P. 1
Toward Country-led Development: The Missing Link

Toward Country-led Development: The Missing Link

|Views: 66|Likes:
This book examines the influence of local public services on the economics of cities. The relationship between economic development and urbanization is indisputable; less clear, however, are the ways in which cities directly contribute to economic growth and employment creation. Current economic thinking holds that the ability of cities to create wealth depends on “agglomeration economies;” that is, the geographic concentration of industries and people which enables economic actors to come together, interact, and become productive. However, this ability to promote productive interaction depends on several factors, one of which is the provision of local public services. The book argues that the quality of local services significantly influences the productivity of a city, and of its business firms. Inferior local services increase the cost of interaction, erode the effects of agglomeration, and diminish wealth-creation potential. This study attempts to assess the costs of inferior local public services to firms. Based on surveys conducted in five cities—Belo Horizonte (Brazil), Montreal (Canada), Puebla (Mexico), San José (Costa Rica), and San Salvador (El Salvador)—it examines the complex issues surrounding local service provision, and illustrates how inferior local services affect firms and, in turn, the ability of firms to contribute to wealth.
This book examines the influence of local public services on the economics of cities. The relationship between economic development and urbanization is indisputable; less clear, however, are the ways in which cities directly contribute to economic growth and employment creation. Current economic thinking holds that the ability of cities to create wealth depends on “agglomeration economies;” that is, the geographic concentration of industries and people which enables economic actors to come together, interact, and become productive. However, this ability to promote productive interaction depends on several factors, one of which is the provision of local public services. The book argues that the quality of local services significantly influences the productivity of a city, and of its business firms. Inferior local services increase the cost of interaction, erode the effects of agglomeration, and diminish wealth-creation potential. This study attempts to assess the costs of inferior local public services to firms. Based on surveys conducted in five cities—Belo Horizonte (Brazil), Montreal (Canada), Puebla (Mexico), San José (Costa Rica), and San Salvador (El Salvador)—it examines the complex issues surrounding local service provision, and illustrates how inferior local services affect firms and, in turn, the ability of firms to contribute to wealth.

More info:

Publish date: Sep 15, 2003
Added to Scribd: May 23, 2009
Copyright:AttributionISBN:9780821356432

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
This book can be read on up to 6 mobile devices.
See more
See less

02/05/2016

160

9780821356432

Recipient country officials surveyed for the
OECD DAC Task Force on Donor Practices iden-
tified the major burdens listed below imposed
by donor practices.

Type of

Frequency

Rankburden

of mention

1

Lack of fit with national

11

priorities and systems

2

Donor procedures in

10

partner countries

3

Inconsistency among

7

donors

4

Excessive demands on

6

time (transaction costs)

5

Disbursement delays

6

6

Lack of information

4

7

Inconsistency with

3

national systems

8

Demands beyond

2

national capacity

Source: Amis and Green. 2002 The survey covered officials
from central government, line ministries, project implemen-
tation units, and relevant civil society organizations in
Bangladesh, Bolivia, Cambodia, Egypt, Mozambique,
Romania, Senegal, the South Pacific, Tanzania, Uganda,
and Vietnam.

p. xxiv-39 for PDF 9/5/03 10:23 AM Page 31

PRSPs, but much remains to be done to achieve
this objective” (IMF/IDA 2002, p. 20).
Admittedly, alignment cannot take place
overnight, since projects in a donor portfolio
typically last for three to five years. Although
the process can take time, this is not an excuse
for not beginning. Donor alignment has made
most progress at the sectoral level through the
use of joint aid instruments (such as budget sup-
port through SWAps and PRSCs).

Many of the observed changes in donor behav-
ior in the country cases and other analyses
derive from these instruments that implement
country-led partnership (Holmgren and Soludo
2002). Surveys show that recipients generally
prefer program and budget support over a proj-
ect approach. This “common pool” or “basket-
funding” has been promoted as a way of
fostering country-led partnership (Kanbur,
Sandler, and Morrison 1999). Common pool
initiatives have been under way in Bolivia,
Ghana, Uganda, and Vietnam. Proponents of
the common pool approach argue that it helps

reduce information and accounting asymmetries
in donor-recipient relationships and enhances
coordination efficiency. Putting the recipient
country in the driver’s seat in program selection,
design, implementation, and accountability
could minimize the problems of bunching in a
few fashionable sectors. It could result in greater
sensitivity to absorptive capacity issues and
improve the collective learning involved in
joint rather than disparate activities. In addi-
tion, it could significantly lower aid delivery
transaction cost burdens as compared with those
of multiple projects absorbing the same volume
of aid as the common pool.

Despite efforts at coordination, project rather
than program aid still dominates, and the harmo-
nization of donor procedures and practices seems
to be minimal. Even for Uganda, where country-
led partnership seems to have moved furthest
along, government data indicate that as recently
as 2001 the aid project portfolio was massive and
fragmented, with 42 different donors providing
assistance through 524 projects and 825 agree-
ments. In Bolivia, despite efforts at coordination,
donor assistance remained highly dispersed and
fragmented, with 850 projects or programs.

Modes of aid delivery

In all the country studies, donors and govern-
ments voiced concern about public sector
capacity constraints, especially a weak civil
service. And while major institutional reforms
relating to public sector management, public
finance management, and civil service pay
reform have been recognized as necessary and
fundamental to bring about significant changes,
the pace of reforms has been slow across coun-
tries. Consequently, technical assistance (TA)
remains a significant mode of aid delivery.
However, the customary manner of delivery has
contributed to a vicious cycle where topping up
of salaries and reliance on project implementa-
tion units (PIUs) and highly paid consultants

32

You're Reading a Free Preview

Download
scribd