Dividing Local Government Units

[Glen Wright]

The trend over the past decades has been to merge small local government units into larger units that cover more area and provide more services with better fiscal capacity.  This has been the trend in the Western European countries and to some extent in the transition countries of Central and Eastern Europe.  The balance of efficient service delivery and maintaining citizen participation has been difficult to achieve. I am interested to know if there has been any countries with experience in dividing their large local government units into smaller units.  What was the basis for this in terms of some criteria that was applied? How was this process organized and what were the problems of doing this?  Is there any roadmap or guide as to how best to do this?

[FitzFord]

Glen,
I have a limited response to your questions. In most cases of the type of changes that you outlined, the motivation is fundamentally political. In most cases, the consequences are systemic degradation - not a surprise. I think it may  be useful to treat the 2 observations I mentioned as hypotheses, and test them and their outcomes. I believe - strongly - that the results of these test, whether my hypotheses are correct or proven wrong, would make a significant and useful contribution to overall understanding of decentralization and what may be done to contribute to longer term positive development of decentralization as a system for improving governance and achieving positive outcomes.
Fitz.

[John Short]

Kosovo has created new decentralised units by splitting them - and often the initial one was not large.  India has bifurcated states and thus created new one.

[Glen Wright]

Fitz and John:  Thanks for your responses.  With regard to motivation it is largely of two reasons that I know of.  Here in Georgia where I am working on a technical guide of how to split up municipalities into 2 or more units, one urban centered and the others rural centered, it is basically for political reasons in response to feeling that  the large 70 municipalities were too focused on the urban area and not enough on the rural problems and that funding was not allocated on a more equitable or prioritized basis.  What is surprising to me is that the local officials are largely in favor of this division, but this seems to be due to their party affiliation with the government majority.  The original proposal was to divide the 70 into approximately 4-5 units, but in the end they only managed to divide them into two areas, urban and rural areas.  So now the rural local government will completely surround the urban area, but the administrative offices for the rural unit will stay in the urban center. Doesn't really mean much of a change in service delivery.  I am familiar with Kosovo as well and using it is a model for developing the Memorandum of Understanding that determines how the municipality will be split.  In Kosovo, it is driven my ethnic issues much more than here in Georgia, although some ethnic considerations are also apparent here in drawing the boundaries. I am trying to develop some criteria for determining on what basis the division could be made, but most examples are criteria that merges local governments rather than divide them.  This is the area where I can't find much to guide me.

[FitzFord]

Glen,
How about setting out a model that links service efficiency and size and revenues available/necessary (tax and service charges) for the proposed divisions and ask the decision-makers in both the central and local arenas to select the options that balance the stated objectives? and how about putting these to open forums in the affected areas?
Fitz.

[John Short]

Sounds like good advice!  Most decentralisation never links expected service delivery to the revenues available for that purpose.  At least this is putting the relevant questions to the political process and then to the people affected - what can be wrong with that?

[Glen Wright]

Fitz:  This is sound advice and in practical terms it might be possible.  There are a few situations where this has been attempted and the most recent one I am familiar with is in Albania.  They are trying to go from 370 local governments done to somewhere between 30 to 70.  They did utilize an approach based on what is termed "functional areas" to try to draw these boundaries and supposedly this was based on economies of scale. They presented these options to the parliament and the public.   Unfortunately, the politics of the situation create some problems.  There is no national consensus on this due to the political opposition not participating in this effort and the belief this is just an effort to reconfigure districts to eliminate their voting strengths.  Secondly, the small units are not willing to combine with larger ones as they feel they will lose influence.  And, finally, some ethnic groups are opposed as this puts them into larger units with other different religious and ethnic majorities. 

I recently did some work in Georgia where they are going from 70 local government units to probably 250-300 for the reasons opposite to what Albania wants to do.  They didn't find economies of scale and the rural areas did not get much in terms of the financing as the urban areas of the districts dominated the councils.  I devised a set of criteria for what they termed territorial optimization where I tried to develop something of a complete but rather complex set of criteria.  I paste below.  Don't know if these are feasible as there is no accurate population, service delivery, or revenue figures that would validate these criteria. 


