“Importance of Representation in Processes of Democratisation”
Oslo Workshop 10-11 January, 2013 (Draft – author’s permission before citing please)
Neil Webster.
Representative democracy and the third pillar of fiscal decentralisation. (DRAFT)
Neil Webster1
Background
The paper is drawing on the experiences from the work of the United Nations Capital Development
Fund (UNCDF), primarily in Nepal, but also elsewhere in Asia and Africa. In Nepal UNCDF is
supporting the government in a national programme, the Local Governance and Decentralisation
Programme. The programme is supported by 13 donor agencies directly, and several more indirectly.
Nepal is pursuing a decentralisation reform agenda in a political context in which ethnic federalism is
being pursued as an outcome of the armed conflict (1997-2006), a constitution has yet to be finalised
more than 4 years after a Constituent Assembly was elected for that purpose and where, with the
dissolution of the same Assembly, a caretaker government rules. The current contest for political power
between three main political parties has left a void in the legislative side of governance permitting a
strong bureaucratic elite to reassert its dominance over the processes of national governance and reform.
This elite strongly opposed any reform agenda that it feels might weaken its position of dominance and
in the most recent period has not felt restrained in making its opposition known to political parties and
donor agencies. Simply stated, the role of UNCDF is to use its quite unique UN mandate that permits it
to make capital grants within an approach that focuses on the strengthening of local public financial
management. This would on first sight appear quite neutral, highly technical and to have little to do with
the strengthening of representative democracy. Closer examination though shows that such a
strengthening of local public financial management can be an important instrument for securing greater
local democracy, participatory and representative, within a national reform process.
Finally, please note that this is very much a paper reflecting work in progress and requires more
theoretical reflection and consideration in a number of its areas. But it seeks to make a link between
research and policy, between the political and the financial management of local government that
appears somewhat under-researched.
Introduction
The reference to a third pillar in the working title of the paper is based upon the proposal that three core
reform agendas need to be pursued for achieving a functioning devolved system of democracy that
supports and strengthens representative democracy at the national level. These are an administrative
reform process that turns hierarchical line ministries on their heads such that their ethos is to serve the
demos as duty bearers (vertical change) and to support and facilitate the work of the elected
representatives (horizontal change); an electoral reform process that seeks to secure the ability of the
demos to influence the decision-making processes that shape the formulation and the implementation of
policy whether through direct participation or through representatives that act for their interest. The third
pillar is that of fiscal decentralisation reform process. Here there are five basic building blocks: (i) the
assignment of expenditure responsibilities to different government levels; (ii) the assignment of revenue
and tax sources to different government levels; (iii) the design of inter-governmental transfers whereby
fiscal transfers or grants are made by central government to local government; (iv) Local government
1
Senior Researcher at DIIS, Copenhagen, currently on leave and working for UNCDF, Southern and Eastern Africa Regional
Centre. The views expressed are entirely the author’s own. ([email protected])
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“Importance of Representation in Processes of Democratisation”
Oslo Workshop 10-11 January, 2013 (Draft – author’s permission before citing please)
Neil Webster.
borrowing (municipal bonds for example): (v) the policy environment and institutional arrangements
for managing local government fiscal arrangements.2
The pursuit of public administration and electoral reforms tend to be highly contested as they threaten to
affect the basis by which bureaucratic and political elites reproduce much of their power. But fiscal
decentralisation, while involving the funds around which power is much contested, can often see a
reform process initiated by governments as they meet demands from donors to manage fiduciary risks
better, to manage local public financial management better, as well as their own domestic concerns with
bringing more development to local communities. It might also be the case that the often quite technical
nature of the reforms and of the fiscal instruments introduced might permit their approval and
implementation to pass under the political radar in the initial phase. The complexities of accounting and
auditing systems, of fiscal performance measures and formula funding for inter-government transfers,
might well permit processes to be set in motion before their full implications are understood.
