Administrative Context

The relationship between local government and other levels of government determines how much scope there is for municipalities to develop their own policy frameworks, and to engage in contracting with private service providers. Even where decentralisation policy and legislation have provided municipalities with greater autonomy, the reality in developing countries is that there is a high degree of dependence, control and interference determining municipal capacity.

In addition, municipalities frequently have low status in the overall government framework. This will severely affect their capacity to establish relationships with international private operators, or in some cases to bring about a shift in the manner in which they plan, manage and operate municipal services. To a large extent, especially in those systems where staff allocation is the responsibility of higher levels of government, the problem has been one of status, capacity and perceived capacity. This is exacerbated when state or provincial levels of government exert the control they have over staffing in ways that undermine municipal efforts and destroy continuity. However, the traditional pattern in which municipalities have the weakest government staff is changing, even in these contexts. The process of decentralisation is slowly drawing attention to the need for more skilled managers, and in some large cities it is now possible to see very skilled managers involved in city management.

Nevertheless, resource-poor municipalities can be made poorer when higher levels of administration hold the strings. This is particularly marked where power plays still exist - often where provincial/state government is not yet comfortable with decentralisation processes, and where politics creates rifts between different levels of government. It is also a problem where municipalities are still wholly reliant on inter-governmental transfers as their main source of revenue. Municipalities can have a great deal of autonomy (even in bureaucratic contexts such as India) if they have established their own revenue streams.

Of the external factors affecting municipalities in efforts to establish partnerships, it is perhaps the administrative factors that present the most perverse actions. While it may be expected that higher levels of government will create an enabling environment and be the facilitators of change, in practice, this is not always the case. State and national governments can hinder municipal efforts through staff policies and practice that downgrade the importance of municipal matters, and through administrative procedures that create barriers to municipal action. For example, tedious procurement policies and procedures often create such barriers. The issues of staffing and procedural change are taken up in detail in the following chapters.

In addition to this, municipalities will be affected by administrative procedures such as government guarantees (discussed in Chapter 7). These undermine municipal authority and accountability even if they do facilitate partnerships, and increasingly governments across the world are moving away from such guarantees. This means that the financial and operational soundness of the deal itself becomes more important, shifting the focus to the municipality's own capacity to engage in binding and enforceable contracts. Other examples of higher levels of government determining municipal outcomes are the control over tariff-setting seen in Zimbabwe, and the bulk water pricing seen in South Africa. The more control higher levels exert, the more municipal accountability becomes compromised. It also often discourages private investors, as it subjects aspects like tariffs to considerations beyond the immediate regulation of a private sector participation arrangement.