Two years of Devolution: Implementation and challenges. What Next?

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BY NDUNG’U WAINAINA

It is the two-year anniversary of Kenya’s devolved system of governance after the first General Elections under new Constitution in March 2013. It has been two years of phenomenal challenges and opportunities, which always associated with any transitional phase of governance systems. It is not unique to Kenya, especially after more than 50 years of highly centralised authoritarianism and skewed economic development. There are a lot of lessons, as well as contesting narratives. How do we address the challenges encountered so far, and turn them into opportunities to continuously support the building of effective county governments to transform peoples’ lives?

The importance of an authentic devolved system of governance enables people to participate more directly in governance processes; it empowers them. As observed so far, imagination and innovation are needed in the building and strengthening of effective democratic devolved governance structures. There is need to tap into the increasing body of comparative knowledge regarding what can be done to improve the working of county governance.

It is not only Kenya that is engaged in devolution processes. Many countries, both developed and developing, are creating local governance mechanisms, processes and policies for increased participation of people in governance affairs. The main challenge is how to create an enabling environment at the national level that facilitates a genuine devolved system of governance, devolution of power and resources to create effective county authorities. This would involve strengthening their capacity to work in the interest of the local population and deliver necessary services in an equitable manner, to help expand people’s opportunities and choices.

Despite an unsupportive national government and a mire of early formative challenges, Kenyans continue to record high support for devolution and county governance. An Ipsos-Synovate poll of November 2014 showed that 73 per cent of Kenyans support devolution.

An Afrobarometer report of March 2105 further shows Kenyans approve and have confidence in county leadership, especially governors. National government keeps undermining county governance through national budgeting process, disregarding intergovernmental relations mechanisms in policy decision-making, deliberately overlooking shared development approach principles, and retaining parallel unnecessary costly governance systems and institutions.

Successful devolution needs to give scope and resources for the contribution to development by all actors. An environment that allows the systems and processes for national and county governance complementary and mutual support is very important.

In the last two years, the country has not yet adopted an appropriate devolution policy and strategy. This has created a situation where national government entities and county authorities are still weak and do not perform the functions prescribed by the Constitution effectively. Mechanisms for cooperation and partnership are poor and uncoordinated.

Overall, the system of public administration is still ineffective and cumbersome, reek with duplications, overlap of functions and unnecessary costs.

The national government preserves the old system of management while county governments are bogged down by bad legacies of the defunct local authorities. A large number of crucial public officials in both national government and county self-government employees need major retraining and improvement of their professional skills, including civic education on devolution. The reality is that county governments are severely lacking in adequate resources and prerequisite governance systems to effectively deliver on their mandate.

This situation should not undermine the broad and growing commitment to the building of strong and vigorous devolved governance systems. Democratically elected county governments represent a new and creative force in improving the quality of governance, changing local services delivery to the people and introducing holistic local economy development models. Consequently, it is imperative that, despite the seeming challenges, efforts at building and sustaining effective and innovative institutions of county governance robustly continue.

Devolved governance as the “core promise of constitution” signals significant steps in the restructuring of state, authority and functions so that there is a system of co-responsibility between spheres of government and between institutions of governance, according to the principle of subsidiarity. This increases the overall quality and effectiveness of the system of governance, while increasing the authority and capacities of self-governance and democracy in counties. Devolved governance is now a worldwide phenomenon due to the declining credibility of centralised systems. It facilitates inclusivity, equity as well as social and political stability.

Reaffirm constitutional autonomy
The dispersion of economic and political power to democratically elected self-government political systems at county levels is a fundamental strategy to maintain political stability.

The Supreme Court of Kenya’s Legal Opinion of 2013 on the Division of Revenue and the High Court of Kenya’s decision on Constituencies Development Funds of 2015 reasserted and affirmed the constitutional autonomy and competence of the county governments to execute and oversee functions and service delivery in their areas of jurisdiction.

