and administrativecapacities.III.1. FinancesFinancial autonomy is the basis of localself-government, as stated in Article 9 ofthe European Charter of Local Self-Government,and it has three dimensions:11. These areconstituentmembers of theBelgium federalsystem, nowadaysrun by institutionsshared, or largelyshared, with thoseof the region.

EUROPE140United Cities and Local GovernmentsIn most Europeancountries localpublic expenditurevaries in realitybetween 6 % and13 % of GDPresources must be in line with the costsassociated with the duties conferred uponlocal authorities by law; the authoritiesmust be able to dispose freely of theresources allocated to them; and theymust have certain powers to determinethe level of their own resources.However, despite the abundance of nationaland international sources, carrying out aninternational comparison of local governmentfinancial systems presents real difficultiesof methodology and interpretation,even in Europe. In the following study, regionalautonomies have been treated as similarto federal entities and have thereforenot been considered as local authorities,contrary to how certain international sourceserroneously represent them.local public expenditure for countries withthree tiers of local authorities (France,Poland). Despite these approximations, thechart reveals three fairly distinct nationalgroups:• Three Nordic countries (Denmark, Finland,Sweden) and Switzerland, whoselocal public expenditure is greater than20% of their GDP;• a large group of countries whose localpublic expenditure varies in realitybetween 6% and 13% of GDP: in factin Italy, the expenditure of local councilsand of their consortia, and of theprovinces, was around 6.3% of GDP in2003; in the same year such expenditurein the Netherlands was 8.5%;12. See above :footnote 2.Analysis of major trends concerning expenditureand resources reveals the growingrole of local authorities in Europe(Dafflon: 2002; Travers: 2005). However,this increase in importance is often accompaniedby a reduction in financial autonomy.III.1.1. Local authority expenditureThe following chart shows the proportionof each nation’s GDP that is allotted tolocal public expenditure, based on figurespublished by Eurostat. The term local publicexpenditure refers to the expenditureof local public authorities; that is, intranationalauthorities with the exception offederal entities and regional autonomies 12 .Note that although Spain is treated as afederal state, Italy is not, despite high levelsof powers and responsibilities for publicspending, as well as legislation devolvedto the Italian regions. The same applies tothe United Kingdom with respect to Scotlandand Northern Ireland. Wales couldalso reasonably be included in the matterof public finances because of the volumeof expenditure devolved to it. Althoughthe European states usually have one ortwo tiers of local authority, the tableslightly overestimates in comparative terms• a small group of countries in whichlocal public expenditure is less than5% of GDP: Greece, Cyprus, YugoslavRepublic of Macedonia and Malta.In the median group, there is a continuumin which it is nearly impossible to place athreshold. But below 8% or 8.5% of GDP,we find only fairly small countries maintaininga certain financial centralization,along with the federal states and stateswith autonomous regions (insofar as partof the expenditure borne by the localauthorities in the unitary states is paid forout of regional budgets.)However, the amount of expenditurealone is not enough to characterizefinancial autonomy. Functional independencealso depends on how much discretiona local authority has to allocateand commit its expenditures, and tomanage its resources.Chart 2 shows local authority capital expenditureas a percentage of GDP. Thisindicator helps show the role played bylocal authorities with respect to the flowof capital investment. It relates only tothe Europe of the 25, as there is insufficientdata for the other countries. In the

141same year, public sector investment in theEurope of the 25 was 2.4% of GDP, withfigures ranging from 1.1% for Austria to5% for the Czech Republic.What emerges from the chart is that localauthorities represent the greatest share ofpublic-sector investment, except in 10 countries:Austria, Cyprus, Czech Republic, Estonia,Greece, Hungary, Lithuania,Luxembourg, Malta and Slovak Republic. Thechart takes into account only local authorityinvestments, and not those of federal entities.It does however take into account the capitalexpenditure of the autonomous regions incountries that have such entities, leading tothe aforementioned overestimate of localauthority investment. The same applies toFrance with respect to the first and secondlevels, because the regions, being localauthorities, have a much greater investmentcapacity; they currently account for aboutChart 1Local public expenditure as % of GDPDenmarkSwitzerlandSwedenFinlandNetherlandsItalyPolandUnited KingdomNorwayHungaryCzech RepublicFranceIcelandLatviaRomaniaSloveniaLithuaniaAustriaCroatiaGermanySlovak RepublicEstoniaIrelandAlbaniaBulgariaPortugalBelgiumSpainMontenegroSerbiaLuxembourgGreeceCyprusMacedonia, FYRMalta3.10%1.90%1.80%0.70%13.50%13.20%13.10%13.00%12.10%11.10%10.13%9.50%8.50%8.44%8.10%7.90%7.50%7.30%7.00%6.91%6.80%6.70%6.50%6.30%6.10%5.90%5.80%5.60%5.40%15.47%15.40%20.10%25.20%25.00%33.00%0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00%Source: Eurostat, 2005.

EUROPE142United Cities and Local Governments10% of the real capital expenditure of localgovernments and their public institutions.Here analysis must be put in context to takeinto account the wider economic climate andthe stage of development for each situation.Macro-economic policies can have a heavyimpact on local authority investments, as isthe case for Austria and Germany. Overseveral years, capital expenditure can showgreater fluctuations than running costs. Althoughthere has been dynamic growth overthe past few years in local authority investmentacross the European Union as a whole,it has been greater in the new memberstates; this reflects the need for new infrastructurein these more recently admittedcountries. Between 2000 and 2005, the averagegrowth in local authority investmentacross the Europe of the 15 was 2.9% ayear. At the same time it was 4.9% in thenew member states, and there was negativeChart 2Local public capital expenditure as % of GDPSpainCzech RepublicIrelandFrancePolandNetherlandsPortugalItalyLuxembourgFinlandSwedenHungaryLatviaSlovak RepublicDenmarkUnited KingdomGreeceBelgiumLithuaniaEstoniaCyprusAustriaGermanySloveniaMalta0.20.50.70.80.80.80.80.90.91.11.21.21.31.61.61.71.71.922.12.12.32.32.32.50 0.5 1 1.5 2 2.5Source: Dexia, 2006.

143growth in Austria and Germany 13 .In the countries of the former Yugoslavia,as well as Albania, Bulgaria and Romania,central authorities at first kept control ofinvestment funds, including those for localpublic investments. This started to changein 2004. There has been easier access toloans in Bosnia Herzegovina, Croatia, andthe FYR Macedonia and Serbia. In Albania,a call-for-tenders procedure was introducedto select local projects receiving statefunding. In Bulgaria and Romania, the roleof local authorities regarding investment ineconomic or social infrastructure has beengrowing thanks to access to Europeanfunds 14 .III.1.2. Local government resourcesTwo questions arise concerning resources:the level of resources with respect to costs,and the degree of control the authoritieshave over their capacity to increase theirresources.The European Charter of Local Self-Governmentstipulates that local authoritiesmust have “adequate financial resources oftheir own, of which they may dispose freelywithin the framework of their powers,”and that the financial resources of localauthorities must be “commensurate withthe responsibilities provided for by theconstitution and the law” (art. 9, paras. 1and 2). The first provision is a condition forlocal freedom; the second is a guaranteefor local authorities that they should begiven the necessary resources to financethe tasks devolved to them by law.The requirement that legally prescribedfunctions (duties) should correlate with theresources allocated –known as the principleof connexity– is the most difficult oneto satisfy because it depends on how costsare calculated. This calculation in turndepends on the level of services deemedsufficient and practicable for the population.This requirement is at the heart of therequests made by local authorities to thehigher authorities that their resources dependon. Increasingly, legislation is providingthat any transfer of powers andresponsibilities prescribed by law must beaccompanied by an adequate transfer ofresources. In France, this principle wasfirst stipulated by a 1982 law, and laterenshrined in the Constitution in 2003 (art.72-2, para. 4). In Germany, the constitutionalreview of August 28, 2006, provided theoccasion for enshrining in the Basic Law (theConstitution) a ban on using federal law todevolve material responsibilities to municipalcouncils and their consortia (new art. 84,para. 1). This was intended to put an end tothe practice whereby the federal legislatorcreated new costs for local authoritieswithout providing the concomitant resources.By contrast, within Länder, constitutionalcourts of Länder ensure that the principleof connexity is respected.However, financial autonomy depends onthe resource system and structure. It ishere that the development of local financesis now showing signs adverse to local selfgovernment.a) The structure of resourcesIn most of the European states, the taxrevenues of local authorities consist for themost part of shared taxes, for which thecentral authorities hold the tax-settingpowers. But the only ordinary revenue overwhich local authorities have sufficientpowers, allowing them to vary the amountof resources through their own direct decision-making,is own tax revenue and incomefrom fee-based local public services. Asincome obtained from these local publicservices depends heavily on how the servicesare managed –directly by the authority,or by a utility receiving direct paymentfrom the users– the most significant variablewith respect to the local authorities’ abilityto determine the development of theirresources through their own decisionmakingis local own tax revenue. Conversely,their part of shared taxes, from theeconomic as well as the political point of13. Dexia, Financespubliquesterritoriales dansl’Union européenne.Evolutions 2000-2005, November2006 [Territorialpublic finances inthe European Union.Trends for 2000-2005, November2006].14. Ken Davey (2007),FiscalDecentralization inSouth-EasternEurope, in: Councilof Europe, “Effectivedemocraticgovernance at localand regional level”,Budapest, OSI,Skopje conferencepapers, 8-9 Nov.2006.

EUROPE144United Cities and Local Governmentsview, is equivalent to receiving grants(transfers). The only difference is that thelocal authority’s allocation is sometimescalculated on the basis of local tax revenue.For example, in Germany, the municipalshare of income tax is related to the localyield of the income tax; the idea here isthat the taxpayer is supposed to be pleasedknowing that part of their tax is helpingfinance local public services. Even so, theirelected representatives have no say in settingthe tax rates and there is no connectionbetween the rate of taxation and thenumber and quality of services provided.The differences among the various Europeanlocal government finance systems stemfrom their different sources of local budgetresources. All draw in particular on own taxrevenue, on various kinds of grants, onshared taxes and on revenue from servicedelivery. However, they diverge in the dif-Chart 3Structure of local budget resources: own tax revenue and grants or shared taxes0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1Albania (2005)GermanyAustriaBelgiumBosnia and HerzegoviniaBulgaria (2005)Croatia (2005)DenmarkSpainEstoniaFinlandFranceGreeceHungaryIrelandIcelandItalyLatviaLithuaniaLuxembourgMontenegro (2005)Norway (2003)NetherlandsPolandPortugalCzech RepublicRomaniaUnited KingdomSlovak RepublicSloveniaSwedenSwitzerland0%1%3%5%7%8%8%10%14%15%15%13%14%13%18%18%19%22%23%21%22%24%27%26%31%34%32%32%36%35%36%33.50%32%38%40%47%51%42% 45%62%58%61%42%42%43%45%46%44.35%50%55%55%57%57%57%60%61%61%64%67%70%71%73%78.30%88%Tax shares + general grant as % of the total incomeOwn tax revenues (= tax revenues subject to a localtax power) as % of the total incomeSource: DEXIA 2002, Council of Europe, 2003 or 2005.

145ferent weighting given to their incomesources, and in the characteristics of themost important ones. We can for exampledistinguish local finance systems accordingto whether the resource structure is governedby own tax revenue or instead bygrants, including allocations carved fromnational tax revenues. Chart No. 3 comparesthese two types of resources againstthe total resources of local authorities inthe majority of European countries. As inprevious charts, this one takes intoaccount only the local level, usually one ortwo tiers, but three in France and Polandand not the federal entities and autonomousregions. This chart also includes dataavailable on Albania and some states fromthe former Yugoslavia.The chart shows clearly that own tax revenueis greater than the total revenue fromnational tax shares and grants in only eightcountries 15 –Belgium, Denmark, Finland,France, Iceland, Norway, Sweden and Switzerland.In all these countries, the incomefrom own tax revenues comprises morethan 40% of the total for local budgetresources. In the other countries, own taxrevenue falls below 35% as a proportion oftotal resources, except in Albania where itreached 40% after reforms took effect in2005. It rises above 30% only in Greece,Hungary, Luxembourg, Poland and Portugal.But even in these countries the proportionof grants and national tax sharesrepresents a much higher percentage ofresources (except in Luxembourg).Analysis suggests that there are indeed differencesamong the various local financesystems that operate with between 30%and 40% of resources coming from own taxrevenues. Such resources are greater thanthose from grants and shared taxes. Whenthese two conditions are met, it can be saidthat the resource system is governed bylocal taxation. Grants then have the role ofproviding a basic source of funds or of fundequalization, or of offsetting costs prescribedby the law. The own tax revenue isenough to allow local authorities to establishtheir own fiscal policies. Conversely, in thecountries where own tax revenue is considerablylower than income from grants ortax shares, and is considerably lower than30% of total resources, it can be said thatsuch resource systems are governed bygrants. In this case, own tax revenue theoreticallyhelps fund non-mandatory expenditures,such as those for discretionarytasks, or helps pay for costs that are insufficientlycovered by grants and tax-sharerevenues. But the lower own tax revenue isas a proportion of total resources, the moredifficult it is in political terms to raise extraresources because a significant increase inresources necessarily implies a significantincrease in tax rates. This political aspectmay change where the central governmentputs pressure on local authorities to raiselocal taxes or cut expenditure by rationingbudgetary transfers and national tax shares.However, connection charges and userfees paid locally for services can providealternative non-tax resources, especially atthe local council level. Increases in local servicecharges and ancillary fees are apt to beaccepted more easily than higher taxes. Afinal point on this matter: in the central andeastern European countries, property revenues(income from alienation or licensing)can continue to play an important role andto increase the proportion of local resourceskept under the control of local authorities;this is only a transitional situation, but it isjust what is needed to facilitate transition.b) Own local tax revenueAs far as the structure of own taxation isconcerned, there are several observationsworth consideration. All countries exceptSweden collect property tax, and this tax isgenerally held to be the most appropriateone for local taxation because of the localizationof the tax base. This view is sharedby most governments throughout theworld. But this tax is dependent on theexistence of a fully-functioning land register.As yet no such system functions properlyin the Central and Eastern Europeancountries, some of which have no registerIn only eightcountries is ownrevenue greaterthan the totalrevenue fromnational tax sharesand grants, and isin excess of 40% ofthe total revenue15. Lithuania is notincluded as thereare clearly errors inthe statisticalclassification of theirresources: in 2002,the local taxrevenue of localauthorities did notexceed 8.4% of thetotal of theirresources (G.Marcou, Lesstructuresrégionales dans lespays candidats etleur compatibilitéavec les fondsstructurels (Europecentrale etorientale) [Regionalstructures inapplicant countriesand theircompatibility withthe structural funds(central and easternEurope)],Luxembourg,Parlement européenSTOA 105 FR, 2002,[Part B: countryfiles]).

EUROPE146United Cities and Local GovernmentsThe generaltendency has beento squeeze own taxrevenues, and toprioritize securingrevenues overfinancialresponsibilityat all. Local taxation of households is rarelybased on a local income tax, though it isthe practice in the Nordic countries and inSwitzerland; these countries also have thehighest levels of local governmental expenditure.In many other countries incometax is a shared tax whose yield is partly orwholly allocated to local budgets. Forexample, shared income taxes account forpart of the local allocations in Austria, Germany,Hungary and Poland; all income taxrevenue is used to fund local budgets inBulgaria, Croatia and Romania. In somecountries, local governments can vote foran additional income tax, calculated on topof the state tax (Switzerland) or based onthe income tax revenue leveled locally(Croatia). One advantage of channelingincome tax revenue to the local level is thetaxpayers’ increased perception of a directconnection between taxes paid and servicesused. In Greece, local taxation mainlycomprises taxes that represent funding forpublic services, and not taxes in the strictsense. This was also the case in Francewith the taxe d’habitation (communitycharge), that is now a direct tax; there isalso the same process with the tax for householdrefuse collection that has in recentyears been used as an adjustment variableby many local and intercommunity councilsvoting rates higher than needed by theservice costs.By contrast, fewer than half of the EuropeanUnion countries have a local tax specificallylevied on economic activity:Austria, Cyprus, Denmark, France, Germany,Hungary, Ireland, Luxembourg, Portugaland Spain. The tax base for economicactivity is variable, but considering localtax revenues and budget levels as a whole,this tax is only a significant resource inFrance, Germany, Hungary, Ireland, Luxembourgand Spain. Moreover, it is vulnerableto economic policy measuresaimed at reducing the burden of businesses;such measures have reduced this taxbase in recent years, particularly in France,Germany and Spain.Overall, the general tendency has been tosqueeze own tax revenues as a proportion ofthe total resources of local authorities, tobenefit resources whose variations are controlledby the central authorities. In France asin Germany, the tax base for the business taxhas been reduced. In France, the businesstax rate was capped at 3.5% of value added,a move that affects nearly half of those qualifyingto pay the tax. In the Netherlands in2006, local property taxes were abolished fortenants and capped for landlords, resulting ina reduction in financial autonomy. Swedenand Italy, each within very different contexts,have proved to be remarkable exceptions tothis general tendency to shrink own tax revenues.The same has been true since 2005 inSlovak Republic where new local taxes havereplaced the allocation of grants. In Sweden,own revenues still provide more than 70% ofthe resources of local authorities. Italy, since1992, has continued the process of restoringown taxation, which was virtually abolishedin 1971 in an effort to promote equalization.All this means that in most countries, securingresources is prioritized over financial responsibility.The rules used for calculatingshared tax allocations, insofar as these arerelatively stable or negotiated (as in Austriaor Germany) and the guarantees pertainingto changes in grants (as in a “stability pact”)ensure that there is a certain balance betweenresources and costs – within the limitsallowed by the economic situation.c) Other funding techniquesAmong the alternatives to public budgetfunding that have emerged and developedin recent years to fund investments are thevarious forms of public-private partnerships(PPPs) inspired by the British Private FinanceInitiative (PFI) of 1992. Since the end ofthe 1990s, many countries have adoptedlegislation on PPPs which, under the variouslegal formats in different countries, nonethelessfollows the same basic process: thepublic authority entrusts a company or aconsortium with an overall mission of designing,realizing, financing and operating ormaintaining a public works on the local

147government’s behalf. This widens the possibilitiestraditionally offered with the systemof concession. The real reason for the developmentof PPPs is a budgetary one.Results have been mixed. Even in the UnitedKingdom, PPPs do not account for morethan 11% of public investment. This limitedsuccess can be explained by the factthat conditions for local authorities’ accessto credit were very restrictive until theLocal Government Act of 2003, so that thePFI represented the possibility of accessingextra resources.Although PPPs often help speed funding forcertain operations, they also have certaindisadvantages. One is that capital raised bythe contract partner on the market will beobtained under less favourable terms thanthose usually given to public authorities.Additionally, the fees payable by the publicauthority have to cover all costs, includingthe financial ones, so that the PPP in effectturns the debt into operating costs, thoughthis does not in itself assure an overallsaving. Another point of concern is the privatecompanies’ push for higher profit marginsfor additional risks they pretend tobear, and it is difficult for public authoritiesto control these margins 16 . In the othercountries, the share of PPPs in public investmentcontinues to be fairly modest, even ifgovernments sometimes set ambitious targets,as for example in France where theavowed goal is 10% by 2010.Such limitations of the PPP as a tool for fundingmay explain the re-emergence of fundingbodies aimed solely at local authorities.Founded on a cooperative basis, they aremodeled on Kommuninvest, a cooperativebody founded in Sweden in 1986 to providefunding to local authorities 17 . Until it wasabsorbed in a 1996 merger, Belgium’s CréditCommunal was similar.III.2. Powers and responsibilitiesIt is necessary to make clear the status ofthe different categories of powers and responsibilities,before reviewing the functions(Committee of Regions: 2002; Marcou,2007).III.2.1. Categories of powersand responsibilitiesThe first thing is to note how the generalclause on the scope of local self-governmentas provided under article 4.2 of theEuropean Charter of Local Self-Governmenthas found widespread application, atleast at the level of municipal authorities.This clause is not concerned with the divisionof powers and responsibilities. Rather,it defines a principle of freedom. This principleis of paramount importance, even ifthe activities it sanctions remain modest inbudgetary terms. Most of the European statesat the Council of Europe level now recognizethe principle of the general clauseas applying to local councils, through theirconstitutions or laws. A few countries, includingPortugal, the United Kingdom andsome Central and Eastern European nations,are exceptions; Spain and Italy raisequestions of interpretation.The fact remains that most of the powersand responsibilities exercised by local authoritiesare established by law. There is a noticeablegeneral inclination to extend thescope of local authority, sometimes in theform of “powers and responsibilities for specificpurposes” (as stated in art. 4 of theCharter) exercised in the name of the stateand under its direction. This is particularlythe case in Germany, Austria, Italy, theCzech Republic, Hungary and Slovenia. Itleads to local councils exercising administrativetasks traditionally performed by the state.This does contribute to the overallempowerment of local government, but thereal reach of this type of extension of powersand responsibilities depends on the controlexercised in practice by the state.In the Central and Eastern European states,the range of material tasks for whichlocal authorities are responsible is vast,especially where they are the heirs to localbodies formerly controlled directly by the16. Numerous inquiriesreported by theCommittee of PublicAccounts of theHouse of Commonssuggestcautiousnessregarding benefitsthat can beexpected by publicauthorities from PFI(for example HC567, 16 July 2003 ;HC 446, 31 March2005 ; HC 553, 14June 2005 ; HC 694,3 May 2006).17. Kommuninvestconsists of 196municipalities and 7county councils.

EUROPE148United Cities and Local GovernmentsThe mostimportantvariations relatingto powers andresponsibilitiesoccur in the fieldsof education,health, and socialsecurityor benefitscentral state. Exceptions are countrieswhere a separate state administration hasbeen re-established or maintained in somedomains at the local level. The “powersand responsibilities for specific purposes”are then predominant in the mission oflocal government, and can effectively keeplocal authorities in the position of beingagents of the state. This is the case, forexample, at the regional level in the CzechRepublic. Because the resources providedto local authorities are hardly enough tofinance the tasks delegated to them by thestate, there is little time or occasion forlocal bodies to exercise their autonomy.A more detailed study of the systemgoverning local powers and responsibilitiesalso raises the question of how relevantsome commonly held distinctionsare. Basic powers and responsibilities arealways regulated by law wherever theyaffect domains or tasks that have a nationaldimension (and are therefore mandatory).What then determines the degree oflocal autonomy are the fine details and thescope of the pertinent legal regulations. Inextreme cases the regulations can makethe system governing such functionsalmost indistinguishable from the systemgoverning delegated tasks. Such a situationled to reforms undertaken in the Nordiccountries in the 1980s. These reformswere often grouped under the term of“free municipality,” and their aim wasreducing the heavy burden of nationalregulations and financial controls on localgovernments. In some countries thecourts occasionally can ensure that regulationsrespect the rights of self-governmentby censuring provisions deemed toexceed the stated aims of the regulations,as in Germany, but such judicial intercessionis unusual.III.2.2. FunctionsRegarding functions effectively exercised inapplication of the law, we will limit our studyto the level of municipalities and their consortia.A detailed comparison reveals thatcertain tasks are carried out by local councilsor their consortia in virtually all Europeancountries. Providing a slight variation, Portugaldelegates these tasks to sub-divisions ofthe local councils. These local tasks typicallyinclude: town planning (urban planning,planning permission, development projects),the allocation of social benefits and the managementof social institutions for certaincategories of the population, particularly forthe elderly. They also include roads andpublic transport, water distribution (with thenotable exception of England), accommodationand housing (with the notable exceptionof the Netherlands, Italy and Switzerland),and the construction and maintenance ofschool buildings. These days we can add tothis list education support in all countries,along with actions for economic development,that can be carried out also throughpowers that are not specifically deemed tothis function, when they are not listed by thelaw. Together, these tasks can be consideredthe common substance of local powers andresponsibilities in Europe.The most important variations relating topowers and responsibilities occur in thefields of education, health, and socialsecurity or benefits. Broadly, local governmentsby national law are responsiblefor such services in the Nordic countriesand to a large extent in the United Kingdom.As of this year, regional authoritiesin Denmark have overall management ofhealthcare and the health insurancesystem, which had previously been run toa great extent by the counties. In Sweden,social security is managed at thenational level, but the counties run thehospitals and the healthcare system. InGermany, France, Italy and Spain, on theother hand, local governments exerciseonly partial or marginal powers and responsibilitiesin these areas. The sameapplies to education: the recruitment andmanagement of staff is generally the taskof state or regional authorities. This is aduty of German and Austrian Länder, ofthe autonomous communities of Spainand in Belgian communautés. In the Nor-

149dic countries it is the responsibility of municipalities,as it is still to a large extent inthe United Kingdom. In Italy, education isoutside the domain of regional authorities.Public safety responsibilities are also devolvedto local governments in many, thoughnot all, European countries. In Belgium, theNetherlands and the United Kingdom publicsafety by tradition is an important responsibilityof the mayor or other local authorities.By contrast, in Germany, Hungary and Sweden,public security hardly appears at all inthe remit of local governments.In the Eastern European countries, responsibilityfor education and health varies considerably,even within individual nationsover time. In Bulgaria for example, managementof the health system and the schoolswas first assigned to municipalities, butwas returned to the state level in 2003. InAlbania, these tasks have been financedout of the state budget since 2003, eventhough the local councils administer thestaff payroll. In Hungary, Lithuania, Polandand Romania, the management of schoolsand education staff is decentralized. InEstonia, Latvia, the Czech Republic, SlovakRepublic and Slovenia, on the other hand,it is divided between the state and localgovernments, the state retaining responsibilityfor staff management.Movement toward centralization can beseen in several countries in the areas ofeducation (United Kingdom), health(Norway) and public safety (Belgium,Netherlands). However, in many othercountries local councils are getting moreinvolved in education, as well as publicsafety. Previously, local councils in thesecountries had had only limited administrativeresponsibilities in these areas. Athird approach is favoured in the Netherlands,Sweden and the United Kingdom:enlisting the private sector. In these threecountries, management reforms focusedon attracting the private sector have reducedthe remit of local governments.III.3.Administrative capacityAdministrative capacity depends on thehuman resources and style of management,both of which have undergone importantchanges in the past few years.III.3.1. Human resourcesThere are substantial differences in the staffinglevels of local governments. Unsurprisingly,these differences reflect those alreadynoted for the powers and responsibilities:countries in which local government and particularlymunicipalities manage both essentialpublic services and the human resourcesthey require, are the countries with the higheststaff levels. In the Nordic countries,Switzerland and the United Kingdom, localgovernment staff represent about 80% of thetotal for public sector employees (63% inNorway). These employees for the most partwork in education and the health services.Despite an extensive range of functions, localgovernments in Eastern Europe have farlower staffing levels (around 40%), except inHungary (69%) and Slovak Republic (90%)(CNFPT: 2005; Pollitt / Boukaert: 2004).The political structure of a state hardlyimpinges on these staffing issues. In fact ittends to be in unitary states that we findthe proportionally highest levels of staffemployed by local governments. For themost part, levels of employment for localgovernments are similar: for example theyare 28% in Germany, 31% in France, 24%in Spain, 34% in Belgium, 19% in Italy and18% in Portugal. Federal states and stateswith autonomous regions, for their part,are distinguished by the lower staffinglevels of their central civil service. Localstaffing is also comparatively low becausethe bulk of their human resources areemployed at the regional level 18 . The lowerstaffing levels of local governments in Greeceand Ireland also reflect their limitedpowers and responsibilities.In recent years, local governments of manycountries have had to cut staff levels be-18. Pollitt / Bouckaert(2004), p.44 et seq.

EUROPE150United Cities and Local GovernmentsThe countries thathave gone furthestin aligning thestatus andconditions of localgovernment staffwith those of theprivate sectorunder labor lawsinclude the UnitedKingdom , and agroup of countriesthat have almostentirely abandonedtheir old careeremploymentstructures in favorof a contract-basedsystemcause of budgetary constraints and the outsourcingof many activities. Outsourcingincreased markedly after the implementationof strategies inspired by the “NewPublic Management” philosophy, and measuresaimed at improving performance.Staff skills and qualifications are also importantfactors affecting the quality of localpublic service. Best practices include recruitmentbased on merit so the impartialityof the public service is protected. A reasonablelevel of personnel mobility amonglocal governments makes it easier for smalland medium-size governments to attractqualified staff. There are many ways ofachieving these objectives, but equally,authorities can fail to achieve them becauseof an inappropriate employment system.In the employment structures of local governments,as is the case for public administrationin general, we can identify twotypes of system:• A career employment structure governedby public law, essentially characterizedby a system of appointment andjob security;• A contract-based employment structurewith private law as the reference, andno guarantee of job security.But the employment systems in the Europeancountries vary widely, and often include amix of methods. Moreover, certain situationscan be misleading, and public lawstructure and career employment structuredo not always come to the same thing inpractice. In the Netherlands for example, acontract employment system prevails withina public law structure, while in Italy and theCzech Republic, local authority employeeshave access to a career path within anemployment structure determined by collectiveagreements.Although local government employmentsystems have been developing in thedirection of increased flexibility of employmentconditions and incentive-based remuneration,thus taking their inspiratonfrom the message of “New Public Management”,they continue to take differentforms depending on specific national traditions.While some countries have gonemore determinedly down the path of contract-basedemployment, others havemaintained the professional career structureas their main system. In many cases,the outcome has been hybridization, mixingfeatures from both models.The countries that have gone furthest inaligning the status and conditions of localgovernment staff with those of the privatesector under labor laws include the UnitedKingdom (where there is no history of alegal distinction between public and privatesector employment) and a group ofcountries that have almost entirely abandonedtheir old career employment structuresin favor of a contract-based system.These countries are Sweden (1974), Denmark(1969) and Italy (1993). In mostcountries, the contract-based system hasbeen partially introduced while maintaininga career employment structure formanagerial posts. Such “mixed” systems,with their strong element of careeremployment structure, are particularlycommon in Germany, Finland and Switzerland.In Germany, this system has longbeen a feature of local governments, thegreat majority of staff being employed onfixed-term contracts; but the two systemshave ended up converging: after 15 yearsof fixed-term work, staff are given a permanentpost.In the post-communist countries of Centraland Eastern Europe, building employmentsystems for local government was an uncertainprocess throughout the 1990s. Theform of local employment system that eachcountry chose, often after going throughvarious changes, depended on specificnational traditions, different reactions tothe post-communism transformation, andefforts focused on training qualified staffand preventing corruption. In addition,

151Table 2Typology of European countries according to the employment system of local governmentsPublic or private law career structure Public law career structure [Contract-based] privatefor executive and managerial posts applied generally or public law employmentAlbaniaAustriaBosnia and HerzegoviniaCroatiaCzech RepublicEstoniaFinlandGermanyItalySerbiaSwitzerlandBelgiumCyprusFranceGreeceHungaryIrelandLatviaLithuaniaLuxembourgMaltaMontenegroPortugalRomaniaSloveniaSpainBulgariaDenmarkMacedonia, FYRNetherlandsNorwayPolandSlovak RepublicSwedenUnited Kingdomcountries preparing for accession to theEuropean Union made changes to accommodatethe process of accession itself. Thecombination of all these factors yielded differentresults in different countries. Thus,some systems lean more toward contractbasedemployment, particularly in Bulgaria,Poland and Slovak Republic, while the careeremployment structure predominates inHungary, Latvia, Lithuania, Romania andSlovenia.The fact remains that overall, the careeremployment structure governed by publiclaw is still predominant. Applying labor law topublic service presupposes that there is asystem of strict collective agreements inplace, which cannot exist without powerfullocal authority associations and equallypowerful trades unions. However, this is thecase in only a handful of countries. Weshould not be misled by the coexistence oftwo employment systems, because whenthis is the case, the public law career structuredoes in fact apply to the executive andmanagerial positions, even if staff on fixedtermcontracts are sometimes employed insuch posts. It has kept therefore a decisiveplace in the system of human resourcesmanagement and a key role in the relationsbetween managers and the political staff.Furthermore, in many other countries, wefind the vast majority of staff employedunder a public law career structure. Theseobservations can be summarised as inTable 2 according to the dominant featureof the employment system.A major criticism of public administrationsbased on the career employment structure islack of recognition for good performance bythe remuneration system. Another is thatpromotion tends to be heavily based onlength of service and seniority. The aim ofpolicies to move from career employmentstructures to a contract-based system wasmade in order to introduce elements of internalcompetition and a system of incentivebasedremuneration. Systems with thestrongest focus on incentives seem to be thoseintroduced in the United Kingdom, Swedenand Italy. However, a move towardsincentive-based remuneration can be notedwithin career employment structures as well.In countries where employment systemscontinue to be dominated by public-lawcareer structures, the move toward moreThe career systemtends neverthelessto prevail, inparticular forexecutive andmanagerialpositions

EUROPE152United Cities and Local GovernmentsEuropeanCommunity law hasa decisive influenceon how themanagement ofpublic servicesevolvesand developsflexible payment and promotion systemshas been slower and less marked. Nonetheless,they are now making demonstrableheadway in Germany and France.III.3.1. Human resourcesFrom the beginning of the 1980s, the processof modernization has been driven byNew Public Management (NPM) ideas,though the vogue for these seems to bediminishing (Pollit / Boukaert: 2004; Kersting/ Vetter: 2003).The key idea of NPM was to overturn theinflexibility and inefficiency traditionallyattributed to public administration (“letmanagers manage”) and to replace itssystem of hierarchical control with managementbased on indicators, feedback andfollow-up.In the United Kingdom after 1979, the reformsforced local authorities to accommodatein their organizational structure forservices a separation between the roles ofbuyer and supplier, and to open their servicesto competition by soliciting outsidesuppliers (competitive tendering). In 2000,these principles came under review uponthe arrival of a new program dubbed “BestValue Authorities,” which puts a greaterstress on performance over costs. Theseparation of the roles of buyer and supplierwas also introduced for local authoritiesin Sweden. In Germany, this trendtook the form of a “new managementmodel” (Neues Steuerungsmodell), whichchallenged the traditional primacy of legalityand hierarchical control. In France, the1983 elections led to the election ofmayors claiming to be inspired by a newconcept of municipal management, wherebya town was to be governed like acommercial company. However results ofmunicipal elections have indicated that thismodel has lost its attraction. Even so, theyhave not signaled a move away frommodern management techniques. At present,the extension to local budgets of theprinciples of the state budget reform (organiclaw on budget laws of 2001: managementbased on programs and directed toresults) is discussed.In the Central and Eastern European countries,the traditional model was first used toset up the new administrative structures,so the managerial model has been slowerto filter through.In the debate on modernizing the public sector,two arguments were advanced to promoteprivatization and the market (Lorrain /Stoker: 1996).First, turning to privatization was advocatedas a means of reducing the weight ofthe central functions of the “welfare state”by letting market forces take over. The ideaof the “lean state” (Etat modeste, schlankerStaat…) has been widely promoted sincethe 1980s at both national and internationallevels.Moreover, turning to the market for thesupply of services was advocated on thegrounds that public authorities should berestricted to an enabling function. Actualperformance of public services should becontracted out to private companies on acompetitive basis. The European Commissionalso argued for this approach with theaim of promoting the single market.These tenets had perhaps their greatestimpact in Sweden and the United Kingdom,because it was there that the local publicsector monopoly was most extensive. Butin Sweden, only about 15% of municipalservices have been effectively contractedout. In the Central and Eastern Europeancountries, where social services werewholly delivered by the state or by publicbodies under the communist system, therehave been fundamental changes in themanagement and range of services offered.The private sector now plays an increasingrole in their delivery. In Germanyhowever, where most social services havetraditionally been delivered by private nonprofitbodies (freie Wohlfahrtsverbände),the local authorities concentrate on organi-

153zing and monitoring tasks. The impact ofNPM was thus rather limited, though it didlater lead to a diversification of “suppliers.”In countries like France and Spain, with along tradition of devolving the operation oflocal public services to the private sector,the NPM principles did not seem of muchrelevance, although new tools to facilitaterecourse to the private sector have morerecently been created. But the focus onperformance as the driving force has gaineda lot of ground, both through stateinterventions (for example, reforms inFrance of local accounts models) andthrough initiatives taken by the local authoritiesthemselves.European Community law has a decisiveinfluence on how the management of publicservices evolves and develops. This isbecause all services that can be classifiedas services of general economic interest–as defined under article 86.2 of the Treatyon the European Community– are subjectto the rules on competition, unless theserules impede the realization of their missionin conditions compatible with the viability ofthe enterprise. According to the Court ofJustice, if a local authority decides to devolvethe operation of a public service to a privatecompany, that local authority must usea competitive [tendering] procedure. Thisapplies even if the authority itself has createda local enterprise specifically to deliverthe service in question, unless it can establishthat it exercises the same control overthis enterprise as it does over any of itsadministrative services (known as the “inhouse”exception). For the Court, it sufficesthat the company has external shareholders,even if only minority ones, to invalidatethis latter condition. The result is thatintegration through the market, as interpretedby the Court of Justice, means thatthe freedom of local authorities to choosehow to manage the public services they areresponsible for is restricted. This applieseven though this freedom has long beenconsidered an important part of local selfgovernmentin many countries, includingFrance, Germany and Spain. Of course,other countries have sought to restrict thefreedom of local authorities in this respect,in the name of opening up the market (Italyand the United Kingdom, in particular). Inthe same way, the new regulation1370/2007 (23rd October 2007) concerningpublic rail and road transport puts anend to the exception that preserves urbanand regional public transport from opencompetition. However, competent localauthorities still have the possibility to providepublic transport services directly orthrough a separate entity over which theyexercise a similar control as for their ownservices and to which they may assign theservice directly. The urban transportsystems of numerous large European citieswill necessarily be reviewed when the newregulation comes into force (3 December2009). The free choice of local authoritiesregarding the operational system will thereforebe limited. By contrast, most Servicesof General Interest (SGI) should not beaffected by the application of the so-called"Services" directive of 12 December 2006.IV. Local democracyThe main trends we can identify can bepresented by distinguishing among localpolitical systems, supervisory structures,the impact of decentralization on nationalpolicies, and the role of the associations oflocal councilors and mayors, and of localgovernments.IV.1. The local political systemThe election of municipal councils, ormore generally of community-level localgovernments, by direct, free and secretuniversal vote is today a reality in all thecountries of the Council of Europe. A lookback over even recent history is enoughto show what important gains have beenmade. As far as intermediate-level localgovernments are concerned, the situationis a little more complex: In some cases,indirect elections seem to be a betteroption for linking intermediate-level tasksThe election ofmunicipal councilsor localgovernments, bydirect, free andsecret universalvote is todaya reality in all thecountries of theCouncil of Europe

EUROPE154United Cities and Local GovernmentsThe mostsignificantdevelopments havetaken place in theexecutive ranks ofcommunity-levellocal governments,namely fora certainpersonalizationof the executiverole and for directelectionswith local-level responsibilities. This isdesirable to prevent legitimate interestsat the middle level from competing andconflicting with those of local councils,and also to protect the independence ofthe latter, as exemplified by regionalauthorities in Ireland, regional councils inFinland and Romania, and provincial delegations(deputación provincial) in Spain.The provincial delegations in Spain areconsidered part of the local level and aremeant to serve the local councils. However,it was decided in Norway and Hungarynot to use indirect elections for thecounty-level councils.The most significant developments have takenplace in the executive ranks of community-levellocal governments, namelyfor a certain personalization of the executiverole and for direct elections (Bäck /Heanelt / Magnier: 2006; Szücs / Strömberg:2006). The most typical changeshere occurred in Italy, Germany and theUnited Kingdom. In Germany, the formervariety among municipal institutions hasgiven way to a unique model, broadly speakingcharacterized by the election of mayorsby direct universal vote, and thepossibility of removing them from office.Italy has introduced the direct election ofmayors, provincial presidents, and regionalpresidents. In the United Kingdom, followingthe election of a mayor of London bydirect vote, the law has also provided forother cities to adopt a similar model, alongtwo variant forms. In Central and EasternEurope, mayors are elected by direct vote,except in the Baltic States, Poland, theCzech Republic and Croatia. The question isbeing debated in Belgium and the Netherlands.In the Netherlands, a draft bill toamend the Constitution to allow the electionof burgomasters failed in 2005, sothese officials continue to be appointed bycentral government on the basis of nominationsfrom the municipal councils, but withthe nominations being open to citizen consultations.Mayors continue to be appointedin Belgium and Luxembourg, but, as in theNetherlands, the executive body is a collegiateexecutive body whose other membersare elected by the council.In the United Kingdom, the Local GovernmentAct 2000 led local authorities toabandon the traditional system of councilcommittees exercising executive tasks, todifferentiate the executive and non-executiveroles and, in some circumstances, tosubmit to referendum proposals for a localconstitution that could include direct electionof a mayor. But these reforms did notreceive the expected support. Among the386 local authorities potentially qualifyingfor an elected mayor, referendums hadbeen held by only 31 local authorities bythe end of 2006. The results favored thedirect election of a mayor in only 12 referendums.However, a feature of thesereforms is that local residents can take theinitiative to hold a referendum on the roleof mayor by submitting a petition, signedby 5% of registered voters, to their localauthority. A less well-known aspect of thereforms, but one with perhaps a greaterimpact over the long term, is the differentiationof the executive and non-executiveroles. This should lead to an enhanced rolefor local councils in providing policy guidance,and also supervision with respect tothe executive bodies. The October 2006White Paper has resumed revitalizing institutionalreforms by reinforcing political leadershipin the local authorities. "The LocalGovernment and Public Involvement inHealth Act 2007 (c.28) makes possible theelection of the council in one ballot andrequires the choice between two alternativeexecutive formulas: a leader elected bythe council or a directly elected mayor,who, in either case, then forms his cabinetby appointing at least two members of thecouncil".Useful parallels emerge here with the Netherlandsreforms known as “dualization”(dualisering), introduced by the laws ofMarch 7, 2002, governing municipalitiesand January 16, 2003 governing provinces(amending the law of September 10,1972), providing for a separation of the

155executive branch from the assembly. Henceforth,the aldermen (at the provincelevel, the deputies) can no longer be membersof the council, and nearly all administrativepowers are concentrated in theexecutive body. To balance this, the legislatorswanted to reinforce the assembly’s roleof policy guidance and supervision. Thesplit timing of the different mandate termsalso contributes to this dualization: fouryears for the council and aldermen, sixyears for the mayor (the Queen’s commissioner).Behind all these developments and reforms,apparently very different in spirit,lies the same key goal: restoring or reinforcingpolitical leadership in local governments,and above all at the municipallevel. Of course this has not been an issuein countries like France or with the Länderin the south of Germany. In both places,the figure of a strong mayor is deeply rootedin history. But it should be noted thatall of the Western European countriesmentioned here have either traditionallyhad a collegiate local executive body, orhave not had an executive body that wasdistinct from the council. In most countriesin Eastern Europe, it was the desire fordemocracy that drove the introduction ofdirectly-elected mayors. However, it is clearthat the various countries have very differentapproaches to this issue. In mostcases, direct election of mayors has seemedthe best way to guarantee politicalaccountability, to the extent that theirmandate is renewable. But in the Netherlandsand probably in the United Kingdom,the preferred approach to reinforcing politicalleadership is to focus on strengtheningthe political role of the councils. Thisambition was also in the background of theso-called “free community” reforms inthe Nordic countries in the 1980s, whichgave municipal councils the freedom todetermine the internal organization oflocal government. Previously, the executivecommittees had been determined bylaw. The reforms (see in particular theSwedish law of 1991 on local administration)meant that the councils could havetheir own choices on their administrativeorganization in relation to their functions;they have also reinforced the executivecouncil’s management lead role in the variousspecialized sectors.For local assemblies, the changes are lessclear. There appears to be a definite tendencytoward what is called “parliamentarization.”This condition is characterizedby a reinforcement of the rights of councilors,and the possibility of calling theexecutive branch to account politically.This is particularly evident in Spain in thedevolving of powers and responsibilitiesfrom the council to the mayor. One avowedaim of this reform is strengtheningthe executive branch’s capacity for action,particularly in the major cities (laws of1999 and 2003). Calling the mayor toaccount can in some countries require aprocedure for recall by the citizens. Thiskind of procedure is seen in most of theGerman Länder as well as some CentralEuropean countries, including Poland,where several such cases have occurred.In a more general form, we are seeingpolitical groups gaining official recognitionin local assemblies of the larger localgovernments. As in France, these politicalfactions have certain rights recognized bythe law in larger councils. This is a form oflegal acknowledgment of the role of politicalparties in the running of local institutions.The increasing responsibilities of local governmentshave inevitably affected thestatus of elected officials (Guérin-Lavignotte/ Kerrouche: 2006). In all of thesecountries, there is a clear trend towardprofessionalizing the status of local executiveofficers, and toward strengtheningthe professional safeguards necessary forthe exercise of their mandate. This tendencyto professionalize manifests itselfalso in the move away from a system ofremunerative allowances to one of realsalaries, complete with social security andpension rights. In tandem with this, thereIn all of thesecountries,there is a cleartrend towardprofessionalizingthe status of localexecutive officers,and towardstrengtheningthe professionalsafeguardsnecessary for theexercise of theirmandate

EUROPE156United Cities and Local GovernmentsIn Eastern Europelocal electionsprovokedramatically lowerparticipation thannational elections,perhaps reflecting ageneral feeling thatlocal authoritiesdon’t have much ofa role to playis a move toward preventing officials fromassuming several executive roles. In EasternEurope, the former classification oflocal executive officers as civil servantshas acquired a particular relevance in thenew institutional context. In Germany, afull-time mayor is classified as a publicsectoremployee for the duration of hismandate; in most of the other countries,such status is only partial.On the other hand, the situation for ordinarycouncilors –the members of the deliberatingassemblies– is generally speakingless satisfactory. The system of leave ofabsence, paid leave and compensation forloss of income that are thought necessaryfor exercising their mandate often providesinsufficient protection. The training of electedofficers is poorly organized, and thesystem for defining ineligibility and inappropriatepractices, aimed at preventingconflicts of interest and improper use ofcertain positions, falls short of acceptablestandards in many countries.Despite all these reforms, one troublesomefact continues to haunt the modernelectoral process: low voter turnout forlocal elections (Gabriel / Hoffmann-Martinot:1999). Declining voter participationand stagnation in voter numbers reflect aworrying disaffection with politics at large.This new iteration of a kind of votertorpor appears to be more a response tohigh-level politics at national level andperhaps the international levels, ratherthan a widespread unhappiness with localauthorities. An exception may be found inEastern Europe where local elections provokedramatically lower participationthan national elections, perhaps reflectinga general feeling that local authoritiesdon’t have much of a role to play.Only three countries are bucking thetrend: Hungary, Ireland and Switzerland.The United Kingdom is also seeing a risein voter participation, albeit from a verylow benchmark. In Spain the trend invoter participation simply is not clearenough to characterize.IV.2. Citizen participationThese developments have been accompaniedby another notable change, increasedcitizen participation that alters traditionalpolitical dynamics. The most obvious formis the referendum, particularly the citizens’referendums initiated by popular demand.This is being increasingly provided for bythe law, though actual use of referendumsis still rare, except in Switzerland and tosome extent in Germany where they are atraditional institution.This should be contrasted with the increasingimportance given to infra-municipalentities, which allow a representation and aparticipation of citizens at the closest possiblelevel to where they live. These entitiesare essentially to be found in countries withlarge municipalities. They are traditional inBulgaria, and in Portugal their role appearsto be growing, which in turn is giving rise tocriticism from council management viewpoint.They can be found in countries thathave undergone territorial reforms, butwithout a role in local administration; in suchinstances they are intended more to maintaina representation to legitimize the amalgamations,such as parishes in England,communities in Wales and villages in Poland,Greece and Lithuania. These can be comparedto the neighborhood institutions inSpain. In the Nordic countries, managementtasks are devolved upon infra-municipal institutionswith corresponding forms of sectorbasedcitizen participation. In other countries,neighborhood councils have been set up,representing local residents; in France theyare mandatory for cities with a population ofmore than 80,000, and are optional for smallermunicipalities. In Italy, neighborhoodcouncils had some popularity in the 1970s,but have since declined.In fact, it has often been thanks to sector-basedprocedures that progress hasbeen made in citizen participation, particularlyin the fields of urban planning,environmental protection and quality-oflifeprotection. Here local government

157has sometimes usefully turned to internationalinstruments and used them toraise public awareness and mobilize campaigns.This happened with the AarhusConvention, and more recently with theenvironmental impact study plans andprograms following the European CommunityDirective of 2001. The real impactof these procedures on public participatoryprocesses is difficult to assess. Particularlyin light of the circumstances andsituations where non-compliance of proceduresleads to the annulment of thedecisions already taken, thus providingcitizens with a more realistic appreciationof the room for participatory maneuverand its subsequent bearing on the decision-makingprocess.Progress in the area of citizens’ right to informationshould not be forgotten either. Thisdoes not just concern the publication of localpublic records. It also speaks to the right ofaccess to administrative documents, whichis an essential condition for transparency inlocal government. Europe has Sweden tothank for the widespread recognition of thisprinciple. Although it has not been implementedin the systematic way seen in Sweden,improved access to local governmentdata does give citizens, associations and themedia a more complete picture of the workingsof their administration. This is, of course,a prerequisite for effective participationand supervision by civil society. Over thepast few years, several Central and EasternEuropean countries have passed legislationto improve public access to administrativedocuments, most recently and particularlythe Czech Republic and Slovak Republic. TheUnited Kingdom also recently adopted sucha law, The Freedom of Information Act.One related development is the advent ofelectronic administration in all the Europeancountries. This trend is not restricted tolocal authorities, and has several aspects 19 .The most important relates to the authorities’intention to simplify administrativeprocedures. The de-materialization of thepublic markets illustrates the potentialinformation technology has for improvingadministrative procedures. One factor inhibitingmore computerization of proceduresis the need for increased computer securityto protect personal data. In many casesthis need for confidentiality prevents electronicproduction and distribution of officialnotices and certificates. With respect tolocal democracy, the Internet serves aneducational function by multiplying thesources of information that citizens canconsult. Of course, it does not guaranteethat relevant information will be madeavailable to them for assessing local managementor policies. That would requireregulations governing what informationshould be made available to citizens, as isthe case in the United Kingdom for performanceindicators.Restrictions, active and passive, still existin some countries on the voting rights ofpart of the population. For example, Latvia,Estonia and Lithuania restrict votingby their Russian-speaking citizens. Suchvoter exclusion is difficult to square withthe European Convention on HumanRights. Conversely, the Netherlands andSweden are extending voting rights to foreignresidents (non-European Union nationals),under certain conditions.IV.3. SupervisionThe supervision of local governments isusually exercised by the state, though infederal states this is usually done by thefederal members and in self-governingregions supervision is at least partially devolvedto the regions.With regard to administrative controls,there is a general tendency to limit theseto legal checks on the lawfulness of actionsand procedures, at least as far as the own(or basic) powers and responsibilities oflocal authorities are concerned. However,one recourse is the “jurisdictionalization”of supervision. This trend is beneficial forlocal self-government. However, a closerconsideration does reveal that in most ofWith regard toadministrativecontrols, there isa general tendencyto limit these tolegal checks on thelawfulnessof actionsand procedures, atleast as far as theown powers andresponsibilities oflocal authoritiesare concerned19. Chatillon, G. / DuMarais, B. (dir.)(2003), Electronicadministration atthe service ofcitizens, Bruxelles,Bruylant.

