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The management of urban development
0197-3975/88 $3.00 + 0.00 Pergamon Press plc
HABITATINTL. Vol. 12, No. 3, pp. 173-186,1988. Printed in Great Britain.
The Management of Urban Development Current Issues for Aid Donors*
Development
RICHARD BATLEY and NICK DEVASPS Administration Group, Institute of Local Government University of Birmingham, UK
Studies,
INTRODUCTION
This paper is concerned with questions of management, by which we mean the organisation of policy-making and implementation, rather than with policy issues per se. Management includes the questions of organisational resources (financial and human), organisational structures and procedures. These are not only narrowly internal issues but ones which cover also the ways in which managers deal with each other across sectors and departments and the way they relate to politicians and the public. Policy developments affect the range of these interrelations; for example, the current view that urban management should above all be concerned with economic development, and that this should embrace concern with cross-sectoral and rural-urban links, imposes demanding new expectations on managers. Moreover, the task is changed and made more complex by involvement in areas where the manager has no direct control; increasingly the manager is expected to support and influence rather than direct.
A NEW CONSENSUS?
MANAGEMENT
AND POLITICS
Management is not simply a technical matter of selecting the right tool for the job. The managerial approach adopted has political significance - it affects (and is affected by) who controls decisions (supranational, national, local, technical, political, public or private bodies), on whose behalf, how exclusively and with what impact on the managed. There is at least an appearance of a new, emerging consensus. Earlier criticism of the bias of state organisation from the Left has been followed by action by the Right to “roll back the state” at least from some activities. There is a commonly perceived danger of building super-power institutions of government which monopolise decisions and impose undesired solutions on the poor and undesirable regulation on entrepreneurs. The tendency is to move away from the idea of developing institutions and professional managerial capacity as ends in themselves. In place, there is the attempt to create a more responsive, public service oriented administration which involves beneficiaries more directly in organisational control. For the Left, there is the idea of public agencies as *This paper was a contribution to the seminar on “The Future of Urbanisation and the Role of British Aid”, held at the Development Planning Unit, University College London, on 24 February 1988. tThe authors wish to acknowledge the valuable comments on an earlier draft of this paper, from colleagues in the Development Administration Group: Jim Amos, Ian Blore, Chris Davies and Malcolm Wallis. tAddress for correspondence: Institute of Local Government Studies, University of Birmingham, Birmingham B15 2TT, UK. HAR 12:3-L
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enablers, empowering the less powerful’s own direct action; for the Right, there is the idea of the government supporting entrepreneurial initiative, doing only what the market cannot do. The objectives are different but, from both Left and Right, public managers are expected to adopt a more restrained, selective and supportive role; action should be arrived at by negotiation rather than direction. This implies change in the management practice and training of officials who have learned to see themselves as regulators, providers and bearers of solutions. Paradoxically, a less directive management style towards the external world may require stronger management within the organisation itself. To the extent that there is a new consensus, this can itself by dangerous if it leads to new “formula” approaches and universally applied solutions. This is a particular danger when the message is borne by powerful foreign agents to weak countries. It has happened before: the colonial legacy has been of regulatory bureaucracy, professional arrogance, elitism and inappropriate standards; more recently, aid agencies have often tried to bring about organisational development which we may now criticise as part of the problem of monopolistic, unresponsive and centralised administration. In 10 years time we may feel the need to recover from the present anti-state consensus with a new wave of “institution building”. There is then a grave risk in generalisations and pre-packaged solutions: what has been successful or appropriate in one country may have failed or be inappropriate elsewhere. It is therefore more important to develop ideas and techniques which are relevant to a particular national/local situation, than to recommend “universal” remedies. Careful research and a good understanding of local circumstances are therefore of crucial importance before proposing particular approaches. Nevertheless, there are some discernible trends in thinking, and some lessons from experience, which have a general relevance. This paper will cover three aspects: (a) alternative explanations and responses: the evolution of thought on the subject and lessons learned in the recent past; (b) the current key issues in the field of urban management; (c) the appropriate role for aid donors. It should be added that this paper draws on a range of experience from various urban development programmes and is not confined to the experience of specific aid agencies.
ALTERNATIVE
EXPLANATIONS
AND RESPONSE
There are alternative possible explanations for problems of implementation, developed sometimes from different political perspectives and suggesting often quite contrary management responses. The first two explanations put the problems of implementation to a great extent beyond the remedy of improved management, locating them in the nature of public administration or state intervention. The other three explanations, relate more directly to questions of management failure. 1. “The public sector is intrinsically inefficient or inequitable” Such views offer little hope of improved management practice. Either, from the Right, the public sector is seen as being monopolistic, lacking competition, and having an unresponsive bureaucratic nature, leading to favouritism and the dominance of professional and bureaucratic interests. Or from the Left, as part of the state, the public sector is seen as part of the structure of domination and
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even an agent of underdevelopment. The solutions are then outside public administration, either in the need to change the state through various forms of popular mobilisation and pressure, or in resort to non-state action: self-help and the freeing of private enterprise. The latter approaches (self-help and market provision) quickly lead to a necessity for new forms of public administration: Do private entrepreneurs exist or do they have to be encouraged? Can they reach “target groups” at affordable prices ? Who can help themselves? Is self-help appropriate at more than local level? Public administration is drawn back in to perform even more intricate tasks as promotor, safety net, guarantor, regulator, equaliser; these tasks may be particularly important - but also more difficult where the private sector and self-help are weakest. The re-assertion of the market has affected public administration not only in what it does but in how it does it. Especially through the agency of the World Bank, the public administration of developing countries has been urged to: measure success in terms of cost recovery and increase in market value (e.g. of land); strengthen managerial autonomy and cost accounting; introduce competition and choice within the public sector. 2. “External obstacles stand in the way of administration” The common complaint of managers is that policy implementation fails due to lack of commitment and support from others: lack of finance; lack of political will/political interference; the dead weight of established practices; the unwillingness of other organisations to collaborate; the apathy and irresponsibility of the clientele - “blaming the clients”. Most of these points are management issues re-posed as if they were external and beyond influence. This reflects not only the real difficulty of management in developing countries (scarcity, uncomprehending clientele, rapid change, and the diversity of transitional societies) but also the absence in many countries of the role of manager. In India, for example, the public service is typically composed of elite and transitory administrators, professional staff and clerks. Administrators are drawn into general policy issues and crisis management, rather than the systematic and long term management of implementation. The professionals see problems narrowly and expect their plans and designs to be implemented without there being any effective structure for implementation. The role of the manager in raising funds, adjusting procedures and standards, reaching out to clients and responding to their requirements is often lacking. In the absence of the manager as mediator, the problems he/she would deal with are taken to be external and therefore even more fundamental and beyond influence than they are. Policy-making in most developing countries is centralised, exclusive and narrowly sectoral. Officials therefore commonly find themselves facing local politicians, “beneficiaries” and even officials from other sectors with ready-made programmes; unsurprisingly they then meet with “obstacles” in the shape of noncollaboration, incomprehension and attempts to manipulate advantage. Local politicians without responsibility can only perform their representative role by acting “irresponsibly” as channels of special pleading, complaint and obstruction. The response to the view that policy implementation faces fundamental external obstacles can be either (1) to give up; (2) to seek to overcome political obstacles and managerial deficiencies by imposing programmes (often conceived centrally), by-passing the normal local processes so as to “get things done”. Aid programmes working through central government, with the leverages of cash and with short time frames for achievement, may have had a particular propensity to impose solutions through special agencies and special
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funding and administrative arrangements. NGOs may make a virtue of their unmediated contact with the poor. The project may work but the basic problems are left to resurface upon the departure of the aid programme; or (3) to strengthen the local political role in policy determination and to increase the local managerial presence, capacity and discretion. This would indicate that aid programmes should work through regular agencies, make a long term commitment, build local powers of fund-raising, co-ordination and problem-solving, encourage local political influence and raise the expectations and demands of excluded sectors (model: Hyderabad UCD). This builds political will by: mobilising the constituency of the poor; promoting decision-making and responsibility of local politicians; increasing local managerial capacity to recognise and resolve managerial problems. 3. The question of organisational competence and effectiveness The classic response since the 1950s has been to promote “institution-building”, of organisations with clear structures, leadership and trained staff. Government administration, at least until it began to meet the sorts of criticism made by the anti-statists (see section 1) in the late 196Os, was seen as the principle agent of change - nationally organised, nationally interested, professional, Western and subject to the influence of donors. The wide reach and systematic organisation of bureaucracy, in this view, makes it possible to concentrate scarce expertise at the centre and apply modernising reforms. Corporate planning and management, PPBS and MB0 are often associated with this top-down model (although they could equally form part of another approach). Integration across sectors is conceived not as a political but as a technical matter involving various forms of central planning and budgeting. Training is then a matter of developing those professional expertise appropriate to the role of the bureaucracy as conceiver and implementer of development. A criticism has been that this has led to the wrong sort of effectiveness: techno-bureaucracy “for itself”, a concentration of expertise behind exclusive walls imposing undesired solutions and inappropriate standards and procedures (e.g. terms of repayment). Effectiveness is measured in terms of the goals of the organisation rather than the client. Another criticism is that building centralised, hierarchic, professionalised organisations may not be effective even in their own terms. The very virtues of bureaucracy - impersonality, standardised rules and procedures, fairness - may break down in situations of dire scarcity, acute need, incomprehension of the rules of the game, and extreme local diversity. The rules cannot cope with the diversity and volume of demands, and every situation becomes a crisis demanding reference to the top - or else there is breakdown and free for all. Officials shelter behind rules and professional standards as a way of fending off demand and responsibility. Training begins to lose any point since the system is too big for anybody to change but everybody also knows that it cannot be made to work. The experience of failure is often then met within the same paradigm, with the setting up of special institutions (linked to the president, governor, chief minister, prime minister) to cut through the system with new solutions. Aid agencies have often been partners in this process. The much spoken of, but little practised, alternative of “development from below” measures its effectiveness not in terms of its capacity to implement centrally conceived policy but of its ability to respond to local demands, requirements and opportunities. It is more spoken of than practised because it implies loss of control by centrally organised elites including politicians, administrators and professionals. Can aid agencies help to give impetus to this approach? (Can they legitimately do so when the same principles do not operate in their own backyard?) What would these principles be? decentralisation; local i.e. the development