If well implemented, devolution provides more effective and efficient service delivery mechanisms that achieve higher economic efficiency, better accountability, larger resource mobilisation, lower costs of service provision, promotes inclusions and equity, and offers higher satisfaction of local preferences. The single greatest virtue of local governance is its closeness to the people who are being governed. It serves both as a democratic institution and as a generator of needed local economic development.

It is, therefore, critical that efforts to build and strengthen county governments seek to encourage the empowerment of all citizens by providing adequate information to cause understanding of both the opportunities for and the responsibilities inherent in county governance. The failure to undertake such initiatives will have significant costs in forms of social dissatisfaction, financial burdens, decline in basic infrastructure and economic capacity.

Collaboration critical
In order to realise the objectives and benefits of devolution, it is crucial that a cogent comprehensive devolution policy establishing competent institutions and correct processes and systems able to deliver their functions effectively be enacted. Solving the teething problems of devolution implementation requires the genuine collaboration of the two levels of governments, local population, civil society, private sector, media and international development partners. At county level, the collaboration of both the public and private sectors and, increasingly, civil society is critical. These groups have different competing interests and values to contribute.

Constitutionally, devolved governance is contextualised and understood within the framework of political transfer of policy and legislative powers to local democratically elected and established governance system. It establishes mechanisms of accountability to local constituents; administrative transfer of functional responsibilities in various sectors as well as staff resources to the jurisdiction of elected county governments; fiscal transfer of revenue, budgeting and expenditure authority; and development planning and management process on development to county authority. This is major constitutional governance and developmental paradigm shift.

It is crucial that those involved in the process of building and/or reforming the institutions of local governance recognise that such efforts often require both much patience and a long-term commitment. Just as there will be success and triumph, there will be losses and disappointments.

Specifically, the devolved system of governance system requires restructuring the national government infrastructure bureaucracy and corporations set up, and devolving the governance authority to the confluence sphere of government (county). Effective devolved governance should re-orientate governance systems to allow effective public participation in policy decision-making processes and facilitate scrutiny and monitoring of county government officials by local population and institutions. It should rationalise and harmonise administrative structures to improve efficiency and effectiveness, and introduce performance and accountability incentive systems to reward efficiency.

The devolved system of governance must ensure functioning of the related offices of county and national governments in an integrated and coordinated approach to achieve synergistic effect and improve service delivery with less cost. Such an approach eliminates delays in decision-making and disposal of business through enhanced administrative and financial authority of county government civil service. It further must improve administrative and financial management practices and exercise management controls over operational units, and redress grievances of people against maladministration.

It is imperative that the management capacity of county governments be significantly enhanced. County governments lack adequate capacity to deliver the kind of services that local populations need. Critical for performance is the implementation of stringent regulatory measures and quality control management systems prerequisite to maintaining public confidence and trust in county government.

In order for the devolved system of governance to be effective and succeed, certain crucial conditions need to exist. These include sufficient powers to exercise substantial influence within the political system (especially at national level policy decisions) and over significant development activities, sufficient financial resources to accomplish important functions, adequate administrative capacity, and reliable accountability mechanisms to ensure both the accountability of elected citizens, and the accountability of county government bureaucrats to elected state officials. Others are clear policy and legal systems, democratic practice, robust civil society and availability of social capital.

There has been financial and governance issues constantly raised against county governments. However, no proper monitoring and evaluation mechanisms to provide well-analyzed evidence based data exist. It is largely perception.  Devolution is supposed to improve governance and public service delivery by increasing allocation efficiency through better matching of public services to local preferences, and facilitating productive efficiency through increased accountability of county governments to citizens, fewer levels of bureaucracy, and better knowledge of local costs of services.

Devolution of functions is required to occur within an institutional environment that provides political, administrative, and financial authority to county governments along with effective channels of local accountability and effective oversight. Further, devolved systems should offer adequate structured channels for civic engagement and meaningful public participation.

The painful labours of devolution do not bear fruits instantly. It is cumulative with quality investment and right decisions making processes. Several conditions must be met before the full benefits of devolved governance are achieved. First, for devolution to increase allocative and productive efficiency, county governments should have the capacity to respond effectively and efficiently to local needs and demands. There must exist adequate mechanisms for accountability. Second, functions need to be devolved to a low enough level of government.