It is this third pillar that the paper looks to, with the suggestion that much that can be achieved here in
the strengthening of certain systems and processes can lead directly to stronger representative
democracy.
There are three main parts to this paper. First a simple model of the approach to change that the paper
looks to. This is to provide the basis for understanding the positioning of the promotion of certain
instruments within a fiscal decentralisation approach vis-à-vis representative democracy. Second the
importance and role of two of these instruments: formula funding (FF) and Performance Based Grant
Systems for good public financial management and thereby stronger representative democracy. The note
will look briefly to the technical instruments used and the political outcomes that can be attributed to
their impact. Third the ways in which the ‘circuit of local governance’, can be strengthened through the
specific use of a third instrument: targeted cash transfers made by local government to citizens.
Strengthening this circuit of local governance requires efficient local financial management, but it can
take the demand for representation into new arenas and thereby secure much at the national level, not
least the need for effective representative democracy to deliver inclusive public services and
development at the local level.
Let me conclude this background with the simple but perhaps polemical statement that public financial
management is the cornerstone of effective and efficient local government and central to improvements
in the quality of participatory and representative democracy (electoral system) and for responsive local
government (public administration)
Factors shaping representational influence in local government bodies
Factors that influence an individual’s capacity to engage in and influence collective decision-making in
local government can be discussed in terms of three dimensions: the structural, the institutional and the
individual citizen. These provide a framework for analysing factors that shape the nature and degree of
representation in decentralized local governance in a particular context; they also provide a means for
assessing the impact of measures designed to improve representation.
2
See Per Tidemand: Local Government Finance Policy Brief , UNDP Local Governance and Local Development Policy
Briefs, Revised 18th October 2012. (unpublished)
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“Importance of Representation in Processes of Democratisation”
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Neil Webster.
Structural factors are those that affect the capacity to participate or to be adequately represented in local
governance. Included amongst these are such factors as gender, ethnicity, caste, religion, class and age.
Institutional factors are those that can be seen in the institutional configurations that enable or disenable
individuals from influencing decision-making in local governance. These are not just mechanisms that
affect the degree of representation in the daily functioning of local government, but also access to other
institutions that help to secure a fairer and more adequate representation. Public hearings, councillor
surgeries, representation on sub-committees, quotas, recall supported by means of public, political and
legal recourse managed through other institutions are examples of the elements found in many
developed countries, but not necessarily a part of the institutional configuration present for citizens in
many poorer countries. Finally, individual/citizen3 factors are those that address the agency of
individuals and social groups as citizens possessing rights. They influence the degree to which these
actors can express agency through their actions both within local governments and upon local
government from without. Structural and institutional factors provide the opportunities for such agency,
but can by no means ensure it. Taking up this dimension is to go beyond the notion of citizens as rights
holders and to stress the importance of the decision to assert agency, to pursue their interests through the
channel of representation in the institutions of local governance.
These factors are presented in the diagram 1 below. The arrows denote influences that different types of
factors have on the working of institutions in decentralized local governance and the capacities of
citizens to assert influence over decision-making and its outcomes:
Figure 1: the factors of change
Field of local
governance
Institutional
factors
o
o
o
o
Structural
factors
3
0
0
Individual
citizens’ agency
in local
governance.
I deliberately place individual and citizen together, fully acknowledging that they are conceptually different.
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“Importance of Representation in Processes of Democratisation”
Oslo Workshop 10-11 January, 2013 (Draft – author’s permission before citing please)
Neil Webster.
Local government reform in the South and South East Asia region has tended to focus on measures
directed at changing the institutional factors affecting participation and representation in local
government including the heads of elected bodies, through adjustments of the electoral system, the
political party system, and measures designed to bring civil society organisations and other nongovernment actors into the framework of decentralized local governance.