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political control as the means of prioritisation and co-ordination (perhaps client control in local instances) in place of central direction and technical processes of co-ordination; flatter hierarchies and more discretion at local and technical level; decision by negotiation with affected people and other organisations; competition between providers and choice between packages; cross-sectoral/crossprofessional teams at the point of action. In this approach, the procedures are recognised as integral to the outcome. Since the objective is not solely to get a particular project implemented but to identify the way in which all organisations can be brought into the solution, it is no longer appropriate to set up special agencies to cut through others; instead it is important to strengthen existing and local agencies. Alternative organisational principles imply different sorts of staff competence. First, where there is greater discretion, competence has to be developed more widely. Second, the competences have to be different (or additional) to existing professional training: the development of powers of analysis, the capacity to understand the different objectives of other groups and organisations, to negotiate, to accept political and client control, to train professionals not in a set of given standards but in approaches for deriving and applying solutions. The managerial need is then for a capacity of analysis and problem-solving and the identification of broad objectives, opportunities and constraints: a learning style in a learning organisation. This approach brings its own problems: not only may it be unattractive to the central politicians, elites and senior officials who now have control, but enhanced local control and discretion also brings the risk of local favouritism and corruption. But “Corruption for corruption and incompetence for incompetence, the scale of things is smaller at the municipal and state levels” (Bolaffi and Cherkezian).’ The big question for development administration is whether it is possible to combine the virtues of impersonality and fairness with those of responsiveness and discretion. 4. Targeting people or targeting needs? By the early 1970s there was clear recognition that in most countries growth was not leading to redistribution. Even in the sphere of collective provision which was supposed to be universal - e.g. in the urban sector: roads, water, sewerage, rubbish collection, public buildings, open space and transport - services frequently gravitated to the wealthier. The public allocation of private goods such as housing was usually found to favour middle income groups and failed to achieve the anticipated “trickle down” effect. It was argued that redistribution with growth could be better achieved through targeting on the poor. Targeting has taken two forms: (1) aiming benefits at identified “target groups”; (2) tailoring public provision to the “basic needs” of target groups. While the first focuses on the identification of the beneficiary group and the development of appropriate channels to reach them, the second identifies their needs and attempts to develop services and supports which correspond precisely to them. Examples in the field of shelter might be, in the first case, the application of subsidies and reserved places to lower income groups in conventional housing schemes, and, in the second case, the provision of subsidised water supplies through public taps in squatter settlements. The common management problems arising from the attempt to aim at target groups are: the difficulty of setting up criteria of selection; the labelling or stereotyping inherent in the picking out of the needy; injustice at the cut off points; the need ‘Bolaffi, date.
G. and Cherkezian.
H., “A RecuperaGio
Economica,
Financeira
e Social do BHH”.
mimeo,
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to patrol/police the “frontiers”; the complexity of rules and consequent exclusion; misrepresentation or “fronting” by non-targeted groups; reallocation of the benefit once acquired. Administrative demands and difficulties grow as services are made more selective. Targeting by area rather than by individual characteristics avoids some of these problems. The basic needs approach tries to avoid administrative problems by dealing in benefits which only the really poor would need - e.g. support for the informal sector, water from public taps, staple food, security of land occupancy, the most basic shelter. The question is whether, in the poorest developing countries, the needs of the poor are so distinct and, if so, whether public administration is capable of identifying these (often locally distinct) requirements and then of adjusting its operation to provide them. If needs are not so distinct then, as in targeting, it is likely that upgrading of the conditions of the poor will be accompanied by diversion (whether through administrative manipulation or reallocation through the market) to the less poor. At the least, this approach requires considerable analytic capacity to identify needs, adjust organisation, and understand (so as to resist) the dynamics of the wider system in which the basic needs of the poor are located. Targeting (at national or international level) focuses on the needs of the poor rather than on the system which produces poverty or presents opportunities to the poor. 5. The question of access Targeting raises in acute form the problem of access: the attempt to direct services to specific groups requires the construction of rules of procedure which may act in themselves to obstruct the target group. This is the question of the bureaucratic entanglement which diverts the purpose of programmes. This issue is paradoxical: the scarcity which requires the tight regulation and control of distribution also creates such urgency of need that the rules break down in practice; the rules which are constructed to help the poor can be most easily understood and manipulated by the non-poor. A world of diverse and acute need does not easily fit the bureaucratic tendency to standardised solutions. On the other hand, the absence of routine forms of delivery, which is the more common experience of the poor, exposes them to unregulated and often rapacious forms of market supply (tank water, money-lenders, illicit land developers) or periodic harassment and clientelistic favouritism from the political authorities (amnesties, temporary permissions, tolerated but illicit electricity connections, extension of public services on special appeal). The regulation of distribution is important to the poor because it represents escape from uncertain (and often high) prices and manipulation or exploitation. The question is how to make the distribution of basic goods and services systematic and “as of right” without introducing complex rules and regulations and (as far as possible) without making special arrangements for the poor which effectively trap them. Possible approaches (many of which have cost implications) include: - provision on a scale which matches overall need; - non-selective of infrastructural programmes: e.g. the routine extension networks without requirement of application; - area programmes inclusive, minimise which, by being geographically individual exclusion; - locating field offices near to intended client groups; - increasing choice and responsiveness in public provision: e.g. maximising choice about matters of individual concern, and accretive development of sites-and-service schemes so as to respond to demands of earlier occupants; - developing the representation of consumer groups/utilisers to provide pressure and feedback;
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research and monitoring on the experience response of clients to services; working through known agencies. MAJOR
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of delivery systems and the
FOR URBAN MANAGEMENT
It has been argued in the preceding section that different explanations of the problem of implementation indicate different solutions. It has also been argued and management that it is important to consider problems, opportunities approaches as they occur in specific countries and cities, rather than trying to identify standard solutions. However, it is possible to draw some broad conclusions about the leading issues for managers. These can be grouped into four sets. The first concerns the recognition of the opportunities and problems of urbanisation; the second set is to do with the role of government - intervening in the process, enabling actors and deregulating - or regulating selectively market forces; the third set is addressed to the enhanced role of local government as an agent of political decision and the vehicle for integrated urban services; and the fourth covers issues of effective, efficient and responsive management of services and assets. Many of the themes discussed here are not new, but we have identified them as being of current concern. In raising these issues, we are not necessarily putting them forward as recommendations, but rather noting them as trends which, whether we like them or not, have implications for management. 1. Coming to terms with urbanisation
In recent years there has been an increasing recognition that the process of urbanisation is not only unstoppable, but that it can play a positive role in economic development. This is especially true for countries with limited land resources, where urban employment is the only option. This means that urban development policies should be designed to accommodate population growth, rather than trying to resist or ignore it, and should aim to harness the economic growth potential of urban development. At the same time, however, many countries have adopted national economic policies which have unduly stimulated urbanisation, to the detriment of national development. Such policies have included: exchange rate, interest rate and taxation policies which encourage capital-intensive industrialisation; holding down agricultural prices; inappropriate styles of education; and concentration of facilities in the capital city. But there is now a significant worldwide trend away from such policies, although there will always be competition for scarce resources between urban and rural areas. 2. Process before projects It is important for governments and other agencies which intervene within the urban system to understand the wider processes within which particular interventions, programmes and projects might fit. This implies a more thorough analysis of: (i) economic development patterns and opportunities; (ii) urban markets in land, housing and services; (iii) the existing institutional system; (iv) existing national and local policy frameworks. Management is then a process of carefully calculated intervention, involving negotiation between sectors, with politicians and with the affected public. Programmes and projects should be tailored to support positive examples or tendencies in the wider system. This is also an argument against pilot projects which try to generate positive outcomes with special and non-replicable arrangements, and in favour of piloting new approaches which are feasible for existing institutions to replicate and maintain.
