local governance and civic engagement in rural russia

Local Governance and Civic Engagement in Rural RussiaA World Bank Project

The World BankRussian country office

The World Bank's mission in Russia is to supportthe effective implementation of the country'scomprehensive reform program, to achievesustainable economic growth that translates intobetter jobs and social services for all Russians. Wedo this through project financing, analysis andadvice that informs the country's reform agenda.

Local Governance and Civic Engagement in Rural RussiaA World Bank Project

Moscow, 2007

1

2

Local Governance and Civic Engagement in Rural Russia

A World Bank ProjectMoscow, 2007

This publication contains the results of the 3-year project «Local Governance and Civic Engagement in RuralRussia» sponsored by the World Bank between 2004-2007 and implemented by the Russian branch of thecharity Charities Aid Foundation (UK) in 3 regions of Russia: Perm, Penza, and the Republic of Adygeya.Above all, the project contributed to the development of civil society in villages and better cooperationbetween local government and rural residents, furthered the creation of the institutional environmentneeded for the vigorous implementation of the federal law No.131 On the General Principles of Local Self-Governance in the Russian Federation, and ultimately contributed to improving the quality of life in ruralRussia.

The publication contains a framework model of participatory local governance and practicalrecommendations for policy makers to e�ectively engage the population in local governance processes andexpand the legal �eld in rural areas. It also includes case studies in providing public services based oncommunity priorities and the results of research to quantitatively measure the e�ects and the e�ectivenessof decentralization in Russia.

The volume will be useful to specialists of local governance, politicians at regional and federal levelsresponsible for rural development, students of public management, as well as all those interested in learningabout progress in decentralization in Russia at the beginning of the 21st century.

Design and layout: D. FedorinovaLayout man and proofreading: K. Ezhov

© M. Amelina, L. Avrorina, O. Azfar, S. Cooley, M. Duganov, M. Garadja, T. Gurgur, A. Kovalevskaya, T. Kuznetsova, T. Nefedova, S. Nikiforov, E. Nikitina, A. Nikulin, A. Olshvang, L. Ovchintseva, A. Shah, N. Sibatrova, M. Yakutova, 2007.

© CAFRussia, 2007.

© 2007 The International Bank for Reconstruction and Development / The World BankAll rights reserved

A publication of Charities Aid Foundation Russian Branch (CAF Russia)UK Registered Charity Number 268369

Published within the Local Governance and Civic Engagement in Rural Russia Project

The project is �nanced by the Japan Social Development Fund (JSDF), Grant N TF 051789

Project idea, general management and monitoring – World Bank

Project senior manager – Maria Amelina, Senior Social Development Specialist, World Bank

Project Implementing Agency – CAF Russia

Project managers : Nataliya Skribunova, Lubov Ovchintseva, CAF Russia

Materials of the publication are protected by copyright and can not be reproduced in full or in part inwritten, electronic, or any other format without the written permission of the «Local Governance and CivicEngagement in Rural Russia» project managers and the World Bank.

3

ContentАcknowledgements 4Glossary 4

Prefaces 5

Kristalina Georgieva 5Vitali Shipov 7Andrey Sharonov 8Theodor Shanin 9

Introduction 10

Anwar Shah. A Comparative Institutional Framework for Responsive, Responsible, and Accountable Local Governance 10

Mechanisms providing effective self-goverence 17

Lubov Ovchintseva. Civic Engagement: the Basis for Rural Development 16Sharon Cooley, Sergey Nikiforov, Nadezhda Sibatrova. Introducing Bottom-up Governance in Rural Areas 23

Project results case studies 29

The Settlement Is Our Home, and We Are Its Owners 29Keeping Novozalesnovsky Clean and Beautiful 30Tapping into Community Resources for Better Water 31Energizing the Community Through Celebration 32Creating Harmony: Enhancing Citizens’ Access to Information 33

Larissa Avrorina. Local Community Foundations – Tools to increase Civic Activity 34Marina Yakutova. Legal Support for Rural Municipalities and Their Communities 37

Measuring the effectiveness of self-governance 40

Antonina Kovalevskaya, Maria Garaja. Methods of statistical data collection based on results-oriented management: settlement locality card 40Maria Garaja, Mikhail Duganov, Elena Nikitina. Monitoring of service efficiency in healthcare, education, and territorial improvement 43Tugrul Gurgur, Maria Amelina, Omar Azfar. What Makes for Good Local Governance? 48

Are people interested in self-governance? 65

Anton Olshvang. Youth and villages: children draw their own settlement emblems and flags 65Alexander Nikulin, Tamara Kuznetsova. Local Community: between the state and local self-governance 67Tatiana Nefedova. Prerequisites and Limitations for Self-Organization of Rural Communities 69

Project recommendations to federal/regional/local governments 72

Project implementing agencies, consultants and partners 74Annexes: Project territories 76

Acknowledgements

Glossary

CFP – Center for Fiscal Policy

CLS LG – Center for Legal Support to Local Government

IUE – The Institute for Urban Economics

LCF – Local Community Foundation

LMC – Legal Municipal Consultant

LSG – local self-governance

NGO – Non governmental organizations

RMC – Rural Municipal Consultant

Rosstat – Federal State Statistics Department

SIAP – Service Improvement Action Plan

WB – World Bank

We are deeply grateful to governmentrepresentatives who have taken an active role inthe implementation of the project LocalGovernance and Civic Engagement in Rural Russiaand contributed in no small way to its success,including: Vitaly Shipov and Sergei Miroshnikov(Ministry for Regional Development), AndreiSharonov and Artem Shadrin (Ministry ofEconomic Development and Trade); AlexeiKamenev, Maksim Reshetnikov, Andrei Shakhaev,Ludmila Shabanova, and Lyubov Korenkina(Administration of Perm region);Taliy BeretarValery Belousov, and Tamara Miroshnichenko(Republic of Adygeya Presidential Administration);and Sergey Yegorov and Nadezhda Kozenko(Penza regional administration).

For bringing relevant international experiences toRussia, we are grateful to Sharon Cooley and RituNayar-Stone (Urban Institute) and to ZanaVocopala and Silvana Braccula (Urban ResearchInstitute, Albania). The team would particularlylike to thank Sergei Nikiforov, Marina Maslova,Nadezhda Sibatrova, Olga Strelets, DmitryZhigalov (Institute for Urban Economics, Moscow)for their exceptional commitment to the projectand for going beyond the call of duty in adaptingthe international experiences to the Russiancontext and for being so attentive to the pilotvillages.

We would also like to thank the team of expertsfor their contributions to the project researchcomponents: Antonina Kovalevskaya and MariaGaradzha (Center for Fiscal Policy, Russia); MarinaYakutova, Savva Shipov, and Olga Savranskaya(Center for Legal Support to Local Government,Moscow); Aleksander Nikulin and Dmitry Rogozin(InterCenter); Tamara Kuznetsova (Institute ofEconomics of the Russian Academy of Sciences);Ekaterina Zhuravskaya, Aleksey Makrushin, andAkhmed Akhmedov (Centre for Economic andFinancial Research, Moscow); Tugrul Gurgur andOmar Azfar (University of Maryland, U.S.A); andAlexander Chvorostov (Institute for AdvancedStudies – IHS–Vienna).

In addition, thanks are due to Tatyana Margolina(Human Rights Commissioner Perm RegionAdministration) for disseminating the project’scivic initiatives, and to Leah Cohen and ImogenWade in the World Bank for their invaluableassistance to the project results.

The project was possible thanks to the energeticsupport of Julian Schweitzer and KristalinaGeorgieva (World Bank Country Directors forRussia in the periods 2001-4 and 2004-7respectively). Senior Information Officer, Chong-Man Kim, provided invaluable help in findingtelecommunications equipment. We are verygrateful to all our colleagues for their guidanceand assistance.

4

Forewords

It gives me great pleasure to introduce thispublication to Russian and internationalaudiences. It is important because it tackles one ofthe most difficult development issues in Russia –improving the lives of people in rural areas acrossthe country and doing so in an inclusive andequitable manner. It is timely because the currentRussian legislation and macroeconomic situationprovides for an opportunity to approach ruraldevelopment in a comprehensive bottom upmanner.

One of the main mandates of the World Bank is towork towards increasing access to opportunitiesfor the poorer strata of the population. In post-socialist societies, increasing access to opportunityfor the poorer rural dwellers has been particularlychallenging because of the changes in terms oftrade for agriculture, the overall challenges ofoperating in the market economy, and the relativeisolation of rural areas. Finding solutions to thesechallenges is a unique country-specific endeavor.However, some basic approaches have proven tobe true in most contexts. The more control peoplehave over their economic and social life, the betterthey are able to take advantage of theopportunities they are given and grow.

Effective, responsive and responsible localgovernment empowers citizens and createsincentives for them to be more active socially,economically, and politically. Transparent,inclusive, and accountable structures of self-governance are key to more equitable distributionof public goods among all citizens, includingvarious groups that would otherwise bemarginalized – the elderly, the ethnic minorities,and poor. Current federal legislation governingchecks and balances as well as distribution ofresources and responsibilities among differentlevels of self-governance in Russia creates greatpotential for the promotion of effective selfgovernance, including rural self-governance.

The materials presented here demonstrate that tomake the promise of effective bottom-up self-governance a reality, an effort needs to be madeto activate the legislated channels of bottom upaccountability. The pilot «Local Self-Governanceand Civic Engagement in Rural Russia» funded bythe Japanese Social Development Fund, makesone step towards activating the newdecentralization framework, helping jump starteffective and accountable self-governance in ruralareas.

5

The experience presented here demonstrates thatRussian villages are ready to become moreresponsible for their economic, social, andpolitical lives. The level of education in rural Russiais very high. The weakness of formal governancestructures is associated with traditionally lowlevels of fiscal and financial mandates of ruraladministrations and the leading role of collectivefarms in providing both economic opportunitiesand social services, and not with the systemic deficiencies of Russian rural leadership. Informally,traditions of self-organization are very strong inmany villages of the Russian Federation. Theproject demonstrated that if the introduction offormal local governance at the settlement level iscombined with adequate training of localadministrations and local residents in participatorybudgeting and other forms of mobilization andmonitoring the use of public resources, greatenergy of effective local governance is releasedand the services provided are better matched withthe needs of the population. In the future, if fiscalrevenue sources are aligned with the assignedmandates, if incentives to encourage the effectiveand efficient use of public resources and effectiveand equitable provision of public services are builtinto the provincial and federal system of transfers,and if all these conditions are maintained in themedium to long term, Russia will succeed inactivating one of its important and thus farunderutilized resources – the social energy of itsrural population in controlling and improving itsown life.

Since 1992, when Russia joined the World BankGroup, the World Bank has been providingresources to help Russia achieve sustainedeconomic growth, improve social services, andcreate a conducive environment for private sectordevelopment. In post-socialist societies in Europeand Central Asia, decentralization and civicengagement are still at an early stage ofdevelopment in comparison to other industrialcountries. The World Bank has assisted thegovernments of many transition countries inimplementing effective and inclusivedecentralization and rural development reforms.The World Bank would be privileged to be able tocontinue advising and assisting the RussianGovernment in this work.

Kristalina GeorgievaCountry Director for RussiaWorld Bank

Forewords

6

7

In January 2006 local self-governance bodies inmore than 20,000 rural settlements across Russiastarted to work according to the provisions ofFederal Law no. 131 – «On the Principles of LocalSelf-Governance in the Russian Federation». Thepast year has revealed the strong points of thepreparatory work done and also revealed anumber of problems that need to be solvedaccordingly at municipal, regional, and federallevels.

The rural settlements that took part in the WorldBank project «Local Self-Governance and CivicEngagement in Rural Russia» were better preparedfor the first year of reform. A great deal ofconsulting, informational, legal and technicalassistance rendered to these settlements withinthe project helped to make up for the lack ofexperience, skills and traditions necessary to dealwith relevant issues independently at the mostlocalized level.

The Rural Municipal Consultants (RMCs) trainedduring the project helped the heads andinhabitants of rural settlements to identify theproblems of rural communities and develop actionplans to solve these problems, and engaged localbusiness, NGOs and resident groups inimplementing these plans. Other importantaspects of the project included legal assistance informing the normative legal basis for ruralmunicipality activities in the new legal frameworkand engaging citizens in municipal development.

Monitoring research into funding of basicmunicipal services – healthcare, education,culture, territory improvement – and comparativeanalysis of local community leaders’ andinhabitants’ opinions about the priorities of ruraldevelopment and local self-governance reform ingeneral brought significant results.

Recommendations were developed based on theresults of the monitoring. The locality card of ruralsettlements, giving a complete picture of themunicipal economy, may be used as a basis fordevelopment plans of rural municipalities.

The techniques and practices developed andtested within the project deserve to be highly ratedand widely used in the regions interested insustainable development of rural municipalities.

Vitali ShipovState Secretary, Deputy Minister,Ministry of Regional Development of the Russian Federation

Forewords

Setting up conditions for the development of civicsociety institutions is an important task of the stateassigned to form the legal and institutionalframework for their activity and promote the bestworking practices and mechanisms. The project ofthe World Bank «Local Self-Governance and CivicEngagement in Rural Russia» contributed a lot tosolving this problem.

Within the project, mechanisms of development ofrural settlements based on the opportunitiesprovided by the local self-governance reform weretested and monitoring tools developed, whichenable the results of reform to be efficientlytracked and at the same time a database on theactivity of rural municipalities to be created.

The project promoted perfection of budgetplanning mechanisms and offered an efficientformat for budget hearings. A new mechanism ofdevelopment planning for rural settlements basedon service improvement action plans, monitoringof municipal services and provision of wide civicparticipation and responsiveness of public opinionwas developed within the project.

Besides, the project promoted the activation oflocal resources, access to information for thepopulation and civic participation in solving ruralproblems and also dissemination of LocalCommunity Foundation practices in rural areas.

The project highlighted a lot of problems the ruralmunicipalities faced in the first year of local self-governance reform according to Federal Law no. 131 – «On Principles of Local Self-Governancein the Russian Federation». The problems included:lack of mechanisms of civic engagement,underdeveloped normative legal basis formunicipalities at the settlement level,disproportional funding to solve locally importantproblems, lack of information at the local level,and weak technical and human resources capacityin rural municipalities.

The mechanisms of problem-solving for ruralsettlements developed and tested within theproject may be used by all interested regions. Oneshould mention the institution of Rural MunicipalConsultants who effectively promote thecooperation of local authorities, community andrepresentatives of local business.

Generally speaking, the effective development oftrilateral cooperation between executive bodies ofregions of the Russian Federation and localgovernment, business and civil society hasbecome one of the prerequisites for successfulsocial and economic development of towns,regions and rural settlements.

Andrei SharonovState Secretary, Deputy Minister of Trade andEconomic Development of the Russian Federation

Forewords

8

The project of the Word Bank, as well as itscollection of articles, have proved generallymultidisciplinary, combining the experiences offederal government to local reforms on the onehand and non-governmental scientific and publicactivities in local self-governance on the other. Theproject is also interdisciplinary, combiningeconomics, law, and sociology. Local budget andfunding of municipal services, activation of ruralcommunities through participation inimprovement and control of budget process,mobilization of internal social, economic, culturaland historic resources of rural communities aresome of the main project components aimed at finding directions for sustainable development,defining the long-term prospects for rural Russia.

Another positive feature of the project (in additionto its interdisciplinary nature) is a careful selectionof regions. The three selected regions representthree geographically and nationally different areasof European rural Russia. Adygeya Republic in theNorth Caucasus is the overpopulated agriculturalfertile South; Penza Region – the central Volgaregion; and Perm Region – the non-Black Earth(chernozem) region of the Ural Region. Theproject allowed the features of regional andinterregional local development of rural territoriesto be considered.

The main achievement of the project washighlighting the sustainable impulses and bottom-up signals from the local population in self-organization with the help of Rural MunicipalConsultants trained within the project, local MassMedia and rural community meetings.

It should be noted that the project materials donot demonstrate only successes in rural localdevelopment arising automatically from theintroduction of Federal Law 131. On the contrary,the results presented here objectively demonstratethe dramatic variety of difficulties andcontradictions in developing rural self-governanceunder the present circumstances: negativeconsequences of agricultural crises since the endof the Soviet Union, significant degradation ofRussian villages, and traditional Russian problemssuch as centralized bureaucracy and rural

residents’ social apathy. The project aimed to findways to overcome these historical long-term difficulties taking the local features of ruralterritories and personal features of ruralinhabitants into consideration. Development oflocal household economy, local entrepreneurship,support of civic initiatives of local communities forsocio-economic development (roads, communalservices), cultural/historical (museums, schools),and infrastructure improvements are just some ofthe most important aspects of life in ruralsettlements positively influenced by the project.

The project «Local Self-Governance and Civicengagement in Rural Russia» is up-to date andinternational, but that’s not all. Historic and multi-national features of local self-governance in Russiaappeared in the course of the project: the greattraditions of zemstva (local governmentassemblies at provincial and district levels createdin 1864) in Perm, unanimous self-organization in‘stanitsas’ and ‘auls’ of the North Caucasus, andunique features of local lore, history and economyin Penza.

We would like to express hope and wish that theproject results and ideas presented here willcontribute to local capacity building and findingnew directions of positive development for thevast territories of rural Russia.

Theodor Shanin,Professor, Manchester University, Rector, Moscow High School of Social andEconomic Sciences

Forewords

9

Introduction

A Comparative Institutional Framework for Responsive,Responsible, and Accountable Local Governance1

1The following is taken from chapter 1 of «Local Governance: Industrial Countries» (2006) edited by Anwar Shah. World Bank (pp.14-20, 35-7) with thekind permission of the author. See enclosed CD for the full text of Chapter 1.

Anwar Shah

A synthesis: Toward a frameworkfor responsive, responsible, andaccountable local governance

The dominant concern in this literature on politicalscience, economics, public administration, law,federalism, and New Institutional Economics isthat the incentives and accountability frameworkfaced by various orders of government is notconducive to a focus on service delivery that isconsistent with citizen preferences. As a result,corruption, waste, and inefficiencies permeatepublic governance. Top-down hierarchical controlsare ineffective; thus, there is little accountabilitybecause citizens are not empowered to holdgovernments accountable.

Fiscal federalism practices around the world arefocused on structures and processes, with littleregard for outputs and outcomes. These practicessupport top-down structures with preeminentfederal legislation. The central government is atthe apex, exercising direct control andmicromanaging the system. Hierarchical controlsexercised by various layers of government have an

internal rule-based focus with little concern fortheir mandates. Government competencies aredetermined on the basis of technical andadministrative capacity, with almost no regard forclient orientation, bottom-up accountability, andlowering of transaction costs for citizens. Variousorders of government indulge in uncooperativezero-sum games for control.

This tug of war leads to large swings in thebalance of powers. Shared rule is a source of muchconfusion and conflict, especially in federalsystems. Local governments are typicallyhandmaidens of states or provinces and givenstraitjacket mandates. They are given only limitedhome rule in their competencies. In short, localgovernments in this system of «federalism for thegovernments, by the governments, and of thegovernments» get crushed under a regime ofintrusive controls by higher levels of governments.Citizens also have limited voice and exit options.

The governance implications of such a system arequite obvious. Various orders of government sufferfrom agency problems associated with incompletecontracts and undefined property rights, as theassignment of taxing, spending, and regulatorypowers remains to be clarified — especially in areasof shared rule. Intergovernmental bargaining leads

10

2См. Andrews, Matthew, and Anwar Shah. 2005. «Citizen-Centered Governance: A New Approach to Public Sector Reform.» In Public ExpenditureAnalysis, ed. Anwar Shah, 153-182. Washington, DC: World Bank.

to high transaction costs for citizens. Universalismand pork-barrel politics result in a tragedy ofcommons, as various orders of governmentcompete to claim a higher share of common poolresources. Under this system of governance,citizens are treated as agents rather than asprincipals.

On how to turn this trend around and makegovernments responsive and accountable tocitizens, the dominant themes emphasized in theliterature are the subsidiarity principle, theprinciple of fiscal equivalency, the creation ofpublic value, results-based accountability, and theminimization of transaction costs for citizens, asdiscussed earlier. These themes are useful butshould be integrated into a broader framework ofcitizen-centered governance, to create anincentive environment in the public sector that iscompatible with a public sector focus on servicedelivery and bottom-up accountability. Suchintegration is expected to deal with thecommitment problem in various levels ofgovernment by empowering citizens and bylimiting their agents' ability to indulge inopportunistic behavior.

Citizen-centered local governance

Reforming the institutions of local governancerequires agreement on basic principles. Threebasic principles are advanced to initiate such adiscussion:

Responsive governance. This principle aimsfor governments to do the right things — thatis, to deliver services consistent with citizenpreferences.

Responsible governance. The governmentshould also do it right — that is, manage its fiscal resources prudently. It should earn thetrust of residents by working better andcosting less and by managing fiscal and socialrisks for the community. It should strive toimprove the quality and quantity of andaccess to public services. To do so, it needs tobenchmark its performance with the best-performing local government.