Political Criteria:
     1.  There will be no merging of municipalities across the present municipal boundaries
Population Criteria:
     1.  No new urban municipality will have less than 20,000 populations and rural  municipality no less than 5,000 populations
     2.  There must be at least one settlement of urban character within the new municipality of at least 3,000 populations
     3.  The population density of the new urban municipalities must be not less than 70% of the average population density of all the urban municipalities
     4.  The average population density of the new urban municipalities must be at least 62 persons per square kilometer. 
Economic Base Criteria:
    1. There must be at least one central population concentration that serves as the main market for the surrounding rural areas for consumable goods.
    2.  There must be an all weather road network that links at least 60% of the settlements within the new municipal area
    3.  The distance from the farthest settlements will not be more than 30km by road distance to the central market area
Service Delivery Criteria:
    1.  There must be at least three primary schools within the municipal boundaries
    2.  There must be at least one out patient health clinic within the municipal area
    3. Infrastructure services, such as water/wastewater, presently linking urban with surrounding rural settlements will be maintained within the urban center boundaries.
Fiscal Capacity Criteria:
    1.  The average per capita budget expenditure of new urban or rural municipality must be not less that 70% of the average of all new urban and rural municipalities.
    2.  The average per capita own source revenue of the new urban or rural municipality must be not less that 70% of the average of all new urban and municipalities.
Geographic Boundary Criteria:
    1.  The elevation of a settlement will be considered a factor in defining new municipalities. 
2.  A grouping of five or more settlements with at least a total population of 5,000 and that are located on average of 1200 meters above sea level will be considered a high mountain self governing unit and will be separate from the rural/urban municipalities.  These areas could be administered by a joint government-public trust that would be responsible for the delivery of services and development of these communities.  One example of this arrangement is the National Trust of Scotland, which manages the development of large uninhabited areas and develops the economy of these areas through tourism and other economic development projects. Some countries, such as Italy, France and Switzerland have specific Mountain Laws that provide for the political and operational basis for developing these areas. Georgian Constitution and Laws cover the high mountain areas as well, but may need amending to provide for political representation of these areas separate from existing municipalities.     
    3.    The drawing of municipal boundaries will follow; where applicable, natural geographic divides, such as rivers, mountains, etc.
Ethnic/Historical Criteria:
    1.  Boundaries of new municipalities must not divide an ethnic community where the population consists of over 40% of that ethnic community within the existing boundaries.
    2.   Where there is an ethnic concentration of over 15,000 in a geographic and urban centered area, a new municipality should be created
    3.  Boundaries will be drawn based on locally recognized historical and cultural connections linking settlements within the area.
Urban Growth Criteria:
    1.  The boundaries of urban municipalities will extend 5km beyond the urban developed area to allow for future growth of population, economic development, and service delivery functions.
Citizen Participation Criteria:
1. The level of voter participation in elections should be at the level of national average for local government elections.
2.  There should be opportunities for citizens to participate in local government affairs through citizen advisory councils, public budget hearings and open public hearings.
3.   There shall be at least one public hearing per month held for citizens to express their opinions in an open forum before the Municipal Council.
4.  Citizens shall submit at least 10 draft resolutions each year to the Municipal Council.
5.  The Government Commission will receive at least 20 public opinions from residents of the municipalities and non-governmental organizations on the proposal to divide the municipality.

[Glen Wright]

I just finished doing a seminar session at Duke University summer program on Fiscal Decentralization regarding the merging and dividing of local governments in various countries.  The participants come from Asia and Africa and to my surprise there is a growing trend of fragmenting local governments, largely based on satisfying political and ethnic situations.  I would be interested to hear from any colleagues if this is developing in your country and what the situation is with regard to these.  What has been the impact on the fiscal decentralization and intergovernmental relations in these countries.  Would like to identify and catalogue some more examples of this fragmentation.