Some measures have sought to compensate for structural factors; for example affirmative actions
targeting specific groups (women, dalits) have been quite widely used. As yet it remains inconclusive as
to whether such positive discrimination can in the longer term weaken the structural causes that give rise
to social exclusion and marginalisation and their consequences for representation.4 Other measures have
focused on the behavioural and attitudinal position of individuals. For example there has been a shift
towards placing greater emphasis on the agency of the poor in local governance including citizencentred and rights-based approaches that aim not just to empower poor and marginalised groups, but
also to change fundamentally the ways that officials and poor individuals view each other and relate to
each other. Not least this involves a major shift in the disposition of local government officials
responsible for providing social and technical services i.e. becoming duty bearers, and a similar shift for
the poor in order to see themselves in relation to these officials as being rights holders.
Individual agency can lead to new institutions and institutional practices that ultimately produce changes
to deep underlying structures. New institutions can work both on individual behaviour (e.g. when legally
enforced or incentivised) as well as structural change in the longer term. New policies can seek to
change land or gender relations for example, but without institutional and even individual agency, may
have little or no impact. In this way we see the inter-relatedness of the three factors of change.
Finally, as touched on at the beginning, the three types of changes can be viewed through the lens of
time - what is possible short, medium and long term; and through the lens of intervention level - whether
an intervention needs to be local, national and international or a combination of these. How do these
play out in the field of local governance? The following slide is an attempt to summarise the types of
activities and the level at which they are directed.
4
Tom Nairn’s article ‘The Modern Janus’ in New Left Review, No. 1/94, Nov-Dec 1975, provides a powerful warning on the
potential dangers present in seeking to promote greater inclusion through policies designed to counter past exclusion through
identity-based targeting and affirmative action. Nepal is struggling with this today.
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“Importance of Representation in Processes of Democratisation”
Oslo Workshop 10-11 January, 2013 (Draft – author’s permission before citing please)
Neil Webster.
Figure 2: The activities of change
One final point needs to be made here; namely that the three pillars referred to in the introduction and
the three factors of change discussed in the above present a holistic approach towards bringing about
democratic change and improvement. The elements are mutually interdependent. If we look to only one
element, the behavioural practices of the individual members of a bureaucratic elite, we will not be able
to analyse adequately the processes that give rise to practices stemming from their perceptions and the
norms with which they consciously or sub-consciously operate. From a development perspective the
problem is even greater. To work on the attitudes of bureaucrats towards say corruption may well find
agreement in the undesirable effects of systematically manipulating or ignoring procurement rules and
regulations, but it might have little or no effect on the practice itself. When 20% ‘commission’ is the
norm and the norm is part of a required redistributive system within the ministry, and promotion is
rooted on patronage and social, political, familial networks, such institutionalisation renders challenging
the norm ineffective at best, extremely costly at worst.
A programme approach brings more instruments that carry leverage, works with countervailing relations
between stakeholders and seeks to work with the dynamics of citizen – government – civil society and
much more can carry a far greater potential for changes that strengthen democracy it is proposed. The
following diagram is a simplistic presentation of the approach adopted by the government with support
from a broad group of donor agencies in Nepal.
Citizens and
communities
New awareness
new functions
New organisations
Rights holders:
engagement with the
government as
planners, implementers
and monitors
Local government
officials and
institutions
New roles and
repsonsibilities
New resources
New mindset
Duty bearerss Improved
accountability,
effectiveness efficiency
and equity
National Policy
Government policies
enabling devolution
(function and fund)
Improved service
delivery and local
investmant in terms of
level, quality,
inclusiveness and
equality
Figure 3: The programme approach towards representative democracy
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“Importance of Representation in Processes of Democratisation”
Oslo Workshop 10-11 January, 2013 (Draft – author’s permission before citing please)
Neil Webster.
