This installment of our interview series saw us ‘sitting down’ with David Jackson, the Director of Local Development Finance at the UN Capital Development Fund, which focuses on strengthening public finance for local development. He started his career in the 1980s in London local government in the United Kingdom. In the 1990s he worked in Mozambique as planning advisor to the Ministry of Planning and Finance and then as Senior Technical Advisor to the UNCDF district planning and financing project. He then ran a company providing technical consultancy services to local development programmes in African and Asian countries for national governments, the World Bank and UN Agencies. Prior to joining UNCDF, he worked as Decentralization Advisor for UNDP Indonesia and was responsible for leading UNDP’s work in strengthening local governance in post conflict situations. You can follow him on Twitter @davidhughjackso
TiP: Thank you so much for taking time to chat with us today.
DJ: My pleasure.
TiP: 2015 is a big year. The global community will move from the MDGs to the SDGs. We are hearing time and again that the priority should be on reaching the most vulnerable. This was a priority under the MDGs and yet the development community hasn’t been overly effective in this. Why do you think this is?
DJ: There are two answers to this question. In some ways the most vulnerable were reached – to the extent that many countries have made great progress on the health and education MDGs – and that overall there are far fewer people living under the poverty line than 15 years ago, including huge numbers in China etc. However, the question is correct – in general there has not been progress in reaching the most vulnerable. We can look at two reasons for this.
First, the MDGs did not include a focus on the sub-national level. There was no understanding of local development and of how the local politics, geography, culture and environment of each country affects the MDG achievement. This meant that governments could report on meeting national targets without sufficient attention being paid to the parts of the country that were lagging behind. So overall a country could be doing well, whilst its poorest region, with say 20% of the population, is falling further behind. The national MDG targets would not pick this up.
Second, the MDGs were about milestones, not about transformation. The targets could be met without structural change in the economy and society. This meant that progress towards the MDG targets was possible without institutional, economic and political reforms. But without those reforms the structure of economic growth still favours capital cities, export sectors, and does not link back into all regions of the country and sectors of the economy.
In general, the MDGs only had a partial effect because they did not include a local development dimension.
TiP: The negotiations around the SDGs, and more particularly the Financing for Development discussions, continually emphasize ensuring local government have access to the resources they need to help their citizens. However, most donors are reluctant to channel money to local governments due to perceived issues of lack of capacity to manage the funds, corruption, etc. Others work at the local level but channel their funding through NGOs. What are the repercussions of these practices on local government being able to carry out their mandates?
DJ: Corruption is just as prevalent at central level as at local level and there are also capacity gaps at central level. In some ways capacity and accountability are greater at local level than in central ministries. So there are some myths here that need to be debunked. In addition, using NGOs for delivery can have a longer term pernicious effect. Countries will only transform themselves when their local institutions are trusted and empowered to play their role. Local politics and local debates are good things and mean that the local structures and citizens are actively engaged in holding each other accountable. Using NGOs for delivery of programmes dilutes their advocacy role and leads to them becoming ‘consultancy companies’ both financially dependent and substantively linked to their clients – the international donor institutions. Far better to encourage citizen driven advocacy from NGOs and use local government and local private sector for delivery.
TiP: In line with this, there is the issue of on-budget and off-budget financing. It is a battle between risk and sustainability. Based on your extensive experience, which has the greater long-term pay-off (as in value for development money invested)?
DJ: Off-budget financing is opaque money to the national political system. It has not been approved by parliament and is not included in the national expenditure and income documents. Whilst there may be extensive parallel reporting mechanisms, it is a dialogue between government staff and donor staff and not necessarily part of the political system and resource allocation process. Also it is not always covered by the legislation on transparency and access to parliaments and citizens. There are two results of this. One is the negative effect on the development of mature and effective institutional structures, as mentioned in the previous answer. Another result is that the resources for operations and maintenance of capital investments and for other linkages and synergies with the off-budget financing are often missing. This reduces the effectiveness of off-budget aid.
