The evaluation identified five main challenges that are summarized as follows:

1. Ways have to be found of focusing greater assistance on building the capacity of elected institutions;

2. The pro-poor orientation of local government needs to be further developed;

3. There is a need to strengthen the participatory orientation of projects;

4. More generally, there is the challenge of dealing with "technicalism," an approach that is driven by official technical specifications and procedural requirements rather than the human, social and financial capital of communities and relevant institutions. (Some examples of technicalism are given in Box 1); and

5. These and other challenges raise policy issues for discussion with the partners concerned, and this is another major challenge.

The evaluation also suggested that downward accountability is implicit in IFAD's approach to decentralization, and its emphasis on mobilizing the poor and helping them gain a voice and access to resources. Upward accountability is explicit in the way senior governments exercise oversight over local governments. But neither the COSOPs nor the project documents propose how IFAD would assist with accountability in local governance and service delivery. Based on literature surveys and practices observed in the region, the evaluation identified a number of mechanisms for accountability that could be employed in IFAD-assisted projects.

Recommendations for capacity building and accountability

The regional workshop highlighted the importance of capacity building by noting that it should be understood broadly in order to support decentralization: capacity building includes development of skills, provision of knowledge and information, improvement of systems and procedures within local government institutions, provision of financial and material resources, and also the creation of an enabling policy environment for local governments to be effective. Participants also noted that IFAD increasingly relies on local government as a vehicle for service delivery, and that the need for capacity building exists at multiple levels. Capacity building should extend, in particular, to elected representatives, civil servants, communities, the private sector and civil society partners. And it should emphasize relevant aspects of development, administration, fiscal management, policy formulation, enhanced poverty orientation, and community-based training for ensuring sustainability. Participants cautioned, however, that capacity building should not be a stand-alone activity, and that it should be integrated into long-term national capacity building plans.

The regional workshop also paid attention to the accountability issues flagged by the evaluation. Participants felt that IFAD has, indeed, tended to promote accountability in service delivery but more could be done in future projects and programmes. More specifically, the workshop recommended that value for money audit should be enforced; mechanisms should be in place for vertical and horizontal accountability, there should be social audits, public display of financial records to user groups, and enhanced beneficiary participation in all processes associated with service delivery. These and the recommendations noted above for capacity building will be reflected in future project design, COSOPs and the IFAD regional strategy for Eastern and Southern Africa.

Recommendations for strategy and project design

Participants at the regional workshop agreed that there is a major strategic issue in the way IFAD approaches decentralization, and this issue queries how IFAD assistance would approach the problems associated with technicalism and sustainability. Participants also agreed that IFAD has a wealth of experience that could now be operationalized through Local Governance and Poverty Alleviation (LGPA) Strategies in selected locations in the region. These strategies should provide operational guidelines for the district level as well as the project or programme level. Participants visualized that such strategies would be based on past experience, existing documentation as well as possibly new documentation that benchmarks good practices from IFAD and other experiences. Participants emphasized, however, that LGPA strategies should be prepared in a participatory manner with the stakeholders concerned, and they must be integrated into policy dialogue and regular interface between IFAD and its partners.

The workshop provided some food for thought regarding elements of LGPA Strategies. These would be stand-alone strategies, differentiated by location as required, and contributing to the future IFAD strategies as well as project design and on-the-ground testing of pro-poor operational policies and procedures. Future IFAD-assisted interventions could be better attuned to the needs and circumstances of the poor if a number of elements were included in the LGPA strategies, including those outlined below in Box 2. It is thought that elements such as these would help IFAD and its partners further develop their emerging niche in local governance. A one-year strategy formulation process is considered appropriate for any selected location in the region. Based on the valuable experience that IFAD has gained, and the feedback provided by the evaluation, it would be appropriate to develop two or three LGPA strategies at a time in selected locations of Ethiopia, Tanzania and Uganda. The LGPA strategies would then feed into the regional strategy and future COSOPs and projects.

Box 2: Suggestions for LGPA Strategies IFAD strategy, COSOPs and projects would demonstrate how to implement what they are expected to do by the regional strategy in terms of targeting the poor within their communities. Participation and ownership of development initiatives by the communities, and especially the poor among them, is key. Decision making has to be vested in the communities. The communities, however, should be trained to ask for technical options, and technical experts should be trained to provide options rather than blueprints to the communities. Technical design as well as institutional arrangements should be driven not by rigid blueprints but by the social, human and financial capital of the communities and local governments. The poor should be actually consulted by the technical experts and their knowledge and priorities reflected in the design of activities. The poor should be offered broad choices rather than menu-driven solutions. Procedures for organizing communities and delivering services would be simplified to the point of being accessible to the poor, instead of insisting that the poor must be educated and trained to comply with unrealistic requirements. Projects would be required to practice full disclosure of information to the beneficiaries and the mass media. Accountability would be strengthened by strengthening elected institutions to play their role more effectively. IFAD assistance would also include other measures to promote accountability and transparency in service delivery, and control corruption. IFAD would be willing to invest in the autonomy of the poor from state actors (as outlined below in paragraphs 15-16).