Accountable governance. A local governmentshould be accountable to its electorate. Itshould adhere to appropriate safeguards toensure that it serves the public interest withintegrity. Legal and institutional reforms maybe needed to enable local governments todeal with accountability between elections—reforms such as a citizen's charter and aprovision for recall of public officials.

A framework of local governance that embodiesthese principles is called citizen-centeredgovernance (see Andrews and Shah 2005). Thedistinguishing features of citizen-centeredgovernance are:

Citizen empowerment through a rights-basedapproach (direct democracy provisions,citizens' charter)

Bottom-up accountability for results

Evaluation of government performance as thefacilitator of a network of providers by citizensas governors, taxpayers, and consumers ofpublic services

The framework emphasizes reforms thatstrengthen the role of citizens as the principals andcreate incentives for government agents to complywith their mandates (see table 1.2).

The commitment problem may be mitigated bycreating citizen-centered local governance-byhaving direct democracy provisions, introducinggoverning for results in government operations,and reforming the structure of governance, thusshifting decision making closer to the people.Direct democracy provisions require referenda onmajor issues and large projects and citizens havingthe right to veto any legislation or governmentprogram. A governing for results frameworkrequires government accountability to citizens forits service delivery performance. Hence, citizenshave a charter defining their basic rights as well asrights of access to specific standards of publicservices. Output-based intergovernmentaltransfers strengthen compliance with suchstandards and strengthen accountability andcitizen empowerment (Shah 2006).

A Comparative Institutional Framework for Responsive, Responsible, and Accountable Local Governance

11

Implications for division of powerswithin nations: Role reversals forcentral and local governments

The framework described above has importantimplications for reforming the structure ofgovernment. Top-down mandates on localgovernance will need to be replaced by bottom-upcompacts. Furthermore, the role of localgovernment must be expanded to serve as acatalyst for the formulation, development, andoperation of a network of both governmentproviders and entities beyond government. Localgovernment's traditionally acknowledgedtechnical capacity becomes less relevant in thisframework. More important are its institutionalstrengths as a purchaser of services and as afacilitator of alliances, partnerships, associations,clubs, and networks for developing social capitaland improving social outcomes. Two distinctoptions are possible in this regard, and both implya pivotal role for local governments in theintergovernmental system. The options are (a)local government as the primary agent,subcontracting to local, state, and federal orcentral government authorities and engagingnetworks and entities beyond government, and(b) local, state, and national governments asindependent agents.

Option A: local governments as primary agents tocitizens.In this role, a local government serves as (a) apurchaser of local services, (b) a facilitator ofnetworks of government providers and entitiesbeyond government, and (c) a gatekeeper andoverseer of state and national governments for theshared rule or responsibilities delegated to them.This role represents a fundamental shift in thedivision of powers from higher to localgovernments. It has important constitutionalimplications. Residual functions would reside withlocal governments. State governments performintermunicipal services. The national governmentis assigned redistributive, security, foreignrelations, and interstate functions such asharmonization and consensus on a commonframework. The Swiss system bears close affinity tothis model.

Option B: various orders of government asindependent agents. An alternative framework for establishing thesupremacy of the principals is to clarify theresponsibilities and functions of various orders asindependent agents. This framework limits sharedrule. Finance follows function strictly, and fiscalarrangements are periodically reviewed for fine-tuning. Local governments enjoy home rule, withcomplete tax and expenditure autonomy. TheBrazilian fiscal constitution incorporates somefeatures of this model, albeit with significantdeviations.

Feasibility of options. Option A is well grounded inthe history of modern governments and is mostsuited for countries with no history of internal orexternal conflict in recent times. It is alreadypracticed in Switzerland. War, conquest, andsecurity concerns have led to a reversal of the rolesof various orders of governments and to areduction in local government functions in morerecent history. Globalization and the informationrevolution have already brought pressures formuch larger and stronger roles for localgovernments (see Shah 2001). Although amajority of governments have done sometinkering with their fiscal systems, the radicalchange recommended here is not in the cardsanywhere. This is because the unlikelihood ofovercoming path dependency – a tall order forexisting institutions and vested interests – makessuch reform infeasible. Under such circumstances,option B may be more workable, but here theclarity of responsibilities may not be politicallyfeasible. In general, there is unlikely to be politicalwill to undertake such bold reforms. Piecemealadaptation of this model will nevertheless beforced on most countries by the effects ofglobalization and by citizen empowerment,facilitated by the information revolution.


12

Responsive governance

Has subsidiarity andhome rule

Has direct democracyprovisions

Has budget prioritiesconsistent with citizens'preferences

Specifies and meetsstandards and access tolocal services

Improves socialoutcomes

Offers security of lifeand property

Offers shelter and foodfor all

Has clean air, safe water,and sanitation

Has a noise-free andpreserved environment

Offers ease of commuteand pothole-free roads

Has primary school at awalking distance

Has acceptable fire andambulance responsetimes

Has libraries andInternet access

Has park and recreationprograms and facilities

Accountable governance

Lets the sunshine in:

Local government bylaw on citizens' right to know

Budgetary proposals and annual performance reports postedon the Internet

All decisions, including the costs of concessions, posted onthe Internet

Value for money performance auditsby independent think-tanks

Open information and public assessment

Works to strengthen citizen voice and exit:

Citizens'charter

Service standards

Requirements for citizens' voice and choice

Sunshine rights

Sunset clauses on government programs

Equity- and output-based intergovernmental finance

Citizen-oriented performance (output) budgeting

Service delivery outputs and costs

Citizens' report card on service delivery performance

Budget, contracts, and performance reports defended atopen town hall meetings

All documents subjected to citizen-friendly requirements

Open processes for contract bids

Mandatory referenda on large projects

Steps taken so that at least 50% of eligible voters vote

Citizens' boards to provide scorecard and feedback on servicedelivery performance

Provisions for popular initiatives and recall of public officials

Bylaw on taxpayer rights

Public sector as a purchaser through performance contractsbut not necessarily a provider of services

Managerial flexibility, but accountability for results

No lifelong or rotating appointments

Task specialization

Budgetary allocation and output-based performancecontracts

Activity-based costing

Charges for capital use

Accrual accounting

Benchmarking with the best

General administration costs subjected to public scrutiny

Boundaries that balance benefits and costs of scale andscope economies, externalities, and decision making

Boundaries consistent with fiscal sustainability

Responsible governance

Follows due process:

The principle of ultra vires or general competence orcommunity governance

The procedure bylaw

Local master plans and budgets

Zoning bylaws and regulations

Funded mandates

Is fiscally prudent:

Operating budget in balance

Golden rule for borrowing

New capital projects that specify upkeep costs and howdebt is to be repaid

Conservative fiscal rules to ensure sustainable debt levels

Major capital projects that are subject to referenda

Maintenance of positive net worth

Commercially audited financial statements

Earns trust:

Professionalism and integrity of staff

Safeguards against malfeasance

Streamlined processes and e-governance

Complaints and feedback acted on

Honest and fair tax administration

Strict compliance with service standards

Citizen-friendly output budgets and service deliveryperformance reports

Participatory budgeting and planning

Works better and costs less:

All tasks subjected to alternative service delivery test—that is, competitive provision involving governmentproviders and entities beyond government

Financing that creates incentives for competition andinnovation

Comparative evaluation of service providers

Table 1.2

Key Elements of Citizen-Centered Governance


13

Some Conclusions about LocalGovernance in Industrial Countries

Historical evolution and the current practice oflocal governance are instructive in drawing lessonsfor reform of local governance, especially indeveloping countries. There is great diversity inpractice in local governance in industrial countries,but there are also some common strands. Thediversity is in the institutional arrangements,which have evolved incrementally over a longperiod. This evolution has resulted in diverse rolesfor local governments and diverse relations withcentral governments across countries. In Nordiccountries, local government serves as the primaryagent of the people, whereas in Australia, that roleis entrusted to state governments, and localgovernment has a minimal role in local affairs.

There is no uniform model for local governmentsize, structure, tiers, and functions across OECDcountries. There are nevertheless a number ofinteresting common features. First, most countriesrecognize that finance must follow function toensure that local governments are able to meettheir responsibilities efficiently and equitably.Second, home rule is considered critical to meetinglocal expectations and being responsive to localresidents. Therefore, local governments must havesignificant taxing, spending, and regulatoryautonomy, and they must have the ability to hire, fire, and set terms of reference for employeeswithout having to defer to higher levels ofgovernments. Only then can local governmentsinnovate in management by introducingperformance-based accountability and innovate inservice delivery by forging alternative servicedelivery arrangements through competitiveprovision, contracting, and outsourcing whereverdeemed appropriate. They can also facilitate abroader network of local governance and harnessthe energies of the whole community to fosterbetter social outcomes. Third and most important,accountability to local residents has been thefactor most critical to the success of localgovernance in industrial countries. Thisaccountability is strengthened through democraticchoice, participation, transparency, performancebudgeting, citizens' charters of rights, and variouslegal and financing provisions that support widervoice, choice, and exit options to residents.

We have presented a brief overview of theconceptual and institutional literature on local governance. A synthesis of the conceptualliterature suggests that the modern role of a localgovernment is to deal with market failures as wellas government failures. This role requires a localgovernment to operate as a purchaser of localservices, a facilitator of networks of governmentproviders and entities beyond government, and agatekeeper and overseer of state and nationalgovernments in areas of shared rule. Localgovernment also needs to play a mediator's roleamong various entities and networks to fostergreater synergy and harness the untappedenergies of the broader community for improvingthe quality of life of local residents. Globalizationand the information revolution are reinforcingthese conceptual perspectives on a catalytic rolefor local governments.

This view is also grounded in the history ofindustrial nations. Local government was theprimary form of government until wars andconquest led to the transfer of local governmentresponsibilities to central and regionalgovernments. This trend continued unabated untilglobalization and the information revolutionhighlighted the weaknesses of centralized rule forimproving the quality of life and social outcomes.The new vision of local governance (see table 1.6)presented here argues for a leadership role by localgovernments in a multicentered, multiorder, ormultilevel system. This view is critical to creatingand sustaining citizen-centered governance, inwhich citizens are the ultimate sovereigns andvarious levels of governments are there to serve asagents in the supply of public governance. Indeveloping countries, such citizen empowermentmay be the only way to reform public sectorgovernance when governments are eitherunwilling or unable to reform themselves.


14

20th century: Old view

Is based on residuality and local governments as wards of thestate

Is based on principle of ultra vires

Is focused on government

Is the agent of the central government

Is responsive and accountable to higher-level governments

Is the direct provider of local servicesIs focused on in-house provision

Is focused on secrecy

Has input controlsIs internally dependent

Is closed and slow

Has intolerance for risk

Depends on central directives

Is rules driven

Is bureaucratic and technocratic

Is coercive

Is fiscally irresponsible

Is exclusive with elite capture

Overcomes market failures

Is boxed in a centralized system

21st century: New View

Is based on subsidiarity and home rule

Is based on community governance

Is focused on citizen-centered local governance

Is the primary agent for the citizens and the leader and gatekeeper for shared rule

Is responsive and accountable to local voters; assumes leadership role in improvinglocal governanceIs the purchaser of local services

Is the facilitator of network mechanisms of local governance, coordinator ofgovernment providers and entities beyond government, mediator of conflicts, anddeveloper of social capital

Is focused on letting the sunshine in; practices transparent governance

Recognizes that results matterIs externally focused and competitive; is an ardent practitioner of an alternativeservice delivery framework

Is open, quick, and flexible

Is innovative; is a risk taker within limits

Is autonomous in taxing, spending, regulatory, and administrative decisions

Has managerial flexibility and accountability for results

Is participatory; works to strengthen citizen voice and exit options through directdemocracy provisions, citizens' charters, and performance budgeting

Is focused on earning trust, creating space for civic dialogue, serving the citizens,and improving social outcomes

Is fiscally prudent; works better and costs less

Is inclusive and participatory

Overcomes market and government failures

Is connected in a globalized and localized world

Table 1.6

Role of a Local Government under the New Vision of Local Governance


15

Lyubov Ovchintseva, Project Manager, CAF

The three-year project of the World Bank «LocalSelf-Governance and Civic Engagement in RuralRussia» was implemented with the financialsupport of the Japan Social Development Fund(JSDF) between June 2004 and April 2007.Initiated by the Ministry of Trade and EconomicDevelopment of the Russian Federation incoordination with the Ministry for RegionalDevelopment of the Russian Federation, theproject was implemented by the Russian branch ofCharities Aid Foundation, UK.

The project showed that despite the objective difficulties and the traditionally reserved attitudesof rural inhabitants towards innovation, active civicengagement in local self-governance, particularlyin budgeting and choosing and implementingdevelopment priorities is possible in any randomlychosen rural area. Rural inhabitants are trained tosuccessfully put into practice instruments of civilengagement, lightening the workload of ruraladministrations and promoting consolidation andsustainability of rural communities.

Project Goals and Objectives

The idea of this project emerged as a result of thedevelopment of a new framework law, definingthe conditions of local self-governance in Russia(no. 131 – «On General Principles of Local Self-Governance in the Russian Federation» passed onOctober, 6 2003). Implementation of the law,presupposing wider civic engagement in local self-governance even at discussion stages, representeda favorable opportunity to introduce mechanismsof civic engagement in budgeting and municipalitydevelopment planning. Rural municipalities wereselected as pilot areas for this project because ruralinhabitants suffer most from lack of informationand resources for real development of self-governance.

The goal of the project is to promote moreeffective and equitable socio-economicdevelopment in rural communities through theimprovement of formal local governance and civicengagement. The project will accomplish this bybuilding capacity among formal and informalcommunity leaders and by helping communities toincrease participation and empowerment throughcivic engagement.

Mechanisms providing effective self-governance

Civic Engagement: the Basis for Rural Development

16

The goal was achieved via the following specificobjectives:

Forming information and consultancynetworks to assist the pilot rural settlements;

Training the Rural Municipal Consultants(RMCs) in the pilot regions to provideongoing consultations on local governmentand community relations and on legal issues;

Activating communities and participatorybudgeting and development of serviceimprovement action plans (SIAPs);

Series of training seminars for RMCs, workinggroup members, heads and specialists of ruralmunicipal administrations on civicengagement, budgets of rural settlements,SIAPs, and legal issues;

Promoting exchange of information amongrural settlements;

Defining development priorities of ruralsettlements and developing SIAPs based onthese priorities;

Legal support of pilot municipalities: training,ongoing consultations, updating thenormative legal bases of rural municipalitiesaccording to new legislation requirements;

Analysis of financial resources in basicmunicipal services for rural population:education, healthcare, and territorialimprovements;

Development and testing of monitoringinstruments for rural self-governance bodies,

Supplying pilot municipalities with necessaryinformation and communicationtechnologies;

Establishment of Local CommunityFoundations or expanding the activities ofexisting regional foundations to rural areas.

The project used the following mechanisms – (a) anetwork of Rural Municipal Consultants (RMCs),who had gone through a special training and andwere tasked with mediating and informing aneffective interaction between the local authorities,population and business; (b) a network of LegalMunicipal Consultants who rendered legalassistance to administrations of municipalities andmembers of community (writing by-laws forsuccessful implementation of the law on local self-governance and other legal acts, providing for thedecentralization of resources and governance); (c)SIAPs for solving problems and mid-termplanning; (d) settlement locality cards as a tool forself-evaluation of municipalities and comparisonof the results achieved; (e) local communityfoundations that enhance the opportunities fordevelopment and engage all sectors of society.


17

As a result of the implementation of Federal LawNo. 131 of October, 6 2003 «On the GeneralPrinciples of Local Self-Governance in the RussianFederation», over 10,000 new rural settlementshave been established (about 40 percent of thepre-reform national total) – almost all of which arerural. By the end of 2006, the total number ofsuch settlements had reached almost 20,000.

The law introduced a two-level system of local self-governance in rural areas (districts andsettlements) and delegated a number ofresponsibilities from district to settlements. Thelegal acts that followed prolonged the transitionperiod up to 2009. However, many constituententities of the Russian Federation, includingAdygeya Republic, Penza and Perm Regions,decided not to put off the formation of local self-governance according to the new principles andintroduced the Federal Law No. 131 in full onJanuary, 1 2006.

According to the law, district and municipal levelsof local self government operate independently ofeach other and each municipality (atsettlement/district level) should have its ownbudget, and also the right to introduce, changeand cancel local taxes and duties.

According to the latest version of the Law no. 131 – «On General Principles of Local Self-Governance in the Russian Federation», local self-governance bodies of a settlement have 34responsibilities and local self-governance bodiesof a municipal district have 28 responsibilities.Settlement responsibilities include:

Organization of electricity, heat, gas andwater supply in the settlement, provision offuel to citizens;

Construction and maintenance of roads andbridges for common use within thesettlement boundaries;

Providing conditions for housing andassistance to provide housing for indigentcitizens;

Providing transport services for citizens in thesettlement;

Participating in prevention and elimination ofemergency situations in the settlement;

Providing initial fire safety measures in thesettlement;

Providing conditions for communicationservices, catering, trade and consumerservices for the citizens;

Providing library services to citizens,formation and maintenance of library funds inthe settlement;

Providing conditions for organization ofleisure and culture organizations’ services forthe citizens;

Maintenance, use and popularization ofcultural legacy objects of local significance onthe settlement territory;

Providing conditions for development of localtraditional amateur and folk arts;participating in preservation, renovation anddevelopment of folk arts in the settlement;

Providing conditions for development of masssports and physical training in the settlement;

Providing conditions for mass recreation andimprovement of mass recreation areas in thesettlement;

Organization of garbage collection in thesettlement;

Organization of improvements and plantingof greenery in the settlement territory,

Organization of street lighting;

Organization of funeral services andmaintenance of cemeteries;

Promoting development of rural production,providing conditions for small businessdevelopment, etc.

The responsibilities of municipal districts that influence rural settlements include the following:

Providing conditions for transport services tocitizens and transport connections amongthe settlements within the districtboundaries;

Organization of public order protection onthe municipal district territory;

Organization of primary, general basic,secondary (complete) general education

Organization of ambulance service, primarymedical assistance in out-patient, in-patientand hospital institutions;

Providing conditions for communicationservices, catering, trade and consumerservices for settlements within the districtboundaries;

Providing leisure organization and cultureservices for settlements within the district;

Leveling the budget incomes of settlementsin the municipal district, at the expense ofmunicipal district budget;

Providing conditions for rural productiondevelopment in the settlements, etc.

18


Project Territories

Three regions were selected to take part in theproject on a competitive basis according to WorldBank procedures: Perm Region, Penza Region andthe Republic of Adygeya. Cooperation agreementswere signed with these regions. This was followedby random selection of districts (three in Perm andPenza regions and two in Adygeya), andsettlements in each district in the same proportion.A total of 30 pilot municipalities were selected atthe level of rural settlements and districts. Pilotmunicipalities received information and consultingassistance within the project.

In addition, districts receiving only informationsupport were selected in the regions (semi-pilotdistricts). The number of such districts was equalto the number of pilot districts in the project.

Moscow

Adygeya Republic

Area: 7,6 k square kilometrePopulation: 450 k peopleincl. rural – 212,2 k people

Penza Region


Perm Region



19


20

Brief description of project Results

An information and consultation network wasformed within the project to support the pilotmunicipalities and strengthen the dialog betweensettlement administrations and their inhabitants.Consultants on social and legal issues wereselected on a competitive basis to work in eachpilot region. The consultants received specialtraining and were able to clarify complicated issueswith specialists from the Institute of UrbanEconomics, Center of Fiscal Policy, and The Centerfor Legal Support to Local Governance, Russia.Hence the project allowed for direct two-waycommunication between municipal consultantsand leading specialists in self-governance. Theopportunity to receive consultations at the highest(usually inaccessible) level really widened accessto information available to the pilot ruralmunicipalities and was one of the most importantinstruments introduced by the project.

The project design ensured that time and spaceisolation, the main constrains of rural territorialdevelopment, were minimized. To mitigate theseconstraints, the project provided the RMCs, LMCs,and rural settlement officials with necessaryinformation and communication technologies(computers, software, mobile telephones,payment for a year of internet and/or mobiletelephone connection). In addition, a feedbackpage on the IUE website was created, so that eachconsultant/settlement head/other participantcould post a question related to municipaldevelopment. A response to questions posted wasguaranteed within 2 weeks.

Two general forums and five training seminarswere held within the training framework of theproject. Consultants and also members of theproject working groups benefited from thistraining (for details on the training seminars seeCD and separate booklet).

