June 2001 Insights Issue #37

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Putting policy into practice: can local government cope?

Increasingly, the debate over private sector involvement in the delivery of urban water services is addressing pro-poor policies and transactions. Yet, improvements in policy are not being accompanied by support for implementation and little emphasis is being placed on how local governments will cope with such complex processes. What capacity do municipalities need to make policy frameworks work in practice? How do municipalities change from 'providers' to 'enablers' and 'promoters'? How do municipalities focus partnerships on the poor?

Typically, municipalities have little experience in working with the private sector in the delivery of basic services. For decades, with varying degrees of success, municipalities have acted as the provider of water supply and sanitation services to urban poor communities. By the 1990s, many municipalities were attempting to implement policies promoting community participation, as a means to promote the community capacity, ownership and maintenance of infrastructure.

It is into this evolving process that PPP policy has now emerged. Such rapid and significant changes would be challenging even to a private sector organisation in the north. Yet in the south, shifts such as these are commonplace. For those municipal leaders coming from the established tradition of engineering-led service provision and not having any experience of any of PPP, the enormity of the challenge must be constantly reasserted. Municipalities are expected to absorb these changes effortlessly despite bureaucratic inertia, resistant attitudes and unskilled staff.

Research for DFID by GHK International, with the University of Birmingham, was initiated to develop a framework for building municipal capacity in the formulation and implementation of partnerships - partnerships focused on the poor. Drawing on lessons from poverty reduction initiatives, the framework builds a livelihoods approach to partnership development, placing people, rather than the transaction, at the centre of the process. The framework allows analysis of issues such as:

Why do municipalities enter into partnerships?

What does a partnership involve?

Who are the stakeholders and what are their roles and responsibilities?

How is a partnership established and sustained?

How do partnerships contribute to poverty reduction?

How are partnerships located and linked into urban governance?

What human resources, organisational and managerial capacities are required for the development of effective partnerships?

As the PPP tide spreads, municipal capacity building for policy implementation is urgent. Findings suggest:

• Municipalities enter into partnerships they do not understand, that do not fulfil their requirements regarding service delivery to the poor, but which they feel unable to renegotiate.
• The issue of capacity is one of imbalance between the private and municipal partners.
• Champions of PPP are instrumental in establishing effective partnerships but significant problems arise when these key individuals move on.
• The skills needed to establish effective PPPs rarely exist within a municipality and are difficult to acquire.
• The re is little convergence between partnership activities and other city poverty reduction responses.
• The capacity of councillors is critical to effective decision-making but democratically elected councils are likely to turnover every three to five years.

The implications for policy are clear:

• Until capacity building initiatives correspond to the degree of change envisaged, policy frameworks will remain out of reach to all but the largest municipal organisations.
• Capacity building must be flexible and ongoing to adjust to the changing nature of municipalities.
• Support for project initiation and transaction is essential to facilitate this process effectively.
• Greater emphasis must be placed on the convergence of PPP approaches with broader poverty reduction policy if PPPs are to contribute to poverty reduction.

Janelle Plummer
GHK International
536 Fulham Road
London SW1A 2AH
UK
plummerj@ghkint.com