Donor's Cooperation in Decentralization and Good Governance in Nepal

-Dahal, Uprety and Subba

The heavy dependence of Nepal on foreign aid for its development goals has made donors an important actor in the country's overall governance. A number of Nepal's international development aid partners are seeking to use decentralization strategies to promote local development processes. More so, if we consider that in Nepal, various international organizations are involved in policy input, capacity building, advocay, linkage building, planning, service delivery, partnership development and adoption of innovation at both micro and macro-levels of governance. In other words, Nepal's local self-government has become an intrinsic part of the international regime. Kaufmann, Kraay and Zoido-Lohaton define '"governance broadly as the traditions and institutions by which authority in a country is exercised. This includes the process by which governments are selected, monitored and replaced, the capacity of the government to effectively formulate and implement sound policies, and the respect of citizens and the state for the institutions that govern economic and social interactions among them".

But the donors have been concentrating on different aspects of governance often coded in the idiom of their political ideologies. Some of them are assisting directly in the implementation of decentralization schemes while others have been playing a supportive role from the periphery. The World Bank and the Asian Development Bank, two major development partners of Nepal, advocate efficiency and accountability of public institutions and service. Their programs seem rather to be oriented towards improving the climate for business, financial management, public enterprise, efficiency, civil service reforms, infrastructure development, environment and resource management and women and development in general than focussing solely on local government. Both the Banks have identifies reforms in financial and fiscal development, public sector management, poverty alleviation, promotion of predictability and the rule of law, investment in infrastructure, and the protection of the freedom of the press and human rights.

The Department for International Development, DFID, another important development partner, is involved in an "enabling the state" program to promote a virtuous state-a state with a strong pro-poor governance. DFID has also been contributing to strengthen democratic polity, macro-economic stability, strategic policy framework, service delivery, access to justice, national security, rule of law, and transparency and accountability mechanism of the polity. It also assists in the creation of a strong private sector and civil society which are able to articulate the needs and aspirations of the people.

The UNDP, on the other hand, is directly involved in promoting decentralization through participatory methods. Under its Participatory District Development Program, PDDP, and Local Governance Program, LGP, it attempts to help Nepal in local institution building, human rights, good governance, gender equality and sustainable human development. The UNDP supports the ministry of Local Development, National Planning Commission, District Development Committees, and Village Development Committees in their capacity building to promote decentralized participatory development. Social mobilization, empowerment of community organizations and multi-sectoral grassroots development are its key strategies for alleviating poverty and achieving self-reliance.

Recently a group of Eight European donor countries including the Norwegian government, British government and Swiss government, under the aegis of the UNDP jointly set up a Trust for Peace and Development, TPD, aiming at reducing violence and promoting peace and development in Nepal. Beneficiaries will be those affected by the Maoists insurgency, particularly the disadvantaged groups, women and youth. It aims to create awareness in the society and advocate for peace and development. Similarly, since April 25, 2000 the United Nations Capital Development Fund, UNCDF, created the Local Development Fund, LDF, to strengthen local governance structures. It "encourages private initiatives through credit systems conceived to aid the poorest people, equips local space with infrastructure and social services and contributes to the emergence of bottom-up development based on good management of the environment through a kind of program known as Eco-development".

The Danish International Development Assistance, DANIDA, is another big donor involved in electoral reforms, local self-government, trade union development and training of public and police officials on human rights, good governance and decentralization in Nepal. Under the Danish support to Local Authorities in Nepal programs, DANIDA has extended cooperation in decentralization policy reforms while Decentralization Advisory Support Unit, DASU, is involved in policy reform, capacity development and strengthening of local government institutions including NGOs and civil society. In addition, it has also extended its cooperation to state institutions, such as the parliament secretariat and the judiciary, state-society linkage institutions, such as Election Commission and civil society organizations, especially media, trade unions, women and disadvantaged groups particularly the Association of District Development Committee of Nepal, ADDCN. DANIDA continues to extend its support to the ministry of Local Development, MLD, and Local Development Training Academy, LDTA.