Perm Region

Berezovsky districtBerezovskoye rural settlementSosnovskoye rural settlementPereborskoye rural settlement

Osinsky districtKrylovskoye rural settlementNovozalesnovskoye rural settlement

Okhansky districtAndreyevskoye rural settlementBelyayevskoye rural settlementTaborskoye rural settlement

Perm Region

Bardymsky districtIl’insky districtKishertsky district

Adygeya Republic

Maikopsky districtKrasnoulskoye rural settlementDakhovskoye rural settlement

Krasnogvardeisky districtSadovskoye rural settlementUlyapskoye rural settlementKhatukaiskoye rural settlement

Adygeya Republic

Teuchezhsky districtGhiaghinsky district

Penza Region

Narovchatsky districtSkanovsky village councilSurkinsky village councilVilyaysky village council

Penzensky districtVasilyevsky village councilZasechny village councilLeninsky village council

Nikolsky districtAkhmatovsky village council Nochkinsky village councilKerensky village council

Penza Region

Neverkinsky districtSerdobsky districtSosnovoborsky district

Pilot Rural Municipalities

Semi-Pilot Rural Municipalities


21

Working groups were established in all pilotsettlements of the project. They includedrepresentatives of all sectors of society in the pilotsettlements: representatives of civil society(women, youth, and veteran organizations), ruraldeputies elected for the first time according to thenew law 131, and settlement administrations.

Consultants and members of the working groupsheld five community meetings in one and a halfyears in each settlement. The attendance of themeetings was quite high – from 30 to 80participants. The meetings were held to definepriorities in development of the settlements thatwere then taken into account when SIAPs weredeveloped. As a rule, three development prioritieswere selected in each pilot rural settlement.

Service Improvement Action Plans (SIAPs) wereprepared by the working groups and discussed atcommunity meetings in each pilot settlement. TheSIAPs were based on the priorities defined by thecommunity. On the whole, working groupmembers included in the SIAP tasks related to therehabilitation of rural social infrastructure (forexample, road maintenance, street lighting, watersupply, support of cultural life in the settlement).The SIAP tasks were either accomplished usingcommunity resources, presented at the budgethearings to be included in budget expenses for thenext year, or in mid-term plans of settlementdevelopment.

The framework of legal assistance of the projectincluded analysis of the legal normative base ofpilot municipalities and development of a structureof model normative legal acts. Municipalitiesselected and passed model acts from a list ofrecommendations after revising them according tolocal needs. Over the period of the projectimplementation, the level of provision bynormative legal acts has more than doubled in thepilot municipalities. In the pilot areas, municipalheads and specialists received over 400 expertconsultations, while the local communities benefited from more than 700 consultations.

Locality cards of municipal districts and ruralsettlements were developed and tested within theproject to be an informative basis for evaluation andself-evaluation of local self-governance bodies inrural settlements. Locality cards were approved in all3 pilot regions.

Analysis of funding for municipal services ineducation, healthcare and territorial improvementswas carried out in the pilot districts of all threeproject regions. Recommendations on monitoringprovision of municipal services were developed.The research results were discussed atteleconferences with representatives of each pilotregion.

A system of monitoring project implementationwas developed, including results indicators.Monitoring research was carried out and adatabase was formed for further processing.

Local Community Foundations in the pilot regionsreceived methodological support. The Foundationsheld annual grant competitions, in which ruralinhabitants started to take part. Fundraisingtraining sessions were held for representatives ofthe pilot settlements, and then local NGOs tookpart in grant competitions and won funding tosolve local problems. For example, in PenzaRegion, a quarter of applications selected forfunding were submitted by rural communities.

Legal consultants in Perm Region held over 300consultations for the citizens of pilot settlementsof the project on issues concerning landlegislation, and application of property and civicrights.

A settlement locality card includes 243quantitative and 31 qualitative indicators, while adistrict locality card contained 337 quantitativeand 31 qualitative indicators. Locality cards wereapproved in Berezovsky district and Dubovskoyesettlement in Perm Region, Giaghinsky districtand Krasnoulskoye settlement of AdygeyaRepublic and in Akhmatovskoye settlement andNikolsky district of Penza Region.

In 2005-2006 over 200 rural projects weresubmitted for grant competitions in the pilotregions, and 40 of these projects won. The totalsum of funds distributed for implementation ofrural projects equaled 1, 761,000 rubles.

Prerequisites for dissemination of projectexperience:

Administrative support on regional anddistrict levels,

Exchange of information and experienceamong rural settlements within and beyond aregion,

Creating conditions for a dialog among allconcerned parties (local business, authorities,institutions of civil society) and governmentdepartments (economic, regional and ruraldevelopment).

One should note that the influence of the project ismuch wider than its direct results. In two pilotsettlements of the project (Andreyevka andBelyaevka, Okhansk district, Perm region) villageschools have submitted applications for thenational project on education launched in 2006.One of the project RMCs, an education specialistin the district administration, assisted the schoolsmake their 4-year development proposals for thenational project using her knowledge and newskills gained from the project training sessions andseminars. In Andreyevskoye settlement (PermRegion), a course on local self-governance hasbeen included as an option in the regionalcomponent of the curriculum. Vera Bolotova, headof the settlement, initiated regular local radioshows on self-governance. The World Banksupported a youth conference where youngcitizens of rural settlements exchanged theirexperience on participating in local self-governance and learned to develop projects andproduce grant applications to provide financialsupport for them. Heads of pilot settlementsexchanged their work experience, e.g.establishment of local associations, and also learntabout foreign practices of effective rural self-governance via study tours to Albania, Bulgaria,Bosnia-Herzegovina, Kirgizia, Ukraine, and others.

Detailed description of all project components isgiven in the materials below prepared by theproject consultants and also on the attached CD.


22

In Krasnoulskoye settlement (Maykopdistrict,Adygeya Republic) the citizens selectedwater supply system renovation, kindergartenrepairs and youth sports ground as theirpriorities.

The problem of renovating the water supplysystem fell under the category of territorialimprovements that the new law 131-FZ passedto settlements. This task was accomplished viacooperation between the settlementadministration, representatives of local smallbusinesses, and citizens. A scheme wasdeveloped to delegate the water supply service toa local enterprise focused on water supply systemrepairs. Three-sided agreements were drawn upbetween consumers, the municipality and theenterprise. As a result water supply was providedin six khutors of the settlement.

Kindergarten repairs were included in the districtprogram on developing pre-school education, asmunicipal services in education are legally theresponsibility of district authorities. The sportsground project was implemented by a youthNGO called «Blue Bird». A lot of work was doneby the schoolchildren themselves, and theyfound funds for the project by applying for andwinning a grant from the regional DevelopmentFoundation.

Sharon Cooley, UI consultant Sergey Nikiforov, IUE consultantNadezhda Sibatrova, IUE consultant

On January, 1 2006 the Federal Law No. 131 «OnGeneral Principles of Local Self-Governance in theRussian Federation» came into force in Russia. Thelaw introduced two kinds of municipalities, defined distribution of functions and authoritiesbetween federal authorities and local self-governance bodies. The legal acts that followedprolonged the transition period up to the year2009. However, a lot of constituent entities of theRussian Federation decided not to put offformation of local self-governance according tothe new principles and fully introduced the FederalLaw No. 131 on January, 1 2006.

According to the law, each municipality shouldhave its own budget. The budget should beformed, approved and implementedindependently by local self-governance bodies.The concept of Federal Law No. 131 presupposesthat local self-governance bodies shouldcooperate closely with local communities and beresponsive to public opinion in the process ofdecision-making. There are some considerablementality and cultural factors that are obstacles tothe introduction of local self-governance in ruralsettlements of Russia: the historic passivity of thepopulation, the absence of ways to really influencethe authorities, and the absence of procedures totake public opinion into account. The populationhas been for a long time excluded from theprocess of decision-making that directly influencestheir interests.

The project «Local Self-Governance and CivicEngagement in Rural Russia» aimed to: promotemore active local communities, enhance thequality of cooperation between local self-governance bodies and citizens, promote civicsociety development, provide the necessaryinstitutional conditions to implement Federal LawNo. 131 and, ultimately, to improve the quality ofcommunity life. In other words, the projectinvolved teaching local self-governance bodies tointeract effectively with community, formulatingprocedures of civic participation in defining anddiscussing local priority issues and ways to dealwith them and introduce the procedures inpractice for everyday use, make them a localtradition (custom, rule), and develop tools ofparticipatory problem-solving and control overlocal self-governance bodies.

Problems Revealed and ResultsAchieved

Initially, administrations of some rural settlementswere skeptical about the project ideas to widencivic engagement in local self-governance for thefollowing reasons:

Settlement budgets for the first year ofimplementation of the new law on local self-governance were formed by fiscal authoritiesof municipal districts, and the settlementgovernments were still restricted in theirresponsibilities regarding the budget processin 2006.

Heads of settlements were concerned thatthere would be no funding in the budget forthe priorities defined at community meetings.

Appeal to public discussion of local problemscould cause an illusion that there areadditional financial resources to deal withthese problems.

Introducing Bottom-up Governance in Rural Areas

«Where the project was carried out, ordinarycitizens of all settlements felt and believed in theirown abilities…»Lyudmila Trushnikova, RMC, Perm region


23

Citizens know little about the distribution ofresponsibilities between local self-government levels and could demandsettlement governments to solve problemsnot in their jurisdiction.

The community meetings could cause unfairdistribution of funds because the most activeand well organized groups of citizens wouldlobby their own interests to the prejudice ofthe settlement’s interests.

However, the methods of interaction with thecommunity proposed by the project experts led topublic consensus. 10 Rural Municipal Consultants(RMCs) were selected on a competitive basis.They were taught the basics of budgeting andgained practical experience of civic engagementactivity in local self-governance while working onthe project implementation.

Working groups, including representatives ofadministrations, municipal council deputies andcommunity members, were formed in the pilotrural settlements with the assistance ofinternational experts and local consultants. 6training sessions were held for the working groupson a wide range of issues of municipalgovernance. Such training itself leads to greaterinteraction between community andadministrations, enhancement of public activity,and civic engagement in service improvement.

According to the project objectives, fivecommunity meetings were held in each pilotsettlement. Levels of attendance and engagementin the proceedings were very high during themeetings.

In all 22 pilot settlements, SIAPs were developedthat helped or are helping to solve local priorityproblems and to improve the quality of municipalservices. The SIAPs aimed to solve a wide range ofproblems – from street lighting, garbagecollection, and road maintenance to support ofthe local youth groups’ initiatives. Many of theSIAPs have already been implemented.

Some RMCs (e.g. in Adygeya Republic) havealready been asked by heads of the settlementsthat didn’t take part in the project to do the samework on their territory. The project provoked greatinterest among heads of settlements. Projectsolutions and dissemination of project experienceto the other regions will promote local self-governance in rural settlements of Russia.


24

«People’s participation in the governance of theirhome territories can be much more active andproductive. Our project has expanded access toinformation, education and specialists, andexperts. This has given people equal rights withother citizens of today’s Russia». Maria Amelina, Senior Specialist in SocialDevelopment, World Bank

As a result of implementing SIAPs in the projectpilot settlements: 107 km of roads and 10 km ofwater pipeline were repaired; 6 water pumps and1 spring were renovated; 3 public recreationareas, 2 playgrounds and 1 market placeimproved; hundreds of trees planted and flowerbeds laid out; street lighting renovated in10 khutors and villages; tons of garbagecollected and removed; a beach organized forchildren on the bank of a pond; a rural sportsunion established; rural holiday traditionsrestored, and much more.

Project Mechanisms

The main project component consisted ofimproving municipal development by expandingcivic engagement in budgeting and municipalplanning and improvement of municipal services.This component was implemented by a group ofinternational consultants, including the UrbanInstitute, Washington DC, Institute of UrbanEconomics, Moscow and Urban ResearchInstitute, Albania (hereinafter – internationalexperts).

The international experts developed a synergeticapproach, including RMCs training, formation ofworking groups and involvement of a wide rangeof local activists in the project. The RMCs weretrained using an intensive learning system andconstant cooperation with the internationalconsultants. The working groups in thesettlements received ongoing assistance. Thegroups, in their turn, involved the wholepopulation of pilot settlements in the project.

«Within the project ordinary people in all thesettlements believed that they are able to changesome things, and started to take part incompetitions for social and cultural projects. Forexample, Taborskoye settlement did not win thegrant but now they have experience in preparinggrant applications. Belyaevka won a grant forleisure activities (they got 10 pairs of skis) andrenovation of public recreation areas.Andreyevska won a grant for professional trainingof tractor drivers – and this profession is veryimportant for any settlement»Extract from a report of Ludmila Trushnikova, anRMC

Community meetings

Seminars for working groupsWorking groups

RMCs

Picture 1

Interaction within the Project


25

«We found out during the seminars andcommunity meetings that both citizens andadministration are in fact ready and open fordialog. Moreover, they strive for this dialog» Оlga Strelets, IUE project coordinator, PenzaRegion

In order to achieve the project goals, the followingtasks were accomplished:

Preparing/training of RMCs,

Formulating and introducing into everydaypractice procedures for civic participation inthe discussion on local issues and ways to dealwith them,

Develop techniques to attract all the partiesconcerned to problem-solving in thesettlement and monitoring of local self-governance bodies.

The following actions were carried out in order toaccomplish these tasks:

A series of training seminars held forrepresentatives of communities andadministrations of the pilot rural settlementswhere the following issues were discussed:

Forms of public participation in local self-governance,

Success factors for community meetings,

Defining priorities of local communityusing priority criteria developed withcitizen participation,

Local participatory budgeting,Development and implementation ofSIAPs,

Principles of intergovernmental relations,

Principles of result-oriented governance asan effective mechanism for budgetplanning and implementation.

A series of meetings for the inhabitants ofpilot settlements to form skills of civicparticipation in prioritization of developmentand decision-making processes

SIAPs developed in the pilot settlements

Calculations to enable settlements toindependently estimate intergovernmentaltransfers.

«Rural municipal consultant – a new profession»

«Analyzing my work experience as an RMC, thefollowing positive points should be noted:…I acquired new knowledge and skills, and usedthem working in the rural settlements of thedistrict

...I understood that the knowledge I have isnecessary for those who live in rural areas, that itcan be used to encourage their interest not onlyto their settlement activities, but also to theactivities of the whole district

...I felt happy for the settlement inhabitants whenthey worked actively and some results wereachieved with joined efforts, especially when theresults led to significant positive changes

...Support of the district administration was animportant incentive for me, it was the mainfactor. It’s good to feel that the head of a ruralsettlement sees you as a partner.»(from L.B. Trushnikova’s (RMC) report)

«At once I developed a set of integration rules formyself.

1. I’m not a guest, but a citizen.

2. I’m not a teacher, but a partner

3. I’m a safe «bridge» between theauthorities and the people. We are going tolearn to respect each other.

4. I will use my knowledge and experienceto serve my settlement.

5. Learn, learn and learn.

Today, as I look back on my almost two-yearexperience in the project, I understand… I wasable to accomplish the most important task:Krasnoulskoye settlement has taken up theprinciple «YOU CAN’T SURVIVE IF YOU DON’TDEVELOP» and is going to use it from now on».(from Alexandra Viznyak’s report, RMC, Republicof Adygeya)


26

Theoretical and practical trainings for RMCsand their preparation for independent work inthe future

Nowadays there is a shortage in rural settlementsof people with skills in democratic governance,community interaction, organization ofcommunity meetings, and surveys of publicopinion, etc. For that reason, one of the projectideas was the training of RMCs who could serve asintermediaries between the population and localgovernments enhancing the effectiveness ofpopular participation in budgeting and otherformal governance processes as well as provideadvice on a range of fiscal and financial issues. TheRMCs were to creatively use the tools offered tothem during the trainings and other capacitybuilding activities. The RMCs were supposed to besufficiently trained by the end of the project towork independently as rural participationfacilitators/advisors on local governance issues.

Holding a series of training seminars for localcommunities and administrations of pilot ruralsettlements

The training seminars on each subject were heldby international experts in all pilot municipalities –districts and settlements. RMCs and members ofthe working groups of each settlement attendedthe seminars in the correspondent districts. Anaverage of 30-40 participants attended each ofthe trainings.

Civic engagement: series of rural communitymeetings

Federal Law No. 131 states that the draft localbudget should be discussed at public hearings.However, experience has shown that it’s notenough to hold budget hearings for even the mostactive citizens to be able to understand budgetplanning and report their needs to theadministration. A multi-stage procedure to findout public opinions on budget priorities wasintroduced in the pilot settlements. A communitymeeting was held at each stage. At the meetings,citizens were informed about the basics of localself-government, responsibilities of localauthorities, and budget structure. Project experts

and RMCs told rural residents how they canparticipate in decision-making and in choosing theways to achieve the priorities set. Following ageneral informative session, there was then apublic discussion of local problems.The working group prepared a final documentaccording to the results of the discussion andsubmitted it to the settlement administration. Theadministration took this report into account in itswork and kept citizens and the relevantrepresentative body informed of progress. Thefollowing community meetings were held withinthe project:

Community meeting 1. «Community VisioningFestival» on the prospects of local communitydevelopment and short-term tasks of thesettlement.

Community meeting 2. «You talked, We listened:Did we get it right?» Reaching consensus betweenthe administration and local activists on priorityissues for the settlement and directions of localadministration work.

Community meeting 3. Draft Budget 2006 PublicHearing.

Community meeting 4. Midterm review of theBudget 2006 and the Service Improvement ActionPlanning activity.

Community meeting 5. Kick-off meetings for FY2007 Budget Development.


27

«The project has expanded the «informationalhorizon» with computer equipment provided forRMCs as well as for the settlements, which usedto have just telephones and no resources topurchase anything else. Nowadays the head ofAndreyevskoye settlement exchanges e-mailswith Moscow and Bulgaria. All holidays arevideotaped in Taborskoye settlement, and inBelyayevka the equipment is used to fill in grantapplications and attract new funds for territorydevelopment» Extract from a report of Ludmila Trushnikova,RMC, Perm region

Service Improvement Action Plans

SIAPs are developed according to the principles ofresults-oriented management practices. Theseplans create a framework and define a course ofactions to improve the quality of a certainmunicipal service or to solve a particular localcommunity problem (e.g. territory cleaning, roadmaintenance, job creation, street lighting, etc.).Development of a SIAP presupposes:

Current situational analysis for the priorityproblem/service selected

Formulating clear and realistic objectives

Development of a strategy and an actionplan to achieve the objectives set (usingoptimal management practices and allresources available)

Monitoring of the service delivery orestimation of results achieved

Intergovernmental relations

Subsidies leveling budget incomes and transfers tosettlement budgets from higher-level budgets arethe most significant source of income for mostsettlements’ budgets. Under these conditions, it isimportant to understand how these subsidies aredistributed among settlements, the relativeimportance of various parameters, etc. Withoutknowing the principles of intergovernmentalrelations, local self-governance bodies will not feelconfident interacting with higher-level authoritiesand will not be able to forecast budget revenuesfrom intergovernmental transfers.

A seminar on the principles of intergovernmentalrelations, which presented in detail the provisionsof regional normative acts on intergovernmentalrelations, was held for the working groups ofsettlements and representatives of districtadministrations. Experts of the Institute of UrbanEconomics developed computer software that canforecast the amount of subsidies for settlements inmunicipal districts that provided the necessarystatistical data.

To sum up the project results, the followingshould be noted:

Heads of settlements that took part in the projectwere able to better understand their role as headsof municipalities, acquired useful knowledge andskills on interacting with the community, andlearned to find optimal comprehensive solutionsto local problems.

Working groups were formed in all pilotsettlements to take part in defining priorityproblems of the local community and discussingpossible solutions.

Social activity in solving local issues increased inthe pilot settlements, which helped to solve agreat deal of problems related to territorialdevelopment, organization of leisure time, andcultural activities for rural inhabitants.

Public hearings have become better organizedand more effective. All issues are discussed in amore constructive manner.

Mutual understanding between local self-government bodies and communities of the pilotrural settlements increased, resulting in higherquality of life. The SIAPs, aimed at solvingimportant community problems, confirmed forboth sides that joint cooperation between thelocal community and self-government can reallyimprove the life of local community. In 18months we were able to solve problems that hadbeen unsolvable for years, and active cooperationof local community and authorities was the key«secret of success.» Nadezhda Sibatrova, IUE project coordinator,Perm Region


28

The Settlement Is Our Home, andWe Are Its Owners

Krasnaya Ulka settlement, Adagheya Republic

«Since the very beginning of the project we havedreamed that if we can address the mostimportant issue – that is, helping the governmentand the citizens see the effectiveness of theircollaboration – then looking at the project’s resultswill definitely be a big community celebration.»Alexandra Viznyak, Rural Municipal Consultant,Krasnoulka settlement, Adygeya Republic

The crowd applauded as the head of the localadministration awarded prizes of 1,000 Russianrubles (about US$40) to households judged themost active in working to improve the quality oflife in the community. Citizens discussed the workachieved during the previous year toward thecreation of a reliable system of quality waterprovision. «From now on, we should take a moreactive role in the life we lead in our settlement,» anurse from the local outpatient clinic said.

This is how Alexandra Viznyak, the Rural MunicipalConsultant for Maikopsky Rayon, describes thescene at a community gathering in Krasnoulka, which recently held a festival to conclude acompetition called «The settlement is our home,and we are its owners» (Poselenye – nash dom, im’i hozyaeva v n’em). The competition was held bythe local administration in recognition of familieswho had set an example in maintaining theirhouseholds and had taken a role in improving thesettlement.

