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Service Delivery with More Districts in Uganda : Fiscal Challenges and Opportunities for ReformsUgandan decentralization efforts of the 1990s represented an unusually authentic and powerful local government reform, compared to similar efforts pursued in many other low-income countries. However, over time the changing interests of the central agencies, dissatisfaction with service outcomes, and the overall dynamics of the country's governance resulted in the adoption of a number of re-centralizing policies. The objective of this report is to take stock of the fiscal and institutional arrangements for service delivery by local governments in the context of district proliferation and in view of recent trends in national public finance, as well as to identify policy options that could facilitate improved service delivery. The report finds that, while district proliferation has not had any major effect on public finances so far, it may have serious adverse effects in the future if the institutional structures and funding mechanisms of district governments are not adjusted to the new realities. Its effect on public expenditure has been rather small since an increasing number of positions in district governments remain vacant, and because a recent bout of inflation has eroded their wage bills. Furthermore, at present the average population of a district is roughly equivalent to that of similar jurisdictions in other countries. The report concludes with a number of institutional and fiscal proposals designed to reduce this risk and to improve value-for-money in service delivery more generally. If Uganda manages to use district proliferation as an opportunity to implement these changes, the resulting fiscal savings and improvements in value-for-money would make it much easier to cover the costs of that process.
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Kyrgyz Republic Public Expenditure Review Policy Notes : Intergovernmental Fiscal RelationsIntergovernmental fiscal relations have
 advanced over the last decade in the Kyrgyz Republic. Since
 the previous public expenditure review in 2004, the
 government of the Kyrgyz Republic has developed a number of
 policy changes in the area of intergovernmental fiscal
 relations. These policy changes helped the country to
 introduce a more transparent and equitable system of local
 government financing. Still, effective decentralization
 continues to face challenges. A set of policy
 recommendations for the government to consider are designed
 to clarify the role of local government and provide better
 incentives for improved service delivery. These are based on
 a review of the four pillars of intergovernmental fiscal
 relations in Kyrgyz Republic: (i) the expenditure assignment
 (of who does what); (ii) revenue assignment (with what
 resources) assignment; (iii) the system of transfers; and
 (iv) borrowing. In this context, the report is structured as
 follows: section one gives executive summary. Section two
 provides a brief description of the institutional context in
 terms of the structure of government and the elements of
 political and administrative decentralization. Section three
 analyzes the delineation of expenditure responsibilities
 among government tiers. Section four analyzes revenue
 sources assigned to each tier of government. Section five
 focuses on the system of intergovernmental transfers.
 Section six examines subnational public investments and
 borrowing. In each of these sections main issues and
 problems are identified in the current system and the
 desired directions for reform are pointed out.
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Sub-National Performance Incentives in the Intergovernmental FrameworkThis paper provides background for the
 Government of Indonesia as it considers if and how to
 introduce more robust local government performance
 incentives into the intergovernmental fiscal framework. The
 next section briefly examines the forces that have driven
 the recent national wave of interest in improving local
 government performance. This is followed by a review of the
 relatively limited set of local government performance
 incentives currently in force in Indonesia. The fourth
 section provides a conceptual overview of how to think about
 the possible expansion of local government incentive
 programs, outlining the potential role(s) of such programs
 in general and the key issues involved in designing and
 implementing them. The fifth section tentatively considers a
 number of options for additional local government incentives
 in Indonesia that the central government may wish to
 consider pursuing. The paper concludes with an outline of
 next steps for moving forward with the possible development
 of more purposeful and meaningful performance incentives in
 Indonesia's intergovernmental fiscal framework.