EUROPE158United Cities and Local GovernmentsIncreasinglyworthy of note arethe widespreadforms ofcooperation amongvarious levels ofgovernment basedon contractualarrangementsthe states, the administrative authoritieshave the power to first censure the actunder dispute, after which the local authoritymay submit the case to the courts. Theadministrative authority also has thepower to suspend any act it submits to thecourts. Few countries limit the power of thesupervisory authority to the submission ofcases to the courts. In France, Hungaryand Spain, the act under dispute remainsenforceable –subject to a few exceptions.In Italy however, the 2001 constitutionalreview led to the total removal of the legalchecks that had previously been carriedout at the regional level, though not by theregion. There remains a power of substitution(stepping in for the lower authority)that the government can exercise in caseswhere Italy’s international and EuropeanCommunity obligations in particular are atstake. The government also has the possibilityof appointing an “extraordinary commissioner”to resolve a problem on behalfof a local authority that has proved unableto do so. This procedure has been used toresolve problems related to water supplyand refuse disposal services in a few citiesin the south.Regional authorities can also exercise certaincontrols, as is the case for urban planningand development in Italy and Spain, wherethey have the power of prior approval oflocal council plans and can stipulate certainamendments as a condition for approval.In some countries, the power of higherauthorities to dismiss or dissolve local bodiesis only very rarely regulated by the law, andcould lead to abuses. Such cases are steadilydecreasing under the influence of theCouncil of Europe and through monitoring ofthe implementation of the European Charterof Local Self-Government.Controls on financial management can affectlocal self-government. While there has beena tendency to decrease the traditional auditsfor checking the lawfulness of accounts, thedevelopment of new management techniquesbased on the accountability of staff andofficials, and on performance evaluation cantranslate into heavier controls. These controlscan be an even more sensitive issuegiven that the performance indicators andobjectives will have been defined in greaterdetail. When such controls are carried out bya higher authority, they are by their naturepotentially harmful to local self-government,no matter that the official aim is to improveeffectiveness.The case of the United Kingdom (England)is exemplary on this. Recent developmentsthere have led to a reinforcement ofthe inspections carried out on local authorities,either directly through the auditseffected by the Audit Commission for LocalAuthorities, which can submit cases to thecourts, or indirectly through proceduresaimed at promoting better public sectormanagement (Best Value Inspection, withthe mission of inspecting all services onthis basis). If local authorities, bound bythe Local Government Act 1999 to constantlyimprove their results, improve theirperformance and obtain the qualification of“best value authority,” they are rewardedwith a greater freedom of action, particularlyin what use they can make of thegrants they receive. The Best Value Performanceindicators are set by the variousministries when these are preparing theannual budget. The Audit Commission(pursuant to the Audit Commission Act1998) must publish to that purpose areport on its evaluation of the performancesof local authorities, and classify theseaccording to their performances into differentcategories defined by the Secretary ofState for Communities and Local Government(pursuant to the Local GovernmentAct 2003, in particular sections 99 and100). The October 2006 White Paper providesfor reducing the number of indicatorsused in the evaluations from 1,200 downto 200.Increasingly worthy of note are the widespreadforms of cooperation among variouslevels of government based on contractualarrangements. Such agreements are used

159under many different conditions for a varietyof purposes. These arrangements arefound in the various areas of shared powersand responsibilities, where cooperationcreates interdependence. They areused in Belgium, France, Germany, Italy,the Netherlands, Portugal, and Poland (seein particular the 1999 law on territorialdevelopment). They even appear in Ukraine(see the adoption in 2005 of the law onregional development and the adoption in2006 of its implementing provisions). InEngland the regional offices of the governmenthave since 2004 been negotiating“Local Area Agreements” with the localauthorities in order to implement some 40programs set by ten ministries. The October2006 White Paper provides for thisto apply to all authorities, setting out alegal framework for these agreements thatwould make them mandatory across thecountry. This approach has raised considerableinterest, which is understandablebecause it sets an official framework fornegotiations, and facilitates the monitoringof how the mutual undertakings are honored.Developing cooperation between thevarious levels of government represents astep beyond the notion of local self-governmentas something defined in oppositionto the state. Instead, it redefines itpositively along the lines of a general participationby local authorities in the differentcollective responsibilities that the publicsystem must carry out. This highlights howrelative the idea of local self-government isin modern states.IV.4.The impact of decentralization andlocal democracy on national policiesIt is paradoxical that apathy toward localinstitutions, as reflected in the increasinglylow voter participation in local elections, ismanifesting itself at a time when the powers,tasks and independent decision-makingof local authorities have markedlyincreased in most countries. Again, evidencesuggests that generally speakingthis development cannot be blamed on thelocal institutions themselves.There is also the phenomenon, well notedfor a long time now, by which the morenational policies depend for their implementationon local authorities, the morethese are in a position to influence de factothe national policies. Or they may causedistortions at the local level, forcing thenational government to anticipate thingsby, at least partly, taking into account thedemands of the local authorities. Thisphenomenon has often been studied, andwas illustrated a few years ago in Franceby a report of the Cour des Comptes(national audit office) on the “city contracts.”The report showed how the contentsof the contracts and theirimplementation strayed from the prioritiesinitially set out by the government(Cour des Comptes, 1992).However, we should not extrapolate toomuch from this analysis, which only appliesto countries where the local authorities,and in particular the mayors, have acquiredsufficient political weight to reduce thescope of the methods of control availableto the government. In particular, there areno indications that similar observationscould be made about the local authoritiesof Eastern Europe, despite the progressmade there.Connections between national and local politicsshould not be overlooked. An extremecase of intermingling is France, where thepractice of politicians being elected to severalmandates exists. This has allowed somelocal issues to permeate debates in thenational parliament, but has also slowedthe renewal of the political scene by allowingelected officials to keep at least onemandate if defeated in election for another.This practice makes it difficult to introduceglobal reforms that would challenge thecollective interests of local representatives.The extensive reach of this system standsin contrast to the countries where radicalreforms have been carried out, such as theUnited Kingdom (particularly the reformsof 1972 and 1996). The British system isfamous for the separation it maintains bet-There is also thephenomenon, wellnoted for a longtime now, by whichthe more nationalpolicies dependfor theirimplementation onlocal authorities,the more these arein a position toinfluence de factothe nationalpolicies

EUROPE160United Cities and Local GovernmentsLocal governmentassociations areplaying a greaterrole in Europe, inparticular withrespect to the EU.Four mainfunctions may bedistinguished intheir activities,none of them beingexclusiveween national and local institutions, andbetween politicians of both levels.In the other countries, although multiplemandates are usually excluded, at least atthe level of executive roles, the practicenonetheless appears in several countries indiluted or indirect forms. In Germany forexample, municipal or district councillorsmay also be elected as members of theregional parliaments (Landtag); the regionalparliaments do in fact play an important rolein local administration and finances.The growing influence of national politicalparties in local elections –at least in countrieswith a system of political parties withwell-established local presence– worksboth ways, but more in favor of centralization.Political loyalties do lead to a certainhomogeneity in the playing out of issues,even if local candidates for office try to putforward issues specific to their constituencyor area. This has long been observedin the United Kingdom, especially sincethe Labour party established itself at thelocal level. But for the same reasons, localelections are often considered as a test forthe government in power, which meansthat national issues tend to predominateover local ones.It is harder to assess the role local politicsplay in the careers of politicians. Even inFrance these days, national political careersare more frequently consolidated by alocal mandate, a likelier option than gettinginto parliament after having becomeknown as a mayor. In the other countries,there are few examples of local politicalleaders who went on to the national level.At most, this applies to the mayors of a fewlarge cities.IV.5. The role of local governmentassociationsIt can safely be stated that local governmentassociations are playing a greaterrole in Europe, even though their importancevaries from country to country. Oneof the goals of local self-government buildingin Central and Eastern Europe was toestablish associations of local governmentscapable of representing their collectiveinterests to central government. Theseassociations in the Western Europeancountries provided crucial support for theirestablishment.The role of these associations in the Europeancountries can be evaluated by theirstatus and by the work they carry out.With respect to their status, legally theyare always associations governed by privatelaw. Even so, they are increasingly beinggiven official recognition, to a greater orlesser degree. In most countries there isjust one organization representing thelocal councils, or respectively the intermediatelevel local governments. This is thesituation in Belgium, Denmark, Italy, theNetherlands, Spain and Sweden where,since 2005, only one association has representedthe local and county councils. InAustria and Germany, certain differencesbetween cities and municipalities arereflected in the two different associationsthey have. Added to this is the associationrepresenting the districts (Landkreis). Austriafor its part is the only country wherethe role of the associations has been enshrinedin the constitution: article 115.3 stipulatesthat the Austrian Federation ofLocal Councils and the Austrian Federationof Towns are bound to represent the interestsof the local councils. A few otherconstitutions enshrine the right of localcouncils to form associations to representtheir interests (Bulgaria, Estonia and Hungary).In France and Hungary there hasbeen a definite increase in associations formingalong sectorial or partisan lines.From the functional perspective, four categoriesof associations can be distinguishedby what they do in practice. None of theseactivities is exclusive; on the contrary,most associations take over several jointly.However, the weight taken by one functioncompared with others allows distinctions to

161be made among four categories of associations.The first is that of the associationswhose activities are essentially to representthe collective interests of localgovernments to the central government, orto the regional authorities. These are foundparticularly in Austria, Belgium, France,Germany, Greece, Italy and Spain, as wellas most associations from the easterncountries. The second category is associationsthat have developed a role of representingthe local authorities as employers,and thus play a part in labour relationswith the local government’s staff; it is theseassociations that sign the collectiveagreements legally required for fixing theemployment terms of local personnel. Thisconcerns the countries where the employmentof local government staff is governedby private law, in particular Denmark, Norway,Sweden, the United Kingdom, andmore recently, Italy. This does not meanthat the other associations are not interestedin such matters; they just do not haveany legal responsibilities for the staff.Third, some associations have developed arole as agents for consultancy and otherservices to the local governments; these

EUROPE162United Cities and Local GovernmentsToday, the Councilof EuropeanMunicipalities andRegions (CEMR)is anon-governmentalumbrellaorganization for thenationalassociations oflocal and regionalauthorities of 35European Statesare often the same ones that appear in thesecond category, though with the additionof associations in Austria, Germany, theNetherlands, Ireland, Finland, and most ofthe Central and Eastern European countries.In the latter countries the associationsreceive support for this from theircounterparts in the Western Europeancountries. The fourth category is characterizedby the difficulty of distinguishing theassociations that represent specific interestsfrom those that are legal tools forfacilitating cooperation between separatelocal councils in jointly carrying out sharedwork on specific tasks (Bulgaria, Estonia,Lithuania). This last category reflects someconfusion, at the same time obscuring distinctionsthat absolutely must be clear ifinter-municipal cooperation is to developon a stable foundation.We can expect that the growing interdependenceof different tiers of government–financial as well as functional– will lead tothe development of the role of localgovernment associations in all the countries.Moreover, local government associationshave been developing cooperation at theEuropean level since the 1950s. Today, theCouncil of European Municipalities andRegions (CEMR) is a non-governmentalumbrella organization for the nationalassociations of local and regional authoritiesof 35 European States. The mission ofthe CEMR is to promote a European Unionfounded on local self-government, and itlobbies to be permitted input on EuropeanCommunity legislation and EU policies. Itregularly publishes documents describingits position on EU initiatives or projects inprogress, for example on the Commission’sGreen Paper on energy efficiency (February15, 2006), on the urban contributionto growth and jobs in the regions(March 10, 2006), on the proposal for aregulation of the European Parliament onpublic passenger transport services by railand by road (April 2, 2006), on the role oflocal and regional governments in relationto migration (October 23, 2006), and onthe directive proposal establishing a frameworkfor the protection of soil (April 14,2007). The CEMR is also the Europeanbranch of United Cities and Local Governments.There are other European-levellocal authority associations, in particularEurocities, a network of 130 big Europeancities in 30 countries that has existed since1986, and whose aims and forms of actionare similar, though more from the point ofview of the big cities. These organizationscan find a support and a relay for their proposalsin the Committee of the Regions ofthe European Union, though this institutionis not their only channel for making representations.

163V. ConclusionThis panoramic presentation of decentralizationand local democracy in the Europeancountries has shown how local self-governmenthas become the general rule, whateverthe diversity of institutions throughwhich it manifests itself. In this respect, thereare greater similarities between states atthe local government level than at the regionallevel, which does not exist in all countriesin institutional form and displays agreat variety where it does.However, similarities can be observed atthe level of values and tendencies, ratherthan between systems. The principles oflocal self-government at present in Europeform a corpus to which all states adhere.One seeks to rationalize territorial divisionsand their scale to make them adequateto their functions. Local governmentresponsibilities can no longer be devisedwith regard to a local public interest, butmore and more to their participation in

EUROPE164United Cities and Local Governmentsfunctions of overall national interest in aframework established by the law. Thedistance that existed formerly betweenEuropean countries, in broad terms betweenNorthern and Southern Europe, isshrinking. This convergence can be foundalso in the spreading of contractual relationshipsbetween government levels. Therole of local government has increasedconsiderably, from the economic point ofview, in the performance of major collectivefunctions, as well as their autonomy init. But own resources tend to decrease,although some countries are excepted, ifunder these terms are meant the resourcesof which local governments are entitledto vary the yield, at least within somelimits. From the institutional point of view,the tendency to stronger political leadershipand the development of participationprocedures can be observed everywhere.In sum, Eastern and Western Europe arebecoming closer.The major ground for these convergenceshas to be found, without any doubt, in thegrowing integration and interdependencebetween the various government levels,

165whatever the differences in legal status.This is the consequence of the extension oflocal government functions and of correlativeincrease of their budgets. Local selfgovernmentis not the Asterix’ village; thisis a relative notion that has to be builtthrough a network of relations, resultingitself from the functions and powers assignedby the law.By contrast, local government systemsare not converging. They further differentiateregarding the forms of regionalizationand the role of the intermediatelevel of local government. Countries withlarge municipal units further contrastwith countries with small municipalunits. The understanding of central-localrelationships is still marked by historicalfactors, reflected in local governmentfunctions. Only history can explain thatin some countries a function is consideredlocal whereas in others it is consideredas national. Local finance systemsare marked by the structure of nationaltax systems; it derives from this that thefinancing of local government budgets beled by transfers and tax shares or by owntax revenues. Local institutions furtherdifferentiate markedly between countrieswith traditions of representative democracyand countries with participativetraditions. In Central and Eastern Europe,and even more in South-East Europe,the burden of the transition is still there;local government is indeed only one piecein the state-building process. Nevertheless,differences do not impede cooperation orexchanges of experience.Lastly, if decentralization contributes tothe development of political democracy,it would be an illusion to think that theconfidence crisis reflected in the lowerrates of participation in local electionsbe solved by decentralizing more. Localgovernment is part of a whole. Localgovernment may suffer a loss of senseof politics at the national level that cannotbe ascribed to it. But it can demonstratethat it can contribute to give itsense again.

L ATIN AMERICAMARI O ROS ALESSALVADO R VALEN CIA CARM ONA *

LATIN AMERICA166 United Cities and Local Governments* In developing this study, the support, information and suggestions kindlyprovided by Edgardo Bilsky of CGLU, Iván Finot of CEPAL and Néstor Vega ofFLACMA have been extremely important. The authors wish to acknowledgetheir contribution and express their gratitude. Nevertheless, the authors areentirely responsible for all statements and data.

167I. IntroductionLatin America is made up of a large group ofcountries located in the territory extendingfrom Mexico’s Río Bravo in the north to Tierradel Fuego at the southernmost tip ofSouth America. Latin America for the purposesof this report is divided into four subregions:Mesoamerica, including Mexico andthe Central American nations of Belize, CostaRica, Guatemala, Honduras, Nicaragua,Panama and El Salvador; the Antilles withCuba and the Dominican Republic 1 ; SouthAmerica, which comprises the Andean countriesof Bolivia, Colombia, Ecuador, Peru, andRepública Bolivariana de Venezuela; andthe Southern Cone, which encompassesArgentina, Brazil, Chile, Paraguay andUruguay.An estimated 540 million people live in LatinAmerica. Predominant cultures includethose embodied by descendants of NativeAmericans, Spanish and Portuguese colonizers,African slaves and successive wavesof European immigrants during thepast two centuries. It is the most urbanizedof the developing regions. Althoughlevels of urbanization vary between 93%in República Bolivariana de Venezuela and42% in Haiti (see Table 1), an estimated77.8% of all Latin Americans live in cities.Latin American countries present very differentdegrees of development. While theaverage regional GDP is $4,044 (CEPAL,2005), it is a continent with great inequalityin the distribution of wealth. Almost40% of the population lives below the povertyline. The inequality has an unfavorableimpact on the advance of democracyand full exercise of citizenship (HumanDevelopment Report, UNDP, 2005).The forms of states are diverse as wouldbe expected in a vast area containing 100states or provinces in federal countries,250 regions or departments, and morethan 16,000 local governments —municipalities,districts or cantons— across thesubcontinent. Several countries, includingBrazil, Mexico, Argentina and RepúblicaBolivariana de Venezuela, have adopteda federal system with at least two levelsof sub-national government. The othercountries have unitary state systems.In Latin America, the presidential regimeis the most prevalent form of governance,with a clear predominance of the nationalexecutive over other state powers.From 1980 onward, the authoritarian regimesthat dominated the area for generationshave slowly given way to democraticgovernments that foster popular electionof local authorities.A few Latin American countries did havedemocratically elected local governmentsbefore 1980, and now all of the nationshave municipal governments elected byuniversal suffrage (see Table 2). Themajority of the countries are democratizingand reforming their statesthrough institutional, political and legaltransformations, of which decentralization2 and strengthening of sub-nationalgovernments are part 3 .In Latin America,the presidentialregime is the mostprevalent formof governance,with a clearpredominanceof the nationalexecutive overother state powers1. The English-speaking countries (Antigua, Barbados, Granada, Jamaica, Saint Lucia, Trinidad and Tobago) are not included in this study.Nor is Puerto Rico or the overseas territories of France, the United Kingdom and the Netherlands. Only brief mention will be made ofHaiti.2. The notion of decentralization is broadly understood as the process of transfer of power and functions from the central state to theintermediate and local levels of government and administration. We make a distinction between political decentralization or devolution—with the transfer of responsibilities and resources in the framework of local autonomy— and administrative decentralization or“deconcentration,” which refers only to the transfer of functions and resources without autonomy. Both processes are accompanied byvarying degrees of fiscal decentralization, i.e., the capacity to establish, collect and administer financial resources, to fulfill functions andprovide services. Complex forms arise from the various combinations of these three processes.3. Valadés, Diego and Serna, José María, 2000; Carbonell, Miguel 2004; Fix, Héctor and Valencia, Salvador, 2005.

LATIN AMERICA168 United Cities and Local GovernmentsTable 1Development Indicators in Latin AmericaCountry Type of state GDP per GDP per inhabitant IHD ranking % population % urbaninhabitant PPP 2006 * below poverty populationin $ US in $ US line 2005Argentina Federal 4.747 13.298 36 26.0 91,8Bolivia Unitary 990 2.720 115 63,9 64,2Brazil Federal 4.250 8.195 69 36,3 83,4Chile Unitary 7.085 10.874 38 18,7 86,6Colombia Unitary 2.663 7.256 70 46,8 76,6Costa Rica Unitary 4.632 9.481 48 21,1 62,6Cuba Unitary 2.797 ------ 50 --- 76,1Ecuador Unitary 2.761 3.963 83 48,3 62,8El Salvador Unitary 2.469 5.041 101 47,5 57,8Guatemala Unitary 2.492 4.313 118 60,2 50,0Haití Unitary 454 1.892 154 --- 41,8Honduras Unitary 1.139 2.876 117 74,8 47,9Mexico Federal 7.239 9.803 53 35,5 76,5Nicaragua Unitary 896 3.634 112 69,3 56,9Panama Unitary 4.797 7.278 58 33.0 65,8Paraguay Unitary 1.201 4.813 91 60,5 58,4Peru Unitary 2.841 5.678 82 51,1 72,6Dominican Rep. Unitary 3.815 7.449 94 47,5 65,6Uruguay Unitary 4.860 9.421 43 18,8 91,9Venezuela, R. B. Federal 5.275 6.043 72 37,1 92,8Latin America 4.471 39,8 77,8Source: CEPAL, 2006; United Nations Development Report, 2006.* Index of Human Development: High is from 1 to 63; Medium is from 64 to 146; Low is from 147 to 177.

169Nevertheless, the depth of the reformsand their impact differ from one countryto another. Argentina, Brazil and Mexico—the three biggest nations in the region—have chosen federalism; in the unitarycountries, the role of the municipalitieshas been expanded, and intermediate governmentshave been organized in the regionsand comparable departments.Argentina, Bolivia, Brazil, Chile, Colombiaand Ecuador have redistributed functionsand resources in favor of sub-nationalgovernments. 4 In Peru, the process of decentralizationthat began in the 1980swas reversed in the 1990s, and restartedafter 2000. In República Bolivariana deVenezuela, the decentralization of the1990s has, in recent years, been muddledby contradictory reforms that couldaffect the nature of local institutions. InUruguay and Paraguay, decentralizationis still in the early stages.Mexico has moved forward with a “newfederalism,” through the opening of the politicalsystem and democratic alternation.Legal and financial reforms favor subnationalgovernments; progress is slowerat the municipal level.The Central American countries are evolvingto a lesser extent. Guatemala and Nicaraguaare passing decentralization laws. Hondurasand El Salvador are increasing the amount ofmoney transferred to the municipalities.Costa Rica and Panama are progressingcomparatively slowly: in Costa Rica, the popularelection of mayors was introduced onlyin 2002; in Panama, decentralization is beingraised to a constitutional level.For the past ten years, decentralization in theDominican Republic has been on the publicagenda, and there has been a gradual increaseof municipal resources as well as enactmentof new legislation favoring the municipalregime. Cuba remains centralized, and Haiti,though still facing severe problems at alllevels of government, recently held its firstlocal elections in several years.II. Evolution of localgovernmentsTension between centralization and decentralizationexisted in the region long beforethe emergence of the nation states. Thecolonial era saw only the centralism of theSpanish and Portuguese Crowns. Decentralizationfirst appeared during the warsfor independence and in the time of theCabildos Abiertos (People’s Councils).Struggles to preserve the colonial systemor to discard it have flared periodicallythroughout the region ever since.During the 19th Century, wars and conflictstook place in the nascent Latin Americannations setting federal tendencies againstunitary ones. Throughout the 20th Century,many emerging nations opted for politicaland economic centralization, to the detrimentof the intermediate and municipal organizations.After the Second World War,national planning and new policies to replaceimports coveted by the pro-developmentsectors, reinforced centralizing tendencies.The tide of centralization began to change inthe 1970s as a consequence of successiveeconomic and political crises.II.1. Decentralization CyclesDuring the 1980s and 1990s, the democratictransition saw state reforms anddecentralization. The centralist modelwas deemed outmoded and inefficient asa way to liberalize economies and reducestate costs. It is customary to distinguishbetween two decentralizing cycles: onemore economic and neo-liberal, the otherwith greater emphasis on social and democraticaspects 5 .The first decentralizing cycle developed fromthe 1980s in a context of debt crisis and highinflation. One of its avowed goals was toreduce the size of the central administrationin order to eliminate the fiscal deficit anddrive the market. The economies made strongstructural adjustments, delivery of serviceswas transferred to the sub-national govern-During the 19thCentury, wars andconflicts took placein the nascent LatinAmerican nationssetting federaltendencies againstunitary ones4. The concept ofsub-nationalgovernments refersboth to state orintermediategovernments andmunicipalities, alsoknown as localgovernments.5. Finot, Ivan, 2001and Wiesner,Eduardo 2003.

LATIN AMERICA170United Cities and Local Governmentsments or privatized by passing responsibilityto privately held or state companies. Resultswere mixed at best. Although this first policycycle did not produce the hoped-for results,it did cause serious social, economic andpolitical problems.The second decentralization cycle took placeat the end of the 1990s, in the midst of thefinancial and social crises that affected countriessuch as Argentina, Bolivia, Brazil, Ecuador,Mexico, Peru and República Bolivarianade Venezuela. It involved strategies to correctthe neo-liberal paradigm with more democraticand social policies. The decentralizationmovement was stimulated by the progress ofmunicipal management of the region. 6Predictably, these great cycles translatedifferently in each sub-region of LatinGraph 1 1980-2005: Evolution of Decentralization in Latin America 7Percentage of the Expenditure of Sub-national Governments in Total Governmental Expenditure6. New paradigms forlocal governmentmanagement cometo light, as in thecases of Curitiba orPorto Alegre, inBrazil; Villa ElSalvador, in Peru;Bogota, in Colombia;Cotacachi andGuayaquil, inEcuador; Santiagode Chile; Mérida, SanPedro Garza Garcíaor San Nicolás de losGarza, in México;Rafaela in Argentina;or La Paz in Bolivia,among many others.7. Sub-nationalexpenditures used asindicators fordecentralization arelimited in nature,given that theyusually aggregatemunicipal andfederal levelexpenditures. Forexample, a higherlevel of expenditurein the provinces inArgentina does notrepresent moremunicipalexpenditure.Brazil 2002 42.1Brazil 1980 32.4 Argentina 2004 41.6Colombia 1982 26.3 Mexico 2000 31.9Argentina 1980 22.2 Colombia 2005 29.8Mexico 1980 22.0 Bolivia 2005 29.5Ecuador 1980 18.3 Peru 2005 26.8Bolivia 1986 14.8 Ecuador 2004 22.1Latin American Average 11.6 Latin American Average 18.8Peru 1990 9.1 Chile 2005 15.0Uruguay 1980 8.6 Uruguay 2005 13.2El Salvador 19 78 5.8 Guatemala 1997 13.0Paraguay 1980 5.5 El Salvador 2005 8.7Guatemala 1980 4.5 Paraguay 2005 7.0Costa Rica 1980 4.0 Dominican Rep 2004 7.0Chile 1980 3.7 Costa Rica 2005 6.0Dominican Rep. 1980 3.5 Nicaragua 2002 3.8Nicaragua 1988 3.4 Panama 2002 3.8Panama 1980 2.0Source: UCLG Country Profiles (2007), National Files.Drawn up by: Mero.

171America (see graph 1). The federal countriesmainly strengthened the intermediatelevels of government and, after these, themunicipalities.Brazil is one of the most decentralizedcountries in the region 8 . It is based on afederal tradition that goes back to the birthof the republic at the end of the 19th century.The main attempts to reduce federalismto the advantage of the central stateoccurred under the presidency of GetúlioVargas (1937-1945) and during the militarygovernments (1964-1985). With theend of this last authoritarian period,decentralization was pushed forward inorder to resolve the state crisis. Thus, the1988 Constitution defined Brazil as an“indissoluble union of states and municipalitiesand the federal district.” Autonomieswere strengthened and local responsibilitiesand powers were increased. The municipalitiesreceived federal entity status andwere granted full autonomy by the FederalConstitution. In 1993, hyper-inflation andstate indebtedness pushed the nationalgovernment to fiscal recentralization, andto reorganizing and privatizing the states’banks and public services. In 2003, thegovernment of Luiz Inácio Lula da Silvapromoted greater dialog and coordinationbetween the federal level and themunicipalities through the Secretariat forFederal Matters. The Ministry for Cities wasalso created to establish a national urbandevelopment policy that would guaranteethe “right to the city,” relying on the municipalitiesto carry out policies to redistributeincome and social programmes like“Zero Hunger.” In March 2003, during theVI March in Defence of the Municipalities,the federal government and municipalentities signed a protocol for the creationof the Committee of Federal Articulation —CAF. This committee became the main instrumentfor negotiations between theFederal Union and the municipalities, helpingto further advance municipal interestsin Brazil in matters such as teacher salaries,school transport, and fiscal and pensionreform.In Argentina, there was an historical andtroubled relationship between the federalgovernment and the provinces. The Constitutionof 1853 attempted to regulate thisrelationship by transferring support for themunicipal government to the provinces.After the military governments (1976-1983), the already centralized division ofpowers and resources was reviewed. In theensuing decade, the national governmentand the provinces redefined the rules of financingthrough co-participation whichincreased transfers in exchange for a decreasein local tax revenues and the privatizationof services. The constitutionalreform of 1994 took up essential aspects offiscal co-participation between the centralgovernment and the provinces. Thus, municipalautonomy was recognized and thecity of Buenos Aires, capital of the country,was granted an autonomous local government.However, it was still within the provinces’power to define the municipalregime, allowing great diversity amongthem. 9Mexico, throughout the 20th Century, livedthrough a process of expansion and enlargementat the central level, in accord withprovisions of the 1917 Constitution. Thenational government absorbed local responsibilitiesand their sources of income, tothe detriment of the sub-national governments.As recently as 1977, 1983 and1999, constitutional reforms favored municipalities,particularly in order to introduceparty pluralism into the councils, and tostrengthen the treasury and local publicservices. During the 1990s, the nationalgovernment undertook policies to favorsub-national bodies through a “new federalism.”In turn, pluralism and politicalalternation facilitated local reactivation. In1994, the statute of the Government of theFederal District of Mexico City was approved,and three years later its Head ofGovernment was elected by popular vote.Mexican municipalities were organized bythe states, but continued to depend on thenational government. However, innovativechanges were taking place in many munici-Brazil is one of themost decentralizedcountries in theregion. It is basedon a federaltradition that goesback to the birthof the republicat the end of the19th century8. With over 40% ofpublic expendituredelegated to statesand municipalities,Brazil has the mostequitable distributionof resources betweenthe two levels of thestate in the region.9. Many provincesusually restrict thelocal autonomy ofsmall municipalities.For example, in theprovince of Santiagodel Estero only fiveout of 126municipalities enjoyfull autonomy.

LATIN AMERICA172United Cities and Local GovernmentsDecentralizationin the Andeancountries hastaken placethroughfar-reachingconstitutionaland legislativereforms,in a relativelybrief timepalities, which were demonstrating modernizationin local management.Although República Bolivariana de Venezuelaofficially has a federal system, it is a stronglycentralized country, heightened by the modelof sustained development in financingpublic expenditure through the distributionof oil income. In 1989, the Ley Orgánica deDescentralización, Delimitación y Transferenciasdel Poder Público (Decentralization,Delimitation and Transfers of Public PowerAct) drove the decentralization process, ofwhich the first achievement was thedirect election of mayors and governors.The process ground to a halt in the secondhalf of the decade. In 1999 the BolivarianConstitution seemed to re-launch the process,but subordinated municipal autonomyto the Ley Orgánica del Poder PúblicoMunicipal (Organic Law of Municipal PublicPower) and its fiscal responsibilities to aLey Nacional (National Law) in 2005. Thetension between centralism and local autonomyincreased with the Ley de los ConsejosComunales (Community Councils Act of2006), which set up a network of localorganizations directly connected to thepresidency in order to channel local financing.At the start of 2007, the Ley de HabilitaciónLegislativa (Enabling Act) was passed,authorizing the national government toregulate the provincial states and municipalities.In the unitary countries, the debateabout decentralization focused on the relationshipbetween the national governmentand the municipalities. The processadvanced more slowly at the intermediatelevel which, in fact, worked in tandemwith the national level. In the majority ofSouth American and Central Americancountries, intermediate administrationsdepend on the central power and are theresponsibility of an official appointed bythe latter. Despite this, there is a growingtendency toward the popular election ofintermediate authorities, as already occursin Colombia, Peru, Ecuador, Bolivia andParaguay.Decentralization in the Andean countrieshas taken place through far-reaching constitutionaland legislative reforms, in a relativelybrief time.In Colombia, after the extreme centralizationof the 1960s and 1970s, and the politicalcrisis expressed in the civil strikes of the1970s and early 1980s, a clear decentralizingprocess began in the middle of the1990s. The 1991 Constitution laid the basesfor a unitary and decentralized territorialgovernment, with autonomy of the territorialbodies: departments, municipalities anddistricts. Moreover, indigenous territories,regions and provinces were created toregroup bordering departments and municipalities.Direct election of mayors(1986) and of departmental governorswas thus established by 1992. Throughoutthe 1990s, abundant legislation was passedregulating different aspects of localmanagement, such as the mechanismsof transfer and participation, distribution ofresponsibilities and territorial organization.By the end of the 1990s, problems of indebtednessand the economic crisis made itnecessary to review the transfer system andimpose a regime of austerity on sub-nationalgovernment spending, along with aredistribution of competences.Bolivia implemented an original decentralizingprocess that recognized its multi-ethnicand multicultural character bystrengthening two levels of sub-nationalgovernment: the municipalities and thedepartments. After many election-free decades,in 1987 municipal elections wereheld. In 1994, the Ley de Participación Popular(Popular Participation Act) was passed,strengthening the municipalitiespolitically and financially and strongly promotingthe participation of grassrootscommunities. In 1995, the Ley de DescentralizaciónAdministrativa (AdministrativeDecentralization Act) benefited the departmentsat the intermediate level, grantingthem elected assemblies. In 1999, the newLey de Municipalidades (Municipalities Act)was passed. The departmental prefect was

173initially appointed by the national government,but in 2006 he was elected by popularvote. In that year, after a prolongedsocial and political crisis, Evo Morales’ governmenttook power and convoked a newConstituent Assembly, in which questionspertaining to the regions, municipalities andindigenous communities took priority. Therichest departments, in particular those inthe east, demanded greater autonomy.Ley de Descentralización Fiscal (Fiscal DecentralizationAct) and the Ley Marco dePresupuestos Participativos (Frameworkfor Participatory Budgets Act). In November2006, regional governors were electedfor the first time by popular vote. Peru nowhas several levels of government: national,regional, as well as distinct levels for bothprovincial municipalities (cities) and districtmunicipalities.In Ecuador, mired in a deep political and socialcrisis that led to the fall of various presidentsand the dollarization of the economy,the 1998 Constitution ratified the decentralization,de-concentration and participationprescribed by previous laws. La Ley de JuntasParroquiales (Parish Councils Act) of year2000, the Decentralization Plan and the regulationof the Ley de Descentralización y ParticipaciónSocial de 1997 (Decentralizationand Social Participation Act of 1997) in 2001,as well as the reforms to the Ley del RégimenMunicipal (Municipal Government Act) of2004 further mandated improvements in servicesand the obligation to transfer responsibilities.Two main levels of autonomousgovernment were recognized: provinces andcantons (municipalities). However, the provinciallevel was limited by its scanty responsibilitiesand resources, and by thecoexistence of two authorities: a popularlyelected Prefect and a governor appointed bythe central government. In small municipalities,mayors and council presidents had beenelected since 1935; since 1988 all mayorshave been democratically elected.In Peru, the Constitutional Reform of March2002 placed emphasis on the creation ofregional governments, effectively restartingdecentralization plans that had beenblocked under the authoritarian governmentof Alberto Fujimori. That same yearthe Ley de Bases de la Descentralización(Bases for Decentralization Act) was passed,followed in the period from 2002 to2005 by various rulings, including the Leyde Gobiernos Regionales (Regional GovernmentsAct), a new Ley Orgánica deMunicipalidades (Municipalities Act), theThe unitary states of the Southern Cone–Chile, Uruguay and Paraguay– have alsocarried out reforms shaped by their respectivecharacteristics.Chile has been a centralized country sincethe middle of the 19th Century. However,in 1891 following a brief civil war, the Leyde la Comuna Autónoma (AutonomousCommunity Act) was passed, and it wasvery advanced for the time. Nevertheless,the ruling did not work and the Constitutionof 1925 recentralized the country.During the 1980s, the military regimeapplied an administrative decentralizationthat handed over to the municipalities theadministration of primary health care, primaryand secondary education, and themanagement of social funds. With thereturn of democracy in 1990, the countrymoved toward a more political decentralizationwith the direct election of mayorsand town councillors in 1992. In 1993, 13regional governments were created,although intendentes (mayors) wereappointed by the national government. Inlater years, new responsibilities, tasks andresources were allocated to the municipalitiesby reforms to the Ley Orgánica Municipal(Organic Municipal Law) of 1999-2000.In Uruguay, local government is identifiedat the departmental level, which includesvarious centers of population, and possessesan extension and population far abovethe average for Latin American municipalities(table 2). After the return to democracyin 1985, the constitutional reform of 1996for the first time confirmed the obligation ofthe state to formulate decentralizing poli-The unitary statesof the SouthernCone –Chile,Uruguay andParaguay– havealso carried outreforms shaped bytheir respectivecharacteristics

LATIN AMERICA174United Cities and Local Governments10. The termintendente wascoined during thecolonial reforms ofthe 17th Century.Such officialsdisplaced thegreater mayors. InUruguay theintendentes are incharge of thedepartments,assisted by acouncil ofaldermen, to thedetriment of localbodies.cies in order to “promote regional developmentand social well being.” It was setdown that departmental elections should beheld on a different date from the nationalelections. Now the tendency is to dissociatethe local level –Juntas locales (Local Councils)–from the departmental, although nolegislation has been passed to this effect.The 19 departmental intendentes (chiefexecutives) have been directly elected since1966 10 .In Paraguay, after 35 years of dictatorship(1954-1989), the first elections for municipalintendentes were held in 1991, and thefirst elections of departmental governorsand councils in 1992. The constitution of1992 recognized the political autonomy ofmunicipalities in handling their affairs,collecting taxes and managing their expenditure.The autonomy of the departmentswas far more limited. In 2000, the NationalCouncil for Decentralization of the Statewas set up. However, despite the newconstitutional framework for democratization,the municipal code has not yet beenreformed, and national officials in concertwith the legislature continue to exercisestrong control over the municipalities.The Central American countries have passeddecentralizing laws, and their mainchallenge now is to implement them. Aboveall, they need to broaden the scant financialcapability of the municipalities.In Costa Rica, the reform of the MunicipalCode (1998) allowed direct election of mayorsfor the first time in 2002. It also approved,through the constitutional reform of2001, a gradual increase in responsibilitiesand transfers to the municipalities, rising to10% of the national budget. However,strong resistance has arisen and there is notyet any legislation to achieve its implementation.El Salvador made a concerted effort to drawup its National Strategy for Local Development,with strategic guidelines for decentralizationto be implemented during the period1999-2004. A law was passed in 1998 toincrease financial transfers to the municipalities(revised in 2005), and recent reformshave been made to the Municipal Code(2005). A new General Decentralization Act isnow in discussion in the Parliament and a CivilService law was approved.In Guatemala, the Ley General de Descentralización(General DecentralizationAct) was enacted through Decree 14-2002. In 2002, the new Municipal Codeand Ley de Consejos de Desarrollo Urbanoy Rural (Councils for Urban and RuralDevelopment Act) also came into force in2002; the Ley del Catastro (Land RegistryAct) (2005) was enacted; the PolíticaNacional de Descentralización del OrganismoEjecutivo (National Policy of Decentralizationof the Executive Organism)was passed in 2005.In Honduras, the National Plan for Decentralizationand Municipal Development waspassed in 1994, the Executive Commissionfor Decentralization was established andthe Plan of Action 1995-1998 was drawnup, though it was not put into effect. Thetopic was taken up again in 2000 and linkedto the eradication of poverty. In 2003,a new Ley de Ordenamiento Territorial(Decentralized Spatial Planning Act) wasissued. Then in 2004 the Ley de Descentralizacióndel Servicio de Agua (Decentralizationof the Water Service Act) wasissued. Other reforms to the Ley de Municipalidades(Municipalities Act) are underway.In Nicaragua, the constitutional reforms ofthe beginning of the 1990s strengthenedthe power and self-financing of the municipalities,and reaffirmed the autonomy ofthe two regions created in 1987 alongNicaragua’s Atlantic Coast. In 2003, adecentralization policy was defined as thecrux of the Estrategia Reforzada de Combatey Eradicación de la Pobreza (ERCERP)(Reinforced Strategy to Combat and EradicatePoverty). Between 2002 and 2004,the Ley de Régimen de Presupuesto Mu-

175nicipal (Municipal Budget Regime Act), theLey de Participación Ciudadana (Civic ParticipationAct) and the Leyes de TransferenciasFinancieras y de Solvencia FiscalMunicipal (Financial Transfers and MunicipalFiscal Solvency Acts) were passed.In Panama, decentralization of the statewas included in the constitution through theconstitutional reform of 2004 and a newlegal framework was developed for provinces,town councils and corregimientos (mayoraljurisdictions) 11 .or departments —some, such as São Pauloand Buenos Aires, possess populations andproductive capacities surpassing those ofmany nations; many others are small andhave quite limited resources.Nearly 90% of the 16,000 Latin Americanmunicipalities have fewer than 50,000 inhabitants.Some administer broad territories,some are meager in size. Themajority have to deal with considerable financialdifficulties, and restrictions on humantechnical resources.In the Spanish-speaking Caribbean, authoritiesat the provincial level in the DominicanRepublic are appointed by the centralgovernment. The town council is the onlyelected level of local government. Amongrecent reforms, mention should be made ofthe division of the National District intovarious municipalities in 2001, and the lawof 2003 that made it possible to increasetransfers to the municipalities. The convocationof a Constituent Assembly in 2007 isbeing contemplated; among its prerogativeswould be the deepening of the decentralizationprocess. The new Law of theParticipatory Budget has been enacted anda Municipal Bill is under debate.In Cuba, the Constitution in force since themid 1970s recognizes the legal status of14 provinces and 169 municipalities. Theyare administered as representative institutionswhose leaders are elected in thePopular Power Assemblies with their ownelectoral division. These are governedaccording to the principles of “socialistdemocracy,” have very limited autonomy,and generally defer to higher levels ofgovernment.II.2. Municipalities, Citiesand Metropolitan AreasThe sub-national administrations and governmentsof Latin America are extremelyheterogeneous. Among the intermediatelevels of government —states, provincesWhere local autonomy is a goal, legislationin many countries sets minimum requirementsfor a municipality: population andterritory of reasonable size, and sufficienteconomic, social and political capacities toensure adequate institutional consistency.As a practical matter, many municipalitiesare nevertheless established without theseminimum requirements, giving rise towhat is often referred to as municipalfragmentation. Such inconsistencies oftengenerate problems in the delivery of municipalservices and in coordination betweenthe intermediate and national governmentalauthorities.Sometimes called the “atomization” of municipalities,fragmentation is to somedegree endemic throughout Latin America.Consider: In Brazil, out of a total of 5,562municipalities, 1,485 were created between1990 and 2001. This gave rise to aconstitutional amendment –the 15/96– tospecify the requisites for creating municipalcorporations. Mexico now has 2,438municipalities, and it may cause little surprisethat in many of its states municipalfragmentation is the norm 12 .Fragmentation has also been observed insome unitary countries, especially thosewith numerous municipalities. Colombia,for example has 1,099 municipalities, Perumore than 2,000 provincial and districtmunicipalities. In Bolivia, the 1994 Law ofPopular Participation created 198 new municipalities,bringing the total to 327.11. The corregimientosare elected submunicipalentities.In effect, thePanamanianConstitutiondecrees that theremust be a municipalcouncil in everydistrict, and thiscouncil mustincluderepresentatives ofthe corregimientowho have beenelected in thiselectoral division.12. In Oaxaca there are570 municipalities;217 in Puebla; 212in Veracruz and 124in the State ofMexico.

LATIN AMERICA176United Cities and Local GovernmentsTable 2Number of Sub-national Governments and PopulationPopulation Federal countries Unitary countries DemocraticCountry (milions) Average States Municipalities Departments Municipalities MunicipalPopulation perElections followingMunicipalityauthoritarian ruleBrazil 190.127 34.183 26 5.562 1986Mexico 107.537 44.091 32 2.439 1977Colombia 47.078 42.837 32 1.099 1986Argentina 38.971 17.531 23 2.223 1983Peru 28.349 13.695 25 2.070 1981Venezuela, R. B. 27.031 80.690 24 335 1992Chile 16.436 47.641 15 345 1992Ecuador 13.408 61.224 22 219 1935Guatemala 13.018 39.211 22 332 1986Cuba 11.400 67.456 14 169 ----Bolivia 9.627 29.440 9 327 1987Dominican Rep. 9.240 60.789 32 152 1978Honduras 7.518 25.228 18 298 1982El Salvador 6.991 26.683 14 262 1984Paraguay 6.365 27.554 17 231 1991Nicaragua 5.594 36.803 15 + 2 regional 152 1990autonomiesCosta Rica 4.399 54.309 7 81 1948Panama 3.284 43.787 9 75 1996Uruguay 3.478 183.053 19 1985Total 549.851 33.548 105 10.559 251 5.831Sources: CEPAL 2005. UCLG Country Profiles (2007). Drawn up by authors.More than half of the population of LatinAmerica dwells in cities with more than amillion inhabitants. No fewer than 50 LatinAmerican cities have populations of a millionor more; of these, four rank among the tenlargest cities on earth: São Paulo (17.8million), Mexico City (16.7 million), BuenosAires (12.6 million) and Rio de Janeiro (10.6million). Three other cities, Bogotá, Limaand Santiago de Chile, have populations inexcess of 5 million; the 3 million mark hasbeen surpassed in Brazil by Belo Horizonte,Salvador de Bahía, Fortaleza, Porto Alegreand Recife; Caracas in República Bolivarianade Venezuela, Santo Domingo in the DominicanRepublic, and Monterrey and Guadalajarain Mexico also have passed thispopulation milestone. Many more cities inLatin America are of intermediate size –between100,000 and one million inhabitants–

177and generate significant demographic andeconomic dynamism.The great size of most big cities in LatinAmerica and the Caribbean means thatthey typically encompass many municipalterritories and, in some cases, an entirestate or province. Mexico City and itsMetropolitan Area, as defined in 1995,envelops more than 41 municipalities intwo states, as well as the Federal District.Buenos Aires covers the territory of theautonomous City of Buenos Aires plus thatof 32 municipalities in the province of BuenosAires; Gran Santiago (Greater Santiago,Chile) takes in 52 municipalities, andSão Paulo in Brazil has 39 prefeituras (prefectures).Territorial administration and managementof the big cities poses a major problem.While various Latin American capital citieshave special regimes, such as Bogotá, BuenosAires, Caracas, Lima, Mexico City andQuito, few have a metropolitan governmentthat allows them to manage the urbanterritory in an integrated manner. Amongthis latter type are the Metropolitan Municipalityof Lima 13 , with a special regime thatgrants it the faculties and functions ofRegional Government within the jurisdictionof the Province of Lima; the MetropolitanDistrict of Quito, created by law in1993, and the Metropolitan District of Caracas,created in 2000 14 . In Montevideo, thenational government has recently created aMetropolitan Consortium, which encompassesthe municipal councils of the departmentsof Canelones, Montevideo and SanJosé, with, altogether, 2,000,000 inhabitants.In most metropolitan areas onlymechanisms for sectoral coordination of limitedscope are in operation 15 .In Central America, some coordinatinginstitutions also function: the Corporationof the Metropolitan Area of San Salvador(COAMSS) and in Costa Rica the MetropolitanFederation of Municipalities ofSan José (FEMETROM) whose aims arelimited to spatial planning and land usemanagement.Given the level of urban and territorialcomplexity, various countries are tryingpolicies to realign land use. Others, such asArgentina, Bolivia, Brazil, Colombia, Ecuadorand a few other Central Americancountries, are promoting the creation ofmancomunidades (associated municipalities)and other associative forms to helpsolve the problem of the small size of manymunicipalities, which is limiting their capacityto respond effectively to the demandsof their communities and citizens.More than 70 municipal mancomunidadeshave been set up to develop and provideservices in Bolivia. In Argentina, thereare 72 inter-municipal bodies whichgroup 770 local governments of 22Argentinian provinces, aimed mainly atWhile various LatinAmerican capitalcities have specialregimes, such asBogotá, BuenosAires, Caracas,Lima, Mexico Cityand Quito, few havea metropolitangovernment thatallows them tomanage the urbanterritory in anintegrated manner13. The Metropolitan Region of Lima is created by Artícle 33 of Law Nº 27783, on Bases for Decentralization. Artícle 65 and following ofOrganic Law Nº 27867, on Regional Governments (modified by Law Nº 27902). Article 151 of Organic Law Nº 27972, on Municipality.The Mayor of Metropolitan Lima carries out the functions of Regional President, as executive organ; the Metropolitan Council of Lima,exercises functions of Regional Council, as normative organ and inspector; the Metropolitan Assembly of Lima, made up of themetropolitan mayor, the district mayors and representatives of civil society and base organizations of the province of Lima, exercisescompetencies and functions of the Council of Regional Coordination, as consultative and coordinating organ.14. Quito has a relatively decentralized configuration, endowed with a council and a metropolitan mayor with responsibility over most ofthe territory. Caracas has a system of municipal government on two levels with a metropolitan mayor and a legislatively electedcouncil, covering the zones of Libertador (the federal district of Caracas has been eliminated) and the muncipalities of the neighboringstate of Miranda.15. See the Comité Ejecutor del Plan de Gestión Ambiental y Manejo de la Cuenca Hídrica Matanza-Riachuelo (Committee to carry out thePlan for Environmental Management and Handling of the Matanza-Riachuelo River Basin) in Buenos Aires. Or else partial and incipientexperiments in inter-institutional cooperation, such as the ABC Chamber of São Paulo (with Santo André, São Bernardo and SãoCayetano).

LATIN AMERICA178United Cities and Local Governments16. Example inEcuador: theMancomunidad ofMunicipalities forthe Rehabilitation ofthe EcuadorianRailway, createdthrough anagreement signedin June 2005 by 33municipalities.17. One criticism of thisclassification is thatin federal countriesthe index for subnationalexpendituresusually conceals thelevel ofcentralization bystate agencies.the promotion of micro-regional economicdevelopment, tourism developmentand the preservation of the environment.In Ecuador, there are more than 20 mancomunidades,bringing together morethan 100 municipalities 16 , with a similarnumber of associative arrangements betweenprovincial, regional and microregionalentities to promotedevelopment. There are more than 60regional, sub-regional and sectoral localgovernment associations operating inChile; and in Colombia there are over 44local government associations representing454 municipalities that work jointlyfor the provision of public services, publicworks and/or carry out administrativefunctions that are delegated to the municipalassociations.III. Finances, responsibilitiesand management capacitiesIII.1. Progress in Decentralizationand Financing CapabilitiesThe progress in financing sub-national governmentsmay be seen as a whole in Table3, though the figures used —based on datafrom the IMF and World Bank, nationalaccounts and others— are not alwayshomogeneous and must be considered withcaution. Nevertheless, the positive impactwhich decentralization has had on all of thecountries is obvious. The simple averagedecentralized expenditure in Latin Americawent up from 11.6% of total governmentalspending around 1980, to 18.8% between2002 and 2005.Drawing from the information for aggregatedexpenditure in the table below (seecolumn 2 in Table 3), the following classificationcan be made:• The first group of countries with subnationalpublic expenditure greater than20% includes federal countries –Argentina,Brazil and Mexico– and the unitarycountries, Colombia, Peru, Bolivia andEcuador. However, in federal countries,the states and provinces take up the largestshare of expenditure, while localgovernment expenditure is lower than20% in Brazil and less than 10% inArgentina and Mexico 17 .• A second group of nations –with an intermediatedegree of centralization– withsub-national public spending between10% and 20% includes República Bolivarianade Venezuela, Chile, Uruguay andGuatemala.• A third group of countries has only incipientdecentralization, with public expenditureless than 10%. These are CostaRica, the Dominican Republic, Nicaragua,Panama, Paraguay and El Salvador.All the same, the indicator for municipalexpenditure shows (Table 3: column 3)that only three countries exceed 15% ofgeneral government expenditure: Ecuador,Colombia and Brazil. They are followedby Chile, Guatemala and Uruguay at13% (in Uruguay, the Departments,given their size, are closer to the intermediaterather than municipal level).Next come Argentina, Bolivia, Peru and ElSalvador with between 7% and 9% ofgeneral government expenditure. Theremaining countries range between3.8% and 7% of this indicator.Brazil stands out in the first group of countriesmentioned above; not only is it thecountry with the greatest degree of fiscaldecentralization, but it is also the countrythat demonstrates the greatest balance inexpenditure (vertical equity) between thethree levels of the state.Argentina, Brazil and Colombia have hadto overcome critical processes arising outof the excessive indebtedness of theirsub-national and central governments.This has made it necessary to make severeadjustments, especially in Colombia.Even so, in Colombia the fiscal balancesin territorial governments have shownimportant improvements. At the end of

179Table 3Evolution and Distribution of Expenditure by National, Intermediate and Local Governmentsin Latin AmericaCountries 1. Non-financial 2. Evolution of Distribution of Total Governmental Expenditure between National Government,Public Expenditure by Intermediate Governments and Local Governments 2002-2005Expenditure Sub-national( % GDP) Governments 3. Local 4. Intermediate 5. National 6. General(% Expenditure Government Government Government Governmentof CentralGovernment)Argentina 25.2 41.6 7.8 33.0 59.1 100.0Bolivia 30.0 29.5 8.5 21.0 70.5 100.0Brazil 24.6 (CG) 42.1 16.6 25.5 57.8 100.0Chile 34.2 15.0 13.2 1.8 85.0 100.0Colombia 35.2 29.8 17.0 12.8 70.2 100.0Costa Rica 25.5 6.0 6.0 ---- 94.0 100.0Dominican Rep. 19.3 (CG) 7.0 7.0 ---- 93.0 100.0Ecuador 24.5 22.1 17.2 4.9 77.8 100.0El Salvador 17.5 8.7 8.7 ---- 91.3 100.0Guatemala 11.7 (CG) 13.0 13.0 ---- 87.0 100.0Honduras 34.1 5.6 5.6 ---- 94.4 100.0Mexico 23.3 31.9 4.3 27.5 68.1 100.0Nicaragua 30.3 3.8 3.8 ---- 96.2 100.0Panama 24.8 3.8 3.8 ---- 96.2 100.0Paraguay 33.3 7.0 5.2 1.8 93.0 100.0Peru 19.2 (GG) 26.8 8.5 18.3 73.2 100.0Uruguay 29.6 13.2 13.2 ---- 86.8 100.0Venezuela, R. B. 32.2 ---- ---- ---- ---- ----Sources: IMF Finance Yearbook 2002 to 2006; World Bank; Central Bank of Colombia; General Audit Office of Chile; “Descentralización Fiscal en C.América”, G. Espitia. CONFEDELCA, GTZ, 2004. “Descentralización en Ecuador”, CONAM; Ministry of Economy of Ecuador; State Bank ofEcuador, 2006. Country Profiles. GC = Gobierno Central. GG = General Government. Drawn up by: MERO.2004, the sector of regions and local governmentspresented a high surplus of1.1%, and repeated that mark in 2005and 2006.In the unitary states, the weight of theintermediate bodies is less. This is thecase because they usually depend whollyor in part on the central government budget,and because frequently their selfadministeredrevenue is not significant. Ingeneral, in these countries progresstoward decentralization is subject to therhythm of the municipalities or localgovernments.Overall, the nations that have carried outmore decisive decentralizing processes have

LATIN AMERICA180United Cities and Local GovernmentsIn the unitarycountries that haveintermediateentities, only a fewtypes of tax revenueare allocated to themiddle level18. In Colombia, in2000 the taxincome from thedepartmentscorresponded to10% of the nationaltotal, 1.8% of theGDP, while that ofthe municipalitiesrose to 15%, 2.7%of the GDP. (JaimeBonet,Descentralizaciónfiscal yDisparidades enIngreso Regional,Banco de laRepública, CEER,Nov. 2004).visibly improved the situation of infrastructure,services and degrees of participation inthe poorer, more remote and rural areas.Bolivia provides a notable example: therehas been a substantial increase in the resourceswhich reach the outlying territories, aswell as in the degree of organization and participationof rural communities.In the countries with a medium degree ofdecentralization there are contradictorysituations, as in Chile. While there arenotable advances in the democratization ofthe municipalities, the intermediate levelcontinues to depend to a great extent onthe central government. Curiously, Chileanlegislation uses the term “regional governments”to refer to the de-concentratedintermediate level, and the expression “localadministration” to refer to the municipalities,even if they possess autonomyand their own resources, and deliver awide range of services.III.2. Income and Taxation Capacity ofIntermediate and Municipal BodiesIn essence, the political autonomy of anysub-national government depends largelyon its financial strength. Self-administeredrevenue comes primarily from local taxes,over which autonomous local governmentsexercise direct control. But in Latin America,restrictions on local taxation powers areone of the main limitations of decentralizationprocesses. In most countries, themunicipalities do not have the power toimpose duties and local taxes. Rather theyhave a high level of dependence on centralfunds transfers, and although the degree ofdependence varies from one country toanother, the overall trend appears to bemoving toward increasing dependency.In the federal countries, most local incomeis derived from fiscal co-participation, althoughimportant revenues are sometimesset aside at the intermediate level.• In Argentina, the provinces receive taxeson income, property, fiscal stamps andvehicles (64%, 14.5%, 7% and 6%, respectively,in 2004).• Brazil has allowed the states to receive thesales tax (Circulation of Goods and ServicesTax - ICMS), which represents 26% ofthe national revenue.• In Mexico, some states receive taxes onpersonal income and from the acquisitionof used cars. Since 2005, local taxes onprofessional services, transfers, and temporaryusufruct of property or businessactivities have been permitted.• República Bolivariana de Venezuela grantsto the states only the tax revenue fromstamps and salt mines.In the unitary countries that have intermediateentities, only a few types of tax revenue areallocated to the middle level. For example, inColombia intermediate entities receive revenuefrom the sale of alcoholic beverages, tobaccoand lottery tickets, plus vehicle registrationfees 18 ; road, highway and harbor taxes in Chile,in Bolivia, departments receive royalties forexploitation of hydrocarbons. In Bolivia, theamount of the income and the system of compensationto departments that do not producehydrocarbons explains the relative importanceof the intermediate-level expenditure.Most countries do not grant municipalities theright to determine taxation. Usually, the intermediategovernments in the federal countries,or the national governments andparliaments in the unitary countries retain theright to approve the respective values formunicipal income laws.With some exceptions, taxation powers aresimilar in federal and unitary country municipalities.The most common taxes are those onproperty, vehicle circulation and economicactivities, including licenses for businessesand industries or income from industry andcommerce. Throughout the region, the mostimportant source of municipal revenue is thetax on property. The exceptions are Argentina,where it is a provincial tax; El Salvador,

181where it is the responsibility of centralgovernment; and the Dominican Republic,which does not have property taxes. As far asthe tax on vehicle circulation is concerned,Argentina and Brazil are also exceptions; inthose countries it is managed by the intermediategovernment. Mexico allocates it to thenational government.In general, taxation pressure in Latin Americais low (16.9% of the GDP, CEPAL 19 ), and thisis especially critical at the local level wherethe capacity to collect taxes is weak. What iscollected generally represents a limited percentageof the local budget. Because of theheterogeneity of the territories, populationand wealth of the municipalities, the yield oftaxes and duties is extremely unequal. Themost developed urban municipalities haveaccess to significant resources of their own,but this is certainly not the case in poor orrural municipalities.In Brazil, self-administered fiscal resourcesrepresented almost 32% of the budget inmunicipalities with more than 500,000 inhabitantsin 2000, but only reached 5% of thebudget in municipalities with fewer than20,000 inhabitants, yet the latter comprise72% of all the nation’s municipalities. InRepública Bolivariana de Venezuela, 50% ofthe municipalities with fewer than 50,000inhabitants depend on 80% of the nationaltransfers, while 2% of the municipalities witha greater number of inhabitants have 90% ofthe self-administered resources. In Argentina,local tax collection amounted to 48% of revenuein the year 2000, although in some provincesit did not reach 10% 20 . In Colombia,taxes collected by Bogotá represented 40% oftotal municipal revenue in 2000. Somethingsimilar occurred with the metropolises of theCentral American countries.This inequality in taxation capacity translates,in many countries, into a tendency towardstagnation in the collection of municipal taxesand local duties. This typically leads to anincrease in transfers, as in Bolivia, Colombia21 , Ecuador, El Salvador, Guatemala,Mexico, Nicaragua and República Bolivarianade Venezuela. In Mexico, self-administeredmunicipal taxes did not increasefrom 1994 to 2004, but transfers increasedthree times 22 during those years.However, there are some clear indicationsthat decentralization does not necessarilyinduce fiscal laziness. Territorial revenues inColombia have grown steadily over the pastdecade, and as regards revenue behaviorpatterns, the municipalities have done betterthan the departments 23 . Increases in territorialentities’ share of national income haveoften been accompanied by an increase inregional tax collection efforts. Between 1996and 2004, the great majority of municipalitiesenjoyed a real increase in tax revenues.There is no evidence, given the experienceof the municipalities over the past years, to19. Cited by Oscar Cetrángolo, “Descentralización y Federalismo Fiscal: aspectos teóricos y práctica enAmérica Latina,” Seminario internacional, Arequipa, 30 and 31 October 2006. The country with thehighest fiscal pressure is Brazil (35.9%) and the lowest is Guatemala (10.6%).20. The main sources of resources are the taxes for services of lighting, sweeping and cleaning, environmentand health regulations for companies and industries, road maintenance and improvement ofinfrastructures.21. The percentage of self-administered taxes collected from the Colombian municipalities went from 76% in1984 to 44% in 2000 and that of the departments from 97% to 45% over the same period.22. Peru is in a similar case: local collection increased at a rate less than the transfers (21% and 82%respectively between 2003 and 2006), which is due to the acceleration of the process of transferringresponsibilities and resources since 2002, National Decentralization Council, Report 2005.23. In real terms, municipal revenues increased by 28% between 1996 and 2004, compared with 20% at thedepartment level. Source: la Comptroller General’s Office of the Republic: “Informe social. Evaluación alas transferencias intergubernamentales 1994-2005” and Boletín de Coyuntura Fiscal 3 CONFIS, Ministryof Finance and Public Credit, Colombia.