Other community members recognized at thefestival were those who had actively worked tomake progress in the priority areas that were identified by the settlement and had been subsequentlydeveloped into Service Improvement Action Plans(SIAP). The three main priorities in Krasnoulka for2006 were: the renovation of the water supplysystem, creation of a new sports recreation area,and street lighting improvements. Various membersof working groups focusing on these priorities wererecognized during the festival as the progress on theSIAPs was discussed, including a local volunteerelectrician working on street lighting and a citizenassisting the youth group «Blue Bird» to build therecreation area. More than 30 people receivedprizes and gifts.

Above all, it was a moment when the communitycould see how the efforts of citizens, the localadministration, and local groups such as the Councilof Business people could mutually reinforce eachother to bring about positive change. As Ms.Viznyak, a journalist by profession, later wrote inone of her articles: «Since the very beginning of theproject we have dreamed that if we can address themost important issue – that is, helping thegovernment and the citizens see the effectiveness oftheir collaboration – then looking at the project’sresults will definitely be a big communitycelebration.»

The Krasnoulky settlement continues to activelyaddress problems in their community. A local boardof trustees has been formed to consolidate andmanage non-budget resources (e.g. citizencontributions) to help address Krasnoulka’s futurepriorities

Project results case studies

The Youth Group «Blue Bird» was honored at a community meetingheld in Krasnoulka for their efforts in making a new sports recreationcenter a reality.


29

Keeping Novozalesnovsky Cleanand Beautiful

Novosalessnovskoe settlement, Perm

A number of garbage dumps had formed inunsanctioned areas throughout Novozalesnovsky.Some residents said they had difficulty hauling thegarbage generated by their household or farm tothe proper disposal site, while others admittedthat initially they did not think the trash piles werea problem.

Over time, however, a number of concerns beganto surface. Some worried that the dumps and theanimals that fed on them could become a sourceof infection. Others noted that trash heaps createdon or near pastures could potentially pose a threatto the health of the livestock and its owners. Someof the heaps attracted packs of stray dogs thatwould scavenge for food and at times becomeaggressive toward humans. Finally, the garbagedetracted from the overall appearance of thesettlement.

During the course of community gatheringsduring 2005 and 2006, the residents agreed: thetrash piles had to go. The community decided thatmaking progress in this area would become apriority for 2006 and a Service ImprovementAction Plan (SIAP) was developed using the skillsthe LG/C Working Group had acquired during theproject’s seminars.

The local administration conducted a surveyamong the local population to confirm to whatextent the garbage dumps were perceived as aproblem and to determine the demand for regulartrash removal services. All of the citizens involvedin the survey expressed their support for clearingthe unsanctioned dumping grounds andvolunteered their help. The survey also showedthat 70% of residents thought they could benefitfrom a regular trash removal service to haulgarbage from their homes.

Following the survey, the residents formed avolunteer group of more than 20 people to startthe process of clearing the unsanctioned garbagedumps. Local high schoolers and other citizensformed an «Ecological Assistance Team» tosupport the efforts. Of the five major dumpinggrounds that had formed throughout thesettlement, two have been cleared thus far.Moreover, arrangements have been made with alocal resident who owns a tractor and a cart tohaul garbage to the proper disposal site twice amonth, for which he will receive a monthlyremuneration of 700 rubles. An official landfill hasbeen created outside the settlement’s residentialterritory and community members were informedof its location.

To further improve the aesthetic appearance of thesettlement, flowerbeds were also planted withinthe scope of the SIAP.

Improving in Novozalessnovskoe.


30

Tapping into Community Resourcesfor Better Water

Vasilievsky settlement, Penza Region

«When the project first began, I have to admit thelocal administrations were a bit skeptical… I seenow that there were some real successes…most ofall, that the communities came together andactually accomplished what they had planned.» Gulnara Kumaleeva, Rural Municipal Consultant,Penzensky district, Penza region

In Vasilievsky, citizens and settlementadministration first came together for aCommunity Visioning Festival in the fall of 2005.They were introduced to the new Law on Local SelfGovernment, and began to discuss the role thatcivic participation could play in the local decision-making process. After a discussion of thesettlement problems, the community determinedthat the renovation of the water system was a keypriority requiring action. The local administrationtook this priority into account when puttingtogether the budget for 2006. A ServiceImprovement Action Plan (SIAP) was thendeveloped.

As part of the SIAP, the settlement planned torehabilitate 5 kilometers of the water pipeline in2006 (out of 9.5 km of pipeline that needsattention). As of November 2006, this goal hadalready been met. As a result, 240 householdsnow have reliable access to clean drinking water.While some financial resources were included forthis project in the local budget, the householdsreceiving the service came together and decided toput forward their own contributions to purchasethe pipeline and conduct the necessary renovationworks. After the works were completed, therewere no funds remaining to level the road surfacethat had been dug up for the project. A privatecitizen, one of the members of the SIAP workinggroup who had access to such equipment, offeredhis help, and he and members of the communitywere able to return the road to proper conditionover the course of one weekend.

The RMC noted that in Vasilievsky in particularthere had been limited enthusiasm fromcommunity members and leaders at the start. Theypointed out that the resources in their budgetwere very limited, worried that «nothing wouldwork,» and cited greater concerns such as highunemployment that could not be easily resolvedthrough civic engagement or participatoryprocesses. While their concerns were founded onreal issues in the settlement, over the course of thepast year they have been able to improve thequality of life despite all the constraints.

In addition to work on the water system, thesettlement was also able to create a puppettheater club. Using the skills acquired in partduring the seminars and training of this project,the local administration competed in a smallgrants competition organized by the «Civic Union»Fund and won funding to purchase puppets forthe children’s puppet theater.

Vera Zadorozhnaya, Head of Vasilievsky Settlement, points toward theroad where the water pipeline renovations took place.


31

Energizing the Community ThroughCelebration

Belyaevska settlement, Perm Region

Although Belyaevka has a rich history ofcelebrating traditional settlement holidays, it hasbeen ten years since its residents have cometogether for such an occasion. At the firstCommunity Meeting held in 2005, the citizensand the local administration agreed that morecultural events would help unify the settlement,raise morale, and provide an additional source ofrecreation and entertainment. To this end, thecommunity decided to make the revival oftraditional settlement holidays a local priority for2006.

A working group – composed of members of theadministration and community members such as ahospital doctor, a physical trainer, and a teacher ofmusic – was formed to lead the development of aService Improvement Action Plan (SIAP). Thegroup applied knowledge acquired during theproject’s trainings to collect information for asituation analysis, set objectives for improvement,develop performance indicators, and determine aplan of action.

Despite the fact that little financing was availablein the local budget for this priority area, thesettlement proceeded with its plan and carried outmany of its planned activities. For example, inMarch 2006 during a festival called «GoodbyeWinter, Dear Winter!» residents came together tocelebrate the conclusion of winter and holdamateur competitions and relay races relating towinter sports. The festival was financed primarilyby local businesses and was covered in the rayonnewspaper, Okhanskaya Storona.

In June, Belyaevka held a festival called «RuralSettlement Day,» which recognized all of thecommunity members through activities rangingfrom a tricycle race for the children to a ceremonyto honor the village elderly with certificates andgifts. The holiday was held with the support oflocal businesses, many of whom were happy tosponsor the event, which was so well-received bythe settlement residents.

In August, the settlement held a «Competition andExhibition of Flowers, Fruits, and Vegetables.»According to the SIAP action plan, two moreevents are planned during 2006: «Play on,Harmonica!» to award the best harmonica playersin Belyaevka; and a celebration of the 35thAnniversary of the Arts Center.

Over the course of the year, these holidaysbrought together members of every age group toparticipate in the planning and implementation ofthe events as well as the actual festivities. Despitethe financial constraints, the settlement was ableto hold a number of public festivals that energizedthe community for collective action andrecognized its citizens for their involvement.

Participants of the «Competition and Exhibition of Flowers, Fruits, and Vegetables» receive awards.


32

Creating Harmony: EnhancingCitizens’ Access to Information

Andreyevka settlement, Okhansk district, Permregion

«As we implemented the plan, we understood thatit is important to set a concrete goal and work toreach it with everyone’s involvement. Civicengagement comes to life when citizens realizethat their voices have been heard.»Nadezhda Babushkina, Director, MunicipalInformation Center «Harmony»

In Andreyevka approximately one-third of thehouseholds raise poultry, a key farming activityand source of income. This made the news reportsin the summer of 2005 when Russia reported its first outbreaks of highly pathogenic avian influenza during, the disease that had at firstaffected southeast Asia hit a bit closer to home.

At the community gatherings held in 2005, thecommunity decided that avian flu deserved theirattention. The outbreak earlier that year in Siberiawas attributed to contact between domestic birdsand wild waterfowl, and the settlement waspotentially at risk due to waterfowl populationsnesting in proximity to the seven ponds and fiverivers on the settlement’s territory.

The first step to disease prevention is awareness,so Andreyevka decided to ensure access toinformation on avian flu and made thedissemination of information about the disease apriority direction for 2006. The LocalGovernment/community Working Group (LG/C)developed a Service Improvement Action Plan(SIAP) to identify outcomes and an action plan.

In recent years, few residents have had regularaccess to newspapers, magazines, and radio.Given the lack of reliable sources of information,one key action taken was the creation of acommunity information center, «Harmony.» TheLG/C group created the center in the villagelibrary, an accessible location for all villagers.

In 2006, employees of «Harmony,» assisted bylocal students, undertook activities to educate thepublic about avian flu. During the summer of2006, they produced flyers, set up exhibit booths,and handed out pamphlets. They also prepared askit and made field visits to neighboringsettlements to educate them about the risksassociated with avian flu. A unit on avian flu wasadded to the curriculum at the local school. Toapply their knowledge on avian flu prevention,residents vaccinated all the fowl in the settlementagainst the virus.

While «Harmony» at first focused on avian flu, itnow serves as a resource for other communityissues, such as serving in the armed forces andlaws affecting the settlement. SIAP performanceindicators will allow for monitoring of the impactHarmony has on a variety of issues such ascitizens’ satisfaction with information about thelocal government.

The information center «Harmony», established in Andreyevkasettlement.


33

Larisa Avrorina,Program Director, CAF Russia

Stimulating civic activity in developing andimplementing social programs and social servicesin rural areas was one of the most importantobjectives for the Project «Local Self-Governanceand Civic Engagement in Rural Russia.» Theincrease in civic activity was expected to beaccompanied by additional, non-budgetresources.

The model of Local Community Foundations (LCF)proved to be an effective tool in attractinginvestments to the social sphere and developingcommunity social activity. This model is developedand supported by CAF Russia in different regionsof Russia.

The basic function of a local communityfoundation is to join the efforts of all societysectors (authorities, business and NGOs) in orderto solve local problems. The concept of localcommunity foundations was brought to Russia inthe early 1990s, when there was no sterlingindependent third sector, or sector of NGOs, andthe public attitude to foundations and non-profitorganizations was rather negative. Under thesecircumstances, creating fundamentally neworganizations that call to join resources of societyto solve local problems, and, what is more, arebased on untouchable capital, seemed utopianand absolutely alien to Russian ideology.

An LCF accumulates local resources and attractsexternal ones to solve the problems of localcommunity and distributes the accumulated fundsthrough competitions. Regular competitionsenable local problems to be solved efficiently. Onehas to be able to develop a project in order toapply for a competition. That’s why Foundationsalso accomplish an educational task – teachingpeople effectively to use new approaches to solvelocal problems, to proceed from an idea to aproject, to share the experience gained.

An LCF works according to the principles ofcollective leadership and accessibility, transparencyand efficient distribution of resources. With thestatus of a non-profit organization, an LCF can usethe local resources, and also attract internationalgrants.

Participation of business in LCF activity andaccumulation of funds shows the trust to theFoundation and confidence in the effectivenessand urgency of the projects the Foundationsupports. The presence and support of an LCF as apermanent institution allow representatives oflocal business to participate in the process ofsolving community problems.

But the most important fact is that an LCF offers apractical mechanism for the interaction ofauthorities, business and NGOs. There are rulesand approaches, procedures and systems ofdecision-making, responsibility of the parties andreporting to the community. Hence LCFs arebecoming more widely spread across Russia notonly as an institution of philanthropy and civicengagement.

Local Community Foundations – Tools to increase CivicActivity


34

Background and Opportunities forEstablishing LCFs in Rural Areas

CAF used the model of local communityfoundation, traditionally applied to towncommunities, for rural areas for the first timewithin the project «Local Self-Governance andCivic Engagement in Rural Russia». Of course, theproject didn’t have the objective to fully transfer(adapt?) this model to rural areas, but particulartraits and parameters, characteristics andapproaches to creating a local foundation wereused.

Previous CAF experience of working with projectsfrom «remote places»2 and rural areas within theframework of other programs helped to define thefeatures, priorities and directions of rural projects.

Three LCF models in project regions

After a competitive selection, the project includedPenza Region, Adygeya Republic and Perm Region.When territories were selected for the Project, oneof the criteria used was the presence of afoundation or, at least, an enabling environment toestablish one.

Each of the three regions selected for the Projecthad formed its own approaches to work in ruralareas, but none of them had developed a specialapproach for rural inhabitants. However, therewere certain conditions and prerequisites to createsuch foundations.

The Resource Center «Assistance» («Sodeistviye»)worked successfully in Adygeya Republic. Itaccumulated municipal and business income anddistributed funds on a competitive basis, mainly intowns. A Resource Center (RC) is basicallyanalogous to that of an LCF, nevertheless arepublican foundation oriented towards rural areaswas established and registered here within theproject. In 2005-2006, four grant competitionswere held which attracted 37 applications,including 10 from rural areas. Six winningapplications got a total of 190,000 rubles andeach of the projects had an average of 100 beneficiaries. The regional Foundation «CivicUnion» («Grazhdansky Soyuz») in Penza region

expanded its grant competition programs to ruraldistricts and held trainings on competitionprocedures for rural NGOs and employees of ruraladministrations within the project lifeline. 4competitions were held in 2005-2006: 94 grantapplications were submitted, of which 28 werefrom rural territories (7 rural applications wongrants). The total funding for rural projects was300,000 rubles, with about 100 beneficiaries perproject.

A specialized rural foundation, implementing allkinds of activity and having all the necessary LCFcharacteristics, was established in Perm Region viaa CAF grant in 2005. The Foundation hasaccumulated considerable resources, holds grantcompetitions and is strictly oriented towards ruraldevelopment. It has proven to be an influentialorganization having enough experience inimplementing interesting projects and promotingcitizen activation in rural areas of Perm Region. In2005-2006, the Foundation held two inter-territorial competitions for applicants only fromrural districts. 86 projects were presented in 2005,of which 18 were awarded a total of 830,000rubles. There were 88 projects in 2006 and 9were financed with a total grant amount of441,000 rubles. On average, there were 25 beneficiaries in each project.

The three foundations dealt with similar tasks:

support the promotion of social collaborationof citizens, institutions and publicorganizations in the social and economicdevelopment of rural municipaIities

unite the efforts of all social sectors in order todeal with local problems

accumulate local resources and use them tosatisfy local community needs on acompetitive basis

teach the basics of project culture to non-profit organizations

define the range of social services demandedby different groups of population

1 CAF Russia program «YUKOS Competition of Social Projects» worked in 9 rural districts


35

The basic tasks of CAF in the project were tocontribute to:

stability of the foundations through assistancein attracting additional financial resources(participation in CAF grant programs,consulting and information on otherfundraising opportunities),

promotion of new foundations (Perm andAdygeya) to the LCF partnership,

increase of recognition of the foundations inthe Project regions and throughout Russia,

additional training and raising the level ofemployees’ skills,

promotion of the foundations internationallyvia conferences and study tours abroad.

Each of the three regional LCF models promotedactivation and engagement of the community inlocal problem-solving, development of newservices and improvement of the quality of life.

Each foundation uses its own fundraisingmethods, each has its own opportunities and difficulties, and each has its own vision of thefoundation’s role in the particular region. Thedissemination of rural community foundations inother regions depends on the presence of a leaderwho is able to attract people and make theminterested in the idea of a foundation. The positivefactors here are the presence of a similarfoundation or a large resource center of civicinitiatives in neighboring territories and also thesupport of the foundation initiative by localgovernment.

The activity of foundations, established andsupported within the Project, shows the existingopportunities for creating a new structure. Thegrant and training programs help to achieve widergoals. The community is activated, and engagedto solve the local problems, and also trainedeffectively to learn about the new approaches.Rural inhabitants are motivated by the principle«not worse that the neighbor». And this principleis a good stimulus for changes in rural areas.

Nina Samarina, Director of «Sodeystviye»(Assistance) Foundation, Perm:

«Where there is some initiative, questions alwaysarise: What to do next? How to develop? Where tolook for resources? How can we influence thechoice of priorities in solving the numerousproblems of rural inhabitants?» Most of thesequestions can be answered if we develop the thirdsector, and establish public organizations andunions, non-profit organizations and LocalCommunity Foundations».

When an LCF is created, all prerequisites – bothobjective and subjective – existing on a particulararea should be taken into account. Suchprerequisites include the level of social andeconomic development of a rural settlement, thepresence of large business structures, enterprisesand organizations, directions of activity anddevelopment of business community on the giventerritory, civic initiatives and activity, localcommunity leaders, trusted and respected by allmembers of the community. Experience shows thatestablishment of an LCF as a form of co-operationrequires long-term effort and a great deal of workwith the population.

The main function of an LCF is to provide financialsupport to social projects on its territory, thus thesuccess of a foundation depends on its ability toattract and manage funds.

A Foundation attracts funding from all availablesources. Its reputation depends on how successfulits fundraising activities are. A precise plan shouldbe developed to form the consolidated budget of afoundation, all possible sources of funds, possibleand potential sponsors – the future friends of yourorganization – should be described. Philanthropicactions may be used along with volunteerassistance, charity exhibition-sales, charity dinnersand balls, auctions, concerts, other mass events,donations at work or «from house to house»,charity phone, donation money-boxes, etc.


36

M.A. Yakutova, PhD, Director, Center for Legal Support to LocalGovernment, Moscow

The attempts to consolidate local self-governance,to replace the current survival philosophy in thelocal communities by a development philosophy,and to activate participation of citizens in solvinglocally important problems are constantly opposedby the citizens’ lack of faith in their own power,lack of knowledge about their rights andopportunities, and general distrust in the staterepresented by numerous officials. There may bedifferent ways to deal with these problems, but itis obvious that such a project can not be effectivewithout a legal component: careful research intofederal and regional legislation on local self-governance, developing the ability to use thesestandards efficiently, perfection of skills and waysof municipal law-making, and development oflegal methods to resolve conflicts on the locallevel.

The goal of the legal component within the projectwas to eliminate the legal vacuum in the pilotterritories by doing the following tasks:

1. Assistance to local self-governance bodies ofthe pilot settlements and districts in preparingand passing normative and legal actsnecessary for the implementation of local self-governance reform.

2. Providing regular legal advice for local self-governance bodies and officials of local self-governance in pilot municipalities.

3. Offering legal assistance to pilot constituententities of the Russian Federation inimplementing local self-governance reform.

4. Interaction with municipal consultants onsocial and economic issues related to the localdevelopment action plans.

5. Providing advice to inhabitants of pilotsettlements on any legal issues.

In order to accomplish the tasks set within theProject efficiently, a network of consultants onlegal issues was created. Lawyers were selected ona competitive basis to work in each pilot region ofthe Project. The criteria for selection used alongwith the general ones (age, education, workexperience) included work experience in federal ormunicipal governance bodies, previous projectwork, practical psychology knowledge, etc.

It was found that there was a critical staff shortagein rural areas. It might seem that a legal educationis one of the most popular degrees today but infact there are very few people with a higher legaleducation, even in towns that are district centers.To make the selected lawyers able to accomplishthe tasks set for them by the Project, a number ofadditional training events was held, and thelawyers’ work was carefully monitored.

Besides, Marina Yakutova and Savva Shipov,experts of the Project, visited the pilot districts tohold working meetings and consultations oncurrent issues of local self-governance reform. Themeetings were attended by heads and deputyheads of pilot districts and settlements,representatives of regional administrations,municipal consultants and regional lawyers.Information on new normative and legal actspassed by Federal Authorities associated with theorganization and implementation of local self-governance in the Russian Federation, analyticalmaterials on the effectiveness of theaforementioned acts, and recommendations ontheir application were forwarded to regionallawyers by CLS LG every month.

Passing the new edition of the Federal Law «OnGeneral Principles of Local Self-Governance in theRussian Federation» significantly systematized thesphere of social relations subject to legalregulation at the municipal level. CLS LG analyzedthe regulatory authorities of local self-governancebodies of municipalities according to old and newlegislation. The results of the analysis wererepresented in a comparative table of regulatoryauthorities, visualizing the changes that have to be

Legal Support for Rural Municipalities and TheirCommunities


37

made in the system of municipal normative legalacts. Before the Project, only 30 to 40% of thenormative and legal basis was formed in the pilotdistrict and rural settlements. In a number of ruralsettlements the legal and normative basis was notdeveloped at all.

