Liberia Decentralization and Local Development Programme -Local development Fund Component

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Evaluation Plan:
2012-2013, UNCDF
Evaluation Type:
Final Project
Planned End Date:
09/2013
Completion Date:
09/2013
Status:
Completed
Management Response:
Yes
Evaluation Budget(US $):
20,000

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Title Liberia Decentralization and Local Development Programme -Local development Fund Component
Atlas Project Number:
Evaluation Plan: 2012-2013, UNCDF
Evaluation Type: Final Project
Status: Completed
Completion Date: 09/2013
Planned End Date: 09/2013
Management Response: Yes
Focus Area:
  • 1. Democratic Governance
Corporate Outcomes (UNDP Strategic Plan 2008-20013)
  • 1. National, regional and local levels of governance expand their capacities to reduce conflict and manage the equitable delivery of public services
  • 2. Legislatures, regional elected bodies, and local assemblies have strengthened institutional capacity, enabling them to represent their constituents more effectively
Evaluation Budget(US $): 20,000
Source of Funding: Project
Joint Programme: No
Mandatory Evaluation: No
Joint Evaluation: No
Evaluation Team members:
Name Title Email Nationality
Roger Shotton
GEF Evaluation: No
Key Stakeholders: UNCDF, UNCDF, EC, SIDA, Ministry of Internal Affairs, County Administrations, DDMCs, PMTs
Location of Evaluation: Country Level
Countries: LIBERIA
Comments: This evaluation is meant to complement the final evaluation of LDLDP, a ?combined evaluation? led by UNDP in 2012. The purpose of the present evaluation is to focus on the LDF component, supported by UNCDF, which the earlier evaluation was not able to examine in great depth
Lessons
Findings
Recommendations
1 Overall comments: Context The Liberia evaluation came at a crucial moment for UNCDF work in Local Development Finance and its connection with local governments and local economic development. From the mid 1990s UNCDF focused on promoting local infrastructure and service delivery in Least Developed Countries through fiscal decentralization and local development funds. Once this basic model was established, and under request from Least Developed Country governments, attention often moved in one of two directions: Further refining the system through performance based grants to local governments and /or focusing on the role local authorities could play in local economic development. The Liberia project falls into the latter category. By 2012, the Local Development Finance Practice had adopted a sophisticated approach to private and public project finance that embraced both options by introducing a separate financing mechanism for private sector finance alongside the local development fund for fiscal decentralization and public infrastructure. In the meantime the Liberia project continued under the original project document and to some extent within the earlier paradigm. The evaluation should be viewed in this context. Main recommendations and follow up programming The main gist of the evaluation is that the project team were ill advised to explore the local economic development route and should return to the fiscal decentralization work, for which there is a strong demand in the country. UNCDF management supports this basic proposition, not because there is no scope for local economic development but because the methods used in Liberia were part of the corporate learning curve and have now been perfected under a new model. A separate scoping mission (with different technical competencies) would be necessary to determine whether there is scope for the financing of private sector initiatives for local economic development. The technical competencies of the evaluation team were strong in fiscal decentralization and non-existent in private sector project finance. On this basis a technical mission was fielded to Liberia following the evaluation and a report submitted on a second round of programming in support to fiscal decentralisation. However core resource constraints meant that UNCDF was not able to commit to a follow up programme and therefore there is currently no programming activity in Liberia. Nevertheless UNCDF stands ready to engage once more when sufficient resources are mobilized. Secondary recommendations regarding UNCDF technical support The evaluator also recommends that UNCDF country programmes are provided with sufficient support to maintain the high level of technical quality expected. Management strongly concurs with this recommendation. Indeed shortcomings in technical backstopping and the separation of accountability for resources delivered from accountability for technical quality have been addressed through a reorganization resulting in a single advisor responsible for a smaller number of countries. There is a second element to this recommendation. The UNCDF intervention in Liberia was part of a joint programme with UNDP. This wider programme was positively evaluated and may have missed many of the points picked up by the more detailed evaluation of the UNCDF specific component. To some degree, the ?high level technical backstopping? the evaluator expected from UNCDF was substituted by support from the UNDP funded technical staff in the joint programme. A further lesson therefore is that the deployment of UNCDFs mandate and operational investment modalities can only be fully effective if linked to its wider network of technical support. Similar lessons emerged from other recent evaluations and these are being taken into account in the design of new joint programmes at the country level.
2 UNCDF, UNDP, MIA: Future Programming in Liberia This evaluation argues that most of the intended agenda of the LDLD/LDF was never actually embarked upon. However, this failure of the LDF component of the LDLD should not be seen as a reason to abandon future UNCDF support for this agenda in Liberia ? for good or ill, the costs have been incurred. Rather, as UNCDF now engages with GoL and other partners on the strategy and shape of a successor programme it is important to ensure that it includes the very elements that were originally proposed in the 2007 LDLD programme document and subsequent MoU: A) A funding mechanism aligned with (but not for now merged with) the existing CDF/SDF, which is open for a broad spectrum of District and community-type public investments (but taking great care with investments in private activities- see below); B) Support for trialing systems and procedures for improved, demand-driven PEM, and which could use the institutional platforms at County and District levels already created for the CDF/SDF, although taking care to address the problems currently associated with these arrangements. It is also urged that more attention is paid to bringing in expertise and experience from elsewhere (to work in tandem with Liberian experts and officials) in the design, monitoring and backstopping of such an initiative. This must go well beyond the simple sharing of documents, study tours and invitations to workshops but include hands-on technical support to MIA in devising, testing, and adjusting procedures and institutional arrangements as basis for future local government financing and PEM systems.
