Poverty and decentralization
Making local government more responsive to the poor: Developing indicators and tools to support sustainable livelihood development under decentralization

Welcome to our annotated bibliography database!

This annotated bibliography comprises a broad amount of recent literature on poverty, decentralisation and forests. It covers major theoretical works in the field of decentralisation and poverty alleviation, as well as publications that try to link the aspects of natural resource management, poverty and decentralisation in a more specific context. The regional focus of the database is Indonesia and Bolivia.

Ade Cahyat, Yandi, Oding Affandi, Dante Fuentes, Yuan Oktafian and Michaela Haug have developed this bibliography as a background database for our action research project on “poverty and decentralisation” and other interested users. It comprises different types of publications, e.g. magazine articles, NGO material, project reports and international academic publications as well as relevant laws and regulations.

Search the Bibliography We have organised our literature collection according to the listed categories – you can straight away start your own search or follow the links from the right menu

Our approach:
Linking Decentralisation, Poverty and Forests

Our understanding of poverty and well being

We understand poverty very broadly as a lack of well being. Our concept of well being consists of a core of primary needs such as minimum food consumption, access to clean drinking water or self-determination and self-respect, and the locally specific context in which this core is embedded. The natural, political, economical, physical, cultural and social dimensions of the context ensure the sustainability of development, offer opportunities to get out of chronic poverty and reduce the vulnerability of the poor. Currently our project together with our local government partners is developing a system to monitor well being at district level.

Linking poverty, decentralisation and forests

The aim of this project is to link poverty with decentralisation and forests as both research locations in Bolivia and Indonesia are located in forest rich regions and the local communities heavily depend on forest resources. With delegating the responsibility for poverty alleviation to lower levels of government decentralisation reforms in both countries provide the opportunity to address poverty within a more specific local context. Local governments in Bolivia and Indonesia are now challenged to pay more attention to the special conditions rural people face in forest areas and try to use the potentials that decentralisation and forests hold to reduce, alleviate and prevent poverty.

Decentralisation

Since the 1990s decentralisation is experiencing an increased popularity and reforms to transfer fiscal, political, and administrative responsibilities to sub-national levels of government are carried out in many developed and developing countries. Compared with former decentralisation trends, the recent reforms are characterised by the effort to embed decentralisation in the promotion of democratic political systems, as they are considered to be an important instrument to achieve the goals of good governance through promoting effective and efficient administration, local participation, and civic competence.

The implementation of decentralisation reforms started in Asia during the 1980s, where the extent and outcome of the reforms vary greatly between the different countries. After first experiments with administrative and political decentralisation under the Dutch colonial government and cautious attempts to decentralise the country under President Soeharto in the early 1990s, Indonesia has passed one of the most rigorous decentralisation reforms throughout Asia with the implementation of regional autonomy in January 2001.

Law No. 25/ 1999 on fiscal balance and law No. 22/1999 on devolution of political authority formed the core of the first decentralisation legislation. Central government retained the authority over foreign policy, defence and security, monetary policy, the legal system, and religious matters, while it ceded authority over all other fields to the district governments. They gained thus full responsibility for such important areas as education, health, labour, public works, the environment and natural resource management.

In October 2004 Law 22 and Law 25 have been replaced by Law 32/2004 on regional government and Law 33/2004 on fiscal balance . This new decentralisation legislation provides local governments with increased funds while it indicates at the same time a shift of power back to central and provincial levels of government. The division of authority among the different levels of government has become even more ambiguous. However, district governments continue to play a key role concerning the well-being of the local population.

So far decentralisation has had promising as well as threatening outcomes and the impacts of regional autonomy have varied enormously between the different regions. A major common problem is caused by the lack of detailed implementing regulations accompanying the two core decentralisation laws. This has created a situation of legal uncertainty, in which local stakeholders act based upon their own perceptions and interpretations of regional autonomy.

Bibliography

Decentralisation reforms in South America/Bolivia

Following a growing global pressure decentralisation reforms in Latin America started during the 1980s. The main decentralisation laws in Bolivia are the Civil Participation Law of 1994 and the Decentralisation Law of 1995. The Participation Law institutionalised civil participation and significantly increased the number of municipalities from 24 in 1994 to 327 in 2005 as well as it provided the municipalities with an own budget. The Decentralisation Law shifted power from central government to the municipal level of government. The new authorities of municipal governments mainly lie within the public service and development sector, whereby they should directly respond to requests from local communities.

