DISAGGREGATING GO VERNANCE INDICATO RS WHY LOCAL GOVERNANCE IS IMPORTANT AND HOW IT CAN BE MEASURED
Paper presented by
Shipra Narang Urban Governance Section UN-HABITAT
At the
Technical Workshop on Governance Indicators April 20-22, New Delhi, India
The Urban Governance Index has been developed by UN-HABITAT ’s Global Campaign on Urban Governance in order to enable cities to objectively measure the quality of local governance. This, in turn, is meant to provide the basis for institutional reform, capacity building and other concrete efforts to improve governance in cities. This paper will discuss the key issues in measuring governance, the need for disaggregation of governance indicators, and experiences and lessons from the UGI development and application process. It will also establish the link between the UGI and national governance indicators and the imperative of applying both in tandem, in order to improve the quality of governance at national as well as sub-national/local levels.
1.
The imperative of measuring governance
Over the last decade or so, there has been an increasing focus on governance issues, at global, national, regional and local levels. If governance be defined as:
The exercise of political, economic and administrative authority in the management of a country ’s affairs at all levels. It comprises the mechanisms, processes and institutions through which citizens and groups articulate their interests, exercise their legal rights, meet their obligations and mediate their differences,i then it is clear that at the heart of the concept of governance lie the notions of participation, engagement and inclusion. In the last few years, issues of national governance such as participatory and representative democracy, rule of law, judicial responsibility have received considerable attention. The relationship of governance with poverty has also become the focus of development debate, with the United Nations and its Secretary-General arguing that:
“Good governance is perhaps the single most important factor in eradicating poverty and promoting development ” Indeed, it is widely acknowledged that the realisation of the Millennium Declaration and the Millennium Development Goals rests in no small measure on improving systems of governance in the poorest countries. Research at the national level has demonstrated that good governance correlates with positive development outcomes.ii A survey on governance in 165 countries reported that a one standard deviation increase in any one of 6 governance indicators causes a 2 1/2 fold increase in the income, a four-fold decrease in infant mortality and a 15 to 25 percent increase in literacy, thus establishing a clear relationship between governance and human development.iii As the survey concluded:
“The result of good governance is development that ‘gives priority to poor, advances the cause of women, sustains the environment, and creates needed opportunities for employment and other livelihood iv ” As the notion of governance has come into sharper focus, the importance of developing objective, measurable indicators to assess the quality of governance in countries and cities, has also gained currency over recent years. Governance indicators are often holistic and aggregate (for instance, the Human Development Index), focus on ranking, and do not reveal the variations between different contexts, national and local levels, or different aspects of governance. Alternatively, they can be narrow in their scope, emphasising only one dimension of governance (for instance, Transparency International ’s Corruption Perception Index). In a recent internet discussion moderated by UNDP, on identifying governance indicators that can be used to assess human development progress, it was argued that the focus should be on core elements of governance (e.g., accountability, transparency, participation 2
in government decision making), and that other issues could be linked to these core elements. A case also was made for developing national indicators that go beyond aggregate indices (often used for global ranking, such as the HDI), to capture the complexities of the governance processes in different countries. There is also a need to ensure pro-poor orientation of governance indicators. The Oslo Governance Centre argues that at present there are very few measures that reflect the interaction of the poor and marginalised groups with governance institutions and processes, both national and local. In UN-HABITAT ’s governance-related activities, too, there has been a strong demand for indicators to measure the quality of urban governance (including the relationships between local government, the private sector and civil society), which bring out issues of poverty and inclusion, and help in identifying policy priorities and capacity gaps.
2. Key issues in measuring governance In general, while developing any indicators to measure a concept as complex as governance, a number of issues come to the fore. Some of these are highlighted below.
Input, output, process, performance and many other indicators Indicators come in different shapes, sizes and colours. They can be used to measure inputs (e.g. resources available for improvement of basic services in a municipality); output (e.g. households with access to water within 200m of dwelling); performance (e.g. average time required by municipal authority to process a water connection; outcome (e.g. under-Five Mortality Rate); perception (e.g. satisfaction with transparency in access to water); and processes (e.g. involvement of civil society in a formal participatory planning and budgeting process before undertaking investment in basic services). By definition, governance indicators should focus on the processes of decision-making, rather than the inputs, outputs or outcomes of those processes.