Increased capacity for local
government to deliver
resources and basic
services in an inclusive and
equitable manner
Effective
representation
required
GOVERNANCE
SUPPLY &
DEMAND
Citizen & communities
empowered: voice,
engagement, accountability
Strengthenned policy &
institutional environment
fordevolution and
community development
Fiscal decentralization and good (local) public financial management (PFM)
Revenue and expenditure assignments in developing countries are often poorly defined in local
government legislation and in the accompanying government rules and regulations. Where they are
present in the least developed countries, and there has been a wave of decentralisation reform agendas
that have included mandated assignments they are usually poorly implemented. There are a number of
reasons, mostly linked to the fact that if a policy is not seen as desirable and feasible by those
responsible for its implementation, then little will happen. For example it is often not in the electoral
interests of politicians to be promote the collection of local taxes or fees; the collection of local revenues
based on licenses (sand and gravel collection from rivers, stones from local quarries, market and
business fees, etc.) tends to be effective only when there is a financial or political incentive for the
administering official to do so (political favours or personal financial gain); and, when
intergovernmental transfers from central to local government are increasing and meeting local budget
needs, then the administrative burden of local revenue collection often sees a reduction in local revenue
generation.
However, the previous paragraph presupposes the notion of a contract between tax paying citizen and
public service providing state. It might also be pointing to weaknesses and malpractices in the
management of this contract, but the underlying idea of a contract nevertheless is there. This is not the
context found in Nepal and in most less developed economies where statehood has more often than not a
range of meanings and generates a range of quite diverse experiences. Work with local financial
management requires an understanding of the political economy and political sociology of local
government finances, their sourcing, management and utilisation. Suffice it to say that the assumption of
a contract based upon consensual agreement by all parties is not consistent with the realities of most
developing economies; nor many developed economies for that matter. Yet the absence or presence and
nature of such a contract is a defining feature of the type of statehood; a consensual contract between a
rights-holding citizen and a duty-bearing state being a core feature of representative democracy.
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“Importance of Representation in Processes of Democratisation”
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Neil Webster.
One area of public financial management in which this absence of consensual contract has been quite
well documented is that of (local) taxation. In The Art of Not Being Governed: An Anarchist History of
Upland Southeast Asia, (Yale University Press, 2009) Scott sheds a renewed perspective on the ways
peoples challenge the impositions of statehood, namely statehood that is largely impervious to their
needs and seeks more from extracting wealth than in providing the benefits that we associate with
modern governance. Interestingly Scott highlights an egalitarianism and independence as often found in
the ideals of hill societies - those who fled the ‘governed valleys’. One of the key points of conflict was
the extractive nature of the taxation system, coercive and not consensual, but in this way reflecting the
nature of the political order, namely government of the people for the rulers and by the rulers. Here there
is little in local public financial management that is designed to serve the needs of the individual, and
least of all to define the individual as a citizen.
In the same vein Deborah Brautigam, Odd-Helge Fjeldstad and Mick Moore write in the introduction to
their edited volume Taxation and State Building in Developing Countries, that:
“Taxation is a core governance function. It has the potential to shape relations between
state and society in significant and distinctive ways. Tax revenues allow states to provide
security and public goods. “The history of state revenue production,” Margaret Levi
declared, “is the history of the evolution of the state (1988: 1).” For these reasons, taxation
should be accorded a central role in analyses of state building.”5
They later discuss the relationship between tax payer and state as characterised by being intrinsically
coercive and therefore not conducive to consensual governance or as involving revenue bargaining
between state and citizens, a process that supports consensual and representative governance. The
coercive relationship is later illustrated by the poll or head taxes designed as a system of mass taxation
to coerce populations towards particular areas of employment and by the flight from coercive revenue
seeking government as documented in the book (See Fjellstadt &Therkildsen). 6 As other papers in the
workshop have well documented, the emergence of a consensual governance in taxation is discussed in
detail in Tilly’s works on the emergence of modern European states.
In a number of ways the transition from coercive to consensual taxation, from extractive and coercive to
accountable and responsive financial management by local authorities, is parallel and complementary to
the transition from (local) authoritarianism as in de-concentrated and/or delegated local rule on behalf of
the centre, to a devolved local rule rooted in participatory and representative democratic governance.
