Dennis de Tray's interview for Economic Review magazine on decentralization

1. What type of measures aimed at supporting decentralization process in Uzbekistan does the World Bank undertake?

One of the main lessons we have learned as a development community is that basic services are often better managed at the local levels of government than by the central government. Why is this so? Because it is easier for citizens to hold local government officials accountable for government actions than to hold central officials accountable. Another reason is that by decentralizing service delivery and accountability it is easier for communities to signal what they really care about. Both of these reasons were mentioned by President Karimov in his recent speech to Parliament, in which he argued for greater accountability of public officials at the local government level. The World Bank is supporting Uzbekistan's decentralization efforts in three areas, health delivery, education and community services such as clean water, sanitation and solid waste management. We are working first through pilot operations that show the government what works and why it works, and then through efforts to scale up what we have learned to the entire population.

Here is an example: One of the objectives of our first Health project is to strengthen the management and financing of primary health care services. Under this project primary health care (PHC) facilities in five pilot regions were given legal independence. Financial resources for the PHC facilities are pooled at the oblast level and then allocated on per capita basis with adjustment for gender and age of the population served. Heads of PHC facilities have the authority for managing the facility including staffing issues, using funds allocated. In this way, through decentralization management authority and moving away from a input-norm based system, the project has generated significant improvements in resource allocation and equity of service, and – at least in one of the pilot oblasts – significant financial savings as well. These reforms are now being scaled up to the whole country under our second Health project approved in September 2004.

One of the greatest promises of effective decentralization is that the enthusiasm and energies of service users can be mobilized to improve the quality of the service. Through the Community Empowerment Network, the Bank tries to build capacity in local communities for people to help themselves e.g. to repair local buildings and infrastructure, protect the vulnerable, and independently raise external funds. Under a new project funded with Japanese grants, housing associations in the cities of Bukhara and Samarkand are being strengthened and funds provided to repair and maintain water supply installations in multi-storey apartment blocks, complementing the renovation of the city water supply system currently carried out by the Government with World Bank and Swiss Government assistance.

2. How do you assess decentralization perspectives in Uzbekistan ?

Successful decentralization depends on a central government's willingness to establish clear lines of accountability between the central and decentralized units of government. Not everything a government does makes sense to be decentralized. Education standards, for example, should be centralized but the responsibility for managing schools should be decentralized. What decentralization does is to reduce the "distance" between those providing public services and those for whom the public services are being provided. In turn this increases accountability, which has generally led to better services. A key factor in the success of decentralization is that local authorities be given either the resources or the tax base to adequately finance local services. Decentralizing responsibility without resources does not help much.

Uzbekistan still stands at the beginning of a decentralization process. The President’s recent speech has brought the issue onto the policy agenda, but experience suggests that it will take considerable time to implement decentralization effectively. The World Bank will continue to look for ways to pilot reforms, gain experience, and then upscale what works to the level of the country.

3. How they could influence socio-economic development of the country?

Decentralization can be an important set in nation building as it increases the sense of ownership and responsibility of citizens throughout the country. Decentralization also gives citizens more opportunity to influence the services they get and to ensure that resources allocated to service provision are well spent. The Government has committed itself to further reduce the role of the state in the economy and is planning to lower the tax burden. This is highly welcome, but it will also mean less revenue to spend on public service delivery. Making public services more efficient through decentralization should thus be an important element in Uzbekistan’s further transition to a market economy.