Instiglio worked with the World Bank to strengthen the institutional capacities and accountability of local governments in Upper Egypt. The goal was to help such governments respond more effectively to citizen needs while addressing key challenges for the region, including unemployment, access to basic services, and infrastructure. To do so, Instiglio established the outcome targets, the performance indicators, the success metrics, the payment mechanisms design, the evaluation design and selected the outcome evaluator.
Country
Egypt
Timeline
2016
Type of Project
RBF Design or Implementation
Sector
Governance
Project
Partners
project description
In Egypt, about 60% of local government revenues are transferred from the central government. Nevertheless, sometimes local governments receive funding without having the absorptive capacity nor the incentives to effectively spend it on local service delivery priorities (UNCDF, 2010).
Weak local government mean that citizens fail to get basic services, like roads, water, and electricity. Strengthening the institutional capacities and accountability of local governments in Upper Egypt could help government respond more effectively to citizen needs, and address key challenges for the region, including unemployment, access to basic services, and infrastructure. (World Bank 2016, PID).
Strengthening the institutional capacities and accountability of local governments in Upper Egypt:
- Can help government respond more effectively to citizen needs
- Address key challenges for the region, including unemployment and access to basic services and infrastructure.
As part of the Upper Egypt Local Development Program, the World Bank is financing a performance-based transfer between the Government of Egypt and the governorates of Qena and Sohag. By tying the amount of additional funds to measurable results, the performance-based transfer incentivizes these governorates to enhance their capacities and improve their performance in various areas, such as participatory planning, financial management, budget execution, accountability and responsiveness to citizens and business.
The objective of this project was to design a performance-based transfer system between the Government of Egypt and the governorates of Qena and Sohag, financed by the World Bank as part of the Upper Egypt Local Development Program.
The World Bank has asked Instiglio to design a $300 million, five-year performance-based transfer system to strengthen the local government capacity for improved service delivery and infrastructure for citizens and businesses. We conducted consultations with key stakeholders on the ground to gain insights on:
- Context
- Challenges
- Opportunities to strengthen local government capacity and improve their performance in various areas; such as
- Participatory planning
- Financial management
- Budget execution
- Accountability
- Responsiveness to citizens and business.
Instiglio also designed the system’s institutional structure, including
- Allocation rules
- Choice
- Structure of payment metrics
- The governorate use of the funds
- The annual performance assessment
The main lesson from this project is that Performance Based Grants have the potential to improve the capacity of local governments. By tying the level of transfers to measurable results in predetermined areas (those that currently constitute binding constraints), the transfers incentivize local governments to enhance their institutional capacities and improve their performance, ultimately ensuring that taxpayers’ money is well spent.