For on-the-ground testing, stakeholders recommend the use of grant funds, as testing new approaches may be considered risky and governments may be unwilling to use loan funds for this purpose. But if willing partners could be found and innovations identified, the next challenge would be to inject demonstrated innovations into larger IFAD-assisted and other programmes. These could be area development projects or perhaps especially designed local governance initiatives with a particular focus on rural poverty alleviation.

Stakeholders noted that the evaluation considered it extremely difficult, if not impossible, that rural communities on their own would be able to hold anyone powerful accountable for service delivery, and improve transparency in decision making. One well-known route to accountability is through elected representatives, and this has been touched upon earlier. Another route (mentioned in Box 2) is to promote the autonomy of the rural poor from state actors, as in the orthodox cooperative movements of Europe, which could also generate benefits in terms of institutional sustainability and improved service delivery. This kind of autonomy would require that rural communities be organized outside the state sector, free from the procedural formalities and diktat of official circles. This does not mean, however, that the NGO model is the answer, for poverty alleviation on a national scale is beyond the resources and capacities of NGOs. This implies that government commitment and support are essential, but government also has to respect the autonomy of rural communities, so that they can be more forthcoming in playing their part in national development.

In practical terms, the proposal leads to a recommendation for autonomous support organizations that perform as "honest brokers" between rural communities and service delivery organizations, including government agencies and NGOs. At IFAD, this recommendation was explained earlier in the 2002 Sri Lanka Country Programme Evaluation (CPE). As explained in the Insight associated with this CPE, such an organization would be "a self-governing, not-for-profit body to help organize the poor, promote participation, and ultimately strive for their empowerment and for rural poverty alleviation. Management would be strictly professional, its board to include some government officials (as a minority) and others known to be politically neutral and committed to development." An endowment fund contributed by the government and donors would cover recurrent costs⁴. Stakeholders agreed that the prospects for establishing such an entity could be explored with the governments concerned during the formulation and testing of LGPA strategies.

Recommendations for policy dialogue and harmonization

18. Stakeholders explored the objectives and nature of IFAD's policy dialogue and advocacy work, the modus operandi of policy dialogue in light of the absence of IFAD staff permanently present in the field, the platforms and processes in which the Fund must engage actively, as well as the human and financial resources implications to effectively achieve the established objectives. The following recommendations should be taken into account in the development of the regional strategy and COSOPs:

1. IFAD should seek stakeholders' contribution to the identification of policy dialogue and harmonization objectives and commitment to their achievement during future strategy formulation. Future strategies should consider policy dialogue and harmonization as integral dimensions of IFAD activities in the region. Policy dialogue and harmonization activities should have measurable objectives, components and activities, outputs, resource allocation and performance indicators;

2. Resources need to be earmarked to identify, document and communicate local policy changes promoted in the context of IFAD operations that could have potential for upscaling and replication at a higher level beyond the operation under consideration. This could be done through the mechanism of LGPA strategies and also in other ways;

3. IFAD should improve its efforts in promoting dialogue among national stakeholders on policy changes identified in IFAD operations. In this regard, IFAD should further strengthen its partnerships with the authorities responsible for decentralization as well as associations of local governments (wherever they exist);

4. The Fund should review and intensify its engagement and participation in selected national and thematic policy dialogue fora on local governance and poverty alleviation; and

5. The preparation of future COSOPs should be used as an opportunity for engaging the government, the donor community and other national stakeholders in policy dialogue on issues of pressing concern in the area of local governance.

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1/ This agreement reflects an understanding among partners (see paragraph 2) to adopt and implement the recommendations stemming from the evaluation.

2/ The CLP consisted of senior officials of IFAD and the Governments of Ethiopia, Tanzania and Uganda.

3/ Special Country Programme, Phase II (Ethiopia), Kagera Agricultural and Environmental Management Project (Tanzania), Participatory Irrigation Development Programme (Tanzania), District Development Support Programme (Uganda) and National Agricultural Advisory Services Programme (Uganda).

4/ Where British law is in use, the organization may be established as a private company limited by guarantee.