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3. Government as enabler rather than provider For much of the post-War period, it has been assumed that provision of urban infrastructure and facilities, including housing in some cases, was primarily the responsibility of government. In recent years, there has been a recognition that, not only can governments clearly not afford to provide adequate infrastructure and services for all, but that the facilities and services which have been provided by governments have often been unsatisfactory from a number of points of view. Weaknesses of direct government provision have included: poor quality and erratic service; provision in a style which does not match people’s aspirations, especially in the area of housing; inefficiency and high cost of service provision; the risk of creating dependency and the discouragement of individual and community initiative; bureaucratic control of access to scarce resources, which can result in corruption and manipulation by the powerful. This is not to suggest that governments no longer have a role, but that different, more strategic, approaches are required: - concentrating on those activities and services which cannot be supplied satisfactorily by the private sector, by individuals or by community organisations, and on those activities which can have the greatest, strategic impact (this is, of course, a theme well explored by John Turner, and which has already had considerable impact on approaches to low income housing in Third World countries); - providing the environment and structures within which individuals and community groups can provide for themselves, rather than relying on public sector provision; - facilitating private sector provision (subject to appropriate safeguards, e.g. competition, hazard control), through deregulation, appropriate pricing and fiscal policies, etc .; an example here might be the encouragement of appropriate private subdivision of land, through mechanisms like Guided Land Development and Land Readjustment, as the means of making land available for housing all income groups, rather than relying on direct public provision; - contracting of private sector or community provision of public services, such as construction, waste collection and disposal, etc. Part of the issue here is the recognition of “management” as a scarce resource, i.e. because governmental agencies have limited management capacity, intervention strategies should seek to conserve management resources as well as financial resources. One implication of the above analysis is that a new approach would be required from public sector managers, who could increasingly become clients for privately provided services, rather than direct providers. This new role, with the responsibilities for drawing up specifications for service provision has implications for internal management and for monitoring performance, systems and for training (see 10 and 11 below). 4. Deregulation In similar vein, there has been a widespread disillusionment in the Third World with governments’ attempts to regulate and control for a number of reasons: - inadequate information on which to base controls, and inadequate understanding of the operations of the markets or systems being regulated, with the result that problems may not be resolved - indeed, they may be exacerbated; for example, the negative effect of minimum plot size regulations on the availability of affordable housing land for the poor; - excessive regulation can have a negative effect on incentives and initiative, or can result in “rent-seeking” (the transfer of effort to earning income from manipulating controls such as licences and quotas);
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- limited capacity to enforce means that most regulations are ineffective, or are corruptly exploited to provide an income-earning opportunity for the enforcers (i.e. regulations are not enforced, but are used as a means of extracting money from selected “offenders”); Again, this is not to imply that governments should opt out of a regulatory role, but that that role should be more strategic: - identifying those aspects where regulation is both essential and is capable of being enforced effectively and fairly; this is another aspect of “conserving scarce management resources”; - using fiscal measures to provide the correct market signals to private suppliers and incentives for improvements in provision by the market. A particular example here is the treatment of the informal sector which has generally come to be recognised as having a positive role in economic development, and over which most conventional forms of regulation are now seen to be largely counter-productive. 5. Building an institutional framework for integrated urban development The concept of integrated development has been less prominent in the urban sector than in the rural sector, but the need for integration, particularly of infrastructure provision, has been increasingly recognised.* This has called into question the approach, widely adopted by aid agencies in the 197Os, of establishing specialist institutions for particular functions, unrelated to the overall urban development context. There has also been a disillusionment with the so-called “integrated” urban development authorities which, although intended to integrate urban infrastructure provision, have been divorced from traditional responsibilities for regular service provision and for operation and maintenance of the infrastructure provided by the development authorities. In recent years, there appears to be a recognition of the need to strengthen existing, multi-purpose local institutions, i.e. local governments, municipal corporations, etc., rather than creating new, specialist institutions.3 There are further reasons for the renewed interest in the role of local governments, and these concern local knowledge and local accountability. Aid programmes generally have to be channelled through central governments, and this has tended to reinforce the dominant position of central ministries. Yet these ministries often have little grasp of what is taking place at the local level, or of what the real needs and priorities are in particular cities. In addition, central direction of all urban development results in an unwieldy central bureaucracy. By contrast, local governments are generally much better placed to identify local needs and priorities. However, local governments in most Third World countries have limited capacity to plan and implement programmes (limitations often made worse by central government controls), and hence the renewed concern to strengthen the capacity of local governments. 6. Encouraging local political control The need for decentralisation may increasingly be recognised, but decentralisation programmes often seek to bypass local politicians. Instead, such programmes should seek to build up their sense of responsibility by giving them a proper role and responsibilities. The political process can co-ordinate or bridge ‘For example. the major “Integrated Urban Infrastructure Development Programme” in Indonesia. ‘For example. Task Force on Financing Urban Development (Planning Commission. Government of India, 1982), and Sevemh Five-Year Development Plan, (Planning Commission. Government of India, 1985).
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differences between sectors, departments and professions, and can mobilise local opinion in the formation of policy and in feeding back to implementation. Above all, the democratic process provides the mechanism for accountability which may be absent where programmes are handled either through special-purpose development authorities, or through central ministries. In some cases, there may be a need for further decentralisation of decision-making to levels below the local government if there is to be effective participation in decisions affecting local areas; this is something which is increasingly occurring in local government in Britain. Encouraging local political control may well not be an easy path to tread: local politicians may themselves be too elitist, or too disorganised, to arrive at collective decisions; politicians and managers may conflict. However, the political and managerial will to ensure that services are provided for the poor can be strengthened by encouraging demands from below from the poor, providing a counterweight to pressures from the elite and from vested interests. Aid programmes can be valuable in this context by demonstrating that the basic needs and aspirations of the poor can be met through routine programmes rather than through special favours and patron-client relationships. 7. Resource mobilisation A related theme has been the need to mobilise financial resources at the local level. This is not only in order to enable local governments to function effectively, but also because of the limitations on central governments’ financial resources. There is generally scope for mobilising additional resources at the local level, both through taxation and through charging for services. As regards taxation, in many countries real property still provides the main local tax base, and there are good reasons for it to continue to do so. However, property tax revenues have been allowed to decline in real terms in many countries, particularly because of problems over property valuation. In recent years, considerable effort has gone into trying to upgrade the property tax in a number of countries. Local taxation of motor vehicles and motor fuel is another resource which is increasingly being advocated. As regards charging, the World Bank in particular has long emphasised the need for cost recovery and appropriate charging policies for urban projects. There are strong reasons from both the points of view of economic efficiency and equity for charging at least at marginal costs, if not full cost recovery, for such urban services as water, sewerage, land development and urban transport. The methodology for appropriate pricing policies is now reasonably well developed and is increasingly being implemented. Of course, there is a real risk that costrecovery policies can result in the poor being excluded, although it is often the general under-pricing of services, which in fact leads to the poor being excluded, because there are not the resources available to expand the service. An example of the undesirable effects of a general tariff subsidy can be found in the case of urban water supplies in Jakarta: here it is the well-off who are connected to the system who benefit from the subsidy, at the expense of the poor who are not served at all and who have to buy water from vendors at much higher prices or else use polluted sources. However, the tendency of aid agencies to require cost recovery on a project-by-project basis may prevent cross-subsidisation between programmes and projects and so may place undue burdens on the poor. There remains the problem of local revenue administration. However fine the array of local revenue sources may be on paper, these will be of little value if revenue administration systems are ineffective. Thus, increased attention is being given to developing more effective systems of valuation, assessment, collection and enforcement of local revenues.