The forms of planning, budgeting, implementation and monitoring found can underwrite a coercive and
extractive PFM regime designed to use rights to revenues as a form of political capital and for personal
aggrandisement or it can be the foundation for an effective and accountable system of local governance.
In the case of the latter, securing the inclusiveness and equitability of government service provision, of
the local investments made, and the efficiency and effectiveness of local government in terms of returns
to monies spent.
5
Taxation and State Building in Developing Countries, Edited by Deborah Brautigam, Odd-Helge Fjeldstad and Mick Moore
Cambridge University Press, 2008
6
Odd-Helge Fjeldstad (Research Director, Chr. Michelsen Institute) and Ole Therkildsen (Senior Research Fellow, Danish
Institute for International Studies) ‘Mass Taxation and State-Society Relations in East Africa.’ In Brautigam et al.
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Neil Webster.
In today’s ‘Nepals’ rapid change is required, nowhere better illustrated than in Nepal itself with its
recent 10 years of conflict 7and now the unsustainable post-conflict dependence on remittances with
nearly 20% of the population working overseas. However, none of this will happen without
interventions that break the norms of local wealth extraction rather than wealth creation; the official as
controller rather than provider; the politician as passive beneficiary of state provisions and active
plunderer of state and private resources rather than representative of the whole demos.
It is here that UNCDF’s use of grants within the framework of local development funds has provided
two quite unique instruments with which (i) to incentivise change at both the individual, but more
importantly, the institutional level in local governance, and (ii) with which to secure inter-governmental
transfers such that they serve policy priorities rather than more personal political interests. The first is
the performance based grant system (PBGS) and the second is the use of formula funding (FF) At the
core of the PBGS is a grant made up of three main elements. The main part is unallocated and therefore
the decision-making responsibility is passed to the local government. Receipt of this grant element is
made conditional on a few minimum conditions being met. A second performance related element is
designed to incentivise institutional and individual performance in local government; a third capacity
development element is present so that those local governments that fail or perform poorly, can
strengthen their capacity to perform better in the following year.
In more detail: Minimum conditions (MCs) are indicators by which the local governments are assessed
to see whether they observed the laws which are compulsory to them. The amount of capital grants
receivable by the local government is determined on the basis of the MC assessment. The can be seen as
representing the minimum safeguards for proper utilization of public resources and for identifying the
basic absorption capacity, in other words for maintaining by basic financial discipline. In the case of
Nepal, indicators for MCs are statutory requirements of local bodies as provisioned in the Local SelfGovernance Act of 1999 and its associated rules and regulations. In order to receive an annual
unconditional capital grant, the local government must fulfill 15 MC indicators in four functional areas.8
Table 1 shows the MCs designed for the District Development Committees (DDCs).9
Table 1: The Minimum Conditions applied to Nepal’s 75 District Development Committees
7
1997-2006, more than 16,000 killed, countless more missing and injured, tens of thousands displaced.
In practice, to date only 13 indicates from three functional areas have been applied due to the failure to hold local elections
that were due to take place in 2002, and the subsequent dissolution of the elected councils.
9
Nepal currently has 75 District Development Committees, 3,915 Village Development Committees and 58 Municiplaities.
This is due to change with the transition to a federal system of governance, but how has yet to be decided.
8
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“Importance of Representation in Processes of Democratisation”
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MC 1
MC 2
MC 3
MC 4
MC 5
MC 6
MC 7
MC 8
MC 9
MC 10
MC 11
MC 12
MC 13
MV 14
MC 15
Neil Webster.
