First Global Report on Decentralisation & Local Democracy (GOLD)

Decentralization should not be considered an end in itself. It is a premise to move towards a democratic form of government, closer to citizenry, that guarantees equality, cohesion and welfare.

Starting point for reflexion

Local Governments are key actors in the process of decentralization. They are part of the structure of the State and part of the public sphere.Therefore, it is necessary to strengthen local governance.

Three conditions: Deepening the process of decentralization, which implies assigning (or devolving) power to governments of proximity.

Ensuring the principle of local self-government; there is no decentralization without an appropriate framework of local-self government.

Guarantee enough economic, material and human resources.

We should reach a consensus

First Global Report on

Decentralization and Local Self-

Government

Some reflexions

www.cities-localgovernments.org/gold/gold_report.asp

Growing Globalization Increase of urbanization and

metropolisation (according to the UN, half the world population live in cities and 90% of demographic growth between 2005 and 2030 will take place in cities)

Importance of local governments in the political and administrative organization of the State.

Global Context

Decentralisation moves forward with different rhythms, processes and

modalities

We can distinguish three levels of intensity in the process of decentralization:

•Low: some countries in Africa, some parts in Asia-Pacific, Euro Asia, Middle East and Western Asia.•Medium: some countries in Latin America, some parts in Asia Pacific.•High: Europe, North America, some parts in Asia Pacific and, in general, OECD countries.

European regional report on Decentralisation and Local Democracy

covers 35 states of Europe and 4.92 million square kilometres, inhabited by 530 million people.

two intrinsic characteristics that distinguish them from all other geo-political regions:

1) Every part of their territories is administered by a municipal government;

2) All of these states recognize a discrete set of fundamental principles on which local democracy is based.

European Charter of Local Self-Government (1985).

local self-government has been recognized as a governing principle by the EU.

 

Some general conclusions

Extreme heterogeneity of territorial areas; the notion of “local” is not the same everywhere.

There is a common governance problem in the major metropolitan concentrations.

Despite differences, it is possible to identify common features in the responsibilities of local government around the world.

General weakness of local governments’ fiscal power, in particular in developing countries.

Undeniable progress of local democracy.

Often local government faces a lack of a normative framework to exercise responsibilities.

Development of local governments’ associations.

General conclusions of the European chapter

The principles of local self-government constitute a corpus to which all states of Europe adhere.

The role of local government has increased considerably. The responsibilities of local governments are not only defined on the basis of local public interest, but rather in relation to their participation in functions of overall national interest within a legal framework.

With the exception of a few countries, levels of own resources are declining compared to the resources that local governments are entitled to set and regulate.

local government systems are not converging, and they differ in relation to forms of regionalization and in the role of the intermediate level of local government.

The role of local government associations.

What distinguishes Europe from other regions of the world is the value attached to the role of local institutions.

Conclusions by field:Local Democracy

Increase of direct elections. Low turnout of voters in local elections. Development and diversification of modes of participation by local citizens in the management of local issues (e.g.: participatory budgets). At global level, promotion of the political participation of women and minorities.

Europe - Local democracy

The election of local governments is a reality today in all countries (with the exception of The Netherlands – appointed Mayor).

voter turnout at local elections is either declining or has remained low.

 Various forms of citizen participation have been provided for by the law, from citizen initiated referenda to other forms of consultation.

State control of local government has evolved. Administrative controls, are generally limited to legal checks and audits. 

Conclusions by field:Responsabilities

The devolution of powers to local government should be accompanied by adequate resources in order to allow local governments to exercise their responsibilities (legal faculties and financial resources) Difficulty to establish the responsibilities of local government without specifying the degree of autonomy. In many cases, local governments are mere providers of services directed and controlled by the national administration. One of the most common problem is the devolution of competences to local government without the assignment of the corresponding resources (“unfounded mandates”).

Europe - Responsibilities

There is a group of core functions common to municipalities in all countries of the region.

Local powers and responsibilities vary across countries in the areas of health, education (recruitment and management of staff), social security and police.

the series of local government functions creates interdependencies amongst the different levels of administration.

Conclusions by field:Finances (1)

The results provided by the Report are very clear and worrying: local governments’ fiscal capacity is, in general, low or nonexistent.

Main problems:fiscal weakness at local level: local governments depend on central powers to establish fees and taxesHigh dependence on central power budgetary decisions: shared transfers and taxes prevail, placing local governments in a dependence situation vis-à-vis the central administration.

Europe - Fiscal and financial

Local public expenditure varies generally between 6% and 13% of GDP, excepting the Nordic countries and Switzerland (above 20% of GDP).

Local authorities represent the greatest share of public sector investment, with rapid growth in Eastern Europe.

In most countries, financial autonomy has advanced in terms of expenditure, yet it remains particularly limited in terms of revenues.

Local budgets are mainly funded through intergovernmental transfers and shared taxes, which are state controlled.

In only eight countries do own tax revenues represent more than 40% of the total of local budget resources. Apart from a few exceptions (such as Sweden or Italy), the proportion of own tax revenues is decreasing.

Conclusions by field:Finances (2)

Future proposals: In response to that, there is a need to develop the local governments’ own tax system and to improve their access to capital market.

Local governments should be able to overcome restrictive regulations due to markets’ and intermediary financier’s failure to adapt to their the needs and means.

Conclusions by field:Human resources

Good governance demands good administration. The lack of administrative capacities would slow the progress of decentralization. There is a lack in number and quality of personnel.

Local government without qualified personnel faces difficulties in assuming the transferred responsibilities.

Strengthen democratic legitimacy. Advance towards subsidiarity. Increase competencies and responsibilities. Enhance local governments‘ financial autonomy. Reinforce institutional capacity by fostering local

public policies that promote social cohesion. Citizen involvement in public management. Create opportunities for collaboration with the private

sector. Strengthen the local agenda according to the

international and regional political agendas. Foster federations and associations of local

authorities.

Main future challenges

THANK YOU FOR YOUR ATTENTION

Francesc Osan i TortLocal Diplomacy Office Head

Province of Barcelona & UCLG Decentralisation o.diplomaciampal@diba.cat