3 UNCDF & MIA: Local Economic Development The mission fully understands the desire of policymakers and of UNCDF to not solely focus on basic public socio-economic infrastructure and services, but also to promote productive activity in the rural areas, both to catalyze local economic development, to raise household incomes and welfare and also to develop the local tax base to finance public goods and services. However, based on LDLD/LDF experience, the mission underlines a number of cautions in regard to attempts to promote LED through sub-national administration or through future local government: A) Where a programme works through local governments, and aims to build capacity to deliver the sort of goods and services in their remit, it surely makes sense to be focusing on the obvious things first: i.e. to be improving the efficiency and equity of delivery of the range of enabling public goods (rural roads & tracks, simple markets, water, agricultural extension ..) which (all evidence and history show) are critical for agricultural and local economic development, which are in huge under-supply now in Liberia, and whose delivery is much less problematic than is direct subsidized investment support to producers. For some odd reason such investments are often defined out of the LED debate ? LED being seen as something distinct. B) If a window for LED is to be opened: (i) this may be phased-in at a later date when more basic PEM capacities are in place; (ii) much more care is needed in defining the role of public investment expenditure to ?catalyse? the sort of local economic enterprise which is viable, and which can be replicated by other entrepreneurs, and for this serious trialing is needed in partnership with more specialized agencies. But in the current context of Liberia it would seem to be overloading a future programme by trying to add such a component right from the start. C) That aside, there are many agencies already operating in the field of ?LED? (in its narrower sense of activities specifically aimed at promoting enterprise) ? ILO, GIZ, USAID, and probably many other agencies and NGOs. It is not obvious what comparative advantage UNCDF does now or could in the future possess in this area.
4 UNCDF: Programme Design It may be gratuitous to list once more the desirable features of a programme design document but LDLD/LDF experience does again illustrate the need for: A) Proper upfront analysis of the institutions with which it is proposed to work, especially where they are supposed to be interim bodies, and of the funding and PEM mechanisms which it is intended to help reform. B) A clear strategic model for the sort of fund mechanism and PEM innovations to be introduced, to guide implementation. C) Allowance for adequate technical support funding to complement the capital funding. D) Less wishful thinking in the budget preparation and more realism about the scope for attracting non-core, coupled with a clearer strategy as to how core is to be deployed.
5 UNCDF: Technical Support, Monitoring & Quality Control This again will appear gratuitous but in light of the way the LDLD/LDF was allowed to develop it is worth highlighting the importance of: A) Regular technical missions, especially in the start-up phase of a programme when difficult decisions and adjustments always have to be made in the details of implementation strategy, and which are often freighted with great policy consequence. B) Critical in-house technical review of key programme outputs ? such as the LDF guidelines, or planning/PEM procedures, etc. ? to ensure that they are relevant, of the right quality and embody the lessons that UNCDF has learnt more widely. These lie at the heart of the value-added that UNCDF claims to be able to provide; and they are the technical guts of any programme and are where innovations can be introduced, but also where serious mistakes can be made. For any such programme there should be adequate budgetary resources assigned to support these outputs, and a mandatory in-house quality control review.
1. Recommendation: Overall comments: Context The Liberia evaluation came at a crucial moment for UNCDF work in Local Development Finance and its connection with local governments and local economic development. From the mid 1990s UNCDF focused on promoting local infrastructure and service delivery in Least Developed Countries through fiscal decentralization and local development funds. Once this basic model was established, and under request from Least Developed Country governments, attention often moved in one of two directions: Further refining the system through performance based grants to local governments and /or focusing on the role local authorities could play in local economic development. The Liberia project falls into the latter category. By 2012, the Local Development Finance Practice had adopted a sophisticated approach to private and public project finance that embraced both options by introducing a separate financing mechanism for private sector finance alongside the local development fund for fiscal decentralization and public infrastructure. In the meantime the Liberia project continued under the original project document and to some extent within the earlier paradigm. The evaluation should be viewed in this context. Main recommendations and follow up programming The main gist of the evaluation is that the project team were ill advised to explore the local economic development route and should return to the fiscal decentralization work, for which there is a strong demand in the country. UNCDF management supports this basic proposition, not because there is no scope for local economic development but because the methods used in Liberia were part of the corporate learning curve and have now been perfected under a new model. A separate scoping mission (with different technical competencies) would be necessary to determine whether there is scope for the financing of private sector initiatives for local economic development. The technical competencies of the evaluation team were strong in fiscal decentralization and non-existent in private sector project finance. On this basis a technical mission was fielded to Liberia following the evaluation and a report submitted on a second round of programming in support to fiscal decentralisation. However core resource constraints meant that UNCDF was not able to commit to a follow up programme and therefore there is currently no programming activity in Liberia. Nevertheless UNCDF stands ready to engage once more when sufficient resources are mobilized. Secondary recommendations regarding UNCDF technical support The evaluator also recommends that UNCDF country programmes are provided with sufficient support to maintain the high level of technical quality expected. Management strongly concurs with this recommendation. Indeed shortcomings in technical backstopping and the separation of accountability for resources delivered from accountability for technical quality have been addressed through a reorganization resulting in a single advisor responsible for a smaller number of countries. There is a second element to this recommendation. The UNCDF intervention in Liberia was part of a joint programme with UNDP. This wider programme was positively evaluated and may have missed many of the points picked up by the more detailed evaluation of the UNCDF specific component. To some degree, the ?high level technical backstopping? the evaluator expected from UNCDF was substituted by support from the UNDP funded technical staff in the joint programme. A further lesson therefore is that the deployment of UNCDFs mandate and operational investment modalities can only be fully effective if linked to its wider network of technical support. Similar lessons emerged from other recent evaluations and these are being taken into account in the design of new joint programmes at the country level.
Management Response:

N/A

Key Actions:

2. Recommendation: UNCDF, UNDP, MIA: Future Programming in Liberia This evaluation argues that most of the intended agenda of the LDLD/LDF was never actually embarked upon. However, this failure of the LDF component of the LDLD should not be seen as a reason to abandon future UNCDF support for this agenda in Liberia ? for good or ill, the costs have been incurred. Rather, as UNCDF now engages with GoL and other partners on the strategy and shape of a successor programme it is important to ensure that it includes the very elements that were originally proposed in the 2007 LDLD programme document and subsequent MoU: A) A funding mechanism aligned with (but not for now merged with) the existing CDF/SDF, which is open for a broad spectrum of District and community-type public investments (but taking great care with investments in private activities- see below); B) Support for trialing systems and procedures for improved, demand-driven PEM, and which could use the institutional platforms at County and District levels already created for the CDF/SDF, although taking care to address the problems currently associated with these arrangements. It is also urged that more attention is paid to bringing in expertise and experience from elsewhere (to work in tandem with Liberian experts and officials) in the design, monitoring and backstopping of such an initiative. This must go well beyond the simple sharing of documents, study tours and invitations to workshops but include hands-on technical support to MIA in devising, testing, and adjusting procedures and institutional arrangements as basis for future local government financing and PEM systems.
Management Response:

Agree

Key Actions:

Key Action Responsible DueDate Status Comments Documents
2.1. A mission was fielded to Liberia that produced a report with concrete recommendations for a new programming cycle that would fully incorporate the recommendations. Lack of funds delayed the initiation of a new programme in Liberia. UNCDF- LDFP- HQ 2014/07 Completed
3. Recommendation: UNCDF & MIA: Local Economic Development The mission fully understands the desire of policymakers and of UNCDF to not solely focus on basic public socio-economic infrastructure and services, but also to promote productive activity in the rural areas, both to catalyze local economic development, to raise household incomes and welfare and also to develop the local tax base to finance public goods and services. However, based on LDLD/LDF experience, the mission underlines a number of cautions in regard to attempts to promote LED through sub-national administration or through future local government: A) Where a programme works through local governments, and aims to build capacity to deliver the sort of goods and services in their remit, it surely makes sense to be focusing on the obvious things first: i.e. to be improving the efficiency and equity of delivery of the range of enabling public goods (rural roads & tracks, simple markets, water, agricultural extension ..) which (all evidence and history show) are critical for agricultural and local economic development, which are in huge under-supply now in Liberia, and whose delivery is much less problematic than is direct subsidized investment support to producers. For some odd reason such investments are often defined out of the LED debate ? LED being seen as something distinct. B) If a window for LED is to be opened: (i) this may be phased-in at a later date when more basic PEM capacities are in place; (ii) much more care is needed in defining the role of public investment expenditure to ?catalyse? the sort of local economic enterprise which is viable, and which can be replicated by other entrepreneurs, and for this serious trialing is needed in partnership with more specialized agencies. But in the current context of Liberia it would seem to be overloading a future programme by trying to add such a component right from the start. C) That aside, there are many agencies already operating in the field of ?LED? (in its narrower sense of activities specifically aimed at promoting enterprise) ? ILO, GIZ, USAID, and probably many other agencies and NGOs. It is not obvious what comparative advantage UNCDF does now or could in the future possess in this area.
Management Response:

Agree and disagree: Management agrees with the first part of the argument above ? under point A) ? that local public economic infrastructure is a valid and important part of LED. This continues to be promoted in many UNCDF local development programmes and should have been included as part of any LED process in Liberia. Management agrees with point B) and has launched a process to trial such catalytic investments in Tanzania. Liberia would not be appropriate for such an exercise. Management disagrees with point C) Indeed the experience of the Tanzania experiment demonstrates that UNCDF?s mandate and expertise in working at the local level can play an important role in catalyzing domestic resources for local economic development.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
3.1. Continue to promote public infrastructure LED investments through fiscal decentralization and local development funds in other countries. UNCDF- LDFP 2014/12 Completed
3.2 Deepen the experience on private sector LED financing based on the lessons learnt in Tanzania and taking into account the points raised in the Liberia evaluation leading to a new mechanism for private finance alongside the local development fund for public finance. LDFP-HQ 2014/03 Completed UNCDF Local Finance Initiative formally approved at Project Appraisal Committee in February 2014
4. Recommendation: UNCDF: Programme Design It may be gratuitous to list once more the desirable features of a programme design document but LDLD/LDF experience does again illustrate the need for: A) Proper upfront analysis of the institutions with which it is proposed to work, especially where they are supposed to be interim bodies, and of the funding and PEM mechanisms which it is intended to help reform. B) A clear strategic model for the sort of fund mechanism and PEM innovations to be introduced, to guide implementation. C) Allowance for adequate technical support funding to complement the capital funding. D) Less wishful thinking in the budget preparation and more realism about the scope for attracting non-core, coupled with a clearer strategy as to how core is to be deployed.
Management Response:

Agree - the quality of program design is one key preoccupation of UNCDF. This issue had been addressed prior to the publication of the evaluation as a result of these concerns

Key Actions:

Key Action Responsible DueDate Status Comments Documents
4.1 Use LDFP investment committee to screen and recommend approval to project proposals before submission to PAC LDFP - HQ 2014/03 Completed Investment committee was introduced mid 2013
5. Recommendation: UNCDF: Technical Support, Monitoring & Quality Control This again will appear gratuitous but in light of the way the LDLD/LDF was allowed to develop it is worth highlighting the importance of: A) Regular technical missions, especially in the start-up phase of a programme when difficult decisions and adjustments always have to be made in the details of implementation strategy, and which are often freighted with great policy consequence. B) Critical in-house technical review of key programme outputs ? such as the LDF guidelines, or planning/PEM procedures, etc. ? to ensure that they are relevant, of the right quality and embody the lessons that UNCDF has learnt more widely. These lie at the heart of the value-added that UNCDF claims to be able to provide; and they are the technical guts of any programme and are where innovations can be introduced, but also where serious mistakes can be made. For any such programme there should be adequate budgetary resources assigned to support these outputs, and a mandatory in-house quality control review.
Management Response:

Agree

Key Actions:

Key Action Responsible DueDate Status Comments Documents
A new monitoring system has been put in place with quarterly reports and a new set of output and impact indicators that apply to all the Local Development Finance programmes at UNCDF. There has been a realignment of Regional Technical staff to ensure the appropriate monitoring and accountability as mentioned in the summary of the management response. This is subject to the caveat that UNCDF can secure a niche for its own quality assurance processes in the midst of the joint programmes in which it participates. The first of these changes (monitoring and indicators) was introduced prior to the publication of the evaluation report as part of the development of the new core approach to local development finance. The second (alignment of technical staff) was introduced from 2014 as part of a wider review of corporate effectiveness introduced by the incoming senior management. LDFP HQ 2015/11 Completed
5.1 Establish new LDFP indicators and reporting framework LDFP- HQ 2014/06 Completed New LDFP indicators and reporting framework established with the launching of UNCDF?s Integrated Results and Reporting Matrix (IRRM) in June 2014
5.2 Realign support of Regional Technical Advisors LDFP-HQ 2014/12 Completed Roles and responsibilities of LDFP Regional Technical Advisors adjusted during UNCDF corporate re-alignment exercise in December 2014

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