Credible and robust indicators Identifying credible and robust indicators is a major challenge. Indicators need to be capable of measuring the quality of governance, and to be sufficiently universal to enable comparison.
Universality versus contextualisation Those who have worked with global indices will agree that there needs to be a balance between universality and contextualisation. While it true that a "one size fits all" approach may not be correct for measuring something so variable as the quality of governance, tailoring the indicators to suit a very specific institutional environment (national or local) can actually lead to a loss of universality, and hence, reduced comparability of datav. In this context, it may be useful to identify “core ” indicators, i.e., those which are relevant across different countries and contexts, and “satellite ” indicators, which are specifically suited to each country ’s particular context.
Ownership UN-HABITAT ’s experience indicates that widespread ownership of the results - stretching beyond local and national governments to include the civil society and private sector - can only be built if the indicators are collected through participatory processes. In addition, the indicators have to be simple to understand and easy to collect – these are crucial factors in building acceptability and ownership in the beginning of the exercise, establishing credibility, and thus ensuring successful application of any indicator set.
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Global, regional, national or local Governance indicators can serve different purposes at different levels. At the global land regional levels, they facilitate comparison and sharing of experiences. At the national level, they can assist in development of policies that can improve the quality of governance within the country, at national as well as sub-national levels. At the local level, they help in capturing the gaps and constraints in policy implementation, identifying specific capacitybuilding needs, and formulating change plans. Disaggregation between national and local levels is imperative because citizens ’ needs and overall governance situation at the local level are often quite different from the national level. Issues such as participation, accountability and efficiency have different policy and capacity implications at the local level than at the national level. As the level of government closest to the people, local governments are the primary providers of basic services such as water supply, sanitation, solid waste management, health, education and, in some cases, housing. It is thus imperative that they engage communities in decision making, build partnerships with stakeholders, be responsive and accountable to citizens, and ensure access of the poor and marginalised groups to these services and to decision-making processes.
Integer or profile Those developing governance indicators at the global level often face many questions when the results are released in form of a final data-set comprising a large number of cities or countries, especially when the data-set is in form of one final integer value accorded to a city or country, which in turn is used for ranking them. Many cities, countries and international organisations have expressed reservations about expressing a complex and multi-dimensional issue such as governance through a summary measure – an “integer ”. It is also argued that such a summary measure may not provide any guidance on specific areas of policy intervention or capacity building.
3.
Why Disaggregate?
The argument for disaggregation touches upon the last two issues raised in the previous section: the need for separation of national and sub-national or local indicators; and the importance of analysing indicators to reveal a profile rather than an aggregate score.
Disaggregation at sub-national and local/urban levels It is impossible not to recognise the challenges and opportunities presented by the phenomenon of urbanisation, especially in the developing world. Half of the world ’s population - three billion people - live in urban areas today, and by 2050, it is anticipated that two-thirds of all people will be living in cities. Cities hold tremendous potential as engines of economic and social development, creating jobs and generating ideas through economies of scale and creative and innovative civic cultures. Cities today, however, can also generate and intensify social exclusion, denying the benefits of urban life to the poor, to women, to youth, and to religious or ethnic minorities and other marginalized groups. UN-HABITAT believes, therefore, that governance-related data at the national level, while extremely important, would not by itself be a good enough measure of the quality of governance in a country. It must be disaggregated and supplemented by information related to local governance, especially on themes such as participation, accountability and efficiency. Although national governance indicators are important for global comparison as well as national-level policy making, it is at the local level that the quality of governance affects the citizen the most. Local governance indicators can thus play a very important role in assisting municipalities to improve their functioning in specific areas, engage more closely with the communities, and become more responsive and accountable. 4
Existing governance indicator sets do not allow for such disaggregated analysis of the quality of governance. In addition, existing indicator sets are often applied as ranking instruments, which are not easily linked to policy reform and capacity building needs. In response to these gaps, the Urban Governance Index (UGI) has been developed by UNHABITAT, as a joint effort of the Global Campaign on Urban Governancevi and the Global Urban Observatory. The UGI is discussed in detail in Section 4 of this paper. Disaggregated data that assesses the quality of governance at the local level, collected through the UGI or other mechanisms, is meant to complement rather than replace national governance indicator sets. The UGI, for instance, doesn ’t cover issues of democracy at the national level, local governance legislation, judicial or electoral systems, or human rights. Instead, it focuses on the governance processes at sub-national and urban levels. It can be used to identify instances of poor application of good policies, or lack of capacity to implement national policies. It can also be used to assess the variation in the quality of governance across a city or region, which can then lead to an assessment of development policies and strategies directed at that sector or region.