LATIN AMERICA182United Cities and Local GovernmentsThe collection ofproperty tax is farfrom efficientbecause ofoutdated propertyregisters and realestate evaluations,excessiveexemptions, and aculture rife amongmunicipalities andcitizens oftolerance for notcollecting or payingtaxessupport the hypothesis that an increase intransfers causes a reduction in local taxcollection 24 .Frequently, the municipalities do not havethe mechanisms needed to increase collection,either because they are not the oneswho do the collecting or because they donot have the authority to set levels of taxation.In particular, the collection of propertytax is far from efficient because of outdatedproperty registers and real estate evaluations,excessive exemptions, and a culturerife among municipalities and citizens oftolerance for not collecting or paying taxes.This matter should be a priority and is a keyissue in decentralization 25 . However, the situationvaries from country to country, andamong municipalities. In Costa Rica, forexample, when the municipalities assumedcadastral management, their revenuesincreased considerably; however, the centralgovernment changed the rules of thegame, to the detriment of the municipalitiesthat are making a greater fiscal effort 26 . Thelaw in Ecuador imposes a bi-annual reviewof the cadastral evaluations, from a minimum2/1000 up to 5/1000.Local taxation structures –often archaicand inefficient– also have much to dowith the low level of tax collection. Forexample, in the Dominican Republic, thelocal tax structure includes 70 taxes, butthe municipalities only bring in 30% ofthese monies. In Central American municipalities,tax revenue represents, onaverage, 0.58% of GDP. The municipalcontribution to the GDP is what is reflectedin minimum local taxation. In El Salvador,Guatemala and Nicaragua, themunicipalities depend to a large extenton central transfers. In Nicaragua, localtaxation had great importance in the lastdecade, thanks to the Municipal Sales Tax(ISV), but this decreased from 5% to 1%of gross sales.In Costa Rica and Panama, the weaknessof the transfers, and above all the reducedmunicipal responsibilities and levels ofspending mean that local revenue –localtaxes and duties– represents between96% and 75% of municipal income. Somethingsimilar occurs with Paraguay in theSouthern Cone where transfers representjust 11% of municipal budgets. But in thisgroup, local budgets are mostly low. All thesame, within this group of countries, goodlevels of income are not synonymous withgreater autonomy; rather, it points to alack of interest and efficiency in the centralgovernments’ systems for redistribution ofrevenue to less favored territories. In thissense, the high percentage of own-sourcerevenues stands out against the limitedbudget and responsibilities for localgovernments.III.3. Transfers and CompensatoryFinancingTransfers from central governments –or intermediategovernments in the federalcountries– to local governments haveincreased in recent years. These may befree of use or directed and tend to includecompensation mechanisms to limit regionalimbalances. Free transfers support autonomoussub-national decisions and are financedthrough tax revenue co-participationsystems. Directed transfers address theoperational costs of national policies, suchas those for health and education services.24. Different studies show that there is not sufficient evidence to support the existence of fiscal laziness. rather, it has been proven that inregions with greater economic activity, the decentralization process tends to revitalize the tax collection process.25. Nickson, Andrew, 2006. Certain cities make an effort to improve the outdated register of the commercial values of properties (Bogotá,La Paz, Quito, Nicaraguan municipalities). Among the measures are: restructuring the legal framework, modernizing collection,computerized systems and self evaluation.26. Information provided by the National Union of Local Governments in Costa Rica, UNGL.

183BoxTransfer Systems in Latin America• Argentina. The Regime of Federal Co-participation with the provinces contributes 57% of the collection of taxes on income, wealth and sales 27 . The provincestransfer part of these funds to the municipalities, to which they add two transfers: a) maintenance of schools, hospitals and specific projects, and b) discretionalresources. Together it adds up to more than 50% of municipal revenue.• Brazil. The two main sources are the Municipalities Participation Fund (FPM) and the States and Federal District Participation Fund (FPE); both are fed by nationaltaxes 28 . Furthermore, the municipalities receive transfers from the states (25% tax on the circulation of goods and services, 50% tax on vehicles and theexportation of goods). Some municipalities receive royalties for the exploitation of natural resources. Transfers over the municipal budget have increased in thepast decade, reaching 90% of the budget for the smallest municipalities.• Mexico. Allocates participations and contributions to draw on federal income. The former are transferred to the states and municipalities through the MunicipalPromotion Fund. The latter are for restricted use by the states and municipalities 29 . Other transfers exist through oil and export revenue in certain states. Transfersgo from 52% of municipal resources in 1990 to 90% in 2005, in particular thanks to “branch 33.”• Venezuela, R. B.. Municipal dependency on transfers rose from 35% in 1986 to 48% in 1998. It is based on the Treasury Fund (20% of tax income) andextraordinary contributions (Inter governmental Decentralization Fund, with resources from VAT and the Law of Special Economic Assignations, with oil resources).• Colombia. The General Participations System (articles 356 and 357 of the Constitution) provides the resources transferred by the state to territorial entities(departments, municipalities and districts, and indigenous reserves) to finance the services that are their responsibility. The resources are divided into: sectorallocations for education (58%), health (24.5%), drinking water and basic sanitation (17%), and special allocations (4%). The distribution of resources is based onpopulation, attended population, population to be attended, equity, fiscal efficiency, administrative efficiency and relative poverty.• Bolivia. Tax co-participation transfers to the municipalities amount to 20% of the national taxes, less the Special Hydrocarbon Tax. To this are added resourcesfrom debt cancellation (HIPC I y II) for education, health and investment in infrastructure and the Fund for Productive and Social Investment (FPS). The transferscontribute two thirds of the municipal budgets; 85% is used for investment.• Ecuador. The transfers derive from the Sectorial Development Fund (FODESEC) and the distribution of 15% of current income from the central government budget. Bothsources allocate 80% and 70% respectively of their funds to the municipalities and 20% and 30% to the provincial councils. The transfers represent between 47% and 74%of the municipal budgets (1998-2000), and are generally conditional —they are usually earmarked for public investment, not for current expenditure.• Chile. The Common Municipal Fund redistributes 30% of municipal taxes (zoning tax, commercial patents, vehicle tax) with the role of addressing imbalancesbetween rich and poor municipalities. The Ministries of Health and Education allocate transfers to finance the corresponding responsibilities. The National Fund forRegional Development, FNDR, and the National Fund for Social Investment, FOSIS, deliver resources to projects for social investment and to reduce poverty. Variousother sectorial funds exist. The transfers constitute half of the total municipal resources.• Peru. Free availability transfers more than doubled between 2003 and 2006 and the municipalities were the main beneficiaries. Of these transfers, 36% comefrom the Municipal Compensation Fund based on the national taxes collected, 16% of the Canon (levy) and royalties for exploiting natural resources, and 2% forparticipation on Customs Duty. The regional governments receive 2% from FONCOR, 4% from the Canon and 1% from Customs Duty. In addition there are transfers offunds from sectorial programs and projects (FONCODES, PRONAA, PROVIAS, etc.)• Uruguay. Transfers account for between 33% and 16% of departmental budgets.• Paraguay. Limited transfers derive from royalties from bi-national hydroelectric companies.• Central America. The legislation allocates a growing percentage of the national budgets to the municipalities: 10% in Guatemala, 7% in El Salvador, 6% in Nicaragua(it will reach 10% in 2010) 30 , 5% in Honduras, although the government failed to meet the targets. In Costa Rica the constitutional mandate (2001), which allocated10% of the national budget to the municipalities, has not yet been implemented. In Panama there is no norm for transfer to the municipalities.• Dominican Republic. Although Law 166 (2003) raises transfers to the municipalities from 6% to 10% of the national budget, only 8% had been transferred (2005).Even so, resources have more than doubled in two years. The Dominican Municipal League, in charge of the transfers, fulfils a controlling and inspecting role overthe town councils. Transfers represent 90% of the local budget in most municipalities.27. Moreover, through fiduciary funds for provincial development, the provinces receive resources for debt reduction programmes, inexchange for greater fiscal control.28. They receive 22% of income tax, 21.5% on industrial products, 50% of the rural property tax and 30% of the tax on financialoperations. In addition, the Compensation Fund for the Exportation of Industrial Products (FPEX), the Fund for the Maintenance andFunctioning of Teaching (FUNDEP) and the Rural Property Tax (ITR).29. Branch 33 of the budget includes 7 funds for municipal activities: primary and normal education; health; social infrastructure;strengthening of municipalities and delegations of the Federal District; multiple contributions; technological and adult education; publicsafety. To these are added specific funds from branches 25 and 39, such as resources for state infrastructures and for natural disasters.30. The Law of Financial Transfers of 2004 stipulates that, beginning with 4% of the current revenue of the state, transfers to themunicipalities must increase annually to 10% of the budget in 2010. The municipalities also receive resources for investment from theFISE and the Institute of Rural Development (IDR).

LATIN AMERICA184United Cities and Local GovernmentsThese services are delivered by sub-nationalgovernments with transfers carried outthrough difficult systems of monitoring,control and evaluation.In Latin America, different transfer systemsare used –over fiscal income or the nationalbudget– with varying fixed or variable percentages,distribution criteria by levels ofgovernment and other conditions (seebox) 31 . Distribution criteria for transfersinvolve different factors –population, levelsof poverty, access to services, economic potential,efficiency in management– but theyhave limited impact on limiting regional gaps.Directed transfers encompass a wide rangeof objectives that respond to national policies,and only collaterally to the strengtheningof democracy and local governance.The majority of countries have sectorialfunds for carrying out projects, which in federalcountries may be administered by theintermediate governments 32 . In the unitarycountries they are usually administered byautonomous institutions that manage resourcesfrom the central government andinternational financing in a centralizedway 33 . For example, the Fund for Productiveand Social Investment (FPS) in Bolivia cofinancesthe provision of infrastructure andequipment for educational establishments.In Central America, the funds were createdthrough peace agreements to deal withemergency situations or reconstruction, oras social compensation for national macroeconomicadjustments. However, they havebecome permanent and now channelinvestment into infrastructure, basicservices or the promotion of productivedevelopment. Frequently, they handleresources that surpass those of themunicipalities without being subject tothe democratic and civic control of thelatter 34 .The excessive proliferation of biddingfunds for projects has a negative impacton intermediate and small municipalities.Smaller cities often can not partake ofsuch funds because the terms are toocomplex, and the local staff lacks the abilityto draw up sufficient projects. In Chile,it is calculated that there are some 200funds and sectorial programs related tomunicipal management.Recently, systems of direct transfer from thenational government to poor families andpeople are taking on greater importance.Some of them bypass sub-national bodies,or tolerate little intervention. 35 In Mexicothese transfers give rise to the “Opportunities”program; in Argentina to the “Heads ofHousehold” program; in Brazil the “FamilyGrant”; in República Bolivariana de Venezuelait gave rise to “Different Missions”;and in Colombia to “Families in Action.” InChile a new National System of Social Pro-31. Martín, Juan and Martner, Ricardo, 2004 pp. 77 and following; Finot, Iván, 2001, pp. 87 and following.32. This is what occurs with the National Funds for Housing, Provincial Roads and Rural Electrification in Argentina, the transfers from theSingle Health System and the Social Contribution to the Education Salary in Brazil, and the Funds for Contributing to Primary andNormal Education and the Health Services in Mexico.33. Fund for Productive and Social Investment (FPS), Bolivia; Fund for Compensation and Social Development in Peru; National Fund forRegional Development, FNDR and Fund for Solidarity and Social Investment, FOSIS, in Chile; Fund for Social Investment (FIS) andSolidarity Fund for Community Development (FDSC), in Guatemala; FISDL, in El Salvador; FHIS, in Honduras; FISE in Nicaragua; Fundfor Indigenous Guatemalan Development, and Fund for Agricultural Development and Guatemalan Housing Fund.34. The Fund for Social and Economic Investment (FISE) in Nicaragua is another example: an autonomous organization which depends onthe Presidency of the Republic, with funding from the central government, bilateral donations from foreign governments and loans fromthe Inter-American Development Bank and the World Bank. Something similar occurs with the Social Investment Fund for LocalDevelopment (FISDL) in El Salvador, which finances strategies for the eradication of poverty and local economic development, alongwith the Honduran Fund for Social Investment (FHIS).35. On occasion they are even manipulated for election purposes.

185tection was organized for the unification andbetter coordination of the different socialsubsidies granted to poor families throughthe municipalities.III.4. Control Systems andDifficulties of IndebtednessThe expenditure of Latin American municipalitiesis subject to internal and externalcontrols. For internal control, the biggermunicipalities establish a municipal accountsoffice or audit unit –organs granted a certaintechnical autonomy. In municipalitieswith a weak structure, this task is entrustedto the municipal treasurer or the person incharge of finance.There are different models of external control.In some countries there is still a controlof the budget by national institutes whosefunction is to support, control and inspect.This is the case with the Dominican MunicipalLeague, but also with the Institutes forMunicipal Promotion or the ComptrollersOffices in some Central American countries.In Costa Rica, for example, municipal budgetshave to be approved by the controlaríabefore they can be allocated.In many unitary states, the external controlover the intermediate-level local governmentbodies is exercised by the Controlaria.Bolivia, Chile, Costa Rica, Ecuador, Guatemala,Nicaragua, Paraguay and RepúblicaBolivariana de Venezuela still maintain thisform of external control. In El Salvador andHonduras, control is exercised by the auditboard or the superior auditor body.In the federal countries, external control ismore complex, since both internationaland national entities intervene. Thus, inArgentina and Brazil external scrutiny ofthe mayor —intendente or prefeito— isconducted by the Deliberating Council orTown Council with the assistance of theprovincial or State Court of Auditors or theMunicipal Court of Auditors, created by theprovincial or state government. Should thefederation have transferred resources tothe municipalities, the audit would becarried out by the Court of Auditors of theUnion. The state legislatures are theorgans of oversight of the municipalities,although control of federal resources isexercised by the Superior Auditor of theFederation’s Office, which in turn dependson the Union Congress.In recent years, the problem of debt hasbeen a priority. Different countries face fiscalproblems through the indebtedness of thesub-national entities. Although in mostcountries sub-national government borrowingmust be approved by national government,this does not guarantee discipline;some countries are trying more innovativesolutions to avoid excessive borrowing 36 .In 1997, Colombia established a ‘trafficlight’ system for regulating sub-nationalborrowing relative to the level of debt incurredby the regional entity. The law establishesthe basis for territorial fiscaladjustment through borrowing performanceagreements that are controlled at nationallevel. These not only limit the debtcapacity, but also manage the repaymentof loans, essentially duplicating the IMFsystem internally. Other laws have complementedthis policy with good results.III.5. Public ServicesThe financial capacity of the municipalities isclosely connected to the delivery of publicservices. In the second half of the 20th Century,national and intermediate governmentsabsorbed public services which, according tothe principle of subsidiarity, are most effectivelyprovided by the municipalities. Newsupport for decentralization has begun toreverse the old approach 37 .The public services generally attributed tomunicipalities include the provision of:urban cleanliness, refuse collection andtreatment, drinking water, drainage andsewers, public lighting, town planning,parks, gardens and spaces for sport, markets,cemeteries and slaughterhouses,36. Law of fiscalresponsibility inBrazil (2000), the“semaphoresystem” inColombia – by Law358 of 1997, inEcuador, the Law ofResponsibility,Stabilization andFiscal Transparencyof 2002.37. Martín, Juan andMartner, Ricardo(coordinators),“Estado de lasfinanzas públicas:América Latina y ElCaribe”, cit. pp. 62and ff, see table 9on revenues andtotal expenditure atgovernment level.

LATIN AMERICA186United Cities and Local Governmentstraffic regulation, roads and civic safety,public shows and culture (see table 4).Bolivia, Brazil, Chile, Colombia and Mexicohave transferred to intermediate and locallevels responsibility for managing healthcare, primary and secondary education,and social assistance 38 .Latin American municipalities also sharethe management of public services withthe intermediate entities and the nationalgovernment. The specific services differ ineach country, but among the most commonare planning, education, health, civilprotection, environmental protection, sportand culture. When these are shared by differentlevels of government, each level takesresponsibility for certain componentsof the policy. However, problems of coordinationas well as ambiguities with respectto management responsibility are fairlycommon at each level.Under the influence of neo-liberalism in the1990s, many countries opted for the concessionor privatization of local services. InArgentina all of the local public services inthe metropolitan area of Buenos Aires andthe provinces in the interior were granted inconcession: mainly water, sanitation andenergy services. In Chile, the basic servicesof water, sewers, electricity, gas and telephonesystems were privatized and takenover by regional and national companies. InBolivia and Ecuador, the management ofdrinking water and sewers has been privatized,granted in concession or delegated toprivate sector operators 39 in the major municipalitiesof La Paz, Cochabamba and Guayaquil.Nevertheless, the management ofsome services is returning to public authoritiesat the local (as is the case in Bolivia andshortly in Guayaquil) and national (BuenosAires) levels.In Brazil, there is some overlap of responsibilitiesbetween levels of government insome regions; others have some inadequateservices or lack certain services entirely.While responsibility for education and healthis transferred to the intermediate governmentsand municipalities with sufficientadministrative capacity, small municipalitiesgive up part of their responsibilities, such asconstruction and maintenance of roads, inexchange for a portion of the fuel tax. Thedivision of responsibilities usually followssectorial logic (water and sanitation andeducation are dealt with by the states; thefinancing of health, housing and sanitationis done by the federal government).In Argentina in the 1990s, while servicesmanaged by the national Government andprovinces were privatized, the municipalitiesheld onto the services for which theywere responsible. Furthermore, those withgreater capacity 40 took on new responsibilities41 . In addition, through delegation ofthe upper levels of the government, somemunicipalities administer social policies andtemporary work programs, programs offeringassistance to micro-companies, andsmall and medium companies, and the developmentof sanitation.38. There are important differences among countries. In Chile, the municipalities administer integrally primary health care, andprimary and secondary education. In Bolivia, they are only responsible for the administration and maintenance of infrastructureand equipment of the establishments. In Argentina, the municipalities carry out complementary actions for infrastructuremaintenance, and in the health sector they share primary health care.39. The concept of “privatization” is generally avoided as it tends to generate strong resistance. Bolivia, for example, opted for“capitalization” where private firms bring capital to public enterprizes, taking over their control.40. The municipality of Rio Cuarto, in the province of Cordoba took on the water supply company —first national, then provincial;through excellent management of the water service, self-financing has been achieved for the first time in years.41. Among the new responsibilities: environment, civic safety, economic promotion, access to justice and resolution of conflictsbetween family members and neighbors without recourse to the law; social promotion (young people, senior citizens, genderequality, disability), health, promotion of culture and sport; and education insofar as it complements the efforts of other levels ofgovernment.

187Table 4 Municipal responsibilities in Latin AmericaBasic services Food distribution Urban planning Social services Economic development City safetyUO W DW SS SL Cem M B P RI TRNS T PS PHC H SS C S/L ED J Tourism CS FB RP EArgentinaX X S S X X X X X S X S S X X X S S S X XBoliviaX X X X X X X X X S X S S S X X S X X XBrazilX X X X X X X X S X S X X X X X X S S S S S X SChileX X X X X X X S X X S S S S S X S S S S S S SColombiaX X X X X X X X X X X S S S S S X X S X S S XCosta RicaX X * X X X X X S X S S XDominican Rep.X X X X X X X X O X X O OEcuadorX X X X X X X X X X ConvConv XEl SalvadorX X Pil exp X X X X X X C XGuatemalaX X X X X X X X X X X S XHondurasX X X X X X X X X X X X X X X XMexicoX X X X X X X X X X X X X XNicaraguaX X S S X X X X X X X S X X X X X S XPanamaX X X X X XParaguayX X S S X X X X X S S X XPeruX X X X X X X X X X S S X S X S S SUruguayX X X X X X X X X X X S X X X X X XVenezuela, R. B.X X X X X X X X X X S X X X X X X X XS: Shared; O: Optional; Pil exp: pilot experiencies; Conv: convention; UO: Urban ownership ; W: waste; DW: Drinking water; SS: Sewer system; SL: Street light; Cem: Cemetery; M: Market;B: Butchery, slaughterhouse; P: Urban planning -land regulation and territorial planning; RI: Road infrastructure; TRNS: Transport; T: Traffic; PS: Primary school; PHC: Primary health care;H: Housing; SS: Social services ; C: Culture; S/L: Sport and leisure; ED: Economic development; J: Job offer; Tourism: Tourism; CS: City safety; FB: Fire brigades; RP: Risk prevention; E: Environment.* In rural areas.

LATIN AMERICA188United Cities and Local GovernmentsIn Mexico, the state institutions and occasionallyfederal ones intervene in the deliveryof local services. Responsibility fordrinking water, the management of townplanning, roads and the collection of taxeshas often been taken over by the states.The participation of local governments inadministering education is limited to themaintenance of certain infrastructures. Bycontrast, since 1997 the financing of socialprograms has been decentralized. Thegranting of services to the private sector isless common than in other Latin Americancountries.In Bolivia, a uniform strategy of decentralizationhas been applied to all public services,including health, education, roadwaysand micro–irrigation. Most are now allocatedto the municipalities. Since 2001, thedecentralization policy in Ecuador has optedfor voluntary transfers of responsibilitiesthrough the signing of individualagreements between the central governmentand the municipalities involved. Newresponsibilities of special interest to localgovernments are: the environment, tourism,social welfare and, to a lesser extent,education, housing and health 42 .In Paraguay, the municipalities provide alimited number of basic services 43 . The centralgovernment assures the provision ofmost of the services, in particular drinkingwater, education and public transport 44 . InUruguay, these services are delivered at thedepartmental level, including more andmore social services (primary health care),environmental protection and cultural development.In Central America, with the exception ofGuatemala, the majority of local governmentstake on the basic services with difficultyand, in many cases, in precariousconditions. The activities that involve greaterresponsibility and require greaterinvestment –education, health, social wellbeing, housing, aqueducts and sewers–are delivered at the national level, in themajority of cases.The municipalities frequently take on responsibilitiesnot anticipated in the legislation.The municipality of San Pedro Sula inHonduras allocates resources for the maintenanceof the hospital and payment of salariesto doctors, nurses and skilled workers,in addition to providing refuse collection servicesto the hospitals free of charge. In severalcountries, the municipalities take part inthe construction and maintenance of thebasic infrastructures of education andhealth. In Honduras, water management,previously in the hands of a state company,was decentralized in 2003 45 .Regrettably, there are few studies thatmake it possible to measure the impact ofall these processes of transfer on accessto, or quality of basic services. Nevertheless,the existing data is promising: inEcuador, for example, it is calculated thatsince the beginning of decentralization the42. Fernando Carrión, “El proceso de descentralización en Ecuador,” July 2006. Interest in new responsibilities for local governments iscentered on three topics: environment 31.5%, tourism 24.6% and social well being 23.3%. To a lesser extent, education at 7%, andhousing and health at 4%.43. Hygiene, waste management, public lighting, slaughterhouses, markets, cemeteries, transport terminals.44. At the end of the 1990s, agreements were made between the Ministry of Health, the departments and the municipalities to createdepartmental and local health councils with limited responsibilities in planning and management. In 2005, only 25% of themunicipalities had signed agreements with the Ministry of Health. In 1996, the Department of Itapúa created a Rotating Fund forMedication for Social Pharmacies, which administers 70 social pharmacies in 30 municipalities (2002). Paraguay File.45. In El Salvador, around 15 pilot projects have been set up transferring the management of water to mancomunidades or localcompanies. In Nicaragua, there are municipal companies or franchises at the municipal or regional level. Also in El Salvador andNicaragua, in the social areas, a limited direct de-concentration is taking shape, aimed at the community and designed centrally(Ministries of Education, Health, Public Works). Ex: EDUCO program –Education with Community Participation”– in rural zones of ElSalvador, and Co-management of Education and Health in Nicaragua.

189percentage of houses connected to thepublic sewer system has risen from 39.5%in 1990 to 48.5% in 2001; homes withelectricity went from 78% to 91%; domiciliaryconnection to the drinking watersupply rose by 10%; and refuse collectionwent up 20% at national level 46 .In Chile, the favorable impact of localmanagement is expressed in the positiveevolution of the main indicators of socialand human development (education, basicsanitation, health). For its part, the systemof directed subsidies, applied from themunicipalities, has contributed decisivelyto reducing poverty from 38% in 1989 to18% in 2002 47 .National Planning observed that in Colombiadecentralization has improved the ratesof educational provision, literacy and coverageof health services. Nevertheless,according to the same source, progress isinsufficient in basic social infrastructuresand provision of services, and regional disparitieshave increased. Improvements inmanagement have been significant, butare still not adequate, although pre-existingimbalances have influenced this factor,as have the difficulties related to thearmed conflict and lack of governance ofcertain territories.III.6. Local Government Personneland Civil Service CareerFor the intermediate sub-national entitiesand municipalities, the absence of a civilservice career is a serious failing. In themajority of countries the predominantsystem in sub-national government is thespoils system which gives rise to a largescale rotation of staff, in particular at theupper and intermediate levels, every timethere are political changes that affect theadministration.The best performing countries in terms ofdevelopment and institutions at the statelevel are Chile, Brazil and Costa Rica. Anothergroup of countries –República Bolivarianade Venezuela, Mexico, Uruguay,Colombia and Argentina– present civil servicesystems that are not particularly wellorganized. The situation is more critical inthe remaining Central American countriesand particularly in Bolivia, Peru, Paraguayand Ecuador, where the degree of politicizationis higher 48 . This situation is worse atthe level of sub-national governments.In the best-qualified countries –Brazil, Chile,Costa Rica– local officials have generallybecome integrated into nationalcareer systems that are now being matchedby systems at the municipal level. InBrazil, the 1988 Constitution allowed localgovernments to define their own statutefor their three million employees, butapplication of this is limited.In Chile, the 185,000 municipal employees(54% of public personnel, including teachersand health workers) are mostly integratedinto different national personnelevaluation systems and career servicesstatutes 49 .Costa Rica had 10,755 municipal workersin 2004 (4.7% of public personnel), ofwhom 25% worked in San José 50 . In 1998a municipal administrative career path wasestablished, but it has not yet been implementedto any effect. Similarly, in 2004Nicaragua adopted the Ley de CarreraAdministrativa Municipal (Municipal AdministrativeCareer Act).Ecuador and Colombia have a legal frameworkconcerning the career civil service forthe public sector as a whole. In Colombia,it is calculated that in the 1990s municipalstaff accounted for less than 10% of publicpersonnel. In Mexico it was 5%.In some provinces of Argentina, the regimeof employees is uniform between theprovincial and the municipal level; inothers, local governments have their ownregime, although mixed situations are themost common.46. Ponce, Juan. Lavivienda y lainfraestructurabásica en elEcuador: 1990-2001. SIISE. Citedby F. Carrión, elproceso dedescentralizaciónen Ecuador, July2006.47. Ministry for NationalPlanning in Chile(MIDEPLAN).48. See the Report onthe Civil Service inLatin America,AIDB, 2006.49. Department ofStudies of theChilean Associationof Municipalities(Asociación Chilenade Municipalidades– ACHM).50. Ministère desAffaires Etrangères-DGCID, Bilan despolitiques deDécentralisation enAmérique Latine,décembre 2005.

LATIN AMERICA190United Cities and Local GovernmentsIn recent years,the great LatinAmericanmetropolises havedriven processesof partialdecentralizationor deconcentrationinto delegations51. In Paraguay thereare 13,250municipalemployees (7.7%of the publicworkforce), halfconcentrated in thecity of Asunción(6,500 employees).In Nicaragua, thenumber ofmunicipalemployees rose to8,648 in 2000;31% of them workin Managua.In most countries, public employees are subjectto national workers legislation and a specialemployment status for public or municipalemployees, although these practices arerarely applied in practice. Unfortunately, themajority of these countries does not possessprecise statistical data on public employees.In theory, in the majority of countries, subnationalgovernment officials and employeesare covered by the national work law and bystatute as public or municipal employees.However, in practice this is rarely fulfilled.Regrettably, most countries lack precise statisticsabout personnel in the intermediategovernments and municipalities 51 .IV. Local democracyIV.1. Local electoral regimesWith regard to municipal government, theterms cabildo, town council, council or municipalcorporation are used, with differentnational nuances. In most cases the municipalinstitution is made up of: the mayor, intendente,síndico (trustee), municipal president orprefeito (prefect), who presides over it, representsit and is in charge of the administration.The concejales, regidores or vereadores (towncouncilors) act as a legislative body, althoughat times they receive specific commissions.Direct election of mayors predominates in theregion, generally through a majority system,on different dates from those designated forthe national elections (Chile, Ecuador, Argentina,Uruguay, Brazil, Peru, Dominican Republic,El Salvador, Nicaragua). In the federalcountries, local elections tend to coincide withthe provincial or state elections (Argentina,Brazil, Mexico). In Bolivia, the mayor is electedindirectly from among the members ofthe Municipal Council who are elected bydirect universal suffrage. Recently, themethod of election has changed from indirectto direct in Chile (2001), Costa Rica (2002),Nicaragua (1995), and República Bolivarianade Venezuela (1989). For the town councilors,proportional representation or the mixed systemsare regularly established (example: singlenames and lists in República Bolivarianade Venezuela). The specifics observed in differentcountries are influenced by respectivenorms and traditional customs.The duration of the mandate of mayors andrepresentative councilors varies from countryto country. The majority tend to have mandatesof four years (Central American countries,Argentina, Brazil, Chile, Colombia, DominicanRepublic, República Bolivariana de Venezuela),but there are also some with three-yearterms (Mexico), two and a half (Cuba), andfive-year terms (Bolivia, Peru, Uruguay, Paraguayand Panama). Re-election of the mayorand councilors is usually allowed, except inMexico and Colombia where re-election tooffice is prohibited.The municipalities of each nation possess theirown territorial division, with sub-municipalentities with different names. Such entities arebeginning to be granted greater participation,and direct election of municipal authorities isnow taking place in various countries. Promisingresults have been observed in the corregimientosof Panama; in the NeighborhoodAssociations’ legal status and election throughdirect suffrage in Chile; with the Juntas Vecinales(neighborhood associations) in Bolivia; theJuntas Parroquiales electas (elected parishassociations) in Ecuador, which were brieflyinterrupted in 1980; the elected auxiliary presidenciesof Tlaxcala and the municipal communitiesof Tabasco, in Mexico.In recent years, the great Latin Americanmetropolises have driven processes of partialdecentralization (18 community centres inMontevideo and 15 communes in BuenosAires) or deconcentration into delegations,sub-mayoral areas or sub-prefectures (16 inMexico City, 31 in São Paulo). In Mexico City,the delegation chiefs are elected by directvote; in Buenos Aires community councilorsare to be elected for the first time in 2007.In the unitary countries, the process of electingintermediate government authorities hasbeen slow. In 2004, only half of the de-

191partments or regions held elections (Colombia,Bolivia, Ecuador, Peru and Paraguay). Inthe federal countries, the duration of governmentterms of office does not alwayscoincide with those of the municipal authorities.In Mexico, for example, the governorshave a mandate of six years, as opposed tothree years for the mayors.As for women’s participation in local governmentin Latin America, recent studiesshow that women’s political representationremains very low. Between 1999 and 2002,there were 838 women mayors serving in 16Latin American countries, representing only5.3% of the total (Table 5). The ratio ofwomen to men councilors is slightly higher.There is open public debate in all the countriesthroughout the region on the underrepresentationof women at local levels, andmeasures have been taken to improve theproportion of democratically elected womenofficials in local government. The quotasystem is the most common mechanism usedto improve women’s political participation 52 .Table 5 Women Mayors in Latin America (between 1999 and 2002)Country Number Percentage1. Panama 1999 11 14.82. Costa Rica 1998 10 12.33. Chile 2000 39 11.44. Honduras 2002 29 9.75. El Salvador 2000 22 8.36. Nicaragua 2000 11 7.27. Colombia 2002 76 7.08. Argentina 1999 136 6.49. Bolivia 2002 19 6.010. Brazil 2000 317 5.711. Paraguay 2002 12 5.612. Venezuela, R. B. 2000 16 4.713. Mexico 2002 80 3.314. Peru 2002 52 2.615. Ecuador 2000 5 2.316. Guatemala 1999 3 0.9Latin America 832 5.3Source: “Participar es llegar”, Alejandra Massolo, INSTRAW.United Nations. Dominican Republic, 2006.52. In Argentina, forexample, the lawprovides thatwomen candidatesmust be positionedin proportionssufficient to getelected; in Bolivia,a minimum of onein three candidateshas to be a woman;and in Paraguay,one in fivecandidates has tobe a woman; by lawin Mexico no morethan 70% of thecandidates can beof the samegender; and inPeru, at least 25%of the candidatesmust be women.There are electoralgender quotas alsoin Ecuador andDominicanRepublic.

LATIN AMERICA192United Cities and Local GovernmentsMultiple proceduresfor citizenparticipation havebeen formallyintroduced intoalmost all thecountries, althoughthese are notalways effective orreally used53. La democracia enAmérica LatinaPNUD, 2004, pp. 77and following.IV.2. Civic ParticipationLatin American democracy has made progress.According to the Index of ElectoralDemocracy (IED) –whose values vary between0 and 1– the region goes from 0.28 in1977 to 0.93 in 2002. Moreover, 89.3% ofthe potential voters are registered on theelectoral rolls, 62.7% actually vote and56.1% cast a valid vote. These percentagesfor participation in elections are below thoseof European countries, but are superior tothose recorded in the United States 53 . Butsignificant progress is still needed in manyrespects: transparency in the financing ofparties, the struggle against corruption, andin overcoming clientism.At the local level, participation in elections ishigh, although in some countries it is tendingto decrease. In Argentina, Brazil and Uruguay,where participation exceeds 80%,voting is mandatory.In Bolivia, participation in local elections hasoscillated between 59% and 63% from themid-1990s to the present. In Paraguay, participationdeclined from 80% between 1991and 1996, the first period of democraticallyelected local authorities, to 50% between2001 and 2006. In the local elections of 2005in República Bolivariana de Venezuela, up to69% of the voters abstained, because of thepolitical situation and the call by oppositionsectors to abstain from voting. However, historicallythe level of participation in municipalelections in Venezuela has been quite low.In Central America, general average participationis near 50% of the population ofvoting age, except for Nicaragua where participationexceeds 70%. In Guatemala in theelection of 2003, 58% of registered votersvoted in the municipal and general elections.In Costa Rica, in the first local elections formayor in 2002, abstentionism reached 48%of the electorate in some municipal cantons.Political pluralism has taken root throughoutthe region, except in Cuba. In Mexico, forexample, at the local level a genuine politicalcompetition has emerged, and in just a fewyears it has overtaken the institutional quasi-monopolyexercised by a single party,contributing to the democratization of nationalpolitical life. New local and regional parties,supporting new leaders, have also emerged.In Peru, the new Ley de Partidos Políticos(Political Parties Act) allows the appearanceof regional political groupings and the formationof provincial and district politicalcommittees that obligate the national politicalparties to review their structures andrenew their leaders. In Colombia and othercountries, national political figures are startingto emerge from the local level.Multiple procedures for citizen participationhave been formally introduced into almostall the countries, although these are notalways effective or really used. The constitutionsand legal reforms define a broad rangeof forms of participation.In Brazil, the Constitution of 1988 mentionsthe plebiscite, referendum, popular tribune,popular councils, and the right to popularinitiative with the support of 5% of thevoters. But it is the participatory budget thathas achieved world recognition as theexpression of direct democracy whereby thecommunity becomes involved in formulatingthe plan for municipal investment. This procedurehas been applied in Porto Alegre since1989, and is used in more than 100Brazilian cities. It has also been extended tosome municipalities in Argentina, Ecuador,Colombia, Uruguay, the Dominican Republic,Paraguay and Chile, albeit in simplified form.In the Dominican Republic, in 2006, more than110 municipalities (two thirds of the country)were applying the participatory budget.In Bolivia, the Ley de Participación Popular(Law of Popular Participation) of 1994 hasgenerated new participatory practices in themunicipalities through the Territorial BaseOrganizations (OTBs). Through these, thecommunities take part in the municipaldevelopment and annual operating plansthat are required in order to access co-parti-

193cipation funds. The oversight committeeelected by the OTB monitors the implementationof development plans, along with thesub-mayors and social syndicates. The resulthas been encouraging in most municipalities,above all in the regions of Chapare andSanta Cruz. But in many cases, legal requirementshave given rise to bureaucraticpractices that get in the way of genuine participation,reinforcing clientism and corruption.In República Bolivariana de Venezuela, theConstitution and the law are fairly careful insetting up mechanisms for civic participation,but do not clearly define the ways to makethem operational. The recently passed Ley delos Consejos Comunales (Community CouncilsAct) of April 2006 creates a new frameworkfor participation through the CommunityCouncils responsible for bringing together differentcommunity organizations, socialgroups and citizens for the direct managementof public policies at local level. Thisinitiative does however present the risk of displacementto these Community Councils,which are highly dependent on presidentialauthority, of programs and resources thatshould be channeled through the municipalities,as the primary political unit of the nationalorganization and democratic participation.In Ecuador, in a context in which nationalinstitutions have lost their legitimacy, citizenparticipation has been channeled towardlocal governments through strategic planningin formulating provincial plans (18),municipal plans (more than 100) and participatorybudgets, and through local sectorialcommittees for public works and service provision;one outstanding example is the participatoryexperience in the municipality ofCotacachi 54 .Also in Peru, recent legislation has promotedthe creation of Councils for Regional andLocal Coordination as spaces in which to participate,and Development Plans and ParticipatoryBudgets in the different levels ofgovernment (districts, provincial municipalitiesand regional governments).In the majority of countries, incentives areoffered for organizing the populationthrough Neighborhood Associations, commissionsor neighborhood councils and otherforms of association (Argentina, Chile, Paraguay,Ecuador, República Bolivariana deVenezuela, Colombia, Uruguay). In Chile,more than 65,000 local organizations linkedto the municipalities manage requests andprojects. Regrettably, the level of participationin neighborhood elections and in the lifeof the organizations is tending to decrease 55 .In Uruguay, the neighborhood councils inMontevideo are elected and have a consultativerole. Moreover, “defenders of the people”(ombudsmen), have been created; thispost is also included in the Argentine constitutionalreform of 1994.Popular initiatives and consultation areprovided for by law in various Latin Americancountries, including Chile and Uruguay.For its part, the cabildo abierto –open sessionof the Municipal Council– with a broaderparticipation by the community, servesto sound out the community with respectto certain impending decisions. This lastmodality has spread particularly in CentralAmerica (Costa Rica, Nicaragua and El Salvador),and since 2004 Guatemala has institutedpopular consultation with neighborsand indigenous peoples. Such processesare, however, still in the earliest developmentalstages 56 .Procedures for the recall of municipal electedofficials also exist. In Colombia, the programmaticvote is taken into account: the mayorsubmits his program and if he does not carryit out, revocation may take place. In RepúblicaBolivariana de Venezuela, the legislationallows for a revocatory referendum for themayors. In other countries, revocation isallowed for cases of corruption or non-fulfillmentof the municipal development plan(Ecuador, Costa Rica). In Bolivia, the mayoris removed from office by the constructivecensure vote of 60% of the councilors, whothen choose from among themselves theperson who will replace him. It is often used54. See “La AsambleaCantonal deCotacachi” -InternationalExperienceswww.municipium.cl55. UNDP: Socialcapital Map of Chile.56. Procedures of socialparticipation havealso been institutedin local planning:communitydevelopmentcouncils, COCODES,and municipaldevelopmentcouncils,COMUDES, inGuatemala;Councils forMunicipalDevelopment,CODEM, inHonduras, etc.

LATIN AMERICA194United Cities and Local Governmentsin response to party political issues ratherthan questions of bad management.and Colombian nationals abroad, withfive representatives in Congress.The rights ofindigenous peoplesand of otherminorities aremoving forwardthrough differentoptions, althoughthe process is stillincipient and doesnot apply in allcountriesIn the interests of greater transparency inmanagement, Brazil and other countrieshave legislated to oblige local governmentsto publish their public accounts, and areexploring other mechanisms for the diffusionof public information.In Cuba, “socialist democracy” establishesthe principle of presenting accounts once ayear, and revoking the mandate of the delegateselected to the Popular PowerAssembly.IV.3. Minority RightsNative peoples are an important part of thepopulation in numerous Latin Americancountries. In Bolivia, Ecuador, Guatemala,Peru and some regions of Mexico, they makeup between 12% and 70% of the population.Significant minorities constituting 10% ormore of the population live in specificregions of Belize, Chile, Paraguay, El Salvador,Honduras, Nicaragua and Panama. Therights of indigenous peoples and of otherminorities are moving forward through differentoptions, although the process is stillincipient and does not apply in all countries.• In Bolivia, the Ley de Agrupaciones Ciudadanasy Grupos Indígenas (Civic Associationsand Indigenous Groups Act) of2004 gives electoral guarantees, theright to present candidates, and recognitionof the traditional authorities. Thepractice of old forms of direct democracyinherited from the ayllus, agriculturalsyndicates, neighborhood associations,and other forms of community participationis very common in local life.• Brazil recognizes indigenous rights in theconstitution.• In Colombia, indigenous territorial entitiesmay be formed with their Council,and a special circumscription is anticipatedfor ethnic groups, political minorities• Guatemala recognizes the multi-ethnicand multicultural character of the municipalities,as well as the indigenous mayoralties,councils of Mayan Advisers andthe law of national languages.• As a result of the Chiapas uprising, inMexico indigenous rights are included inthe Constitution. Among state legislatures,Oaxaca stands out with 480 municipalitieselecting their authorities by useand custom.• Nicaragua grants constitutional autonomyto two regions on its AtlanticCoast by means of a Statute of Autonomyand each region’s own Ley dePropiedad (Property Law). In thisway, native indigenous peoples livealongside Afro-descendants and othersocial groups.• In Panama, the Comarca de San Blas (IndigenousCommunity of San Blas) hasconstitutional autonomy because that iswhere the Kuna people live, having beengranted their own charter. Their highestauthority is the Congress of Kuna Culture.They are entitled to two legislators inthe parliament.• In República Bolivariana de Venezuela,the law recognizes that in the municipalitieswhere there are indigenous communities,their values, ethnic identity andtraditions must be respected. The figureof the indigenous municipality is established,and through it the indigenous peoplesand communities define, execute,control and evaluate public management.IV.4. Municipal Associativism andDefence of Municipal AutonomyThe transformations in local governmentscaused by decentralization processes permitthe creation and strengthening of nationaland regional associations of local

195Table 6Associations of Municipalities in Latin AmericaCountry / Region Name of the Association Acronym Year foundedRegional AssociationsLatin America Latin American Federation Cities, Municipalities and Local Government Associations FLACMA 2003Sub-regional AssociationsCentral America Federation of Municipalities of the Central American Isthmus FEMICA 1991Mercosur Mercocities 1995National AssociationsArgentina Argentine Federation of Municipalities FAM 1997Bolivia Federation of Municipal Associations of Bolivia FAM 1999Brazil Brazilian Association of Municipalities ABM 1946National Confederation of Municipalities CNM 1980National Front of Prefects FNP 2001Colombia Colombian Federation of Municipalities FCM 1989Costa Rica National Union of Local Governments UNGL 1977Chile Chilean Association of Municipalities ACHM 1993Ecuador Association of Ecuadorian Municipalities AME 1940El Salvador Municipal Corporation of the Republic of El Salvador COMURES 1941Guatemala National Association of Municipalities of Guatemala ANAM 1960Honduras Association of Municipalities of Honduras AMHON 1962Mexico Association of Local Authorities of Mexico AALMAC 1997Mexican Association of Municipalities AMMAC 1994National Federation of Municipalities of Mexico FENAMM 1997Nicaragua Association of Municipalities of Nicaragua AMUNIC 1993Panama Association of Municipalities of Panama AMUPA 1995Paraguay Paraguayan Organization of Inter-municipal Cooperation OPACI 1964Peru Association of Municipalities of Peru AMPE 1982National Association of District Mayors ANADIS 2003Network of Rural Municipalities of Peru REMURPE 1997Dominican Rep. Dominican Federation of Municipalities FEDOMU 2001Uruguay National Congress of Intendentes CNI 1959Venezuela, R. B. Association of Venezuelan Mayors ADAVE 1996Association of Boliviarian MayorsADABOVE

LATIN AMERICA196United Cities and Local Governmentsauthorities. With the exception of Brazil,Ecuador and various Central Americancountries, the majority of regional andnational associations of municipalities inLatin America were established between1980 and 2000 (see table 6).In some countries, the associations enjoy alegal status recognized by national legislation(Argentina, Bolivia, Ecuador, Colombia,Paraguay, Uruguay). However, theirrepresentative and institutional capacitiesare uneven. In general they offer advisoryservices, information and training, maintaincontact with the governments andchannel resources from international cooperation.Many of them have incipient institutionalstructures.In some countries, the associations enjoy a legal statusrecognized by national legislation. The majority of countriesalso have sub-national associations of regional municipalitiesThe Latin American Federation of Cities,Municipalities and Local GovernmentAssociations (FLACMA), whose roots dateback to 1981, brings together the majorityof national associations in the region.In addition, two sub-regional organizationsoperate: FEMICA with the six nationalassociations of Central America(AMHON, AMUNIC, AMUPA, ANAM, COMU-RES, UNGL) and the Mercocities Networkwith 181 associated cities in Argentina,Brazil, Paraguay, Uruguay, República Bolivarianade Venezuela, Chile and Bolivia.Recently, a network of Andean cities hasbeen set up, and COSUDAM, anotherorganization made up of local governmentassociations, was established.The majority of countries also have subnationalassociations of regional municipalities.Bolivia’s FAM is, in fact, a federationof departmental associations of municipalities.There also exist associations ofindigenous mayors (AGAAI in Guatemala,Coordinator of Alternative Local Governmentsin Ecuador) and associative structuresof aldermen or town councillors (Colombia,Paraguay, Uruguay).The governors of provinces and states,and more recently of regions or departments,create their own organizations,such as CONAGO in Mexico, and theNational Conference of Governors inColombia. At the end of 2004, the LatinAmerican Organization of IntermediateGovernments, OLAGI, was set up, bringingtogether governors, intendentes,prefects and regional presidents from 14Latin American countries that administerintermediate governments.A number of local-government women’sorganizations have been formed in LatinAmerica, including: the Association ofWomen Councilors of Bolivia (ACOBOL);the National Association of Women Councilorsand Mayors of El Salvador (ANDRY-SAS); the Ecuadorian Association ofFemale Municipal Employees (AMUME);and the Paraguayan Network of Women inMunicipal Government (RMMP). In other countries,there are organizations operating atsub-regional levels, such as the Networkof Women Councilors of Ayacucho in Peru.Additionally, a bi-annual Congress of womenmayors and councilors is held withinthe organizational framework of the ChileanAssociation of Municipalities. In1998, the Latin American and CaribbeanFederation of Women in Local Government(FEMUM-ALC) was set up; the organizationis linked to FLACMA.V. Achievements, limitations andperspectives on decentralizationAlthough progressive and sometimes contradictory,the decentralization and strengtheningof the municipalities and intermediategovernments of Latin America is a reality. Injust over two decades, there have beenimportant achievements.• Election by the people of local authoritieshas become common, changing theway that parties operate, bringing

197about renewal of leadership and transformingthe municipality into a space inwhich leaders are formed, from whichvarious Presidents of the Republic havealready emerged;• Multiple constitutional and legal reformshave transformed the states, with competenciesand resources being transferredto sub-national governments, althoughnot always with clear strategies andmethods;• In various countries, such as Bolivia,Brazil, Chile, Colombia and Ecuador,the positive results attained throughdecentralization are reflected in theincreases of local investment, extensionof basic services, improvementin human development indicators,decrease in poverty and broadenedcitizen participation.However, the decentralizing process showsgaps and faces obstacles, such as:• Sub-national resources have increasedsignificantly, although unevenly, andthe average decentralized continentalexpenditure has risen from 11.6% in1980 to 18.8% of total governmentexpenditure between 2002 and 2005;• The new responsibilities of the localgovernments translate into progressiveinstitutional development – thoughuneven – where some municipalitiesstand out because of their capacity forinitiatives and innovation, while othersstill cling to their traditional structuresand practices;• The local spaces for civic democracyhave given rise to new experiences ofparticipation by citizens, such as thestrategic participation plan and participatorybudgets;• Unequal relations and frequent subordinationof the intermediate entities andmunicipalities to the central governments,heightened by the increase infragmentation and municipal heterogeneity;• Gaps between the proliferation of legislationand weakness in its application,which may be attributed largely to prevailingpolitical and institutional cultures;• Limited financial capacity of local governments,because of central resistanceto handing over resources in acontext of macro-economic instability,lack of financing policies and adequatecredit, citizens not used to paying forsubsidized services, but also because ofthe lack of political will to strengthenthe local capacity to collect taxes;A bi-annualCongress ofwomen mayorsand councilors isheld within theorganizationalframeworkof the ChileanAssociation ofMunicipalities• Experiences in municipal de-concentrationor decentralization have also beendeveloped to share management withthe communities and open spaces togroups that were previously marginalized(indigenous populations below thepoverty line);• Low efficiency of many local administrationsin delivering services, because ofthe absence of human resource policiesand bad handling of personnel (rotation,lack of career paths), resulting in alow level of efficiency and professionalismin local personnel;• The new responsibilities of the localgovernments and the transformationof relations with the national governmentsare expressed in the creationand strengthening of the national andregional associations of local authorities;• Limitations in civic participation in developmentmanagement due to a lackof adequate financial and local humanresources, poor adaptation of centrallaws and policies, and difficulties inorganizing and mobilizing the actualcommunities.

LATIN AMERICA198United Cities and Local GovernmentsThe decentralizing process in Latin Americahas shown diverse and contradictory signs,and is passing through a moment of uncertainty.In big countries like Brazil, there is aneed to review the federal pact and transferpolicies in order to deal with the growingcost of the new responsibilities ofeducation and health.In Argentina, party political centralism continuesto be a limiting factor for local autonomy,particularly at the provincial level. InRepública Bolivariana de Venezuela, it is fearedthat the government will intervene increasinglyin the provincial states andmunicipalities, cutting down their autonomy.In Mexico, where democratization of nationaland local political life has made significantadvances, strong pressure persists onthe federal government to move forwardwith questions of federalism and decentralization.local, regional and state levels, generatetensions between the municipal and departmentallevels. In the framework ofthe current Constituent Assembly, the topicof decentralization and regionalizationis at the heart of the national politicaldebate.However, in Peru, Ecuador and the DominicanRepublic, intended constitutionalreforms have positive implications for localgovernments. In the Dominican Republic, anew Law of Presupuesto Participativo orParticipatory Budget has been passed, anda new Municipal Law is expected.Meanwhile, in Chile the national governmentand the Chilean Association of Municipalitiesare negotiating a new MunicipalReform to increase the responsibilities andresources of the municipalities with thehope of stimulating local development andreducing social and territorial inequalities.57. Centralizedestablishment ofremunerations bylocal authorities,cutting of transfersand centralizationof decisions tofinance projects.In some unitary states, this process hasbeen slowing down. In Colombia, local governmentspending is controlled in orderto reduce the fiscal deficit of the centralgovernment. During the last years, decentralizationhas not been intensifying.In Colombia, sub-national expenditure iscontrolled to alleviate the deficit of centralgovernment, and the decentralizationprocess has not deepened over the lastyears. In Ecuador, the transfer of competenciesis at a standstill; local authoritiesare asking the government to undertakeconcrete measures to re-launch the process.In Peru, local authorities haveshown concern about recent unwelcomemeasures taken by the national government57 .In Bolivia, where local governments nowadminister half of the national public investment,the rigidity of the transfer systemand the overlap of responsibilities at theIn those countries with more incipientprocesses, the situation seems stable. InParaguay, control from central governmentcontinues to be decisive in theaction of the sub-national governments,although the Paraguayan Organization ofInter-municipal Cooperation, OPACI, haspresented a project to the national governmentto pass a law reforming municipallegislation.In Uruguay, various “Intendencias Departamentales”(department executives) insistthat the Local Commissions or Juntas befurther strengthened, and propose newmechanisms of citizen participation. Thereis a new bill in parliament for Local Decentralization,which intends by 2010 to bringthe public administration closer to the peoplethrough the municipal authorities intowns or villages with more than 2,500 inhabitants.

199Despite advancesin decentralization,Latin America is stilla continent with ahigh degree ofpolitical, territorialand economiccentralization,exacerbated byconcentration in themetropolises andimmense social andterritorialdisparitiesVI. ConclusionDespite advances in decentralization, LatinAmerica is still a continent with a highdegree of political, territorial and economiccentralization, exacerbated by concentrationin the metropolises and immense socialand territorial disparities.In the near future, new debates are envisaged.New centralizing trends have emergedthat are curtailing local self-government,such as the accreditation of local capacitiesneeded in Costa Rica to qualify for the transferof responsibilities and resources. Publicpurchase 58 , information and monitoring systems–through administrative mechanisms–control, condition and restrict municipalautonomy.The decentralizing experiences have reignitedthe debate about the importance oflocal development for sustainable andsocially equitable development at the nationallevel. The issue of good local governanceis emphasized and understoodas a form of territorial self-governmentbased on participatory networks of localactors, public-private alliances and themobilization of own territorial resourcesto activate the endogenous processes ofdevelopment.58. In Chile, Chile Compras, as the only public sector purchasing website, is presented as an example of procedural transparency andrationalization of public purchasing for central government and municipalities. Yet it is not very practical for local governments,as it displaces local providers, favors national companies and slows down the administrative process, to the detriment ofmunicipal responsiveness to the demands of the community.

MIDDLE E AST / WESTERN A SIAMUSTAPHA ADIB

MIDDLE EAST / WESTERN ASIA202 United Cities and Local Governments

203I. IntroductionThe geographical region of Western Asia/theMiddle East encompasses Turkey, the NearEast 1 –with the exception of Israel–, the ArabianPeninsula, and Western Asia, includingIslamic Republic of Iran. The region has, formany decades, undergone political, military,ethnic, and religious tensions that have affectedits stability. Of the countries that we willbe examining, seven are monarchies (Bahrain,Jordan, Kuwait, Oman, Qatar, Saudi Arabiaand United Arab Emirates), six arerepublics (Islamic Republic of Iran, Iraq,Lebanon, Syria, Turkey and Yemen) and theautonomous territory of Palestine, which hasnot yet all the attributes of a state. IndeedTurkey is the only country that has enjoyedstability, for several decades, based on secularand democratic institutions. The religiousfactor is also important and omnipresentthroughout the region, in the constitution andacross private and political spheres.This grouping of over 260 million inhabitantsis dominated from the demographic standpointby Turkey (74.7 million inhabitants)and Islamic Republic of Iran (69.5 million).The population is now predominantly urban(Syria 50.1%, Islamic Republic of Iran 67%,Iraq 67.2%, Turkey 67.3%, Oman 77.6%,Jordan 79%, Lebanon 87.5%, Kuwait96.3%), with the exception of Yemen(25.6%). But the existence of a few industrializedeconomies and the wealth generatedby oil revenues must not lead one tooverlook either the huge differences thatexist between the countries of the region, ortheir sometimes mediocre performances interms of education, governance, and freedom–performances which were highlightedby the 2004 UNDP report.Nevertheless, in spite of the ceaseless political,military, and religious tensions, wars andother perennial obstacles to the regions’ stabilityas a whole, and certainly to the developmentof local autonomy anddecentralization, some advances deserverecognition: the first local elections in SaudiArabia, the holding of democratic local electionsin Palestine, the restoration of mayoralelections by universal suffrage in Jordan,and the 2002 constitutional reforms in Bahrain.Under pressure from elite segments oftheir populations, Islamic Republic of Iranand Kuwait have also begun tentative changesin this direction. Turkey, which has had amodern municipal system since 1930 andwhose citizens as a whole support decentralizationas one of the criteria for membershipof the European Union, is something of anexception to this description; three new lawsfavorable to decentralization were adoptedin Turkey in 2004-2005.These changes, however, cannot conceala broader trend throughout the region–Turkey excepted– toward the gradualconfiscation of local authority by centralgovernments. In certain cases, even thetasks of providing street cleaning, sewermaintenance, and public health measures,are being taken away from local governments.The most extreme case isJordan where the provision of 13 differenttypes of service has been taken backby the state. This form of centralized controltypically involves privatization, underthe pretext of improving efficiency andoverall services.Decentralization only appears in the constitutionsof Lebanon, Syria, Islamic Republicof Iran, and Turkey. Turkey has a middlelevellocal government, but in the otherthree countries decentralization applies toonly the lowest tier, municipalities.Apart from the Sultanate of Oman, SaudiArabia, and Bahrain, where the roles of themunicipal councils have been defined fromthe start as purely and openly consultative,legislation in other countries in this region– especially Kuwait and Turkey – doesgrant certain powers to local authorities.Nevertheless, the existing laws rarely presenta precise list of local powers, suchspecifics being the province of futureimplementation orders promised but neverpublished. The vagueness of such lawsThe religious factoris omnipresentthroughoutthe region, in theconstitution andacross private andpolitical spheres1. Insofar as there doesnot exist anygenerally accepteddefinition of theterms ‘Near East’and ‘Middle East,’we shall refer to theformer Levant,(Lebanon, Syria,Palestine andJordan) as the ‘NearEast,’ and thecountries of theArabian Peninsula,Iraq, and IslamicRepublic of Iran, asthe ‘Middle East.’Turkey for ourpurposes here isconsidered part ofWestern Asia.