Planning and Management
Approved annual plan and budget for the current fiscal year by district council in previous fiscal Year (LSGA,
Art. 188, 195, 197, 202 and LSGR Art. 199)
Annual budget ceiling and planning guidelines provided to Municipalities and VDCs by DDC. In case central
government did not provide such guidelines and ceilings to DDCs, even then the DDC should have provided
them from its internal resources
DDC has publicly informed the Municipalities, VDCs and relevant stakeholders about the approved annual
budget and programs
Annual progress review of the previous year conducted by the DDC
DDC has submitted its reports as per the provision mentioned in grant guideline
Financial Management
Accounts and financial details of the previous of the previous FY should be completed and submitted for the
final audit
DDC has prepared the annual statement of income and expenditures of District Development Fund (DDF) and
financial statements for the previous FY
DDC must release the budget or grant from DDF (non‐operating account) to VDCs, Municipalities, sectors and
other organizations as per approved work plans and budgets. No transfer should be made in the operating
account prior to council approval
Internal Audit Section established (LSGA art. 232) and functioning in accordance with (LBFAR art. 57 and 58)
Due and timely response have been made upon comments and reactions made in the Office of the Auditor's
General Report within 35 days
Cumulative Records of unsettled irregularities documented and updated (LBFAR 60 Annex 75)
DDC appointed auditors for the final audit of last FY of the last FY of VDCs final accounts10
Formation and Functioning of Committees
Formulation and functioning of supervision and monitoring committees: MC‐13 (this indicator is not active)
Formulation and functioning of account committees: MC‐14 (this indicator is not active)
Transparency
Information and documentation centre established and need to keep all information and records as specified
For their part, Performance Measures (PMs) are designed to create incentives for local governments to
improve their performance. PMs provide a range of score in different functional areas that help to assess
the service delivery capacity and efficiency. A local government’s annual grant will depend on the
scores achieved in PMs. The indicator of the performance evaluates the procedures, result and quality of
the different working areas of the local government. These indicators direct the local government to
monitor its own function, to improve internal working capacity and to compare its activities with other
equivalent local governments; in the case of Nepal DDCs, VDCs, and Municipalities.
The assessment of MCs and PMs of local governments helps to establish data on service delivery status,
accountability to citizens and also to identify capacity weaknesses in various functional areas. Such
information is used for developing a strategic and pragmatic capacity building programme. Furthermore,
regular assessment of MCs and PMs will strengthen the general monitoring and evaluation system of
local governments that promotes annual progress in various service delivery functions, responsibility
and ensure that accountability can be measured.
Table 2 shows the scoring system developed by the Nepal Local Bodies Fiscal Commission (LBFC) for
the DDCs. The performance attained releases the rewards and incentives. Tables 3 shows the rewards
and sanctions applied on the basis of the score achieved..
10
Simply revised in the Second Amendment
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Table 2: Summary of PMs Indicators and Score for Nepal’s DDCs
Performance areas
1. Planning and Program Management
2. Budget Management
3. Financial Management
4. Fiscal Capacity
5. Budget release and Program Execution
6. Communication and Transparency
7. Monitoring and Evaluation
8. Organization, Service Delivery & Property Management
Total
No. of
indicators
8
6
9
6
7
8
5
8
57
Max. score
possible
15
11
15
11
12
14
10
12
100
Min. score
required
6
4
6
4
4
5
3
4
36
Table 3: Summary of Sanctions and Rewards for Nepal’s DDCs
Performance “rating” & conditions
Reward/ Sanction
Staff Incentives
MCs not met
MCs met but failure in an area of PMs
MC met & obtained 36‐50 marks in PMs
MC met & obtained 51‐65 marks in PMs
MC met & obtained 66‐80 marks in PMs
MC met & obtained 80 + marks in PMs
Lose all development grant
lose 20 %
Static
Bonus by 20 %
Bonus by 25 %
Bonus by 30 %
none
none
none
Rs. 100 thousand
Rs. 125 thousand
Rs. 150 thousand
The second instrument used by UNCDF in relation to the allocation of grants to local governments is
Formula Funding’. This is designed to support two important initiatives. First the use of a formula for
grant allocation can enable specific policy initiatives to be pursued. For example, policies of poverty
reduction and equity can be pursued by using indicators such as administrative area and size of
population weighted with a cost index. In this way a citizen in a remote mountainous region will have a
greater chance of having access to basic services such as education, health, drinking water, technical
advisory services, and other mandated local government service and investment fields on a level closer
to that of a citizen in a much more accessible locality. Secondly, the use of formula for grant allocation
results in a significant reduction in the political manipulation of grant allocations. As a Joint Secretary in
the Nepal Ministry of Federal Affairs and Local Development succinctly expressed it: “ When a
Minister calls me and demands that I allocate funds to his or her constituency, I cannot say that I will
not, I have to say I cannot.” He also added “This is not a good place to further my career.”