Disaggregation by issues or principles Urban governance is defined by UN-HABITAT as:
“ …the sum of the many ways individuals and institutions, public and private, plan and manage the common affairs of the city. It is a continuing process through which conflicting or diverse interests may be accommodated and cooperative action can be taken. It includes formal institutions as well as informal arrangements and the social capital of citizens. ”vii Based on its experience of working with cities, UN-HABITAT argues that good urban governance is characterized by the principles of sustainability, subsidiarity, equity, efficiency, transparency and accountability, civic engagement and citizenship, and security, and that these principles are interdependent and mutually reinforcing. A UN Inter-Agency meeting in June 2001 reviewed seven principles of sustainability, subsidiarity, equity, efficiency, transparency and accountability, civic engagement and security and finally recommended the adoption of five UN principles of Good Urban Governanceviii: x Effectiveness (includes efficiency, subsidiarity and strategic vision) x Equity (includes sustainability, gender equality and intergenerational equity) x Accountability (includes transparency, rule of law and responsiveness) x Participation (includes citizenship, consensus orientation and civic engagement) x Security (includes conflict resolution, human security and environmental safety These principles form the framework for the Urban Governance Indexix. As described in the previous section, concerns have been raised about expressing a complex and multi-dimensional issue such as governance through a single summary measure. The disaggregation of data according to sub-indices, reflecting the core principles of good urban governance, enables us to capture the complexity of governance issues in a particular city in its entirety. Examination of the entire spectrum of indicators helps in identifying precise gaps for capacity building, policy reform or formulation of change plans.
Disaggregation by population Finally, it is equally important to disaggregate data, as far as possible, to reflect the characteristics of different sections of the population. Such disaggregation can be on the basis of gender (for example, voter turnout by sex), income and social characteristics (e.g.
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access of the poor to justice; participation of youth in decision-making), ethnicity and origin (e.g. inclusion of migrants), etc. This would help to direct policies towards specific groups that are usually excluded from governance processes – the poor, women and girls, ethnic and religious minorities, migrants, youth and other such marginalised groups.
4.
The Urban Governance Index
The aim of measuring urban governance is to synthesise the complex concepts of urban governance described above, into a simplified summary measure. The Urban Governance Index measures the quality of governance mechanisms, institutions and processesx.
Objectives of the UGI The Index has a two-fold purpose. At the global level, it is used to demonstrate the importance of good urban governance in achieving broad development objectives, such as the Millennium Development Goals and those in the Habitat Agenda. The Index expects to demonstrate that good urban governance is vital to improving the quality of life in cities. At the global and regional level, the Index is expected to facilitate comparison of cities based on the quality of their urban governance. At the local level, it is expected to catalyse local action to improve the quality of urban governance by developing indicators that respond directly to their unique contexts and needs.
Selection of indicators Identification of credible and robust indicators has been one of the major challenges of the process of developing the UGI. Two expert group meetings were held and a list of 66 indicators drawn up initially. Inclusiveness was the central issue for selecting indicators. As it was not feasible to use all the 66 indicators for the field test, a structured evaluation exercise was undertaken to reduce the list. Five factors were considered: a) consistency with campaign goal, theme and principles, b) ease of collection, c) credibility, d) comparability across countries and e) media appeal. After this evaluation, 26 indicators were short-listed to be field-tested in two stages. The field test was conducted in 24 cities for testing the selected indicators. Originally, the Index was composed of five-sub-indices - effectiveness, equity, participation, accountability and security – but the security sub-index and the indicators included therein didn ’t prove to be good process indicators during the field tests, and were therefore droppedxi.