MIDDLE EAST / WESTERN ASIA204United Cities and Local GovernmentsWith the exceptionof Turkey, localauthorities’ limitedfinancialindependence iscoupled witha prioriadministrativecontrol of localcouncilproceedings, aswell as a posterioricontrol of all workby local authorities2. Yves Lacoste,Géopolitique,Larousse, 2006,p. 227.creates overlapping areas of responsibilityin practically all fields. The central governmentuses this vagueness to retain most ofthe powers, leaving municipal authoritieswith only derisory duties.Reliance on conveniently vague laws typicallyresults in a paucity of financial resourcesfor local authorities, and theconcomitant restriction of the services localgovernments can realistically provide. Apartfrom Turkey, the only country in which localauthorities have decent (although not large)resources at their disposal is Palestine,where they keep up to 90% of the taxesthey collect plus income provided by nongovernmentorganizations (NGOs). In themajority of nations in the region, obtainingmoney for operations and services requiresunceasing appeals to the central government,or to the organizations that managenational finances. One result: increasinglevels of debt.A single figure is enough to describe thescale of the problem. Whereas the localgovernment share of public expenditurerepresents 20% of the gross domestic product(GDP) in OECD countries, money forlocal government averages only about 5%of GDP in the Arab countries.Furthermore, with the exception of Turkey,local authorities’ limited financial independenceis coupled with a priori administrativecontrol of local council proceedings, aswell as a posteriori control of all work bylocal authorities. Together, these two measuresensure complete control of local powersby central government.By contrast with Turkey, there is, in IslamicRepublic of Iran and Syria, ‘cascading’supervision of lower councils by higher councils.In Palestine repeated outbreaks of violenceoften make it impossible to submitmatters to the central power, leaving localauthorities with de facto autonomy.Local governance is underpinned by localdemocracy, which is itself boosted andsupported by civil society. Within the region,the voice of civil society is sometimeshesitant to make its opinions heard, andthis in turn has repercussions for decentralizationand local government.This trend toward centralization has experiencedan unprecedented intensificationsince the first Gulf War. In fact, because ofa particularly unstable geo-strategic situationdue to the upsurge of armed conflicts,the heightening of community and sectariantensions and the interplay of internationalpressure, the governments of theregion are haunted by the fear of thebreak-up of national entities. This is particularlythe case where the ethnic or religiousgroups in power are a minority, orcomprise a very slight majority. In IslamicRepublic of Iran, which is a mosaic of 80communities, 51% of the population is Persian;in Lebanon, 18 communities, eachwith a different religion, live together; Jordanhas a very strong Palestinian minority;and several countries in the region have alarge Kurdish community.II. Evolution of local governmentstructuresThe following table presents local governmentorganization in the region.Before going further with an analysis of theregion’s governmental structures and theirrecent evolution, it is necessary to emphasizethat Turkey is unique in this part of theworld. Turkey is included in this study of theNear East and Middle East because of itsgeographical location at the gates of theLevant, and its majority Muslim religion.However, as Yves Lacoste has stressed,“The North-South model experiences astumbling block in the very exceptional caseof Turkey” 2 . Turkey is a secular state adjacentto Europe, but most of its residents areIslamic. Turkey is geographically part of theMiddle East; its topography affects manyMiddle Eastern states, and has done so forcountless millennia. Within the frameworkof a secular state, Turkey is relatively cen-

205Table 1Administrative organizationCountry Population / land area Political regime Federal entities or Second tier Local levelautonomous regionsBahrainIran , Isl. Rep. 67.7 m 1,648,200 km 2GDP (per capita): 2,770 USDIraqJordanKuwaitLebanonOmanPalestine0.727 m 690 km 2GDP (per capita): 14,370 USD*26.5 m ** 438,320 km 2GDP (per capita): 928 USD***5.4 m 88,800 km 2GDP (per capita): 2,500 USD2.5 m 17,818 km 2GDP (per capita): 24,040 USD*3.6 m 10,452 km 2GDP (per capita): 6,180 USD2.6 m 309,500 km 2GDP (per capita): 9,070 USD*3.5 m5,842 km 2 (The West Bank)+365 km 2 (Gaza Strip)Constitutional monarchyIslamic republicParliamentary republicConstitutional monarchyAbsolute monarchy (Emirate)Parliamentary republicAbsolute monarchy (Sultanate)‘Palestinian Authority’KurdistanProvince (28)Department (314)RegionGovernorateDistrictGovernorate (12)Governorate (5)Region (6) (Mohafazah)Department (Caza)Governorate (14)(9 in the West Bank5 in the Gaza Strip)Municipality (12)City/town (931)Small townVillageMunicipalityMunicipality (99)MunicipalityMunicipality (930)Municipality (43)Municipality (74)(63 in the West Bank11 in the Gaza Strip)Qatar0.813 m 11,000 km 2GDP (per capita): 28,833 USD***Absolute monarchy (Emirate)Municipality (10)Saudi Arabia24.6 m 2,149,700 km 2GDP (per capita):11,770 USDAbsolute monarchyProvince (13)GovernorateCenter (A or B)Regional council (7)Principal council (5)Council (107)Group of villages (64)SyriaTurkeyUnited ArabEmiratesYemen19 m 185,180 km 2GDP (per capita): 1,380 USD72.6 m 783,820 km 2GDP (per capita): 4,710 USD4.5 m 83,600 km 2GDP (per capita): 23,770 USD*21 m 527.970 km 2GDP (per capita): 600 USDAuthoritarian presidentialrepublicParliamentary republicFederation of absolutemonarchies (Emirates)Authoritarian presidentialrepublicEmirates (7)Department (14)Special departmentaladministration (81)GovernoratesTown (107)Small town (248)Village (207)Rural unitMunicipality (3,519) 316 Metropolitan MunicipalitiesVillage (35,000)MunicipalityMunicipality (326)Provincial municipality (20)District municipality (326)Source: World Bank 2005, except: * Source: World Bank 2004. ** Source: World Bank 2003. *** Source: World Bank 20023. Beside these ordinary municipalities, the metropolitan municipalities provide urban services at themetropolitan level to ensure greater efficiency, as well as harmonization and coordination between municipaldistricts. The metropolitan municipalities supervise and provide assistance for district municipalities.

MIDDLE EAST / WESTERN ASIA206United Cities and Local GovernmentsTurkey is the onlypluralist seculardemocracy,and has alwaysattached greatimportance todeveloping itsrelations withEuropean countries4. These reforms alsofell within theframework of the‘Six Arrows’ asAtaturk’s generalnationalist policyaimed to ensure themodernization ofTurkey.tralized, but its local government system issubject to a constitutional jurisprudencethat is extraordinary in the region.Turkey is the only pluralist secular democracy,and has always attached great importanceto developing its relations withEuropean countries. Historically, Turkishculture has had a profound impact overmuch of Eastern and Southern Europe. Afterthe First World War and the proclamationof the Turkish Republic in 1923, theKemalism, to which the present Turkishstate is heir, deliberately distinguished itspolitical and social system from that of theArab countries. This was particularly emphasizedby the abolition of the Caliphateand the adoption of the Latin alphabet,modified only slightly 4 . Turkey’s moderndemocratic conception and acceptablyfunctional institutions present more contrastthan similarity to other Middle Easternnations. This contrast is no less apparent inregard to decentralization.II.1. The objectives of decentralizationBy means of constitutional and legislativereforms during the past ten years, all thecountries in the region have embarkedupon a change of direction toward increasedadministrative decentralization. However,far from being uniform, the underlyingmotives and results are quite different andwide-ranging.a) External factorsMembership of the European Union. As acountry where decentralizing reforms areincreasing in scale, Turkey has been motivatedby its desire to gain membership ofthe European Union, whose criteria formembership include respect for humanrights. It is therefore within the frameworkof the European Charter of Local Self-Government,signed in 1988 and ratified in1992, that this wide-ranging renovation ofstate structures – including new local governmentlaws and constitutional changes– is taking place.U.S.A. policy in the region. The United Statesmaintains a military presence in the region,particularly in Iraq. The promotion ofthe principles of « good governance » anddemocracy have become the declared USpolicy in the region. With the on-going supportof different countries, the United Statessustains its regional policy throughdirect and indirect means.Economic pressures. Along with political pressuresand within a context of neoconservativeglobalization, the non-petroleum-producingcountries – Lebanon, Jordan, and Palestine –face demands from international backers forthe restructuring, not only of their weak economies,but also of their societies. Thestrengthening or the establishment of localgovernment is one of the pillars of thesereforms in that it constitutes the first step inapplying the principles of good governance.b) Internal factorsInternal population pressure. Although civiliansociety is not accustomed to makingits voice heard, there has recently been anincreasing demand for local democracy bytwo groups whose interests converge onlyin this single area. Both appear to see inmoves toward democracy the means ofbringing victory to their overall concept ofthe state. One group, often referred to asradicals, wants a more rigid system of government.The other group, the intellectualelite, wants to establish real democracy. Anexample of this urging toward democracyis the 100 Saudi intellectuals who in January2003 presented the Crown Prince with apetition requesting changes; similar pressureled the Jordanian government to restorethe election of mayors by universal suffrage.Coming to terms with demands for autonomy.In the specific case of Iraq, where internalpressures are nationalist in nature,decentralization has enabled the granting ofextensive autonomy, including legislative powers,to Kurdistan. However, these powersdo not grant or imply independence for thatregion.

207The need for economic restructuring. With theexceptions of Turkey, Lebanon, Jordan, andYemen, the economies of the region arebased on oil; only Syria and Turkey can beconsidered industrialized countries.Yet the exhaustion of oil reserves in the nearfuture appears likely 5 . The governments ofoil-producing nations are therefore trying toanticipate a profound structural change intheir economies to facilitate rapid expansionof private initiative. This concerns Syria inparticular. Dubai, which does not have anyoil, but which benefits from oil revenuesthrough the federation of the Emirates, representsa striking example of success inthis type of restructuring.Restoring impetus to governance in general.After almost 30 years of systematicdestruction of Palestinian state structuresby Israel, the Palestinians, according tothe 1993 Oslo Accords, wanted to settheir state structures back on their feet inorder to construct a state. However, as itis impossible to establish a real centralgovernment inasmuch as there is no territorialcontinuity between the West Bankand the Gaza Strip, the only way of providingservices to the people and to enablethem to take effective action regardingthe affairs which concern them is throughthe local governments. This removal ofcentral authority has greatly increasedpublic confidence and trust in local Palestiniangovernment, the institution closestto its citizens.It is surprising that providing better publicservices is mentioned as a concern only inTurkey. One explanation may be that, forthis purpose, administrative decentralization(déconcentration) in Saudi Arabia, anda rather authoritarian management areperceived as quite effective. In fact, themanagement of the city of Dubai, which isa resounding success in terms of townplanning, infrastructure, economic development,and service provision, results solelyfrom the will of the Emir.II.2. Encouraging progressIn Turkey, where the decentralization processis most advanced, three new reforms 6were passed in 2004-2005. Furthermore,the 2005 union of municipalities’ law 7 willfinally make the villages a real tier of decentralization.It is now possible for the localauthorities, on their own initiative, toorganize referendums on specific local issues—an interesting system of directdemocracy.Likewise, Iraq’s 2004 constitution establishesdecentralization as a priority, (Iraq’s1990 constitution did not) devoting an entirechapter to “regions, governorates, andmunicipalities.” This document sanctionsthe autonomy of Kurdistan, which becomesa “region” with a regional government, parliament,and judicial authority. Moreover, itencourages the creation of regions by thegrouping together of governorates. In addition,and in contrast to other countries ofthe region, except Turkey, where administrativedecentralization (déconcentration)and delegation prevail, Iraq’s newconstitution organizes decentralization onthe basis of the administrative and financialautonomy of local authorities, includingregional and municipal councils 8 .Following this same trend, in 1999 IslamicRepublic of Iran finally achieved a longstandingreform: the elections of councils.This reform was first presented as far backas the 1907 Constitutional Revolution, andwas again championed after the revolutionof 1979. Some 92 years after it was firstproposed, this change took effect underthe presidency of the reformer Khatami.Another important reform is currently inprogress in Jordan, a country whose kinghas made good governance principles oneof the national objectives. This reform aimsto divide the country into three regions,each of which will have its own regionalparliament as well as local management ofits own affairs.5. On this subject, it isinteresting tocompare the officialfigures provided bythe governmentsand the large oilcompanies withthose provided byASPO.6. On the municipalities(no. 5393 of 3 July2005), on themetropolitanmunicipalities (no.5216 of 10 July2004) and on thespecialadministration ofthe department (lawno. 5302 of 22February 2005).7. Law no. 5355 of 26May 2005.8. In actual fact, this isonly really applied inthe north, inKurdistan.Elsewhere, the localauthorities onlyenjoy a weak levelof autonomy, and itis not uncommon tofind that municipalcouncilors andmayors areappointed directly.

MIDDLE EAST / WESTERN ASIA208United Cities and Local Governments9, Lebaneseconstitution, art. 17.10. Taëf Pact [III : A,art. 3].11, Id. Art. 412. Maire de quartier.This institutionexists in many Arabcountries, includingLebanon.13, Art. 50.14. Notice no. 1988/23of 22 June 1988 anddecision no.1988/19 of 13 June1988.15. Law no. 5302 of 4March 2005, art. 11.Lebanon used to have properly functioningmunicipal governance, but this lost all substanceduring the 1975-1990 war, as securityconcerns led to the centralizing of all serviceswithin the different ministries. Executivepower was concentrated 9 in the office of aPresident of the Republic, who was always aMaronite Christian. However, at the end ofthe war, the Taëf Pact, a constitutionallyvalid document signed to put an end to thewar, made more room for all communities.In the first place, executive power passed tothe Council of Ministers, whose membersrepresent different faiths in proportion totheir demographic importance. The documentalso mentions administrative decentralizationas one of the main areas forreform, thereby distinguishing itself fromthe constitution, which does not mention itat all. The new accord directs that “a moreextensive decentralization be adopted at thelevel of the smallest administrative units” 10and that “the municipalities, agglomerations,and unions of municipalities see theirresources strengthened by the provision ofthe necessary financial resources” 11 . Withinthis framework, it became far easier forlocal communities to voice their demandsfor a greater degree of self-government;the creation of 25 municipalities since 2004testifies to the acceptance of this reform athigh levels of the Lebanese state.In a similar case, the Palestinian Authority,which was formed as a result of the OsloAccords, was especially keen to proceed withthe strengthening of local government. Thepopulation naturally made these bodies itsfavorite forum for public expression ofdemands, including practical requests regardingservices. All this was in a situationwhere the increasingly weak states, or themokhtars 12 , who had lost the confidence ofthe population because of their suspect roleduring the occupation, were not in a positionto ensure the provision of services. As viablepower centers, these municipalities arebecoming increasingly autonomous.Two other cases also deserve mention. InBahrain the new constitution, promulgatedin 2002, states that 13 the law ”will do so asto ensure the independence of local authoritiesunder the supervision and directionof the State,” and “will do so as to ensurethat the local authorities are able to manageand supervise local affairs.” In SaudiArabia, the first election of half the municipalcouncilors was organized in 2005.Yet in Turkey the reform of the executivecommittees (encümen) –the entities responsiblefor municipal management– stillraises concerns. In fact, each tier of decentralization–Special Provincial Administrations(SPA), ordinary and metropolitanmunicipality and village– has a deliberativebody called a council, which is elected byuniversal suffrage. At the municipal andvillage level, the executive officer (themayor or the Muhtar respectively) is alsoelected by universal suffrage. On the otherhand, at the top provincial level is a governorappointed by the state. Moreover, eachcouncil works in conjunction with an executivebody called the ‘executive committee.’Before the reform, this executivecommittee was fully appointed in the metropolitanmunicipalities, fully elected inthe SPA and half was elected and half wasappointed in the ordinary municipalities.The new legislation directs that, withoutexception, half of all executive committeesmust be elected and half must be appointed.Although this measure is based on a managerialvision of local government management,the presence on an executivecommittee of members appointed by themayor or the governor runs counter to thefull exercise of local democracy and decentralization.It is, moreover, the interpretationthat the Turkish Constitutional Courtgave of it 14 in 1988: all deliberative bodiesmust be elected. It is therefore not impossiblethat these texts will be amended inthe near future.Likewise, according to the new law 15 , theSPA council now elects a chairman fromamong its own members. Although thischairman is responsible for the council agenda,it is the governor who stays at the

209head of the executive committee and whorepresents the SPA 16 .In Islamic Republic of Iran, the new lawregarding councils, which was adopted atits first reading by the Islamic ConsultativeAssembly, also seems intended to restrictthe councils’ room to maneuver.II.3. The persistence of the centralizedmodela) Central state supervisionThese advances toward further decentralizationare quite significant, even though, forthe most part, they are still reforms onpaper or are restricted to administrativedecentralization only. Most such reformsstill await the fiscal and economic decentralizationthat is essential for their implementation.Consequently, the standard systemof government in the region remainsstrongly centralized. Moreover, it bearsmentioning that some countries, such asOman and Qatar, do not even mention localpowers in their constitution. In Saudi Arabia,provisions for local governance are alsoabsent from the constitution; instead, theyare specified in a separate text, the 1992‘law on the provinces.’ Even this documentdoes not deal with municipalities. Rather itaddresses only provinces, all of which arecontrolled by princes of the royal family.Independent decision-making by localauthorities is allowed in Turkey, Palestine,and Iraq, but in other countries in theregion, real decisions are made only by higherauthorities, either a single designatedofficial or some lesser officials holdingpower through a complex of arcane laws.Where there is a clear, single channel ofauthority, municipalities are subject de factoand de jure to government authoritythrough their relevant ministry. This is thecase in Saudi Arabia, where local authoritiesare dependent on the Ministry of Rural andMunicipal Affairs. In Jordan, little can bedone without the backing of the territory’sgovernor; in Bahrain, Oman, and Lebanonup to 80% of the decisions must be checkedby the Ministry of the Interior, or by a governorwith regional executive powers.Other governments practice a more insidiousform of control. Under the guise of anominal freedom to make decisions, anarsenal of measures appreciably limit thedecision-making powers of local authorities.‘Cascading supervision.’ In Syria and IslamicRepublic of Iran, there is ‘cascading supervision’of lower-tier councils by higher-tiercouncils. In Islamic Republic of Iran, theconstitution specifies, moreover, that “theprovincial governors and the mayors […]must apply, within their jurisdiction, thedecisions of the Higher Provincial Council” 17 ,a fact that clearly calls into question publicprofessions of a desire for decentralization.The executive committees. Two countrieshave, in addition to local councils, municipallegislative bodies vested with executivepowers; these are called executive committeesin Turkey, executive bureaux in Syria.While the members of local councils areelected by the people, the members of executivecommittees or the executive bureaux,are appointed by more or less directprocedures 18 . In Turkey, the constitution 19defines local authorities as bodies that havea legal personality, and whose legislativebodies are elected. This, in fact, opens theway to the election of all or part of themembers of the executive committees, asmuch at the Special Provincial Administrationlevel as at the municipality level 20 .Syria’s case is slightly different. There athird of the members of the executive bodycan be recruited from outside the municipalcouncil –on the basis of criteria whichare far from clear.The ambivalent role of popular councils. Inaddition to the municipal councils, themahalle muhtarligi (neighborhood councils)chaired by a muhtar have existed in16. Id. Art. 25 et 29.17. Art. 103 ‘Of thepower [of the HigherProvincial Council]on localgovernment.’18. In Turkey, theappointed half of theexecutive council isselected by themayor from amongthe municipality’schief officers, withinthe framework ofthe ‘strong mayorsystem.’19. Art. 127.20. The TurkishConstitutional Courthas ruled that theexecutive councilsare governingbodies and that theirmembers must beelected.

MIDDLE EAST / WESTERN ASIA210United Cities and Local Governments21. Law no. 5393.22. ELISSAR SARROUH,DecentralizedGovernance forDevelopment in theArab States, reportpresented duringthe forum ongovernance in theArab states, Sana’a,6-9 September2003.Turkey since the Ottoman Empire. Theyare very similar to the Lebanese mokhtar.The role of these local community leaderswas made official by Article 9 of the newmunicipal law. 21 This law gives them officialfunctions, notably in the field of the registrationof births, marriages, and deaths,and in tax collection. In addition, theyensure contact with the municipality andrepresent their local community area onthe ‘town councils’ by passing on therequests and comments of the people fromtheir administrative area. Introduced bythe new municipal law, the “city council”–kent konseyi– is a consultative institution,an outcome brought by the success ofthe Turkey Local Agenda 21 Program. Thisconstitutes a unique mechanism of governancein Turkey that brings together thecentral government, local government andcivil society within a framework of partnership.In general, this participatorymechanism encompasses a broad spectrumof local stakeholders, representativesof working groups, neighborhood committees,women and youth councils.In other countries, however, authoritiesworking in parallel with the municipalcouncil can represent an important oppositionforce in the hands of the central government,particularly when they have thepotential to report on and perhaps slowdown the work of the municipal councils. Itis this second situation which applies forthe Syrian ‘popular organizations,’ whichrepresent various socio-professional categories,such as manual workers, farmers,and women, and which must make up atleast 60% of local councils. Furthermore,their elected representatives, even thosenot on the municipal council, have the rightto monitor their activities.b) The weight of the politicaland social systemThe report of the United Nations DevelopmentProgramme (UNDP) indicates that“the progress in the field of decentralizationin the Arab countries has been veryslow, particularly because of the unevenlevel of involvement in decentralizing reforms.”22 In fact, it is difficult not to see inthe persistent strong centralization a reluctanceon the part of the governments ofthe region to accept local governance andthe independence inherent therein.The refusal of a loss of sovereignty. Themain reason for government distrust of localgovernance is fear of a loss of sovereignty.Excluding Turkey, where powerbelongs to the institutions, governing traditionis based on the personal exercise ofpower, with the government, on its owninitiative, delegating a part to people of itsown choice. Given this context, to put inplace real decentralization would require acomplete overhaul of state structures,beginning in some cases with a separationof powers and election of legislative bodiesby universal suffrage.In the particular case of Lebanon, whichnevertheless satisfies these conditions, theonly area of agreement of the traditionalcommunity leaders is their wish to put abrake on the resumption of municipal governance.In fact, they consider local municipalauthorities to be usurping some oftheir prerogatives. They seem to believethat municipal authorities are only intendedto provide services for their supportersin exchange for their votes. This viciouscircle keeps the local councils in a state oflethargy. Members of parliament, who arethemselves traditional leaders or who oweallegiance to them, use their legislativeposition to gradually weaken the power ofthe municipalities.This analysis is equally valid for those stateswhere members of the ruling families,or those of a political party, or of a dominantmovement have all the power.The security factor. The other factor whichhinders the decentralization of the states issecurity. Some large fault-lines cross theregion, the main one being the communityorganization. In fact, the risk of subversion is

211far from negligible in those states with a largeShiite community, as in Saudi Arabia, Iraq,and Bahrain. Neither are Islamic Republic ofIran, Lebanon, and Iraq safe from implosion.The inertia of civilian society. Again exceptingTurkey, those in power are not alone intheir indifference to decentralization. In thegeneral population, it is mostly identifiablegroups who desire increased decentralization.Such groups include the culturedurban elite, extremist parties, and thosewho see it as a means to autonomy or evensovereign independence.Civilian society reduced to its most simpleexpression is typically comprised to a greateror lesser degree of client networks,which are perceived as being more efficientand more reliable than the state,sharp divisions among different culturaland religious communities, and a widespreadtradition of submission to centralauthority. Indeed, in this region the desirefor freedom is embodied far more in religionthan in politics, suggesting that thelarger citizenry plays an insignificant roleas a driving force for change. Evidence forthis is the absence of political parties insix of the 14 countries studied (Saudi Arabia,Bahrain, the United Arab Emirates,Kuwait, Oman and Qatar). In Jordan, politicalparties were not legalized until 1992.Further support for the weakness of politicalsystems for expressions of popular willcan also be seen in the rapid expansion ofradical religious movements. It is throughreligious organizations that we receivecalls for reform, the popular expression ofdemands that can not be voiced successfullyby political means.The influence of the religious factor. Mostof the countries in the region base theirlegislation on the Sharia. This is the case ofSaudi Arabia, (Const. art. 1), Bahrain (Art.2), Islamic Republic of Iran (Art. 2), Jordan(Art. 2), Kuwait (Art. 2), Oman (Art. 2),Qatar (Art. 2), and Yemen (Art. 3). TheSyrian Constitution establishes a slightnuance by indicating that “Islamic jurisprudencewill be one of the main sources oflegislation.” The exceptions are Turkey andIraq, which are secular states, and Lebanon,where a hybrid system entrusts privatelegal matters to the religious tribunals ofeach religious community, Christian orMuslim, but takes as its basis secular businessand public law.The original feature of Islam in comparisonwith other religions is that it provides guidancenot only on private life, but also onthe system of government. This, however,does not mean that its interpretation istotally unequivocal, and the two famousayets —“Consult them in the affairs whichconcern them” 23 and “Let them consulteach other” 24 — gives rise to a wide rangeof interpretations. It is on the narrowest ofthese interpretations that Saudi Arabia,Bahrain, and Oman have based their decisionto replace the legislative bodies with aconsultative assembly, the Majlis-al-Shura;the same ayets have, on the otherhand, given rise to the election of councilsin Islamic Republic of Iran and Jordan.The perception of a supranational identity.With the exception of Oman and Turkey, allthe countries of the region claim in theirconstitutions to be an “Arab nation,” (Bahrain,Jordan, Lebanon, Kuwait, Qatar,Syria, and Yemen), or an “Islamic nation”(Islamic Republic of Iran); both in the caseof Saudi Arabia. This is seen as the ultimategoal toward which the national structurewould be a stage. It is a question of thetranslation into political terms of the senseof belonging to the Umma (the communityof Islamic believers). This mythic identitywould in no case succeed in resulting in afederal reality, but it tells us a good dealabout religious aspirations and about thedominance of the group over the individual,and of global over local policy.Between necessary change and an inwardlookingidentity: Most of the countries ofthe region are recent in origin, and arecurrently grappling with two major trends:the wish for change and modernization,23. Koran, [3:159].24. Koran, [42:38].

MIDDLE EAST / WESTERN ASIA212United Cities and Local Governmentsand the influence of Islamic movements.Caught in the crossfire between globalizationand an inward-looking identity, andfaced with real threats of destabilization, anumber of leaders prefer to play the stabilitycard to the detriment of structuralreforms – all the more so because suchreforms are sometimes perceived as beingencouraged by the West.the different municipal councils that makeup the metropolitan municipality. If thisreform has indeed successfully strengthenedthe metropolitan municipalities’ rangeof activities, some balance remains. Onone side, a mayor elected by direct universalsuffrage; on the other, the presence ofmembers of the first-tier ordinary municipalitycouncils within his council.25. In decreasing orderof their population in2006: Teheran,Istanbul, Baghdad,Riyadh, Ankara,Ispahan, Jeddah,Amman, Izmir, Alep,Mashed, Damas,Kuwait, Beirut,Sana, Mosul, LaMecca, Damn,Dubai, Tabriz,Bursa, Gaza, Basra,Shiraz, Andana,Gaziantep. Qom andAhvaz.26. In Yemen 8% of thepopulation, in Syriaand in IslamicRepublic of Iran25%, in theEmirates 30%, inIraq 37%, inPalestine 38%, inSaudi Arabia 43%,in Jordan 46%, inLebanon 55% and inKuwait 72%.Bahrain, Oman andQatar don’t haveany city of morethan one millioninhabitants.27. Law no. 5216 of 10July 2004.II.4. Specific structures forthe organizationof the metropolitan citiesThe region of Western Asia/Middle East encompasses28 big cities of more than amillion people 25 . In 2006 these cities togetherhad 77.14 million people which represents37% of the whole population of theregion 26 .The metropolis experienced a veryfast growth: 10.6% between 2005 and 2006compared to only 2.56% experienced bythe population of the whole region.Only Turkey in 1984 granted its majorcities the special status of ‘metropolitanmunicipalities,’ a status that was reformedin 2004 27 . Turkey’s 16 metropolitan municipalitieshave a total population of 25.9million inhabitants –38% of the country’stotal population.This special political status enables Turkishcities to be run with comparative efficiency.Big cities are divided into two levels: theproper metropolitan municipality, and theordinary first-tier municipalities. Themetropolitan municipality is responsible forurban services: urban planning, largeparks and green areas, collection and disposalof household and industrial wastes,water, sewerage, natural gas and publictransportation, establishing and operatingmarketplaces for wholesalers and slaughterhouses,sports, leisure and large recreationareas.Nevertheless, the latest reform was keento encourage coordination and cooperationbetween the two levels, as well as amongIn other countries, there is no special statusfor big cities, although this has beendiscussed, but never undertaken in Jordan.Only Amman, Beirut, and Damascus havespecial status, and this only in matters ofsecurity. Their municipal councils areessentially deliberative bodies with no realpower.Regarding the organization of metropolises,some are based on a hierarchical model,e.g. a central municipality vested withthe executive authority and lower levelmunicipalities the functions of which aremainly licenses (such as delivering buildingpermits) and administrative work. This isthe case, for example, in Amman. Othersfollow a “horizontal” model, with equal status,as for example Mashad in Saudi Arabia.However, in most cases there are big citieswith a municipal council vested with executiveand legislative functions; there existsometimes inner city district municipalities,whose status goes from pure executivebodies (Tehran) to consultative bodies(Baghdad). In this case, surrounding municipalitieslocated in the metropolitan areaare subject to the regional authority (regionor governorate).The case of Dubai is exceptional. The managementof the city has been devised as foran enterprise, the head of which is a generaldirector.It is clear that, apart from the exceptions ofTurkey and some cities elsewhere, such asAmman and Dubai, the exponential deve-

213lopment of metropolises has taken authoritiesby surprise. Most have to establish anurban planning considering all aspects ofthis expansion, in particular socio-economicaspects.III. Responsibilities, managementand financesIII.1. Local authority financesThe lack of reliable data and the issue oftransparency. First, it must be acknowledgedthat obtaining reliable up-to-date dataon the finances of local authorities in thisregion is a formidable challenge. Severalfactors limit accessibility to pertinent data:Practical obstacles to data collection:• The lack of reliable data compiled inaccord with international standards;international organisations have notbeen able to publish comparative dataon public finance in relation to thecountries examined in this report.• Lack of training for municipal employeesin the principles of accountancy and inthe exacting standards of accuratebook-keeping.• Lack of computerization of data, althoughsome countries are on the righttrack.• In the case of Palestine, the destructionof the archives by Israel.Informal obstacles:• A tradition of secrecy that pervades theentire region.• Lack of cooperation from some municipalofficers.Few national governments in this regionhave demonstrated sufficient concern aboutaccounting practices to cause a discernabledecline in the widespread public perceptionof corruption. However, some progress isapparent in a few countries. In Lebanon,Prime Minister Fouad Sanioura introducedan annual independent audit of all the ministries,along with the computerization ofaccounting data. Jordan has become amember of the International Monetary Fund’sGovernment Data Dissemination Systemand has started to communicate verifiabledata. Saudi Arabia and Oman have alsostarted to publish their accounting data, andTurkey has achieved remarkable transparency,partly due to government efforts andpartly because of a citizens’ initiative called‘Society Follows the Budget.’The weakness of local taxation. In Turkey,local expenditure amounts to 4% of theGross Domestic Product (GDP), 75% of thisshare goes to the municipalities and 25% tothe SPAs. This is the highest share of GDP inthe region, except Jordan (which is 6%according to UN-POGAR).In Turkey, the Constitution and the lawsrequire the national government to contributeto the financing of local functions.State funding covers little more than 50%of municipal budgets; 55% of these statefunds represent a 6% share of nationaltaxes, redistributed to the municipalities inproportion to their population. Moreover,the metropolitan municipalities receive ashare of 4.1% of the taxes collected in theregion, revenues which in turn are redistributedto the metropolitan municipalityitself (55%) and to the municipalities(35%). A further 10% is allocated to waterand sanitation. In addition, 15% of themunicipal budget is paid as subsidies fromthe various ministries. National governmentsubsidies and transfers assure a more balanceddistribution of financial resources amonglocal governments throughout the country.The share of local taxes, those collectedwithin the municipalities’ own financial resourcebase, remains rather small, reachingonly 12.4%. To that are addedvarious taxes paid directly by the municipalities,including taxes on propertyownership, gambling, public shows and activities,as well as on electricity and gasconsumption. Although small, this localshare of tax revenue collected locally hasbeen increasing since 1988.

MIDDLE EAST / WESTERN ASIA214United Cities and Local Governments28. Figures provided bythe Bahrain FinanceMinistry.The system’s stumbling block is that localauthorities have no taxing rights, withthe exception of the tax on propertyownership, because they are members ofthe committee that fixes the tax base. Allthe rates, including those for the propertyownership tax, are fixed by thecentral government, in accordance witharticle 73 par. 3 of the constitution, whichstates that “All types of taxes and rightsare to be established by the law,” andthat the Council of Ministers can beempowered by law, and within the limitslaid down by law, to fix the exemptions,reductions and rates. Between 1980 and1990, the Constitutional Court deliveredseveral rulings which interpreted theseconstitutional provisions as meaning thetermination of any local authority taxingright.A bill currently under consideration predictsan increase in municipal and SPA revenuesas well as a real equalization; however, itstops short of granting taxing rights to thesebodies.In Lebanon, own taxation only reaches30% at best. However, the legislation since1992 has gone in the direction of reducingthis type of taxation, and replacing it withtaxes collected by central government –agood example of the political desire toweaken the municipalities. In Syria, localfinances can hardly be said to exist, as allpublic expenditure is included in the nationalbudget. Local governments receivefunding from central government for runningexpenses, to which unspent balancesare eventually returned (POGAR).Insufficient and haphazard resources. Oneof the recurring problems of the region’smunicipalities is the lack of resources,which prevents them from successfullycarrying out their functions. In Syria, Lebanon,Jordan, Palestine, and Yemen, themunicipalities are poor, or even very poor.In Jordan the total budgets of 99 municipalitiesincreased, in 2006, to 161 milliondollars.As we mentioned earlier, this is partly dueto weak or non-existent local taxing powers.The second problem is the low levelof state subsidies, which are haphazardand arbitrary. Most of the time, state fundingbarely covers operating expenses– sometimes not even that – in countriessuch as Jordan, Lebanon, and Palestine.This does not leave much leeway for investmentpotential or the financing of culturaland social activities. For that the municipalitieshave to rely on the good will ofwealthy locals (“evergets”) or people livingabroad. There are even local authoritiesthat are so deprived of decent resourcesthat the mayors are paid by central government,and all the services are providedby other bodies.Moreover, the financing of local authoritiesis under no circumstances considered to bea priority; services such as health, education,civil engineering, and water andpower supply, are run either by the ministriesor by centralized sector-based bodies.In Islamic Republic of Iran, the present lawon municipalities does not even mentionfinances. For that, the earlier law of 1982must be consulted. It is also perhaps interestingto note that in Bahrain’s annualbudget for 2006 28 , the items ‘Municipalities’and ‘Agriculture’ appear under theheading of ‘Miscellaneous,’ along with theupkeep of the royal stud farms.In Palestine, there was a slight improvementin 2002, since the mayors then obtainedthe right to collect directly taxes onfuels and road traffic, in addition to an educationtax, the only tax they were allowed tocollect directly until then. The PalestinianAuthority is supposed to pay back to themunicipalities 90% of these local taxes, butit does not do so. Result: the municipalitiesare becoming increasingly poor. Furthermore,Palestinian cities are not able tocollect taxes in the surrounding areas. Realistically,tax revenues can be collected onlyin villages, to which many people who nowlive abroad send money, or towns withlongstanding strong commercial activities.

215Until recently, 90% of local investmentexpenditure was funded by the PalestinianAuthority, thanks to funding from outsideorganizations, such as the World Bank, theEuropean Union for the urban areas, andthe UNPD for the rural areas, as well as bilateraltechnical aid from the G8 countries.However, unhappy about the recent takeoverby Hamas, most sources of outside fundinghave stopped all aid, and there is now amovement toward a fragmentation of services.Similarly, in Lebanon municipalities aresupposed to receive a percentage of revenuescollected by the electricity, telephone,and water services. This percentage is supposedto be redistributed to them by therelevant ministries in proportion to theamount collected in each geographicalarea. In reality, these ministerial organizationsreturn the money only in dribs anddrabs.In theory, a significant part of the municipalities’revenues comes from a percentageof tax revenues allocated to the statewhere they are managed by an organizationcalled the ‘Independent MunicipalFund’ 29 . However, this fund has never materializedso revenues payable to municipalitiesgo directly into the national treasury.By some estimates, in 2002 this represented0.75% of Lebanon’s GDP and 2% of thegeneral budget 30 . Despite the modest percentages,the money takes years to bepaid, and typically flows only after interventionby a local leader. The situation isimproving, but the state, bankrupt andheavily in debt, is still two years behind inits payments.Those municipalities with a theoretical rightto collect local taxes often encounter reluctanceamong citizens to pay the levy, howeverlegal the tax may be. Particularly inLebanon, Jordan, and Palestine, most localauthorities lack the means of compellingpayment. For a variety of practical, social,or security-linked reasons, tax collection isat best uncertain.The high level of municipal debt. Borrowingis standard practice for a modern localauthority, especially for infrastructure.Bahrain 31 and Kuwait 32 have included intheir constitutions provisions for municipalitiesto “take out, agree to, or secure aloan”. Such borrowing power is also possiblefor the executive body of municipaladministration in Islamic Republic of Iran,though not for the municipal councils.But such measures in municipal fundingcan lead to disaster, particularly when theyare used to compensate for a lack of operatingrevenue, when they are not used forinvestments, and when local authorities donot have the means to repay the loans.This is the case in Jordan and Palestine,and both countries are incurring increasinglyhigh levels of debt. Following theHamas election victory, the withdrawal ofinternational donors from Palestine, asproviders of direct financial assistance tolocal governments, led to the rapid deteriorationof the municipalities. In Lebanon,due to scarcity of fiscal resources, somemunicipal governments have to resort toadvance payments from the IndependentJoint Municipal Fund, which are disbursedat high interest rates.In Jordan, new measures address this borrowingcrisis. Where municipalities haveborrowed to cover operational costs, especiallysalaries, and are overwhelmed byinterest and service fees, the state haspaid off the loans. Thanks to a reduction ofabout 20% in its general administrativeexpenses, the government has wiped theslate clean for third- and fourth-classmunicipalities (the smallest), and has committeditself to do the same for the remaining27 municipalities by 2011.The increase in the need for public servicesin Turkish metropolitan municipalities hasled to an increasing level of debt. In 2002,this debt was the equivalent of 4% of theGDP –a full year’s revenue for the municipalities.However, there is no legal requirementthat municipalities balance their29. Established bydecree no. 1917 of 6April 1979.30. Al-Dawlyia lalMaalumet(InternationalJournal ofInformation).31. Art. 108, ‘On publiclending.’32. Const. Art. 136 and137. ‘On publiclending’ and ‘Onlocal authoritylending.’

MIDDLE EAST / WESTERN ASIA216United Cities and Local Governments33. Art. 47 andfollowing.34. The law ofSeptember 1997gives them adiscretionary powerin many sectors.budgets, and the state has always madeup the shortfall with agreeably flexibleloans from the Bank of the Provinces.State supervision of local authority finances.State monitoring of local authority financesis a normal, necessary and healthymeasure as it ensures that finances aremanaged not only efficiently, but also withintegrity. However, this monitoring shouldnot immobilize the decision-making process.In Lebanon, for example, three separateentities monitor public municipalfinances: the comptroller general, the auditor-general,and the State Audit Office. TheState Audit Office carries out a priori and aposteriori inspections of local authorityfinances, focusing particularly on municipalproperty management above a specifiedthreshold, the signing of public contracts,public works, and service provision. Ineffect, such oversight power negates localgovernmental autonomy for municipalities.Jordan, Saudi Arabia, and Bahrain havesimilar systems; budgets are proposed bymunicipal councils, but the councils can notvote to approve their budgets.With the aim of reconciling decentralizationand the careful management of municipalfinances, Turkey has set up a supervisionsystem based on internal bodies calledaudit committees. These consist of fromthree to five council members who must beelected annually by their respective municipalcouncils in towns with more than10,000 inhabitants, and the SPAs. Theirrole is to provide a check on the incomeand expenditure of local authorities. Assuch, they make up a form of democraticcounterweight to the established authority,particularly in those places where themayor is both the municipality’s highestauthority and the official with the power toauthorize expenditure.A posteriori checks are carried out, as in anymodern country, by the State Audit Office.This lack of resources, combined with theirincapacity to implement the areas of responsibilitythat they have been allocated, makeslocal authorities dependent on the state,transforming them into central governmentgo-betweens. The central government alsomanages in an authoritarian and arbitraryway the money that is actually distributed tolocal treasuries. Unequal distribution isoften the rule rather than the exception. Forexample, the money allocated for streetcleaning in just the city of Amman amountsto a third of the entire budget for all Jordanianmunicipalities. In a similar case, overthe past few years the Lebanese governmenthas withdrawn huge amounts of moneyfrom the Independent Municipal Fund topay for street cleaning in metropolitan Beirut.In the same way equalization is nonexistentin numerous countries,such as Jordanand Lebanon.III.2. ResponsibilitiesIII.2.1. Extensive theoretical areasof responsibilityIn most countries in this region, municipalitieshave official responsibility for a widerange of tasks, including infrastructure andmany human services. On paper, municipalitiesare responsible for highways, publicbuildings and drains, outdoor lighting, andwaste collection, and also health, education,culture, sports, and social services. Lebanon’slaw on municipalities 33 gives municipalcouncils extensive prerogatives in all theseareas, including the support of destitute anddisabled people. Similarly, the Palestinianand Jordanian municipalities 34 are supposedto have, respectively, 27 and 39 differentareas of responsibility.III.2.2. A reality often out of stepwith the legislationHowever, in many countries, there is a gapbetween legislation and its implementation.Many factors prevent municipalitiesfrom meeting their official responsibilities.The overlapping of areas of responsibilitywith central government. In Saudi Arabia,the Ministry of Rural and Municipal Affairshas drawn up a very precise list of munici-

217palities’ areas of responsibility 35 . In Oman,the Ministry of Regional Municipalities,Water, and the Environment has done thesame. But several national constitutionsremain vague on the subject, mentioningonly the major sectors of planning, health,and education: or nothing at all. Where theyexist, ordinary laws and statutory instrumentsfor their implementation retain thislegal vagueness. The predictable result isoverlapping of areas of responsibility, whichis highly prejudicial to the efficiency of localgovernment work.Again, Turkey provides the exception. Therea modus vivendi seems to have been establishedbetween the municipalities andthe Special Provincial Administrations (SPAs),with each providing services according toits ability. Such is the case for environmentalconcerns shared by municipalitiesand the National Administration for theProtection of the Environment, and alsofor collective housing issues addressedjointly by local authorities and the NationalAdministration for Collective Housing.The distribution of responsibilities is alsoorganized on a territorial basis. In territorieswhere there is a metropolitan municipality,the municipality is responsible formost services; this accounts for the presentexplosion in expenditure. This alsooccurs within the administrative area of anormal municipality; in areas not dependenton either, the SPAs are responsible forproviding services. The recently legislatedreorganization of responsabilities has alsocontributed to this development.Unlike Lebanon and Jordan, Turkey does nothave a general competence clause of municipalities.At the present time, the main responsibilitiesof local bodies, particularly themunicipalities, are urban planning, publictransport and communications, water supply,sanitation, and the treatment of solid waste.Law no. 5302 added economic action, althoughwhat exactly this covers is less clearfor municipalities than for SPAs. The law alsoconfirmed the pre-existing situation of theinvolvement of the municipalities in themaintenance of school buildings and the provisionof the necessary supplies. However,the provision permitting municipalities toopen preschool establishments was suspendedby the Constitutional Court 36 on thegrounds that this runs counter to the spirit ofthe constitution, for which education isstrictly a state prerogative.Everywhere else, almost all the responsibilitiesare carried out by the central governmentthrough its ministries, leaving themunicipalities only planning tasks and basicfunctions such as lighting, drainage, highwaymaintenance, and waste collection. Ofcourse, there are exceptions, most notablyJordan where 13 essential service responsibilitieswere taken away from the municipalitiesby the law of 1995. Beirut, Lebanon, isalso a special case. There the provincialgovernor has executive power, the municipalcouncil being a deliberative body. Also inLebanon, the mokhtar has supplanted mostmunicipal authorities in the registration ofbirths, marriages, and deaths. It should benoted that this is the mokhtar’s only real responsibility,though in theory their remit 37covers public order, health, and education.In Jordan, some of the responsibilities thathave been taken away from the municipalitieshave been taken over by private nationaland foreign companies. Similarly, in Lebanonthe state has begun to sign contracts directly,not only without the consent of the municipalities,but sometimes without even informingthem. Such was the case with contracts forstreet cleaning, public lighting, and streetpaving in Beirut and Mount Lebanon. Themoney for these contracts is directly withdrawnby the state from the funds of the theoreticalIndependent Municipal Fund. Hopefor more profitable public services inducedPalestine’s central government to enlist theprivate sector to manage services that requirea high level of investment for infrastructureconstruction and maintenance —water,electricity, and sanitation.Administrative checking and central governmentsupervision. In a decentralized coun-35. For the precise list,see the ‘SaudiCommerce andEconomic Review’,November 2004. Itcan nevertheless benoted that streetcleaning, publichealth, townplanning, (viceministerof townplanning) and themaintenance ofpublic buildings,public transport, andtraffic management(Department ofTransport and TrafficPlanning) all comeunder the authorityof the Ministry ofRural and MunicipalAffairs, with waterdistributioninfrastructures andthe building ofsewers beingadministered by aspecial service thathas seven regionalbranches.36. Notice no. 2005/14.37. Art. 25 and followingof the law on themokhtar.

MIDDLE EAST / WESTERN ASIA218United Cities and Local Governments38. ABDELGHENI IMAD,Municipal elections,Jarrous Press, p. 20.try, the state exercises three checks onlocal decisions: legal, financial and administrative.When this type of checking iscarried out a posteriori it is the sign of astate that is concerned about good localmanagement. On the other hand, checksconducted a priori entail the infringementon local autonomy; this is so, even whensome local authorities – particularly thosein Lebanon – who are faced with depletedresources, interpret it as a sign of protectionand guarantee.Taking a broader perspective, two fairlydistinct systems emerge in the region. InSaudi Arabia, Kuwait, and Oman, municipalitiesare branches of their controllingministry, though they occasionally functionas go-betweens. Elsewhere in the region,laws and regulations delineate a minimal,quasi-autonomous status for local authorities,albeit with significant political and financialconstraints.We have seen how much a priori financialmonitoring weighs heavily on the autonomyof municipalities, preventing them fromperforming their functions. Similarly, withthe exception of Turkey, municipal councildiscussions are also subject to a priori monitoringby the central government or byone of its representatives, such as the provincialgovernor in both Lebanon and Jordan.Technically, this monitoring of virtuallyall discussions may even be illegal in somecountries where it occurs routinely. Indeed,in Jordan and Lebanon, the constitutionsstate in almost identical terms that all localaffairs must be managed by the municipalcouncils. Yet in Lebanon, on average only20% of municipal council decisions areimmediately enforceable, 33% require theprior approval of the provincial or regionalgovernor, and 47% need approval from theMinistry of the Interior and the Municipalities38 .In a similar way, local councils in IslamicRepublic of Iran rely on the Higher ProvincialCouncil, an assembly of all the local representatives,to convey concerns to nationalauthorities. The Higher Provisional Councilis responsible for the monitoring and coordinationof the lesser councils. It also draftsbills that concern local authorities, and presentsthe bills to the National Assembly.In Turkey, on the other hand, central governmentsupervision has been reduced bythe latest reforms, with the provincialgovernor no longer having direct controlover council proceedings or their finances.His powers are now restricted to submittinga case to the administrative tribunalwhen there is a suspicion of malpractice. Inaddition, within the framework of a newmanagerial vision of municipal management,the new laws emphasize theimportance of a performance audit basedon modern audit methods, rather than on alegality oversight.The comparative administrative autonomy oflocal governments in Palestine is offset bysignificant fiscal control by the central government.Communication difficulties makecentralized administrative control impractical,but most financial resources flow downwardfrom the central authorities.In Syria, Islamic Republic of Iran and SaudiArabia, there is an additional administrativecheck in the form of an electoral systemrequiring that candidates for local posts beapproved by an ad hoc electoral committee;this could be called an ‘absolute apriori check’ since it takes place prior tothe discussions themselves.The security factor. The Palestinian Authority’sexclusive powers apply only to 20% of itsterritory (the category A areas, which aremainly urban), the rest being run jointly withIsrael or by Israel alone. As a result, themunicipalities only rarely see their decisions,whether about urban planning or tax collection,applied in their area. The use of lawenforcement personified by the PalestinianPolice is subject to the prior authorization ofIsrael, which retains control of the vast majorityof the rural areas. In addition, everythingto do with heavy infrastructures and land use

219planning is dependent on an outside body:the State of Israel.On the whole, local authorities throughoutthe region have only nominal, if not fake,autonomy. At best, national leaders eitherretain a traditional concept of the role oflocal authorities, or consider them unable todeliver higher-quality services; at worst, theydo not want them to gain increased importance.As usual, the exception is Turkey, where acertain number of responsibilities are actuallycarried out – some since the latest law – bydecentralized local authorities.III.2.3. External solutions to the municipalframeworkThe myriad formal and informal arrangementsthat prevent local governments inthe region from representing their citizensin a meaningful way, lead with little surpriseto increasing interest in alternativemeans of civic participation.Unions of municipalities. Some municipalitiesin Palestine and Lebanon have sought asolution in the pooling of their resources. InPalestine, for example, ‘Joint Service Councils’have been set up by the Ministry of LocalGovernment to construct and run communalinfrastructures. This has obvious appeal tothe mayors of small local communities, butworries city authorities. The higher municipalauthorities understandably fear the lossof their prerogatives, and would rather bringpooling activities to a halt. In Lebanon, onthe other hand, it is the lack of resourceswhich prevents the communities of municipalitiesfrom functioning, as state subsidiesare never fully paid out.In Turkey, where the municipalities work well,inter-municipal cooperation occurs primarilyin rural areas where there is a marked shortageof skilled administrative personnel. The2005 reform 39 reorganized inter-municipalorganizations, making them a new tier of decentralization,with the responsibilities recentlygranted to the Special ProvincialAdministrations and with a proper budget.This reform should lead to an improvementand increased local management of servicesin the rural areas. Thanks to these, all Turkishvillages should benefit, before the endof 2007, from water supply, drainage, andaccess roads. There are two types of cooperativestructures: unions of municipalitiesand unions for irrigation.Neighborhood committees. During the Israelioccupation in Palestine, Palestinian neighborhoodcommittees were gradually createdto deal with those services that would ordinarilybe provided by municipalities. They stillcontinue to provide some services, such aswaste collection, in the Al Mahâta area ofKhan Younès in the Gaza Strip, for example.This system exists also in Iraq, where in thecity of Basra 170 local informal committeessustain the municipal council not elected to bedistributed food and fuel.In Turkey, on the other hand, the neighborhoodcommittee consists of a traditionalstructure organized by the latest law as adirect link between the inhabitants and themunicipality.Private benefactors. Despite the informaland seemingly haphazard nature of privateaid, private benefactors (“evergets”) havealways played an important role in MiddleEastern municipal life, Turkey again excepted.At times private funds make up for stateinadequacies, but more often private benefactorsprovide cultural and social services.Primarily in Palestine and Lebanon, thoughsporadically throughout the Middle East,most municipalities are reduced to relying onprivate benefactors for grants for schools,health centers and some hospitals, freemeals, and cultural centers. During the July2006 war in Lebanon, traditional leaders andbusinessmen took responsibility for financingthe reconstruction of bridges.III.3. Administrative capacitiesAfter finances, recruitment methods and trainingfor local government employees is theleast transparent administrative element. It isdifficult, if not impossible, to obtain precise,39. Law no. 5355 of 26May 2005.

MIDDLE EAST / WESTERN ASIA220United Cities and Local Governments40. Law on themunicipalities inLebanon, art. 88.reliable figures on the people employed bylocal authorities. A tradition of patronagemakes such information especially difficult toobtain. However, certain major trends arebecoming apparent.Central government supervision. In Lebanon,only lesser municipalities are permittedto draw up their own organizationcharts 40 . Government employees in provincialcapitals and in important towns arepublic servants dependent upon the NationalCouncil of the Public Service, whichanswers directly to the Prime Minister. InJordan the recruitment of public sectoremployees, for which the Civil Service Officeis responsible, has been decentralized,to each governorate, by the creation ofcouncils run by the governor.In the countries where some or all municipalcouncillors are appointed by the centralgovernment, they are public servants inthe service of the central government;municipal employees who report to themcannot therefore be considered localgovernment personnel. This has been thecase in Saudi Arabia, Jordan, and Kuwaitsince the last elections in those countries.The issue of the training of local governmentstaff. The lack of training for mostlocal authority employees is a serious impedimentto efficiency. Aware of this, severalcountries of the region, with theencouragement of the UNPD, have launchedextensive training programs for localgovernment personnel.In Saudi Arabia, the ‘Municipal Chairmen’sPerformance Improvement Service,’ a specialdepartment of the Ministry of Rural andMunicipal Affairs, has created a program toimprove the skills of municipal personnel,and to encourage their geographical mobility.This is taking place within the frameworkof a long-standing training programfor public servants. The number of thosewho have received training has risen from12,649 in 1989 to 23,056 in 2004, andnearly doubled to 43,132 in 2005.In Turkey, a new municipal law sets deadlinesfor payment of salaries, and fixes aceiling for staff expenditure, making it thepersonal responsibility of the mayor if theselimits are exceeded. At the same time,municipalities have been given more flexibilityin their staffing structure.Jordan too launched a series of training programsafter an assessment showed thatlack of skills and low productivity amongmunicipal employees was slowing the generalrestructuring of the municipalities.By contrast, Lebanon has effectively imposeda freeze on municipal hiring since1975. True, a 1977 law on the municipalitiesdirected the Minister of the Interior toorganize training seminars for local employees,but it also seems that nothing substantivehas been done since. An indicatorof decline in the public sector is the averageage of local municipal employees: 55years. As a result, the number of localgovernment employees is insufficient, as italso is in all branches of the civil service.In Syria, as in most countries in the region,skilled people are moving out of localauthority jobs, and into the private sectorwhere pay and career prospects are muchbetter.Malfunctioning recruitment methods. Manylocal authorities actively circumvent arcaneofficial hiring regulations. Instead, they hireincreasing numbers of local people on shorttermcontracts. In principle, this strategyallows the municipalities to have more localmanagement of their affairs.Practices in Turkey are illustrative. Althoughrecruitment of public servants hasa high priority in the national legislature,and a competitive examination has beenestablished for government employment,the number of official public servants hasremained more or less stable. At thesame time, the number of temporaryworkers, most of whom are not well-qualified,and are employed for an average of

221one year, is steadily increasing. From1995 to 2003, the percentage of temporarymunicipal employees increased from21.4% to 35%. These temporary workerscan be far more easily taken on and dismissed.Throughout the region, the recruitment ofmunicipal employees is not done on thebasis of their skills and experience, but ratherthrough patronage based on politicalor community factors.This practice results in an excess of staff,many of whom are poorly qualified or unqualified.Officials simply award jobs in localgovernment as a means of establishingtheir personal influence. Though to somedegree ubiquitous, this practice is especiallycommon in Lebanon and Jordan.Inefficiency is by no means the only harmfuleffect of pervasive nepotism and patronage.Such practices perpetuate a systemof corruption whereby the person who providedthe job expects favors in return. Theperception of corruption is strong in theregion. When citizens in a 2002 Turkish surveyassessed their confidence in localauthorities at only 5.2 out of 10, the nationalgovernment was moved to create aspecial ethics committee to investigate corruption,and three new laws 41 were passedto address the situation. But this requires astrong political will. It should also be notedthat the countries that obtain the best scoresregarding corruption are also those,such as Dubai, with the most visibly proactivestate policies.IV.Local democracyIV.1. A changing local democracyTable 2 summarizes significant advances inlocal democracy in the Middle East region.Note that if the local elections in somecountries are based on specially devisedelection law, they are still in the process ofdevelopment.In Saudi Arabia, Prince Mansour Bin Mitab,a firm supporter and the main organizer ofmunicipal elections, did not hesitate todescribe them as the first stage, emphasizingthat improvements are still needed,including women having the right to vote.As evidence of the newness of the election,the electoral districts themselves had to bedrawn up after the registration of voters onelectoral lists.Jordan, since the first local elections in1999, has been going backward and forward.The government went back on thenomination of mayors in 2003, but promisedto hold new elections on the basis ofuniversal suffrage before the beginning of2007 – except in the city of Amman, whichhas special status. There were until now360 appointed council members comparedwith 920 who are elected. The numberof municipalities has been reduced frommore than 300 to 99. With the new municipallaw of 2007, all council members areelected, except in Amman. Indeed, themunicipal elections took place on the 31stof July 2007; about 2,300 candidates ranfor 1,022 seats.In Lebanon, the election by universal suffrageof mayors and their senior deputies wasabolished just before the 1998 elections byan amendment in extremis of election law.Mayors are now elected by the municipalcouncil.In Palestine, the voting method is not fixed.Since 2005, when municipal elections wereconducted in five successive stages, therehave been changes to the procedure, passingfrom voting for a single candidate toproportional representation. Moreover, theright to vote is not the same throughout thePalestinian territories. In the Gaza Strip, allrefugees can vote, regardless of their placeof residence; in the West Bank, refugeeswho live in the towns take part in the voting,but those who still live in the refugee campsindicate their wish to return to their homelandby unanimously keeping well awayfrom local political life.41. Law no. 3628 of 4May 1990 amendedby law no. 5020 of26 December 2003,law no. 5237 of 26September 2004 ofthe penal code.