The use of Formula Funding is a simple but extremely effective way to challenge political allocations. It
has the double benefit of strengthening key policy objectives through the targeting it introduces and of
reducing political interference to support vote buying, patronage and self-aggrandizement.
Strengthening the Circuit of Local Governance
A third instrument has also been introduced by UNCDF, the use of cash transfers by local government.
Cash transfers or grants to individuals are by no means a new phenomenon. Social protection
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programmes widely use the use of cash transfers or food for work and similar as a means by which to
promote specific policies; to reduce infant and maternal mortalities by using primary health facilities, to
increase food security, to increase literacy rates amongst children and girls in particular.
It is also an area of considerable theoretical disagreement and thereby political friction. For example,
economic targeting is seen by some as administratively burdensome and financially expensive and cash
transfers should be universally provided. Similarly, to attach any form of condition to the receipt of a
cash transfer
However, when cash transfers11 or grants to individuals are made by local government rather than by
national ministries, they offer a powerful instrument with which to implement national policies in a far
more nuanced and perhaps more effective way in key areas such as improving the level and socially
inclusive nature of access to specific public services and assets and even such broad policy objective
such as poverty reduction and the reduction of inequalities. In addition, they can also strengthen the
citizen – representative relation and thereby the condition of statehood beyond the immediate local
context. This potential has not previously been realised I would suggest, particularly as part of a peace
and development strategy in a post-conflict context.
To the extent that local governments are responsible for providing infrastructure and service delivery
services, their active involvement in the implementation of safety net programmes provides an
opportunity for linking supply and demand. In the specific case of workfare, most local governments
already plan and undertake infrastructure development, thus providing a framework within which to
establish public works programmes. Assuming that delegated or devolved safety net programmes allow
for a degree of local discretion, local governments provide a natural “laboratory” for experimentation
and innovation through heterogeneous implementation arrangements. Finally, and because they are
already “there”, local governments can potentially reduce the administrative and management costs
associated with the implementation of safety net programmes
11
The term cash transfer is used rather than that of social protection in order not to open up a much wider set of debates in
this paper.
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Table 4: The technical instrument of local government cash transfers
Strengthen
Means
The capacity of central and local government
in delivering social protection


The linkages between a service sector (e.g.
education) and local government


Local government accountability to citizens




Management tools such as Management Information
System, automated reports, user-friendly guidelines
and forms
More effective and efficient mechanisms:
registration, targeting, payment
Harmonised data management
Coordination of supply and demand measures in
education
Performance incentives
Better monitoring
Grievance management
Information campaign
From a purely technical perspective, as with PBGS and FF, the approach appears as a set of capacity
building measures. In themselves, these are no small addition to the role and capacity of local
government, but again they assume the citizen – government contract is in place in an apolitical manner.
The important addition is the leverage added by using performance incentives to introduce mechanisms
that reverse the norm in state – client relations. The introduction of a grievance mechanism with agreed
contractual obligations on the part of local government officials to respond to grievances is itself a
radical change towards securing a more accountable system of local governance. It also encourages the
representative to side with the citizen in claims and demands against higher levels of government. In this
way the circuit of local governance is strengthened as a building block for representative democracy at
the national level.
