Local Development Programmes

he growing recognition that development assistance is more effective when focused locally has created an historic opportunity for development organizations not only to provide their assistance in a more effective way, but also to contribute to a political process better suited to addressing the needs of the poor. UNCDF is at the forefront of this effort; its programmes are now structured to encourage partnerships among local governments, community groups and the private sector. This helps each party to fill the role for which it is best suited: the community helps to set priorities and manage investments; local government serves as administrator, providing planning and financing; and the private sector participates as one of the producers. In this way, UNCDF-financed programmes strengthen the capacity of local governments to provide public goods and services. They also provide opportunities for local communities and individuals to elicit greater responsiveness from their government, particularly in providing and managing investments. The end result is better long-term maintenance and sustainability of development projects as well as more effective governance at the local level.

Local Development Programmes (LDPs) are pilot projects that assist least developed countries in three critical areas: capital investment funds for rural infrastructure and other service-related investments, strengthening the institutions necessary to sustain such investments, and capacity building to produce the skills, procedures and resources required to sustain the institutions. LDPs involve demand- driven capital funding mechanisms, called Local Development Funds (LDFs), that are given to and managed by local governments to be used in conjunction with local contributions. The systems and procedures used are designed to evolve, with adaptation, into national systems for channeling resources to sub-national levels of government.

After an extensive participatory project design process that involves all stakeholders in the project, LDFs are used for investments in small-scale rural infrastructure such as village-level rural access roads, schools and small irrigation projects, and in support of improved natural resource management. All microprojects supported by UNCDF local funds must be determined through a participatory planning process involving all sectors of the local community. The community is required to contribute a percentage of the overall cost of the project (financial and/or labour).

The LDP approach encourages dialogue and partnerships between local government, civil society and other rural institutions. LDPs aim to both improve service delivery and contribute to an environment of more responsive, accountable local governance. Since few of the countries meet all the conditions needed to implement and replicate decentralized development planning and financing, LDPs also dedicate significant resources to assist policy reform and strengthen local institutions. Both governance and service delivery are therefore considered key priorities.

While LDPs embody common principles of encouraging participation through the decentralized management of resources, the exact design varies from country to country, depending on the local situation and context. Whether local government authorities or community groups manage the funds depends primarily on the existence and structure of formal decentralized institutions.

Despite the current popularity of decentralization and governance themes for development assistance, very few development organizations or agencies have taken on the challenge-and risks-of entrusting funds directly to local governments while also using these field experiences to engage central governments and influential donors in policy dialogue about decentralization. UNCDF is aware that LDPs are inherently risky and that their success is constrained if central governments do not empower local authorities through an appropriate assignment of responsibilities and resources.

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