MIDDLE EAST / WESTERN ASIA222 United Cities and Local GovernmentsTable 2The lack of a democratic traditionCountry Date of the last local council elections Date of the first election of a municipal council Political partiesSaudi Arabia20051963 in Riyadh – but no elections between 1963 and 2005 (First electionon a national scale)NoBahrain20061921 in some towns – but no elections between 1921 and 2002 (Firstelection on a national scale)NoUnited ArabEmiratesNo electionsNo electionsNoIraq2004 (Dhi Qar province)2000 & 2001 (Kurdistan)*1999 (Rest of Iraq)1869 – but no elections between 1957 and 1999*YesIran Islamic Rep. 20061999YesJordan20031878 42 – but no elections between 1957 and 1989Yes (since 1992)Kuwait2006 (partial)1932NoLebanon20041878– but no elections between 1963** and 1998(2001 for the villages in the south)YesOmanNo electionsNo municipalitiesNoPalestine20051927No elections between 1934 (Gaza Strip) or 1976 (West Bank) and 2005YesQatar20031999NoSyria2003***1878 – but no free elections between 1972 and 2007***YesTurkey20041856 (for Istanbul); 1878 (for Ottoman Empire);1930 (for the Republic of Turkey)YesYemen20062001Yes42. This refers to municipalelections held in certainmunicipalities of theOttoman Empire in1878 in accordance withthe Law on Municipalitiesin the Provincesof 18 May 1877.* February 2000 for the areas dominated by the Kurdish Patriotic Union andMay 2001 for those areas under the control of the Kurdish Democratic Party.** First significant municipal elections carried out on a national scale.*** That is to say without a closed list.

223Syria, where the municipal councillors havelong been elected by universal suffrage, nowwants to move toward real pluralist localdemocracy. The 2007 reform law stipulatesthat people may elect the candidates of theirchoice, and not, as has been the case so far,just one from a list drawn up by the NationalProgressive Front –a coalition led by theBaath party currently in power.IV.2. Partially kept promises:the central state and local politicsThe only two states in the region wherethere is absolute centralization are the UnitedArab Emirates and Oman. There are noelections in these two states, though thepossibility of introducing elections is beingconsidered on an official level.Municipal elections have been establishedin all the other countries. For all that, seculartraditions, which are more based on thevoluntary ‘consultation’ by the sovereignthan on the sovereignty of the people, arenot easy to circumvent. The electoral processin many places is still marked by centralgovernment intervention.a) A prior state interventionNominations. The clearest and most officialtype of intervention is, of course, thenomination of all or part of a municipalcouncil, including mayors. This is presentlythe case in Saudi Arabia, Jordan, Bahrain,and Kuwait.In Syria, as we have seen, it is the existenceof an ‘executive council’ or ‘executivebureau’ parallel to the municipal councilwhich embodies this central control.Prior examination of the candidates. Anotherform of interference is the prior examinationof the candidates by the central power. Thispermits the central government to effectivelysteer the election in a particular direction.It is this process that caused theextraordinary length (from February to mid-December) of the 2005 elections in SaudiArabia. In Islamic Republic of Iran, candidatesare accepted only after an examinationvalidates the intensity of their faith, or theirbelief in the authority of a jurisconsult, theVelâyat-é-Faghih – a situation which continuesto arouse strong suspicion. In Syria,according to the present law, the party inpower compiles the list of candidates.Election into office. This type of electionlimits the number of candidates to the numberof vacant posts, ensuring that all candidateswill attain public office. Seen as acost-saving measure, it is reserved for unusualcircumstances. When, on the otherhand, it is the result of pre-electoral bargaining,it can be detrimental to the exercise ofsocially aware democratic principles.Pre-election arrangements influenced Lebanon’smost recent elections; 121 municipalcouncils and 400 mokhtar were elected intooffice following an alliance between the politicalparties and traditional leaders; ineffect, the two factions merged. In Jordan, asimilar approach was observed in 17 municipalities.b) A posteriori interventionThe modification of municipal councils. InJordan in 1999, the king changed the compositionof municipal councils to include awoman in each of them – a rather positiveaction. By contrast, in Kuwait in 1986, theEmir simply dissolved all the municipalcouncils.In Syria, once the local councils are elected,they in their turn elect an executivebureau; a third of the executive bureaucandidates can be recruited from the localcouncils themselves. Furthermore, after anelection, certain specific public servicerelatedissues can be placed in the handsof permanent or temporary committeesthat include people from outside the municipalgovernment.Intervention in the election of the mayor.This form of tutelage of the State is

MIDDLE EAST / WESTERN ASIA224United Cities and Local Governments43. www.transparency.org.44. The right to votewas given to womenin 1948 in Syria,in 1952 in Lebanon,in 1963 in IslamicRepublic of Iran,in 1967 in Yemen,in 1973 in Bahrain,in 1974 in Jordan,and in 1980 in Iraq.harmful to democracy and to good governance.In Lebanon, the abandonment ofdirect elections has contributed to thistutelage.IV.3. The people’s participationPalestine’s 2005 elections were the first in71 years in the Gaza Strip, and the firstelections in 29 years in the West Bank.Voter turnout was extraordinary: averageturnout was 82% and rose to 98% in certainareas. The elections were widely perceivedas the restoration of the right of thePalestinian people to self-determinationafter years of the systematic destruction oftheir state structures.In Turkey also, the turnout percentage isgenerally quite strong, proof of the population’sinvolvement in local life. In 2004,average voter turnout reached 72.3%.In the rest of the region, voter turnout ismuch lower. There are two main reasonsfor this. The first is the widespread perceptionthat the game is corrupt. Thesecond, which must not be underestimated,is public disappointment with mostof its elected officials. When dishonesty isexpected, whether by pre-election selectionof candidates with reserved seats —the case in Saudi Arabia and Syria — orby manipulation of election results oreven election law, turnout is apt to decline.Allegations of corruption were particularlystrident in Yemen after the lastelection there; the Shiites of Saudi Arabia,and most Lebanese elected officialsare widely suspected of cheating. InLebanon, however, low overall turnoutfigures (33.3%) can mask wide disparitiesin local turnout, depending uponwhat is at stake or the extent of candidates’mobilization. Thus, the low figure ofa 21.4% turnout in Beirut contrastsstarkly with the 70% turnout in theBekaa, and the 65% turnout in Nabatiah;in both high-turnout areas, the mainbeneficiary of the surge in participationwas Hezbollah. The second reason, voterdisappointment with the outcome of previousballots, or the subsequent ineffectivenessof elected officials, does take atoll. Disillusionment with elected officialsand the process by which they come topower has been noted especially in Jordanand Islamic Republic of Iran.However, voter disinterest can vanishwhen the vote is perceived as an expressionof popular demand or a form of approbation.The 2006 municipal elections inBahrain thus had a turnout — a clear increase— of 72% because of the involvementof the Shiites. Similar elections in IslamicRepublic of Iran saw a 60% turnout becauseof immense discontent with the policiesof President Ahmadinejad.IV.4. A specific problem:the representation of womenA low representation. Unsurprisingly, in its2005 report Transparency Internationalseverely criticizes the Middle East as beingthe region of the world where the politicalrepresentation and participation of womenis the lowest 43 .Turkish women were given the right to votein 1930, and since 1934 the right to beelected 44 . Saudi women, on the otherhand, will only be given the right to vote in2009, whereas nothing of the kind is plannedin the Emirates. Kuwaiti women obtainedthe right to vote in 2005.Elsewhere, their representation figures arederisory, hardly reaching 2% of the municipalcouncils in Lebanon, 1.53% in IslamicRepublic of Iran, 3.4% in Qatar, 6.6 % inSyria, and an unabashed 0% in Bahrain.In most of these countries, entering thepolitical arena requires strong-willed womenat a time when merely working outsidethe home is still discouraged. Womenwho want to take part in politics often faceextremely difficult social factors, such asfamily opposition and public disapproval.Some allege that women also must overco-

225me the reluctance of party managers toaccept women, but in all fairness, such maleintransigence is hardly unique to the MiddleEast.Steps towards the participation of women.Faced with a glaring lack of femalerepresentation in local and national politicallife, several strategies have beenput in place. The quota system, which isapplied in Palestine, reserves a minimumof two seats per council forwomen 45 . Jordan and Kuwait have chosenthe direct nomination of one womanper council. At the same time, importantcampaigns in favor of women have beenlaunched in Jordan and Syria.Thus, municipal councils throughout theregion face enormous difficulties, leading,in some instances, to their resignation,as in Jordan; in other countries,an even larger number of councils haverenounced any form of concrete action.IV.5. Local elections as an ideologicaland community platformIf it is necessary and healthy that acountry’s political life should rest onnationally constituted parties, it is notdesirable that national issues overridelocal concerns. Municipal elections are,after all, intended to create an efficientlocal authority management.Lebanon provides an illustrative example.Although the number of nationalparties is negligible, elections are welland truly fought on religious communityissues which are national in scope.A curious development is the way inwhich local elections can become aforum for banned national parties or factions.Because local elections are consideredless of a threat to the centralgovernment, they may not be as tightlycontrolled as national elections. Localelections therefore present an opportunityfor disapproved or illegal partiesand ideologies to appear on the ballot,overwhelming local issues with far morepotent national matters. Such was thecase in Palestine when Hamas triumphed,and in Saudi Arabia when Shiitesof the Eastern Province boasted ofhaving won the election in their regionalstronghold. Similarly, the victory of Hezbollahin South Lebanon used local electionsto effect a national change, and inIslamic Republic of Iran the 2003 municipalelections in Tehran led to thereturn of the conservatives, and particularlyof President Ahmadinejad, the city’smayor. Ironically, the 2006 municipalelections rejected his policies throughoutthe country, with the populationgoing to the polls on a massive scale inorder to vote for the opposition. Thiswas also the situation in Bahrain, whichwas the scene of a very strong Shiiteupsurge in November 2006.IV.6. The role of the security factorand the delicate situationof the governmentsThe religious community issue. Manycountries are currently the scene ofdeep-seated tensions, some attributableto the merging of religion and politics,others to centuries-old feuds betweenIslam’s Shiite and Sunni communities.The latter is especially important wherethe Sunni have held power for a longtime in spite of the presence of a strongShiite minority, or indeed a majority, asin Lebanon, Iraq, and Bahrain. SaudiArabia’s government contends with aShiite community that could deliver a20% turnout – not the 5-15% which isgenerally reported. The central governmentthere exercised strong controlduring the election in the Eastern Provincewhere the Shiites are a clearmajority, and where, it is useful to note,there are important oil-fields. Likewise,the King of Bahrain faces the risk of destabilizationby the Shiite majority there,as the results of the recent parliamentaryelections showed.45. There are 15 seatsin the cities, 13 inmedium-sized townsand 8 in small townsaccording to theelectoral law of1996, amended in2005.

MIDDLE EAST / WESTERN ASIA226United Cities and Local GovernmentsThe risk of destabilization is real. This is whythe Lebanese and Iranian governments (thePersians in Islamic Republic of Iran are onlyin a majority of 51%) exercise such strongcontrol over local governance.Kurdish nationalism. The recognition ofKurdistan by the transitional Iraqi government,and the granting of extensive autonomywhich even includes legislation,gave hope to the Kurdish communities inneighboring Syria and Turkey. It is clearthat municipal elections provide a convenientmeans for Kurdish people in thosetwo countries to agitate for a degree ofautonomy comparable to that granted inIraq.Religious extremism. The other factorwhich must not be neglected is the rise ofhard-line religious extremism. Such religiousfanaticism characterizes several factionsof fundamentalist Islam. Theiravowed goal is to establish regimes basedon a particularly narrow reading of religioustexts. These groups are not onlyopposed to secular governments, but alsoto those that, like Saudi Arabia and Jordan,are already governed by the Sharia. Eventhese officially Islamic states are perceivedby fundamentalists as being too inclinedtoward westernization. Some fundamentalistsin Saudi Arabia refuse to vote in legislativeelections because, they say, “God isthe only dispenser of law.”

227V. ConclusionWhat emerges from this study is that decentralization,understood as the devolutionof responsibilities, and financial anddecision-making self-government, is notyet completely operational in the countriesof the region, with the exception of Turkey.Currently, the majority of municipalitieshave little room for maneuver, subject asthey are to a twofold dependency – formaland informal - on the State and traditionalleaders.At the same time, one should take intoaccount the social organization and securityenvironment of the region. Limited progressin the processes of decentralization shouldbe considered in the overall context of tensionsand conflicts, in the relations betweentraditional leaders, either tribal or religiousbased,as well as in relation to the populationat large.All these factors help explain UNDP-POGAR’s 46 more prudent approach to changethat advocates a gradual pace of reform aspart of a comprehensive strategy of restructuringof the State, beginning with thestrengthening of national legislatures. Broadawareness campaigns on local governanceand effective institutions are also key.Problems in service delivery and weak localmanagement functions in general need to beaddressed, as underlined by UNDP POGAR,through the development and strengtheningof local capacities as well as of transparency.The success of decentralization efforts dependson the selection and training of municipalcivil servants and employees. Thatrequires special focus and attention.Local governments should be equipped withthe adequate means to carry out their tasksi.e. the necessary fiscal and budgetary resourcesaccompanied by the transfer of independentdecision-making authority.Finally, although many countries in the regionare on the right track towards decentralization,it will take some time beforethese processes become fully operational.46. See:www.pogar.org/governance/localgov.asp.

MIDDLE EAST / WESTERN ASIA228 United Cities and Local GovernmentsAnnex 1Great metropolises of the regionCountry Number of Total % % Increase Existence Municipal organizationlarge cities population of population population of total of a(more than the three of the of the country municipal1 M. largest cities, country country population specificinhabitants) 2006 (in M. in 2006 in 2005 2005-2006 structureinhabitants) (1) (in %) in the threelargestcitiesIraq310,8337%N/A2,8%NoOne single municipality and councils as advisorsin Baghdad and Basra districtsIran, Islamic Rep.717,2725%23%0,0%NoOne single municipality with a main municipalityand many councils and district municipalitiesunder the first levelJordan11,934%24%1,8%No, butpossiblereform for thelarge citiesAmman has a metropolitan structureKuwait12,0272%71%3,7%NoOnly one municipal councilLebanon11,9755%50%0,8%NoOne single municipality, but for security reasonsthe ‘Prefect’ has the powerPalestine11,4338%25%5,6%NoOne single municipalitySaudi ArabiaSyria4210,864,8743%25%36%25%2,4%2,6%NoNoa) One municipality which supervises manymunicipalities of district on administrativematters only (Riyadh and Jeddah)b) one single municipality (Mecca and Damman)One single municipality with the administrationin the districtsTurkey622,0130%26%1,4%YesMetropolitan municipalities and others of first levelUnited ArabEmirates11,4230%29%4,4%NoUnique structure : Dubai is managed as anenterprise under a ‘General Director’Yemen11,929%9%2,9%NoSpecial status for the Sana governorateTotal2877,1437 %10,6%2,56%Source:World Bank Indicators.

229Annex 2 Local democracyMunicipal councils Executive local authorityCountry 4Form of One or Number of Participation Mayor Mayor Mayor Power in Number of Indictment byscrutiny several periods and estimates elected elected appointed hands of the periods and the citizens or(proportional / electoral duration of by vote by the by Mayor or in a duration of by themajority districts the terms municipal a superior collegiate the terms municipalcouncil authority body councilBahrain Majority Several 4 years 72% for 2006 No No Yes (Ministry MHHE) (3) Ministry MHME 4 years No(increasing) 51,3% for 2002Iraq (5) Variable Var. Var. 79% in Kurdistan in 2001 Var. Var. Var. Var. Var. Var.Iran, Islamic Rep. Relative majority Unique 4 years 60% 2006 No Yes (6) No Mayor 4 years Yes by the(increasing) 49.96% 2003 Municipal Council (7)Jordan Majority Several 4 years 58 % in 2003 (decreasing) No No Yes (8) Municipal council 4 years NoKuwait (9) Majority Several 4 years 50% (decreasing) No Yes No Mayor 4 years NoLebanon Majority Unique 6 years 33,3% in 2004 (decreasing) No Yes No Mayor (In Beirut 6 years Yes, by the Municipal(unlimited) the governor) unlimited (10) Council after 3 yearsOman NA NA NA NA NA NA NA NA NA NAPalestine Proportional (11) Several 5 years 82 % in 2005 No Yes No (12) Yes 5 years Yes by the MunicipalCouncil (by offence) (13)Qatar (14) Majority Several 4 years 30% in 2003 (decreasing) No Yes No MMAA 4 years No (15)(at first round)Saudi Arabia Majority Several 4 years (1) 40% in 2005 (2) No No Yes (The King) Mayor 4 years NoSyria (16) (List of candidates Unique except 4 years 29,3% in 2003 No No (18) Yes, Ministry of Municipal 4 years Nowith fixed seats) Damasc and Alep (decreasing) (17) Municipal Affairs Council (19)Turkey Proportional Unique 5 years 71,75 % mayors 69.97% Yes (relative No No (20) Mayor 5 years Evaluation every year bymetropolitan mayors majority, less than 3 / 4of councils or(65% in 2004) one round) motion of indictement by 3 / United Arab - - - - - (4) - - - -EmiratesYemen Majority Unique 5 years 65% No No Yes by Ministry of local Mayor 5 years Noadministration (21)NOTES1. Only half of the councils are elected, the rest areappointed.2. About 18% of the potential voters, one third of themis registered in the electoral lists.3. Ministry of Housing, Municipalities and Environment.General Director.4. A Sharjah only, but the Municipal Council itself is notelected.5. There are several situations: Municipal Councils chosenamong the Ministry of Municipalities and PublicWorks employees (MMPW) Basra; elected by universalvote, Baghdad; chosen by a group of importantcitizens, Mosul.6. Accumulation of jobs is forbidden for Minister, Viceminister, Congress Deputy and Director of Bank orDirector of other public entity.7. Article 73 of the Municipal Council Law. The Councilcan accuse the Mayor who has to present hisarguments in 10 days. The Council then decides if heis removed or not.8. Ministry of Municipal, Rural and Environment Affairs.9. In each Council 10 members are electedand 6 are appointed.10. The election of the Mayor and that of the Mokharstake place together.11. The number 5 Law of 1996 for the councils’ electionwas amended in 2004 and twice in 2005. Frommajority, the scrutiny became proportional.12. From 1976 to 1993 a great proportion of the Mayorswere appointed by Israel.13. But the destitution has to be approved by the localInterior Ministry.14. There is only one Municipal Council for all the country15. Only by decision of the Minister of Municipal and RuralAffairs.16. But a new more liberal law will be passed in 2007.17. 21% in cities, 34% in small towns and 33% in verysmall villages, while 66% in 1999.18. It should be done according to the new law19.It is in fact a council of the city.20.But the Executive Council has elected and appointedmembers.21. The government has to approve it.

NORTH AMERICA(CANADA AND THE UNITED STATES)JEFFERE Y SELLER S

NORTH AMERICA232 United Cities and Local Governments

233I. IntroductionThis chapter compares local governmentand decentralization in Canada and theUnited States. These two North Americancountries share important, parallel inheritances.Both are settler societies that emergedout of British colonialization. The similaritiesin their local government systemshave frequently led to their classificationtogether (Hesse and Sharpe 1991; Sellers2006, 2007), and with other countries withsimilar legacies such as Australia and NewZealand.Both countries are established constitutionaldemocracies with federal structuresof government. Both possess highly developedeconomies and have in commonlegal, institutional and cultural legaciesfrom British colonization from the seventeenthto the nineteenth centuries. Othercolonial and pre-colonial legacies alsomark the practice of local government incertain areas of each country. Most notably,French influences have been strongin the Canadian province of Québec, andhave also affected aspects of institutionalpractice in Louisiana in the U.S. In partsof each country, indigenous traditions remainimportant to local government practice.Local government in both countries wasestablished in the original British coloniesprior to the creation of a national government.The arrangements for local governmentin what would become New Englandin the United States grew directly fromthose in early colonial settlements. InCanada, provincial acts of the 1840s and1850s established the framework of localgovernment prior to the Constitution Actof 1867.Although present-day local government inthese countries can possess considerablepowers, it lacks either national constitutionalprotections or a legislated grant of autonomy.What powers local governmentshave received have come from either nationallegislation or measures taken byindividual states or provinces. In bothfederal countries local government is acreature of federal states, provinces, orterritories. In Canada and a number of U.S.states, state legislatures determine thecontent and powers of local government.The main exceptions are provisions insome U.S. state constitutions for localgovernment powers. In the United States,approximately half of these documentsspecify some general power for localgovernments.Institutional practice in these countriesalso reflects the legacies of the Britishultra vires principal that limits the generalpurpose authority of local governments.The “Dillon Rule” in the United States –theprinciple that local governments cannotclaim powers beyond those specificallygranted by the state legislatures—providesa good example. Thirty-one of the fiftyU.S. states continue to apply Dillon’s Ruleto all municipalities, and eight further statesapply it to some but not all types ofmunicipalities (Richardson, Gough andPuentes 2003: 17). Increasingly, however,exceptions to this principle have beenintroduced. Beginning in the nineteenthcentury, U.S. states legislated guaranteesof general local government authority in“home rule” legislation as well as in stateconstitutions. This trend continued up tothe 1990s. As a result, local governmentin all but three states has some degree ofhome-rule powers, and 28 U.S. stateshave broad powers that in some casesamount to grants of full local autonomy totreat local affairs (USACIR 1993). InCanada, in 1994 in Alberta, in 1999 in BritishColumbia and, since 2000 in Ontarioand Québec have also given broaderpowers to localities, even as larger citiescontinue to call for additional institutionalizedlocal powers.These variations reflect another way thatlocal government in the United States, andto a lesser degree Canada, differs fromthat of many other countries. Because dif-Institutionalpractice in thesecountries alsoreflects thelegacies of theBritish ultra viresprincipal that limitsthe generalpurpose authorityof localgovernments

NORTH AMERICA234United Cities and Local GovernmentsThe evolution of local governmentstructures in Canada and the United Statesneeds to be understood in relation to thedistinctive model of local decentralizationthat has long prevailed in these countriesferent U.S. states have established avariety of legislative frameworks, there aresome fifty American local governmentsystems. Even within states, the diversityof local arrangements has produced moreheterogeneous systems of local institutionsthan elsewhere. Most of the largest citiesin the United States, as well as Montreal,Winnipeg, Vancouver and Saint John inCanada, have individual charters fromtheir respective state or provincial governments.Expansion of localpowers has beenonly one of severallocal governmentreforms. Along withenhanced localpowers, legislationin both countrieshas articulated localresponsibilities in greater detail, and hasspecified mechanisms for accountability in avariety of specific functional domains, suchas local educational services, environmentalregulation, and planning. In the United Statesbut much less frequently in Canada, privatizationhas emerged as a more recurrentstrategy in service delivery. In various ways,local governments have also evolved practicesto address the growing horizontal interconnectednessof localities and regions. InCanada these reforms have often taken theform of inter-governmental consolidation ormetropolitan governance; in the United States,informal inter-local cooperation andspecial district governance have proliferated.In both countries, state or provincial governmentsas well as local governmentsthemselves, have been the sources of reforms.The extent of recent reform generallyhas fallen short of the comprehensivereforms passed in New Zealand or parallelreforms in Australia. But local governmentsin Canada and the United Statesalready possessed many of the powers recentlygiven to local governments in thetwo Australasian nations.II. Local Government Structuresand Their EvolutionThe evolution of local government structuresin Canada and the United States needs tobe understood in relation to the distinctivemodel of local decentralization that haslong prevailed in these countries. On theone hand, the national and other higher levelgovernments have generally grantedlocal governments limited legal authoritycompared with that permitted in continentalEuropean countries, and less financialsupport from above. On the other hand,local governments are also less subject tothe direct local supervision of territorialfield offices or prefectures, and enjoy highlevels of local fiscal autonomy comparedwith counterparts in Europe and Asia(Sellers 2006; Sellers and Lidström 2007).In recent years, the elaboration of policymakingin North America, both at local andhigher levels, has changed this model inseveral functional areas. Higher levelgovernments have introduced new responsibilitiesin many of these areas. Althoughthis trend can be seen as a move towardcentralization in one sense, new activitiesand often new powers and fiscal resourcesfor local governments have often accompaniedit.Local government takes a variety of forms,with a different nomenclature in eachcountry (Table 1). In the United States,local government in many states has atleast two traditional tiers of government:counties and towns. Counties play animportant role in every state outside ofNew England as major providers of generalservices like courts, jails, land records,welfare, health, and roads. A number ofeastern and Midwestern U.S. states havealso maintained an intermediate level oftown or township governments betweencounties and municipalities. The legal statusof the town level varies considerablyaccording to state laws. In Canada countiesand their equivalents generally haveless power and are only present in someprovinces, but the types of municipalities

235Table 1Governmental and Country CharacteristicsName Canada United StatesInhabitants (thousands) 31,362 288,205Area (km2) 9,984,670 9,631,420Inhabitants/km2 3 30GDP/capita € 35,758 € 42,623National Federal Government Federal GovernmentIntermediate Provinces (10), States (50)Territories (3)Local:Upper Tier: Counties, Regions, Counties (3,034),Districts (199)consolidated CitiesLower Tier: Cities, Towns, Townships/towns (some states) (16,504)Villages,Municipalities (Cities, Boroughs,Townships (3731) Villages) (19,429)Special Districts (48,558)Note: Population and GDP data for 2002; Area (land and water) for 2006; Canada (Upper tier), United States),2006 (Canada (lower tier).Sources: (area) CIA World Factbook (retrieved December 10, 2006 athttps://www.cia.gov/cia/publications/factbook/geos/us.html); (population and GDP) OECD Statistics Portal(retrieved December 10, 2006 athttp://www.oecd.org/statsportal/0,2639,en_2825_293564_1_1_1_1_1,00.html); (governments) Rivard andCollin 2006, p. 5; Commonwealth Local Government Forum 2002a, p. 2; Commonwealth Local GovernmentForum 2002b, p. 3; U.S. Census Bureau (2002), p. 3.vary widely. Single-tier local governmentspredominate in all but three provinces ofCanada, Ontario, Québec, and British Columbia.Local government consolidation andinter-local governance. Recent trendstoward new regional arrangements or localgovernment consolidation in much of Europehave had mixed resonance in NorthAmerica. Part of the reason for this may bethe roles that established governmentalunits –Canadian provinces and territories,U.S. states, and U.S. counties and townships–have played in providing regionaland inter-local governance. Especially inthe United States, informal and specializedinter-governmental arrangements haveoften taken the place of formal and general-purposeinstitutions.In Canada, consolidation of local governmentunits took place in Québec, NovaScotia, Ontario and a number of metropolitanregions since 2000 (Rivard and Collin2006). More recent initiatives have rolledback some of these reforms in Québec andelsewhere. In the United States, the

NORTH AMERICA236United Cities and Local Governmentsdegree of consolidation has always variedwidely by regions. In recent decades consolidationand annexation of territory bylocal governments have been commonplacein faster growing areas of the South andWest, but have remained more limited orexceptional in the Northeast and otherareas of older settlement. On the whole,recent counter-trends toward creation ofnew municipalities have offset countertrendstoward consolidation. From 1992to 2002, the number of municipal governmentsincreased by 150 to 16,504 (U.S.Bureau of the Census 1992, 2002).Much more than in Canada and other countries, inter-localgovernance in the United States has taken place throughseparate, special-purpose district governments that areindependent of local governmentsLocal government consolidation has beenonly one of several types of arrangementsthat could foster inter-local governancewithin metropolitan regions. Anupper tier of local government or a newform of functional cooperation amongmunicipalities may also provide mechanismsfor this task. Practical moves inthis direction over the past decade havetaken a variety of forms.Canadian provinces and municipalitieshave undertaken some of the most far-reachingreforms in metropolitan governance.Mainly in eastern Canada, reorganizationsin most metropolitan areas haveproduced more encompassing metropolitanunits of governance. Alongside theconsolidations of municipalities, regionalbodies have been formed in three provinces,and metropolitan planning initiativeshave taken place in a number of the largestmetropolitan areas (Rivard and Collin).Such a move is less apparent in the UnitedStates. Only a few of the large metropolitanareas, such as Portland, Oregon,and Minneapolis-St. Paul in Minnesota,have developed distinct metropolitan institutions.County governments like KingCounty in metropolitan Seattle, Washington,and Pima County in metropolitanPhoenix, Arizona, have encompassed largeportions of the metropolitan area, andhave often addressed issues on a metropolitanscale. In a few small-to-mid-sizedmetropolitan areas, such as Jacksonville,Florida, and Sacramento, California, consolidationof city government into countygovernment has created what amountsto a metropolitan government (Lelandand Thurmaier 2004). Advisory regionalcouncils of governments, a legacy offederal requirements for transportationplanning, frequently provide a basis forcoordination of planning issues. Moststates also authorize cooperation amonglocal governments (Richardson, Goughand Puentes 2003).Much more than in Canada and other countries,inter-local governance in the UnitedStates has taken place through separate,special-purpose district governments thatare independent of local governments.The largest number of these (13,506 in2002) administered separate public schoolsystems across the country. Others dealwith water and sewers, hospital services ortransportation. Although the total numberof these districts (48,588), as counted bythe U.S. Census of Governments, exceedsthe number of traditional local governments(35,933), the actual number of specialty,inter-local districts is probablyhigher. The number of school districtsdeclined slightly (900) from 1992 to 2002,typically due to consolidation among municipalitieswithin metropolitan areas. Butthe number of other special districts increasedby 3,500 over the same period. InCanada too, most primary and secondaryeducation is administered by school boardsindependent of local government, and anumber of agencies, boards, and commissionssee to special functions jointly sharedamong municipalities. Unlike their U.S.,counterparts, however, these boards donot have independent powers of taxation.

237Decentralization has attracted the mostcritical attention in the United Stateswhere both local government powers andlocal geo-political fragmentation haveremained extensive. Patterns of localgovernance there have been found toexacerbate inequalities among de factosegregated groups by means of inequalitiesin local services (Joassert-Marcelli,Musso and Wolch 2001; Blakely 2000). Inparticular, inequalities in educationalopportunities in the United States havegenerated widespread debate and manyreform initiatives.The wider effects of regional integrationbetween North American countries for localgovernance are difficult to discern, andless pronounced than the consequences ofcross-border integration across Europe.The most notable impact has occurred inthe cross-border regions of Cascadia in thePacific Northwest mainly between the provincialand state governments (e.g., Blatter2001).III. Functions, Managementand FinanceIII.1. FinanceIn terms of its place in public expenditures,public finance and functions, localgovernment in Canada and the U.S.,occupies an average place within thespectrum of developed countries. In theTable 2Financial managementAustralia Canada New Zealand United StatesTotal Public Expenditure (% of GDP) 37% 42% 42% 35%(per capita) (Euros) € 11,486.56 € 13,717.90 € 9,692.57 € 14,507.04Local Public Expenditure (% of GDP) 2.4% 7.5% 3.9% 9.6%(per capita) (Euros) € 275.68 € 1,031.16 € 380.50 € 1,386.30Local/Total Public Expenditure (%) 6.6% 17.8% 9.4% 27.4%Local/Total Public Investment (%) 6% NA 16% 8%Local Revenues:Local taxes (% of local revenues) 38% 41% 58% 38%Property tax (% of local taxes) 100% 92% 91% 72%Local tax autonomy (0 (high) - 2(low)) 0.34 0.12 0.43 0.82Grants (% of local revenues) 16% 40% 10% 39%Sources: (Public expenditure) OECD in Figures 2005; (Local expenditure) IMF Government Finance Statistics (Australia, Canada, US: 2001, NewZealand: 2003); (Local Revenues, Taxes and Grants) IMF Government Finance Statistics (Australia, Canada: 2001; US: 2000; NewZealand: 2003): (Local tax autonomy, Supervision of borrowing) Sellers and Lidström 2007, Table 4; (public investment) U.S. Bureau of theCensus, 2005 Statistical Abstract of U.S. Section 9; Compendium of Government Finances: 2002 Table 1; (Australia and New Zealand)Brilliantes et al. 2007, Table 4.

NORTH AMERICA238United Cities and Local GovernmentsUnited States, the role of local governmenthas generally been more pronounced, but inCanada that role still exceeds local governmentpowers in other countries with similarBritish colonial legacies, including Australiaand New Zealand. The relative discretionthat North American local governmentsexercise over their own finances, and themodest supervision by higher governmentofficials also set local government in bothcountries apart from most of their counterpartsworldwide, including in Europe andEast Asia.In both countries local governments have in recent yearsfound themselves less reliant on grants from higher levelgovernments for local revenuesExpenditures. Overall, the proportion ofGross Domestic Product (GDP) devoted togovernmental expenditure in Canada andthe U.S., remains somewhat lower than theaverage for the OECD (Table 2). The localgovernment portion of this expenditure,though it varies considerably, also remainsbelow levels reported for Northern Europe.In Canada and the United States, 18% and27%, respectively, of public expenditurewas distributed to local governments. Thebulk of these distributions is spent on education.Education consumes 57% of all localexpenditure in the United States, and 40%in Canada. Security services such as policeand fire represent about eight percent oflocal expenditures in the United States, ninepercent in Canada. In both countries, localpublic expenditures as a percentage of thetotal public expenditure have also creptupward slightly in recent years.Revenues. Locally raised revenue pays formost educational and security expenditures.As in other former British colonies,such as Australia and New Zealand, theproperty tax remains by far the mostimportant source of local governmentrevenue. In Canada, it has generated 80%to 90% of all local tax revenues. In theUnited States, partly in the wake of taxpayerresistance in some states, other localtaxes, such as sales taxes, income taxes anduser fees grew from 22% of local tax revenuesin 1975 to 28% in 1999. Even so, theproperty tax has continued to supply 72% oflocal tax revenues (OECD 2001).A distinguishing feature of the propertytaxes, as well as most other local taxesin these countries is the comparativelylarge degree of discretion local authoritiespossess in setting rates and inassessing property. Ratings of local taxautonomy consistently show this discretionto be high compared with that seen inother countries. In the United States, thelaws of some individual states restrict localinitiatives to raise taxes or change assessmentsby requiring prior approval by localvoters. In Canada, setting these rates isalmost always left to the discretion of localgovernment but subject to control by theprovinces.In both countries local governments havein recent years found themselves lessreliant on grants from higher level governmentsfor local revenues. In the UnitedStates and Canada, state or provincialgrants for education and other servicesremain considerable but modest by comparisonwith many other OECD countries.The current 39 percent of total revenues inthe U.S. represents a decline from levels ofup to 45 percent in the late 1970s, but hasfluctuated over the 1990s and early 2000s.The current 40 percent in Canada representsa decline from levels as high as 50percent in the late 1970s, down 2 or 3%from levels in the 1980s (OECD 2001).Revenues in relation to tasks. Despitedwindling access to funds from above, aswell as local opposition to tax increases,local governments in Canada and the UnitedStates have assumed more responsibilities.Additional areas of responsibility thatare increasingly being delegated to localgovernments include: environmental regulation,planning, transportation, publichealth, immigration, education, emergency

239preparedness and security. Even so, the fiscalautonomy of local government in thesecountries makes local governments especiallyvulnerable to unfunded mandates.Higher-level governments sometimes contributefunds for these added tasks throughlegislation and new policies. But higher-upscan impose such tasks without contributingfunds, leaving local governments to cope asbest they can.In Canada, the Federation of CanadianMunicipalities has noted an increase in thedelegation of responsibilities to municipalities.Although the local government portionof expenditures remained stablerelative to the provincial level from 1990 to2000 – increasing in some provinces butdeclining in others (Diaz 2003) – local revenuesas a percentage of the whole havedecreased. In the United States, despitethe federal Unfunded Mandates Act of1995, the federal government has imposedsuch measures as the No Child Left BehindAct of 2002, which gave state governmentsincentives to administer regular tests asmeasures of performance for public schools.The resulting programs in many statesgave rise to accusations that the Act reallyjust forced school districts to abandon moreworthwhile programs in order to provide resourcesfor the new standardized tests.Local government borrowing. In theface of such pressures, there have beenshifts in restrictions on local borrowing.This practice has been most widespread inthe United States (Sbragia 1988).Although often conditioned upon localvoter approval, borrowing by local governmentsis subject to approval by a higherlevel government in only one state. InCanada, local borrowing sometimes generallyrequires approval by a provincialboard, and has been more limited. In bothNorth American countries, local governmentshave also turned to user fees andother charges to supplement revenues.III.2. FunctionsThe limited role of local government in theoverall public expenditure and revenue ofthese countries reflects limits in the functionsthat local government has assumed.With the exceptions of local education andpublic safety, local governments continueto play a subsidiary role to central andintermediate level governments in the broadrun of public policies (Table 3). In recentTable 3Local Government FunctionsFunctions Australia Canada New Zealand United StatesPlanningHousing State, Local Province, Local (DS) Central, Territorial (DS) Federal, Local (DS)Town Planning Local Province (DS), Local Regional LocalAgriculture land planning State Province, Local (DS) Local State (DS), Local (DS)Regional Planning Local Regional State (DS), Local (DS)EducationPre-School State Province Central Local (DS)Primary State Province Central LocalSecondary State Province Central LocalVocational and Technical State Province Central State, LocalHigher Education Federal, State Federal Central State

NORTH AMERICA240 United Cities and Local GovernmentsTable 3Adult Education State Province Central State, LocalOther State CentralProvision of Social ServicesKindergarten and Nursery State Province Central State, Local (DS)Family Welfare Services State Province Central Federal, State, LocalWelfare Homes State, Local (DS) Province, Local (DS) CentralSocial Security Federal Province Central FederalOthersProvision of Health ServicesTerritorial (DS)Primary Care Federal Province Central (Private)Hospital State Province Central Federal, Local (DS)Health Protection Federal, State, Local Federal, Province Central, Territorial Federal, State, Local (DS)Mental Hospital State Province Central StateWater SupplyWater and Sanitation State, Local Local Territorial Local (DS)Water supply State, Local (DS) Province, Local Territorial Local (DS)Energy SupplyGas Services State Province Central, Regional Local (DS)Electricity State Province Territorial (DS) Local (DS)Public TransportRoads State Local Central, Territorial FederalTransport State Local Central, Regional, Territorial State, LocalUrban Roads State, Local Local Territorial State, LocalUrban Public Transport Local Local Territorial State, Local (DS)Ports State Federal, Province, Local Territorial (DS) Local (DS)Airports State Federal, Province, Local Central(DS), Territorial(DS) Federal, Local (DS)Other transportationBusiness Development SupportFederal, Local (DS)Agriculture, forests, and Fisheries Federal, Province, Local (DS) Federal, Province Central, Territorial (DS) Federal, StateEconomic Promotion Federal, Province, Local (DS) Province, Local Central(DS), Territorial(DS) State, Local (DS)Trade and Industry Federal, Province, Local (DS) Federal, Province Central (DS) Federal, State, Local (DS)Tourism Federal, Province, Local (DS) Federal, Province, Local Cen(DS), Reg(DS), Terr(DS) State, Local (DS)Other Economic Services Federal, Province, Local (DS) Central(DS), Territorial(DS) Local (DS)SecurityLocal Government Functions (Continued)Police State Local (generally) Central, Regional LocalFire State Province, Local Regional, Local LocalDS: Discretionary Services by the local authority. For Australia, provinces includes territories.Sources: Commonwealth Local Government Forum (2002a, 2002b, 2002c); Stephens and Wikstrom. 2000, p. 156; supplemented by author’sresearch on government websites.

241years, however, local governments havebecome more active in a wide range ofpolicy domains in both countries, mirroringcertain global trends. The most widespreadtrend has been toward the growth of multilevelgovernance as both local governmentsand higher-level governmentsassume new roles in areas where theywere less active before.Local government functions. Local governmentsin Canada and the UnitedStates take on certain functions that areunusual in most established democracies.The greater local expenditure in the NorthAmerican nations stems largely from localgovernment responsibilities in educationand public safety. In the United States,individual states assign to local governmentsresponsibility for primary, secondaryand pre-school education, as well as forpolice and public safety. These traditionalareas of local responsibility have becomemore complex in recent years, but haveremained comparatively stable in recentdecades.Canadian provinces and U.S. states varywidely in their responses to other functionsrelegated to local government. Severalprovinces and states, for instance, havetheir own policies for land use and agriculturalplanning; others have set down specificmandates for local planners to follow. Inmost states and provinces, however, planningremains predominantly a local function.Provision of health and social servicesalso varies. Some states and provinceshave enacted legislation that gives localitiesmore responsibility for welfare services,hospitals and other matters.Ontario, for instance, assigns localitiesauthority for administering social securityand kindergartens; other provinces do not.Environmental services, planning, buildingpermits, land use, sanitation, and refusecollection usually require some local responsibility,as they do in many countries.Even road maintenance may require somelocal government participation, especiallyin urban areas in Canada. In both countries,cultural services, such as museums,may also fall to local government alongwith some responsibility for local infrastructure,and fire protection or health services.Over the past four decades, there has beena gradual expansion in the number andtypes of responsibilities local governmentshave taken on. However, most have involvedsome sharing of responsibilitieswith higher government tiers. In severaldomains where local governments havebecome more active, such as environmentalpolicy, waste management, publichealth, and transportation, authorities atthe national, provincial or state level mayplay as decisive a role as local authorities.Shifts in local service provision. One ofthe most far-reaching recent transformationsin provision of local services has beenthe shift toward privatization. Contractingfor services with private businesses ornonprofit organizations has become a commonpractice among local governments inthe United States. For the most part, thishas come about without the legal mandatesthat have spurred privatization in NewZealand or Europe. In the U.S., privatizationis now well-established as a pragmaticalternative when other resource channelswill not serve. In surveys, two thirds ormore of local managers report that privatizationhas been considered and approvedas an alternative to public provision (ICMA2003). After a surge in the 1990s, it seemssafe to say that privatization has been astaple of local government since 2000.Although privatization has been on theagenda in Canada as well, it has not beenpursued as aggressively as it has in theUnited States. Even so, in neither countryhas the shift to privatization been as dramaticas it has been in Australia, New Zealand,and some European countries.Local entrepreneurship, in the sense of localownership of utilities, transport authorities,and facilities, is more limited than it is in partsThe greater localexpenditure in theNorth Americannations stemslargely from localgovernmentresponsibilities ineducation andpublic safety

NORTH AMERICA242United Cities and Local GovernmentsThe overwhelmingproportion of theadditional localpersonnel in theUnited Statesworks in thelocalized educationsystem, and in bothNorth Americancountries publicsafety officialsalso make up muchof localgovernment staffof Europe. However, it is common to find localgovernments generating revenue throughadministration of airports, ports and othercommercial operations. In the United States,special authorities controlled by local governmentstypically take on these administrativeroles. The city of Los Angeles, for instance,derives a large portion of its revenue from LosAngeles International Airport and the Port ofLos Angeles.III.3. Administrative capacityThe size of local government staffs varieswidely. This has not prevented implementationof largely parallel practices designedto secure integrity in local government, tocarry out management reforms, to introduceat least limited elements of e-government,and to pursue policies supportinggender equality.Personnel. Far more people work in localgovernment than might be expected inlight of the comparatively modest expendituresat the local government level (Table4; compare with Table 2 infra). In the UnitedStates more than 60% of all governmentemployees work in local government.This rate approaches that of the Nordicdemocracies or Japan, where much of thewelfare state is administered locally. InCanada the proportion is lower but stillconsiderable at 35%.These contrasts owe largely to the differencesin the functions local governmenthas assumed. Although local governmentin Canada and the United States is not responsiblefor large public health sectors andsocial benefits as in the Nordic countries, itretains responsibility for some of the mostlabor-intensive public social services. Theoverwhelming proportion of the additionallocal personnel in the United States worksin the localized education system, and inboth North American countries publicsafety officials also make up much of localgovernment staff. The additional sectorsof social service, health, infrastructure andeducational provision in Canada also employpersonnel who work at provincial or nationallevels in Australia and New Zealand. Thelow staffing levels in these countries alsoTable 4Government Personnel, by Level of GovernmentName Australia Canada New Zealand United StatesTotal 1,485,800 2,552,613 227,220 19,869,558National 248,500 357,308 205,540 2,878,819Federal units 1,090,600 1,313,379 4,370,562Local 146,700 881,926 21,680 12,620,177PercentagesNational 17% 14% 90% 14%Federal units 73% 51% 22%Local 10% 35% 10% 64%Years: 2000 (United States), 2001 (Australia, Canada, New Zealand).Source: OECD 2002.

243reflect the consequences of systematic policiesthat have contracted out more of infrastructureand local services.The growth of local government in the UnitedStates has outstripped that at otherlevels. While the federal government hasdeclined as a proportion of all governmentpersonnel, and the state governmentshave maintained essentially the same proportion,local governments now hire fourpercent more government employees thanin the 1980s (U.S. Department of Commerce2006). In Canada, local governmentemployment declined along with publicemployment over the course of the 1990s.It has been rising again since 2002 (StatisticsCanada 2006: pp. 6-7), roughly intandem with growth in provincial governmentemployment.Public service rules and guaranteesfor employees. A distinguishing characteristicof local government in both countriesis the absence of a national civil service forlocal government. In most other developedcountries, either a national civil service ora national local civil service dominateslocal government staffing. But in NorthAmerica, municipal hiring is by individual,private law contract. Although there arecivil service systems in many local governments,the character of these varies widely(e.g., Freyss 1995). Partly as a consequence,many local government employees arerecruited locally. Within specific domains oflocal government activity, professional credentialingand certification often provide apartial substitute for civil service standards.This is notably true in the UnitedStates, where public school teachers, policeofficers, firefighters and financial officialsmust have professional accreditationand associated training.Mechanisms for enforcement of public integrityare present in each country. Most U.S.states and Canadian provinces have enactedcodes of conduct for public ethics thatinclude openness and proper resolution ofconflicts of interest. Often provisions forethics in local government are part of amore general system of norms applied toall public employees within a state or province.Measures of this kind have helped toassure comparatively high standing forpublic officials in these countries (WorldBank 2006).A distinguishing characteristic of local governmentin both countries is the absence of a national civil servicefor local governmentReforms and management initiatives.Efforts to improve quality and efficiencyhave proceeded steadily at the local levelin the United States and Canada, though itis difficult to assess how much difference theseefforts have made. Professional organizationslike the International City/CountyManagers Association have sought to providebenchmarking studies and best practicesguidelines for these local efforts.E-government. A growing majority oflocal governments in both countries haveadopted “e-government” practices. Mostlocal governments now have websites; largermunicipalities use these to distributeincreasing volumes of public information.Local e-government varies widely in scopeand amount. Studies in the United Statesshow that it is most extensive and widespreadamong wealthier communities whereresidents can easily afford computers,and are apt to be highly educated (Reece2006). Several municipalities and somestate and provincial governments havemoved beyond passive online content. InCanada, Nunavet and Yukon have “introducedlegislation which allows council andcommittee meetings to be held electronically.”(UNESCAP 2005).Gender equality policies. In both countries,an array of general workplace guaranteesof civil rights extend protections ongender equality to local governments.

NORTH AMERICA244United Cities and Local GovernmentsVoters in the UnitedStates and Canadaoften have theopportunity to votemore frequently forlocal officeholdersthan do theircounterparts inother countriesIV. Local democracyIn the workings of democracy at the municipaland other local levels, Canadian and U.S.local governments maintain some of theirmost distinctive practices. Non-partisanelections, single-member electoral districts,frequent elections, direct democracy, andgreater local choice of institutions set localinstitutions in these countries apart. A numberof these practices mark clear divergencesfrom inherited British traditions,as well as from the institutions in comparablecountries like Australia and New Zealand.IV.1. Parties and partisanshipIn Canada and the United States the overwhelmingproportion of local elections arenon partisan. Canadian candidates tend tobe listed either as independents, or to beaffiliated with local, rather than nationalparties (UNESCAP 2005b). Even whennational politicians run for local office, thelinks between local elections and nationalparty organizations remain loose. In theU.S., most states, particularly those in the“reform” areas of the South and West,require elections to be non-partisan. In largercities, partisan affiliations are oftenwell known even in formally non-partisanelections and can play an important role.IV.2. Elected executivesAlthough a variety of arrangements characterizelocal elections, several broad institutionalpatterns have predominated(Table 5). In the United States some 38%of municipal governments feature amayor-council system, with an electedmayor who often exercises considerableindependent authority (MacManus &Bullock, 2003 pg. 3). This arrangement ismost common in larger cities. A growingmajority of U.S. cities – a 2001 survey estimatedthe proportion at 53% – have adoptedinstead a council manager system. Inthis system the mayor is elected by thecouncil from among its members andusually has few powers. In Canada, mayorsof lower-tier authorities are generallyelected. But in rural authorities, the mayors,reeves and wardens who exerciseexecutive authority are generally appointedby councils.IV.3. Council voting systemsCouncil voting systems vary, but displaysome overarching commonalities. Althoughthe single-member district method of electionis part of the British local governmenttradition, in the United States at-large electionshave grown to predominate. In a 2001city council survey 45% of councilors in citieswith populations over 25,000 reported thisform of elections, compared to 28% withward elections and 26% with a mixture(Svara 2003; p. 13). Among cities over200,000, however, ward elections remainmost frequent. In Canada as well, the typeof representation varies among and withinprovinces. There the ward system with firstpast-the-post voting generally predominates.IV.4. Citizen participationOne of the distinguishing features of localgovernment in Canada and the United Stateshas been the greater extent of participatoryopportunities for local citizens.Electoral terms are short, elected officesoften more numerous, direct democraticprocedures like recall and referenda morewidespread, and citizen commissions havelong been a regular feature of local government.Voters in the United States and Canadaoften have the opportunity to vote morefrequently for local officeholders than dotheir counterparts in other countries. Thethree years that correspond to the averageterm in U.S. cities for elected executivesand councilors, and corresponding practicesin Canada, represent only one dimensionof this additional opportunity. Even forcouncils with four-year terms, the termsare often staggered so as to schedule anelection for part of the council every two

245years. In the U.S. there are often multiplelocal electoral offices, including boards,local administrative officials and sometimeslocal judges. Recall elections for localofficials are authorized in around half ofU.S. states. In California these have becomea regular occurrence. Term limits in agrowing number of U.S. localities have alsoprevented incumbents from holding on tosafe seats. Finally, referenda are a moreregular feature of local politics in much ofthe United States than in any country otherthan Switzerland. Although resort to directdemocracy varies widely by state andregion, voting now plays a major role intransportation, infrastructure and publicfinance in such states as California, Ohioand Washington State. Canada also has along tradition of referenda (Hahn 1968).With the exception of three-year councilterms, these practices set both countriesapart from fellow former colonies Australiaand New Zealand.Participation in local elections is relativelylow, conforming to the international trendof higher voter turnout for elections athigher levels. This tendency is particularlypronounced in the United States whereelectoral turnout has been lower than it isin other countries affiliated with the Organisationfor Economic Co-operation andDevelopment (OECD). Local election turnoutas a proportion of the eligible popula-Table 5Local DemocracyLocal councils Local executive DirectdemocracyProportional/ Constituencies Term Mode of Term Collegial / Recallmajority rule selection unitaryAustralia preferential or plurality One 3-4 years Mostly popular 3-4 years Unitary No Infrequentsystems (4 states),election, somepreferential orindirectly electionproportionalrepresentation (2),proportionalrepresentation (1)Canada Generally, plurality Multiple 3 years, Direct election 3 years, Unitary No Frequent: for4 years or (8 provinces), 4 years or taxes, planning2-3 years indirect election (2) 2-3 yearsNew Zealand Plurality Multiple 3 years Direct election 3 years Unitary No Occasional,infrastructureand electoral rulesUnited States Mostly plurality, Multiple, one 3.3 years Direct Generally Collegial Authorized Frequent orsome multimember and mixed on average election (50%), 2-4 years (5%), in half of very frequent:districts and single indirect election (3 on average) Otherwise states, revenues,nontransferable (50%), unitary occasionally infrastructure,vote systems used annexation issuesSources: Bush (1995); Commonwealth Local Government Forum (2002a, 2002b); International City/County Management Association (1997);McManus (1999); Mouritzen and Svara (2002); United Nations Economic and Social Commission for Asia and the Pacific (2002a, 2002b );Zimmerman 1997; Canadian provincial and territorial local government acts.