So far the main achievements of decentralisation in Bolivia are the increased participation of local communities and the improved access to funds through local governments. However, the funds allocated to municipal level are insufficient to provide extensive public services. Decentralisation remained limited and several authorities do overlap, which leads to conflicts between different government levels.

Poverty in general

Poverty has clear political and economic dimensions. This becomes obvious as political and economic interests are increasingly leading to a diversion of available resources from domestic to global markets, while trade and power interests over natural resources often lead to serious conflicts, and in some cases even to war. Such conflicts worsen the situation of the poor, as well as they cause an increasing dependency and inequality.

However, poverty contains many more dimensions. According to the Millennium Development Goals issued by the UN it is necessary to improve the living standard, guarantee the fulfilment of basic needs such as food, water, shelter, clothing, health, education, create a stable political, social, natural and economic environment, with associated political, social and economic freedoms, and allow to make free and informed choices within a democratic environment.

Well-being and Livelihoods

To address our broad concept of poverty and well-being we are drawing on the Sustainable Livelihood Approach (SLA), which has been introduced in the early 1990s and since then been continuously refined as it has been adopted by many international development organisations. A livelihood is commonly defined as comprising people, their capabilities and their means of living, including food, income, and assets. The SLA provides a qualitative understanding of poverty as it offers the possibility to gain a holistic view into the various factors that are influencing peoples' struggle to make a living. Livelihood systems are not viewed as isolated entities, but as embedded in a multidimensional context, which includes aspects of macro-economy, politics, history, geography, climate, culture, ethnicity, and social life. With this multidimensional frame in mind the main livelihood components are analysed as well as dynamic processes and external factors, which are influencing them.

Poverty/well-being in Indonesia

During the New Order period poverty decreased throughout Indonesia , mainly due to continuing economic growth and Indonesia spent little effort on anti-poverty programs. According to data from the Central Statistics Agency (BPS) the headcount poverty rate fell from 40% in 1976, relative to the BPS line, to 17,4% in 1987. Poverty continued to fall in the early and mid 1990s, and by February 1996 was estimated to be only 11%, relative to the BPS poverty line.

This picture changed dramatically when Indonesia was hit by the economical crisis in 1997 and poverty rose sharply. Fearing that poverty could fall back to levels of the 1980s, the government introduced new anti-poverty programs in 1998, which provided rice at subsidised prices as well as job, infrastructure, and loan schemes. This so called social safety net (SSN) programs differed greatly from former approaches to poverty and brought social security at the forefront of policy debates. In the still continuing post crisis recovery period more comprehensive social programs have now to be constructed under decentralisation to provide all citizens access to basic needs and services.

Poverty/well-being in Bolivia

Bolivia is part of the Debt Initiative for Heavily Indebted Countries (HIPC). The purpose of HIPC is to provide a final reduction in foreign fiscal debt, to promote growth and substantially reduce poverty, especially targeted to help the most vulnerable groups.

The Bolivian government introduced a number of social reforms within the structural reforms starting in the mid eighties. These included education, health and pension reforms, basic sanitation and social infrastructure programs, as well as the Civil Participation Law and the Decentralisation Law.

A national dialogue on development planning has been started in 1997. It resulted in an action plan based on the four pillars of equity, opportunity, dignity and institutionalism. At the same time Bolivia developed its PRSP building on this participative dialogue, which included all principal social and political actors, such as churches and NGOs, as well as the political opposition. Based on this strategy paper the Bolivian government began to prioritize spending on social issues and implementing programs to alleviate poverty in 2001. The share of public investment outlays directed at poverty reduction rose from 18.5 percent of all public investment in 1990 to 60 percent in 1999. International cooperation in conjunction with the state budget provides the funding for social development programs.

Bibliography

Forests and Poverty

Very large numbers of the rural poor live in or near forest areas. For them, forests are living spaces that have social and cultural values and that provide them with a huge variety of natural resources, including timber as well as non-timber forest products. These forest resources play a major role for local livelihoods, as they are source of food, construction material, and income. Yet a lot of people living in forest areas are considered to be chronically poor because they often only receive short term benefits from large scale forest exploitation and because they experience a lack of infrastructure, communication, and health and education services. With the high value of forest resources forests do hold a huge potential for poverty alleviation, but if this potential is used heavily depends on the political will and clear policy efforts to allocate resource revenues from the forest to poverty alleviation and to ensure that they are sustainably invested in long-term assets.