Third, citizens should have sufficient channels to communicate their preferences and get their voices heard and reflected in the county government’s decisions and policies. Citizens need to have accurate, timely and adequate information about county government policies and activities.  Fourth, broader national enabling environment for devolution, including policies and attitudes on county governance, are critical. Carefully created new institutional governance structures go beyond the “businesses-as-usual” approach and firmly tackle the resistance of existing national institutions to accept devolved governance as reality. Fifth, well structured and implemented public participation mechanisms with appropriately designed partnerships among different sectoral actors are vital.

Devolution initiatives need to interrogate holistically key components of county governance and service delivery systems, rather than focus on single dimensions. Certain vital support components are required to operationalize and sustain devolution efforts.  Successful devolution is a process of gradually and strategically building systems, capacity and trust.

There is need for a clear and specific policy framework for devolved governance, addressing concretely political, financial and administrative powers. A long-term development perspective on good local community governance systems should be encouraged to allow adequate periods for learning-by-doing supplemented with demand-driven capacity development efforts rather than the imposition of centralised standards and supply-driven management mechanisms. The county governments’ delegation of responsibilities for local services delivery to lower county level units must take the subsidiarity principle into account and involve commensurate transfers of financial resources and qualified personnel to ensure continued quality, coverage and sustainability of service delivery.

In creating effective devolution policies, strategic decisions relative to cost effectiveness need to ensure quality service delivery and accountability. Devolution of powers should also assess how increased costs for infrastructure and personnel are mitigated, public-private competition is accounted for, and that accountability is structured.

Inclusive structures
Governments, both at the national and the county level, can create environments that are either friendly to or supportive of civil society growth, or that retard and limit its development and operations. It is crucial that civil society organisations and county governments work in partnership to explore the most effective means for delivering services to residents of the county. The most effective system of delivering needed services to citizens involves civil society, private sector and county government working together.

County governments must adopt stronger measures to increase transparency and improve accountability. These include developing indicators and standards for measuring performance in service delivery, strengthening guidelines for quality controls and inspection, and broadening the role of oversight institutions, which perform financial and service delivery audits, investigations and reporting to the public on their findings.

Sustainable financial and revenue bases for the county governments remain a serious challenge. Counties are still highly dependent upon national government. Such dependence inevitably limits the capacity of county governments to provide services to citizens and to play their role in the processes of democratic institution building.

The authority and capacity to raise revenue, whether through imposing taxes and fees or incurring reasonable debt, is essential to the building of strong county governments. That is not just because revenue is a prerequisite to the provision of effective and adequate public services, but also because the raising of revenue locally forces local public officials to act more responsibly. Public officials who are required to impose taxes upon the people who are going to vote them in or out of office will remain attentive to their constituents and behave responsibly. This means there have to be major reforms in national fiscal and taxation policies to ensure county governments start to create stable financial independence.

Fiscal devolution is integral part of a comprehensive system where restructuring of national state and governance systems as well as setting proper institutions, processes and systems is vital.  Finance follows function. There must be a strong framework with ability to monitor and evaluate devolution including looking into new paradigm of economy, finance and taxation policy in context of devolution. The country will record significant human and developmental progress if all the 47 corners are firing in all cylinders.

One intergovernmental system does not fit the urban and rural sectors. Fiscal devolution requires significant county government taxing powers depending on local dynamics.

National and county governments must keep the fiscal devolution rules that they make and keep them simple. The design of the intergovernmental transfer system should match the objectives of the devolution. Fiscal devolution should consider functions of the levels of governments and avoid duplications by imposing a hard budget constraint and recognising that intergovernmental systems are always in transition, which must be planned for.