Two systems of normative legal acts («Trees»)were developed by the Center, which regulatedsocial relations associated with the responsibilitiesof municipal districts and rural settlements. Overthe period of project implementation, thenormative legal basis of pilot municipal districtsand rural settlements was significantly improvedand the model structure of normative legal acts formunicipalities developed by CLS LG andmethodological recommendations of the Centerplayed an important part in the process. Themodel By-law of a rural settlement, developed bythe experts of the Center, was adopted by somepilot settlements (e.g. Krasnaya Ulka Village,Adygeya Republic).

As a result of implementing the legal component,the normative and legal bases of local self-governance bodies in pilot municipalities wereconsiderably improved. The legal basis ofmunicipalities in Penza was improved, and in thenewly-formed municipalities of Perm Region andAdygeya Republic the normative and legal basesof local self-governance were practically createdfrom nothing. Having the «Tree» in front of them,municipal deputies and employees will be able tocontinue planned and sensible work to developand pass new normative legal acts after theproject’s end.

The practicability of legal advice to heads of ruralmunicipalities and deputies of representativebodies of local self-governance by externalconsultants is obvious. It promotes legal literacy oflocal self-government officials, including electedofficials and, consequently, leads to greater efficiency of local self-governance bodies insolving locally-important problems. In the year ofproject implementation, consultants provided legaladvice to 370 municipal employees and over 700inhabitants of pilot municipalities.

The results obtained during the implementation ofthe project «Local Self-Governance and CivicEngagement in Rural Russia» allow some generalconclusions and recommendations onimplementation of LSG reform in rural areas to bemade.

The project showed that in the constituent entitiesof the Russian Federation one still counts first of allon municipal districts, not on settlements and theinteraction with local self-governance is exercisedthrough municipal districts, which does not let theState Authorities react in time to the needs of ruralsettlements, distorts the real situation and limitsthe equality of rights for municipalities. Transitionof authorities in budget income leveling to localself-governance bodies of municipal districts leadsto these authorities being used to subordinatesettlement officials to district officials with the lackof legal and fiscal regulations from the constituententities of the Russian Federation.

The issue of staffing for municipal institutions isextremely acute in rural settlements. New, high-quality and systematic educational programs needto be developed, and conditions need to becreated to retain young specialists in rural areas:training for municipal employees has to be fundedby the state.

The requirements for qualifications of officials incharge of forming and executing the settlementbudget established by the Government of theRussian Federation do not permit substituting jobsin finance because of a lack of qualified staff. Suchrigid requirements are not justified for ruralsettlements, as the budget of a rural settlementoften varies from several thousand to severalhundred thousand rubles per year.

Serious negative consequences are caused by theabsence of proper information to local self-governance bodies of rural settlements. Access tolegal base is made difficult, methodologicalmaterials are rarely received or are not received atall. One of the ways to improve quality ofmunicipal governance is to provide local self-governance bodies of the settlements with newmethodogical materials and information.

«Overall, providing free legal consultations is areal windfall of the project. People with limitedmaterial resources are happy to have access tospecialist advice.»Yulia Mashtakova, municipal lawyer, Nikolskidistrict, Penza region


38

The Registry of Expenditure Obligations as a codeof municipal legal acts, establishing expenditureobligations, allows for high quality municipalgovernance and correspondence between localself-government activities and its competencies.Formation of the Registry of ExpenditureObligations is the most important task of thepresent period of implementation of local self-governance and administration reform.

It is necessary to introduce obligatory record-keeping of expenses for maintenance of municipalproperty objects, renovation and construction ofnew infrastructure. Local self-governance bodiescannot and do not have to be responsible for thefact that settlement infrastructure, needed to solvelocal problems, has been underfinanced for manyyears by the federal government.

Inter-municipal cooperation should be organizedbut not only and not so much in creatingeconomic entities, as in exercising a number offunctions requiring specialist knowledge, but notfull-time work. In this case, it is reasonable to useone specialist for several settlements with shared financing. It obviously makes sense to think ofcreating an intergovernmental body that couldtake up a number of executive functions (exceptauthoritative ones). It is extraordinary importantto elaborate mechanisms for coordination ofactivity and agreement of interests between thestate authorities and local self-government ofsettlements in dealing with issues of territorydevelopment and protection of citizens’ rights,and also within national priority projects in thesocial sphere.

It is necessary to develop legal procedures foragreement of viewpoints and conflict resolutionbetween state authorities and local self-governance bodies.

And finally, only wide civic engagement in solvingthe locally important problems, results-orientedservice provision by local-self-governance bodies,strict observation of legal provisions to reach andpreserve balance between state and local interestswill form a solid basis for civic accordance and freecreative activity of people, i.e. for developed localself-governance in this country.


39

Antonina Kovalevskaya, Development Director, CFP

Maria Garaja, Senior Consultant, CFP

Local self-governance reform in Russia has madegovernment authorities in the constituent entitiesof the RF and municipalities face the need to makeindependent decisions on territorial developmentin a difficult social and economic situation. Thetraditional practice of development ofmunicipalities, based on tasks and resourcescoming from the center, was no longer efficient.Given the recent decentralization reform andclearer distribution of responsibilities amongdifferent levels of governments in Russia, it wasnecessary to develop new systems of localdevelopment planning and management, systemsthat make planning a tool for grounded decision-making, aimed at accomplishing territorialdevelopment tasks, organized budgeting andimproving the quality of community life.

The tasks of territorial development cannot be fullyaccomplished without a serious situationalanalysis in the region as a whole as well as inseparate municipalities. Current national statisticsbodies do not satisfy the needs of municipalities,especially at the settlement level, for informationnecessary for decision-making. This is true bothfor sources of local budget income and for thebasis of expenditure needs of municipalities. Agreat deal of this information exists in anunformalized state, held by certain specialists inlocal administrations, businessmen, budgetaryinstitutions, etc. At the same time, the issue ofinformational provision of municipal decision-making has another aspect. It is necessary topreserve the balance between the amount ofinformation and details and the effort to collectand process it, especially in rural settlements thatoften lack the labor potential and financialresources for detailed situational analysis andforecasting of social and economic developmentof a particular municipality.

Measuring the effectiveness of self-governance

Methods of statistical data collection based on results-oriented management: Settlement locality card

40

One of the ways to implement the new approachto settlement management in the post-reformlocal governance climate is to develop and updatelocality cards. The idea of locality cards is not new,although it reflects a long-standing need ofadministrative bodies to have trustworthyinformation on the object of governance.Attempts to create locality cards and passports ofmunicipalities have been until now limited bypublishing different variants of collections ofstatistical information with various sets ofindicators on a municipal district level at best. As arule, these collections are static documents thatdon’t allow for analysis and visualization ofinformation on a municipality and, moreover, forcomparison of its development with othersettlements.

A settlement locality card has been developed tomake up for the lack of information onmunicipalities at settlement level. It contains notonly statistical indicators, collected by statisticsbodies (demography, quality of life of thepopulation, engineering infrastructure, etc.), butalso analytical information, data on financialassets and municipal property, and alsoinformation on results for a number of servicesthat are the responsibility of settlements accordingto current legislation. The indicators in eachsection of the locality card are grouped so that theuser can get complete information on social andeconomic development of a municipality, resourcepotential and quality of life of the population, aswell as on particular economic sectors (culture,education, improvements, etc.)

The locality card was developed to be filled in bymunicipal personnel. It is meant to increasemunicipality access to information on results ofsettlement development. Its aim is to serve as abasis for monitoring and analysis of local self-governance implementation in a rural municipality,and also for decision-making in social andeconomic development and governance of a rural

territory. Most of the information may be collectedby settlement administration but the map alsocontains indicators that may be obtained frombudgetary organizations located in the settlementthat provide municipal services to population(healthcare, education, culture, etc.) and fromstatistics bodies of the district. Besides statisticalinformation, the map includes indicators that maybe obtained by population surveys (indicators ofsatisfaction with service quality). A locality cardalso contains a number of indicators that will helplocal self-governance bodies do their ownevaluations on the quality of municipal financialmanagement. Filling in the map is voluntary.


41

Over half (55,9%) of rural settlements arecharacterized as highly subsidized: the share ofsubsidies and also of income transferredaccording to classified standards instead ofsubsidies varies from 50 to 100% of the totalamount of local income. Only 6.6% of ruralsettlements are characterized as low subsidizedi.e. the share of subsidies and also of incomepassed according to classified standards insteadof subsidies is less than 5% of the total income.This means that local budgets of rural settlementsdon’t get enough income from local taxation andnon-tax income according to their newlyobtained responsibilities.

In 2006 43% of the total number of ruralsettlements had positive local budgets, 38% hadbalance of income and expenses, and 19% hadnegative budget forecasts for 2006. Out ofmunicipal district budgets 37% had negativebudget forecasts, 59% – positive, and 4% hadforecasts with balanced budgets.

Source «Information on Results of Monitoring ofLocal Budgets in the Russian Federation as ofOctober, 1 2006» Ministry of Finance of RF,http://www1.minfin.ru/rms/monitoring011006.pdf

In a developed system of local self-governance,municipal statistics is necessary not only for top-down control, but also for self-control of LSGbodies and for information on the quality and efficiency of work of LSG bodies for citizens. Alocality card is a source of information to increasethe transparence and accountability of local self-governance bodies and to promote civicengagement in local self-governance. One of theprerequisites is open access to information on themunicipality, the budget and results of work oflocal self-governance bodies. A documentcontaining information about a settlement will beinteresting not only for settlement inhabitants butalso for commercial organizations operating on itsterritory or planning to develop their businessthere. The map may be formatted differently forpublic dissemination, depending on the topic andthe need for information. In any case, a normativelegal act should be passed in the settlementstating the list of indicators, format and periodicityof update and dissemination.

The locality cards have been approved in all threepilot regions.

See attached CD for a complete locality card inelectronic table format.


42

«Having more than twenty years of experience aseconomist in the district administration, I cannote that the locality card is very useful foranalytical work, as it provides details on anumber of indicators and besides, gives a totalimpression of the district. Analytical indicators offinancial management are especially valuable,because we haven’t dealt with these problems inthe district before. The indicators of developmentdynamics of local community are also veryimportant as they have been previouslyneglected. The locality card will undoubtedlyenjoy high demand when forecasting districtdevelopment for the next few years. I believe it isnecessary to continue completing and updatingthe cards in the future.» Tatyana Pirozhkova, Economist, Administration ofBerezovsky District, Perm Region

Maria Garaja, Senior Consultant, CFP

Mikhail Duganov, Leading Consultant, CFP

Elena Nikitina, Senior Consultant, CFP

Implementation of reforms in local self-governance and intergovernmental relations inRussia, accompanied by the processes of budgetdecentralization and increase in independence oflocal self-governance bodies in managing localbudget resources, causes numerous problemsassociated with the need to asses communitydemand for municipal services and to justify theexpenditure obligations of municipalities.Municipal development practice raises newquestions that have not been discussed before inthe process of distribution of funds. Thesequestions include effectiveness of budgetexpenses, quality of municipal services, andmonitoring of results according to decisions madeabout municipal social development.

Research carried out by the Center of Fiscal Policy(CFP) was devoted to results of analysis done inrural areas of three constituent entities of theRussian Federation to identify the functional and financial problems of the basic spheres ofmunicipal services for rural populations –education, healthcare and territorial improvement.

Within the research, the current normative basisregulating distribution of responsibilities in eachservice sphere; funding objectives, amount andstructure of spending obligations of ruralmunicipalities; and the legal provisions for fundingof institutions in each of the three service spheresfrom municipal budgets were analyzed. Theresearch included analysis of incomes andexpenses of municipal budgets for healthcare,education and territorial improvement, includingthe dynamics of budget expenses in 2003-2006,external funding, and unsupported or partiallysupported expense obligations of municipal

budgets. Institutional aspects of funding foreducation, healthcare and territorial improvement,including monitoring and control of budgetspending, were examined in detail.

The results of analysis allowed to draw a numberof conclusions, proving the need for budget policybased on the characteristics of the presentsituation with municipal service provision in ruralareas and estimation of the possible influence ofdecisions made on the service quality, estimationof settlement and district budget incomes andadequacy of these incomes to fund budgetobligations. For example, problems of territorialimprovement in the settlement, which have notbeen funded for the last 5-10 years, should be inmost cases be solved in cooperation with districtand regional authorities. In many settlements,improvement activities over the research periodwere implemented only with civic participation.However, taking the incomes of rural populationinto account one could hardly expect them to fundexpensive activities.

The reform caused a number of difficulties inhealthcare, which had once functioned as anintegral system. Most of the constituent entities ofthe RF faced the problem of delegatingresponsibilities in the sphere of specialized medicalassistance from the constituent entity level tomunicipal level. The problem with transition ofnursery hospital beds, orphanages, specializedchildren’s health centers from municipal level tothe level of constituent entities of the RF is stillacute. The issues of property transition in order toexercise particular responsibilities have still notbeen resolved.

Implementation of the national «Healthcare»project is still difficult in rural areas because theadministration system of national projects is verycomplex, and local self-governance bodies arefacing serious difficulties with «integrating» theirmunicipalities in the projects.

Monitoring of service efficiency in healthcare, education,and territorial improvement


43

Budget funding in education goes mainly to coveroperational costs and there are practically notarget programs of innovative activity andtechnical equipment of educationalestablishments. The expenses are highlydifferentiated for different educational institutionsand there is no leveling mechanism. One of thefeatures of rural system of education is thepresence of a large number of schools with a smallnumbers of pupils (less than 100 pupils in total,offering 8 years of education) – about 64% of thetotal number of schools.

There is no regional mechanism for transition tostandard head-funding from the budget, and themunicipal budget funds are still distributedtraditionally, i.e. «depending on what has beenachieved».

Of course, many of the problems listed above canonly be solved by introducing changes to federalor regional legislation, but a wide discussion ofthese problems should be initiated bymunicipalities, where these problems are anobstacle for development and improvements tothe quality of municipal services. Therecommendations that were developed based onthe results of analysis are intended for municipaladministrations. The recommendations are basedon the authorities of municipal governance bodiesand the opportunities they have to improvemunicipal services in each sphere.

Municipal education servicesfunding in rural districts of PenzaRegion

The following conclusions were drawn based onthe results of analysis of the normative legal basis,institutional aspects of education funding, andalso the analysis of correspondence between theobligations according to legislation and the actualbudget expenses:

As there is no approved mechanism oftransition to standard head-funding, themunicipal budgets are still distributed amongschools traditionally. The standard funds donot reach schools, which preserves thesituation of school funding «depending onwhat has been achieved».

The number of pupils in an average class of arural school usually varies from 9 to 10, theaverage number of children in groups of pre-

school institutions usually corresponds to themaximum recommended federal standard(20 children) and is high – an average of 19children for all age groups.

High differentiation of expenses is notedacross educational establishments. There areno mechanisms of leveling and raising efficiency of budget expenses.

According to 2005 data, the largest share ofmunicipal district expenses for commoneducation is spent on secondary schools –79% (15% - for kindergartens and 6% –additional education establishments).

Salaries comprise a large part of the structureof expenses for education – 71-73%.

The material/ technical equipment ofeducational institutions is out-of date, thefunding is mainly used to cover operationalexpenses, there are no target programs forinnovations and technical equipment.

A lack of funding for financial provision ofeducational service in the basic educationalprograms was identified in the analysis ofdistribution of educational subvention usingthe standard of head-funding.

According to the results of analysis,recommendations have been developed toimprove management and public spending in thesphere of education:

1. Transition to distribution of educationalsubvention according to the standard ofhead-funding, approved each year on thelevel of constituent entities of the RF.

2. Provide funding to rural schools with smallclasses according to the standard, includingcosts not depend on the number of pupils.


44

Secured tax incomes of settlements consist ofland tax, single rural tax, property tax and incometax for physical entities. Land tax and property taxof physical entities are fully included in thesettlement budget. It also includes 10% ofincome tax for physical entities and 30% ofsingle rural tax.

3. Certification of school and kindergartenbuildings for an in-depth analysis of expensesfor public services, further transition tostandard funding for public services

4. In order to estimate efficiency of budgetspending for education and activitiesimplemented in this sphere, it isrecommended to develop a system of results-oriented indicators, and establish correlationbetween conditions of education services andend results (number of hours for eachsubject, teachers’ qualifications, availability ofnecessary materials with the level of schoolresults, number of winners in Olympiads andcompetitions, attendance, number of pupilswho entered higher educationalestablishments, etc.)

Municipal services funding interritorial improvement in AdygeyaRepublic

The following conclusions were drawn upaccording to the results of the analysis of territorialimprovement funding in pilot settlements:

Improvement sector is funded according tothe residual principle, budget expenses forterritory improvement are minimal (0,1 – 1%of total budget expenses). Budget funds arespent mainly for maintenance of roads andbridges. Since 2006, when territorialimprovement funding became theresponsibility of settlements, the situation hasnot improved as settlement budgets did notget enough funds to fulfill their obligations.

A great deal of activities in territorialimprovement sphere is accomplished at theexpense of budgets of local companies andcommunities and with their directinvolvement in the activities.

The activities in territorial improvement areregulated by local self-governance bodies.The normative legal basis for territorialimprovement is just being developed andneeds to be further improved (a long-termprogram on territorial improvement, methodsof forecast of funding needed, standards of

improvement services, criteria of servicequality evaluation, etc.).

Only some of the settlements have companiesthat work in the sphere of territoryimprovements, the amounts of availablefunding only allow to attract physical entities.The criteria of service quality acceptance andevaluation are not included in contractualagreements on territorial improvement works.The only criterion for acceptance andevaluation is timely accomplishment of work.

The monitoring and controls in the sphere ofterritorial improvement need to be changedas the information on activities in this sphereand the condition of territorial objects (e.g.village park, pond etc.) have not beensystematized (there is no correlation betweenfunding, work amount and results); there areno special reporting forms.

The main recommendation for the improvementof budget management and spending on thissphere of public services is to introducemonitoring of public spending results (the firststage of introduction of service-orientedbudgeting).

Further introduction of results monitoring interritorial improvement requires a number ofactivities that need to be approved by the head ofthe municipal administration:

1. Inventory taking of improvement objects inthe settlement and evaluation of their state.

2. Development of a registry of expenseobligations for services in territorialimprovement.

3. Development of territorial improvementprograms using result indicators.

4. Organization of public hearings on prioritiesof budget spending for improvements,present an action plan on improvementsdeveloped using the new approach.

45


Overview of budget spending forhealthcare of Berezovsky, Osinskyand Okhansky districts in PermRegion

The following conclusions were drawn accordingto the results of analysis of institutional aspects ofhealthcare funding:

The distribution of powers and expenseobligations between municipal budgets andbudget of the constituent entity of theRussian Federation has not been finished.Hence the funds from local budgets are usedineffectively to fulfill expense obligations ofbudgets of other levels of government.

The main problem of municipal healthcare isthe persistent inconsistency between budgetallocations and the actual need for sectorfunding.

The system of funding for municipalhealthcare needs to undergo serious reformsinitiated by the National project (currentlybeing implemented), in particular transitionfrom two-channel funding system to one-channel system (using the funds ofcompulsory medical insurance), introductionof new legal and organizational forms ofinstitutions and mechanisms of partial andfull fund-keeping of district healthcareservice, introduction of full tariffs,development of a market of chargeablemedical services.

A model action plan for healthcare systemimprovement was developed. Some generalrecommendations on optimizing healthcare inmunicipal districts based on the results of researchinto the current situation in healthcare include thefollowing:

1. Carry out analysis of early death rate, whichleads to decrease in working potential of thecountry. Carry out an in-depth informalsurvey to provide information on the actualsituation concerning alcohol abuse, one ofthe main reasons for early death.

2. Establish a funding standard for Centers ofmedical and obstetrical aid independent ofthe number of patients served.

3. The property of Centers of medical andobstetrical aid, nursing care hospitals anddistrict hospitals should become the propertyof municipal districts (village councils), andregistration certificates should be issued forthis property.

4. The nursing hospital beds should be fundedfrom the municipal district budget, withmedico-social status,. In order to provideaccessibility to primary medical aid in ruralareas where there are no medical institutions,an ambulance station or a center of medicaland obstetrical aid should be established.

5. Change the organizational form of dayhospital, without changing the layout ofbeds, i.e. introduce day hospital beds ofoutpatient type.

6. Discuss the question of creating a reservefund in Perm Region which could be used forsubventions in case the planned number ofconsultations in outpatient clinics exceeds theplanned number.

7. Apply standards of work load insideoutpatient clinics with internal and externaltariffs. The availability of internal resourcescreates additional motivation for medicalspecialists to work better. If the salaries arenot simulative and the work load increased,the accessibility of medical assistance topeople is decreased and the motivation ofmedical personnel is low.


46

8. Take steps to improve the work of ambulanceservice, develop dispatchtelecommunications, and establishcooperation between ambulance andoutpatient clinic doctors.