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Increased attention is also being given in many countries to the pattern of central-local financial relations to ensure that grant distribution systems are not only equitable between regions, but that they are designed in a way which provides the correct incentives to local governments to mobilise local revenues and to pursue appropriate policies. One particular approach much advocated is revenue sharing, which gives local governments an incentive to assist in mobilisation of national taxation. One further element which is assuming increasing importance is the establishment of municipal Development Funds. In the past, local governments have generally had to rely on ad hoc capital flows from central government for their development projects. By establishing municipal Development Funds, urban authorities which have the capacity to service loans can borrow to finance development projects as required. Such Funds can then provide a mechanism for recycling investment resources, and for mobilising additional resources from the public.
All too often, urban development programmes have involved “targeting” preformed packages on beneficiary groups with little consideration of their real needs and preferences. There are a number of ways in which programmes could be made more responsive to client choice: (a) introducing market mechanisms to provide greater choice to consumers (for example, competition in public transport), monitoring response and adjusting future supply accordingly; (b) analysing existing practices and revealed preferences of consumers, and encouraging and enhancing the operations of those organisations and actors which best serve beneficiaries’ needs; (c) greater decentralisation of field management to the local level, and greater responsiveness to representations through that field management or through the local political process. 9. Increasing management discretion
A related issue concerns the nature of bureaucratic systems: all too often, these involve long bureaucratic chains which are unsuited to conditions of rapid change, acute need and local diversity. Therefore, hierarchies need to be flatter to allow more local discretion and responsiveness. Rather than seeking to implement pre-conceived plans and policies, management needs to be more capable of analysing needs and opportunities, and of negotiating towards objectives. This implies a shift from planning as control to planning as a developmental and continuous interactive process. Thus the management function needs to be strengthened at the local level, and professionals need to be made more aware of their management (implementation) role. 10. ~~~~gernent of services and assets
Here we are essentially concerned with internal management, and the need is for increased effectiveness and efficiency in service provision and asset management. There are a number of approaches which would seem to be relevant here. Firstly, there is the need for a corporate approach to management, in which objectives are clearly defined (ideally through the political process - although it has to be acknowledged that the political process often does not operate in such a “disinterested” manner), and plans, policies and strategies are developed through inter-departmental discussion. The budgeting process should be
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integrated with the policy-making and planning process, so that budgets reflect policies and plans, and so that plans are implemented through budgetary decisions. Secondly, there is the need, within the corporate framework, for clearer definitions of responsibility, and for managers to be held publicly accountable for the services and functions for which they are responsible. Thirdly, the concern with staff management. Public services in developing countries often suffer from low staff productivity and poor motivation. New approaches (many of which are well established in developed countries) are needed towards staff appraisal, supervision, career planning, incentive schemes, training, etc. Fourthly, there needs to be a greater concern with “value for money” and with the relationship between service outputs and input costs; all too often, this analysis is never made, and services are very cost-ineffective, not least because of low labour productivity. One approach which has already been mentioned is the trend towards greater use of indirect provision, through contracting and private or community provision; this facilitates the explicit examination of costeffectiveness, but requires a new approach to service management, specifically concerned with quality control and contract supervision. Fifth, improved systems of financial management need to be implemented, which not only provide appropriate control mechanisms and prevent fraud and corruption, but also provide the financial information which managers require in order to run their services effectively. Sixth, the issue of corruption remains a critical issue in many countries, preventing effective service delivery, and often discriminating against the poor. There is a need for a deeper analysis of systems prone to corruption, and for personnel and incentive systems which discourage it, and machinery to permit greater accountability and transparency. 11. The problem of maintenance
There is widespread recognition of a serious problem concerning the maintenance of new urban infrastructure.4 Not only does failure to maintain represent a major waste of resources, but the resulting breakdowns have serious effects on the efficient functioning of the city. There are numerous reasons for the failure to maintain: unclear responsibilities, lack of resources, obsessions with new investment, the lack of kudos from maintenance work, etc. In this, aid donors have much to answer for, as they have generally been willing to finance only new infrastructure, leaving host governments to deal with the maintenance problems, despite their obvious lack of resources and skills for such a task. Maintenance has to be seen to have a higher priority within the urban management cycle. Responsibilities have to be clearly assigned and resources identified; in particular, the situation in which a specialist agency constructs new infrastructure and hands it over to another agency which has not been consulted over the planning or construction and has no funds for maintenance - a common arrangement in metropolitan areas in India - is clearly inappropriate. In the case of local upgrading and environmental projects, there is clear evidence that, where the local community is properly involved in decisions about the plans and the execution of the works, that community is much more likely to be willing to take responsibility for maintenance (examples include the Hyderabad Urban Community Development Project, and the Supratman Kampung Improvement Programme in Surabaya). 4Sundaram. P.S.A.. “Maintenance of Urban Infrastructure in India: Certain Management Issues” (Seminar on Management and Finance for South Asian Countries. Bombay. December
and Financial 1987).
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12. Training of urban managers
This is an area on which much of British aid to the urban sector is spent, and on which there is a considerable body of experience. However, too much training, both overseas and in-country has been inappropriate. This section aims to indicate a number of directions in which training is - or should be - moving. (a) A closer link between training and operational programmes and projects, both to relate the training to organisational priorities and to offer field experience to trainees, should be established. There are now well established in which participants are enabled to undertake models of “action-training”, particular tasks within their work organisation, monitored and supported by training staff. (b) Rather than training isolated individuals, training programmes need to be geared to whole institutions, aimed at transforming the overall competence and style of organisations, and permitting continued support for new approaches. (c) Training needs to develop analytical and problem-solving skills, rather than concentrating on narrow text-book learning or professionally-oriented standards and techniques. (d) Training is needed to reorientate professionals to a management role which is concerned with plan implementation, rather than mere plan preparation. (e) There are training implications in the development of the new approaches to management outlined in earlier sections, concerned more with enabling rather than with direct provision; such an approach implies the need for new skills in and individual communication, response to and support for community initiatives, etc. Likewise, the shift to a greater role for market provision and contracting by government of services from the private sector requires new skills in evaluation, monitoring, quality assurance, etc. (f) There should be an increased concern with the output value of training programmes, rather than just with inputs. This implies the need for training programmes to be tailored precisely to the specific needs of a particular situation; this involves a great deal of preparation, research and material gathering. Although this may increasingly be done, there is still a tendency to view the number of classroom sessions as the main element of a training programme. It also implies the need for a system of ex-post evaluation of training in terms of the increased effectiveness of the individual and the agency concerned, rather than in terms of the immediate satisfaction of trainees, or in terms of more obvious indicators such as number and type of sessions provided. It also implies the need for rigorous selection of trainees according to suitability and relevance to the course, and for participants to be given adequate time to prepare for training.
THE ROLE OF AID PROGRAMMES
Of necessity, the role of aid donors in the management of urban development is largely indirect: through management systems incorporated into specific development projects, through advice provided by consultants, and through training. Nevertheless, the scope for influencing the style of and approaches to management can be considerable. In this section, we try to identify briefly a number of pointers concerning the appropriate role for and approach of aid donors in this field. In many cases, this will represent current practice, in other cases there is a need for some reorientation. (a) Aid programmes should seek to support positive policies and tendencies locally, and existing institutions, and should, as far as possible, be adjusted to
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national development objectives. There is clearly a nice balance to be maintained here, since there may often be a need for shift of policy or practice, but this should be accomplished through open-minded discussion on both sides, as well as through training and management support which enables managers to see why changes are required and how they can most effectively be made, rather than by imposing externally determined packages of policies and practices. (b) Therefore, it is important that aid programmes should have longer horizons and be concerned less with the immediate achievements of individual projects and more with the strengthening of durable processes. This implies committing aid to the long term development of existing institutions, permitting a long term reorientation of those institutions, on the job training of staff at all levels and a commitment to maintenance. This in turn implies that larger amounts of aid may be required if effective changes are to be brought about, and a greater willingness to be concerned with maintenance implications, as opposed to just new construction. (c) Where possible, training and technical aid should be integrated with capital programmes and development projects, so that these components can be mutually reinforcing. (d) There is a need for increased field research as an integral part of technical assistance or training programmes, and for increased monitoring and evaluation of outcomes, both short and long-term, which allow for an improved understanding of situations and processes; the results of such research and evaluations should be more widely disseminated, to permit greater learning from experience. (e) Technical assistance and training to facilitate the reorientation of management along the lines discussed in this paper; in particular to strengthen the developmental, enabling and facilitating roles of management. (f) Aid programmes can be used to demonstrate that the basic needs and aspirations of the poor can be met through routine programmes rather than through special favours and patron-client relationships. (g) Aid agencies should avoid establishing special agencies, complex administrative arrangements and special financial conditions which add to the management burden of the recipient government. (h) Competition between aid agencies, each with different approaches to urban management, should be avoided.