TiP: Some people argue that public-private partnerships (PPPs) are the way to go in terms of efficient service delivery. However, there are some arguments that PPPs may actually marginalize the most vulnerable from critical public services even further if those services are now provided for a fee rather than for free by government. (see http://www.thoughtleader.co.za/mandeeptiwana/2014/06/09/privatisation-of-governance-a-multi-stakeholder-slippery-slope/). What are your thoughts? Are PPPs an alternative to more effectively reaching the most vulnerable, or will they be a force for a wider have-have not gap?
DJ: There are many different type of PPP. One problem is that PPP is often seen as a way of providing effective services when government capacity is low. But this view forgets three things. First, private sector capacity is also often low, or lower. Companies are sometimes set up just to run these lucrative contracts without any institutional memory or deep capacity relevant to the task in hand. Second, an effective PPP requires a high level of public capacity for contract management and dispute management. The public side of the PPP becomes accountable for ensuring the contract is correctly implemented and for taking remedial action. This also requires effective legal and law enforcement institutions. If the public capacity is not there, how can the public side of the partnership effectively defend the citizen? Third, introducing PPP creates new drivers and incentives, including possibilities for corruption. It is ironic that sometimes those who mistrust local governments on corruption grounds advocate for PPPs. It also creates additional costs, including the contract management and litigation costs. Costs of re-tendering the franchise etc.
There times and places where PPPs can work well. There are also different types of partnerships, such as blended finance, where the idea is not to contract out service provision, but instead to find partnerships for financing a service or investment. Currently I am working on partnerships between local banks and local governments to finance infrastructure investments that accelerate local economic development. This is a different model.
In conclusion – there is no one size fits all. PPPs can be cost effective and they can be inefficient. It is interesting to look at how the British National Health Service is struggling with the debts inherited from PPPs in the 1990s. On the other hand, that experience did create a lot of new health facilities and / or modernize existing ones. The jury is still out on whether it was cost effective. For PPP the devil is in the detail.
TiP: Can you tell us about some of your most memorable experiences in local development? Are there any particular events that stand out?
DJ: Many thanks for this question. There are three that immediately come to mind. Many years ago during the 1980s, the riverside park in Central London, site of the London Eye, was going to be turned into offices. Then there was a proposal to fence it off as a private space when the neighboring government building was privatized as a hotel. If either of these proposals had happened there would be no London Eye today. It was a privilege to be working for Local Government in the middle of one of the most famous cities in the world and to defend the public interest. We argued that local development is about quality of life as well as jobs and that all people should have access to the banks of the river. In turn this would create the opportunities for local businesses – particularly given that very few of the office workers lived locally. It was a great moment when the park was finally saved.
Another memory comes from Mozambique. After the civil war in Mozambique in the 1990s, many people still did not believe that peace had arrived. In Nampula province traditional leaders were still advising their followers not to send their children to government schools for fear of “indoctrination”. I was lucky to work with local government leaders that had the vision to develop local economic and social development plans to involve all people in sharing the benefits of the peace. There was one day when a traditional chief recorded a video interview declaring that for him “the war was now over.” This was years after the official cease fire. It was an emotional feeling to see our work finally pay off.
Finally, in Tanzania, I was in a position to promote national ownership of a programme for local economic development. This has led to an acceleration of its implementation and the adoption of the model into the national development system – leading to the mobilsation of domestic resources from banks alongside the capital investments of local governments in a way that avoids some of the issues associated with PPP mentioned above. I believe that this would not have happened without trusting the local and central government staff concerned.
TiP: Finally, what advice would you give to people working in local development? What lessons have you learned over your career that you would like to share?
Local development is about facilitation and trust. Easy to say but difficult to do. Try to wash away your own ideas and perceptions. Local development is also about the leverage of local value and its retention within the local space. It is not the same as development that happens locally, because all change happens somewhere. Finally, local development is not only for developing countries or the poorest regions and people. It is everywhere. Look around the areas where you live and work. What changes and developments contribute to Local Development and enrich the local environment, local economy and local society? And what changes and developments extract value (in whatever form) and weaken or impoverish (in whatever way) the local environment, economy and society?
TiP: Thank you so much for your time!