The Decentralization Support Programme is an initiative of the Government of Pakistan, being implemented with the partial funding support of Asian Development Bank, to carry forward reforms in the areas of decentralization, fiscal restructuring and local governance. It is an innovative , demand-driven and output oriented program , serving a range of clients at all level of governments.

DSP's objective is improved local government representation; accountability and efficiency, resulting in improved service delivery.

For the past three years a radical programme of reform has been underway in Pakistan. It was first outlined in the 2000 Devolution Plan, and then implemented in the 2001 Local Government Ordinances. The reforms relate to devolution of power.

Under the old system of government, the provinces administered the districts and tehsils directly through the bureaucracy at the division, district and tehsil level. Executive and judicial authority was concentrated in the person of the Deputy Commissioner. There was little scope for elected representatives to participate in local administration.

This old system of administration lacked democracy and accountability at the local level. Governance was centralized so that decisions about local level planning and development were taken higher up, with little reference to local needs and priorities. Because civil servants were not answerable to the public, there was little incentive for them to ensure high quality service delivery. Lack of checks and balances left the system open to abuse. The deliverance of police and judiciary were being criticised

The Devolution Plan and Local Government Ordinances brought about a wholesale transformation in Pakistan's system of government, especially at the local level. Divisions were abolished, and instead a three-tier local government structure comprising of three categories of local government - districts, tehsils and unions - was brought in.

Elected Nazims and Naib Nazims head each union, tehsil and district local government, and there are political linkages between the three tiers. These elected bodies ensure that planning and development is carried out in accordance with local needs. They also monitor the functioning of local administrations. Civil servants are thus accountable to elected representatives, who are in turn accountable to the public at the local level.

Devolution in Pakistan follows the principle of subsidiarity, whereby all functions that can be effectively performed at the local level are transferred to that level. This has meant the decentralization to the districts and tehsils of many functions previously handled by the provincial governments.

Alongside administrative and political decentralization, provisions have been made for transfer of funds to the local governments so they can carry out their planning and development functions effectively.

Devolution of power brings many benefits:

In short, devolution of power can prove a huge boost to growth and development in Pakistan. But this will only happen if it is implemented properly.

Achieving devolution of power in Pakistan is a huge undertaking. It entails:

i. Political devolution, through the establishment of elected local governments;
ii. Fiscal decentralisaiton, through the transfer of funds to local governments;
iii. Administrative decentralization, to correspond with the new devolved political and fiscal arrangements.

In Pakistan, devolution of power is taking place side by side with reform of the police and judiciary. The Police Ordinance 2002 radically alters the structure and responsibilities of the police, and the judiciary. It creates new citizen accountability mechanisms.

All this reform - political, fiscal, administrative, judicial - is taking place in a very short period of time. It is therefore hardly surprising that the implementation record to date is mixed, spelling out issues for attention.

On the plus side:

But there is also a long minus list:

To some extent, implementation of devolution is facing the same kinds of natural teething problems that any new reform programme faces, and that should ease out with time and effort.

But there are also serious problems and flaws which, if left unaddressed, could hold back the whole decentralization programme. Three key issues that have emerged are:

1) Lack of operational funds
Many local governments complain that they do not have the funds to carry out their assigned functions. This includes funds to run offices effectively, and funds for development.
2) Lack of capacity
The new local government system has been in place for almost two years. Yet many elected councilors, administrative personnel and other stakeholders still do not fully understand their roles and responsibilities are and how they should perform them.
3) Lack of systems
The decentralization of certain functions has not been matched by the establishment of corresponding systems at the local level. There is still no comprehensive system for district government accounting adequately supporting local financial arrangements, for example. Many of the new structures established by the LGO also need formulation of institutional processes - the Provincial Finance Commissions and Local Government Commissions, for example.

For Successful implementation of the decentralization program and empowerment of local government institutions above problems are required to be addressed and resolved. Capacity also entails having the necessary systems in place to reflect, accommodate and rejuvenate political and fiscal decentralization.

DSP's objective is improved local government representation, accountability and efficiency, resulting in improved service delivery.

The policy objectives of DSP are:
1. Sufficient and effective Federal support for decentralization and related reforms, including gender and social development
2. Effective and sustainable provincial-local intergovernmental relations
3. Local government institutions managing resources accountably and equitably, contributing to efficient and equitable delivery of services by public and private sector agencies according to clearly established norms of public participation, access to information and accountability.

DSP seeks to achieve this by addressing some of the main problem areas in implementation - lack of operational funds, lack of capacity, and lack of systems - in the following ways:
· Improving the effectiveness of local government institutions
· Ensuring they get regular and predictable funds
· Making accounting a transparent process
· Putting necessary systems in place and training people in their use
· Promoting monitoring of service delivery
· Making recruitment processes competitive and transparent
· Promoting participation of relevant stakeholders in decision processes
· Installing systems for access to information and citizen accountability
· Ensuring redress of grievance.

The main $270 million is a program loan to support GOP initiatives for decentralization over a period of four years related amount goes into the federal budget to help the Government meet the costs of decentralization. This has enable the GoP to transfer 2.5% of GST to local governments. During the financial year 2002-03 these funds were transferred to local governments from the federal government through the provinces.

TA1 for Local Government Performance Enhancement specifically addresses the training and systems needs in the new local government system.

The main features are as follows:
1. TA1 support is available at the federal, provincial and local level. It can be accessed by civil servants, elected representatives and civil society groups.
2. TA1 gives support for training (capacity building) and for systems development and installation.
3. TA1 gives support in 11 thematic areas including audit, accounts, budgeting, revenue generation and social audit. TA1 places deliberate stress on strengthening fiscal decentralization because this is the next and crucial stage in devolution.
4. TA1 is a demand-driven programme: it provides capacity building and other assistance in response to local needs.
5. TA1 places deliberate stress on the lowest tiers of government - districts, tehsils and unions - and on improving basic capacities.

TA1 will help ensure that all those involved in the new local government system - elected representatives, civil servants, and civil society groups - have a clear understanding of their roles and responsibilities and how to carry them out.

TA2 for Governance and Gender Mainstreaming is designed to address the problems of women's participation in politics and government, and the inclusion of women's needs and priorities in decision-making. TA2 will promote and facilitate women's participation in government planning and decision-making. It will also encourage planning and development that caters to women's needs. Five Gender Reform Action Plans are under consideration with the federal government and the provinces to put in place essential institutional capacity for ensuring women's developments.

In addition to the loan instruments a grant of $2.9 million through co financing of ADB DFID, CIDA and the Dutch government has been arranged to provide strategic support through a team of specialists working with the PSOs. The four objectives of the ADTA titled ‘Support to Implementation of decentralization’ are:
i. Provide support to the PSOs;
ii. Provide technical assistance to Implementing Agencies;
iii. Promote performance monitoring and evaluation;
iv. Promote strategic exchanges and policy development.

The table below illustrates how DSP will help resolve the problems that have been experienced in the implementation of devolution.