GOLD Report I - UCLG

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.