HABITATINTL. Vol. 12, No. 3, pp. 173-186,1988. Printed in Great Britain.
The Management of Urban Development Current Issues for Aid Donors*
Development
RICHARD BATLEY and NICK DEVASPS Administration Group, Institute of Local Government University of Birmingham, UK
Studies,
INTRODUCTION
This paper is concerned with questions of management, by which we mean the organisation of policy-making and implementation, rather than with policy issues per se. Management includes the questions of organisational resources (financial and human), organisational structures and procedures. These are not only narrowly internal issues but ones which cover also the ways in which managers deal with each other across sectors and departments and the way they relate to politicians and the public. Policy developments affect the range of these interrelations; for example, the current view that urban management should above all be concerned with economic development, and that this should embrace concern with cross-sectoral and rural-urban links, imposes demanding new expectations on managers. Moreover, the task is changed and made more complex by involvement in areas where the manager has no direct control; increasingly the manager is expected to support and influence rather than direct.
A NEW CONSENSUS?
MANAGEMENT
AND POLITICS
Management is not simply a technical matter of selecting the right tool for the job. The managerial approach adopted has political significance - it affects (and is affected by) who controls decisions (supranational, national, local, technical, political, public or private bodies), on whose behalf, how exclusively and with what impact on the managed. There is at least an appearance of a new, emerging consensus. Earlier criticism of the bias of state organisation from the Left has been followed by action by the Right to “roll back the state” at least from some activities. There is a commonly perceived danger of building super-power institutions of government which monopolise decisions and impose undesired solutions on the poor and undesirable regulation on entrepreneurs. The tendency is to move away from the idea of developing institutions and professional managerial capacity as ends in themselves. In place, there is the attempt to create a more responsive, public service oriented administration which involves beneficiaries more directly in organisational control. For the Left, there is the idea of public agencies as *This paper was a contribution to the seminar on “The Future of Urbanisation and the Role of British Aid”, held at the Development Planning Unit, University College London, on 24 February 1988. tThe authors wish to acknowledge the valuable comments on an earlier draft of this paper, from colleagues in the Development Administration Group: Jim Amos, Ian Blore, Chris Davies and Malcolm Wallis. tAddress for correspondence: Institute of Local Government Studies, University of Birmingham, Birmingham B15 2TT, UK. HAR 12:3-L
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enablers, empowering the less powerful’s own direct action; for the Right, there is the idea of the government supporting entrepreneurial initiative, doing only what the market cannot do. The objectives are different but, from both Left and Right, public managers are expected to adopt a more restrained, selective and supportive role; action should be arrived at by negotiation rather than direction. This implies change in the management practice and training of officials who have learned to see themselves as regulators, providers and bearers of solutions. Paradoxically, a less directive management style towards the external world may require stronger management within the organisation itself. To the extent that there is a new consensus, this can itself by dangerous if it leads to new “formula” approaches and universally applied solutions. This is a particular danger when the message is borne by powerful foreign agents to weak countries. It has happened before: the colonial legacy has been of regulatory bureaucracy, professional arrogance, elitism and inappropriate standards; more recently, aid agencies have often tried to bring about organisational development which we may now criticise as part of the problem of monopolistic, unresponsive and centralised administration. In 10 years time we may feel the need to recover from the present anti-state consensus with a new wave of “institution building”. There is then a grave risk in generalisations and pre-packaged solutions: what has been successful or appropriate in one country may have failed or be inappropriate elsewhere. It is therefore more important to develop ideas and techniques which are relevant to a particular national/local situation, than to recommend “universal” remedies. Careful research and a good understanding of local circumstances are therefore of crucial importance before proposing particular approaches. Nevertheless, there are some discernible trends in thinking, and some lessons from experience, which have a general relevance. This paper will cover three aspects: (a) alternative explanations and responses: the evolution of thought on the subject and lessons learned in the recent past; (b) the current key issues in the field of urban management; (c) the appropriate role for aid donors. It should be added that this paper draws on a range of experience from various urban development programmes and is not confined to the experience of specific aid agencies.
ALTERNATIVE
EXPLANATIONS
AND RESPONSE
There are alternative possible explanations for problems of implementation, developed sometimes from different political perspectives and suggesting often quite contrary management responses. The first two explanations put the problems of implementation to a great extent beyond the remedy of improved management, locating them in the nature of public administration or state intervention. The other three explanations, relate more directly to questions of management failure. 1. “The public sector is intrinsically inefficient or inequitable” Such views offer little hope of improved management practice. Either, from the Right, the public sector is seen as being monopolistic, lacking competition, and having an unresponsive bureaucratic nature, leading to favouritism and the dominance of professional and bureaucratic interests. Or from the Left, as part of the state, the public sector is seen as part of the structure of domination and
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even an agent of underdevelopment. The solutions are then outside public administration, either in the need to change the state through various forms of popular mobilisation and pressure, or in resort to non-state action: self-help and the freeing of private enterprise. The latter approaches (self-help and market provision) quickly lead to a necessity for new forms of public administration: Do private entrepreneurs exist or do they have to be encouraged? Can they reach “target groups” at affordable prices ? Who can help themselves? Is self-help appropriate at more than local level? Public administration is drawn back in to perform even more intricate tasks as promotor, safety net, guarantor, regulator, equaliser; these tasks may be particularly important - but also more difficult where the private sector and self-help are weakest. The re-assertion of the market has affected public administration not only in what it does but in how it does it. Especially through the agency of the World Bank, the public administration of developing countries has been urged to: measure success in terms of cost recovery and increase in market value (e.g. of land); strengthen managerial autonomy and cost accounting; introduce competition and choice within the public sector. 2. “External obstacles stand in the way of administration” The common complaint of managers is that policy implementation fails due to lack of commitment and support from others: lack of finance; lack of political will/political interference; the dead weight of established practices; the unwillingness of other organisations to collaborate; the apathy and irresponsibility of the clientele - “blaming the clients”. Most of these points are management issues re-posed as if they were external and beyond influence. This reflects not only the real difficulty of management in developing countries (scarcity, uncomprehending clientele, rapid change, and the diversity of transitional societies) but also the absence in many countries of the role of manager. In India, for example, the public service is typically composed of elite and transitory administrators, professional staff and clerks. Administrators are drawn into general policy issues and crisis management, rather than the systematic and long term management of implementation. The professionals see problems narrowly and expect their plans and designs to be implemented without there being any effective structure for implementation. The role of the manager in raising funds, adjusting procedures and standards, reaching out to clients and responding to their requirements is often lacking. In the absence of the manager as mediator, the problems he/she would deal with are taken to be external and therefore even more fundamental and beyond influence than they are. Policy-making in most developing countries is centralised, exclusive and narrowly sectoral. Officials therefore commonly find themselves facing local politicians, “beneficiaries” and even officials from other sectors with ready-made programmes; unsurprisingly they then meet with “obstacles” in the shape of noncollaboration, incomprehension and attempts to manipulate advantage. Local politicians without responsibility can only perform their representative role by acting “irresponsibly” as channels of special pleading, complaint and obstruction. The response to the view that policy implementation faces fundamental external obstacles can be either (1) to give up; (2) to seek to overcome political obstacles and managerial deficiencies by imposing programmes (often conceived centrally), by-passing the normal local processes so as to “get things done”. Aid programmes working through central government, with the leverages of cash and with short time frames for achievement, may have had a particular propensity to impose solutions through special agencies and special
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funding and administrative arrangements. NGOs may make a virtue of their unmediated contact with the poor. The project may work but the basic problems are left to resurface upon the departure of the aid programme; or (3) to strengthen the local political role in policy determination and to increase the local managerial presence, capacity and discretion. This would indicate that aid programmes should work through regular agencies, make a long term commitment, build local powers of fund-raising, co-ordination and problem-solving, encourage local political influence and raise the expectations and demands of excluded sectors (model: Hyderabad UCD). This builds political will by: mobilising the constituency of the poor; promoting decision-making and responsibility of local politicians; increasing local managerial capacity to recognise and resolve managerial problems. 3. The question of organisational competence and effectiveness The classic response since the 1950s has been to promote “institution-building”, of organisations with clear structures, leadership and trained staff. Government administration, at least until it began to meet the sorts of criticism made by the anti-statists (see section 1) in the late 196Os, was seen as the principle agent of change - nationally organised, nationally interested, professional, Western and subject to the influence of donors. The wide reach and systematic organisation of bureaucracy, in this view, makes it possible to concentrate scarce expertise at the centre and apply modernising reforms. Corporate planning and management, PPBS and MB0 are often associated with this top-down model (although they could equally form part of another approach). Integration across sectors is conceived not as a political but as a technical matter involving various forms of central planning and budgeting. Training is then a matter of developing those professional expertise appropriate to the role of the bureaucracy as conceiver and implementer of development. A criticism has been that this has led to the wrong sort of effectiveness: techno-bureaucracy “for itself”, a concentration of expertise behind exclusive walls imposing undesired solutions and inappropriate standards and procedures (e.g. terms of repayment). Effectiveness is measured in terms of the goals of the organisation rather than the client. Another criticism is that building centralised, hierarchic, professionalised organisations may not be effective even in their own terms. The very virtues of bureaucracy - impersonality, standardised rules and procedures, fairness - may break down in situations of dire scarcity, acute need, incomprehension of the rules of the game, and extreme local diversity. The rules cannot cope with the diversity and volume of demands, and every situation becomes a crisis demanding reference to the top - or else there is breakdown and free for all. Officials shelter behind rules and professional standards as a way of fending off demand and responsibility. Training begins to lose any point since the system is too big for anybody to change but everybody also knows that it cannot be made to work. The experience of failure is often then met within the same paradigm, with the setting up of special institutions (linked to the president, governor, chief minister, prime minister) to cut through the system with new solutions. Aid agencies have often been partners in this process. The much spoken of, but little practised, alternative of “development from below” measures its effectiveness not in terms of its capacity to implement centrally conceived policy but of its ability to respond to local demands, requirements and opportunities. It is more spoken of than practised because it implies loss of control by centrally organised elites including politicians, administrators and professionals. Can aid agencies help to give impetus to this approach? (Can they legitimately do so when the same principles do not operate in their own backyard?) What would these principles be? decentralisation; local i.e. the development
