Effective governance is often the missing link between
anti-poverty efforts and poverty reduction.
A missing link between anti-poverty efforts and poverty reduction: governance. Even when a country tries to implement economic policies to foster pro-poor growth and mount targeted poverty programmes, inept or unresponsive governance institutions can nullify the impact.
When governments are unaccountable or corrupt, poverty reduction programmes have little success in targeting benefits. The poor cannot gain a hearing for their views from undemocratic and authoritarian political regimes. They cannot gain access to public services from an unresponsive central bureaucracy - or know that the services exist if they lack information. Even when services are decentralized, the poor might not benefit if a local elite diverts the resources for its own interests.
In such an environment reforms of governance institutions should be moved front and centre, to provide the minimum conditions for getting poverty reduction programmes - and any other people-centred programmes - off the ground.
Holding governments accountable to people is a bottom-line requirement. Having regular elections - free and fair - can bolster accountability. But if people want government to represent their interests, they also have to hold officials to account between elections. And for this, they need to be organized.
Holding government officials accountable is a function of civil society organizations, spanning myriad forms - from community self-help groups to trade unions to political parties. Without the continuous pressure of popular organizations, democracy can be locked up and carted away along with the ballot boxes after each election.
To make democracy work, people need to be well informed. New technologies have the potential to over-come people's exclusion from channels of information. But special efforts need to be mounted to connect people to the technologies. Empowering people this way will help hold governments more accountable to their needs.
Governments are delegated the task of mobilizing and allocating society's resources for public purposes. In the intersection between raising funds from people and allocating them to people's essential needs, resources can take the wrong turn - through mismanagement or outright corruption. Or the entire system can be inequitable - raising funds from the poor to allocate to the rich. Thus accountability in the use of public resources is another core requirement for people-centred governance (box 5.1).
Responsive and accountable governments can surely benefit the poor. Ensuring that society's resources are equitably distributed requires, however, additional efforts. Even with corruption rooted out and democratic elections instituted, widespread deprivation can persist. Democracy is no vaccination against poverty.
The non-poor have to be concerned to eliminate poverty, or the poor organized to demand it. Usually the two go together. And the state has to be structured to make it easier for the poor to encourage government officials to respond to their needs. Putting decision-making power closer to poor communities can contribute to this. Helping poor communities organize to lobby for their interests is the other half of this power equation. This means cultivating and sustaining people's participation, starting at the local level.
Promoting Accountability through Elections
Elections at the national level remain a major mechanism to promote accountability. Through voter education drives, national elections can also be used to activate the formerly uninvolved and unrepresented. In some cases elections can alter the entire political landscape of a country - shifting the balance in favour of the disenfranchised. Local elections can also have a powerful impact. At
this level the poor are more likely to begin engaging in political activism. In some countries local elections are overturning deeply entrenched power structures and galvanizing the poor into political action.
Promoting Free and Fair Elections
UNDP has supported numerous electoral initiatives - mostly national ones, such as the 1999 general elections in Indonesia. The objective was to support electoral authorities in conducting a free and fair election and informing voters, especially women and first-time voters, of their rights and responsibilities. Twenty-one Indonesian civil society organizations - including women's groups - conducted a voter education campaign targeted to women, first-time voters and journalists. The campaign is estimated to have reached more than 110 million Indonesians. And in June 1999, 117 million Indonesians turned out to vote for a new parliament.
In Bangladesh in 1996 UNDP assisted the Election Commission in organizing national elections - in 90 days. UNDP helped in three major areas: training of electoral officials, monitoring by international observers and, most important, voter education. The election was declared to be free and fair, and a campaign to target marginalized groups raised voter turnout from the previous mark of 40% in 1991 to 73%, with a big increase in women voters.
Fostering Direct Democracy in India
Thanks to two amendments to India's constitution in 1992, Panchayat Raj institutions - elected institutions of self-government at district, block and village levels - have re-emerged stronger from a long history of weakness. From the 3 million elected positions in these bodies, scheduled castes and scheduled tribes are assigned about 660,000 seats, in proportion to their share of the population, and women get 1 million. Many women have formed discussion groups and networks to strengthen their position in the face of long-standing cultural barriers. Today India's system of governance is being built slowly from the bottom up - based on direct democracy - not erected from the top down.
Civil society organizations are joining with local government to promote change. At the village level people are conducting "social audits" of government funds to ensure accountability and transparency. Gram sabha, or village assemblies, are contesting corruption and abuses of power. Local governments are mobilizing new tax revenues and initiating development projects based on participatory consultation.
Greater democracy at the local level in India is clearly linked to progress against poverty. States with a strong tradition of social activism have made the fastest advances. Now land reform, long promised, is being implemented in several regions because local bodies can monitor its progress.
Improving Accountability in Finances
While elections improve the accountability of officials in responding to people's interests and needs, systems also have to be instituted to ensure the fair and transparent allocation of government resources.