Interestingly, a grievance mechanism requires the simplification of governance practice in order that the
grievance can be made and the outcome of the claim understood. Clarity and transparency in the practice
of local governance changes the relationship of citizens with officials and elected representatives.
Government can be reluctant but social protection has become an element in national politics today as it
can target specific communities of voters – women, the old, ethnic minorities, widows, etc. Changing
the delivery towards local government and emphasising the purpose as being to improve access to public
services has set in motion new processes, new channels for citizens to have leverage towards their local
representatives.
Conclusion: Why introduce technical reforms that undermine the patronage practices of those
who control the state?
Policy and programme shifts are the work of elites, no more so than in Nepal. In viewing the role of
elites and as to whether they see certain policies as desirable and feasible, and thereby their response to
reform agendas, it is analytically useful to separate between an elite’s formal position of authority on the
one hand, and its ability to exert influence on those with decision-making authority on the other. This I
have sought to capture in Figure 1. The formal position is based upon the decision-making authority (i.e.
form of authorisation) that goes with the holding of that position, the occupancy of that office. It will
vary from country to country and not least reflect the so-called real authority within the political system
as a whole. For bureaucrats it is rooted in exclusive institutional practices and hierarchical organisations
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“Importance of Representation in Processes of Democratisation”
Oslo Workshop 10-11 January, 2013 (Draft – author’s permission before citing please)
Neil Webster.
amongst other things. For politicians it is about mobilising constituencies whether by distributing
resources, ethnic or regional mobilisation, ideology, and similar; both inclusive and exclusive in their
practices. For economic elites it lies in their success in the market, the returns they bring to their
stakeholders ranging from extended family to national economy. For social elites, the formal forms of
authorisation are even more diverse, but include social mobilisation, ideological commitment and access
to funds. For all four elite groupings the global also provides forms of authorization; recognition of
politicians as heading a sovereign government, linking economic elites into global markets, building
transnational alliances in civil societies, but perhaps the most obvious in Nepal being the donors and the
assistance they bring.
Figure 4: Elites in abstract and in practice
Formal position at a particular point in time (e.g.
minister, head of department, NGO leader, etc.)
Bureaucratic
elite
Networking as a way to mobilise personal or
group (partisan) interest. (e.g. social capital)
Bureaucratic
elite
Economic
elite
Economic
elite
Societal
elite
Societal elite
Political
elite
Political elite
The formal position of the elite actor (as a decision-making authority).




Their rules and norms, organisational forms, structural factors
The formal capacity to make a decision on policy and/or its implementation
To set policy agendas
To make something happen (or not) in the implementation of that policy
The informal capacity the elite actor to assert influence on decision-makers (formulation and implementation)
through networks based on:
 Commonalities in personal histories
 Commonalities in career paths
 Commonalities in policy interests
 And the (everyday) practices of network maintenance
If the abstract condition is captured in the left hand side of the previous figure, then the reality is
captured in the right hand side. Here the boundaries between elites become blurred, some actors having
several elite identities, their perceptions and actions varying according to issue, capacity to act,
economic and social pressures, and much more. Here the social networks that provide the means to
secure a position, engage in successful rent-seeking activities, mobilise a political constituency, provide
the channels and levers for favour and patronage, The financial management instruments that have been
pointed to in this paper are presaged upon strengthening the boundaries by the conditioning and
13 | P a g e
“Importance of Representation in Processes of Democratisation”
Oslo Workshop 10-11 January, 2013 (Draft – author’s permission before citing please)
Neil Webster.
incentivising of sets of practices by and for the local political and bureaucratic elites. In this way, the
formal roles are strengthened and the informal weakened; accountability to the demos is institutionally
strengthened in the systems and processes surrounding local public financial management. The
capacities for informal practices of patronage and favour and their impact on decision-making are
weakened. By having planning, budgeting accounting, implementing and monitoring brought more
firmly into the public domain the challenge to the existing norms begin to be weakened. In these ways
the technical reforms of fiscal decentralisation can support very significant political outcomes.
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