[FitzFord]

Glen: Your last 2 postings illustrate indicators of tendencies to disintegrate governments as a consequence of national government failures and resulting loss of trust. I think that there is a case to be made for designing decentralization strategy on the basis of assigning responsibilities based on the efficiency of service delivery (which entails trust and collaboration, among other factors) and reasonable (?) allocation of authority to raise local funds and sharing of national funds, plus the sense of collaboration and sharing that is meaningful to the territory under the particular jurisdiction. This is hardly likely to be a geometrically or otherwise mathematically smooth structure. I am inclined to argue for an approach that builds understanding and trust. This would have been pie-in-the sky stuff until fairly recently. However, the technology that allows just about anyone, anywhere, to know what is happening in their areas of interest, offers the possibility of government systems that are much more transparent than have existed before, to take advantage of the opportunities to increase local and national benefits. It isn't likely to be quick or easy. But it makes technical and good governance sense.

Fitz.

[Glen Wright]

Fitz:   I would certainly argue for the approach that you advocate as well and the decentralization strategies I have done follow that approach.  If it was just an issue of assignment of functions and revenues this would probably work okay.  Where it gets difficult is when there is some restructuring of the territorial units that rearrange the political divisions, either reduce the number or increase the number.  In Albania, they chose to do administrative-territorial restructuring by reducing the number of local governments from 360 to 61.  This was done supposedly on the basis of identifying functional areas that would correspond to some service delivery and economy of scale efficiencies.  The problem was that this was seen as a disguise by the political opposition to rearrange the political divisions and they simply boycotted the whole process.  The political distrust was the main factor in this process and this conflict is still going on with the opposition trying to overturn this change.  The same situation is developing in Georgia as well but in the opposite direction where then intend to increase the number of local government units from 70 to about 300.  While most of the political parties are against this, one part of the ruling coalition has succeeded in getting this process started.  Behind this is supposedly the intention to create the smaller units that will be strongholds of this political party so that even they are no in power at the central level they will have a local political base.  So, the dilemma for me is how to take this out of the political arena and make it a purely technical problem with specific criteria.  Unfortunately, it always seems to get politicized.

[STONE]

Glen, It seems that France is doing a bit of state and local government restructuring: a mixture of merging and dividing - reducing state governments (regions) grouping communes/municpalities into intercommunalities and proposing to remove the departements

[Glen Wright]

Stone:  Thanks for this.  I had heard that France was doing something, but have not gotten any details on this.  Do you know if there is any source of information on this.  Would like to learn more about it and particularly how they determined how to merge or divide these communities.

[Glen Wright]

As a continuation of this discussion on merging or fragmenting local governments I found this about the development of the merging of regions in France.  This was mentioned earlier and now seems to be a reality.  Consequences for the many local governments is still to be defined, but potentially changes to the local government service delivery functions will be significantly changed, but not clear if these political units will be changed.

Taken from Brookings Brief of December 11, 2014

Today the French National Assembly advanced the latest draft of a bill that will reduce the number of regions, the country’s highest tier of sub-national governance, from 22 to 13. After one last read by the Senate, the final bill is expected to be ratified by the end of the month. Notoriously centralized France is preparing to unleash much stronger regions.

Several motivations lie behind the move. One is administrative clarity: France’s infamous “mille-feuille” of local governments breeds waste and duplication and still leaves many citizens unsure of exactly which layer of government is responsible for what service. The deficit-conscious central government also hopes to achieve administrative economies of scale. 

The primary and most compelling rationale for reform, however, is economic.  The reforms are designed to turn France’s regions into engines of economic development. Redrawing regional boundaries is only the first step. Assuming passage, next year the newly formed regions will hold fresh elections, after which they can look forward to a significant expansion of powers and purse.

At present, French regions effectively serve as collectives of smaller local governments. Managing the day-to-day has left little room for economic strategy making or long-term planning. Although France has one of the largest public sectors in Europe, its regional governments spend approximately one-tenth the European average per capita—revealing a void of capacity and resources at a critical geographic scale. Hollande’s plans will begin to rectify this imbalance by devolving sole authority over employment and training policy, secondary education, transportation projects, regional planning, and large scale infrastructure initiatives to regions. Most importantly, regions will be empowered to craft and execute their own "territorial strategies” for economic development.