A central target for such systems: corruption. It distorts the allocation of resources away from their most efficient use and depresses the incentive to invest. It thus slows economic growth. And its corrosive effects are pervasive not only economically but also socially and politically.
The poor pay a high price. Corruption directs income away from them and robs society of resources that it could deploy to combat poverty. And when a country does launch a poverty programme, corruption can siphon off many of the benefits. Much like inequality, but in a balder form, corruption deprives the poor of an equitable share of society's resources and indirectly reduces the opportunities for poverty reduction by dampening economic growth.
Any time public benefits are distributed in line with the ability to pay - one hallmark of corrupt government - the poor are bound to suffer because they have so little. Resources tend not to flow into social services for them because the bribery receipts are low. Instead, corruption thrives on big, capital-intensive projects, such as for large infrastructure and military hardware, where bribery income can be hefty and the chances of detection slim. These projects rarely provide much direct benefit to the poor. Where resources do go to social services, corruption tends to concentrate on the construction of facilities such as schools and hospitals. By adding a hidden tax, corruption reduces the resources for extending these services to the poor.
Many of the rural poor, often small farmers, directly encounter the corruption of the "middlemen" who monopolize the marketing of their agricultural products. Agricultural marketing boards have sometimes become breeding grounds for patronage and corrupt payoffs. And many of the urban poor cannot start legitimate micro-enterprises because of the gauntlet of payoffs they have to navigate.
Getting Resources to the Intended Beneficiaries
People's participation in poverty programmes goes hand in hand with transparency in decision-making and accountability in the use of funds. People give much stronger support to programmes that distribute benefits equitably and have safeguards against patronage and corruption. In many cases targeting is bankrupted not by the administrative costs of identifying and reaching the poor but by the diversion of a big part of the resources into other hands.
The UNDP-supported South Asia Poverty Alleviation Programme has been attempting to establish models of 
transparency for local governance structures. Whenever a new public investment project for a village is approved by a national team, the entire village is informed of the decision and the details on materials purchased and the cost of the project are shared with all.
In Thailand new reforms are encouraging decentralization and community participation to overcome the traditional autonomy of government departments, which have lacked accountability and responsiveness to citizens' needs. In Uganda a 1996 auditor general's report indicated that a significant share of development funds were diverted before reaching intended beneficiaries in local communities. These problems plague poverty programmes almost everywhere. But some governments, like those in Thailand and Uganda, are trying to tackle them.
If corruption were cleaned up at the same time that the poor organized themselves, many national poverty programmes would immediately ratchet up their success in directing their benefits to the people who need them. So, many problems of targeting are, at bottom, problems of unaccountable, undemocratic institutions of governance.
UNDP's Pacts against Corruption
An international campaign against corruption could unlock resources for a campaign against global poverty. But the two campaigns need to be linked - with the poor as one of the strongest and most vocal allies against corruption because they bear the brunt of its impact.
UNDP is helping governments fight corruption on several fronts. Its Programme for Accountability and Transparency (PACT) is helping countries institute sound financial management and accountability systems and launch anti-corruption initiatives, with pilot programmes to develop national action plans under way or planned in Burundi, Jordan, Mongolia, Venezuela and Yemen.
UNDP country offices are supporting country-driven initiatives: In the Philippines with the Centre for Investigative Journalism, to boost the effectiveness of journalism as a tool to expose and deter corruption. In Georgia with the Anti-corruption Group, an independent civil society organization, to do research and devise innovative ways to prevent corruption. And in Bolivia, to finance the 10-year National Integrity Plan, for extensive reform of public institutions.
UNDP has also helped convene international and regional workshops on corruption and in 1999 supported the Ninth International Anti-corruption Conference, organized by Transparency International and hosted by the Ministry of Justice in South Africa. At that conference UNDP and Transparency International announced the Partnership Fund for Transparency, a non-governmental, non-profit organization to help civil society organizations design, implement and monitor anti-corruption programmes.
Expanding Access to Information and Communication
The new information and communications technologies have extraordinary potential to democratize governance structures and increase people's participation in development. But access to these technologies remains woefully unequal. At the beginning of 1999 more than 150 million people worldwide were on-line. Of these, 87 million were in North America, and another 33 million in Europe. Only 4.5 million were in Latin America, and just over a million in Africa. Poor developing countries are definitely not yet "networked" (table 5.1).
Developing countries have been left largely behind by the revolutionary changes in information and communications technologies. Yet these technologies can impart a powerful new dimension to international development cooperation, enabling it to deliver assistance faster and cheaper and to reach poorer, more remote areas. What is needed, however, is a development partnership among government, the private sector and civil society to connect the technologies to people, particularly poor people.
UNDP has been supporting initiatives to put the new technologies at the disposal of developing countries. These have included global programmes, such as the Sustainable Development Network Programme; regional programmes, such as the Asia-Pacific Development Information Programme and the Internet Initiative for Africa; and many country-level projects.
UNDP has supported pilot projects to set up regional "telecentres" in a number of countries. Communities define how to use these telecentres, which can offer a range of services - providing long-distance learning, supplying telemedicine, and offering agricultural extension and rural development services.