NORTH AMERICA246United Cities and Local GovernmentsRepresentationof racial and ethnicminoritiescontinuesto pose problemsin both countries.tion has been estimated as low as 10%(Hajnal and Trounstine 2005). A study offive major U.S. metropolitan areas from1996 to 2003 showed an average turnoutof 29% for municipal elections, comparedwith an average turnout of 57% for thepresidential election of 2000 (Sellers andLatner 2006). In Canada, where the onlyavailable measures are for the majorcities, local election turnout since the 1990sranged between 41% and 49% of the eligiblepopulation in general election years, andbetween 31% and 39% in off-year elections.The traditional New England town meeting,a legislative assembly of citizens themselves,survives today in only a very smallproportion of U.S. local governments. Butcitizen commissions and boards remain aregular feature of local governmentthroughout Canada and the United States,and several municipalities have adoptedinnovative new forms of citizen participationin recent years. Several larger cities ofCanada and the United States have adoptedsystems of neighborhood-level councilswith elected representatives (Berry et al .1993; Rivard and Collin 2006: 7). Most ofthese councils have been confined to advisorypowers. In a few cases, such as theborough system of New York City and theneighborhood councils of San Antonio,sub-municipal councils of this sort alsoexercise governmental powers. A fewCanadian municipalities have also experimentedwith such innovations as participatorybudgeting. New practices in suchfunctional areas as planning have alsoincluded consultations with neighborhoodassociations and even individual residentsin the preparation of local developmentplans.IV.5. Choice of localities to determinethe shape of their own institutionsIn Canada and the United States, localgovernments have historically exercisedconsiderable authority over the shape oftheir institutions. General laws governingmunicipal government in the provinces andstates offer a choice among a variety of differentlegal forms, as well as discretion tochoose different voting systems, executiveforms, and other electoral processes. As apractical matter, choices vary only moderatelyamong a limited number of standardtypes, often depending on population sizeand the rural or urban character of a jurisdiction.Especially in the areas of laterEuropean settlement –outside the northeasternregion of the United States, forexample– state laws for annexation andmunicipal incorporation facilitate the formationof new local governments as wellas the public annexation of land. Throughoutthe U.S. and in a number of Canadiancities, many larger city governments havebeen maintained through a specificallylegislated charter under the state government.This leads to even more distinctiveinstitutional arrangements for each suchcity. A charter of this kind enables higherlevelgovernments to establish the localgovernment’s structure, fiscal authorityand other powers for each city. Localauthority of this kind is unusual in Europe,or even Australia and New Zealand,although it is fairly common in developingregions.IV.6. Local political representationRepresentation of women in local governmenthas increased in recent decades. In a2001 survey by the U.S National League ofCities, 28% of city council members werefemale, two percent more than in 1989(Svara 2003, p. 5). In the city councils oflarge cities, as well as ‘liberal’ states likeNew York, the number has risen to morethan 30% (ibid.; Anthony Center: 2006).In 2002, 17% of mayors in cities withpopulations of 30,000 or more werewomen (Conway 2005: 60). Female representationwas highest, 44%, on localschool boards (ibid.). In Canada the proportionis somewhat lower. A 2004 nationalsurvey by the Federation Canadian ofMunicipalities reported that only 21.7% ofmunicipal councilors were women (Federa-

247tion of Canadian Municipalities 2004: 9),with much lower representation of womenfrom minority ethnicities.Representation of racial and ethnic minoritiescontinues to pose problems in bothcountries. In the United States, with therise of majority-minority jurisdictions inmany central cities, African-American,Latino and Asian-American representativeshave in many places acquired a significantor even predominant role in local councils.In cities of all sizes – especially in thelargest ones – surveys indicate that minorityrepresentation doubled from 1979 to 2001(Svara 2003: p. 7). But studies continue toshow under-representation of minorities inrelation to their numbers, a situation oftenlinked to low electoral turnout and otherfactors (Hajnal and Trounstine 2005).Similarly, a 1998 analysis of council membersin Montreal showed only 29% fromthe ethnic minority groups that comprised43% of the total population (Simard 2000:p. 17).IV.7. Traditional institutionsIn particular regions in both countries,indigenous populations from the yearsbefore European settlement continue tomaintain traditional institutions that canalter or replace the workings of other localgovernments. In some cases, relationsbetween indigenous local practices andlocal government have become enmeshedin renewed debates about indigenousclaims to land title and forms of sovereignty(Langton et al. 2004). Widersystems for providing services and maintaininginfrastructure have also had to bemodified to accommodate local selfgovernment through traditional institutions.In Canada, where there are some 1500indigenous tribes, a series of treaties sincethe 1970s has established the right of FirstNations to self-government (Morse 2004).The need for cooperation with the localgovernments has led First Nation treatynegotiators for British Columbia to agree toa protocol that guarantees local governmentrepresentatives a place in treatynegotiations.On the 550 Indian reservations in the UnitedStates, the tribal government is thelocal government authority. Reservationsare exempt from certain taxes, such asstate sales taxes, and often maintain theirown tribal courts. The isolation and povertyof many reservations makes settlementssome of the poorest in the country (Kaltand Cornell 2000).IV.8. Decentralization and oversightof local governmentAdhering to the British system that influencedthe early development of these countries,higher-level governments in Canada and theUnited States do not rely on the territorialrepresentation of a prefect, or a comparablegeneral representative at the local level. Inthe federal systems of the two countries,separate departments of the states, provincesand territories provide general oversight. InCanadian provinces and territories, Ministriesor Departments of Local Government providethis function. In the U.S. states, the Secretariesof State generally have this responsibility.In both countries, the oversight activitiesinclude supervision of local elections,administrative records, and other requirementsincluding those for balanced budgets.National governments in both countries have,for several decades scaled back direct interventioninto municipal affairs. Canada eliminatedits federal ministry of urban affairs inthe 1970s; the Department of Housing andUrban Development (HUD) in the U.S., hasalso reduced its role. However, the nationalgovernments have undertaken some initiativesin recent decades, intervening directly inlocal affairs. In Canada, the creation of a Ministerof State for Infrastructure and Communitiesin 2004, which became the Minister forTransport, Infrastructure. In certain areas,such as grants for housing or community de-In some cases,relations betweenindigenous localpractices and localgovernment havebecome enmeshedin renewed debatesabout indigenousclaims to land titleand forms ofsovereignty

NORTH AMERICA248United Cities and Local GovernmentsSince the 1970s inthe United States,the public hasplacedgrowing trust inlocal government,particularly incomparison withgovernment athigher levelsvelopment or the administration of nationalparks in the United States, direct interventionof this sort bypasses officials of state and provincialgovernments. In areas like transportationplanning or regulation of air and waterpollution, the federal government in the UnitedStates has enlisted state governments innational regulatory schemes, and sometimesworks alongside state officials at the local level.Higher-level governments, therefore, doretain some broad powers to oversee localaffairs, and to intervene in local governmentactivities. Canadian provincial ministersresponsible for local government, inaddition to broad oversight and approvalpowers, can go so far as to dissolve localcouncils and appoint administrators tocarry out local government functions. Inthe United States as well, state governmentsare generally empowered to takeover administration of local governmentsthat default on financial obligations orotherwise fail. This has occurred, for instance,in the takeover of the urban Philadelphiaschool district by the state ofPennsylvania. These powers are also typicalof higher level governments in othersystems with British colonial legacies,including, once more, Australia and NewZealand.Among politicians, the holding of multipleelectoral mandates offices for local andstate or national office is rare, and is largely,if not entirely, prohibited by conflict ofinterest laws. Although politicians haveoften moved between offices at differentlevels, they do so through a succession ofposts. In U.S. states, where term limitshave increasingly restricted the number ofmandates a politician can serve, movingbetween state office and local office hasbecome increasingly common.IV.9. Public opinion on local governmentAs in most advanced industrial democracieswith longstanding institutions, skepticismabout public officials and politicianshas increased. In both the United Statesand Canada, however, the public opinion oflocal government appears to be somewhatmore positive.Since the 1970s in the United States, thepublic has placed growing trust in localgovernment, particularly in comparisonwith government at higher levels. In 1972,a Gallup survey showed that 12% placed“a great deal” and 51% “a fair amount” oftrust in local government – a total of 63%.In 2005, 23% expressed “a great deal” oftrust and 47% “a fair amount” – a total of70%. From 2001 to 2004, the proportion inboth categories averaged 5 % higher thantrust in state government, and eleven percenthigher than trust in the federal government.In Canada as well, a recent survey showedskepticism about the performance of the federalgovernment, but positive assessmentsof the performance of local government infacing local issues (Infrastructure Canada2006). Fifty three percent of respondentsrated local governments “excellent” or“good” in addressing these issues. This comparedwith 37% for provincial governments,and 32% for the federal government.IV.10. Local Government AssociationsAs in other countries with highly developedsystems of local governance, nationalassociations of local governments andlocal government officials play diverseroles. The Federation of Canadian Municipalities(FCM) began in 1901 as the Unionof Canadian Municipalities. In the UnitedStates, the National League of Cities(NLC) was founded in 1924, and the UnitedStates Conference of Mayors in 1932.Much of local government legislation is amatter of state or provincial and territoriallaw. Local government associationsformed within these intermediate levelsof government are also very active andinfluential. Associations of local professionals,such as the International City/CountyManagement Association, havealso been a major factor.

249One of the most important roles thatthese organizations have served is ascorporate representatives of the interestsof local governments in nationaland state or provincial policymaking. TheU.S. Conference of Mayors (USCM), forinstance, emerged in the 1930s from thefirst successful efforts by a coalition ofmayors to secure a package of federalfinancial aid targeted to city governmentsduring The Depression. The CanadianFederation of Municipalities (FCM)has increasingly gained recognition as avoice for protection of the rights of municipalitiesin national debates. By contrast,the U.S. national organizationshave in recent decades scaled backefforts to influence national policy. Stateor provincial organizations of municipalgovernments are often more active atthese lower levels of government, wheremost policies and frameworks for localgovernments are crafted.IV.11. National organizations also takeon other rolesDocumenting and disseminating best practicesand information about local governmenthas been a goal for all of these

NORTH AMERICA250United Cities and Local Governmentsassociations. This role has been especiallyprominent among the national associationsin the United States. The National Leagueof Cities (NLC) maintains a database oflocal government practices, and a MunicipalReference Service that collects informationon local government activitiesaround the country. Both the NLC and theInternational City/County Managers Associationregularly conduct surveys of localgovernments. Their surveys have becomethe most important source of informationon broad trends at the local level. In theU.S., national forums linked to the USCMand the NLC bring local officials togetherregularly to discuss issues of common concern.Networking both domestically andinternationally among local governmentshas also been an important element of theseactivities. As part of its initiatives forlocal capacity building, the FCM has establishedthe Center for Sustainable CommunityDevelopment (CSCD). The FCM alsomaintains a Green Municipal Fund (GMF), aunique $550 million endowment from thefederal government devoted to environmentalsustainability and local capacitybuilding. Since 1987, Canadian municipalitieshave authorized an International Centerfor Municipal Development torepresent the FCM in international work.In both countries, international partnershipshave proliferated outside as well aswithin the auspices of national associationalactivities.

251V. ConclusionIn both Canada and the United States, localgovernment has evolved quite far from itsoriginal British colonial legacy. Their parallelevolution has given these settler nations adistinctive type of local government that canbe understood only partly through comparisonwith contemporary British local government,or even with local government inother former British colonies. Long-standingfeatures of these systems include limitedlegal status, comparative local fiscal autonomy,a modest municipal role in overallpublic finance, a strong role in local civicaction, and an emphasis on local democracy.By comparison with Europe and EastAsia, these systems may seem to embody alimited role for local government. But thatrole is also much more institutionalized androbust than in many newly decentralizingcountries, and less subject to supervisionfrom above than in most of the developedNorth.Within both countries, but especially withinthe United States, considerable varietycontinues to mark local governance. Localgovernment remains subject to differentlegal frameworks by state or province, andeven by individual city. Informal and formalinter-local arrangements also differwidely, even across a single metropolitanarea. Such common trends as the growthof local government, the shifting of responsibilitiesto the local level, and thesearch for new inter-local and public-privatearrangements for governance showfew signs of abating.In the United States, local government hasthrived even as it has confronted widespreaddecentralization, greater supervision,intergovernmental fragmentation and anincreasingly limited role in national policy.Local government powers in some statesinclude general authorizations like those ofNorthern Europe, and overall, local governmenthas one of the highest proportions ofpublic employment in the world. Both thisproportion and the local government portionof public spending continue to rise.The growing trust of citizens in localgovernment suggests that this growth willcontinue.Canadian local governments traditionallypossess more limited powers and fiscal resourcesthan do those in many U.S. states,but this may be changing. Local governmentrepresentatives have lobbied forstrengthening these powers. New governmentalunits, and planning at the metropolitanlevel have taken hold, and thetrust of citizens in local government remainshigh.In both Canada andthe United States,local governmenthas evolved quitefar from its originalBritish coloniallegacy

METROPOLITAN GOVERNANCEJEFFERE Y SELLER SVINCENT HOFFMANN-M AR TINOT

METROPOLITAN GOVERNANCE254 United Cities and Local Governments

255I. IntroductionWorldwide, metropolitan regions (also referredto as “urban regions” or “city regions”)are rapidly becoming the predominant formof human settlement. In 1800 only 2% ofthe world’s population lived in urban areas.Five years from today –most likely when avillager somewhere in Asia or Africa movesto an urban center there– the majority ofthe world’s population will be urban. Thereafter,humankind will be, indisputably, anurban species.With the industrial revolutions of the 19thand early 20th Centuries, urban regions becamethe predominant form of settlementthroughout most of the global North. Thisprocess of urbanization is now increasinglythe rule in the global South as well. Forexample, most of Latin America is now urbanized.The United Nations predicts that from2005 to 2030, 90% of all global populationgrowth will take place in urban regions of theglobal South (UNCHS 2005).The size and form of metropolitan regionsdiffer considerably, both within countries andbetween global North and global South regions.The size of today’s largest urbanregions is unprecedented in world history. In1950 only one city had a population of morethan 10 million. By 1975 there were fivecities of this size, three of them in the developingworld. By 2000 there were 16 citieswith populations over 10 million, twelve ofthem in the developing world. However, suchmegacities like these present only part of thestory. Cities with populations in excess ofone million are proliferating worldwide, andthe number of cities with more than five millioninhabitants is also increasing. As morepeople are drawn into expanding urbanregions (UNCHS 2005), the world’s metropolisesgrow more extensive, more diverseand more fragmented.Simultaneously, changes in the governance,economics and societies continue to transformthe spatial and social structures of urbanregions. Diverse service sectors in boththe South and the North have grown intodominant components of metropolitan economies.As economic globalization has increasinglylinked urban regions to each other,and cities to their peripheries and hinterlands,competition among cities and regionshas intensified. At the same time, widespreaddecentralization has encouraged high-levelgovernments to abandon local governmentswithin metropolitan regions to the myriadconsequences of the ongoing demographic,economic and social changes.Social scientists have for many years linkedurbanization with economic development,education and other components of “modernization”(Ingram 1997). Of course, citiesare still the centers of economic and socialactivity worldwide, but in important waysthe dynamics of modernization have changed.It is increasingly clear that today’s metropolitanregions face unprecedentedgovernance challenges. The size of moderncities, their continued growth, their socialand spatial fractures, their distinctive economiccharacteristics, and their institutionaldimensions present hitherto unanticipateddimensions of governance. As expandingmetropolitan regions cope with the newfacts of governance, governments at higherlevels must also acknowledge and addressmetropolitan issues. Nor is it likely thatsolutions will be simple. Solutions for oneregion may not pertain in another. Eachmetropolitan setting, North and South, is inimportant respects unique.II. Conditions of metropolitangovernanceWorldwide urbanization has given rise tothe global phenomenon of geographicallyextended metropolitan regions. This chapterfocuses on governance of these settings,governance being defined as “actionsand institutions within an urban region thatregulate or impose conditions for its politicaleconomy” (Sellers 2002, p. 9). Despite themany forms that metropolitan governmentstake, they confront common challenges shapedby parallel shifts in politics, economics andThe size of today’slargest urbanregions isunprecedented inworld history

METROPOLITAN GOVERNANCE256United Cities and Local GovernmentsAs marketsfor residence andemployment inmetropolitan areasdiversify, affluenthouseholds seizethe opportunity tosort themselvesinto areas withsuperior amenitiesand a better qualityof lifesociety. Still, fundamental differences betweenNorthern and Southern cities makegovernance a significantly different propositionabove and below the equator.Urban growth means territorial expansion aswell as population growth. De facto metropolitanborders push thus farther and fartherout into the surrounding rural area. At thesame time, improved transportation andcommunication technologies have greatlyincreased the mobility of employers and residents.Especially in developed countries,clear dichotomies between city and countrysidehave given way to dispersed, polycentricpatterns of settlement and economicactivity. Many developing areas, such as thePearl River Delta of China, manifest a similarevolution.The problem of horizontal governance acrossan extended area confronts all of these urbanregions. Settlement and economicactivity frequently expand across institutionalizedboundaries, and beyond thereach of stable, pre-existing governancearrangements. This phenomenon presentsseveral potential problems:exception. Yet when the social and economicstructures within a metropolitan regionare interconnected, decisions andactions taken by one community can easilyaffect or even undermine the choices madein a neighboring one. This interconnectednessof metropolitan communities standsat the core of the metropolitan problem.Partly for these reasons, metropolitan governancerequires vertical as well as horizontalrelations among governments. The social andeconomic problems that the higher-levelgovernments of both developed and developingcountries confront – from economic developmentto reducing pollution – are alsoincreasingly the problems of metropolitanregions. Opportunities for governance withinthese regions are often provided by nationalpolicies and institutions. For example, transportationpolicy determined at a higher levelof government can be coordinated with localdecisions about economic development. Similarly,implementation of national or regionalpollution laws can be facilitated by appropriatelocal planning; or an overarching socialwelfare policy can be coordinated with localeducational policy.• Absence of territorial controls and guidance:Urban spread can be limited andrestricted only by co-operative actionamong the affected urban areas. Local governmentsmust look beyond their parochialvision and strategy, and make atleast a minimal effort to acknowledge andaccommodate this crucial spillover dimension;• Shortcomings in management capabilitiesand experience: Small governmentunits find it difficult to attractand develop the administrative andtechnical resources required for territorialmanagement. Pooling resourcescould provide increased efficiency andeconomies of scale;• Lack of structural consultation for solvingcommon problems: Collective actionby local governments is still theOther social and economic dynamics in metropolitanareas compound the need for metropolitangovernance. Recent researchpoints to growing socio-economic disparitieswithin many contemporary metropolitanregions (e.g., Fainstein 2001; Segbers et al.2007). As markets for residence and employmentin metropolitan areas diversify,affluent households seize the opportunity tosort themselves into areas with superioramenities and a better quality of life. Poorhouseholds gravitate toward areas with thelowest housing costs. Especially where theboundaries between affluence and povertycorrespond to boundaries between governmentalentities, such as villages or towns,heightened differences in the number andquality of public services can reinforce socialdisparities. Without public measures toequilibrate the fiscal disparities among locales,governance arrangements can reinforcespatial advantages and disadvantages.

257Even beyond the boundaries of metropolitansettlement itself, increased mobility andcommunication have intensified social andeconomic links between urban centers andoutlying areas. Metropolitan regions, likemost central cities, function as centers ofproduction and distribution for the surroundingregions. However, they are also centersof consumption for outlying areas, providinga strong cultural economy for intellectuallife, education and tourism. Indeed, growthin the metropolis often comes at the expenseof rural economies, triggering a populationinflux from rural areas.Differences between northernand southern metropolitan regionsWithin these broad commonalities, urbanregions in the developed North and those inthe developing South have distinctive characteristicsand face markedly different challenges.In parts of the South, especially in Asia andAfrica, urban regions are growing at unprecedentedrates, faster even than cities grew atthe onset of urbanization in the North. Flightfrom the countryside is driven by rural environmentaldegradation, disappearing jobopportunities and poverty. So dire are conditionsin many rural areas that growth insouthern metropolitan regions is simplyexplosive. Although current rates of growthamong cities in the North vary widely, theyare generally lower. In much of Europe, decliningbirth rates and migration present newproblems among declining urban populations.The populations and forms of peripheral settlementalso differ. In most of the North,middle class and affluent residents have leda migration from the central cities (Hoffman-Martinot and Sellers 2005). In most of theSouth, however, urban regions remain generallymore concentrated and dense, and poorresidents typically predominate on the urbanperiphery.Concentrations of poverty and slums may stillbe found in major metropolitan areas in theUnited States and in a number of Europeancountries. In many Southern metropolitanregions, however, poverty predominates. Thelatest survey data suggest that 25% of theurban population is below the poverty line inIndia, 15% in Brazil, 30% in Tanzania, 19% inGhana, 13% in Jamaica, 57% in Sierra Leoneand approximately 7% in Vietnam (UNF-PA:2006). If poverty in the South were measuredby the same standards applied indeveloped countries, at least half of the urbanpopulation in many developing countrieswould be categorized as poor. In developingnations, the urban figure is usually less thanthe proportion of households below the relevantpoverty line in the rural areas (UNFPA:2007).The most recent UN figures also suggestthat one third of the world’s urban population– 90% of city dwellers in the developingworld – live in slums, defined as areaswith inadequate provision of infrastructuresuch as sewers, running water and electricity(UNFPA: 2007).For urban residents in the South, a notablemeasure of informality characterizes employmentand housing (cf. Gilbert 1998;Segbers et al. 2007). While their legal statusvaries with local circumstance, these settlementsby definition lie outside the formalplanning and legal system, and are usuallybuilt on land that the inhabitants do not own.Such residential areas come in many formsand sizes, and most attain de facto acceptanceby local authorities. Local municipalpoliticians often use their residents as sourcesof patronage and electoral support. Oneresult of this acknowledged but unofficialstatus has been the appearance of a fullfledgedunderground housing market withproperties (usually shacks) being unofficiallybought and sold. Because most settlementresidents can not afford to “own” property,even under such quasi-legal conditions,there is also a strong rental market.In many developed countries, local governments,planning regimes, property laws andwelfare states institutionalized at the natio-Concentrationsof poverty andslums may still befound in majormetropolitan areasin the United Statesand in a number ofEuropean countries

METROPOLITAN GOVERNANCE258United Cities and Local GovernmentsThe growthpatternsof metropolitanregions are mostusefully viewed asproducts of bothgovernment andprivate-sectorpoliciesnal level have provided powerful instrumentsto steer metropolitan settlement and addressresource inequalities. In the South, however,even where comparable mechanisms exist,they are apt to be less extensive and lesseffective.In confronting rapid urbanization and thechallenges of metropolitan governance in the21st Century, Southern metropolitan areascan find guidance in the growing number andrange of global institutional models. Thesemodels incorporate international expertiseabout policy in specific sectors, and accumulatedlessons about metropolitan managementgarnered from previous experience withurbanization. But the sheer size and extent ofthe largest urban regions, as well as the growinginfluence of outside forces and metropolitaninterconnectedness, frequently give riseto unforeseen circumstances and dauntingcomplexities.The growth patterns of metropolitan regionsare most usefully viewed as products of bothgovernment and private-sector policies.Intentionally or not, even the most diverseand expansive metropolitan areas achievedcertain aspects of their present form partlyas a result of governmental choices. Suchgovernmental efforts include extendingtransportation systems, such as motorways,trains and other forms of mass transport,designating locations for businesses and residents,providing incentives through taxabatements and other subsidies, and planningsuburban habitats. At the same time,individual businesses and consumer housingpreferences exert powerful, ongoing influenceson growth patterns.III. Key challenges of governingmetropolitan areasThe governance of metropolitan areas is particularlydifficult for a number of reasons.Whatever the institutional arrangements orthe peculiarities of the surrounding region,metropolitan governance must address increasinglyextended, diverse, and dividedspaces. Many metropolitan areas must dealwith continued demographic expansion. Manyothers must also overcome institutional fragmentationdue to the lack of a central, encompassingregulatory authority. Most, tosome degree, also have to cope with new andsometimes intense local conflicts.III.1. Social and territorial diversityThe shape of metropolitan regions todaymarks a clear departure from the traditionalform of cities. Especially in Europe, urban settlementhas long been understood to followan agglomerative concentric model. Withinfortifications, behind gates and along greatboulevards, the European city developed adistinct economy and way of life. Beyond thecity walls lay the economically and administrativelyseparate sphere of rural settlement.Modern metropolitan regions, however, havefar more complex patterns of territorial diversitythat often blend urban and rural elements.Such new patterns are reinforced bysocial diversity that frequently outstrips thatof urban regions in centuries past.Though it may seem counterintuitive, todaythe fastest growth often occurs in the ruralcommunities on the fringes of urban areas.In the developed countries of the North, thisgrowth is fed by young families looking forhomes with more space. Many of these “newrural dwellers” left denser urban neighborhoodsor even established suburbs to live inoutlying villages. Though they move fartherfrom the center of the city, these familiestypically remain dependent on the city foremployment and public amenities.In the developing countries of the South,especially in Brasilia and Mexico City, middleclass and affluent households are alsomoving away from the center of metropolitanregions. However, an even larger numberof new arrivals are poor residents of ruralareas and poor urban dwellers seeking affordablehousing.As the urban fabric spreads and stretches, thenotion of ‘conurbation’ – a continuous net-

259work of built-up urban areas – has increasinglyfailed to capture the fluid and ambiguous natureof peri-urban regions. It has given way tomeasures of commuting intensity or patternsof migration toward a central city. Significantly,geographers and urban planners haveeven invented special terms to describe thenew entities that are taking shape aroundlarge cities: City-archipelago, emerging town,megalopolis, metapolis and metropolitan areaare a few examples of recent additions to theurban-studies lexicon (Ascher 1996; Gottman1961; Mongin 1998; Veltz 1995).Growing social diversity in many urban regionshas contributed to the increase inground-level territorial diversity. The largesturban regions in developed countries generallyfeature higher levels of social and economicsegregation by residence. In Europeand North America, many such regions havealso absorbed the largest proportions of newimmigrants, including those from developingcountries. Growing economic and socialdiversity has often compounded metropolitansegregation. Although middle class areaspredominate in the largest metropolitanregions of the developed world, it is usuallypossible to find both exclusive affluent localitiesor neighborhoods and concentrations ofpoverty and social disadvantage. Overalllevels of territorial segregation vary widelyamong metropolitan regions, but range higherin the United States than in most ofWestern Europe or Japan.In most southern cities, the incidence ofpoverty is determined primarily by the locallabor market. The income, security, andbenefits linked to employment remain theprimary means by which households canavoid impoverishment. Industrial firms arethe major employers in the urban centers ofthe South, though in some places the servicesector has been replacing them. Street tradingand the informal job sector have becomea major source of employment forthose not in the formal sector. The proportionof jobs in this sector varies betweencities but often accounts for upwards of 20%of those in employment.III.2. Governmental fragmentationAnother challenge for governance stemsfrom the organizational fragmentation of localgovernments in extended metropolitanregions. Much of this fragmentation is geopolitical.As more people move into anincreasing number of communities surroundingcentral cities, more local governmentsare drawn into problems that beset the entiremetropolitan region.Data from the 476 metropolitan regions inthe International Metropolitan Observatory(Hoffmann-Martinot and Sellers 2005) offerthe most systematic current overview ofgovernmental fragmentation in OECD countries;data for several additional cases areprovided as well. Measured by the proportionof the central city population in areas ofmore than 200,000 inhabitants, Israel is oneof the most fragmented countries from ageopolitical point of view, along with Switzerland(30%), Germany (31%), the UnitedStates (34%) and France (36%). In the Netherlands,about half the population lives incentral city neighborhoods, but in the othercountries studied, the bulk of the populationcontinues to reside in central towns ratherthan traditional suburbs.The number of communities with approximately100,000 inhabitants is a secondwidely accepted measure of this kind of political-institutionalfragmentation (e.g., Brunnand Ziegler 1980) in metropolitan areas. Thehigher this indicator is for a metropolitanarea, the greater the fragmentation. In amajority of the countries in the InternationalMetropolitan Observatory (IMO) project, thismeasure of institutional fragmentation is low,having a value lower than five. Such a lowscore invariably indicates that municipalitiesin the region have been merged, as theywere recently in Canada (1). Sweden andthe Netherlands (2), Poland and Israel (3),and Norway (4), also merged their metropolitanmunicipalities comparatively recently.In Spain, the exurban parts of metropolitanareas have only developed in recent years,accounting for that country’s low level of ins-The largesturban regions indevelopedcountries generallyfeature higherlevels of social andeconomicsegregation byresidence

METROPOLITAN GOVERNANCE260United Cities and Local GovernmentsAs measured bythis index, Franceappears as themost territoriallyfragmentedcountry in Europetitutional fragmentation (3). The highestvalues appear in countries where pre-industrialmunicipal boundaries largely survive,such as France (32), the CzechRepublic and Switzerland (21), Germany(18), the United States (15) and Hungary(12). It may seem surprising that thesevalues are much higher in Hungary and inthe Czech Republic, former communistcountries, than in Poland (3) or in otherpost-communist countries such as SlovakRepublic. This higher level of fragmentationis a result of planned programs for municipaldisaggregation carried out by the Czechand Hungarian national governments.Overall, the IMO data show geopoliticalfragmentation to be highest in those developedcountries where metropolitanizationhas proceeded amid continued legacies ofolder town and village settlement andadministration (France, Germany, Switzerland,the eastern portions of the UnitedStates). Fragmentation is also progressingrapidly in a number of other countries wheremetropolitanization is relatively new, suchas the Czech Republic, Hungary, Spain andIsrael. By contrast, far-reaching reformshave succeeded spectacularly in reducingfragmentation in Scandinavia, Canada, andthe United Kingdom.A geopolitical fragmentation index developedby Brunn and Zeigler (1980) combinesthe two previous indicators into a singlemeasurement. This enables a summarycomparison among the IMO countries.As measured by this index, France appearsas the most territorially fragmentedcountry in Europe with a value of 11. Thisindicates considerably more fragmentationthan the average for the United States (7),which is more or less the level for Switzerland.International comparison of the Zeiglerand Brunn scale shows that there is nouniform North American model: Canadianmetropolitan areas are institutionally verydifferent from those in the United States,and recent consolidation reforms haveplaced Canada closer to the NorthernEuropean model. Similarly, it is not possibleto put all countries in Eastern Europe inthe same bracket. While they were all subjectto waves of mergers during the communistperiod, the fragmentation of thepost-communist Czech Republic (3) presentsa completely different profile fromHungary (1.7) or Poland (0.6). Because ofa recent, less-pronounced metropolitanizationprocess, Spain (0.5) appears to becloser to the Netherlands (0.5), Sweden (0.3)and Norway (0.8) than to neighboringFrance. Germany (6) is highly fragmented,and has higher levels in eastern metropolitanareas, as well as some western metropolitanareas, including Koblenz.Other than South Africa, which is includedin the IMO project, no comparable data areas yet available to measure geopoliticalfragmentation in the developing and transitionalcountries of the South. However,South Africa provides a dramatic exampleof governmental restructuring in the South.Post-apartheid reforms in South Africa effectivelyeliminated geopolitical fragmentationby reconfiguring municipal boundaries tocorrespond with the economic and socialoutline of the major metropolitan areas.Similar moves toward metropolitan consolidationtook place earlier in other developingcountries during the period when governmentalconsolidation was fashionable in NorthernEurope. In 1973, the Brazilian militaryregime created nine metropolitan regionsthat are still functioning today. In Republic ofKorea, the regime instituted metropolitanregional governments for Seoul and severalother cities. Many Southern countries alsoestablished some form of metropolitan territorialauthority for their capital city regions.In the South, these consolidation efforts havegenerally failed to eliminate the problem ofgeopolitical fragmentation. There as in theNorth, the problem remains especially evidentin the largest urban regions. Laqian, in arecent survey of governance in Asian metropoles,calls political and administrative fragmentation“[t]he most serious problem thatmany of them face” (2007, p. 145). In some

261former colonies, structures of colonial administrationstill define local district boundariesoutside central cities. Elsewhere, as with theIndian panchayat or the Philippine barangay,indigenous settlements shape municipaljurisdictions. Where metropolitan governmentsare in place, spatial expansion oftencontinues beyond the formal administrativeboundaries into surrounding localities. Metropolitangovernments now administer 50% ofthe metropolitan population in Mexico City,71% in Sao Paulo, 45% in Seoul and 38% inJohannesburg.Even where the jurisdiction of metropolitangovernmental authority extends over the entiremetropolitan area, other forms of fragmentationcan frustrate effective governance.In Bangkok, Manila, and Mumbai, for instance,metropolitan authorities have securedextensive geopolitical jurisdiction, yeteffectiveness is often limited by political andadministrative interference. To some extentlocal or high-level governments can formallyrestrict the power of metropolitan institutions.A further dilution of metropolitanauthority occurs where agencies or officescharged with different sectoral tasks, such asroads, housing, and transit, resist directivesfrom the metropolitan government.III.3. Economic globalizationand competitivenessIncreasingly, in both the North and the South,metropolitan regions have been recognizedas key nodes for national economic strategies.They are also regarded as vital hubs formobilization for rapid economic development.Alongside the globalization of trade and productionnetworks, the shift to service andhigh-technology business has reinforced thistransformation of metropolitan commerce.Most literature on “global cities” initially centeredon the largest cities of the North, andsought to analyze urban regions accordingto global hierarchies based on their positionin international finance, corporate governance,elite travel, and communication (e.g., Sassen1991; Taylor 2003). Other work on “globalcity regions” points instead to the role ofregional economic clusters in the high-technologyand advanced service components ofmodern industrial economies (e.g., Scott2001). In developed countries, a range ofsmaller and mid-size urban regions havealso managed to stimulate growth by attractinghigh technology, corporate branch offices,and educational or administrative services(Markusen, Lee and DiGiovanna 1999). Thisnew round of economic competitiveness hasnot pushed growth in just one direction. Increasingly,metropolitan centers find thatthere is considerable commercial allure in avibrant urban environment and the culturalamenities found there (Glaeser, Kolko andSaiz 2000). Such new regional economicdynamics further reinforce demands for moreregional collective action.In the South, development has been comparativelyuneven. Despite greater pressuresthere to pursue economic prosperity, governanceof metropolitan regions in the Southpresents challenges that are similar to thosein the North. For the first half of the 20thCentury, cities in Asia and Latin Americafocused almost exclusively on industrialdevelopment and modernization. In much ofLatin America, as well as in the Asian countriesof Thailand and Republic of Korea,cities absorbed much of this industrializationand commanded correspondingly large proportionsof national resources. Aggravatedby conditions of authoritarian rule in many ofthese countries, urban primacy had thedemonstrated effect of reducing the potentialfor overall national development (Adesand Glaeser 1994).Since the 1970s, however, much of the newmanufacturing capacity in the developingworld has been built outside urban centers,usually in surrounding towns. New industrialparks and high-technology centers have alsobeen situated on the periphery of majorurban centers, such as Campinas in the SaoPaulo region (Markusen, Lee and DiGiovanna)and the HITEC Center outside of Hyderabad(Kennedy 2007). In the face of theunderdevelopment and declining fortunes ofSince the 1970s,however, muchof the newmanufacturingcapacity in thedeveloping worldhas been builtoutside urbancenters, usually insurrounding towns

METROPOLITAN GOVERNANCE262United Cities and Local GovernmentsServices, hightechnologyactivities andcommercialdevelopment haveincreasinglyreplacedtraditionalmanufacturingas the objectsof metropolitaneconomicrecruitmentthe countryside, new centers of developmentin the South continue to rely on the infrastructure,capital, and other advantagesconferred by proximity to the largest urbanconcentrations. This stands in contrast withthe North where more disparate, smallerurban regions, including Austin, Montpellier,Raleigh-Durham and Toulouse, have seensignificant growth in high technology andservice development (Sellers 2002).A corresponding consequence of global economicshifts has been a general increase ininequality. According to Sassen (1991), theincrease in disparities between the elite inservice businesses and the underpaid, immigrantwork force employed by those businesses,results in an increase in social andspatial polarization. Regional strategies associatedwith globalization are often gearedmore toward attracting economic developmentthan to addressing these new disparities.In more dynamic regions, publicexpenditure tends to support physical infrastructurethat facilitates growth and new economicactivities. Especially when accompaniedby the fragmentation of many metropolitanregions, such strategies can compound disparitiesin the provision of local public services.III.4. Socio-political conflictsThe emergence of metropolitan regions hassome of its most far-reaching implicationsfor territorial conflicts. Especially in much ofthe North, as the monopolistic position ofcentral cities has declined, increasingly fierceeconomic and political competition pitsurban centers against surrounding municipalitiesthat refuse to be relegated to suburbsor satellites. Experiments in inter-localredistribution of resources in Europe andNorth America have largely arisen out of intensifiedarguments over fiscal exploitationbetween ex-urban communities and cities.As the localities within metropolitan regionshave coalesced into distinctive demographicand income clusters, tensions over the territorialdistribution of resources and responsibilitieshave increased. Conflicts now focusroutinely on the financing of collective goodsand services, from public transportation tocultural facilities to sewage treatment. Evenwithin a consolidated jurisdiction, territorialpolarization between neighborhoods orother parts of cities can generate growingconflicts. In the wake of decentralization anddemocratization in Southern cities, metropolitanleaders in such diverse settings asBrazil, South Africa and India have all had toaddress tensions of this kind.The socio-economic dimension of conflict cantranscend territorial bases. A classic exampleis the perennial clash between the interestsof capital and those of the workforce andlocal residents. Conflicts of this type harkback to the mercantile origins of cities, yetthey still drive debates over metropolitangovernance institutions. Proponents of metropolitangovernance, regardless of whetherthey are themselves local chambers ofcommerce or business representatives, oftenportray economic development as a primaryobjective. But in the South as well asthe North, the arguments about this objectivehave shifted. Services, high technologyactivities and commercial developmenthave increasingly replaced traditionalmanufacturing as the objects of metropolitaneconomic recruitment. In the North, local businessesnow mobilize regularly alongsidegovernments around local initiatives to bringthese activities (Sellers 2002; Jouve andLefèvre 2002). In much of the North partisansof growth limits or growth managementalso regularly contest the untrammeled pursuitof regional growth (Clark and Goetz1994). In the South, environmental groupsusually exercise less influence, but are becomingmore active.Ethnicity and religion present another sourceof conflict that can cross territorial boundariesin metropolitan regions. In both theNorth and South, ethnic, racial and religiousdivisions often reinforce existing barriersbetween the haves and have-nots. Whereminorities, especially immigrants, move intoareas dominated by residents with a dif-

263ferent ethnicity or race, the integration ofthe newcomers can give rise to conflicts witha national majority, as well as between thenew minority and the resident majority.Immigration and citizenship issues havethus provoked both populist backlashes andresurgences in minority-rights movementsin the cities of Europe, Japan and the UnitedStates. In the growing number of large citieswith pervasive ethnic or racial divisions, suchas Mumbai or Los Angeles, group identityregularly furnishes flashpoints for social tensions,political clashes and inter-group violence.institutional designs for metropolitan governance.At the beginning of the 1940s, one ofthe leading representatives of the ChicagoSchool of urban studies, Louis Wirth (1942),called for formal institutional consolidation:“We live in an era which dissolves boundaries,but the inertia of antiquarian lawyersand lawmakers, the predatory interests oflocal politicians, real estate men, and industrialists,the parochialism of suburbanites,and the myopic vision of planners have preventedus from a full recognition of the inescapableneed for a new planning unit in themetropolitan region.”In many countriesthe numberof partiesand political groupsrepresented inlocal assemblieshas grownsubstantiallyA fourth element of the new urban strife ispartisan conflict over ideologies, programsand strategies. The influence of distinct partiesand coalitions differs considerably,depending on location and context. Reflecting,at least in part, trends in other dimensionsof conflict, political parties have alsodeveloped new forms. In many countries thenumber of parties and political groups representedin local assemblies has grown substantially.In Europe new ecological andpopulist parties have appeared. In the Southdecentralization and the establishment of localdemocracy has helped foster new interestgroups in the local partisan landscape.Partisan organizations traditionally haveexerted only limited control over local politicsin many Southern cities. Now upstartreligious and ethnic parties compete openlyand with some success with the establishedparties. As in Europe, these new groupsthreaten traditional single – or two-partydomination, and further complicate the alreadyfragmented local party system.IV. Institutional alternatives forgovernance within metropolitanareasIn early 20th Century North America, widespreadsuburbanization created some of themost extensive and dispersed urban regionsever seen. Under conditions of high geopoliticalfragmentation, a debate emerged thatto this day continues to shape choices aboutUp to the 1970s academic opinion throughoutthe global North reflected this view. Thewave of reorganization of local governmentin the 1960s and 1970s in Europe, NorthAmerica and parts of the South drew onthese critiques. Two arguments were essentialto the case against fragmentation. First,the essential tasks and responsibilities ofgovernance – from infrastructure to socialequity – spilled over fragmented jurisdictionalboundaries in ways that demanded consolidatedinstitutions. The second, opposing,concept posits that larger governmentalunits could take advantage of economies ofscale, providing public services at lower costthan smaller governments.Applied to vastly different regional, nationaland socio-political contexts, a decades-oldargument has coalesced around two generalstrategies: supra-community reformationand territorial polycentrism.IV.1. Supra-community reformTo those in favor of creating overarchingmetropolitan governments to replace a multitudeof existing local authorities, a salientfailing of the multi-government model is itsweak performance as a democratic institution.This is evidenced by a decline in localpolitical and electoral participation in manycountries. In addition, many local governmentsare perceived as inefficient and disconnectedfrom the expectations of theircitizens.

METROPOLITAN GOVERNANCE264United Cities and Local GovernmentsThere isa perceptible lackof collective willamong those whomight effect broadchangesin metropolitanboundariesThe weakness of a multitude of local governmentspreoccupied with only local concerns isa perceived unwillingness to act on issues thataffect the entire region. This was the argumentadvanced, for example, by the Quebecgovernment in their White Book onmunicipal reorganization (2000:20): “The limitedsize of the municipalities is sometimespresented as an advantage in terms of theexercising of democracy because it allows foran administration that is more attuned to residents’needs. However, insofar as the fragmentationof the municipalities limits theirability to deal with the often important issuesthat transcend their territories, e.g. land useplanning, the environment, public transportation,and economic development, there is insteada risk that residents will be lessinterested in participating in municipal life.”The significance of these arguments needs tobe understood in light of the highly decentralizedstates where they were put forth. InNorth America, the fragmentation of localauthorities, including municipalities and districtsestablished for education and other services,contributes to great disparities in theservices different communities receive. Insome cases these differences are caused byvariations in local skills and in the professionalismof municipal bureaucracies. In theUnited States and Canada, those in favor ofintegrated forms of metropolitan governmenthave generally stressed the need to reduceintra-metropolitan area socio-economic disparitiesin such services as education andsecurity (Dreier, Mollenkopf and Swanstrom2004). Reform was also held out as a betterway to address problems that require coordinatedcollective action throughout a metropolitanarea, in such sectors as water supply,waste management and air pollution.IV.2. Territorial polycentrismIt was ultimately in more centralized NorthernEuropean countries, for example the UnitedKingdom, where successive waves of communalconsolidation came closest to realizing thegoals of supra-community reform nationwid..In the United States, a countermovementemerged to defend decentralized metropolitanarrangements. To counter the arguments ofreformers, those against the formation of metropolitangovernments criticized their redtape, their high operating costs and their remotenessfrom their citizens.The supporters of the political-economicapproach known as Public Choice have providedthe main inspiration for arguments infavor of small local units as the main unitsfor governance in metropolitan areas (Ostrom,Bish and Ostrom 1988). This approachanalogizes local governments competing forresidents to privately owned companiescompeting for the production or sale of goods.Proponents argue that it is more efficientand democratic for the localities within ametropolitan area to compete among themselvesfor the production or sale of publicservices than to leave those services to onemonolithic government entity. They arguefurther that the coexistence of differentgovernment units with different combinationsof services and taxes offers inhabitantsa wider choice of residential areas. Residentscan thus select the community within themetropolitan area that best corresponds tothe level of public service they seek. Resourcesneeded by the separate metropolitantowns can be shared through agreementsabout specific functional sectors, such astransportation, education and health (Marksand Hooghe 2003).Beyond such operational concerns, there is aperceptible lack of collective will among thosewho might effect broad changes in metropolitanboundaries. Middle classes in manycountries have shown little desire to contributefinancially to the reduction of intrametropolitanwealth disparities, and to thequest for fiscal equity. There has thus beenonly limited middle-class support for a keyprinciple underlying the push for metropolitanintegration.IV.3. The “New Regionalism”Given the imposing realities of life in largemetropolitan areas, a practical compromise

265may be found in a flexible solution with avariable scale of inter-municipal cooperation.In this case results can be manifestedin different ways. The advantages of suchquasi-formal cooperation have been emphasizedin many empirical studies.By the end of the 1970s, disenchantmentwith conurbation institutions became apparentin many countries. In Great Britain thesuppression of urban counties and the GreaterLondon Council took place in 1986; thesame year saw the dissolution in the Netherlandsof the Rotterdam and Eindhovenconurbation bodies. At about the same time,Australian authorities acknowledged the failureof repeated federal and state attemptsto consolidate local authorities, and in Spainmetropolitan governments in Valencia andBarcelona were dismantled. The French calledan early halt to an urban communities’ institutionalizationprocess, the Italian effort tocreate metropolitan areas failed to get offthe ground and in Germany consolidationexperiments such as the Umland VerbandFrankfurt and the Kommunalverband Ruhrgebietproved disappointing.However, the concept of metropolitan areagovernment itself has substantially changedin the past 20 years. Most of the modelsenvisaged or experimented with in the1980s are now seen from the perspective ofgovernance, rather than government. Moreover,governance is no longer confined to thebuilt-up areas of distinct urban conurbations;it now extends to vast multi-polarurban regions that continue to expand andchange.This new trend toward a more flexible, polycentricform of governance, described inNorth America as new regionalism, is firstlyassociated with the global decentralizationprocess. This approach seeks to strengthenlocal authorities at the expense of large,supra-municipal organizations, especially inareas of the world that are on the path todemocracy. At the same time, the form,pace and scale of contemporary metropolitantransformations has made traditionalforms of metropolitan government seem increasinglyinadequate.It is therefore not appropriate to speak ofsimple replacement or of the substitution ofone model by another over time. Rather it ismore useful to envision increased differentiationamong a variety of mixed systems ofgovernment. This movement can be observedin most countries, both in the North andin the South.How can these new forms of metropolitan governancebe characterized? Analysis of recentinstitutional experience reveals five particularlysignificant aspects:• Pragmatic responsiveness in execution.State governments tend not to imposetheir ideas any more; instead they takegreat care to consult, listen, put into perspective,harmonize and reconcile. Ratherthan propose a single institutional modelfor all urban areas, they work carefully ona “made-to-measure” solution. Decisionsto undertake reform respond to specificchallenges related to the management ofurban growth (Downs 1994).This view makes it easier to understandthe changes in governance of the Tokyoregion. The Tokyo Metropolitan Government(TMG), became one of many players– prefectures, regional ministerial offices,Japan Railway, private companies – involvedin regional governance. In a similarfashion, the recently created Greater LondonAssembly appears to be a relativelysuperficial mechanism. It cannot exerciseany real influence except in strict collaborationwith the boroughs, privately ownedpublic service companies (special purposeagencies), two regional developmentagencies, and several central governmentdepartments. Canada, throughout thesecond half of the 20th Century a leader inintegration of metropolitan governments,has now turned toward a polycentric neoregionalism.This shift comes in the wakeof spectacular de-fusion measures followingreferenda among municipalitiesGovernance is nolonger confined tothe built-up areasof distinct urbanconurbations; itnow extends tovast multi-polarurban regions thatcontinue to expandand change

METROPOLITAN GOVERNANCE266United Cities and Local GovernmentsMetropolitangovernmentscan usefully beclassified by theamount of territorywhere they havejurisdiction,their institutionaldepth, and theirdemocraticintensitygrouped within metropolitan areas. Thedevelopment of “lighter” governancestructures built around regional districtsand metropolitan municipalities has followed.• The adaptation of existing territorial unitsand governments above the municipal levelto manage emerging challenges ofmetropolitan regions. For large urbanregions, such as Tokyo, Paris and Sao Paulo,a regional or federal unit of governmentprovides administration at a scalebeyond the local government itself. Similarly,in the United States county governments,which are a higher level thanlocal municipalities, often provide a moreencompassing administrative frameworkfor carrying out planning or providing socialservices across municipal boundaries.American advocates of metropolitangovernance increasingly look to coalitionsamong representatives of cities and suburbsin the legislative and policymakingarenas of state and federal governmentsas a source of metropolitan policy (Dreier,Mollenkopf and Swanstrom 2004).• Strengthening democratic legitimacy. Forthe supporters of new forms of metropolitangovernance, direct popular electionof legislators and government executiveshas a double purpose: enhancing localautonomy and strengthening the linkbetween citizens and their political representatives(responsiveness). The directelection of the leadership for Metro Torontobegan in 1988. In Stuttgart, whenthe political parties offered lists of candidatesfor election to the Stuttgart RegionalCommunity (Verband Region Stuttgart)founded in 1994, party leaders took careto include the smallest possible numberof local representatives. This tactic limitedpolitical ties to parties in existing localgovernments, further empowering theregional assembly. Since 2000, the GreaterLondon Assembly and the mayor areelected directly by the people. Unlike theformer Greater London Council, the GLAhas adopted a strategy to encouragecompetition and social cohesion ratherthan simply to supply services directly(Harloe 2003).• The primacy of mission over management.The metropolitan administration iscommitted above all to planning, coordinatingand integrating policies set bymetropolitan area local authorities. Truemanagement tasks remain limited. As aconsequence, expert and scientific analysisof the metropolitan problem is morenuanced and pluralistic than it was 20years ago. Rather than agencies of strategicdirection, the new structures ofmetropolitan governance are necessarilylighter: The Greater London Authority haslittle more than 600 employees.• Close association with the private sector.At all stages in the process of institutionalmaturity, the strong influence of privatesector leaders and organizations can beseen. In Europe as well as the UnitedStates, chambers of commerce and associationsof enterprises are particularlyprevalent. In some countries, the role ofthe private sector is determined by legislation.V. Panorama of existing metropolitangovernance arrangementsWorldwide there is great variety in metropolitangovernance. As illustrated in Table 1,metropolitan governments can usefully beclassified by the amount of territory wherethey have jurisdiction, their institutionaldepth, and their democratic intensity. Theposition of metropolitan regional governmentsin the overall governmental hierarchy,including national and other systems, alsoinfluences the effectiveness and significanceof metropolitan governance. Additionally,the specific governmental functions assumedby the institutions of metropolitangovernance reveal global similarities andcontrasts, as do any trans-national arrangementsthat address the challenges of de factointernational metropolitan governance.

267Table 1Dimensions of governance institutions in metropolitan areasLower Moderate HigherINTERNALSpatial coverage Fraction of the metropolitan area Majority of the metropolitan area The entire metropolitan areaInstitutional thickness Inter-community co-operation Authority for metropolitan development or specific sector Metropolitan townDemocratic intensity Local democracy only Multi-level democracy Compound metropolitan democracyEXTERNALCentrality to higher level policymaking Intra-metropolitan divisions Regional capital Prime urban regionInter-metropolitan divisions National alliance of urban regions National capitalLimited representationSector-specific integrationfor metropolitan interestsV.1. Spatial coverageExisting institutions may cover all of ametropolitan territory, or only part of it. Consequently,their ability to regulate, manageand affect residents necessarily varies.Especially under conditions of rapid growth,the fluid functional and demographic boundariesof metropolitan regions make spatialcoverage a constant challenge.Most metropolitan governments have tomake adjustments to accommodatechanges in their official territory. In some cases,the metropolitan government at its inceptiondid not encompass its entire modernregion; others have seen their region grownwell beyond their official boundaries. Forexample, Metro Toronto was created in1953, but by 1991 still covered only 54% ofthe Toronto metropolitan area. Similarly,the Greater Bombay Municipal Corporation(GBMC) covers only 67% of the populationin the Mumbai metropolitan region, eventhough it serves 12 million of the region’s18 million inhabitants. More recently, thereform that created metropolitan governmentsfor South African urban regions succeededin bringing only 38% of the totalpopulation in the Johannesburg metropolitanregion under the single central metropolitangovernment there.Many metropolitan governance arrangementsare confined to limited, often sociallyand spatially distinct portions of metropolitanareas. In Argentina, the Northern MetropolitanRegion, a consortium created in2000, encompasses just a portion of themainly affluent municipalities in the BuenosAires metropolitan area (San Fernando, VicenteLopez, San Isidro, Tigre). In the samemanner, the minimal coordination of publicpolicy among 39 different towns in the SaoPaulo metropolitan area appears to affectjust seven of them. All seven, Diadema, SaoCaetano do Sul, Sao Bernardo do Campo,Santo Andre, Maua, Ribeirao Pires and RioGrande da Serra, operate within the CamaraRegional do Grande APC. It is symptomaticthat the central town, Sao Paulo, is not amember of this consortium.V.2. Institutional thicknessThe governance of metropolitan areas can bemore or less institutionally concentrated andintegrated, both territorially and functionally.a) New town or metropolitan townIt is relatively rare for a single authority toexercise general and multifunctional authorityover an entire metropolitan territory. Itoccurs where a merger of all componentcommunities has taken place.