National government, through legislation and fiscal policies, shapes the environment within which county governments operate, and limits or support their capacity to act effectively. It is therefore necessary that those at both the county and the national level recognise that the strengthening of one level of government does not represent a “zero sum game” in the sense that, if one level of government is enhanced, will inevitably become weaker. Indeed, much contemporary experience, particularly in countries where governmental institutions are highly developed, suggests quite the opposite. When one level of government becomes institutionally stronger and more competent, pressure builds for the other to follow suit and enhance its delivery capacity.

Budget is one critical policy document for any government. It reflects both the specific priorities and the goals of the government. It is critical that county government budgetary processes be open, transparent and highly professional. Community-based planning which reflects the needs of the entire community is perhaps the single most effective means to develop priorities that truly reflect the needs of that particularly community. Consequently, the implementation of participatory strategic planning techniques is important to the development of effective county government, and linking of the targeted outcomes of such processes to the development of budget priorities is very important.

Budgeting and planning need well-researched policy analysis and insights especially with intergovernmental relations and revenue sharing. To ensure revenue sharing and transfer is effective and smooth, it is advisable that simple agreed-upon rules be set and adhered to.  There is identified the role for both general-purpose transfers and for special purpose matching grants. The total pool of resources to be distributed in general purpose transfers should be set in a stable but flexible way. General purpose funds should take into account both need and capacity, but it should do so in as simple, reliable, and transparent a manner as possible.

The general purpose transfers should be properly designed even as the county governments have discretion to horizontal allocation.  No conditions should be imposed on county governments as to how general-purpose funds are spent. However, special purpose grants should have a matching component. To the extent that such grants are intended to finance specific projects, the county governments should be required to satisfy technical conditions sufficient to ensure that the money is properly spent and satisfactorily accounted for.

All county governments should be required to manage financial matters in accordance with high standard procedures, maintain adequate and current accounts, and be audited regularly and publicly. Similarly, although national government should not pre-approve or direct county government budgets and activities, it should maintain up-to-date records and complete information on county finances and make such information publicly available. In the intergovernmental fiscal relations, better information is not an option. It is an essential component of well-functioning governance system.

Symbiotic relationship
County governments play a pivotal role in promoting and providing business friendly regulatory framework. County governments can learn from the private sector in terms of facilitating local economy development, efficiency and accountability. The private sector can also benefit from the broader perspective and the wider array of values that the public sector embodies. Consequently, when joint public-private ventures work, the resulting synergy can be extraordinarily beneficial both to the private sector and to the local population of the county.

Citizens are increasingly demanding that county government be both accountable and transparent. For citizens to participate effectively in county government, they must be able both to understand it and to have confidence in it. County governments being relatively new governance institutions, have the opportunity to set new standards of excellence in terms of accountability and transparency and to help reverse the trend of disillusioned citizenries with government institutions.

Finally, the process of governance reform and the building of effective good governance systems require time, patience and effort. As a result, county governance transformation must continue to be an important matter of concern for local and international partners. Most development partners tend to support short-term governance projects designed to produce quick results.

While there can be no doubt that positive results have to be achieved in some reasonable amount of time, development partners need to develop strategies that provide continuing support to the nascent process of county governance and democratic institution building.

The service delivery and governance needs of communities are essential to future well-being. Ways and means must be developed for communities to realise their full potential through creative policy frameworks and sound management practices.

In conclusion, devolution and its design and implementation clearly point towards some basic elements for its success. These elements include clear policy framework under recognised law and suitable responsibilities, along with corresponding financial resources, participation of people, transparency and accountability.

The building of effective basic institutions, systems and procedures of accountable, responsive and working county governments, i.e. citizen participation, effective public management, transparent financial administration and developing thriving, inclusive local economies, remain critical work in progress. County governments need to get concerned about the nature, quality and equitability of the distribution of services that citizens receive, and the development of public-private partnerships to enhance service delivery.

Popular support for effective county governance will depend on the responsiveness, value and utility of the services that are provided to the local residents. Therefore, national and county governments must create an appropriate devolution policy framework and establish the right processes and mechanisms that deliver results, and effectively manage the delivery of public and social services at the county level. County governments are, of necessity, required to adopt and practice good governance, as a necessary condition for people-centered development, and to facilitate local economic growth.

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