In Mongolia, which has one of the lowest population densities in the world, the Asia-Pacific Development Information Programme has set up citizen information service centres in remote provincial towns, including in the Gobi Desert, to supply residents with news, connect them to the central government and offer basic training in computing.
A similar programme in Jamaica plans to set up six community cybercentres on the island. The first, set up on the southwestern coast, has disseminated information broadly, including to rural and marginalized groups. Local farmers are now informed about what is happening in agroprocessing. And the programme is training post office staff all across the island in using email and the Internet. In Ukraine the first of eight rural telecentres has been opened to provide women farmers with access to outside advice on agriculture and farm management. The effort is aimed at helping women overcome the greater obstacles they face compared with their male counterparts in 
obtaining access to land and credit and registering their farms as private enterprises.
In Egypt UNDP and the United Nations Volunteers have worked with the central government, an investors association, the regional government and the Chamber of Commerce to establish three technology access community centres in the governorate of Sharkeya, two hours away from Cairo. These centres provide remote rural communities with public access to information technology, especially the Internet, and training in how to use it. Among the goals are to provide Internet content in Arabic and distance education programmes for a variety of purposes.
Making Decentralization Pro-Poor
Generally, decentralizing decision-making that is more appropriately left to regional or local governments is a priority for promoting democracy. It provides a more conducive enabling environment for poverty reduction. But to have the biggest impact, decentralization should go hand in hand with strengthening accountable local government and fostering popular participation.
Decentralization has different meanings. Is it based solely on the de-concentration of functions? Or does it also include the devolution of political authority? Early experi-ments with decentralization focused on de-concentration, on the administrative delegation of responsibility - say, from the headquarters of a ministry of agriculture to a district agricultural office or even an extension officer. The main purpose was to increase efficiency in the delivery of government services.
A downward transfer of authority is not necessarily part of this, however, since the district office remains accountable primarily to the ministry and not to the public. While greater efficiency in delivering services is likely to benefit the poor, the impact might not be substantial or lasting if the public accountability of local government offices is not improved.
Under deconcentration, those accustomed to receiving public services might obtain them more readily, but those who are not - the poor - are unlikely to receive a windfall. For that, local government has to be more accountable to people, and the poor have to be organized to advance their own interests.
The devolution of authority moves a step closer to these conditions. Unlike deconcentration, it involves the transfer of authority to elected local governments. Local bodies then have authority to make decisions independent of central government. And if they are elected, their decisions are more likely to reflect the interests of local people. Recent experiments with decentralization, such as those in Uganda, have generally recognized the political and economic benefits of devolution - when wedded to greater accountability and democracy - and have combined it with deconcentration of functions.
Whether the poor are organized enough to advance their interests with local government goes beyond the question of devolution - though any system of good governance must take this into account. Moreover, if the poor are a minority, even being well organized might not be enough to change their situation - though it increases the likelihood that others will take account of their interests (chapter 7).
So there are several links in the chain stretching from decentralizing central governmental authority to directly improving the lives of the poor.
Devolving Resources
UNDP has generally supported decentralization as a governance component of poverty programmes - as in Ghana, Nepal and Uganda.
Reforms in Ghana have devolved significant authority to local districts (see the country profile). Within the guidelines provided by the National Development Planning Commission, districts now have considerable autonomy to decide their development needs and priorities, and they have more control over resources. Districts can raise some of their own revenues and negotiate directly with external donors for additional resources. In addition, 5% of the national budget is allocated to them - in part on the basis of need - specifically for development purposes, with a fifth of this for poverty reduction activities. This innovation underscores the general point that devolution of responsibilities has to be accompanied by devolution of resources. Despite some success, Ghana is having to strengthen devolution by introducing greater accountability and democracy.
Uganda has one of the most advanced programmes of decentralization in Africa (see the country profile). Building on the country's new constitution, adopted in 1995, its Local Government Act in 1997 mandated the devolution of authority to local councils, which were elected in 1998. But the accountability of the councillors to the electorate is still to be tested. Local government has the power to raise revenue, but the local tax base is weak in many areas. Moreover, the influence of local elites and political patronage are still problems. To make devolution work, systems of accountability need to be strengthened.
Nepal has been decentralizing since the early 1980s. In the 1990s the Ministry of Local Development began spearheading work to strengthen local institutions' capacity to carry out anti-poverty work, and the government began more systematically to join decentralization to efforts to build participatory local institutions (see the country profile).
In both Nepal and Thailand more democratic political systems have recently boosted the chances for meaningful decentralization. Thailand's new constitution, adopted in 1997, provides for greater accountability of the state to its citizens and greater participation by people in public policy-making (see the country profile). But the local capacity to make devolution work is still lacking. Local districts need more authority to raise revenue, but also need additional resources from the central government - or from external donors - to accelerate the training and capacity building that can enable the districts to shoulder their new responsibilities.