What does the UGI reveal? Given the Campaign ’s emphasis on the actors, mechanisms, processes and institutions to create more inclusive cities, an attempt has been made to carefully develop selected process indicators as part of the UGI. The Index thus complements, but does not replace, indicators that focus on inputs, outputs, outcomes and perception, described in Section 2 above. The UGI also complements any national governance indicators that may be developed by countries. It should therefore be seen as a core (not satellite) set of indicators, albeit at the urban/local level. The four sub-indices that make up the Index - effectiveness, equity, participation and accountability – are composed of between 4 and 6 indicators each. The indicators are designed to bring out the quality of these four key dimensions of governance in a city. Examples of indicators that are covered by the UGI include: Ratio of mandated to actual tax collection; Published performance standards; Proportion of women councillors; Existence of a People ’s Forum; Formal publication of contracts, tenders, budget and accounts; and Disclosure of income and assets. The full list of indicators is included as Annex 1.
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Universality of the UGI The issue of universality and contextualisation of indicators was discussed extensively while developing and applying the UGI. UN-HABITAT proposes to resolve this issue by promoting, first of all, a core set of indicators which must be collected by every city that runs the Urban Governance Index (this set comprises 25 indicators), which facilitates global comparison. In addition, there could be an extended set of indicators that are developed within each country, with the involvement of national and local-level policy-makers and stakeholders, which capture the specificities of the context and facilitate intra-country comparison.
Building ownership Many of the existing governance indicators are based on perception or experience (for instance, the Afrobarometer, Opacity Index), or expert opinions (e.g. Freedom House’’s Annual Survey of Freedomxii). The indicators included in the Urban Governance Index are based on factual data and information, most of which is available from municipalities or local governments. The methodology emphasises, however, that the data for the Urban Governance Index be collected through a participatory workshopxiii, convened by the municipality and involving the key stakeholders in a city. This is important in order to ensure acceptable interpretation of the facts (e.g. on the existence of a pro-poor water policy), agreement on which figures or data are to be used (e.g. Voter turnout), and ownership of the follow-up. The participatory nature of the process builds ownership and interest of all stakeholders, not only in the indicators and Index results, but also in the policy reforms that are initiated as a result of the process. It also addresses the oft-raised concern that governance assessments are secretive and do not disclose what is being mesured, why, and how.
Applications of the UGI As stated earlier in this paper, one of the main objectives of the UGI is to demonstrate the importance of, and advocate for, good urban governance as a means to alleviate poverty and achieve the Millennium Development Goals. A second key objective is to identify policy and capacity gaps for reducing urban poverty. These objectives are being achieved by applying the UGI in the following ways. x
As a mechanism for initiating stakeholder engagement: Some cities are using the
x
As a self-assessment tool for cities: Many cities, especially those receiving development
x
x
participatory collection approach of the UGI to initiate a dialogue with stakeholders on governance priorities in the city. One such example is the city of Mostar in Bosnia and Herzegovina, which was divided into seven ethnically segregated cantons after the war, and is now seeking to develop an integrated urban plan for the entire city. It proposes to utilise the UGI to bring together different ethnic groups and key stakeholders for initiating a dialogue on governance and development priorities.
assistance for governance reform, have used the UGI has a self-diagnostic tool to establish a baseline and identify policy reform priorities and capacity building needs. In Sri Lanka, for instance, the UGI is being used as an objective mechanism to identify the main areas for local government capacity building.
As a tool for national comparison: In Zimbabwe, the UGI has been applied in 5 cities,
and the results are being used for inter-city comparison and experience exchange. It is extremely interesting to see that while the aggregate value of the Index is in the same range for all the cities, there are large variations in the values of the four sub-indicesxiv.
To establish a correlation between poverty and urban governance: UN-HABITAT is working with the World Bank and DFID-supported Urban Growth Management Initiative, which aims to establish a substantial database (120 cities) related to urban sprawl, 7
security of land tenure and urban governance. An important outcome of this exercise would be the comparison and correlation of UGI with HDI and local MDG targetsxv, which can then be used to make a strong case for improved urban governance.
5.
Where do we go from here?
UN-HABITAT intends to further refine the UGI and widen its application through a wide range of initiatives.