Decentralisation of natural and forest resource management

The devolution of political power to lower levels of government often goes along with a decentralisation in natural resource control. This offers local governments the possibility to change existing power relations over resources in favour of poor population groups and thus effectively contribute to secure peoples' livelihoods. However, recent research reveals that most decentralised natural resource management systems are still characterised by a continuation of central government control and so far have neither significantly increased the access by the rural poor to natural resources nor the sustainability of resource use. Instead negative trade-offs are common and most felt by the poor, while local elites tend to be the main beneficiaries from changes in resource management as they have the power to suit decentralisation outcomes according to their interests.

Decentralisation of natural and forest resource management in Indonesia

The disorderly and sudden nature of the implementation of regional autonomy has been extremely apparent in the forestry sector. In many regions local governments are attempting to generate revenues from forest resources without adequately considering social and environmental consequences. The main beneficiaries of this trend are local elites and timber companies. Local communities remain relatively powerless and mainly gain limited short-term benefits despite the fact that decentralisation has led to a greater recognition of the significance of local communities and indigenous rights. Additional problems arise from the unclear and in some parts contradictory legal framework of regional autonomy, as the central government still holds superior rights over forests and land, while resource management and access to land and forests within the districts is regulated by the local government.

Decentralisation of natural and forest resource management in Bolivia

The decentralisation of natural and forest resource management in Bolivia is regulated by the Forestry Law of 1996, which aimed at reforming the previous forest regulations dating back to the mid-1970s. The new forestry law is connected with the country's Civil Participation Law of 1994 and the Decentralisation Law of 1995.

The decentralisation process has promoted a larger involvement of municipal governments in a wide range of forestry-related issues and enabled municipal governments to receive revenues from forest licenses since the end of 1997 . An example of the interconnection between the forestry and the decentralisation law is the creation of Municipal Forest Units (UFM) .

In some cases, however, the co-operation between the central and municipal level of government is still insufficient. An ineffective sharing of tax revenues limited the transfer of funds from the central Forest Superintendence (SIF) to the municipal level. This has made some municipals set up their own UFMs through their regular budgets or externally financed projects. A lack of capacity at municipal levels has resulted in a limited transfer of authority to the municipal level.

All in all the processes of decentralising natural and forest resource management in Bolivia are still in a transition period.

Bibliography

Decentralisation and Poverty

Through the search for good governance and related poverty implications the potential of decentralisation reforms have become an important factor in alleviating poverty. Decentralisation reforms can contribute to poverty alleviation mainly in two ways. They can indirectly support efforts to reduce poverty by creating a more enabling institutional environment and directly by influencing local resource allocation and resource management for the benefit of the poor, e.g. increase the access to forests or enlarge the income from forest products. They also give local governments a more important role in developing anti-poverty strategies, which are expected to be more suited to local needs and thus more effective.

Decentralisation-poverty link in Indonesia

The implementation of regional autonomy in Indonesia has delegated the main responsibility for poverty alleviation to the district level (Kabupaten). It is hoped that local governments, now equipped with better access to funds and new authority, will be able to address poverty and its causes more effectively in their respective specific local contexts. Currently Poverty Reduction Strategy Papers (PRSP) are formed on the national, provincial and district level, whereby the national strategy is supposed to become a general guideline for the more specific and detailed approaches planned by the district level. The first outline of the national PRSP is in process. At the provincial and district level the status of PRSPs varies throughout the regions.

Decentralisation-poverty link in Bolivia

The implementation of decentralisation has tremendously increased the importance of municipal governments in poverty alleviation. The municipalities have now to provide humanitarian aid, health service, education and cultural services, programs for children and adolescents as well as to promote urban and rural development. However, some of these new tasks do overlap with the authority of branches from central government at department level, which is especially felt in the health and education sector. This overlap of tasks can lead to conflicts between the central and municipal government levels as well as to unclear financial situations.

The implementation of decentralisation has also significantly altered the role of the main economic actors. The private sector has acquired a predominant position in economic activities, while the public sector is now focusing on its normative, supportive, and regulatory functions, as well as on road building, basic sanitation, education, and health as key ingredients in poverty reduction.

Bibliography

Despite the huge prospects of decentralisation, recent studies of world-wide decentralisation efforts show that reality often lags behind the high expectations that are linked with such reforms. It has become obvious that the options and limits of decentralisation processes need to be understood in the very specific regional context and should best be accompanied by a monitoring process to ensure that new policies are responsive to local peoples' needs. Therefore it is the aim of this CIFOR project to bring the three aspects of decentralisation, forests, and poverty together, in order to monitor the impacts of the decentralisation process in forest rich areas in Indonesia and Bolivia and assist local governments to consistently and effectively support local livelihoods under regional autonomy.