The German Society for Technical Cooperation, GTZ, is basically involved in participatory community development programs, construction of green roads, urban development through local efforts, environment and natural resource management, small farmers' cooperatives, self-help organizations at grassroots, etc. Moreover, aside from supporting the decentralization process, all the regional rural development projects undertaken by GTZ have very strong "social capital formation" focus aiming at breaking the micro-process of poverty reduction. Promotion and strengthening of self-help organizations, awareness building, enhancing local participation and resource mobilization, social reforms, skill development, introduction of appropriate income enhancing technologies together with measures to improve access of the poor to institutional credit and support to establish basic community infrastructure are the major areas of program intervention. The main purpose of Urban Development through Local Efforts, UDLE, is to increase the capacity of municipalities to plan and manage urban development. It also contributed to Town Development Fund, supported the MLD and the ministry of Physical Planning and Works to prepare municipality act and helped in the management of solid waste, the abolition of Octroi and initiation of administrative reforms.

The general policy documents of United States Agency for International Development, USAID, focus on the promotion of sustained economic development, increasing democratic participation, protection of human rights, legitimate government behavior, and the augmentation of fundamental human values, such as the civilian control of the military, protection of minority rights, political tolerance, peaceful resolution of conflicts, civic education etc. The Country Strategic Plan of USAID for Nepal for the Fiscal Year 2001-2005 aims to improve the impact of its assistance by a) focusing on critical improvements in governance of key resources (9Water, other natural resources and human resources including health and human rights); b) strengthening essential policy, institutional and decision making mechanism; c) targeting assistance to a few key sectors of manageable interest (health, hydropower, democracy and natural resources); d) leveraging assistance through coordination and collaboration with other donors; and e) closely aligning USAID/Nepal programs with the overall United States Government and USAID regional and global initiatives".

The embassy of Finland has created a local fund for "Democracy, Good Governance and Human Rights" to foster the democratic process, promote good governance in the public institutions, including local authorities and civil societies, promote and secure social and gender equality and human rights and alleviate poverty for a more equitable and sustainable development of the country. Decentralization of decision making is one of the key elements of the Local Fund. All these efforts, including the ones carried out by other official development regimes such as the Swiss Agency for Development and Cooperation, SDC, Norwegian Agency for Development Cooperation, NORAD, Netherlands Development Organizations, SNV, and INGOs like Care Nepal, Action-Aid Nepal, FES in Nepal are directed towards generating local knowledge, modernizing state institutions, creating and developing pro-decentralization societal forces to a critical level until they are capable of applying enough pressure for reforms and redefine state-society relationships for good governance. Some of the donors have taken up the agenda of governance and attached them to the efficiency of aid projects and participatory development while others have found a tension between the two approaches: They want downsizing of the government, on the one hand, and at the same time call for a more powerful government-adequately powerful to face up to well-organized pressure groups in the society, which are looking for a greater share in decision making.

Good governance is corruption free government based on the rule of law and is efficient in public sector management. Ironically, a greater involvement of donors in policy regimes and program implementation has not improved the situation either in the governance of aid or in the control of graft, corruption and arbitrary use of authority. In developing countries, the agenda of governance is, therefore, often associated with the notions of devolving power, authority and resources. The problem of building democratic government is not solved by concentrating political and economic power at the center but rather by decentralizing the devolving it to the local level for the organization of self-governance. The emerging thinking is: decentralization promotes democracy and development and they are preconditions to good governance. In many modernizing societies, the political system fails to meet this condition because traditional authority always fears the loss of power, and authority and institutions once it allows the power to get of its control. Therefore, the big question is:; How can decentralization be conceptualized and situated for the promotion of local self-governance? Furthermore, how are sectoral and general interests mediated for good governance? How are the organization, integration and communication needs of the society and the authority of the state realized to capture the synergy for a stable national community?

Text courtesy: Good Governance and Decentralization in Nepal authored by Dev Raj Dahal, Hari Uprety and Phanindra Subba.

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