Global initiatives The aforementioned Urban Growth Management Initiative is one of the major activities being undertaken to refine the UGI and obtain a statistically valid global database of the quality of governance in cities. The surveys in 120 cities will be conducted in mid-2005, and some data and a basic level of analysis would be available by the end of 2005. Also at the global level, the Global Campaign on Urban Governance is exploring the establishment of an award system to provide incentives to cities showing progress towards meeting urban governance benchmarks. This is currently being discussed with United Cities and Local Governments (UCLG), Commonwealth Local Government Forum (CLGF) and other networks/associations of local authorities.
National efforts The focus of ongoing initiatives at the national level is on developing capacity for data collection in selected countries and link urban governance indicators to ongoing or proposed governance reform and poverty reduction programmes (e.g. in Zimbabwe, Sri Lanka, Somalia, Madagascar, Macedonia etc.) Such efforts involve working closely with other international agencies, national ministries and local government associations, in the respective countries. The Global Campaign on Urban Governance and UNDP have agreed to collaborate on the Oslo Governance Centre ’s project on developing governance indicators at the national level in six pilot countries, with a view to link national and local governance indicator systems. The idea is to ensure complementarity between national and local level indicators and to enhance effectiveness of all efforts aiming to promote good governance.
Local programmes A number of cities have requested UN-HABITAT ’s support in applying the Index in order to establish benchmarks, engage stakeholders and identify capacity gaps. The Campaign, however, is unable to provide support to individual cities unless this is viewed as a pilot intervention, which has the potential for being scaled up to the national level. An exceptional case is the city of Mostar, where the UGI will be applied in the coming months as a first step in the participatory planning process.
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Notes i
UNDP (1997) Governance for Sustainable Human Development, pp. 2-3. See also the draft Working Consensus Definition of Governance presented to the U.N. Consultative Committee on Programme and Operational Questions (ACC/2000/POQ/CRP.20 of 14 September 2000). ii See for example, D. Kaufmann, A. Kraay and P. Zoido-Lobaton (August 1998), “Governance Matters. ” World Bank, Washington, DC. and the follow-up study, “Governance Matters II, ” (2002). iii Wescott. Clay (2000); Measuring Governance in Developing Asia, Asian Development Bank, Manila. See also D.Kaufmann, A.Kraay, and P.Zoid-Lobaton (1999); Governance matters, Washington, DC, World Bank iv UNDP (1997) Re-conceptualising Governance, Pg. 1. v Comparability of date does not necessarily imply ranking. vi UN-HABITAT launched the Global Campaign on Urban Governance in 1999 to support the implementation of the Habitat Agenda and contribute to the eradication of poverty through improved urban governance. It is UNHABITAT's experience that the key ingredient to realizing the Inclusive City is neither money nor technology, nor even expertise (although these are important), but good urban governance. vii UN-HABITAT (2002) The Global Campaign on Urban Governance: Concept Paper (Second edition). viii See UN-HABITAT Global Campaign on Urban Governance Minutes of Inter-Agency Meeting on the Principles of Good Urban Governance, June 2001 at http://www.unhabitat.org/governance/ ix These five urban governance principles could be linked to Amartya Sen ’s five measures of freedom. For Economic Facilities, one would measure the effectiveness of production and exchange as perceived by the people locally. For Social Opportunities one would consider the degree of equity in the make up of the fabric of society. For Political Freedom, one would measure the degree of participation. For Transparency Guarantees, one would use a local system of Accountability. For Protective Security, one would use a security assessment. Further work may explore these linkages between urban governance indicators and measures of freedom as complementary assessment criteria at the local level. x As discussed in the Expert Group Meeting, Urban Governance Indicators, Nov. 2002 xi UN-HABITAT (2004) Urban Governance Index: Conceptual Foundation and Field Test Report. Unpublished report. xii UNDP and Eurostat (2004) Governance Indicators: A Users ’ Guide. xiii With some advance preparation by the municipal officials and other stakeholders, over 90% of the data required can be collected within a two-day workshop, sometimes in an even shorter time period. xiv This also reinforces the argument that cities can be strong in a particular area of governance (e.g. effectiveness) while being extremely weak in others (usually accountability), and that the complete governance profile needs to be assessed in order to introduce policy reforms or capacity-building interventions. xv The sub-indices can also be used for correlation with other indices on the same theme – for instance, the Accountability Sub-index can be correlated with the CPI, etc.
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