9. Where there is a severe shortage of budgetfunds, money should not be distracted tofund budget obligations of district and federalbudgets and the system of compulsorymedical insurance, in particular to supportschool and pre-school departments,organizational methodology office,centralized accounting office, centralizedpurchase of bacterial medications, andmedications against diabetes andtuberculosis.

10. For the development of chargeable services:

Change price regulation from price lists tolimited profitability method.

Not to limit the contractor’s salary by theSingle Tariff System, but transit to contractand bonus system, depending on theamount and quality of services.

11. Introduce changes to the «Procedures ofusage of rented municipal property» in order


47

Tugrul Gurgur, (State Maryland Univercity)

Omar Azfar, (State Maryland Univercity)

Maria Amelina, (WB)

The unique feature of the pilot project «Local Self-Governance and Civic Engagement in RuralRussia» is a very rigorous measurement of theresults. We have used the opportunity of the pilotto try to answer some key questions of Russianrural decentralization experiences.

These issues are:

1. What characteristics of the locality and itspopulation are related to variouscharacteristics of good governance, such asopenness, accountability, andprofessionalism, and fiscal autonomy?

2. What characteristics of the locality and rulesof self–governance make local governmentsmore responsive to the needs of theirconstituencies?

3. How does assistance in reformimplementation – in this case training andconsultations – affect how well bothhouseholds and local governments adapt tothe new decentralization regulations andpractices?

There are many objective and subjective factors,little studied to date, that influence the quality oflocal governance. Here we present some of theresults of our baseline study, the first wave of adynamic, 3-year analysis on the quality of localgovernance1. In this analysis, we are measuringthe correlates and (in some instances)determinants of good governance, assessing thestate of local self-governance in rural areas in thebeginning of the reforms and identifying thosecontextual features (such as features of thelocality, historical context, and the characteristicsof the population) that are likely to prove significant in the implementation of self-governance reform and, therefore, need to betaken into account by policy makers andpractitioners.

The main findings of the first wave of datacollection have been summarized in 2 paperspresented in the attached CD. The first tackles aspecific issue of matching of preferences forparticular social and other public services amonglocal government officials (both at the settlementand district levels) and the population of thelocality, testing the hypothesis that the closer thegovernment is to the population the betterinformed it is about the needs and requests of thepopulation it serves. The second addresses thebroader issue of the context of the reforms –which characteristics of localities, households, andpower holders make local governments appearmore open, trustworthy, professional, andaccountable to their constituencies.

What Makes for Good Local Governance?(executive summary)

1The second and the third wave of data collection (the second to be carried out at the end of the intervention in April 2007, to test on the immediateeffects of the intervention, and the third in the spring 2008 to assess the sustainability of the results) will let us answer the third in the list of centralquestions of the study above, namely, what kind of effect (if any) did training and consultations have on the quality of local governance in the context ofthe decentralization reform.


48

Project Design

To answer these difficult questions in a convincingmanner, we designed the project so as to diminishbiases and to the extent possible take humandiscretion out of the selection process. Provinces –the Republic of Adygeya, Perm, and Penza – wereselected on the basis of specific criteria. Thoseincluded subjective criteria – the interest ofprovincial governments in having the project on theirterritory, openness of provincial administrations withdata and information about social and economicstatus of rural municipalities, as well as objectivecriteria – geographical location, the share of ruralpopulation. The districts within the provinces as wellas settlements within the districts were selectedrandomly. The sample was stratified as follows:

T1: Districts and settlements where municipalofficials and the population received bothtraining and consultations in participatorybudgeting, setting of social and economicpriorities, and the achievement of thesepriorities (training and capacity buildingdistricts);

T2: Districts and settlements where municipalofficials received training and information, butno on-the-ground consultations (trainingdistricts);

C: districts and settlements selected as controlswhere no project activity was taking place.

To test for the spillover effect T2 and C settlementswere selected in the same districts as T1settlements as well as in an additional sub-set ofdistricts in the same provinces.

The study covered 6 districts in the Republic ofAdygeya, 9 districts in Penza, and 9 districts inPerm. In total, 110 settlements in 24 districts werecovered by the intervention and the study. Tocollect subjective data in each of the settlements,2 surveys were carried out, a household-levelsurvey and a local government officials survey (forthe questionnaires see the CD attached). Thesampling frame of the household survey included17 to 19 randomly selected households persettlement. In the local officials’ survey 2-3 publicofficials per settlement and 4-5 public officials perdistrict were surveyed. In total, 690 public officials(517 at the settlement level and 173 at the districtlevel) and 2049 household level respondents weresurveyed. The surveys, among others, tackled thefollowing issues:

Trust to fellow villagers and to formal powerholders of different levels

Participation in formal and informal collectiveaction

Voting patterns

Trust in media

Assessment of the quality of social servicesreceived

Priorities in the delivery of public services

Satisfaction with the responsiveness of localgovernment officials to the needs of thepopulation

Ability to lodge a complaint, solicit a responseto a public needs issue from a local public officer

Economic and demographic characteristics ofthe household

Collected objective data included: informationabout geography (e.g. location, distance from anurban center), demography (e.g. population,gender, age, change in population in the past 5years), economy (e.g. income per capita, changein income per capita), fiscal issues (total revenue,share of own revenue), budget (e.g. use of publicresources per expenditure item), administrativeissues (e.g. years of chief local administrators inpower, elected/appointed), and history (e.g.share of serf population in 1860, expenditure onhealth and education during the Stolypin andother 19th century decentralization reforms, shareof old believers in the population, share of literatepopulation in the late 19th century). The second and the third waves of data collectionwill allow us to assess whether the importance ofcontextual factors increases or decreases over timeas decentralization reform is fully introduced, and,importantly, how various forms of assistanceprovided to local government officials and to thepopulation when adapting to the decentralizationreform affect the perceived and objectivelymeasured performance of local government officials.


49

What do Rural Russians Want?

Matching of Preferences of Local Government Officials and the Population in Service Delivery

According to the premise of local democraticgovernance, «Elected local officials have anincentive to find out what citizens in their localitywant and to provide these goods. Doing so furtherimproves welfare and the satisfaction levels ofcitizens because they get the goods and servicesthey most want» (Tiebout 1956 and Oates1972). However, the normative properties ofmore centralized and devolved governments inrelation to satisfaction with local governmentcontinue to be debated, especially in the contextof transitional economies.

Good governance at national and local levels istoday the central concern for both scholars andpolicy makers working on developing andtransitional economies. Good governance involvesrulers i) knowing the demands of citizens, and ii)providing these goods in an honest and efficientway. The vast and expanding literature oncorruption and government effectiveness gives thesecond question the attention it deserves. The firstquestion, however, on whether rulers know thedemands of the population, which we regard asequally fundamental, remains understudied.In this paper, we address whether rulers knowwhat citizens want. Specifically, we examine whichof 17 publicly provided goods and services citizensmost want in rural Russia and how accuratelypublic officials can predict these demands. Thestudy was carried out in several districts andsettlements in three contrasting provinces of theRussian Federation: Republic of Adygeya, Penzaregion and Perm region.

Main findings

Our results are generally supportive ofdemocratization and decentralization in Russia.We find that Russian public officials do in fact havea reasonably accurate knowledge of citizens’preferences. This is true both for the entire country– the goods that most households say they wantare also the goods public officials say people want;and for local variation – officials appear to knowwhat people want in their locality if their area hasdifferent preferences from the rest of the sampledlocalities.


50

We find that truly local public officials, those at thesettlement level, have more accurate knowledge ofpreferences than district officials. Settlement levelofficials also agree more closely with the generalpopulation about the conditions of 17 publicservices. One explanation is that the smallergeographical distance between settlement level officials and the majority of citizens creates betterinformation flows between citizens and truly localofficials. This might provide an additionalargument for devolving service delivery to thesettlement level – though the actual decisionshould also take into account tradeoffs with thepossibly lower capacity at the settlement level.

We also find that elected public officials have moreaccurate knowledge of citizens’ preferences thanappointed officials (public official that holdtechnical positions (here identified as«professionals») are separated in a sub-category,not to affect the appointed/elected dichotomy)and more accurate comprehension of thecondition of publicly provided goods. This is whatwould be predicted by the optimistic theories ofdemocracy which argue that elections providerulers with incentives to find out what citizenswant and to provide these goods4. Our resultstherefore suggest an argument fordemocratization of local government in Russia.

Unemployment

CollecFarm

Roads

Health

SmallFarm

Housing

Communal S

PrivFarm

SmBusiness

PublicTransPre�Educ

WasteRecreationGenEduc

Law and orderCulture

0%

10%

20%

30%

40%

50%

0% 5% 10% 15% 20% 25% 30% 35% 40%

HHs' Preferences

POs'

Per

cept

ions

r = .82

Cemeteries

W

anddultu

4Wittman, Donald A. The Myth of Democratic Failure: Why Political Institutions Are Efficient (American Politics and Political Economy Series), University ofChicago Press 1997.

Figure 1

Household (HH) and public officials’ (PO) preferences


51

UnemploymentCollecFarm

Health

SmallFarm

Housing

Communal S

PrivFarm

SmBusiness

PublicTrans

Pre�Educ

Waste

Recreation

GenEduc

Law and order

Culture

Dis

tric

t PO

's P

erce

ptio

ns o

f HH

r = .74

Cemeteries

0%

10%

20%

30%

40%

50%

0% 10% 20% 30% 40% 50%HHs' Preferences

UnemploymentCollecFarmHealth

Roads

SmallFarm

Housing

Communal S

PrivFarm

SmBusinessWaste

Pre�Educ

PublicTrans

Recreation

GenEduc

Law and order

CemeteriesCulture

ublic

GSett

lem

ent

PO's

Per

cep

tio

ns

of

HH

0%

10%

20%

30%

40%

50%

0% 10% 20% 30% 40% 50%HHs' Preferences

r = .87

(Each observation is a public service category at the aggregate level)

Figure 2

Households’ Preferences and District and Settlement Public Officials’ Perceptions of Households’ Preferences


52

Unemployment

CollecFarm

Health

Roads

SmallFarm

Housing

Communal S

PrivFarmSmBusiness

PublicTrans

Pre�Educ

Waste

Recreation

GenEduc

Law and order

CemeteriesCulture

Sm

ne

W

PO's

Per

cep

tio

ns

on

HH

s

0%

10%

20%

30%

40%

50%

60%

60%

0% 10% 20% 30% 40% 50%HHs' Preferences

r = .69

UnemploymentCollecFarm

Health

Roads

r = .71

SmallFarm

Housing

PrivFarm

SmBusiness


Waste

Recreation

GenEduc

Law and order

Cemeteries

Culture Communal S

sing

P

WaenEd

POs'

Pre

fere

nce

s

0%

10%

20%

30%

40%

50%

60%

60%

0% 10% 20% 30% 40% 50%HHs' Preferences

Figure 3

Households’ Preferences and Public Officials’ Perceptions of Households’ Preferences


53

a) Professionals

b) Appointed POs

Unemployment

CollecFarmHealth

Roads

SmallFarm

Housing

Communal S

PrivFarm

SmBusiness


Waste

RecreationGenEduc

Law and order

Cemeteries

Culture

alth

usinRe

G

POs'

Pre

fere

nce

s

0%

10%

20%

30%

40%

50%

60%

60%

0% 10% 20% 30% 40% 50%HHs' Preferences

r = .90

0%

10%

20%

30%

40%

50%

0% 10% 20% 30% 40% 50%

Households

(Each observation is a public service category at the district level)

(Each observation is a public service category at the aggregate level)(Each observation is a public service category at the aggregate level)

Figure 4

Conditions of services: Households’ Perceptions vs. Public Officials’ Perceptions

0%

10%

20%

30%

40%

50%

0% 10% 20% 30% 40% 50%Households

0%

10%

20%

30%

40%

50%

0% 10% 20% 30% 40% 50%

Households


54

c) Elected POs

a) Professional PO

b) Appointed PO

c) Elected PO

r = .64

r = .73

r = .45

We also examine the effect on outcomes in ourlocalities of local government reforms in the 19thand early 20th centuries, which introducedgreater autonomy and decentralized moreresponsibilities for public funding of some services(such as health and basic education). We find thathistorical factors may play an important role intoday’s local institutions. As the share of educationand health spending increases in the 1897budget, the mismatch between the preferences ofhouseholds and public officials declines.

We find some evidence that local revenuemobilization may have a positive impact onpreference matching. Districts that rely on localrevenue sources, rather than federal grants, aremore likely to have a closer match between whatpeople want and public officials’ opinions ofpeople’s preferences.

We additionally examine whether preferencematching corresponds to other well knownmeasures of governance like corruption andsatisfaction ratings. We find that localities withhigher levels of corruption do in fact have worsepreference matching. One possible explanation forthis is that some deeper measure of poorgovernance causes both corruption and poorerpreference matching. Another is that corrupt officials may have an incentive to misstate thepopulations’ preferences to justify a reallocation ofresources to sectors where they can most easilyextract rents.

Finally, we examine how preference matchingaffects citizens’ satisfaction with service delivery –perhaps the most direct measure of the quality ofpublic services. We find that, indeed, citizens givepoor satisfaction ratings to goods where public officials underestimate citizens’ demands. Thisindicates that preference matching is in fact animportant component of governance, andultimately underscores the importance of thequestion studied.

Lo

cal r

even

ue

mo

bili

zati

on

6%

8%

10%

12%

14%

40% 50% 60% 80%70% 90% 100%

Local revenue mobilization

r = �.56

Figure 5

Preference Matching and Local RevenueMobilization (share of local revenue in total budget)

Diff

eren

ces

in p

refe

ren

ces

6%

8%

10%

12%

14%

40% 50% 60% 80%70% 90% 100%


r = �.35

Figure 6

Preference Matching and Corruption in LocalGovernment

(Each observation is at the district level)


55

2003

2004

(Each observation is a public service category at the district level)

Diff

eren

ces

in O

pin

ion

s

3%

6%

9%

12%

15%

0% 10% 30%20% 40%

Perceived Corruption

r = �.47

What Determines Good Governancein Rural Russia?

The goal of this paper is to assess whether thosetraits that have been associated in the literaturewith good governance empirically relate to theobjective characteristics of well governedterritories as well as to the perception of citizenson the quality of performance of district andsettlement level public officials. The characteristicsof governance singled out in the study are:

openness (the proxies used in the paper aretrust among citizens and trust to local,regional, and national level government officials, support to association and collectiveaction, effectiveness of channels ofinformation about the needs of the citizensand feedback mechanisms, accountability);

professionalism (proxies used in the paper arecompetency, meritocracy, motivation andeducation);

fiscal/administrative independence (proxiesused in the paper are local revenuemobilization (per capita and as a share oftotal public revenue) autonomy of the rulemaking, level of coordination betweenregional and district/settlementadministrations);

tradition of respect to citizens and publicservice (proxies used in the paper are theshare of the serf population, expenditure onhealth and education during the end of the19th century zemstvo reforms, the share ofliterate population, the share of old believersamong the population).

We approach the study of «good governance» byidentifying a virtuous circle of civicness and goodgovernance vs. a vicious circle of disengagement,apathy and corruption. In this framework, we firstaddress the formal and informal institutions(openness) that are influenced by historic factors(such as the cultural residue of serfdom differentreligious practices, and the influence of 19thcentury decentralization reforms on localgovernments). Then, we link these twodimensions of local social and historic practices toprofessionalism and fiscal and administrativeautonomy.

We use multivariate regression analysis to isolatethe effect of various determinants of goodgovernance. We repeat our analysis at both districtand the settlement level to understand which levelof government is more affected by theseunderlying patterns and whether the closeness oflocal governments to the locality is an importantfactor itself.

Both formal and informal openness are importantprerequisites of good governance. Length offormal local government at the settlement levelbodes well for trust and participation. In localitieswhere the people trust each other and theirgovernment officials more (those variables arestrongly correlated), the levels of corruption areperceived to be significantly lower and the qualityof public service delivery significantly higher.

In turn, trust to each other and to localgovernment is positively correlated with activism –membership in public organizations – which againcorrelates with a low level of perceived corruptionand high level of perceived quality of servicedelivery.


56

Perf

orm

ance

(H

H)

Trust in Local Governments (HH)

2.00

3.00

3.002.001.00

1.00

(3.00)

(2.00)

(1.00)(2.00)(3.00) .00)

Figure 7

Trust of households in local governments vs.Performance of local governments (households’perception)Trust of households in local governments vs.Corruption in local governments (households’perception).

Loca

l Cor

rupt

ion

(HH

)

Trust in Local Governments (HH)

2.00

3.002.001.00

1.00

(2.00)

(1.00)(2.00)(3.00) 1.0

District averages. The indices are normalized using the mean and standarddeviation of scores

Moving to more active forms of socialengagement – collective action – we find acontinuation of the same pattern i.e. householdswith higher levels of interpersonal trust and trustto local government officials are more activelyengaged in publicly beneficial collective activities(cleaning of streets, renovation of public buildings,public meetings). In turn, households in districtswhere citizens are actively engaged in collectiveaction perceive their local officials as less corrupt.

Formal participation in local government is alsostrongly associated with openness and trust.Residents of settlements that have had legally defined formal status as settlements the longesttime (settlements in Penza region) trust localgovernment officials most. Direct and indirectpolitical activism – voting in local elections, fillingcomplaints with public officials, following localnews, etc. – grows out of high social capitalcharacteristics described above. Interestingly,following local news makes local population morecritical of local government officials anddiminishes trust in these officials.

Collective action vs. Trust in Other Households.Collective action vs. Corruption in localgovernments. Collective action vs. Service delivery performanceof local governments (households’ assessment).District averages. The indices are normalizedusing the mean and standard deviation of scores

District averages. The indices are normalized using the mean and standarddeviation of scores

Figure 9

Trus

t in

Oth

er H

ouse

hold

s (H

H)

Collective Action (HH)

2.00

3.002.001.00

1.00

(2.00)

(1.00)(2.00)(3.00) (1.00

Cor

rupt

ion

(HH

)


2.00

3.002.001.00

1.00

(2.00)

(1.00)(2.00)(3.00) 1.

Perf

orm

ance

of L

ocal

Gov

t (H

H)


2.00

2.001.00

1.00

(2.00)

(1.00)(2.00)

District averages.The indices are normalized using the mean andstandard deviation of scores

Figure 8

Mutual trust between people vs. Trust in localgovernment.Mutual trust between people vs. Corruption inlocal government’ (households’ perception).

Trus

t in

Loca

l Gov

ernm

ent (

HH

)

Mutual Trust Between Residents (HH)

2.00

3.00

3.002.001.00

1.00

(3.00)

(2.00)

(1.00)(2.00)(3.00) (2.00)) (

Cor

rupt

ion

in L

ocal

Gov

ernm

ent

Mutual Trust Between Residents (HH)

2.00

3.00

2.001.00

1.00

(3.00)

(2.00)

(1.00)(2.00) 1 00

57

The study has also shown that formal governanceat the settlement level (in our sample, only Penzaregion has had uninterrupted formal settlementlevel governance since the beginning of transition)translates into higher accessibility of localgovernment officials and a higher number ofmeetings with the population. At the same time, avital ingredient of local governance proved to benot just the presence of formal local levelgovernance, but the format in which the officialshave acquired their power. In Penza, where localgovernment officials have been appointed, notelected, the population perceives theresponsiveness of government officials to theirneeds to be the lowest.

In the same vein, the presence of rules is not initself sufficient to generate openness, trust, orperceived lowering of corruption; only theenforcement of these rules is reflected in positiveshifts in trust and negative shifts in perception ofcorruption. Those government officials that reporthigh degree of professionalism (competency,meritocracy in promotions, high level ofmotivation to perform) are more likely to serve indistricts and settlements where householdsperceive local governments to be open andaccessible.

District averages. The indices are normalized using the mean andstandard deviation of scores

Figure 10

Participation in local politics vs. Trust in localgovernment.Participation in local politics vs. Trust in otherhouseholds (households’ perception).Participation in local politics vs. Corruption in localgovernment (households’ perception).

Trus

t in

Gov

ernm

ent (

HH

)

Political Participation (HH)

2.00

2.001.00

1.00

(2.00)

(1.00)(2.00)

Trus

t in

Oth

er H

ouse

hold

s (H

H)


2.00

2.001.00

1.00

(2.00)

(1.00)(2.00) .00)

Cor

rupt

ion

(HH

)


2.00

2.001.00

1.00

(2.00)

(1.00)(2.00) )


58


Figure 11

Ope

nnes

s of

Loc

al G

ovts

(H

H)

Professionalism (PO)

2.00

2.001.00

1.00

(2.00)

(1.00)(2.00)

(

Acc

ount

abili

ty in

Loc

al G

ovts

(PO

)

Professionalism (PO)

2.00

2.001.00

1.00

(2.00)

(1.00)(2.00)

Professionalism in local governments vs.Openness of local governments (households’assessment). Professionalism in local governments vs.Accountability in local governments (public officials’ assessment).

Another significant factor affecting householdperception of the quality of local administration isthe availability of local public resources. Localgovernments that mobilize more local resourcesfor public needs (and there is only a weakcorrelation between the wealth of the district andmobilization of public resources) are perceived tobe less corrupt, enjoy higher level of popularparticipation in public life, and are assessed to bemore flexible in solving local problems.