METROPOLITAN GOVERNANCE268United Cities and Local GovernmentsThe metropolitanlevel of governancecan take any oneof several forms:a metropolitandevelopmentcouncil,a metropolitandevelopmentauthority,or a fullyempoweredmetropolitangovernmentWhen this happens, the metropolitan area islikely to be structured around the metropolitantown that provides most services. TheBangkok Metropolitan Administration (BMA),for example, was created by merging Bangkokand Thonburi. Similar absorption of atleast some functions and responsibilities oflesser towns has occurred in Seoul, KualaLumpur, Surabaya and Jakarta. The SeoulMetropolitan Government is run by a mayorand an assembly that is more or less electeddirectly by the people, and encompasses25 districts called Gu. The Chinese governmentcreated metropolitan towns directedby powerful mayors who areappointed by the state in Beijing, Shanghai,Guangzhou, Chongqing and Tianjin. Onthe infra-metropolitan level, districts still exist,but with reduced authority and budgets.This sometimes leads to friction between themetropolitan level and the affected areas.A series of mergers between communitiesbelonging to two-level metropolitan systemshas taken place at the instigation of Canadianprovinces. In 1970, the New DemocraticParty, having a majority in the Manitobaprovincial parliament, decided to combinethe Corporation of Greater Winnipeg and itsdistricts into a single town, Winnipeg. Thehope was that the merger would alleviatesocio-economic and financial difficulties inthe central town by including its wealthiersuburbs in the region’s resource pool. TheOntario government in 1998 employed asimilar merger strategy to forge the newTown of Toronto. Two years after that, theprovince of Quebec created the new,enlarged municipal areas of Montreal andQuebec.One of the world’s most striking recent experimentswith metropolitan governance istaking place in South Africa. By its nature,the old apartheid regime with its institutionalizedsegregation prevented any type ofmetropolitan organization. The abolition ofapartheid in the 1990s led in a very shorttime to the appearance of metropolitantowns. Pressure for this change came primarilyfrom the dominant party, the ANC, whichsaw in metropolitan government the mosteffective vehicle for territorial reform and forreduction of socio-economic inequities. InDecember 1998, the Local Government MunicipalStructures Act officially recognized theformation of metropolitan towns, whoseboundaries would be defined by a commissioncalled the Municipal Demarcation Board beforethe 2000 local elections. There are nowsix such towns: Cape Town, Ethekwini, Johannesburg,Ekurhuleni, Tshwane, and NelsonMandela (Cameron and Alvarez 2005). It isstill too early to draw firm conclusions fromthis unique effort. So far, however, the creationof metropolitan towns appears to haveimproved the lives of residents in some placesbut had mixed or even disappointing results inothers.b) Co-existence of local governmentswith metropolitan structuresThis formula combines proximity betweenlocal authorities and their citizens with transfersof responsibility for metropolitan issuesto a specific supra-community entity. Inprinciple, the federal logic underlying suchan arrangement precludes any hierarchicalor subordinate relationship between the twoterritorial levels. The Canadian provinces ofOntario, Manitoba, Quebec and BritishColumbia created such structures for all oftheir metropolitan areas in the 1950s and1960s; for a long time Metro Toronto (1953-1997) was the government prototype. Similarmetropolitan governance structures alsoplay a role in Metro Manila, Sao Paulo, Lima,Rio de Janeiro, Bombay and Calcutta.The metropolitan level of governance cantake any one of several forms: a metropolitandevelopment council, a metropolitan developmentauthority, or a fully empowered metropolitangovernment.The metropolitan development council guaranteesthe retention of power by componentlocal governments. Members of thelocal government designate their mayor, orsome other local official, as their councilmember. These council members in turnselect a council executive from among their

269number. Advisory councils with this type ofstructure can be found in most metropolitanareas in the United States, For example, theMetropolitan Washington Council of Governments(WASHCOG), was created in 1957 forthe Washington metropolitan area. Thesame structure is also found in El Salvador inthe Council of Mayors for the MetropolitanArea of San Salvador (COAMSS: Consejo deAlcaldes del Área Metropolitana de San Salvador).The Metro Manila Development Authority(MMDA) was created by Filipino legislationin 1995. The council is made up of staterepresentatives and 17 mayors (seven townswith extended powers, and 10 municipalities).It replaced the Manila MetropolitanAuthority, which in 1990 had in turn replacedthe Metropolitan Manila Commission,which was set up in 1975 with relativelyimportant powers. The MMDA is not a territorialcollective. It is a specific public bodyplaced under the direct control of the Presidentof the Philippines. The MMDA is responsiblefor planning, monitoring andco-ordination tasks, but its budgetary resourcesremain limited. It is considered notwell suited to regulating the policies of itscomponent parts because of the weaknessof its integration instruments. The MMDAappears to be caught between the power ofthe state authorities and the desire of the17 municipal authorities to escape fromany direction or restriction imposed by higherauthorities. (Laquian 2001).Compared with a metropolitan developmentcouncil, a metropolitan developmentauthority concentrates more on technocraticfunctions than on political methods ofgovernance. This model has been adoptedby many Indian metropolitan areas,including New Delhi, Bombay, Karachi andColombo.The model of a metropolitan governmentsuperimposed on local authorities providesmore functional integration, and its leadershipis often elected directly by the people. This isthe case in Tokyo and in Toronto.Tokyo’s TMG was created in 1943 by a mergerof the City of Tokyo and the Prefecture ofTokyo. Today, it is a metropolitan prefectureconsisting not only of the central town andits districts, but also the Tama area, whichincludes 39 municipalities, 26 towns, 5localities and 8 villages. It appears thatthe TMG gives priority to running the servicesand development of 23 districts of theCity of Tokyo guided by a system of financialequalization, while running the western partof its territory (Tama) in a more detachedmanner (Vogel 2001).The degree of institutional thickness dependson a metropolitan structure’s financialautonomy. The Chinese centralgovernment has given metropolitan areassignificant scope in taxation and the managementof their own resources, includingbuying and selling of land, tariffs and licensefees and securing loans in China andabroad. In France, the communautés urbainsare responsible for large budgetsthat correspond to their expanded areas ofauthority. The Communauté Urbaine deBordeaux (CUB) budget is twice the size ofthe budget of the City of Bordeaux, in partbecause the CUB carries both compulsoryand optional missions associated with theproduction of large facilities, the modernizationof urban services and the developmentof the local economy.c) Intercommunity co-operationGoverning metropolitan areas can also becarried out by means of agreements betweenand among municipalities. Legislation canprescribe or simplify such arrangements indesignated sectors or services. An intermunicipalagreement, which is the most populararrangement worldwide, can operate even inthe absence of a specific metropolitan institution.Such cooperative agreements havebeen established in quasi-official form withinthe metropolitan areas of Sydney (Kübler2005), Australia, and also in Lima-Callao,Santiago du Chile, and Santa Fe de Bogota inSouth America. They also foster mutual supportbetween large Russian towns and theirsurrounding oblasts (regions) and amongThe degreeof institutionalthicknessdepends on ametropolitanstructure’sfinancial autonomy

METROPOLITAN GOVERNANCE270United Cities and Local GovernmentsFlexible structuresto coordinate localparticipationaround targetedinitiatives arecommon, and havebecome more soover the past fewyearsmany municipalities and counties in UnitedStates metropolitan regions.Under these types of agreements, territorialfragmentation persists, but specific sectorbasedintegration overcomes it in the performanceof specific, sometimes narrowlydefined sectors, such as water and sanitation,electricity, transportation and wasteprocessing. The resulting arrangements areexpected to realize economies of scale for themanagement of capital-intensive services.The two main agencies of Metro Manila arethe Metropolitan Waterworks and SewerageSystem, and the Light-Rail Transit Authority.The Karachi Metropolitan Corporation specializesin economic development projects in thelargest of Pakistan’s cities, the Karachi DevelopmentAuthority manages property andinfrastructure and the Karachi Water Supplyand Sewerage Boards preside over their respectivetasks. Another example of inter-communitycooperation is seen in the Dhakametropolitan area of Bangladesh. There specializedagencies operate in parallel both inthe City of Dhaka, and with a set of municipalities(pourashavas) and 42 state services.Among these, the most important are RAJUK(Capital Development Authority), the DhakaCity Corporation and the partly state-controlledDhaka Water and Sewerage Authority.Similar arrangements may be found in othermajor metropolitan regions from Los Angelesto Sao Paulo (see Appendix).Flexible structures to coordinate local participationaround targeted initiatives are common,and have become more so over thepast few years. The State of Sao Paulo, forinstance, has initiated a number of thesearrangements since the 1990s. In conjunctionwith an NGO, the Metropolitan Forumfor Public Safety created the institute “SaoPaulo Contra a Violência.” The state alsoestablished a system of governance for riverwatersheds, incorporating a variety of localstakeholders (Abers and Keck 2006).Especially in the South, many metropolitanareas have weak intra-metropolitan coordination:in some cities there, none at all. Lackof sufficient local autonomy or capability oftencontributes to this problem. In Nigeria,Ethiopia and Tanzania, the urban authoritieshave rarely experienced a level of autonomythat would allow them to manage their ownpolicies, much less forge cooperative agreementswith neighboring local governments.In Nigeria, disputes over the proper applicationof existing governmental and professionalskills have impeded intra-city cooperation.It was only in 2003 that the decentralizationbegun by Ethiopian state authorities gaveAddis-Ababa a new charter with the expressaim of ending a century of centralized development.In Tanzania, decentralization in the1970s was simply a de-concentration exercise.Dar el-Salaam’s new municipal structure,operational since February, 2000, followed along period of technocratic and centralizedmanagement of the town. In all three of theseAfrican metropolitan towns, territorial parcelingthrough the creation of new administrativeunits contrasts with the unificationprocess seen in South Africa.Intervention by higher level governmentscan also supplant metropolitan cooperation.In Israel, for instance, despite the high proportionof its population living in the fourmetropolitan areas of Tel Aviv, Jerusalem,Haifa and Beer Sheva, there are very fewmetropolitan governance mechanisms. Inthe Tel-Aviv metropolitan area most intercommunityefforts are organizationally weak.At least in part, this is because centralauthorities maintain strict control over territorialdevelopment, transport and regionalinfrastructures (Razin and Hazan 2005).V.3. Democratic depthThe citizens’ role in the appointment andcontrol of metropolitan authorities varieswidely. Although electoral institutions aloneare rarely sufficient to ensure responsivenessor democracy, recent local electoralreforms in many countries have been intendedto extend opportunities for electoral participation.The growing size, complexity andterritorial connectedness of metropolitan

271regions increasingly poses what Devas(2005) calls a tradeoff between “scale” and“voice” in governance. The larger the scaleof governance, the more difficult it is to provideeffectively for the participation of localunits, neighborhoods, civil societies or individualcitizens.Indeed, integrated metropolitan structureshave frequently been imposed by authoritariancentral governments. Alongside technocraticefficiency in urban management,non-democratic governments have usedmetropolitan administration to control politically“sensitive” urban regions; that is, thosesuspected of having potential to breed opposition.For example, in 1973 it was the Brazilianmilitary regime that created the ninemetropolitan regions of Belém, Fortaleza,Recife, Salvador, Belo Horizonte, Rio deJaneiro, Sao Paulo, Curitiba and Porto Alegre.Though initially supported and tightlycontrolled by the government, only vestigesof this system remained at the start of the1990s. By then, a new democratization anddecentralization process was well underway.Similarly, the Metropolitan Manila Commissionwas created by the Marcos dictatorshipin 1975, its leadership entrusted to ImeldaMarcos.Association with authoritarian regimes mayexplain why metropolitan governance has toa certain extent been neglected in somecountries. In metropolitan governance systemsthat are based on the functions of specializedagencies, management is mainlycarried out by technicians or bureaucrats.This necessarily reduces democratic control,and with it, legitimacy. Appointed by the Presidentof the Philippines, the MMDA executiveis often politically impotent in the presence ofthe 17 directly elected mayors of the towns inthe metropolitan area. These mayors providefinancial contributions to the metropolitanauthority’s budget.Direct election of a metropolitan executive,as in Tokyo, Bangkok and Jakarta Raya, canenhance the legitimacy of metropolitan politicalinstitutions. South African metropolitantowns are run either by mayors (Johannesburg,Ekurhuleni, Tshwane, and Nelson Mandela)or by executive colleges (Cape Townand Ethekwini). Although the latter are notdirectly elected by the people, they areappointed by the parties according to theirelectoral score. In some cases, only some ofthe representatives are elected by the people.The council of Bombay’s GBMC, forinstance, is elected, but its executive isappointed by the state of Maharashtra.Democracy can be organized on an infra-metropolitanscale. Sub-municipal electedgovernments play an especially importantrole when the municipal government is large.Thus, South African legislation allows provincialauthorities to create either sub-councilsor ward committees. The sub-councils, madeup of municipal councilors and councilorsfrom adjacent wards, perform a consultativerole for the municipal council, which candelegate specific powers to them. Ward committees,made up of the ward municipalcouncilor and representatives of the people,function as instruments of participativedemocracy. Sixteen, then 20 sub-councilshave been created in Cape Town. Ward committeeshave been set up in Johannesburg,Ekurhuleni, Tshwane and Nelson Mandela. Asin many such instances of sub-municipal participation,municipal authorities have generallybeen hesitant to transfer power to thesebodies. Initial assessments of their operationshow only modest participation by local people(Cameron 2005).In the case of the Tokyo TMG, arrangementsfor sub-metropolitan democracy have recentlyprovided greater democratic depth.The mayors of the TMG districts have since1974 been elected directly by the people.Since then, the districts have been transformedfrom administrative entities into specialurban governments that carry out a portionof metropolitan government services. A reformto devolve financial functions and skillsto the districts was adopted in 1998 and tookeffect in 2000. The metropolitan authorityremains responsible for fire-fighting servicesas well as water and sanitation.Electoralinstitutions aloneare rarelysufficient to ensureresponsiveness ordemocracy, recentlocal electoralreforms in manycountries havebeen intendedto extendopportunitiesfor electoralparticipation

METROPOLITAN GOVERNANCE272United Cities and Local GovernmentsSincethe emergenceof metropolitanareas asa widespread formof settlement,democratictheorists haveadvocatedcompounddemocratic formsof this natureThe depth of democracy refers to an aspirationthat may never be entirely met. Nonetheless,governance structures that comeclosest are those that go beyond multi-levelparticipation procedures and provide realempowerment to make participation meaningfulat each level, from neighborhoods tometropolitan councils. Mechanisms thatallow public participation in routine governmentalplanning and budgeting can alsodeepen democracy. Since the emergence ofmetropolitan areas as a widespread form ofsettlement, democratic theorists have advocatedcompound democratic forms of thisnature (Dahl 1969).V.4. Relations with higher-levelgovernmentsThe politics of metropolitan governance playsout at higher levels of government, as well aswithin metropolitan regions themselves. Fromthe perspective of leaders in metropolitanregions, effective governance often dependsupon bringing wider regional and nationalorganizations and resources to bear. As urbanregions have become increasingly extendedand connections with the hinterlands havegrown, a better understanding is needed ofthe changing dynamics of intergovernmentalrelations between large cities and othersurrounding regions.It can not be surprising that relations betweenmetropolitan regions and higher levelsof government vary widely. At one end of thespectrum are urban regions that have secureda central position in the national politicalprocess. Such cities contain the bulk of anation’s urban population, economic activityand cultural production. The metropolitanregion of Seoul, for instance, contains 47%of the Republic of Korean population; metropolitanLima contains 32% of the populationof Peru; metropolitan Buenos Aires has 32%of the Argentine population. The demographicweight of such cities often goes alongwith economic, political and cultural centrality.In the smaller countries of the North, thegrowth of cities into inter-connected regionshas sometimes created metropolitan regionswith a similar kind of primacy. In the Netherlands,for instance, the national economy revolvesaround the Randstad region thatencompasses Amsterdam, Rotterdam andthe Hague. Even with a smaller proportion ofthe national population, status as a nationalcapital can enhance the position of an urbanregion in the national economy and in theshaping of national policy.In the South, the political dominance of majorcities in the middle of the 20th Centuryprovoked criticism that “urban bias” in policymakinghad rewarded the urban elite at theexpense of citizens living in smaller settlementsand in rural areas (Lipton 1977; Bates1983). Although cities, especially the largest,remain more prosperous than rural areas,recent analyses have rejected such a broadconclusion. The increasing prosperity of citiessmall and large, the growth of poverty withincities, the democratization of national andlocal governments, and the growing interdependencyof city and countryside havefundamentally altered underlying assumptionsof that early analysis (Corbridge andJones 2005). Moreover, accumulating evidenceshows that policy intervention canalter economic and social disparities betweencities, as well as between cities and thecountryside (Overman and Venables 2005).National development in much of the Southnow hinges on the exploitation of jointadvantages in cities, in the countryside andin the rapidly growing zones in between.By comparison with other metropolitan regions,those with a favored position in nationalpolitics can benefit from advantages inpolicymaking as well as in economic and culturallife. Paris, for instance, has been a repeatedsite of major planning initiatives sincethe 19th Century. Similar initiatives in manysmaller French cities began only in the 1970s.Latin American capital cities such as Bogotaand Santiago, as well as Bangkok, Manila andSeoul in Asia, have been leaders in efforts tobuild metropolitan governmental institutions.However, some metropolitan regions, especiallyin the largest nations, lack a notable

273degree of socio-economic and political centrality.Under these conditions, metropolitanregions can still find a voice at higher levelsof government, and secure crucial supportfor governance at the metropolitan level. Infederal countries, metropolitan dominancewithin one of the federal states can securesimilar resources. The Sao Paulo region inBrazil, for instance, dominates the largerstate of Sao Paulo; the Mumbai region is themetropole for the Maharashtra state in India.Officials and activists from the Sao Pauloregion helped secure state-level legislationfor water basin governance that created newpossibilities at the metropolitan level (Abersand Keck 2006). Similarly, public companiesand officials from Maharashtra state haveplayed an important role in the developmentplans of localities in metropolitan Mumbai.In specific sectors of policy-making, stateministries or other specific organizations representinghigher-level governments maycontribute to metropolitan governance inways that need not implicate those governmentsas a whole. National and state environmentalagencies, for instance, often playactive roles in antipollution initiatives. Organizationssuch as the Metropolitan RegionDevelopment Authorities in Karachi andMumbai can mobilize higher-level governmentresources and authority on behalf oflocal development. (See Appendix.)At the national level, disparate metropolitanregions can form alliances to represent collectiveinterests. Politically influential organizationsof urban representatives, such as theGerman Staedtetag or the Nordic local governmentassociations, provide examples ofthis potential (Sellers and Lidström 2007). Inother countries such as the United States,urban representatives have faced growingmarginalization in national political processes(Dreier, Mollenkopf and Swanstrom 2005).The increasingly dispersed, fragmented anddivided nature of metropolitan regions inmany developed countries poses new problemsfor effective political and intergovernmentalrepresentation of this sort. At thesame time, political and economic divergencesbetween metropolitan regions canfrustrate alliances in pursuit of commonmetropolitan interests. Intra-metropolitanand inter-metropolitan political divisions arenow a recurrent feature of governance in theUnited States, and recently have begun toemerge in such countries as Canada, France,Switzerland and the United Kingdom (Hoffmann-Martinotand Sellers 2005).V.5. Sectoral diversity and limitedconvergenceAs Hooghe and Marks (2003) have observed,governance arrangements for local cooperationin specific policy sectors – roads, education,and pollution regulation – departsfrom the traditional hierarchical model of relationsbetween higher-level and local governments.By and large, such arrangements forgoverning metropolitan regions reflect a globalconvergence around this more sectorspecific,flexible approach, which is consistentwith the “new regionalism.” To a degree notseen in the earlier U.S. debates over polycentricand supra-communal arrangements, higher-levelgovernments have played decisiveroles in many sectors. But the main internationalcommonalities in organizational practicescorrespond to differences betweendistinct sectoral domains.A look at the main organizations involved inmetropolitan governance in six major metropolitanregions provides illustrative examplesof several distinctive patterns. (SeeAppendix.) The two examples from the developedworld present both centralized anddecentralized models. Los Angeles has relativelydecentralized governing arrangementsunder a federal state, whereas Paris relies ona more centralized pattern under a unitarystate. The remaining cases include Seoul,which has experienced recent transitions resultingfrom industrialization and democratization,and the Southern metropolises ofJohannesburg, Mumbai and Sao Paulo. Thesesix examples include two national capitals(Paris and Seoul), two capitals of federal states(Mumbai and Sao Paulo), and two metropo-The increasinglydispersed,fragmented anddivided nature ofmetropolitanregions in manydevelopedcountries posesnew problemsfor effectivepolitical andintergovernmentalrepresentation

METROPOLITAN GOVERNANCE274United Cities and Local GovernmentsThe metropolitanregionsof Los Angelesand Paris contrastwith theircounterparts in theSouth in theirreliance onstronger localinstitutions,particularly thosecommanding thegreater resourcesavailable to townsoutside the urbancenterslises that are neither state nor national capitals(Johannesburg and Los Angeles). Thecomparative table of the Appendix focuseson the main organizations charged withcarrying out policy implementation in ninesectoral domains, including the distributionof public and private responsibilities.Regional geopolitical fragmentation by itselfimposes similar problems for all of thesedifferent governmental structures. As istypical of other metropolises, the centralcity in these cases contains between 19%and 67% of the metropolitan population. Inevery case – even Johannesburg in thewake of the recent metropolitan reforms–the local governments across the metropolitanarea divide into multiple units. If weinclude the infra-local district governance inJohannesburg, then every configuration ofgeneral-purpose governments includesboth some local units and a second layer ofunits that takes the obligations of the entiremetropolitan area into account. In eachcase, under both unitary and federal states,an intermediate unit of government at theregional level stands between the nationallevel and these local arrangements.Even more striking similarities among metropolitaninstitutions emerge from thebreakdown of specific sectors of policy. Forexample, a similar configuration of agenciesand firms addressing needs at national,metropolitan and local levels carriesout transit services. Roads administration isalso divided among national agencies responsiblefor big state and national roads,local governments charged with maintaininglocal roads and other governments forthe roads in between. Municipal and interlocalarrangements manage most trashcollection and land use planning sectors.Against a backdrop of national legislation inall six countries, local or metropolitangovernments are often given the job ofimplementing environmental policies.These common trends reflect a transnationalunderstanding of best practices, as wellas common influences at work within eachsector.Of course, there are significant contrasts.In Seoul and in the Southern metropolitanareas, the examples demonstrate howpublic corporations tied to national or otherhigher-level governments play a more pervasiverole in many areas. National publiccompanies in all of these countries exerciseexclusive control over all airports. Nationalor state-held development companies playa leading role in land-use planning androads. National or provincial governmentscarry out secondary and – except in Mumbai– primary education. Even where localgovernments bear much of the responsibility,there is less evidence of active interlocalarrangements or local initiatives inFrench and U.S. metropolitan areas. Especiallyin the rapidly developing areas outsidethe main urban centers, local governmentcapacities remain weak.The metropolitan regions of Los Angelesand Paris contrast with their counterparts inthe South in their reliance on stronger localinstitutions, particularly those commandingthe greater resources available to townsoutside the urban centers. Yet Los Angelesand Paris differ significantly in their patternsof organizational fragmentation. To afar greater degree than that seen in Los Angeles,the 1584 communal governments ofmetropolitan Paris exemplify a polycentricmodel espoused by Public Choice proponentsof territorial fragmentation. In trash collection,water or sewage and land-use planning,inter-governmental arrangements inParis have proliferated more or less in waysthat Public Choice theory would prescribe.Even in these domains, however, multiplemunicipalities often depend on unified centralizedagencies or companies. Before thedecentralization of the 1980s in France,even land use and planning were carried outby national field offices.By comparison, the 180 municipalitiesand five counties of greater Los Angelespresent a less fragmented organizationallandscape of general purpose localgovernments. However, numerous sectorsthat are centralized in France are decentrali-

275zed and fragmented here. Primary and secondaryschools present perhaps the biggestcontrast. Unlike any other metropolitanregion, in the Los Angeles area a patchworkof local districts operating almost independentlyshare the primary responsibility forthis area. Ownership of the area’s airportssimilarly belongs to four different local governments,although the central city ownsthe largest airport, Los Angeles International,and one other. Land-use planning lacksthe coordinating intervention that has typifiedplanning at the regional level in Parisand in other metropolitan regions. Evenpollution regulation is the responsibility of metropolitan-leveldistrict organizations createdby the state government, rather than beingsubject to direct intervention by higherlevelgovernments. The result is an organizationallandscape that is in important respectsmore fragmented than metropolitan Paris.Private contracting, a widespread practicein greater Los Angeles for trash collection,adds to the organizational fragmentation oflocal service delivery.A full comparison of metropolitan governancewould include other elements that would bedifficult to categorize without more detailedcomparative case analysis. These includelegal norms, fiscal relations betweendifferent levels of government, the role ofprivate factors, and the dynamics of leadership.Organizational comparison nonethelessdemonstrates both broad globalsimilarities in the practical form that governancetakes and strong contrasts that standout boldly only when differences betweensectors of governance and policy are takeninto account.

METROPOLITAN GOVERNANCE276United Cities and Local GovernmentsVI. Conclusion: the emergingmetropolitan agendaTo a significant degree, the governance of21st-Century metropolitan regions poses similarquestions both for the established metropolisof the North and for the emergingones of the South. The extension and increasingdiversity of metropolitan settlement hasimposed new conditions for governance inthe metropolitan areas of both regions. Inboth, arrangements for governance presentparallel dilemmas of fragmentation andcoordination. North and South, the formalinstitutional alternatives for metropolitangovernance share similar dimensions. Metropolitangovernance presents commonproblems of accommodating an array of diverse,conflicting interests and influences. Inboth the North and the South, growing mobilityand the influence of trans-local andtrans-national connections are reshaping thepossibilities as well as the imperatives formetropolitan governance.In important respects, however, the problemsof metropolitan governance inSouthern urban regions still differ fromthose in Northern ones. The growth ofSouthern metropolitan regions has createdthe largest metropolitan areas in theworld. More compact, denser and lessgeographically fragmented, Southernmetropolises are more likely to be drivenby security concerns born of greatdisparities between affluent and poorneighborhoods. Southern metropolitanareas also have fewer economic andadministrative resources to bring to bearon far more pressing and massive problems.VI.1. Multi-level governanceAs urban regions have become increasinglyextended, and connections withtheir hinterlands have proliferated, abetter understanding is needed of thechanging dynamics of inter-governmen-

277tal relations between cities and theirsurrounding regions. Metropolitanregions in both the South and the Northare not only crucial to the realization ofnational policy in numerous domains,but can take an active role in influencingpolicies at higher levels.VI.2. Participation in metropolitangovernanceParticipation in metropolitan governancepresents important issues for the realizationof democracy as well as foreffective decision-making processes.Whatever institutional form it takes,governance at the metropolitan levelconfronts the problem of incorporatingthe participation of a growing number ofincreasingly diverse interests. Understandingthe informal as well as theformal dimensions of participation iscrucial. The challenges surrounding participationare particularly acute for marginalizedgroups, such as the urban poorand ethnic and racial minorities.VI.3. Ecological sustainabilityEnvironmental policy in many domainsdepends on effective implementation atthe local level, and in turn on the efficacyof metropolitan governance. Theprovision of adequate water resourcesand water quality, especially in theSouth, presents some of the most farreachingchallenges. Global and nationalefforts to assure air quality and carbonconservation depend on sustainabletransportation as well as solid regulatoryand energy policies at the local level.Metropolitan initiatives are critical tothese efforts.VI.4. Social and spatial inequalitiesAddressing the legal informality andpoverty of Southern cities is one of thehighest priorities for metropolitan governance.Concentrations of the disadvantagedoften require more interventionand public expenditure to combat relatedproblems, such as crime, inadequateeducation and health needs (Pack 1993;Chernick and Reschovsky 1995). Indiverse, segregated metropolitan regions,fragmented governance can exacerbatethe disadvantages of the poor inobtaining public services (Alesina, Baqirand Easterly 1997). Similarly, extended,diverse metropolitan regions can offeraffluent communities opportunities andincentives to segregate themselves fromthe rest of society. This process can alsoundermine collective efforts to providegoods to the entire metropolis.Metropolitangovernancepresents commonproblemsof accommodatingan array of diverse,conflictinginterests andinfluences

METROPOLITAN GOVERNANCE278 United Cities and Local GovernmentsAnnex 1Examples of metropolitan organization, by tasksMetropolitan Los Angeles Paris Seoul Sao Paulo Mumbai JohannesburgAreaPopulation(per km 2 )196 per km 2927 per km 2 1929 per km 22.314 per km 24.089 per km 21.692 per km 2Percent incentral city22.29%19.00%44.94%57.32%66.90%38.23%Sub-nationalgovernmentsState (1), counties (5),municipalities (180),regional councils ofgovernments (11)(advisory)Regions (1),departements (7),communes (1.584)City of ParisProvince (1),metropolitan localgovernments (2),other municipalities (20)State (1), MetropolitanRegions (3),municipalities (139)State (1), municipalcorporations (7),municipal councils(13), state districts (4),villages (900)Metropolitan or districtmunicipalities (3)TransitRoadsAmtrak (national railcompany), Metrolink(joint authority oftransit agencies),separate county transitauthorities (5),interlocal authorities(6), municipal systems(39), private linesFederal HighwayAdministration(national roads), StateTransportationDepartment, RegionalCouncil of Governments(advisory), counties,municipalities (localroadsSNCF (nationalrailway), RATP(public companywith metro, bus,regional rail),OPTILE (network of39 public, privatelines), STIVO(network of publicand private lines)Infrastructureministry fieldoffices (region,department);departments,municipalities(local roads)Korail (national railway),Seoul Metropolitangovernment, Seoul MetroSubway Corporation and SeoulMetro Rapid TransitCorporation (city-ownedcompanies), provincial transitauthorities, municipalsystems and private lines,national ministriesMinistry of Construction andTransportation, SpecialMetropolitan City Government,Provincial/City/County/DistrictGovernment, publiccorporations (KoreaConstruction ManagementCorporation, KoreaExpressway Corporation)State Secretariat forMetropolitanTransports, Sao PauloTransporte, SA, (privatecompany), Companhiado Metropolitano de SaoPaulo Metro, CompanhiaPaulista de TrensMetropolitanos, andEmpresa Metropolitanade Transportes Urbanos(state companies),numerous private firmsby concessionFederal TransportationMinistry (federal roads),State Department ofRoads, municipalities(local roads), privatecompanies byconcessionIndian Railways(national publiccompany), State RoadTransport Corporation,Mumbai MetropolitanRegion DevelopmentAuthority (state agencywith participation bycentral city), other stateagencies, interlocal andmunicipal bus servicesNational HighwaysAuthority, MumbaiMetropolitan RegionDevelopment Authority(state agency), CityIndustrial DevelopmentCo. (state company),municipal governmentsSpoornet (nationalrailway), Metrobus(central city-ownedcompany); municipalgovernments; provincialDepartment of PublicTransport, Roads, andWorksNational Roads Agency(national roads),Johannesburg Roads(central city-ownedcompany), municipalgovernmentsTrash collectionPrivate contracting(42), municipalgovernments (13),some interlocalcooperationMunicipal and alimited number ofintercommunalagencies: 65+(collection), 30+(treatment)Municipal governments andprivate contracting. Someinterlocal cooperationMunicipal governments(mostly), limited use ofprivate contracting,municipal firmsMunicipal governments,limited privatecontractingPikitup (central cityownedcompany), othermunicipal governmentsWater/sewageNumerous county,municipal and interlocalutilities or agencies,private contractorsMunicipal and alimited number ofintercommunalagencies, privatecontractorsMunicipal governments,national public corporations(Environment ManagementCooperation (EMC),ENVICO(Korea Environment &Resources Corporation)) andinterlocal cooperation directedby Ministry of EnvironmentBasic SanitationCompany of the State ofSao Paulo (SABESP)(state-ownedcompany), stategovernment, basincommittees of localofficials and othersMunicipal governments,City IndustrialDevelopment Co. andMaharashtra IndustrialDevelopment Co. (statecompanies)Johannesburg Water(city-owned company),other municipalgovernments, privatecontractors

279Annex 1Examples of Metropolitan Organization, by Tasks (Cont.)Metropolitan Los Angeles Paris Seoul Sao Paulo Mumbai JohannesburgAreaAirportsFive (two owned bycentral city, others byseparate municipal orcounty governments)Two (owned byParis Airports(national publiccompany))Two (owned by Korea AirportCorporation (national publiccompany))Three (owned byINFRAERO (Nationalpublic company))Two (both under Airportauthority of India, onemanaged by privatefirm)Five (owned by AirportsCompany South Africa(national publiccorporation))Land useplanningMunicipal governments,counties, advisorycouncil of governmentsMunicipalgovernments,interlocalcooperation,privatecontractingMunicipal governmentsadvised by Korea LandCorporation (national publiccompany) and Ministry ofConstruction andTransportation , SeoulMetropolitanDevelopment Corporation(city owned company)Municipal governments,private contracting,Empresa Municipal deUrbanizacao company)Mumbai MetropolitanRegion DevelopmentAuthority (state agencywith central cityparticipation), CityIndustrial DevelopmentCo. (state company),other state agencies,municipal governmentsMunicipal governments,advised by provincialgovernmentAir pollutionAir quality districtsestablished by state(2), governed by boardsof local officialsNationalgovernmentagency fieldofficesMunicipal governments andinterlocal cooperation led byMinistry of EnvironmentState EnvironmentMinistry, StateEnvironment Agency(CETESB)State pollution controlboard, municipalgovernmentsMunicipal governmentsWater pollutionWater quality districtsestablished by state(3), governed by boardsof local officialsNationalgovernmentagency fieldofficesMetro government andmunicipal agencies and publiccorporations, Ministry ofConstruction andTransportation, K-Water(Korean Water ResourcesCorporation (national publiccompany), nationallydesignated water test centers(usually public institutions)State EnvironmentMinistry, StateEnvironment Agency(CETESB), basincommittees of localofficials and othersState pollution controlboard, municipalgovernmentsMunicipal governmentsPrimary andsecondaryeducationLocal school districts(172)National ministryof educationNational ministry of EducationState Secretary ofEducation (elementaryand secondary),municipalities(elementary)State government(secondary), localgovernments(primary), privateschoolsProvincialgovernmentDepartment ofEducationSources: Abers and Keck 2006; Metropolis 2007; Segbers et al. 2007; and governmental and organizational websites.

CONCLUSION280 United Cities and Local Governments

281CONCLUSIONDecentralization and DemocracyA Global Perspective in 2007Tim CampbellThe purpose of the First World Report onDecentralization and Local Democracy– and of this overview – is neither normativenor prescriptive 1 . Rather, the aim is toprovide a balanced view of the state ofdecentralization and local democracy inthe world.The opening section of these conclusionsprovides an overview of trends. The sectionalso frames the major issues –thepolicy objectives and component issues–that virtually all states must engage toachieve decentralized democracy, notingoutstanding areas of progress as well asareas of concern. The succeeding sectionthen reviews each of six central policyissues, analyzed from the perspective oftheir contribution to decentralized democracy.Next, are emerging sets of globalissues, selected Millennium DevelopmentGoals – climate change, land use, health,and gender – are directly relevant to localgovernments and will require more attentionin the future. Another emerging issue,though not an MDG, concerns metropolitangovernance. Suggestions for next steps toaddress the state of inter-governmentalrelations and democracy are included inthe closing section.Though the regional reports provide a centralsource of information for this synthesis,additional perspectives are brought infrom a variety of local, national, independent,and supra-national organizations. Inaddition, recent research from a samplingof academic literature complement andround out the discussion.I. The Many Faces ofDecentralization and DemocracyThe nations covered in this report presenta wide variety of experiences, most ofthem leading toward decentralized governancein some form. The fact that so manystates have chosen to move along the pathof decentralization constitutes a remarkablephenomenon, the impetus for whichmust connect with deep underlying structuralfactors felt around the globe.Among the more frequently mentioned driversof change are the exhaustion of thecentral state model after the collapse ofthe Soviet Union and the realization that anew departure towards state developmentwas required, one that relied on a broaderbasedpyramid of legitimacy and state presence.Meanwhile in Europe, the process ofregionalization was encouraged by theEuropean Union and many countries wereconfronting the emergence of regionalistdemands (Spain, Italy, Scotland, and NorthernIreland). At virtually the same time,and for similar reasons, the spread ofdemocracy was a palpable form of reconnectingcitizens and governments, andmany actors and grass roots movementspushed for deeper democratization in the1. The author wishes toacknowledge theextensive and detailedcontributions of theWorld Secretariat ofUCLG to thepreparation of thisreport. The presentanalysis draws fromregional chapters fromtime to time.Reference is made tothe respective chapterwhenever necessary.

CONCLUSION282 United Cities and Local Governmentscountries of Africa, Asia and Latin America(Haggard, 1994; Campbell 2003).In a related sphere, and about the sametime, liberalization of trade and the dramaticallyincreased velocity of global transactionssuddenly thrust states into a morevulnerable, more competitive environment,as compared to just decades earlier(Swyngedouw, E. A. 1992; Amin and Tomaney,1995). One consequence of theglobalized economy has been the rise ofcross-state corporate connections. Asnational borders began to lose their importanceas markers of comparative advantage,regions and cities became the nextdistinguishing feature on the economiclandscape (Harris, 2003; Taylor and Watts,1995). Some authors point to the “…opposingforces of horizontal competition imposingmarket based disciplines in Europe…constrained by within-country redistributivetendencies and mobility-based competition.”(Salmon, 2007). Accordingly, aregional perspective on economic developmentbegan to assume an important placein both the process and the outcome ofdecentralization.Snapshot of the RegionsIn short, looking across an extremelydiverse set of nations grappling with acomplicated field of issues, nations havemoved on decentralization in a half dozendistinct directions, and have not held closeto any single normative framework to guidethe formulation and implementation ofdecentralized governance.• European countries seem to haveembarked on a new phase of territorialreforms. Not all states are similarlyaffected by this development, withsome in fact remaining outside of it. Inessence, the reforms are concernedwith strengthening the municipal andintermunicipal framework, a trend toregionalization, and the problems relatedto organizing urban areas.• In North America, higher-level governmentshave shifted more of the responsibilityfor financing activities to thelocal level, often cutting back on fiscalsupport from above. New substantivemandates and procedural requirementsfor accountability have often accompaniedthese shifts. To varying degreeslocal governments operate under lessregulatory restrictions than in otherregions and have sought new modes ofservice delivery through privatizationand public-private partnerships. Variousinnovations have introduced elementsof interlocal cooperation or territorialconsolidation.• In Africa, implementation of thedecentralization process has rarelybeen properly planned. Many countries,especially south of the Sahara, haveundertaken reforms in the field of organizationof the state and public life, particularlyby adopting decentralizationpolicies. These countries have organizedlocal elections, which have seenlocal authorities emerging as new publicauthority figures alongside the nationalauthorities. In almost all these countries,this splitting of public authorityhas caused problems, as this major institutionalchange has not yet beenreflected in the behavior of most nationalauthorities. But in West and CentralAfrica, apart from Mali, Senegal andBurkina Faso, there is no real plan toimplement decentralization, whichseems to rest on policy announcements.And in North African countriesthe autonomy of local government isstill restricted overall in relation to thecentral state.• In Eurasia, the main idea of the reformswas to separate the state from localself-government. Legal reforms havebeen approved, but for the most partthe functions of local authorities are notclearly defined. The Soviet system ofsub-national government forms a legacythat continues to influence the

283evolution of decentralization. The principleof local autonomy has often comeinto collision with that of regional autonomyand nowhere more than in theRussian Federation from the early1990s onwards. It is possible to distinguishthree groups of countries. In thefirst – Armenia, Azerbaijan and Russia –local governments could be seen asindependent institutions. Whereasin the second group – Georgia, KyrgyzRepublic, Moldova and Ukraine – theprocess of the formation of local selfgovernmentis still not concluded.Reforms can hardly be implemented, orsimply could not be achieved until now.The third group is composed of the statesof Central Asia (Kazakhstan, Tajikistan,Turkmenistan, Uzbekistan) wherelocal issues in this region are vested inlocal state organs subordinate to centralgovernment.• In Latin America, the three biggestnations (Argentina, Brazil, Mexico) allfederal systems, focused mainly onstrengthening the intermediate levels ofgovernment, although Brazil shifted moreweight to the municipal level. In RepúblicaBolivariana de Venezuela, also a federalcountry, contradictory reforms areactually taking place that could affect thenature of local institutions. In the Andeancountries, decentralization has taken placethrough far-reaching constitutional andlegislative reforms, in relatively brief processes.Colombia and Bolivia producedcomprehensive visions of reforms in theearly 1990s. But economic and politicalcrisis altered their coherence and slowedthe pace of their implementation. In Peru,the process of decentralization restartedafter 2000 following a reversal of directionin the 1990s. The unitary states of theSouthern Cone – Chile, Uruguay andParaguay – have also carried out reformsshaped by their respective characteristics.Central American countries have enactedlaws on decentralization, and their mainchallenge is to achieve their implementation.• In the Middle East and Western Asia, inspite of the ceaseless political, military,and religious tensions, some advancesdeserve recognition: the first local electionsin Saudi Arabia, the holding ofdemocratic local elections in Palestine,the restoration of the mayoral electionsby universal suffrage in Jordan, and the2002 constitutional reforms in Bahrain.In Turkey, three new laws favourable todecentralization were adopted in 2004-2005. Decentralization is one of the criteriafor membership of the EuropeanUnion.• In Asia Pacific, decentralization hasbecome a major theme of governancereform over the past decade and decentralizationhas for the most part beenaccompanied by enhanced local democracy.But the forms and patterns oflocal governance have varied widely, ashave the outcomes, reflecting the diversityof country contexts. While there areclearly a great many weaknesses in thecurrent arrangements for decentralizedgovernance, and while further reformswill undoubtedly be required, it is hardto imagine that any wholesale return toa centralized system of governancewould be either appropriate or politicallyacceptable.Framework of IssuesIn short, decentralization has been pursuedby different countries with differentobjectives – some political, others moreeconomic, still others give more weight tobetter services or democracy. Furthermore,states have placed emphasis on differentcombinations of the half dozenstrategic areas which must be engaged todecentralize successfully. These includenational policy, state organization, responsibilitiesof local governments, intergovernmentalfinance, mechanisms ofparticipation, and capacity strengthening.Taken together, the objectives and strategicareas constitute a framework for un-

CONCLUSION284 United Cities and Local Governmentsderstanding the breadth and depth of thedecentralization experience.To illustrate, from the snapshot of cases,political reforms were mixed with economicrestructuring in some regions, notably in thetransition states in Eastern Europe, the formerSoviet Union, and China and Vietnam.Still others centered on democracy andmodernization of the state as in Africa, LatinAmerica and in some countries in Asia (e.g.Indonesia, Philippines). Improved serviceswere perhaps a more notable priority inNorth America, Australia and New Zealand.And though this categorization is far fromneat, pursuit of policy and practice, especiallyin political reforms, economic development,and finance, has strayed even furtherafield from the avowed objectives of manystates.counsel for their neighbors in the region.Reviewing the uneven record, Cheemaand Rondonelli (2007) point to ineffectivenessin implementation, as opposedto weaknesses in the concept of decentralizationitself. They also cautionabout the use of parallel administrationsat the subnational level, a ploy that isultimately self-defeating. The most troubledcases, from the point of view ofpower-sharing and democracy, are thosecountries afflicted by armed conflict or oilwealth. They present understandablesluggishness, even resistance.In the middle, a disparate collection ofcountries that, with few exceptions, are inan active tug of war over the state ofdecentralized democracy. Some detailedexamples, below, are drawn from theregional chapters.Velocity of ChangeTurning to the pace of change in decentralization,the nations covered in the reportscan be classified very broadly in threegroups. At one extreme, are those countries(many of them higher income GDP)where decentralization has advanced quitefar, having built on 50 years or more ofconsolidated local government. In manycountries of this group (and some countriesin other groups, as noted below), deliberateif not measured progress has beenmade on policy and technical issues in asearch for what must be called a dynamicbalance in power sharing. Shifting politicalpreference is complicated by gradual improvementin institutional capacity andoccasional shifts in technological possibilities,all of which can move the fulcrum ofbalance in central/local relations.At another extreme, mainly but not entirelyin the Middle East, are those countriesthat are taking a long, slow take-off,mostly in the direction of improving participationat the local level. A few countriesare making good faith efforts and showpromise to be sources of advice and• The most exemplary case in this respectis South Africa, where the end ofthe Apartheid regime imposed a newapproach to governance based ondecentralization and involving the entirepopulation in public management atall levels. In most francophone countriesof Africa, the profusion of statutescomplicates the implementation ofdecentralization and slows things down,causing substantial delays betweenapproval of laws and their actual enforcement(delays of 10 years are common).In countries of North Africa, thepace of decentralization is uneven.• In Latin America, some countries, suchas Bolivia, Brazil, Chile, Colombia, Peru,and República Bolivariana de Venezuelastarted early and, with Argentina andEcuador, went further than others in thedevolution of functions and resources.Peru and República Bolivariana de venezuelareversed some of the decentralizationreforms begun in the 1980-90s.Mexico has moved forward with a “newfederalism,” but progress is slower at themunicipal level. Other countries are evolvingto a lesser extent.

285• In Eurasia, particularly in EasternEurope, reforms were taken quickly todismantle the former system andmove toward local self-government,and at present the countries haveattained different levels of institutionaldevelopment. In some countries localself-government exists as an independentinstitution, while in others reformhas not been implemented.• In Asia-Pacific, Indonesia, the Philippines,and India provide the most dramaticexamples of major reform for enhancedlocal government autonomy. Countriessuch as China and Vietnam have adopteddecentralization strategies withinthe context of strongly centralized politicalruling systems. In some othercountries, like Pakistan, there has beena noticeable cyclical movement to andfro between periods of centralizationand decentralization. By contrast, inBangladesh and Malaysia resistancefrom the center has impeded any substantialdecentralization that wouldstrengthen the political role of localgovernment. Finally, the OECD countriesin the region, Australia, Japan, theRepublic of Korea and New Zealand,also emphasize decentralization as partof their ongoing administrative reformprocesses.With these two perspectives – on strategicobjectives and on velocity of change – weturn now to explore how the nations andlocal governments have approached theorganization of the state. To what extenthave policy frameworks guided the designand implementation of decentralized governance?What changes have been madein assigning functions, in providing adequatefinance, and arranging for participationand democracy? How closely havegovernments adhered to international expectationsand standards as expressed inthe UN Habitat Guidelines on Decentralizationand the Strengthening of Local Authoritiesand the European Charter of LocalSelf-Government?II. Progress and Pitfalls:Six Core IssuesThough the preceding introduction may berhetorically useful for grasping a glimpse ofthe global state of affairs, it is not a tidycategorization and has limitations in termsof understanding the tactical issues inimplementation. Countries are in variousdegrees of engagement with the six areasof policy 1) national policy and strategy, 2)organizational units, 3) responsibilities, 4)financing, 5) mechanisms of participationand accountability, and 6) institutionalcapacity. This section reviews the six coreissues, noting trends across or withinregions, and spotting promising areas ofprogress where lessons may be useful in awider setting.Policy and StrategyThis review of countries and regions revealsa wide spectrum of policy positions andorganizational strategies for local governments.Though few countries have fullblownstrategies, as we note below, mostmake some reference to the EuropeanCharter and Guidelines on Decentralization(see Box 1, below). Both documents refer toprinciples that have been widely discussed,synthesized and generally accepted by theinternational community. The EuropeanCharter was published in 1985. UN Habitatin close collaboration with local authoritiesproduced Guidelines on Decentralization.Only a handful of nations have framed acomprehensive policy on decentralization,blending political reform (power-sharing),economic development, and democraticchoice-making with capacity-strengtheningand financing in order to produce a longterm solution. As noted above, Bolivia,South Africa, and Indonesia have eachmounted comprehensive elements, but nota complete strategy. Bolivia and SouthAfrica produced comprehensive visions (in1992 and 1994, respectively), and thoughBolivia recently reaffirmed its intentions(Government of Bolivia 2006), neither go-

CONCLUSION286 United Cities and Local GovernmentsBox 1Guidelines and charter of EuropeUN Habitat Guidelines on Decentralization and the Strengthening of Local Authorities• The principle of subsidiarity constitutes the rationale underlying the process of decentralization. According to that principle, public responsibilities should be exercisedby those elected authorities, which are closest to the citizens.• In many areas powers should be shared or exercised concurrently among different spheres of government. These should not lead to a diminution of local autonomy orprevent the development of local authorities as full partners.• National, regional and local responsibilities should be differentiated by the constitution or by legislation, in order to clarify the respective powers and to guaranteeaccess to the resources necessary for the decentralized institutions to carry out the functions allocated to them• As far as possible, nationally determined standards of local service provision should take into account the principle of subsidiarity when they are being drawn up andshould involve consultation with local authorities and their associations.• Local authorities should freely exercise their powers, including those bestowed upon them by national or regional authorities, within the limits defined by legislation.These powers should be full and exclusive, and should not be undermined, limited or impeded by another authority except as provided by law.European Charter of Local Self-Government• Basic powers and responsibilities of local authorities shall be prescribed by the constitution or by statute• Local authorities shall, within the limits of the law, have full discretion to exercise their initiative• Public responsibilities shall generally be exercised, in preference, by those authorities which are closest to the citizen.• Powers given to local authorities shall normally be full and exclusive.• Where powers are delegated to them by a central or regional authority, local authorities shall, insofar as possible, be allowed discretion in adapting their exercise to localconditions.vernment has been able to sustain coherenteffort to implement its strategy.Indonesia’s sudden “Big Bang” of reform isnotable for the scope of change (transferringseveral million public sector workersto local authorities), but not for the integrated,long term solution needed. None ofthese countries has developed a comprehensivedecentralization plan, a blue printwith concrete objectives and milestones toguide the decentralization process, includinglocal capacity strengthening and acentral agency to see through the entireprocess. Even when piecemeal legislationis in place, sluggish regulation drags downthe speed and limits the reach of implementation.International institutions – financial, technical,and political – have had no shortageof normative frameworks to recommend togovernments, yet neither do they fullyaddress the practical issues of implementationmost governments face. The internationalfinancial assistance organizations like theWorld Bank and the regional developmentbanks adhere to a market-based approach,seeking to introduce quasi-market mechanismsto guide supply and demand ofpublic goods. The Asian Development Bankdoes not have a specific policy paper ondecentralization. Instead, it focuses ongood governance and corruption.The Inter-American Development Bank (IDB)published its public sector strategy in 1996and last year issued a companion policypaper on the issues of implementing decentralization(IDB 1996, 2002). Like mostdevelopment banks, the IDB policy startswith the fiscal imperative of macroeconomicstability. Guarding against excessivedebt, and particularly sub-national debtheld by domestic banks and even suppliers,is not merely to keep the banks inline with their primary stakeholders, nationalgovernments. It is also to safeguardexposure to risk and increased cost ofborrowing on international capital markets.

287A companion principle in the internationalfinances institutions (IFI) framework ismanagement of economic systems freefrom distortions (for instance, due to interferencein local decision-making). Efficientresource allocation places a premium onexpression of demand, especially at thelocal level. The banks also recommend clarityin the division of labor among levels ofgovernment. All of the development banksespouse a similar line in connection withreform of the state.The World Bank recently cast decentralizationissues in terms of poverty alleviationand services for the poor. Building on earlierwork devoted to reform of the state(World Bank 1995), the World Bank’sWorld Development Report (WDR) of 2000dedicated a chapter to decentralization,and the 2004 report focuses on services tothe poor, arguing that politicians, providersand the poor must be brought into tighterjuxtaposition with one another in order toimprove provision of and access to basichealth-care and education. A key mechanismis “local voice.” Expression ofdemand at the local level goes hand in glovewith the idea of participatory democracy.The Bank points out that localgovernment plays a key role in certain circumstances,for instance, when local populationsare more or less homogeneous andwhen services are easy to monitor. Thesetests could prove useful in evaluating policiesof nations and roles of local governments.Thus, governments have the benefit of severalinternational sources on general principles.We shall see in the ensuingdiscussion that more practical strategies ofimplementation might be useful. Beforemoving on, note should be taken of importantareas that have been largely ignoredand should be addressed in the future. Onegap is the calculation of the cost to thenation of decentralizing in a piecemeal orhaphazard way. None of the regional chaptersspeak of the economic and social costsof burdens being transferred to localauthorities in the shape of half-baked orunder-financed decentralization schemes imposedon poorly-equipped local governments.Organization of the StateThe inchoate nature of national decentralizationpolicies is mirrored by piecemealmeasures, either explicit or tacit, to organizeadministration of the state at thelocal level. This may be partly due to thedual nature of governmental units. Governmentshave both territorial andfunctional aspects. They are put in placeto connect to citizens and they operate todeliver services. Decentralization experiencessometimes get wrapped up withthese multi-dimensional features – federal,unitary, territorial, functional – producinga system of governance which isincomplete or out of sync.Many federated systems accord to states,with their own constitutions or legal statuesor both, the powers to govern, regulate,sometimes even create, lower tier,municipal governments. For the most partfederated systems have been adopted inlarge territories, as for instance in Russia,Brazil, and India, and often, national governmentslike Argentina, USA and Indiahave left many issues for the states todecide. This can either compound or helpto solve problems, depending on the systemin question, i.e., states can help coordinate,but as the regional reports haveshown, they can also introduce confusionand interfere with national policy on bothfunctional and representational issues.Some states were more inclined to respondto a clamor for representation, as in themajority of African, some Latin Americanand some Asian countries in the 1990s.Most states in Eurasia have created or extendedlocal government units to accommodateregional or ethnic groups. Othercountries (New Zealand, Germany) focuson the functional side, aiming to improvethe extension or efficiency of services. Thissometimes means a diminution of numbers

CONCLUSION288 United Cities and Local GovernmentsGaph 1 Local governments and populationpercentage distribution LAC40353025Percent20151050Population rangeLocal governments Population Percentage distribution LACSource: IDB 2006.in local government units. In OECD countries,a wave of amalgamation is takingplace to reduce the sheer number of localgovernment units in the interest of improvingefficiency. OECD Countries such asthe UK, Belgium, and Greece, amongothers have reduced the numbers of governmentalunits by substantial fractions.Where local units were weak in the past(Hungary, France, Italy), new tiers havebeen created to handle new tasks.The wide range of organizational approaches,and even conceptions of localgovernment, makes head to head comparisonsbetween nations not just difficult, butalso ultimately unproductive. Nevertheless,it is useful to gain an appreciation forthe variations in approaches taken by statesin different regions.Many countries are experiencing problemswhere units of government overlapin dense urban areas. Countries have exploredvarious kinds of partnerships amonglocal units –a step that is frequently allowedin national legislation. North Americanlocal governments have fewerconstraints imposed upon them aboutcooperating across boundaries, both horizontaland vertical (with states). The USis unusual also in having developed a largenumber of special districts; governmentalunits with high target finance anda tightly focused mandate (for instance inprimary education, environmental controlsor fire safety).Outside Europe and North America, Japanis the only country that provides examplesof policies of amalgamation of municipalities.Horizontal cooperation among firsttier units of government is taken up againin a later section of this paper on metropolitangovernance.It should be noted that the sheer numbersof small local governments implies a policydilemma. The weak institutional capacityof many small local governments affects a

289Box 2Subsidiarity - an issue at the heart of autonomy—is viewed in different waysby academics, political organizations, and development institutionsOates, 1972World Bank2004, p. 189European CharterArt. 4.3“Assign to the lowest level of government possible, those local public goods and services which can best be delivered at that level."“The lowest tier of government that can internalize the costs and benefits of the service.”“Public responsibilities shall generally be exercised, in preference, by those authorities which are closestto the citizen.”minor share of the population, while a fewstrong local governments of big cities holdan important share of the population (seeFigure 1). Take the example of Latin America,a region with 16,400 units of localgovernment and a population (2005)of nearly 550 million. Less than 5 % oflocal governments – those in big cities –contain more than half the population,while more than 53 % of local governmentsin small towns and rural areascover less than a tenth of the population.Similar proportions are found in most regions(see Figure 1).In a nutshell, the issue of organizing localgovernment units is one of balancing atension between two imperatives. Effectiverepresentation is needed to servedemocracy, but this tends to require moreunits of government. Against this expansionarypush is a constricting pull toreduce the number of units, or fold theminto higher tier governments in order toachieve economies of scale and moreefficient service delivery. Virtually allcountries in the middle and many in theadvanced stages are engaged at somelevel with this issue.ResponsibilitiesThe logic of assigning responsibilities tolocal governments is to achieve efficacy orefficiency in delivery of local goods andservices to citizens. And though the guidelineprinciples of subsidiarity and autonomyprovide a normative standard forgovernments, in practice, states find manydilemmas when implementing subsidiarity(See Box 2).States also face many temptations to pushthe limits, like shifting responsibilities tolocal governments with little or no consultationand without corresponding financialresources. The issues related to responsibilitiescan be summed up as follows: a)clarity and consistency in observing subsidiarityand autonomy of choice; b) achievingefficiency in allocation and in deliveryof services, an issue that involves publicand/or private provision of service; and c)the impact of technology.Subsidiarity and Autonomy in Choice.Most countries have devolved a core set oflocal functions, and many countries graduallyadjust these, as circumstancesrequire. On the one extreme are China’sbig cities that handle supra-local functionslike judiciary, pensions, and economicdevelopment. A more typical arrangementinvolves local public services, like waterconnections, streets, solid waste, localmarkets, urban and land use planning, andprimary care in health and often education,social policy and sometimes economicdevelopment and housing.In Europe the most important variationsrelating to powers and responsibilitiesoccur in the fields of education, health, andsocial security or benefits. Broadly, localgovernments are responsible for such servicesin the Nordic countries and to a large

CONCLUSION290 United Cities and Local Governmentsextent in the United Kingdom. Others restrictassignments to be either exclusive(land-use controls in many countries) orshared, such as primary education in mostcountries and in others, police and security.Still others share responsibilities. Turkeyprovides an example of a modusvivendi in which municipalities and theSpecial Provincial Administrations (SPAs)share public services, including education(maintenance of school buildings).None of these variations necessarily violatesthe principles of subsidiarity and autonomy.The problem comes, as regionalreports frequently show, when assignmentsare shifted in a way that is unclear,is ambiguous, or is unreasonable, arbitrary,or inconsistent. For instance, in theUS, recent devolution of Home Securityresponsibilities suddenly imposed severefinancial constraints on many cities. Anotherexample is found in Eurasia, where inmost countries the functions of localauthorities are not clearly defined by law,largely because of an unending process ofredistribution of powers between differentlevels of government. In the Middle East,on the other hand, many countries designatelocal services in national law, but theseare sometimes ambiguously worded,contradicted, or ignored. The report on theMiddle East notes that formal assignmentsare “highly idealized and out of step withreality…” (of local authorities and institutionalcapacity).In Africa, while public assertion of the newnominal powers of local governments iswidespread, the actual transfer of real executiveand operational powers is still rare.In Northern Africa, national ministries typicallyretain control of local services, ordelegate them to the private sector. Thistendency can also be observed in West andCentral Africa, although basic services therefor education, health, water, sanitationand transportation are generally acknowledgedas local concerns. In several easternand southern African countries, likeGhana, South Africa and Uganda, centralgovernment defines strategic guidelinesfor sectoral policies regarding health,water and education and local governmentsare responsible for implementation.Direct intervention by higher levels is anotherform of disturbing subsidiarity andviolating the principle of choice. Ambiguousor overlapping jurisdictions sometimeslead to “end run” practices –nominaldecentralization coupled with direct deliveryby central government. This representsa significant slippage in the waygovernments should work. Serious problemarose in Latin America in the 1990swhen central governments either delivereddirectly to local citizens, as a means of gainingpolitical support, or simply fell short oncoordination, meaning that both centraland local governments were spending onredundant services, resulting in the increaseof economic costs to the nation (Peterson,1997). Similar problems have beendetected in Russia.Intervention from higher levels of governmentin Europe is currently the focus ofdebate in connection with the EuropeanCommunity Laws on public service managementsubject to competition rules. Theissue is the extent to which, in seeking toprovide certain services, national powerseffectively limit local self government. Theposition of local governments is that theyshould enjoy complete freedom to choosethe modality of service provision that bestreflects the needs of their communities.The uncertainty and lack of definition illustratedin these examples – examples whichare a few among many cited in the regionalreports – effectively rob the subsidiarityprinciple of its virtues and limit the choiceof local governments.Efficiency in Allocation and Production.A second aspect of the assignmentsissue is efficiency. Two distinct functionsare involved: 1) deciding on what is needed(allocation efficiency) and 2) actuallydelivering the services (production effi-

291ciency). Allocation efficiency is one of theprincipal economic rationales for decentralization.It is to ensure public sector decisionsare made close to the citizens whouse (and may need to pay for) infrastructureand services. For this reason, participationin choice-making – in voicingpreferences and voting in local elections –is important. These topics are covered in amore organic way in a subsequent section,below, having to do with participation andchoice.One of the front edge issues in the deliveryof services is whether and how much tocontract out, to privatize, or to delegate. Inthe case of the Middle East, mentionedearlier, so-called “external solutions” includejoint service councils for infrastructurein small rural areas and neighborhoodcommittees. A survey of North Americanlocal governments in 2003 showed that asmany as two-thirds of the municipalitieshad tried privatization of some kind,although this trend has declined in thisdecade. New Zealand and Australia havefollowed a steadily expanding privatizationpolicy. In other countries, the reformprocess that has been reliant on the privatesector has led to a reduction of localgovernment competencies (UK, Hollandand Sweden).In the 1990s, public-private-partnerships(PPP) were advanced by the internationalfinancial assistance agencies (World Bank,Asian Development Bank, International FinanceCorporation) as a promising solutionto lagging investment and poor managementby public agencies. PPPs promised apractical alternative for financing the evergrowingdemand for services. The argumentreached the point of suggestingthat local governments should limit themselvesto a strictly “enabling function,” leavingservice provision in the hands of acompetitive private sector (European Commission).In hindsight, the promise of privatesector investment in infrastructurewas overestimated. A World Bank reportshows that private participation in infrastructurerepresented a small and decreasingproportion of the total in local publicand urban infrastructure in the 1990s(Annex 2006).Technology. Finally, few if any assignmentsof functional responsibilities will hold for alltime because of shifting preferences, politicalagendas, and administrative capacityin government. Changing technology alsoplays a role. Technological change in suchfields as distributed solar power, healthcare diagnostics, distance-learning in education,and water purification can affectthe placement of responsibilities. Furthermore,the time cycles of change – either ofdecentralizing functions or bringing newtechnologies on line – have similar lifecycles. This means that a well-intentionedcountry might, say, centralize diagnosticaspects of health care and take three orfour years to accomplish it, only to findthat during the period of implementation,technological progress now permits sophisticateddiagnoses to be done virtuallyanywhere. For these technological andother reasons, the assignment of responsibilitiesis probably best viewed as a movingtarget.Financing Decentralized SystemsWhen assignments change, so should finance.Inter-governmental finance isinextricably linked with decentralizationbecause the vast majority of states on theplanet have more than one level or tier,and lower tiers of government are rarely, ifever, financially self-sufficient. In fact, it isworth noting that the notion of pure financialautonomy for local governments is illusory.Even the richest countries, forinstance those in the G-8, support half ormore of local government expendituresthrough revenue transfers of some sort.Constraints on many local governments inthe south – for instance limited or no abilityto set rates, raise taxes, or borrow –make the idea of financial autonomy evenmore remote.