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political control as the means of prioritisation and co-ordination (perhaps client control in local instances) in place of central direction and technical processes of co-ordination; flatter hierarchies and more discretion at local and technical level; decision by negotiation with affected people and other organisations; competition between providers and choice between packages; cross-sectoral/crossprofessional teams at the point of action. In this approach, the procedures are recognised as integral to the outcome. Since the objective is not solely to get a particular project implemented but to identify the way in which all organisations can be brought into the solution, it is no longer appropriate to set up special agencies to cut through others; instead it is important to strengthen existing and local agencies. Alternative organisational principles imply different sorts of staff competence. First, where there is greater discretion, competence has to be developed more widely. Second, the competences have to be different (or additional) to existing professional training: the development of powers of analysis, the capacity to understand the different objectives of other groups and organisations, to negotiate, to accept political and client control, to train professionals not in a set of given standards but in approaches for deriving and applying solutions. The managerial need is then for a capacity of analysis and problem-solving and the identification of broad objectives, opportunities and constraints: a learning style in a learning organisation. This approach brings its own problems: not only may it be unattractive to the central politicians, elites and senior officials who now have control, but enhanced local control and discretion also brings the risk of local favouritism and corruption. But “Corruption for corruption and incompetence for incompetence, the scale of things is smaller at the municipal and state levels” (Bolaffi and Cherkezian).’ The big question for development administration is whether it is possible to combine the virtues of impersonality and fairness with those of responsiveness and discretion. 4. Targeting people or targeting needs? By the early 1970s there was clear recognition that in most countries growth was not leading to redistribution. Even in the sphere of collective provision which was supposed to be universal - e.g. in the urban sector: roads, water, sewerage, rubbish collection, public buildings, open space and transport - services frequently gravitated to the wealthier. The public allocation of private goods such as housing was usually found to favour middle income groups and failed to achieve the anticipated “trickle down” effect. It was argued that redistribution with growth could be better achieved through targeting on the poor. Targeting has taken two forms: (1) aiming benefits at identified “target groups”; (2) tailoring public provision to the “basic needs” of target groups. While the first focuses on the identification of the beneficiary group and the development of appropriate channels to reach them, the second identifies their needs and attempts to develop services and supports which correspond precisely to them. Examples in the field of shelter might be, in the first case, the application of subsidies and reserved places to lower income groups in conventional housing schemes, and, in the second case, the provision of subsidised water supplies through public taps in squatter settlements. The common management problems arising from the attempt to aim at target groups are: the difficulty of setting up criteria of selection; the labelling or stereotyping inherent in the picking out of the needy; injustice at the cut off points; the need ‘Bolaffi, date.
G. and Cherkezian.
H., “A RecuperaGio
Economica,
Financeira
e Social do BHH”.
mimeo,
no
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to patrol/police the “frontiers”; the complexity of rules and consequent exclusion; misrepresentation or “fronting” by non-targeted groups; reallocation of the benefit once acquired. Administrative demands and difficulties grow as services are made more selective. Targeting by area rather than by individual characteristics avoids some of these problems. The basic needs approach tries to avoid administrative problems by dealing in benefits which only the really poor would need - e.g. support for the informal sector, water from public taps, staple food, security of land occupancy, the most basic shelter. The question is whether, in the poorest developing countries, the needs of the poor are so distinct and, if so, whether public administration is capable of identifying these (often locally distinct) requirements and then of adjusting its operation to provide them. If needs are not so distinct then, as in targeting, it is likely that upgrading of the conditions of the poor will be accompanied by diversion (whether through administrative manipulation or reallocation through the market) to the less poor. At the least, this approach requires considerable analytic capacity to identify needs, adjust organisation, and understand (so as to resist) the dynamics of the wider system in which the basic needs of the poor are located. Targeting (at national or international level) focuses on the needs of the poor rather than on the system which produces poverty or presents opportunities to the poor. 5. The question of access Targeting raises in acute form the problem of access: the attempt to direct services to specific groups requires the construction of rules of procedure which may act in themselves to obstruct the target group. This is the question of the bureaucratic entanglement which diverts the purpose of programmes. This issue is paradoxical: the scarcity which requires the tight regulation and control of distribution also creates such urgency of need that the rules break down in practice; the rules which are constructed to help the poor can be most easily understood and manipulated by the non-poor. A world of diverse and acute need does not easily fit the bureaucratic tendency to standardised solutions. On the other hand, the absence of routine forms of delivery, which is the more common experience of the poor, exposes them to unregulated and often rapacious forms of market supply (tank water, money-lenders, illicit land developers) or periodic harassment and clientelistic favouritism from the political authorities (amnesties, temporary permissions, tolerated but illicit electricity connections, extension of public services on special appeal). The regulation of distribution is important to the poor because it represents escape from uncertain (and often high) prices and manipulation or exploitation. The question is how to make the distribution of basic goods and services systematic and “as of right” without introducing complex rules and regulations and (as far as possible) without making special arrangements for the poor which effectively trap them. Possible approaches (many of which have cost implications) include: - provision on a scale which matches overall need; - non-selective of infrastructural programmes: e.g. the routine extension networks without requirement of application; - area programmes inclusive, minimise which, by being geographically individual exclusion; - locating field offices near to intended client groups; - increasing choice and responsiveness in public provision: e.g. maximising choice about matters of individual concern, and accretive development of sites-and-service schemes so as to respond to demands of earlier occupants; - developing the representation of consumer groups/utilisers to provide pressure and feedback;
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research and monitoring on the experience response of clients to services; working through known agencies. MAJOR
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of delivery systems and the
FOR URBAN MANAGEMENT
It has been argued in the preceding section that different explanations of the problem of implementation indicate different solutions. It has also been argued and management that it is important to consider problems, opportunities approaches as they occur in specific countries and cities, rather than trying to identify standard solutions. However, it is possible to draw some broad conclusions about the leading issues for managers. These can be grouped into four sets. The first concerns the recognition of the opportunities and problems of urbanisation; the second set is to do with the role of government - intervening in the process, enabling actors and deregulating - or regulating selectively market forces; the third set is addressed to the enhanced role of local government as an agent of political decision and the vehicle for integrated urban services; and the fourth covers issues of effective, efficient and responsive management of services and assets. Many of the themes discussed here are not new, but we have identified them as being of current concern. In raising these issues, we are not necessarily putting them forward as recommendations, but rather noting them as trends which, whether we like them or not, have implications for management. 1. Coming to terms with urbanisation
In recent years there has been an increasing recognition that the process of urbanisation is not only unstoppable, but that it can play a positive role in economic development. This is especially true for countries with limited land resources, where urban employment is the only option. This means that urban development policies should be designed to accommodate population growth, rather than trying to resist or ignore it, and should aim to harness the economic growth potential of urban development. At the same time, however, many countries have adopted national economic policies which have unduly stimulated urbanisation, to the detriment of national development. Such policies have included: exchange rate, interest rate and taxation policies which encourage capital-intensive industrialisation; holding down agricultural prices; inappropriate styles of education; and concentration of facilities in the capital city. But there is now a significant worldwide trend away from such policies, although there will always be competition for scarce resources between urban and rural areas. 2. Process before projects It is important for governments and other agencies which intervene within the urban system to understand the wider processes within which particular interventions, programmes and projects might fit. This implies a more thorough analysis of: (i) economic development patterns and opportunities; (ii) urban markets in land, housing and services; (iii) the existing institutional system; (iv) existing national and local policy frameworks. Management is then a process of carefully calculated intervention, involving negotiation between sectors, with politicians and with the affected public. Programmes and projects should be tailored to support positive examples or tendencies in the wider system. This is also an argument against pilot projects which try to generate positive outcomes with special and non-replicable arrangements, and in favour of piloting new approaches which are feasible for existing institutions to replicate and maintain.