Our unique data base allowed us to measure ararely measured aspect of public activism and self-governance. Our data for the share of serfpopulation in Penza in 1861 (as opposed to the«tzar’s peasants» – the state peasants who livedunder a significantly different legal regime, whichexcluded corporate punishment and had obrok asa form of taxation instead of barshina, a poorlynormalized semi-slave labor on noblemen’s land)showed that those modern districts that had lessserf population demonstrate higher degrees oftrust to government, higher openness of

governance structures, and higher levels ofparticipation in local elections. These preliminaryresults show that patterns of self-mobilization areembedded in the historical and social context anddeserve further analysis.

To assess the relative significance of the abovevariables in the perception of the corruption levelsof local governments as well as the perceivedperformance of local governments, we performeda multivariate analysis, with perception ofcorruption at the settlement level as a dependentvariable in the first case and performance ofsettlement governments as perceived byhouseholds in the second. Our findings arepresented below.

Trus

t in

Gov

ernm

ent (

HH

)

Serf Population, 1861

10080604020

3.00

2.00

1.00

(1.00)

(2.00)

0 80

Ope

nnes

s (H

H)

Serf Population, 1861

10080604020

3.00

2.00

1.00

(1.00)

(2.00)

0


Figure 12

Cor

rupt

ion

(HH

)

Resources (PO)

2.001.501.000.50

1.00

2.00

(1.00)(1.50)(2.00) (0.50)

(1.00)

(1.00)

0.500)

Polit

ical

Par

ticip

atio

n (H

H)

(log) Local spending per capital

3.50

2.00

1.00

(1.00)

(2.00)

3.60 3.70 3.80 3.90 4.00 4.10 4.2060 3 70 3 80

Adequacy of Resources (public officials’assessment) vs. Corruption perception ofhouseholds. Local spending per capital and Politicalparticipation index.

Figure 13

Serfdom and Trust in Government, districtaveragesSerfdom and Openness of government(households’ perceptions), district averages



59

Corruption

Our dependent variable is the corruption indexthat we have constructed using the questions inthe Household survey (see chapter 2 for details).

We have five main sets of regressors:

Public Sector Management variables

Openness, accountability, professionalism,resources, corruption

Social Capital variables

Trust in other households, support forvoluntary organizations, collective action,political participation

Historic variables

Serf population, Old Believers population, theStolypin reforms

Decentralization variables

Internal resources, local governmentexpenditure per capita, local revenuemobilization, flexibility, relations withcentral/regional government

Settlement specific variables:

Wealth, wealth inequality, population,urbanization, whether local elections are heldor not

The regression is at the settlement level. Due topossible reverse causality problems, we did notinclude trust in government variable in theregression.

The results are reported in Table 1 below. Since thehistoric variables, public expenditure and localrevenue mobilization variables are not available forall three regions, the first set of results omits theseregressors from the model. Later, we run the fullmodel for the districts of Perm, where all variablesare used.

We start with settlement characteristics. We haveonly one significant variable: settlementpopulation. It has a positive coefficient, suggestingthat corruption is more prevalent in localities withlarger populations.

Then, in column 2 we move to characteristics ofthe locality. Both collective action and support forvoluntary organizations have significant andnegative coefficients, suggesting that socialmobilization of households support goodgovernance in local governments. Voting turnoutand political activism also tend to reducecorruption, indicating that political participation ofcitizens have a similar positive impact on public officials. Another significant variable is trust inmedia. The more people trust in media, the lowercorruption in the public sector.

In the third column, we replace householdcharacteristics with public sector managementvariables. Only openness of local governments hassignificant coefficient with expected sign

In the next column, we look at internal resourcesand decentralization variables. The coefficient ofinternal resources is significant with negative sign.This indicates that local governments that haveadequate resources are less likely to be perceivedas corrupt by households.

In the fifth column, we include all relevantvariables in the model, except historic variablesand fiscal decentralization due to data restrictions.Settlement population is still significant withpositive coefficient. Among social capital variables,social mobilization variables (support for voluntaryorganizations and collective action) are also significant with negative signs. Although politicalactivism loses its significance, voter turnoutremains significant at 5 percent, suggesting thepotential influence of political participation ingood governance. Openness and transparency oflocal governments and internal resources are also significant.

In the last column, we also add historic variablesand fiscal decentralization variables to the model.Since these variables are available simultaneouslyin only Perm region, our sample is restricted tothat region. The results are again mostly consistentwith the base model. Among new variables, onlypublic expenditure per capita is significant with anegative sign.


60

Sample: Settlements in all regionsRandom Effects model

Wealth

Wealth inequality within the settlement

Settlement population (log)

Urbanization

Local Elections (Yes)

Trust in other households

Support for VoluntaryOrganizations

Collective action

Voting turnout

Political activism

Following media and knowledgeof local politics

Trust in media

Openness of local governments

Accountability procedures in localgovernments

Accountability in practice

Professionalism of localgovernments

Resources of local governments

Coordination between local andregional/federal government

Autonomy of local governments indecision making

Serf population, 1897

Old Believer population, 1897

Health and education spending asa share of state budget, 1897

Public expenditure per capita (log)


N

Rsq

(1)-0.1326 (-1.56)

0.1100 (1.35)

0.1404 (2.00)**

-0.1120 (-1.44)

-0.0531 (-1.05)

110

0.1102

(2)-0.0990 (-1.39)

0.0991 (0.92)

0.1692 (1.99)**

-0.0733 (-1.05)

-0.0033 (-0.05)

-0.1003 (-1.41)

-0.1890 (-2.03)**

-0.3566 (-2.89)***

-0.2292 (-2.40)**

-0.2003 (-2.41)**

-0.0873 (-0.94)

-0.1929 (-2.32)**

110

0.3287

(3)-0.0401 (-1.39)

0.0477 (0.78)

0.1027 (2.22)**

0.0470 (0.77)

0.0099 (0.13)

-0.2102 (-2.12)**

0.0751 (1.15)

-0.1326 (-1.56)

0.0992 (1.16)

110 0.

1652

(4)-0.0777 (-0.45)

0.0366 (0.31)

0.0904 (1.73)*

0.0002 (0.94)

0.0412 (0.65)

-0.2502 (-2.42)**

0.0654 (0.26)

0.0284 (0.11)

110

0.1482

(5)-0.1234 (-0.95)

0.0009 (0.03)

0.1718 (2.33)**

0.0763 (0.33)

0.0302 (0.31)

0.0904 (1.53)

-0.3693 (-3.44)***

-0.2622 (-2.25)**

-0.1718 (-2.33)**

-0.1112 (-1.47)

-0.0771 (-0.65)

-0.1785 (-1.53)

-0.2001 (-2.32)**

0.0011 (0.10)

-0.0692 (-1.30)

0.0929 (1.03)

-0.1821 (-2.30)**

0.0932 (1.53)

0.0024 (0.04)

110

0.3781

(6)-0.1544 (-1.56)

0.0393 (0.25)

0.1402 (1.94)*

0.0441 (0.99)

0.2261 (2.51)**

-0.1043 (-1.81)*

0.2422 (2.08)**

-02347 (-2.32)**

-0.1327 (-2.22)**

-0.1103 (-1.07)

0.2951 (2.14)**

-0.2330 (-2.19)**

0.0770 (0.97)

-0.0990 (-1.39)

0.0112 (0.17)

-0.2178 (-2.24)**

0.0593 (0.41)

0.0218 (0.36)

0.0244 (0.80)

-0.1102 (-1.02)

-0.0033 (-0.05)

-0.2302 (-2.31)**

0.0411 (0.41)

44

0.4627

Table 1

Determinants of Corruption in Settlement GovernmentsDependent Variable: Corruption in settlement governments (as perceived by households),


61

Performance of Local Governments

Our dependent variable is the local government’sperformance as perceived by households. We alsolooked at the perceived change in theperformance as well.

Public Sector Management variables

Openness, accountability, professionalism,resources, corruption

Social Capital variables

Trust in government, trust in otherhouseholds, support for voluntaryorganizations, collective action, politicalparticipation

Historic variables

Serf population, Old Believers population, thezemstvo and Stolypin reforms

Decentralization variables

Internal resources, local government expenditureper capita, local revenue mobilization, flexibility,relations with central/regional government

Settlement specific variables:

Wealth, wealth inequality, population,urbanization, whether local elections are heldor not

The regression is at the settlement level.

The results are reported in Table 2 below. Since thehistoric variables, public expenditure and localrevenue mobilization variables are not available forall three regions, the first set of results omits theseregressors from the model. Later, we run the fullmodel for the districts of Perm, where all variablesare used.

In the first column we look at the settlementcharacteristics. Households in wealthier settlementsare more likely to be satisfied with localgovernments than those in poor settlements.Wealth inequality, on the other hand, does not havea significant effect. Interestingly, settlements thathave local elections are less satisfied with theperformance of municipal administrations. It ispossible that households in these localities tend tobe more critical and judgmental in their assessment.

Moving to characteristics of households in thenext column, we observe that performance oflocal governments improves when there is mutualtrust among households living in the same locality.Mutual trust may be a critical factor that reducesthe transaction costs in the handling of local goodsand services. Both collective action and supportvoluntary organizations also have significant coefficients with positive signs. Although voterturnout is not significant, political activism turnsout to have strong influence on local governments’performance.

In the third column, we look at public sectormanagement variables. Among public sectormanagement variables, openness of localgovernments and corruption variables are significant with expected signs. Local governmentsthat are perceived by households as more open,transparent, and accessible also receive betterratings from households in service deliveryperformance. Corruption, on the other hand, is asignificant deterrent.

In column (4) we add internal resources anddecentralization variables in place of public sectormanagement variables. All three variables aresignificant with expected signs. The moreresources a local government has, the more likelythat it receives good rating from households.Better relations with central/regional governmentsand more flexibility in personnel management,budgeting, and service provision also improves theperformance of local governments.

In the fifth column, we include all relevantvariables in the model, except historic and fiscaldecentralization variables due to data restrictions.Existence of local elections still has a negative coefficient, although it is significant only at 10 percent. Trust in other households,openness/transparency of local governments andcorruption are the most significant variables withexpected signs. Collective action loses its significance, but support for voluntaryorganizations is still significant with positive sign.Among resource-related variables, internalresources and adjustability remain to be significant.

In the sixth column, we add the historic variablesand decentralization variables. However, neither ofthem turns out to be significant in the model.


62

Sample: Settlements in all regions, Random Effects model

Wealth

Wealth inequality within thesettlement

Settlement population (log)

Urbanization

Local Elections (Yes)

Trust in other households

Support for VoluntaryOrganizations

Collective action

Voting turnout

Political activism

Following media and knowledgeof local politics

Trust in media

Corruption in local government

Openness of local governments

Accountability procedures in localgovernments

Accountability in practice

Professionalism of localgovernments

Resources of local governments

Coordination between local andregional/federal government

Autonomy of local governments indecision making

Serf population, 1897

Old Believer population, 1897

Health and education spending asa share of state budget, 1897

Public expenditure per capita (log)


N

Rsq

(1)0.2448 (2.51)**

-0.1369 (-1.18)

-0.0399 (-0.41)

0.0129 (0.44)

-0.2685 (-2.49)**

110

0.1102

(2)0.2213 (2.13)**

-0.0397 (-1.12)

0.1355 (1.16)

-0.0032 (-0.09)

-0.2305 (-2.11)**

0.2022 (2.30)***

0.1980 (2.24)**

0.1092 (1.58)

0.0701 (0.29)

0.2189 (2.68)**

0.0091(0.33)

0.0965 (0.95)

110

0.3287

(3)0.1509 (1.97)**

-0.0494 (-0.49)

0.0967 (0.90)

0.0282 (0.61)

-0.2685 (-2.33)**

-0.2439 (-2.44)**

0.3317 (2.99)***

0.0545 (0.40)

-0.1326 (-1.16)

-0.0047 (-0.02)

110

0.1652

(4)0.1935 (1.87)*

0.0341 (0.22)

0.0551 (0.60)

0.0093 (0.14)

-0.2344 (-1.98)**

0.1716 (2.00)**

0.2761 (2.44)**

0.1904 (2.12)**

110

0.1482

(5)0.1344 (1.58)

-0.2294 (-0.50)

0.0134 (0.89)

0.0111 (0.13)

-0.1740 (-1.93)*

0.2198 (2.89)***

0.1551 (1.97)**

0.1389 (1.58)

0.0937 (1.52)

0.1918 (2.21)**

0.0212 (0.21)

0.0424 (0.62)

-0.2558 (-2.57)**

0.2900 (2.96)***

0.0511 (0.21)

-0.0633 (-0.63)

0.0009 (0.01)

0.2122 (2.53)**

0.1009 (1.55)

0.1606 (1.80)*

110

0.3781

(6)0.0701(0.29)

0.0048 (0.55)

0.0879 (0.27)

0.0111 (0.13)

-0.1985 (-1.99)**

0.2535 (2.71)***

0.0924 (0.89)

0.1753 (1.52)

0.0724 (0.83)

0.2261 (2.78)***

0.0212 (0.21)

0.1240 (0.74)

-0.1902 (-2.30)**

0.3104 (2.67)**

0.0831 (0.81)

-0.0133 (-0.10)

0.0009 (0.01)

0.2387 (2.37)**

0.0320 (0.41)

0.1260 (1.53)

0.0409 (0.38)

0.1101 (1.41)

-0.1059 (-1.04)

0.0971 (0.89)

-0.0289 (-0.40)

44

0.4627

Table 2

Determinants of Performance of Settlement GovernmentsDependent Variable: Performance of settlement governments (as perceived by households)


63

Conclusion

Drawing on an in-depth governance micro-surveywithin Russia, we addressed in detail the questionof the relative importance of the variousdeterminants of governance. We found that localgovernments that come to power through directelections are more likely to attain betterinformation about the needs of theirconstituencies. At the same time, citizens in suchlocalities tend to be more critical about theworking of local governments. Openness ofsocieties (as measured by collective action,support for voluntary organizations, and trust inother households) is a critical determinant thatfacilitates client oriented practices in the publicsector. Such communities are also less likely to facecorruption and give higher ratings on localgovernments. We also found some evidence thatpolitical participation of households (eitherthrough voting or active participation in publicmeetings, etc.) is crucial to reduce corruption andmotivate public officials to improve the delivery ofpublic services.

Although the existence of formal accountabilityprocedures and mechanisms does not create anenvironment for good governance, openness,transparency, and client oriented practices do. Wedid not find any strong link betweenprofessionalism and merit based practices in localgovernments and good governance. It is likely thatthe measures we used to quantify professionalismwere too unreliable to reach a conclusion becausethey were based on public officials’ selfassessment. We also discovered that therelationship between good governance andresource related variables (such as internal

resources, administrative decentralization andcoordination with federal/regional governments)is quite complex. Although the adequacy ofinternal resources helps to reduce corruption andincrease satisfaction of households, we did not find any evidence that its mere existence is sufficient to align policies with households’priorities. Similarly, autonomy and flexibility inpersonnel management, budgeting, and serviceprovision raises satisfaction ratings, but does nothelp in preference matching.

When it comes to the historical roots of goodgovernance, we unearthed some evidence thatreforms in the 19th century and early 1900s(which introduced greater autonomy andtransferred responsibilities for public funding ofsome services to the local level) lead to bettermatches between households’ priorities andpublic officials’ perceptions of these priorities.However, the legacy of serfdom in some regions ofrural Russia tends to undermine this process.

Last, but not least, we found that people in moreopen and democratic regions tend to be moreskeptical about the actions of local government,which could mean that they are more critical ofpublic officials. Although they tend to give lowratings on performance of their elected officials,when we move from these subjective measures ofgood governance to more formal objective ones(such as the extent of preference matchingbetween households and public officials), weindeed find that local governments in such regionsare more client-oriented and avoid top-downpractices.


64

Each culture is unique and includes a unique valuesystem passed from one generation to another.The specific features of historical development ofRussia have led to failures in the successionmechanism; the result of this is that many people,including a lot of rural communities, do not knowexactly who they are, where they belong, whatfacts they should regret in their history and whatthey should be proud of. Under the presentconditions of a rapidly changing political andeconomic context, there is a desire for self-identification at individual, village, town, orregional or national levels. The aspiration to

acquire a unique image is expressed at all levels ofpublic life. This image has a lot of functions, actsas a means of communication (a visiting card) andas an address (cultural and territorial self-identification).

Unfortunately, revival of cultural values today isoften impossible without special long-termcultural projects, developed according to the specific features of economic development of acertain territory and/or group of people who livethere. According to World Bank specialists, thecumulative effect of such projects implemented atthe same time and/or within the so calleddevelopment projects exceeds the effect of any ofthese projects implemented separately.

In this context, we implemented a pilot culturalproject for rural youth.

Project idea: to ask children and teenagers todevise symbols, e.g. flags and emblems, thatwould express their own attitude to theircommunity, and create them with artistic means.These could be their own family symbols,emblems and flags of a settlement, a district,household, or even a group of people. Eachaudience was offered its own theme that would bethe most familiar to them, as the individual systemof values – self-identification may be recreatedonly in a system of clear and common coordinates.

Are people interested in self-governance?

Youth and villages: children draw their own settlement and flags

Flags and emblems painted by master class participants in pilotAkhansky rayon.

65

Anton Olshvang, Artist

Principles of Project Implementation

Pilot territories should be selected accordingto specially developed selection criteria,

Local head of the project should be familiar tochildren, and carry authority with them,

The project should be implemented on thebase of a local museum (school, industrial,regional), and a regional historian should behead of the project, if he/she meets therequirements listed above,

A school club or optional class may be theplatform of the project for children of youngerand middle age,

Older children may be united in a dancinggroup or club with the help of DJs and VJs(video artists).

The activity started with master-classes forchildren and teenagers in pilot settlements ofOkhansky district in Perm Region (Andreyevka,Belyaevka, Ostrozhka, plus the district center townof Okhansk). Master-classes were held in themunicipal regional museum of Okhansk and theregional museum of Andreyevka settlement. Thechildren were very keen on the project idea andtook part in it with great pleasure.

The children’s works were presented on anexhibition in their home district and the best oneswere exhibited in the media-club of StateTretyakov Art Gallery in Krymsky Val, Moscow, inJune 2006. According to feedback from visitorsand participants of the project, the works of theyoung artists uncovered their inner world andshowed the richness of aspects in the children’s

relationships and attitudes with their family andsocial-historical environment. The children’sattitude towards creating flags and emblemsdemonstrated their deep interest in the history oftheir home villages and concern for its futuredestiny.

On behalf of the small project we would like tothank Perm Foundation for Support of SocialInitiatives «Assistance» («Sodeistviye») and«Alendvik» company for their interest in theproject and assistance in its implementation

There is a permanent exhibition of settlementheraldry by local children in our local museum. IfLyudmila Borisovna5 hadn’t brought AntonOlshvang here, the children would have neverdemonstrated their talents in this sphere. Aprofessional artist saw that good and talentedchildren live in remote rural areas, and they carefor their settlements. Since September we’ve hadweekly classes on local self-governance in seniorgrades using the textbooks provided within theproject.

Vera Bolotova, Head of Andreyevka ruralsettlement, Perm Region

5Ludmila Borisovna Trushnikova, Rural Municipal Consultant for the project, Okhansk district, Perm region


66

Alexander Nikulin, Candidate of ES (Intercenter),

Tamara Kuznetsova, PhD (Institute of Economics,Russian Academy of Sciences)

In March-April 2006, the InterdisciplinaryAcademic Center of Social Sciences (Intercenter)carried out a sociological survey on theintroduction of a new law 131 – «On GeneralPrinciples of Local Self-Governance in the RussianFederation» among representatives of ruralmunicipal administrations and local population inAdygeya Republic, Penza and Perm regions. Atotal of 67 interviews were conducted – over 20 ineach of the three project pilot regions.

All respondents were asked to express theiropinion on the questions connected with thehistory of their families and households, thecurrent social and economic situation of theirsettlement, district and region. Special attentionwas paid to the respondents’ knowledge andopinions about local self-governance (LSG) andthe new law no. 131.

The research team consisted of: A.M. Nikulin,Candidate of Economic Sciences (head of theproject), T.E. Kuznetsova, PhD, D.M. Rogozin,Candidate of Social Sciences, and A.D. Yashina,Master of Sociology.

The accompanying CD contains a short overviewof the large amount of material gathered, whichneeds to be further analyzed and described indetail.

The authors have summarized the opinions andattitudes of rural inhabitants and thus present thecontext in which the World Bank project «LocalSelf-Governance and Civic Engagement in RuralRussia» was implemented. The detailed materialon the CD contains several extensive quotes thatreflect, according to the authors, interestingobjective conclusions and facts provided by localinhabitants on their everyday interaction with stateand local self-governance bodies.