CONCLUSION292 United Cities and Local GovernmentsGraph 2Local government expenditures, sample countries70605560Percentage of Public Spending50403020105101520253501 2 3 4 5 6 7 8Legend: 1. Costa Rica, Nicaragua, Panama; 2. Botswana; Belarus; 3. Israel, France, Belgium; 4. Albania, Bulgaria, Poland; Latin Americanaverage; S. Africa; 5. Netherlands, Italy, UK; Uzbekistan; 6. Norway, Sweden, Finland; 7. Denmark; 8. N. Antilles.Source: World Bank 2004.National governments structure many waysto finance local investment and services,and almost all of them involve issues of tax(and rate setting), borrowing (or privateinvolvement), and revenue sharing. Buteach of these singly and in combinationentails issues of policy and practice, includingmechanisms of control, capacity constraintsand problems of transparency anddiscretion. The question is how have currentpractices around the globe engaged andsolved these issues?Though regional reports document a widespreadgrowth in the share of spending bylocal governments relative to centralgovernment spending, the share is small inall but a few cases. Denmark and theNetherlands Antilles are the only two countrieswhere municipal spending is over 50percent of the total sub-national spending.Figure 2 shows spending by all sub-nationaltiers. Municipal-level spending rangeswidely and on the whole is on an upwardtrend over the past few decades. At the lowend of the spectrum are some Caribbeanislands (zero) and a number of countries inthe Middle East, which range in a few percentagepoints of total government spending.The chapter on Africa reports a rangeof five to 10 percent in 30 African countries.Most of Latin America is under 20percent, but it is notable that this proportionhas increased from 11% to 18% in thepast two decades. On the high end arecountries like Denmark, Switzerland, Finlandand Sweden. More than anything,these figures suggest that many formulasfor spending are in use.On the income side, central governmentsare in the habit of restricting the incomepotential of local governments. In LatinAmerica, local governments depend on theexecutive or legislative branches and sometimesthe states in federated systems toset taxes and, in some instances, to settariffs. Fiscal power in the Middle East,Africa, and Eurasia is even more limited or

293nonexistent, with very low levels of revenue(excluding Turkey, Zambia and SouthAfrica). More than half the countries in theAsia-Pacific region have own-source revenuesabove 30% of the total. The samepattern holds in North America and Europe(around 40%).Perhaps the most troubling trend is thetendency of central governments to imposespending responsibilities on localgovernments without loosening the constraintson income. These unfunded mandatesare a burning issue in high incomecountries and some southern countries.Virtually all of the regional reports mention(but did not quantify) increasing burdenson local governments.Non-tax sources of income – borrowingand private finance – have been tightly circumscribedin most countries. In the firstplace, only a small fraction of local governmentsare credit worthy. Some countries(Chile) flatly prohibit borrowing; others(Philippines) are experimenting with graduatedsystems of indebtedness. In theEuropean Union, the newer states enjoyfewer restrictions on borrowing. Often, thepotential for revenue mobilization variesdirectly with city size, and the distinctiveadvantage of larger cities echoes an earlierdiscussion about the possible practicaladvantages of managing decentralizationby size class of city.Even when credit worthiness can be established,national governments face moralhazard issues of sovereign guarantees. Indiahas begun to experiment with syndicatedsubnational borrowing by packaging loans togroups of local governments. Europeancountries are discussing municipal credit,somewhat along the lines of the Swedishand former Belgian municipal funds. Municipalbonds are common in the US. They areapproved by voters at elections and enjoytax advantages, but these arrangementswould be of dubious feasibility in lower incomecountries. Depending upon the state ofcapital markets, credit worthiness, and thewillingness of national governments to offersub-sovereign guarantees, bond financingcan be feasible for a handful of well-managedlocal governments.Transfers from central government, in grantsor revenue sharing, are the most commonway to cover local government costs (the socalled“vertical gap”). They are also useful inhelping less advantaged regions (“horizontalgap”). Intergovernmental finance specialistshave a multitude of tools – automatic, formula−drivenrevenue sharing, block grants,and conditional grants, for instance, thathave matching requirements and other refinements.Fiscal specialists are learningabout the multiplier effects of conditionalgrants (Shah 2007) and the importance ofhard budget constraints (Rodden, Eskelandand Litvack 2003).A tension in financial imbalance is discerniblein virtually every report. The theory ofintergovernmental finance is not the problem.The problem arises more with ambiguousor changing rules (Latin America),lack of transparency (Middle East), andexcessive discretion (Africa) on the part ofcentral governments in implementing revenuesharing programs. Wescott (2005) providesa review of these arrangements andthe questions they raise for nations and theAsian Development Bank in the case of severalAsia-Pacific countries.One more point deserves emphasis. For themost part, intergovernmental transfers areformulated, promulgated, and defended bycentral governments, often on advice frominternational financial institutions (IFIs). Thepoint of view of local governments is rarelygiven equal weight in adjusting the system.In the case of Latin America, constant tinkeringwith transfer formulas left local governmentsperpetually in the dark aboutprospective income from year to year (Peterson,1997). An added problem is imprecisionof data. The regional reports speak of a fiscalsqueeze in which local governments havemore responsibilities without the financialmeans with which to discharge them. None

CONCLUSION294 United Cities and Local Governmentsof the regional reports contains data to measurethe magnitude of this squeeze. Indeed,many reports call attention to the need forreliable, time-series data to document financialand other issues (for instance, personnel).Even fewer countries have accuratenumbers on the costs of delivering local services.Objective cost and expenditure dataare vital to help decision makers formulateand defend policies on finance and spending.Local Democracy:Participation and AccountabilityOne of the signal features of decentralization,and one of its bright spots, is therenewed connection between citizens andgovernment. The regional reports documenta growing tendency of involving citizensin the decision-making process. Thisis important for economic reasons – theallocative efficiency discussed earlier – andfor political reasons of legitimizing localgovernment and holding elected leadersaccountable for their actions. In practice,governments employ many modes of participationand choice-making.The range of issues considered in the participatorydimension of decentralization includes:a) elections and electoral rules;b) the focus on chief executives and councilsat the local level; andc) modalities of voice, participation, andchoice.that “pluralism is taking hold” and theNorth America report notes an independencefrom partisanship. Further, in NorthAmerica “…single-member electoral districts,frequent elections, direct democracy,and greater local choice set localinstitutions in these countries apart” fromothers with British traditions like Australiaand New Zealand.Yet a number of concerns persist in connectionwith local elections. One issue signaledin several regions is the tendency for nationalpartisan issues to crowd out local concerns.Some observers feel that local andnational elections should be staggered intime in order to prevent local elections frombecoming miniature battles of nationalissues. A second issue is low turnout of votersin local elections. With some exceptions,turnouts are in decline in North America,Europe and Eurasia and decreasing in someparts of East Asia and the Pacific.Still another issue, one that requires muchmore scrutiny, concerns the rules of elections,not just the timing, but also how winnersare declared (first past the post versusmajority or slate lists) and the issues ofdirect and indirect elections, the periods ofoffice (often short, three to four or five years),and whether electoral rules allow for selfsuccessionin re-election. Short periods andprohibitions on re-election make it difficult todesign and implement significant programsat the local level.Elections. The very fact that elections aretaking place at the local level in mostregions of the world is by itself a notableachievement. The regional reports note“important gains” in Europe and that, “undeniableprogress” has been made in Africa,LAC, Asia, Eurasia, and MEWA. Severalreports refer to political parties and electionrules in connection with local democraticchoice-making. The Eurasia reportnotes that elections are “increasingly competitive,”and in Asia-Pacific, that “multipartydemocracy is thriving” and is thenorm. In LAC, the regional report notesExecutive and Legislative. Much of thefocus of local democracy has been on thecity or municipal executive – mayor, principalofficer, or municipal president. Selectionof chief executives is not alwaysdirect. Countries have structured indirectmeans to select second tier executives orto accommodate minority parties at thelocal level. But direct elections appear tohave increased accountability (in Europe).Some countries – for instance Indonesiaand Vietnam – are beginning to relax therules on candidacy. In Asia-Pacific and LatinAmerica, big city mayors are a well-known

295stepping stone to higher political office. Onthe other hand, more than half the NorthAmerican cities have adopted a councilmanager form of executive, separatingpolitical functions from the day to day operationsof running a large city. City managersbring certified, professional skills tohandle the complexities of modern citymanagement. The disadvantage of themanager (or in Russia the hired manager)system, is that this arrangement puts theCEO of the city one step further away fromdirect electoral accountability, since mostmanagers are hired by, and are accountableto, the city council.Modes of Participation. Modes of participationby local citizens – i.e., expressingvoice and making choice – are the mostcolorful and innovative spots in the unfoldingstory of decentralization and democracy.Perhaps the most refreshingmessage in the reports is that many countriesin Africa (for instance, Ghana, Niger,and Uganda) in Asia (India and Pakistan)in East Asia (Philippines) and in LatinAmerica draw on tradition and custom,making creative use of village councils tohear citizen opinion and deliberate. Agood example is the Gram Sabha in ruralIndia, a mandatory meeting of registeredvoters called to decide important issues.Table 1 illustrates the many ways that citizensat the local level take part in planning,implementing and monitoring localgovernment activities.However, evaluative research reports thatparticipation by itself does not mean thatgovernance or services are better or thatpoverty is any more quickly reduced, oreven that local autonomy is safeguarded.One tricky issue concerns interventionsby central state actors on behalf of disadvantagedpeople at the local level (Johnsonet al 2005 in India; Tendler 1997 inBrazil). Other studies have focused on theconditions of successful participation.Crook and Manor (1998), suggest that inthe cases of South Asia and Africa, theimpact of participation depends on preexistingconditions and the type of participationemployed (see Table 1).Still others argue for the importance ofconnecting participation to the deeper issueTable 1Sample mechanisms of participation and their functionsArea of effectivenessParticipatory mechanism Policy and planning Demand preferences and budgeting Implementation and oversight AccountabilityTapping Into Grassroots OpinionGram Sabha, India; Neighborhood Councils (Africa, Middle East)Mobilizing Grassroots Groups Participatory budgeting (several countries in LAC, Neighborhood work gangs, Comités de Vigilancia (Bolivia)Philippines, Europe).many countriesBeneficiary Contributions Mayor’s funds (Chile) Bond measures in USCitizens Initiated Contact Voluntary neighborhood Rating systems India, USorganizations in JapanElectoral and Voting Process Programmatic campaign Referenda in US, Europe, and(Colombia)Eurasia (permitted but not used).Legal and Judicial SystemImpeachment, LAC, US, CanadaSource: Adapted from Campbell 2003.

CONCLUSION296 United Cities and Local Governmentsof citizenship and citizen rights (Hickey andMohan, 2005). Local leadership, centralmonitoring, an articulate civil society, andthe right kinds of information are all necessary,though not a guarantee that governmentservices will work better (Devas andGrant 2003). Several of the regionalreports speak of serious issues in the freeflow of information and the need to ensurethe availability of information, as representedin legislation on freedom of information(Philippines, UK, US).A somewhat deeper modality of participation,one that relies on the instigationof citizens, is in such tools as the ballotinitiative, referenda, and recall elections(see Campbell 2003 and Cabrero 2007).These are widespread in North Americaand Japan, and though permitted inmany countries of Eurasia, not used.They are “seeping down” in Europe andLatin America. The LAC region has itsown innovative uses of participation, inthe form of participatory budgeting. Asthe name implies, the practice involvescommunity and neighborhood groupstaking part in semi-formal planning sessionsto determine the mix and scale ofcapital investment.CapacityThe second most important problem afterfinancial shortfalls, (again, except formany OECD countries) is the yawning gapin proficiency of administration and managementin local government. The range ofissues covered includes a) the sheer numbersof qualified staff, b) contracting andmanagement systems, c) the need formerit based reforms and d) corruption,where it occurs.In the first place, the majority of regionalreports note that local governments areundermanned and their personnel underpaid and in many places poorly qualified.In purely numerical terms, the reportsfrom regions frequently cite local publicsector workers as a proportion of totalpublic sector (often ignoring differencesacross countries in responsibilities assignedto local governments).A somewhat more useful ratio is thenumber of local government personnel inrelation to the population. This figure,compiled from the regional reports, runsfrom 2 per 1000 population in West Africato over 43 per 1000 population in the US(see Table 2).Another way to normalize the data is toexpress municipal staff in relation to theresponsibilities of local government, forinstance, per capita public expenditures atthe local level (column 2 in Table 2). Therange here is €5.6 in West Africa to €348 inJapan. The implications of these ratios areclear. A municipal government of 100,000in West Africa would have no more than sixprofessional staff to look after a spendingprogram of €1 million. Increased decentralizationor increased assistance to Africancities or both, imply a need to improve theseratios. The numbers of qualified personnelper capita, would need to move aheadof public expenditure (the denominator) inorder to expect national governments todeepen decentralization. But the data aresketchy. Moreover, time series data arerarely available. Nickson (1995) is a notableexception.But the regional reports are clear about thediscouraging, vicious circle of local employees.In several regions, for instance, the MiddleEast and Africa, there is little careerprospect for municipal employees. As aresult, qualified professionals do not seekpositions in local government. One consequencenoted in Lebanon, admittedly anextreme case because of the war, is that theaverage age of municipal workers is 55.Another consequence is that governmentsturn to contract workers. Turkey has revertedto a short term contract system. Elsewhere,the prospects for rent seeking beginto appear in the system. The perception isthat corruption has increased in China andIndonesia, and a survey in the Ukraine esta-

297Table 2:Local Government Personnel and Spending in Selected CountriesCountry Personnel per 1000 population Expenditure/cap/staff (euros)Africa (5)* 3 West 2 North 2 5.6Eurasia (5) 2.5 NaN. America (US) 43.8 31.6Canada 28.3 36.4Europe Na NaAsia Pacific (4 low income) 6.75 NaIndonesia 12.8 4.84Malaysia 2.3 67.4Australia 7.5 36.8New Zealand 5.5 69.1Japan 11.1 348.5LAC 4.9 Na* Uses per capita expenditures from West African Economic and Monetary Union.Source: Compiled by author from Regional reports, Nickson (1995), OECD.blished that 60 % of the respondents had“faced one fact of corruption” in the previousyear and in Turkey, the confidence level isonly 5.2 on a scale of 10.Different systems of management – publiclaw, civil service, and private contractlaw – can all be made to work. Public lawis still the predominant career employmentstructure in Europe. Russia hasrecently taken this step (Art 86 of its publicframework law of March 2007). Somecountries are in the process of extendingthe national civil service to local levels(ex: in LAC Colombia, Brazil, Costa Rica,Nicaragua, El Salvador.). It should benoted that the civil service is only onesolution of many. Certification systems arebeginning to appear in Mexico and Thailand.In the US, certification is managedby professional associations of municipalemployees, not by government. The issueis not so much the nature of legal framework,but rather that few governmentshave established a unified system of meritbasedpublic employment that offers careerprofessional employment and mobility.Other hopeful signs of progress include thenew public administration (NPA) reformsthat have begun to influence thinking andpolicy in several regions, though accordingto the Europe chapter it is “running out ofsteam.” Many countries have launchedinitiatives to improve professional competenceof local public officials or to explorealternatives to direct service (such as increasedprivate provision with local publicsupervision), for instance, public transportin Europe, the US, and Latin America and theswapping of national and local employees,as in Republic of Korea, Germany, andJapan, so that national officials might seethe world from the shoes of local officials.

CONCLUSION298 United Cities and Local GovernmentsOnly a small handful of countries in thesouth have framed a long term strategy tobuild capacity at the local level. These circumstancesleave local governments weakand provide a convenient justification fornations to hold position in the stalematedtug of war.III. Metropolitan GovernmentsCities that are comprised of more than onelocal governmental unit are of special concernto decentralization and democracy.Virtually every regional report, in additionto the dedicated chapter on metropolitangovernance, calls attention to the specialproblems of large, multi-jurisdictional cities.National strategies and actions arehobbled by the lack of understandingabout feasible approaches to horizontalcooperation among governments in largecities. The changing global environment,coupled with rapid city growth, have oftenmade institutional arrangements obsoletesoon after they are promulgated.Definition: Numbers and GrowthMuch attention has been paid to the growingurban population, and to the peakcities in the demographic pyramid –theso-called mega-cities of 10 million ormore in population. More attention needsto be paid to the growth in the number oflarge cities – those of a million or more inpopulation. Cities in this size-class numberedaround 200 in the latter part of the20th century. They will reach more than500 by 2015 (Table 3). These are allmetropolitan cities in the sense that theyare either of great economic importance(Douala, Cameroon) in their countries; orare centers of cultural heritage or religioustradition; or because they arenational capitals (Rabat), or all of thesethings. Many cities have special regimes(Abuja), but not a metropolitan government.Virtually all cities in this group arecomprised of more than one municipality,and often involve many units of localgovernment. Only about a quarter ofmetro cities are in advanced economies.Emerging Features of Metro Cities:Flatter, More Fragmented,In CompetitionThree features about growing metropolitanareas add new challenges to decentralizedgovernance and democraticchoice-making. First, metro cities are spreadingout. Angel et al (2005) have recentlyreported that average densities are fallingin cities around the globe, and particularlyin the developing regions. Angel’s data areTable 3 Cities by population size, 2015Size range World total Less Developed More Developed10 M > 21 17 45-10 M 37 31 61-5 M 496 378 1180.5-1 M 507 400 107Total >500.000 1.061 826 235Source: National Research Council 2003.

299drawn from side-by-side comparisons of1990 and 2000 satellite images of a representativesample of 120 cities. His teamcalculated that average density decrease isa direct function of spreading city perimeters.These observations are corroboratedby the chapter on metropolitan governanceand by data from East Asia (e.g. Webster2003, Laquian 2005).Second, as settlements move beyond establishedadministrative and jurisdictionalboundaries, they stretch the customary definitionsof city limits and often lead to newmunicipalities, contributing to a fragmentationof the metro area. The Africa reportprovides a comprehensive illustration of thelarge number of municipal jurisdictions inAfrica’s major cities. A well-known exampleof this spreading urban region is the Boston-Washington corridor, a megalopolitan regionwith a population of 50 million, whichextends more than 600 km, far beyond theprospective planning competence of any ofthe more than 50 metropolitan areas in theregion.The significance of spreading urban regionsis not just the growing territorialexpansion, but also the increasing socialdistance implied in these developments.Though many low income populations stillsettle in and around the urban core ofmetro cities, increasingly, low income settlementstake up residence on low-costland where property values are suppressedbecause of distance or due to cloudedtitle, poor conditions of slope or flood. Atthe same time, wealthy settlements springup in nearby places, formed as self-containedenclaves protected by securitywalls. Both the poor and emerging middleclasses require services of health, education,water, and roads outside the establishedperimeters of the city. Thesesettlement patterns translate into fragmentedpolitical units and uncoordinatedactions. Metro cities increase the importanceof inter-jurisdictional coordinationin planning, infrastructure investment,and services delivery.A third feature of metropolitan centers isthat they have entered a more competitiveenvironment. Liberalization of trade leavescities much more exposed to outside competitionbecause the elimination of protectionisttrade regimes no longer shields cityindustries from competitors. Also, theincreasing velocity of international transactions– in trade, exchange of capital, andinvestment – means that metropolitancities must move quickly to retain industriesas well as to attract new ones. Beaverstocket al (1999) have developedindicators which measure the growing extentto which metropolitan centers are connectedto global places of doing business.Policy ChallengesThe policy challenges for cities spanningmore than one jurisdiction or sprawlinginto outlying regions fall into three familiarareas:1) substantive issues of growth, poverty,and environment;2) institutional issues of powers, organization,and finance;3) issues of democratic representation.City regions have always been the centersof national GDP. For example, the cities ofRio and Sao Paulo in Brazil accounted foraround 40 percent of the nation’s US$800billion dollar economy in the early 2000s.This made the economies of those twocities approximately equal in size to theeconomic importance of all five Andeancountries, combined. And although cities indecentralized regimes all around the worldare handling much more public spending,few nations have found the solutions andtools to manage infrastructure and servicesin metro cities.Handling spillovers, both positive andnegative, is a defining feature of metropolitanareas. Smaller cities or units ofgovernment cannot generate the economiesof scale that are typical of productionin metropolitan cities. On the other side of

CONCLUSION300 United Cities and Local Governmentsthe coin, major cities generate negativespillovers in pollution and congestion. Thechallenge is made sharper by the need toincorporate large regional hinterlands.Few organizational models seem to holdup under the pressures of changing economicand political circumstances. Virtuallyall the European countries areengaged in the question of metropolitanorganization. Turkey has addressed theproblem directly with reforms that linkmunicipal, metropolitan and national tiersin planning and functions and the directelection of a metropolitan mayor. Russianand some former Soviet states have givencapital cities special legal or financial status,as is the case with many capitals,particularly special districts, for instance,Brasilia, Canberra, and Abuja (Nigeria).These enjoy special spending or planningstatus, often linked directly to centralgovernment budgets. Cities in Europe,Canada, the US, and Republic of Koreahave all undergone a variety of configurationswith mixed success. Many of thecities – London, Montreal, and Toronto,for example – have reversed field, goingfrom regional councils or area-wide governmentsto facilitate planning andinvestment of large scale infrastructure,back to small governance units, and backagain to larger areas in a quest to capturea wider tax base. In the US, the policybattle has been over whether there is aneconomic payoff to cities with regionalauthorities (Nelson and Foster 1999).Recent TrendsKorea and Peru. Cooperative regionalismmight describe the problem-solving approachand give-and-take arrangements forlarge regions in Europe and the ad hocintergovernmental agreements in the US,like Seattle’s King County. An example offlexible arrangements is the growing use of“convenios” (agreements) in Brazil, havinggrown from a handful in the 1990s to hundredstoday (Spink 2005), or the mancomunidades(associated municipalities).IV. Role of AssociationsVirtually every region reports a floweringof regional and sometimes professionalassociations involving local governments.In Latin America, 28 associations are listed,the oldest (in Ecuador) dating from 1940,but 16 having been formed since 1990.Further, many regions report a parallelgrowth of associations of local governmentprofessionals, for instance, of mayors, offinance officials and engineers. For thesegroups, the most common denominatorsfunctionally are:1) representing interests of local governmentsin national policy;2) advocating for local governments;3) building capacity to strengthen localgovernments.They also create a platform for exchangeof views and experience about policy andpractice. Very few countries do not haveassociations, but some, for instance in Africa,have very limited resources.The chapter on metropolitan governancepoints out that recent trends are towardcooperative pragmatism at the regionallevel. Governments are recognizing that nonormative solution will fit the rapidly changingpolitical and economic circumstancesof the globalizing world, and that metropolitangovernance needs to start with solutionsfor basic problems and have degreesof flexibility as it moves to more complexarrangements, as they have in Republic ofAt the apex of national and regional groupingsis the Union of Cities and Local Governments(UCLG), formed from the WorldFederation of United Cities and the InternationalUnion of Local Authorities andMetropolis. UCLG came into being officiallyin 2004 and counts on various regionalaffiliates (known as sections), a network ofregional associations which is growing innumbers and strength. For instance, in Africa,the United Cities and Local Governments

301of Africa, a Pan-African local governmentorganization, arose from three local governmentorganizations previously dividedalong linguistic lines. The founding congressin 2005 marked a starting point for aunified African municipal movement.National associations have had mixedsuccess in mobilizing political movementto solve the many problems faced by localgovernment. A combination of approacheshas been tried and needs deepening;they include focused educational activities onselected topics for local and national governmentsto assist national associationsto do their job, documentation of goodpractice approaches and techniques, and asystem of learning and information exchangebetween and among local governmentsacross nations and regions.V. Global ChallengesNew evidence is coming to light about theimpact of decentralization on the MillenniumDevelopment Goals (MDGs) andrelated issues. Besides poverty, gender,health, technology and culture, the MDGshave brought out the importance of environmentallysustainable development. Butclimate change, particularly the productionof greenhouse gasses, moves this issue toa much higher and more urgent plane.Similarly, some infectious and communicablediseases threaten to become globalproblems.Local governments have a front line positionin the battle against poverty,through social inclusion, access to basicservices, and participation. But environmentalissues are increasingly at the topof the agenda: fighting greenhouse gasses,for instance, land use and transportation,building standards, densitycontrols, solid waste recycling, and manyother aspects of urban growth that frequentlyfall under local government jurisdiction.Hundreds of cities have takenaction to improve environmental sustainabilityof urban growth following LocalAgenda 21 and the Aalborg Charter of1994, that addresses climate changeagendas and action plans. Scores of Europeancities have developed detailed plansto achieve a smaller “carbon footprint,”that is, more sustainable settlements. Inthe US, mayors are joining a coalition toachieve or surpass Kyoto protocol targets.More than 500 US mayors have signed aclimate protection agreement.Recent evidence reported by Angel et al(2005) shows a trend towards decreaseddensity in cities, signalling an alarmingmove in a direction away from sustainableurban living. Brazil and China have begunto focus on urban remedies to the problemsof rapid conversion of land into theurban fabric. Brazil has recently enactedlegislation requiring local governments tomeet a higher standard in land-use planningand has created land-swapping toolsto do so.As for the MDGs, local governments havean important role to play in managinggrowth for health and safety. Effectiveaction in these spheres would strengthenthe rationale for governments to mobilizelower tiers to address these issues. WHOhas recently signaled the importance ofthe social determinants of health, pointingparticularly to issues of safety, violence,and prevention of at risk buildings in urbansettings. WHO’s contribution adds to thealready large body of work on local levelaction to address communicable diseaseslike HIV/AIDs, malaria and tuberculosis(Kjellstrom, et al 2007). In health and climatechange, local governments have acritical role to play.On other MDG issues, gender, culture, andtechnology, local governments are againon the front line. More than a few countries– Africa, Middle East, Asia-Pacific arenotable examples among many – speakof quotas to involve woman in localgovernment. Special status is accorded towomen in Africa; 30 to 40 % of council seats

CONCLUSION302 United Cities and Local Governmentsare held by women in Eurasia, and Indiahas set aside 30 % of local governmentelected positions for women and scheduledcastes. Cultural issues, in heritage,buildings, and inter-cultural dialog,are areas where cities have shown promiseand have great potential, for examplein city to city exchanges, in culturalunderstanding, and in informal alliancesaround issues of sport and festivals. Newinformation technology holds great promisefor local governments in a variety offields – management, information for citizens,and education to name a few. In allof these areas, the agenda is wide andpromising.VI. Next StepsIn this final conclusion we have attemptedto summarize the main points and findingsof the World Report, while also introducingnew elements and insights that mayenhance reflection. Quite possibly, thestudy does not always provide precise,conclusive answers to the issues and questionsraised in the introduction of theReport regarding the principles of localself-government and subsidiarity.The discussion remains open. Only throughthe sustained practice of running local governmentsand continued interaction with theircitizens and other levels of government willconcrete solutions be found.Therefore, the Report essentially concludeswith a call for initiatives that develop anddeepen local democracy. In effect, theobjective should be to apply these coreprinciples of local self-government, subsidiarityand participation to the praxis, particularlyby:• Underpinning policies favorable todecentralization. The Guidelines on Decentralizationapproved by UN Habitatare important instruments foradvancing in this direction. It is necessaryfor UCLG and local governmentassociations to disseminate this Reportand to encourage the implementation ofthe Guidelines both at national levelsand among international and regionalorganizations, e.g. African Unionthrough the African Conference onDecentralization and Local Development(CADDEL), the Organization ofAmerican States (OAS) and its Inter-American High Level Network on Decentralization(RIAD).• Strengthening policy-making capacitiesof local government. In effect, UCLG,through the Global Observatory onLocal Democracy and Decentralization(GOLD), should develop indicators,recognized by national and internationalinstitutions, to monitor processes ofdecentralization and the implementationof the Guidelines; and contribute tolocal capacity for policy dialog vis-à-visnational governments and internationalorganizations. These indicators shouldbe used to shape and inform local developmentpolicies and national strategiesfor poverty reduction.• Enhancing local finance systems. Localaccess to adequate funding is key todevelopment. In view of the fiscalweaknesses observed at local level,UCLG should continue to promote proposalsand initiatives to strengthenlocal finances and to draw up plans, inconsultation with governments and regionaland international financial institutions,for new national systems in orderto keep pace with urban explosion, growingdemands for basic services andmounting environmental challenges.This list of initiatives could, without adoubt, be extended further to includeequally as important initiatives such aslocal government capacity building, upgradingservice provision and urban policy forsustainable development.Local governments have an integral role toplay in the international development

303agenda not only to articulate their ownneeds and have them met, but also to playa role in reaching the MDGs and fightingclimate change. The sustained efforts of localgovernments to integrate their needs inthe international development agenda forthe fulfillment of the MDGs and fightagainst climate change will continue to guidethese actions.Quite plainly, change and transformationcannot be brought about without the directinvolvement and determination of local governmentsaround the world.

POSTFACE304 United Cities and Local Governments

305POSTFACEEssay on the clarification of some key conceptsand methodical problemsGérard Marcou 1The World Report offers, for the first time,the possibility of clarifying the meaning ofwords used to address the term “local”. Viathe different situations and developmentsanalyzed, the words often seem closelyrelated but not accurately synonymous. Inaddition, the choice of linguistic equivalentswhen translating may involve nuancesof meaning or presuppose differenceswhich, in fact, are merely differences interminology. The interest of the WorldReport is that it puts key notions into contextby comparing political and legal discoursefrom many countries on allcontinents. The definitions arrived at couldthen acquire legitimacy from the fact thatthey are not self-centered. The convergenceswe have found are not alien to thesocio-political reality of each of the countriesconcerned, even though mimeticeffects may still exist, and at times arisefrom prescriptions imposed by internationalorganizations. These convergences canbe considered as positive effects of globalization.However, convergence at the level of ideasdoes not necessarily imply that thesame occurs at institutional or practicallevels. On the contrary, factors of differentiationremain, resulting from verydiverse socio-political and economic realities,which should not be overlooked.The very notion of “local” varies considerablyfrom one country and one continentto another and with it varies the definitionof the territories constituting the frameworkof local self-government, and theconcept of local-state relations. Thesociology of local institutions is dependenton the importance of the socialstructures. The role of local democracy indecentralization depends on the state’spolitical system. The scope of decentralizationdepends on the political weightand human and financial resources availableto local authorities. Decentralizationdoes not exist outside the statebut it ceases to exist even withinwhere local authorities are no morethan the executors of policies determinedby higher authorities. Theseare the extreme positions that limit thespace of local self-government; this is thespace within which the equilibrium ofdecentralization must be created in eachcountry depending on the conditions 2 .The World Report refers explicitly to twonotions: decentralization and local democracy.These two terms should be clarifiedtogether with their status in the politicaland legal systems of states. A distinctionshould also be made between them andsimilar or correlated notions. This clarificationmust be contextual and comparative,i.e. based as much as possible on theaccepted concepts used by states in thevarious regions of the world, depending ontheir history and institutions. But at thesame time, these notions are part of globaldebates fostered by international organizationsand a number of states, contributingto the convergence of ideas under discussionby providing terms of common reference.Firstly, a distinction can be made betweenthree separate semantic fields: decentralization,self-governance and democracy.1. The text below is apart of the synthesischapter submittedby the author toUCLG under thetitle:“Decentralizationand local democracyat the age ofglobalization”.2. In what follows, theinformation quotedcomes fromchapters in theWorld Report,unless other sourcesare indicated bynotes.

POSTFACE306 United Cities and Local GovernmentsThe first of these three terms refers torelations between the various levels ofpower, the second to the status of theauthorities and the third to the way inwhich power is exercised. We will notaddress the expressions of these semanticfields relating to federalism or to regionalautonomies. The comparison between thesethree fields shows a convergence at thelevel of political ideas and legal notions;even though some major states have remainedoutside this tendency.I. DecentralizationThe notion of decentralization is understoodtoday in very different ways dependingon the author and institution,which leads to misunderstanding andconfusion. Sometimes, overly broaddefinitions of decentralization becomeconfused with governance, a notionwhich in itself is already not very precise.This is the case in a report publishedby the UNDP on decentralized governanceà propos the services which ought tobe provided to poor populations: “Conceptually,decentralization relates to theroles of, and the relations between, centraland sub-national institutions, whetherthey are public, private or civic.Improved governance will require notonly strengthened central and localgovernments but also the involvement ofother actors from civil society organizationsand the private sector in partnershipswith government at all levels” 3 .According to this definition, the relationsbetween the state or local governmentand private companies or NGOs are partof the problem concerning decentralization.The report then distinguishes four types ofdecentralization: administrative decentralization,in which local authorities areaccountable to higher authorities; politicaldecentralization, in which local authoritiesare theoretically independent of the state,invested with powers and elected; budgetarydecentralization, which refers to thetransfer of the resources necessary for theexercise of the transferred powers and responsibilities;and lastly, divestment ormarket decentralization, which entails atransfer of functions to the private sector(companies, NGOs...), including planningand administration, previously held bypublic institutions.However, the argument slips from decentralizationto governance. We recognizethat improved governance might indeedcall for the involvement of private actors,but this applies to all levels of governmentand not just to relations between localpowers and higher authorities. This idea isalso represented in a recent book with contributionsfrom various United Nationsexperts. Globalization would necessitatean enlarged vision of decentralizationwithin the framework of the new concept ofgovernance. According to these authors,decentralization cannot be devised anylonger as the devolution of powers withingovernment, and rather embraces resourceand power sharing in policy making insociety as a whole. The enlarged conceptof “governance decentralization” suggestsa new decentralization category, in additionto the traditional ones: “economicdecentralization”, including “market liberalization,deregulation, privatization ofpublic enterprises and public-private partnerships”4 .3. Work, R. (2002), The Role of participation and partnership in decentralized governance: a brief synthesis of policy lessons andrecommendations of nine countries on service delivery for the poor, UNDP, New York, p.3.4. G. Shabbir Cheema / Dennis A. Rondinelli (2007), “From government decentralization to decentralized governance”, p.6 in: G. ShabbirCheema / Dennis A. Rondinelli (eds), Decentralizing governance, Brookings Institution Press / Ash Institute for Democratic Governanceand Innovation.

307This approach is not really all that new. Itcomes from a critique of the “Welfare state”,developed in particular in the 1980s.Such lines of thinking advocated marketcompetition as an alternative for the provisionof services that the public powerscould no longer provide, as well as decentralizationso that fiscal competition wouldexercise pressure to reduce public expenditureand so better satisfy the collectivepreferences of the electorate through competitionbetween local authorities 5 . Hence,a distinction could be made between “economic”,“administrative” and “political” decentralization.“Economic decentralization”refers to economic decisions (decentralizedwhen they result diffusely from the play ofmarket forces, centralized if they are decisionsmade by the government); “administrativedecentralization” refers instead tothe degree of dispersion or concentrationof public decisions; and, finally, “politicaldecentralization” which refers to theauthorities with the capacity to make politicalchoices 6 .In this framework, it has been possible topropose a classification of all systems ofdecentralization based on two dimensions:the method of allocating resources (puremarket and state controlled economies representthe two extremes) and the levels ofpolitical and administrative organization towhich the resources are allocated (central,local or intermediate). Obviously, all realsystems are mixed systems but they aresituated somewhere between four extremetheoretical models as follows: the centralizedpublic model, the centralized marketmodel, the decentralized public model andthe decentralized market model 7 . Thesemodels make it possible to assess the characteristicsof real systems and to comparetheir relative positions.Despite its heuristic value, this global theoryof decentralization may be criticized for leadingto a degree of confusion. Firstly, therelations between the public powers and therelations between the public powers and theeconomy are not the same; unlike the publicpowers, the decisions of economicagents are not subject to democratic procedures.In addition, the fact of turning to themarket to produce or supply a good or aservice does not mean that the publicauthority, local or otherwise, is no longercompetent. If the responsibility of the publicauthority is to ensure that a good or a serviceis offered to the population and it is allowedby law to chose the method or form ofprovision, it can then assess whether it ispreferable to set up a public organization, toconclude public procurement contracts or toproceed to delegate the public service to theprivate. However, the public authority remainsresponsible in the eyes of the law andthe citizens for the provision of the serviceunder the conditions it has defined. Thecase would be different, of course, if privatizationis decided on by the state and theconsequences affect the local authorities, orif the law obliged them to resort to the privatesector, even when the local authoritycontinues to exercise powers of control andorganization. It is then paradoxical to usethe expression “decentralization” to characterizemeasures which result in a reductionof the role and responsibilities of the localauthorities.This is why it is preferable to reservethe notion of decentralization for therelations between the public powers,some of which are placed under thecontrol of others, and not for the relationsbetween the public powers andthe economy or society in general. Thisis not to ignore, for all that, the importanceof relations with the economy, and theymay be addressed in an analysis of governance,but they do not come under what isnormally called decentralization.Even within these boundaries, the notionof decentralization is still likely to beunderstood in two different ways: a broadmeaning, which relates to the public economyor to the sociology of organizations,or a narrow meaning, of a legal and politicalnature. The former has become thegeneral or commonplace meaning; the lat-5. See amongst basictexts on the subject:Tiebout, C.M.(1956), “A puretheory of localexpenditure”, Journalof Political Economy,vol.64, p.416;Buchanan, J.M. /Tullock, G. (1962),The calculus ofconsent: Logicalfoundations ofconstitutional liberty,University ofMichigan Press, AnnHarbor.6. Wolman, H. (1990),“Decentralization:What it is and whywe should care”,p.29-42 in: Bennett,R.J. (ed),Decentralization,local governmentsand markets.Towards a postwelfareagenda,Oxford, Clarendon.7. Bennett, R.J. (1990),“Decentralization,intergovernmentalrelations andmarkets: towards apost-welfareagenda?”, pp.1-26in: Bennett, R.J.(ed), op. cit.;Bennett, R.J. (1994),“An overview ofdevelopments indecentralization”,pp.11-37 in:Bennett, R.J. (ed.),Local governmentand marketdecentralization.Experiences inindustrialized,developing andformer Eastern Bloccountries, UnitedNations UniversityPress.

POSTFACE308 United Cities and Local Governmentster, more exact, is the only one, as we willsee, which has a normative scope. Decentralizationshould also be distinguishedfrom related notions: devolution, originallyan English concept, and deconcentration,which is of French origin and the notion ofdelegation.But it still signifies, and this is the basis ofits unity, an institutional and political differentiationbetween the state and the localauthorities, and the legitimacy of representationat local level of public interestsdistinct from those for which the state isresponsible.8. Op. cit. p.4.In its broadest sense, decentralizationexpresses a quality of the relations betweenlevels of authority one of which is under thecontrol of the other. We say that these relationsare more or less decentralized, dependingon whether the inferior power benefitsmore or less from freedom of action in theexercise of its attributions under the controlof the superior power. The notion of decentralizationcan thus apply both to the relationsbetween the federal power and themember states (for example Austrian orAustralian types of federalism are said to bemore centralized than those in the USA orCanada) and to the relations between thestate and local authorities in a unitary state,or between the federated entities and thelocal authorities which they comprise, oreven to the internal relations in a companyor a group of companies considered as anorganization.In the narrow sense, decentralizationmeans that local authorities are establishedby the law, have a legal personalityand are administered by bodies throughwhich they exercise, with a degree ofliberty, the powers and responsibilitiesthey obtain from the law under the controlof the state. This notion was first assertedin France. According to an English variantfound in many countries influenced by Britishtradition, the law confers the legalpersonality and powers not on the communitiesbut on the bodies; since the 90s, it isthis concept which has been followed, withcertain differences, by Russian legislationand that of other former Soviet Unioncountries. Decentralization understood inthis way, depending on the variant, hasresulted in quite different regimes from thepoint of view of local institutions and theself-governance left to local authorities.From decentralization in its narrowest sense,we must compare and distinguish theEnglish notion of devolution, which onehesitates to translate as “dévolution” inFrench. It is a relatively imprecise notionwhich appeared at the end of the 19 th centuryas an attempt to respond to the Irishindependence movement through an internalregime of extensive self-government(Home Rule). Devolution corresponds tothe transfer of wide-ranging powers to apolitical assembly for the management ofinternal affairs. The word was used todesignate the projects in the 70s and thereforms of 1998, which transferred importantpowers and means to regional bodies.But it is also used, today, in a broader sense,particularly outside the UK, to designatetransfers of power to local or regionalcommunities.The meaning of the word devolution thusseems akin to a distinction commonly madetoday between political decentralizationand administrative decentralization. Butthe criterion of the distinction is far fromclear. In the typology of decentralizationproposed in the UNDP report referred toabove, administrative decentralization ischaracterized by the fact that the localauthorities are accountable to the higherauthority. This corresponds to what onecould call de-concentration or delegation(depending on the cases - cf. infra). Thiscontrol relation (accountability) withthe higher authority does not exist inpolitical decentralization nor in devolution,which implies a total transferof powers and responsibilities, decision-makingpower and resources,including the power to procure resources8 . However, devolution does not necessarilyimply that the local authority results

309from election, just as decentralization alsodoes not necessarily entail the election oflocal authorities.However, the distinction between politicaland administrative decentralization is morecurrently based on other criteria. A fewexamples follow. Political decentralizationcorresponds to the exercise of politicalpower, as in the case of federated governmentsin the framework of a federal state;whereas administrative decentralizationonly consists of the institutionalization ofthe legal entities responsible for managinglocal interests 9 . It is therefore the exerciseof legislative power by sub-national territorialunits which is considered as theexpression of political decentralization, incontrast with the classical case of the unitarystate in which the unity of legislationis the expression of the unity of power 10 .Or again, political decentralization presupposesthe dispersion of political decisionmakingpower, i.e., a degree of freedom ofaction as to the determination of policies,the capacity to mobilize resources and thefreedom to use them 11 . But some definitionsof administrative decentralization donot differ greatly from this latter concept:according to Maurice Hauriou, it is the needfor political freedom rather than administrativeneeds, which justifies decentralization12 ; according to Charles Eisenmann,administrative decentralization “consists ofgiving to locally competent authoritiespowers of action, therefore firstly of decision-making,independent of the centralauthorities” 13 .But today, over and above these theoreticalapproaches, another criterion must beadded, that of the election of local authorities.Although, from a theoretical point ofview, the notions of decentralization anddevolution do not necessarily imply theelection of local authorities, the fact is thattoday territorial decentralization is inseparablefrom the democratic legitimacy oflocal authorities, and in all countries theinstitution of locally elected councils is therule. Even in the Arab Gulf states, localelections have been held over the last fewyears with the exception of the United ArabEmirates. If the classical idea of decentralizationaccepts the autonomy oflocal authorities in the framework ofthe law, the modern view of decentralizationis today inseparable from thedemocratic norm, and no one disputesthis even if its transposition and implementationare often criticised.As soon as universal suffrage applies forthe designation of local authorities, it becomesinevitable that decentralization willtake on a political dimension, even though,in certain countries, political parties arenot allowed to participate in local elections,and even though the official vocabulary continuesto speak of “administrative” decentralization,or “administrative” elections àpropos local elections. This is so, given thatelections imply a form of responsibility ofthose elected vis-à-vis their electorateeven if the higher authority exercises aform of supervision. This is the meaning(the direction) of accountability whichmakes the difference, as shown in theUNDP report: no longer towards the statebut towards the electorate.In this case, devolution is not distinguishedfrom decentralization through its politicaldimension but by its possible scope. Inpoint of fact, the idea of devolution has nolimit on the transfers which may carriedout, other than the point at which thetransfers would mean independence; onthe contrary, the idea of decentralization isinseparable from the idea of the unity ofpower. Decentralized entities administerthemselves without ceasing to be an integratedpart of the state and without thestate conceding to them part of its constitutionalfunctions. Extended to the transferof legislative powers, political decentralizationcorresponds in fact to a differentnotion of decentralization in its strictestsense. This results in the fact that, apartfrom this hypothesis, devolution anddecentralization may be considered assynonymous particularly for local authori-9. Bourjol, M. (1975),La réformemunicipale, Paris,Berger-Levrault,pp.56-58.10. Aja, E. (1999), ElEstado autonómico.Federalismo yhechosdiferenciales,Madrid, AlianzaEditorial, pp.23 etsuiv.11. Wolman, H., op. cit.pp.29-30.12. Hauriou, M. (1919),Précis de droitadministratif, Paris,Sirey, preface.13. Eisenmann, Ch.(1982), Cours dedroit administratif,Paris, LGDJ, tome 1p.278 (cours de1966-1967).

POSTFACE310 United Cities and Local Governmentsties at municipal level for which there isnever a transfer of legislative powers.On the other hand, a clear distinction mustbe made between deconcentration anddecentralization and the former must not beassimilated to a restrictive application of theidea of decentralization as is proposed withina broad concept of decentralization. Deconcentrationis originally a French notion whichapplies to the relations between the centraladministration and their local-level officesthat depend on the delegation of powers tothe latter. Deconcentration is the oppositeof decentralization in that it governsthe relations within an administrativehierarchy, whereas decentralizationexcludes any hierarchical relations betweenthe state and local authorities.Deconcentration comprises two elements:i) the existence of territorially competent serviceswithin the state administration;ii) delegation of powers to these services.But the term delegation may also be usedto designate an intermediate situation:state powers and responsibilities are delegatedto a decentralized authority (i.e.,resulting from an election and not fromnomination by a higher authority) and areexercised on behalf of the state and forwhich the decentralized authority isaccountable to the state. This situation ismost often designated by the expression:“delegated powers and responsibilities”.Depending on the case, it may be thatelective legitimacy weakens the control ofthe higher authority or, on the contrary,that the weight of the delegated powersand responsibilities weakens decentralizationbecause of the control exercised bythe higher authority.These distinctions lead to a preference fora strict definition of decentralization whichmarks the difference from related notions.Decentralization is thus characterizedby the existence of locally electedauthorities, distinct from the state’sadministrative authorities, and exercising,in the framework of the law,their own powers and responsibilitiesfor which they have a degree of selfgovernment,under the control of thestate. As understood in this way,decentralization in its modern meaningis inseparable from the idea oflocal self-government and the democraticprinciple. But the volume of responsibilitiesexercised is not sufficient toassess the level of decentralization in agiven country; that depends also on theregime under which the responsibilities areto be found and the control effectivelyexercised by the state.In its broadest sense, decentralizationexists in almost all countries although ithas very different characteristics. Butstrictly defined, decentralization is lackingin very many countries. Hence, when article96 of the constitution of the China statesthat “local congresses of the people atdifferent levels are the organs of the state-’s power”, this is a form of decentralizationin its broadest, and not strictest, sense.This was the concept in the Soviet Union,abandoned today under article 12 of theconstitution of the Russian Federation. Butsome states, formerly part of the SovietUnion, still adhere more or less explicitly tothis concept (in general the states of CentralAsia and Belarus). In Cuba, althoughassemblies of people’s power are characterizedin the constitution as the “higher localbodies of state power”, it is however recognizedthat they fulfil specific functionsother than the assistance they provide inrealizing the ultimate goals of the state(art.102 and 103). Other political conceptsmay also lead to principles excludingdecentralization of the local administration.This is the case in Saudi Arabia, inOman and in Qatar; in other Arab countriesand in Islamic Republic of Iran somemoves have been made towards decentralizationin recent laws and constitutions.Yet the Iranian constitution, which sets uplocally elected councils, subjects them tothe principles of the Islamic regime and

311envisages their “subordination” to centralgovernment authority (article 100) 14 .Despite this, there is a tendency towardsthe diffusion of the model of decentralizationand the recognition of a sphere ofresponsibility specific to local authorities,at least regarding the principles, even incountries which seem far removed fromthese principles.II. Self-government (autonomy)Autonomy literally means the power to setfor oneself the rules by which one isgoverned. However, this notion may alsobe understood in at least two differentways. In the sense of political autonomy,it is a demand for sovereignty whichstops at the limit of independence, fromwhich it is distinct. Understood as administrativeself-government, it expressesthe possibility for the local authority togovern its own affairs and those whichthe law entrusts to it. It is in this secondsense that it is generally understood aslocal self-government. The regional autonomystatutes in different Europeancountries (e.g. in Spain or in the UK) andon other continents (for example theautonomy of Karakalpakstan in Uzbekistan,or that of Aceh in Indonesia) comeunder the first meaning. The Frenchconstitution today accepts both meaningsbut applies them to entities of a differentnature: the first to “overseas countries”(New Caledonia, French Polynesia)(art.74), and the second to territorialcommunities (art.72). The EuropeanCharter for Local Self-government as wellas the “Guidelines” recently adopted bythe Governing Council of UN Habitat bothrefer to the second meaning. This selfgovernmentalso has a political dimensionbut it results from elections not fromthe statute of the local authorities.Local self-government, as understoodabove, is more and more widelyrecognized on the different continents.The exceptions are states whichdo not refer to decentralization in thelegal meaning of the word and also a fewcountries which attribute a political statusto municipal self-government.Local self-government is expressed insometimes differently coined legalnotions but which are, in general, similarin content. In certain European countries,reference is formally made to the notionof “autonomy” in the constitutions (Italy:art.5; Spain: art.140; Portugal: art.6;Romania: art.120; Greece: art.102.2;“administrative autonomy”). In all theother European countries, the term usedcorresponds literally to the Germanexpression Selbstverwaltung (FundamentalLaw: art.28.2), defined as “the rightto govern, under one’s own responsibility,all the affairs of the local authority”,which corresponds to the notion of “libreadministration” in the French constitution(art.72), and the English notion of selfgovernment15 . This latter expressioncould however be distinguished insofar asits material content derives only from theprovisions of the law, but this limitation isreceding both in the United Kingdom andin the USA and Australia (constitution ofcertain federated states in the latter twocountries), and by the link with a degreeof freedom of organization at local level(home rule).This notion of “self-government” (“libreadministration” in French) is to be foundin the 1993 Russian constitution (mestnoesamoupravlenie, art.130 to 133),including the freedom of organization inlaw 131/2003), the Ukrainian constitutionof 1996 (mitzeve samovriaduvania,art.140) or the Polish constitution of1997 (samorzad terytorialny: art.163 etseq.). In Latin America, the word “autonomy”is usually preferred, both in unitarystates (Colombia: art.287) and infederal states (Argentina: art.123, ensuringmunicipal autonomy is a duty of theprovincial constitutions; see for examplethat of La Rioja: art.154). In Asia, countrieswhich were under British colonialrule have retained the British concept of14. Jalali, M. (2005),“Iran: unedécentralisation entrompe l’œil? Lesfondementsessentiels de ladécentralisation enIran”, Revueiranienne de Droitconstitutionnel,summer 2005, n°4,pp.74-86.15. In this sense:Breuillard, M.(2000),L’administrationlocale en Grande-Bretagne, entrecentralisation etrégionalisation,L’Harmattan, coll. «GRALE » Paris.

POSTFACE312 United Cities and Local Governments16. Franck Moderne(2006), “Lemunicipio commeentité politique dansl’organisationterritoriale fédéraledu Brésil”, pp.347-363 in: Mélanges enl’honneur de Jean-Claude Douence. Laprofondeur du droitlocal, Paris, Dalloz.local government and of local selfgovernment,including the restoration oftraditional methods of local organization(not only Australia and New Zealand, butalso India, Pakistan, Malaysia) but othercountries refer rather to the wording“local autonomy” (Japan, Indonesia,Republic of Korea, Philippines).One can see however that these differencesin terminology and sometimes conceptualizationhave no impact on the realcontent of “autonomy” or “self-government”.There is nothing that allows us toassert that the reference to “local autonomy”corresponds to a degree of decentralizationgreater than the reference tothe principle of “self-government”, if onecompares institutions, powers and responsibilities.Municipalities in Germany orFrance do not benefit from less extensivedecentralization than municipalities inItaly or Portugal; decentralization is nomore advanced in the Republic of Koreathan in India. But decentralization isessential as a reference standard for localgovernment. This standard is being developedby the European Charter for LocalSelf-government and the UN Habitat Guidelinesfor Decentralization.This general tendency has however a fewnuances. In African countries, the conceptswhich the constitutions and nationallaws reflect follow those of the formercolonial power. However, this conceptionhas been dominated since independenceby the wish to ensure the unity of thestate, which has upheld a centralized systemand an essentially instrumental visionof decentralization. However, for anumber of years, the reforms undertakenin a certain number of states bring themcloser to the general trend by giving todecentralization a more substantial contentof local self-government (for example:South Africa, Uganda, Zambia,Burkina Faso, Niger, Senegal).Lastly, a few countries stand out, conversely,by the affirmation of a concept ofmunicipality which makes it a componentof the state or the framework of an expressionof sovereignty. Sweden is theonly European country whose constitutiondeclares that “self-management oflocal communities” contributes to therealization of “national sovereignty”(1:1). The constitution of the Ukraine alsostates that the people’s sovereignty isexercised by the organs of power of thestate and by the bodies of local selfgovernment(art.5), but this formula recallsthe former adherence of local bodiesto the state power. In Brazil, the 1988constitution, in principle, confers on themunicipalities (municipio) political selfgovernment:the municipios, as withfederated states, are part of the componentswhose “indissoluble unity” formsthe Federal Republic of Brazil (art.1), andthe federal constitution defines the basesof their organization and their powersand responsibilities (art.29 to 31). Thepractical scope of this concept seems,however, limited 16 . In Indonesia, the introductionof the reference to “autonomy”in the laws of 1999 and laterlaws, corresponds on the other hand to achange of concept, with the transfer ofwide-ranging powers, responsibilities andresources and the direct election of thelocal executive.Local self-government is a constituentelement of decentralization.The terms “local autonomy”, “libreadministration” and “self-government”do indeed correspond to oneand the same notion. It presupposesfreedom of action and organizationfor the local authority in the contextof the laws; this freedom may bemore or less extensive but this doesnot affect the notion itself.III. DemocracyThe classical notion of decentralizationdoes not necessarily imply democracy;an organization may be decentralized

313without being based on democratic principles17 . Conversely, an organization basedon democratic principles may becentralized.Now, the link between decentralizationand democracy has become narrower andmore direct, as in the past in Europe, thelink between parliamentary government,arising out of the census system, anddemocracy. Decentralization, understoodin its strictest sense as a methodof organization, today impliesdemocracy. It presupposes the selfgovernmentof local authorities inthe framework of the law, but it isdemocracy which is the basis forlocal self-government. Democracyeffectively allows citizens to expresscollective preferences which direct theexercise of power held by local authoritiesby law. This has not always been thecase: property ownership as a requirementfor voting or the recognized authorityof the traditional elite have in thepast constituted the basis, or the drivingforce, for decentralization.This has not completely disappeared. Onthe contrary, in certain countries, the institutionsgive community leaders or religiouschiefs a controlling role in civilsociety and the law sometimes givesthem a place in the representative bodiesexercising public powers (for example:Ghana, Uganda, Niger, South Africa...).In certain Middle Eastern countries, theauthority of members of the local aristocracyis influential even though there areelections (UAE, Saudi Arabia and Bahrain).Despite these surviving customs, the generaltrend is towards the election of localgovernment bodies and to the developmentof instituted forms of popular participation.Even if the election is notdisputed, it is considered to be essentialfor the authority and the legitimacy of thelocal authorities and one can see that legislationtends to introduce a degree ofpossibility of choice or influence for electors(Vietnam, 2004 local elections; Chinaat village or district committee level).In conclusion, it is obvious that a systemof reference for decentralization is beingconsolidated which includes recognizinglocal self-government and calls for representativeelected institutions and participatoryinstitutions by which the peoplemay express their collective preferencesand interests. We should underline thatthis system of reference is not foundeverywhere, but it is challenged by anyother reference system and continues tospread. Without question, its strengthlies in its ability to take form in a widevariety of institutional models.17. A renowned Frenchlegal expert, CharlesEisenmann, wrote:“decentralization isa system without agiven politicalcolour; it can beequallyundemocratic anddemocratic”; all thatis required is thatthe designation oflocal authority be“independent ofcentral authority”(op. cit. p.277).

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Decentralization and local democracy in the worldThe first GOLD Report by United Cities and Local Governments (UCLG) constitutes a global reference ondecentralization by presenting the contemporary situation of local governments in all regions of the world. Thereport is one of the main products of UCLG's Global Observatory on Local Democracy and Decentralization andanalyzes local authorities in each continent under three main themes: (i) the evolution of territorial structures;(ii) responsibilities and power, management and finances; and (iii) local democracy. An additional chapter isdedicated to the governance of large metropolises, where rapid growth presents major challenges, in particularin the fast developing countries of the South. This report also offers a comparative overview of the different realitiesconcerning the state of decentralization, and how the basic indispensable mechanisms for local democracy do, ordo not exist in some countries. Relationships between the state and local authorities are evolving towards innovativeforms of cooperation. In this context, the role of local authorities in the development of global policies is increasinglyrecognized. The GOLD Report is the first of what will be a triennial publication.Generalitatde CatalunyaThe Publication can be obtained electronically from the World Bank or UCLG:www.cities-localgovernments.org/gold/gold_report.aspwww.worldbank.org