PRIORITIZATION OF MDG TARGETS WITHIN THE RESOURCE ENVELOPE OF SUB-NATIONAL GOVERNMENTS:

A MODEL FROM THE URBAN SECTOR

“Results-Based Public Sector Management in Support of the MDGs”

Flagship Conference of the Asia-Pacific Community of Practice

on Managing for Development Results (APCoP), UNDP, and UNESCAP

13-15 June 2012, Bangkok, Thailand

Session 8: Parallel Sessions: Implementation of the MDGs at the Local Level

Dr. Michael LindfieldLead Urban Development Specialist

Asian Development Bank

OUTLINE OF PRESENTATIONThe session will discuss variables in a matrix of top-down planning/budgeting and bottom-up

priorities/agenda setting that have an impact on the implementation of urban projects in the context of decentralization.

Context of Asian Cities Decentralization and Devolution – Fiscal and Administrative Tiers of Governance Link to Finance Top down Planning-Budgeting = High reliance of local governments in Asia on

budget allocations from national governments. Bottom-up Prioritization

Political Priorities = champion projects / High profile projects City-wide needs MDG targets (for urban poor)

Planning-Budgeting Implementation = weak linkages Tool for Project Prioritization

. Cities on average provide 80% of the economic base — but large disparities have emerged as poverty has

urbanized – over 200 million people live in poverty in Asia’s cities

and many more are vulnerable to economic and environmental shocks.

MDG 7 targets improving the lives of 200 million slum dwellers.

Addressing the needs of these poor requires:> New forms of engagement> New forms of finance and

> The flexibility to adapt to the circumstances of each community

MILLENNIUM DEVELOPMENT GOALSGLOBAL TARGETS

NATIONA

L

•National MDG Reports and MDG plans and

•Other strategies and commitments; Political orientation

•National Budgets; level of administrative and fiscal decentralization;

SUB-NATIONA

L

•Sub-National MDG plans and other strategies and commitments

•Political priorities

•Linking to Finance: Weak in some countries (Philippines); strong in others (India, China)

LOCAL

•Local MDG assessments and MDG-linked development plans

•Political priorities; championing projects

•Reliance on Inter-government fiscal transfers; Availability of finance

Development priorities and

actions

Monitoring and Reporting

PRIORITIZATION OF MDG TARGETS

Are the MDG indicators and targets prioritized efficiently and effectively in resource allocations of the Local Government Budget?

Do the local governments in Asia have the capacity and tools to assess and prioritize for planning results and set priorities?

What decision making tools can help them in choosing urban projects in face of conflicting political priorities?

LOCAL REVENUES UNDER FISCAL DECENTRALIZATION

Tiers of Governance Link to Finance Top down Planning-Budgeting = High reliance of local

governments in Asia on budget allocations from national governments.

Financing options

LINKING GOVERNANCE AND CAPACITY

Bottom-up Prioritization Political Priorities = champion projects / High profile projects City-wide needs MDG targets (for urban poor)

Planning-Budgeting Implementation = weak linkages Capacity of local government for programming and

prioritization of urban projects

Investments for Urban Social Development

STEP-UP in Philippines

STEP-UP is important for Government’s response to urban poverty. Implemented by the Philippine Business for Social Progress, an NGO supported by the CSR contributions, the project had 3 components:

•strategic partnership building, focused on coalescing three groups deemed critical to urban poverty reduction: business; local government and the homeowners associations

•housing improvement; microenterprise support; upgrading of community infrastructure (roads, drainage, water supply, multipurpose centers, and access to health/ sanitation)

•risk reduction and management issues relating to natural and artificial disasters.

Strategic Private Sector Partnerships for Urban Poverty Reduction (STEP-UP) in Metro Manila, Philippines

MDG/PSM MATRIXMDG/PSM PLANNING BUDGETING IMPLEMENTATION MONITORING EVALUATION

GLOBAL Defined indicatorsAppropriate targets

Cities AllianceADBWorld BankBilaterals

UN Habitat

NATIONAL Internal Revenue Allotment (IRA)Community Mortgage Program

Housing and Urban Development Coordinating Council (HUDCC)

HUDCC HUDCC?

SUB-NATIONAL

Regional Development Councils(RDCs)

RDCs RDCs

LOCAL Local Shelter Plans

% of IRA Other finance sources

Local Government Urban Poor OfficesData collection

TARGET MATRIX FOR PSM TARGET

7…Planning Budgeting Implementation

Policies and Regulatory Framework> Priorities

Governance Finance Management:Institutional Structures/ Mechanisms

National

Sub-National

Local

Which Levels

finance what

priorities

Legislation reporting and

monitoring systems Incentive

systemsResources for each priority

Coordination links

by level by sectorResource

managementby level

by sector

CIIPP TOOL-KIT Many city governments in Asia want to access

infrastructure financing but are not sufficiently equipped to undertake the task of programming and prioritizing strategic urban investments.

The City Infrastructure Investment Programming and Prioritization toolkit (CIIPP) has been developed by ADB-CDIA to help fill the gap.

FILLING THE GAP

TARGET MATRIX FOR PSM

TARGET7…

Planning Budgeting Implementation

Policies and Regulatory Framework> Priorities

Governance Finance Management:Institutional Structures/ Mechanisms

National

Sub-National

Local

Which Levels

finance what

priorities

Legislation reporting

and monitoring

systemsIncentive

systemsResources

for each priority

Coordination links

by level by sectorResource

managementby level

by sector

IN SUMMARY: PRINCIPLES OF EFFECTIVE FISCAL DECENTRALIZATION

Policy: Assessment of most effective tiers for implementation across investment sectors.

Regulatory Framework: Provides mandate for sectoral investment at each tier.

Governance: Legislation linking mandates to finance – intergovernmental fiscal relations – and mandating coordination across tiers and agencies – inter-linkage of finance, reporting and monitoring.

Finance – performance-based allocation of incentive funds.

Management systems: mirror governance – linking coordination, monitoring, finance across implementing agencies (sectors).

THANK YOU!