The rural inhabitants’ opinions and comments tothem are grouped according to the followingtopics:

Short characteristics of the current situation inthe regions,

Estimation of the situation connected withenforcement of law no. 131,

Description of the state of households,

Situation in healthcare, education, culturespheres of social infrastructure providingmunicipal services to population.

Despite some pessimistic remarks, the researchhas shown that there are obvious prerequisites forthe development of local self-governance in ruralareas of all surveyed regions. Research hasdiscovered spontaneous processes ofself–development and self-organization of thepopulation. It should be noted that the interactionbetween local authorities and local communitiesnecessary for sustainable development of LSG isstill underdeveloped.

Local Community: between the state and local self-governance


67

In practically all regions, authors saw situationswhen the funds of rural municipalities went todistricts and the district funds were transferred tothe region. It is necessary to make an inventory ofland and property in the municipality to providefair distribution of resources and optimizeintergovernmental relations, but in fact this ishardly done everywhere. There should be anopportunity to revise the borders of municipalities,as the territories between settlements mentionedin 131 may be used as additional resources byrural municipalities in particular.

The research concluded that regional and localeconomic, social and cultural features are of greatimportance for successful local implementation ofthe federal reform. If they are not known orneglected in applying the self-governance reformlocally, this could make the effect of stateinvestments, even if they are substantial enough,considerably weaker. The flexible definition policy,under which reforms are adjusted to localities, willprovide important feedback and timely correctionsin the reform process. The reform should result inmore opportunities for communities to make freedecisions on their own development. Let’s notehere that such self-development often depends onthe local leaders and elite – people who arerespected and carry authority with the community.They are the interpreters of reform and promotethem in rural life; they set examples and in factteach the principles of local self-governance, civicengagement in the life of their village or region tothe local community. As a rule, such leaders inrural areas are heads of local, federal, or privateenterprises and also specialists from the budgetsphere (above all, education and healthcare). It isimportant both for the leaders and for thepopulation not only to declare but also toimplement the opportunities of local self-governance. As one of the respondents said,«above all people want to know whether their lifewill be better or not».

Civic engagement mechanisms lay the foundationfor orientation on local specific features,strengthening the sprouts of self-development,and in the end – for implementing theopportunities for effective local self-governance inrural areas provided by the new legislation.

«The public organization «Narovchat localassociation» has been active in Narovchatsettlement of Penza Region since 1999. Thisorganization unites rural citizens who want to helptheir fellow villagers to deal with social andeconomic issues, and support the development oflocal culture. The intelligence, knowledge andexperience of the members of Association aremajor and invaluable resources for the ruraladministration.» Extract from a presentation bythe Head of Narovchat settlement Ivan Bormotovat the Interregional Scientific and PracticalConference «Development of Local Democracyand Self-Governance in the constituent entities ofthe Russian Federation»


68

Tatyana Nefedova, PhD, Institute of Geography,Russia Academy of Sciences

In Soviet times, rural enterprises used to be themain structural unit for rural areas. The crisis ofrural sectors of the economy made the situationdifficult for rural inhabitants. Economic self-organization of population in crisis conditions ofenterprises does not increase linearly. Self-organization is oppressed in extreme situations:both when an enterprise is powerful and stilldetermines the life in a certain area and when it isneed. The latter case causes the most complexsituation, as the population still counts on theenterprise’s assistance, but it cannot provideanything. In this case, individual farming growsand also more people are involved in non-ruralactivities. Self-employment has become one of thesolutions to the problem of rural unemployment,but it offers prospects only if a household is notbalancing at the level of minimum self-repaymentbut provides incomes. Growth of self-organizationin rural communities has definite limits: there is nodirect correlation between the state of localeconomy and the level of self-organization.

Limitations of self-organization are caused first ofall by significant depopulation of rural areas as aresult not only of demographic disasters of the XXcentury but also of the inescapable demographictransition and rapid urbanization. Many districts,especially in non-Chernozem zones, have lost over2/3 of the rural population over the last 50 years.As the most active citizens went to cities, there hasbeen a sort of negative selection for decades.Where the loss of population was too high,peculiar rural communities formed, where most ofthe population are aged people and the rest areunemployed heavy drinkers, who are alreadyincapable of working. Social degradation isfollowed by economic dilapidation. In Soviettimes, enterprises in under populated areassurvived due to large amounts of subsidies.

Currently they have fallen into total decay. Thisenvironment scares off young people, and theywon’t go back there for new jobs and highsalaries. This environment is not suitable forentrepreneurs either: there are no reliableemployees. The situation is a little better insettlements that have successful rural enterprises,which provide jobs for people and support theirprivate households, in settlements that havepreserved traditional crafts, in nationalsettlements.

In addition, even if there is no social degradation,the psychology of rural inhabitants has undergonegreat changes in the Soviet times. The passiveadaptive behavior prevails among the population(this is a characteristic feature of almost all post-Soviet countries). The limited ambitions anddistrust in authorities that can be opposed only bysilent sabotage of their decisions still define thebehavior of most rural inhabitants. They have notovercome the wage-earners’ psychology either:once there is no contracted work, there is no workat all, and people feel abandoned by the state,even if their own households are profitable. It isnatural that most of the farmers were previouslyheads and specialists of rural enterprises. And allthis is taking place despite the fact that in mostdistricts, except the suburbia of big cities, thepopulation has almost unlimited opportunities touse the land.

Prerequisites and Limitations for Self-Organization of RuralCommunities


69

According to national statistics, in 2004 17.6% ofpopulation in Russia lived beyond the poverty line.The poor population is distributed proportionallybetween rural and urban groups of thepopulation, but the poorest people live in smalltowns and rural areas.

The reaction of the social environment to thegrowth of economic activity and self-organizationof rural community depends on a number of factors.First of all, it depends on the size and administrativestatus of the settlement. It might seem that thelarger the settlement, the more difficult self-organization. However in small villages(where villagers are much more dependent on eachother), the community’s opposition to any oneperson or group of people being active is great. Thegeographic location also plays a role (the populationtends to become more conservative going fromNorth to South and from suburban to more remoteareas), as does the accessibility of region to inflowof settlers (e.g. in Southern regions of Povolzhye,where immigrants are accepted better than inChernozem Regions, there is more space forindividual and public initiatives).

As large enterprises began to lose theirorganizational functions, elements of local self-governance were formed spontaneously in ruralareas. However, our society (not only in ruralareas, but also in towns) is not ready for bottomup self-organization. It still needs an intermediarybetween people and state, an official «head» who«takes care of» the population. The part of suchintermediary was spontaneously performed bycustomary local level administrative units – villagecouncils that took up some of the functions in thesphere of community organization. In somedistricts, where large enterprises are in a state ofdeep crisis, singular administrative communitieshave formed bearing some resemblance to districtcommunity self-governance. A lot can be said onthe destiny of rural communities in Russia. But it ismuch more important to understand that there isno return to traditional municipal communality,because there is no rural community as such,especially in ethnic Russian districts.

Rural administrations that have recently acquiredmore economic and other functions could not fullyreplace collective farms: they have less economicresources and organizational experience. Ordinarycommunity meetings («skhody»: an old Russianword) are usually initiated by the same ruraladministrations, and rarely perform organizationalfunctions, e.g. on territorial improvement. For that

reason, the population is afraid to face the stategovernment on its own and is still committed tothe usual collective farms, supposed to protectthem even if they don’t pay cash wages. Thus, the schemes proposed by authorities in thenew legislation to expand bottom self-organization of community are not supported by asustainable foundation.

In order to provide for more active development oflocal self-governance and civic society, it isnecessary to form a middle class, which has alwaysbeen the weak point in Russian culture. In today’srural settlements, this class consists of farmers(the most successful ones take up social functionsas well), households with commodity economy,rural intelligentsia, and sometimes – summerresidents (dacha owners).

But it is not only about people. The changes inmanagement of budget resources are faced with alot of local problems. In conditions of a shadowrural economy, when both enterprises andindividual farmers actively apply tax-reductionschemes and there is no budget income besidesthe scanty land tax and a couple of sales outlets,the problem of municipal incomes and their abilityto perform their financial obligations is stillunsolved.

In this objectively difficult situation, the project«Local Self-Governance and Civic Engagement inRural Russia» is of great current importance.

The analysis of normative legal bases of differentlevels allowed the project consultants to determinethe strengths and weaknesses of currentdistribution of responsibilities and funds in theconstituent entities of the RF, districts andsettlements and their interrelations: those thatactually exist and those proposed in the law onlocal self-governance. An attempt was made todefine the scope of problems that can be dealtwith at municipal level and provide specificrecommendations on the subject based on thegeneral situation with correlation of financial andadministrative function at different levels ofgovernment.


70

The monitoring of funding of daily municipalservices – education, healthcare and territorialimprovement – is also very important. Education issignificant because of rural depopulation and theprevalence of schools with small numbers ofpupils. The prospects of head-funding may resultin 2/3 of rural schools being closed, which willcontribute to young people going away to towns.The importance of research into healthcare iscaused by the large numbers of aged people, highlevel of alcohol abuse among rural inhabitants,and low health indicators of rural inhabitants ingeneral. The infant mortality rate in rural areas is14% higher than in towns, and the mortality ratefor children under 5 years old is 25% higher.These problems require attention and needfunding that exceeds the local budget limits. Andlaborious and expensive territorial improvementwas often impossible for the former collectivefarms and even districts. Local leaders often had to«squeeze» funding for territorial improvementfrom the central authorities even in Soviet times.And now the roads are in terrible conditions,especially inside the settlements (the roadsbetween settlements were improved in a numberof regions in the 1990s thanks to RoadFoundations).

Increase in civic social activity by implementing amodel of Local Community Foundationsuccessfully used in other countries has becomean important direction of project activity. TheFoundations accumulate local resources as well asexternal ones (charity donations of internationalorganizations, companies, individuals, andsometimes regional budgets) and distribute themon a competitive basis. The Foundations are activein 20 regions of Russia and are ready to partiallyfund the social needs of communities. The projectalso undertook a program of trainings for RuralMunicipal Consultants, who assist in solving theproblems of self-governance in the ruralsettlements. Their task is to define and train themost active and capable representatives of localcommunities to take part in local development. Itis obvious that qualified consulting assistancewould be useful for rural inhabitants not only inthe pilot territories of the project.

Research, accomplished during the project, hasshown how difficult it is for rural inhabitants toadapt to economic and social changes in Russia. It has also indicated a certain misbalance ofpriorities between local authorities andcommunities. Local community members are notyet interested in institutional changes (many ofthem have never heard about the new law on localself-governance) and they are often absolutelyindifferent to general discussions on municipalbudgets and their incomes. However, they are verymuch concerned about the problems of roadmaintenance, public transport, water supply,communal payments for electricity, youthemployment, preserving schools, kindergartens,sports grounds, etc. But the project let the peopleunderstand the close interrelation between localproblem-solving and their civic activity,participatory budgeting and setting priorities forfuture development of their home settlements.


71

To increase the effectiveness of local self-governance the pilot project recommends the followingintegrated measures to be introduced for maximum impact:

Strategic planning for socio-economic territorial development inrural areas/defining developmentpriorities

Municipal financemanagement/effective and efficient budget spending,transparent budget

Quality of municipal services

Development of socio-economic territorial development strategies for ruralareas, based on bottom-up principles, regularly updated taking into accountcitizens’ preferences and voice. Working groups report on results progress;results clearly identified and communicated to community

Regional/district administrations should invite experts to increase theeffectiveness of planning/solving issues considered by the local communityas priorities. The recommendations of invited experts should be accessible tothe community and be discussed openly.

Results-oriented management practices used

Results-oriented management practices used

Transition to budget spending based on principles of results-orientedmanagement

Creation of a register of spending commitments of rural settlements

Creation of system to monitor the effectiveness of public spending

Attracting budget and off-budget financial resources

A) creation of community foundations/social funds, regional associations

B) creation of favorable conditions for non-agricultural economicdevelopment in villages, diversification of rural economy

C) development of planning skills to attract budget and off-budget financialresources and to achieve local priority development goals

Regional/district administrations should encourage local initiatives focusingon social and economic issues and allow off-budget resources to be used bycreating grant programs/social funds as well as other windows supportinglocal initiatives with co-financing.

Development and implementation of service improvement action plans(SIAPs) at settlement level. SIAPs annually compiled detail the strategicdevelopment goals, use participatory approaches with expert support, andare periodically discussed and revised if necessary. Public monitoring of SIAPscarried out according to pre-set parameters.

Lack of federal/regional/districtterritorial development strategies forrural areas

Fiscal sources of revenue are notcommensurate with the mandates ofrural settlements

Lack of feasible and relevant criteriafor evaluating needs and spendingcommitments of rural settlements

Opaque budget process

No possibilities for public monitoring

Lack of stable revenue sources andsubsidies for budgets of ruralsettlements

Lack of criteria and standards forevaluating the quality of municipalservices

No systematic municipal statistics

Issue Current State Suggested Mitigation mechanisms

Project recommendations to thefederal/regional/local governance

72

73

Monitoring of socio-economicdevelopment of ruralareas/municipal statistics

Training of municipal personnel

Isolation of Russian villages

Legal and regulatory framework oflocal self-governance/legalgroundwork for local self-governance

Systematic changes in methods and goals of collecting municipal statistics:new forms of data collection, analysis, use and dissemination not just forgovernment control but also to inform citizens about the work of localadministration in providing services and using municipal resources, and tocompare results across settlements and districts.

Municipal statistics publicly available;

More comprehensive record in statistical data of municipal property: clarification of property delimitations between settlements, districts, andregions/inventory of municipal property

Training of rural municipal consultants/creation of regional consultationservices

Development of system-defined educational programs, methodologicalmaterials/increasing qualifications of municipal staff

Creation of information centers in villages, with data bases of experts and firms offering formal assistance (administrative, legal etc.) as well as help onproviding services/diversification of local economy (e.g. education,healthcare, rural tourism, creation of small enterprises in sectors where themost favorable conditions for development exist in a given territory).

Regional/district administrations are recommended to provide support andco-financing in order to establish such centers.

Training of young people, introduction into school curriculums of courses onlocal governance

Widening inter-municipal cooperation, for example to attract qualifiedpersonnel

Training on modern communication technology for information exchangeand learning, creation of interactive websites about settlements

Wide dissemination of best practices via media and other sources

Creation of regional/federal level associations

Participation in international associations and conferences on ruraldevelopment issues (e.g. rural tourism, rural youth etc.)

Regional/district administrations are recommended to encourage and co-finance exchanges and study tours on governance practices and todisseminate results of these activities and ways to adopt these experiences tothe Russian context in home territories via conferences/discussions etc.

Support to rural settlements via a system of legal consultations at district andregional levels

Dissemination of methodological recommendations on legal and regulatoryframeworks in rural settlements in accordance with recent Federal legislation

Providing local government bodies with access to legal data bases

Development of legal procedures for the co-ordination of positions, andresolution of disputes and discrepancies between state authorities and localself-government bodies

Regional/district administrations are recommended to encourage and co-finance (via for example assistance with transport) pro bono work ofqualified legal advisors, especially counselors/lawyers (the most neededconsultations are on questions such as registration of property and benefitsto pensioners).

No systematic municipal statistics

more than 10,000 new ruralsettlement municipalities created byrecent legislation

deficit of professional personnel invillages

Weak civil society

Geographical isolation and poorcommunication infrastructure (e.g.lack of phone, internet) mean thatvillages lack information aboutmodern patterns of governance anddecentralization effectively practiced insome parts of Russia and abroad.Progress hindered by artificially closednature of rural communities.

Deficit of legal groundwork for ruralsettlement municipalitiesno accessible legal consultations formany rural residents

Project recommendations to the federal/regional/local governance

Project Implementing Agency - CAF Russia

Natalia Skibunova, manager Lubov Ovchintseva, manager Larissa Avrorina, consultant Tatiana Yakovleva, assistantElena Orlova, finance managerYulia Chekmareva, senior lawyer

Consulting Agencies:

Participatory planning and budgeting,performance community management andexpanding demand-driven service provision,development of training materials for RMCs -consortium of Urban Institute (Washington),Urban Research Institute (Albania), Institutefor Urban Economics (Moscow)

Legal support for pilot communities - TheCentre for Legal Support for Local Governance(Moscow)

Public services monitoring - The Centre forFiscal Policy (Moscow)

Project monitoring – IRIS Center (TheUniversity of Maryland), The Institute forAdvanced Studies (IHS), Austria, TheLaboratory for Social Research (Moscow StateUniversity)

Project consultants:

Sharon Cooley, Urban Institute Ritu Nayar-Stone, Urban Institute Zana Vocopola, Urban Research InstituteSilvana Braccula, Urban Research InstituteSergei Nikiforov, Institute for Urban EconomicsOlga Strelets, Institute for Urban EconomicsNadezhda Sibatrova Institute for Urban EconomicsMarina Maslova, Institute for Urban EconomicsDmitry Zhigalov, Institute for Urban EconomicsMarina Yakutova, The Centre for Legal Support forLocal GovernanceSavva Shipov, The Centre for Legal Support forLocal Governance

Olga Savranskaya, The Centre for Legal Support forLocal Governance Antonina Kovalevskaya, The Centre for Fiscal PolicyMaria Garadzha, The Centre for Fiscal PolicyElena Nikitina, The Centre for Fiscal PolicyMikhail Duganov, The Centre for Fiscal Policy Alexander Nikulin, InterCenterOmar Azfar, IRIS Center (The University ofMaryland)Tugrul Gurgur, IRIS Center (The University ofMaryland)

Rural Municipal Consultants:

Svetlana BashkirovaDmitri BusovikovAlexandra Viznyak Alexandr GalkinYuri GordeevAlexandr KasianovAnzaur KatbambetovGulnara Kurmaleeva Aslan KushuEkaterina LekomcevaSergei Litvin Alexandr Logvinenko Elena Luzina Yulia MashtakovaOleg NekorystnovElena Titova Ludmila Trushnikova Olga Operai

Regional Local Development Foundations – ProjectPartners

Mariet Rezcova, Resort Centre «Sodeistvie»,Republic of Adygeya

Nina Samarina, Local Initiatives Support Centre«Sodeistvie», Perm krai

Oleg Sharipkov, Civic Society Foundation, Penzacity

Project implementing agencies, consultants and partners

74

Heads of pilot municipalities - Project Partners

Perm krai

Berezovsky municipal RayonAlexandr Ponomarev

Berezovskoye settlementIgor Chaikin

Sosnovskoye settlementVassilii Asanov

Perborskoe settlementSergei Kobelev

Ossinsky municipal RayonSergei RomanovAlexandr Okhorzin

Krylovskoye settlementIakov Luzyanin

Novozalesnovskoye settlementLubov Gordeeva

Okhansky municipal RayonAndrei Zubrikov

Andreevskoye settlementVera Bolotova

Belyaevskoye settlementNatalia Okulova

Taborskoye settlementAnatoli Pirozhkov

Penza Region

Narovchatsky municipal RayonAlexandr VodopianovTatiana Baicherova

Skanovsky selsovetTatiana Tereshkina

Surkinsky selsovetVladimir Nikishov

Vilaisky selsovetNikolai Tarasov

Penzensky municipal RaionAlexandr Krylov

Vassilievski selsovetVera Zadorozhnaya

Zasechny selsovetVassiliy Sobolev

Leninsky selsovetRaissa Goryachkina

Nikolsky municipal RaionMikhail KuznetsovVladimir Umnov

Zasechny selsovetAlexandr Avdeev

Nochkinsky selsovetNikolay Sergeev

Kerensky selsovetVladimir Zhravlev

Adygeya Republic

Maykopsky municipal RaionNikolay Yanushkevich

Krasnaya Ulka settlemetTatiana Plotnikova

Dakhovskoe settlementGrigoriy Borodkin

Krasnogvardeysky municipal RaionMurat Kudaev

Sadovskoe settlementViktor Topchilov

Ulyap settlementBeslan Documov

Khatukai settlement Yusuf Alkashev

75

Annexes: Project territories

CAF (Charities Aid Foundation) – one of the largest international charitable foundations, established in theUnited Kingdom in 1924, has international offices in 7 regions of the world. CAF’s Patron is HRH The PrincePhilip, Duke of Edinburgh KG KT.

The Russian representative office – CAF Russia – has been successfully working in Moscow since 1993.Annually CAF Russia implements about forty programs in collaboration with the largest Russian andInternational companies and foundations directing over 5 mln dollars towards social projects.

Among charitable programs in the realization of which CAF takes part are: Vladimir Potanin NationalScholarship Program, Life Line Program providing assistance to seriously ill children, New Day grantcompetition, etc.

Please visit www.cafrussia.ru, www.cafonline.org.

Branch of Charities Aid Foundation (UK) in Russia

24/2 Tverskaya St., building 1, entrance 3, floor 5, Moscow, 125 009, Russia

T: + 7 (095) 792 59 29 F: +7 (095) 792 59 86 E: [email protected] W: www.cafrussia.ru, www.cafonline.org

UK Registered Charity Number 268369

local governance and civic engagement in rural russia

Documents

year project local governance

rural development

civic engagement

rural residents

rural areas

project idea

international bank

regions of russia