A Users' Guide to Measuring Local Governance

Poverty focus
PBGSs pro-poor indicators are incorporated under
Performance Measures, such as the determination
of the allocation of the development expenditure
in order to assess the proportion applied to
the pro-poor sectors – education, heath, water,
agriculture and roads (Tanzania); the analysis of
Local Government poverty and livelihood
issues including poverty trends (cause-effect
relationships), livelihood analysis for the different
poverty categories/vulnerable groups (like
children, people living with HIV/AIDS, the elderly,
people with disabilities, displaced persons, the
urban poor etc.) and geographical poverty pockets
– related to performance measure for the quality of
the Development Plan, of the Investment Plan
(Uganda); the mention of pro-poor policy, national
and district development priorities, criteria for
selecting projects by municipalities within the LG
activities concerning budget ceilings and planning
guidelines (Nepal).
In addition, PBGSs can be adapted in order to
overcome the potential tension that can arise
between the focus on performance and the
objective of poverty reduction. First, they might be
restricted to the poorer rather than richer local
governments. Second, performance grants
systems can be designed focusing on lower
capacity local governments.Third, they can include
poverty or poverty proxy measures in the basic
allocation criteria prior to the adjustment to the
results on the performance measures.
Strengths
• PBGSs improve local administration performance
by linking transfers to performance in terms
of revenue mobilisation, administrative
performance accountability, good governance.
In countries such as Uganda and Kenya, local
development plans and budgets are now
being elaborated with a larger involvement
of the citizens, more transparency and
inclusiveness than prior to the introduction of
the system. Improvements were also realised
on the strengthening of accountability
procedures, the establishment of internal
audits, the functioning of tender boards,
councils and committees. In many countries,
PBGSs are supported by systemic reforms
especially in the field of decentralisation and
financial management.
• PBGSs have proved to be a tool for improved
dialogue between citizens and public
administration officials, while providing a way
to address the local challenges more efficiently.
• PBGS applying clear criteria (formula-based)
for transfers are more transparent, predictable
and equitable than ad hoc transfers, and more
suitable for the local planning process.
Weaknesses
Given that the performance-based grants are
usually administered by ministerial bodies, the
process of assessment and delivery of these grants
can be subject to political pressures, in order to
manipulate the assessment’s results. In this case,
it seems preferable to involve in this process
other local government representatives and/or
stakeholders, in order to guarantee transparency
and independent judgement.
Where to find it
http://regionalcentrebangkok.undp.or.th/practices/governance/documents/uncdf_nepal-int2005.pdf
Supplementary tools/guidelines
Conceptual Basis for Performance Based Grant Systems and Selected International Experiences:
http://regionalcentrebangkok.undp.or.th/practices/governance/documents/uncdf_nepal-int2005.pdf
Performance Based Grant Systems – Using Grants as Incentives; Concept and Lessons Learned:
http://www.kl.dk/_bin/7dbb8d72-4a58-47c8-b0ba-26d123226395.ppt
128 UNDP Oslo Governance Centre