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3. Government as enabler rather than provider For much of the post-War period, it has been assumed that provision of urban infrastructure and facilities, including housing in some cases, was primarily the responsibility of government. In recent years, there has been a recognition that, not only can governments clearly not afford to provide adequate infrastructure and services for all, but that the facilities and services which have been provided by governments have often been unsatisfactory from a number of points of view. Weaknesses of direct government provision have included: poor quality and erratic service; provision in a style which does not match people’s aspirations, especially in the area of housing; inefficiency and high cost of service provision; the risk of creating dependency and the discouragement of individual and community initiative; bureaucratic control of access to scarce resources, which can result in corruption and manipulation by the powerful. This is not to suggest that governments no longer have a role, but that different, more strategic, approaches are required: - concentrating on those activities and services which cannot be supplied satisfactorily by the private sector, by individuals or by community organisations, and on those activities which can have the greatest, strategic impact (this is, of course, a theme well explored by John Turner, and which has already had considerable impact on approaches to low income housing in Third World countries); - providing the environment and structures within which individuals and community groups can provide for themselves, rather than relying on public sector provision; - facilitating private sector provision (subject to appropriate safeguards, e.g. competition, hazard control), through deregulation, appropriate pricing and fiscal policies, etc .; an example here might be the encouragement of appropriate private subdivision of land, through mechanisms like Guided Land Development and Land Readjustment, as the means of making land available for housing all income groups, rather than relying on direct public provision; - contracting of private sector or community provision of public services, such as construction, waste collection and disposal, etc. Part of the issue here is the recognition of “management” as a scarce resource, i.e. because governmental agencies have limited management capacity, intervention strategies should seek to conserve management resources as well as financial resources. One implication of the above analysis is that a new approach would be required from public sector managers, who could increasingly become clients for privately provided services, rather than direct providers. This new role, with the responsibilities for drawing up specifications for service provision has implications for internal management and for monitoring performance, systems and for training (see 10 and 11 below). 4. Deregulation In similar vein, there has been a widespread disillusionment in the Third World with governments’ attempts to regulate and control for a number of reasons: - inadequate information on which to base controls, and inadequate understanding of the operations of the markets or systems being regulated, with the result that problems may not be resolved - indeed, they may be exacerbated; for example, the negative effect of minimum plot size regulations on the availability of affordable housing land for the poor; - excessive regulation can have a negative effect on incentives and initiative, or can result in “rent-seeking” (the transfer of effort to earning income from manipulating controls such as licences and quotas);
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- limited capacity to enforce means that most regulations are ineffective, or are corruptly exploited to provide an income-earning opportunity for the enforcers (i.e. regulations are not enforced, but are used as a means of extracting money from selected “offenders”); Again, this is not to imply that governments should opt out of a regulatory role, but that that role should be more strategic: - identifying those aspects where regulation is both essential and is capable of being enforced effectively and fairly; this is another aspect of “conserving scarce management resources”; - using fiscal measures to provide the correct market signals to private suppliers and incentives for improvements in provision by the market. A particular example here is the treatment of the informal sector which has generally come to be recognised as having a positive role in economic development, and over which most conventional forms of regulation are now seen to be largely counter-productive. 5. Building an institutional framework for integrated urban development The concept of integrated development has been less prominent in the urban sector than in the rural sector, but the need for integration, particularly of infrastructure provision, has been increasingly recognised.* This has called into question the approach, widely adopted by aid agencies in the 197Os, of establishing specialist institutions for particular functions, unrelated to the overall urban development context. There has also been a disillusionment with the so-called “integrated” urban development authorities which, although intended to integrate urban infrastructure provision, have been divorced from traditional responsibilities for regular service provision and for operation and maintenance of the infrastructure provided by the development authorities. In recent years, there appears to be a recognition of the need to strengthen existing, multi-purpose local institutions, i.e. local governments, municipal corporations, etc., rather than creating new, specialist institutions.3 There are further reasons for the renewed interest in the role of local governments, and these concern local knowledge and local accountability. Aid programmes generally have to be channelled through central governments, and this has tended to reinforce the dominant position of central ministries. Yet these ministries often have little grasp of what is taking place at the local level, or of what the real needs and priorities are in particular cities. In addition, central direction of all urban development results in an unwieldy central bureaucracy. By contrast, local governments are generally much better placed to identify local needs and priorities. However, local governments in most Third World countries have limited capacity to plan and implement programmes (limitations often made worse by central government controls), and hence the renewed concern to strengthen the capacity of local governments. 6. Encouraging local political control The need for decentralisation may increasingly be recognised, but decentralisation programmes often seek to bypass local politicians. Instead, such programmes should seek to build up their sense of responsibility by giving them a proper role and responsibilities. The political process can co-ordinate or bridge ‘For example. the major “Integrated Urban Infrastructure Development Programme” in Indonesia. ‘For example. Task Force on Financing Urban Development (Planning Commission. Government of India, 1982), and Sevemh Five-Year Development Plan, (Planning Commission. Government of India, 1985).
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differences between sectors, departments and professions, and can mobilise local opinion in the formation of policy and in feeding back to implementation. Above all, the democratic process provides the mechanism for accountability which may be absent where programmes are handled either through special-purpose development authorities, or through central ministries. In some cases, there may be a need for further decentralisation of decision-making to levels below the local government if there is to be effective participation in decisions affecting local areas; this is something which is increasingly occurring in local government in Britain. Encouraging local political control may well not be an easy path to tread: local politicians may themselves be too elitist, or too disorganised, to arrive at collective decisions; politicians and managers may conflict. However, the political and managerial will to ensure that services are provided for the poor can be strengthened by encouraging demands from below from the poor, providing a counterweight to pressures from the elite and from vested interests. Aid programmes can be valuable in this context by demonstrating that the basic needs and aspirations of the poor can be met through routine programmes rather than through special favours and patron-client relationships. 7. Resource mobilisation A related theme has been the need to mobilise financial resources at the local level. This is not only in order to enable local governments to function effectively, but also because of the limitations on central governments’ financial resources. There is generally scope for mobilising additional resources at the local level, both through taxation and through charging for services. As regards taxation, in many countries real property still provides the main local tax base, and there are good reasons for it to continue to do so. However, property tax revenues have been allowed to decline in real terms in many countries, particularly because of problems over property valuation. In recent years, considerable effort has gone into trying to upgrade the property tax in a number of countries. Local taxation of motor vehicles and motor fuel is another resource which is increasingly being advocated. As regards charging, the World Bank in particular has long emphasised the need for cost recovery and appropriate charging policies for urban projects. There are strong reasons from both the points of view of economic efficiency and equity for charging at least at marginal costs, if not full cost recovery, for such urban services as water, sewerage, land development and urban transport. The methodology for appropriate pricing policies is now reasonably well developed and is increasingly being implemented. Of course, there is a real risk that costrecovery policies can result in the poor being excluded, although it is often the general under-pricing of services, which in fact leads to the poor being excluded, because there are not the resources available to expand the service. An example of the undesirable effects of a general tariff subsidy can be found in the case of urban water supplies in Jakarta: here it is the well-off who are connected to the system who benefit from the subsidy, at the expense of the poor who are not served at all and who have to buy water from vendors at much higher prices or else use polluted sources. However, the tendency of aid agencies to require cost recovery on a project-by-project basis may prevent cross-subsidisation between programmes and projects and so may place undue burdens on the poor. There remains the problem of local revenue administration. However fine the array of local revenue sources may be on paper, these will be of little value if revenue administration systems are ineffective. Thus, increased attention is being given to developing more effective systems of valuation, assessment, collection and enforcement of local revenues.
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Increased attention is also being given in many countries to the pattern of central-local financial relations to ensure that grant distribution systems are not only equitable between regions, but that they are designed in a way which provides the correct incentives to local governments to mobilise local revenues and to pursue appropriate policies. One particular approach much advocated is revenue sharing, which gives local governments an incentive to assist in mobilisation of national taxation. One further element which is assuming increasing importance is the establishment of municipal Development Funds. In the past, local governments have generally had to rely on ad hoc capital flows from central government for their development projects. By establishing municipal Development Funds, urban authorities which have the capacity to service loans can borrow to finance development projects as required. Such Funds can then provide a mechanism for recycling investment resources, and for mobilising additional resources from the public.
All too often, urban development programmes have involved “targeting” preformed packages on beneficiary groups with little consideration of their real needs and preferences. There are a number of ways in which programmes could be made more responsive to client choice: (a) introducing market mechanisms to provide greater choice to consumers (for example, competition in public transport), monitoring response and adjusting future supply accordingly; (b) analysing existing practices and revealed preferences of consumers, and encouraging and enhancing the operations of those organisations and actors which best serve beneficiaries’ needs; (c) greater decentralisation of field management to the local level, and greater responsiveness to representations through that field management or through the local political process. 9. Increasing management discretion
A related issue concerns the nature of bureaucratic systems: all too often, these involve long bureaucratic chains which are unsuited to conditions of rapid change, acute need and local diversity. Therefore, hierarchies need to be flatter to allow more local discretion and responsiveness. Rather than seeking to implement pre-conceived plans and policies, management needs to be more capable of analysing needs and opportunities, and of negotiating towards objectives. This implies a shift from planning as control to planning as a developmental and continuous interactive process. Thus the management function needs to be strengthened at the local level, and professionals need to be made more aware of their management (implementation) role. 10. ~~~~gernent of services and assets
Here we are essentially concerned with internal management, and the need is for increased effectiveness and efficiency in service provision and asset management. There are a number of approaches which would seem to be relevant here. Firstly, there is the need for a corporate approach to management, in which objectives are clearly defined (ideally through the political process - although it has to be acknowledged that the political process often does not operate in such a “disinterested” manner), and plans, policies and strategies are developed through inter-departmental discussion. The budgeting process should be
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integrated with the policy-making and planning process, so that budgets reflect policies and plans, and so that plans are implemented through budgetary decisions. Secondly, there is the need, within the corporate framework, for clearer definitions of responsibility, and for managers to be held publicly accountable for the services and functions for which they are responsible. Thirdly, the concern with staff management. Public services in developing countries often suffer from low staff productivity and poor motivation. New approaches (many of which are well established in developed countries) are needed towards staff appraisal, supervision, career planning, incentive schemes, training, etc. Fourthly, there needs to be a greater concern with “value for money” and with the relationship between service outputs and input costs; all too often, this analysis is never made, and services are very cost-ineffective, not least because of low labour productivity. One approach which has already been mentioned is the trend towards greater use of indirect provision, through contracting and private or community provision; this facilitates the explicit examination of costeffectiveness, but requires a new approach to service management, specifically concerned with quality control and contract supervision. Fifth, improved systems of financial management need to be implemented, which not only provide appropriate control mechanisms and prevent fraud and corruption, but also provide the financial information which managers require in order to run their services effectively. Sixth, the issue of corruption remains a critical issue in many countries, preventing effective service delivery, and often discriminating against the poor. There is a need for a deeper analysis of systems prone to corruption, and for personnel and incentive systems which discourage it, and machinery to permit greater accountability and transparency. 11. The problem of maintenance
There is widespread recognition of a serious problem concerning the maintenance of new urban infrastructure.4 Not only does failure to maintain represent a major waste of resources, but the resulting breakdowns have serious effects on the efficient functioning of the city. There are numerous reasons for the failure to maintain: unclear responsibilities, lack of resources, obsessions with new investment, the lack of kudos from maintenance work, etc. In this, aid donors have much to answer for, as they have generally been willing to finance only new infrastructure, leaving host governments to deal with the maintenance problems, despite their obvious lack of resources and skills for such a task. Maintenance has to be seen to have a higher priority within the urban management cycle. Responsibilities have to be clearly assigned and resources identified; in particular, the situation in which a specialist agency constructs new infrastructure and hands it over to another agency which has not been consulted over the planning or construction and has no funds for maintenance - a common arrangement in metropolitan areas in India - is clearly inappropriate. In the case of local upgrading and environmental projects, there is clear evidence that, where the local community is properly involved in decisions about the plans and the execution of the works, that community is much more likely to be willing to take responsibility for maintenance (examples include the Hyderabad Urban Community Development Project, and the Supratman Kampung Improvement Programme in Surabaya). 4Sundaram. P.S.A.. “Maintenance of Urban Infrastructure in India: Certain Management Issues” (Seminar on Management and Finance for South Asian Countries. Bombay. December
and Financial 1987).
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12. Training of urban managers
This is an area on which much of British aid to the urban sector is spent, and on which there is a considerable body of experience. However, too much training, both overseas and in-country has been inappropriate. This section aims to indicate a number of directions in which training is - or should be - moving. (a) A closer link between training and operational programmes and projects, both to relate the training to organisational priorities and to offer field experience to trainees, should be established. There are now well established in which participants are enabled to undertake models of “action-training”, particular tasks within their work organisation, monitored and supported by training staff. (b) Rather than training isolated individuals, training programmes need to be geared to whole institutions, aimed at transforming the overall competence and style of organisations, and permitting continued support for new approaches. (c) Training needs to develop analytical and problem-solving skills, rather than concentrating on narrow text-book learning or professionally-oriented standards and techniques. (d) Training is needed to reorientate professionals to a management role which is concerned with plan implementation, rather than mere plan preparation. (e) There are training implications in the development of the new approaches to management outlined in earlier sections, concerned more with enabling rather than with direct provision; such an approach implies the need for new skills in and individual communication, response to and support for community initiatives, etc. Likewise, the shift to a greater role for market provision and contracting by government of services from the private sector requires new skills in evaluation, monitoring, quality assurance, etc. (f) There should be an increased concern with the output value of training programmes, rather than just with inputs. This implies the need for training programmes to be tailored precisely to the specific needs of a particular situation; this involves a great deal of preparation, research and material gathering. Although this may increasingly be done, there is still a tendency to view the number of classroom sessions as the main element of a training programme. It also implies the need for a system of ex-post evaluation of training in terms of the increased effectiveness of the individual and the agency concerned, rather than in terms of the immediate satisfaction of trainees, or in terms of more obvious indicators such as number and type of sessions provided. It also implies the need for rigorous selection of trainees according to suitability and relevance to the course, and for participants to be given adequate time to prepare for training.
THE ROLE OF AID PROGRAMMES
Of necessity, the role of aid donors in the management of urban development is largely indirect: through management systems incorporated into specific development projects, through advice provided by consultants, and through training. Nevertheless, the scope for influencing the style of and approaches to management can be considerable. In this section, we try to identify briefly a number of pointers concerning the appropriate role for and approach of aid donors in this field. In many cases, this will represent current practice, in other cases there is a need for some reorientation. (a) Aid programmes should seek to support positive policies and tendencies locally, and existing institutions, and should, as far as possible, be adjusted to
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national development objectives. There is clearly a nice balance to be maintained here, since there may often be a need for shift of policy or practice, but this should be accomplished through open-minded discussion on both sides, as well as through training and management support which enables managers to see why changes are required and how they can most effectively be made, rather than by imposing externally determined packages of policies and practices. (b) Therefore, it is important that aid programmes should have longer horizons and be concerned less with the immediate achievements of individual projects and more with the strengthening of durable processes. This implies committing aid to the long term development of existing institutions, permitting a long term reorientation of those institutions, on the job training of staff at all levels and a commitment to maintenance. This in turn implies that larger amounts of aid may be required if effective changes are to be brought about, and a greater willingness to be concerned with maintenance implications, as opposed to just new construction. (c) Where possible, training and technical aid should be integrated with capital programmes and development projects, so that these components can be mutually reinforcing. (d) There is a need for increased field research as an integral part of technical assistance or training programmes, and for increased monitoring and evaluation of outcomes, both short and long-term, which allow for an improved understanding of situations and processes; the results of such research and evaluations should be more widely disseminated, to permit greater learning from experience. (e) Technical assistance and training to facilitate the reorientation of management along the lines discussed in this paper; in particular to strengthen the developmental, enabling and facilitating roles of management. (f) Aid programmes can be used to demonstrate that the basic needs and aspirations of the poor can be met through routine programmes rather than through special favours and patron-client relationships. (g) Aid agencies should avoid establishing special agencies, complex administrative arrangements and special financial conditions which add to the management burden of the recipient government. (h) Competition between aid agencies, each with different approaches to urban management, should be avoided.