Cararro and Lakhey (2018, 10) provide an excellent overview of the federal system and the opportunities that it is meant to provide
“…the 2015 Constitution provides for a federal and decentralised governance system with non-hierarchical relationships between Federal, State and Local Governments…Through decentralisation and devolution there is a general expectation that this should help to foster different groups identify, empower people, improve service delivery, and reduce poverty and inequality.”
At the same time there are clear risks associated with the federalism transition. In this section we review the consequences—both intended and unintended—that the transition to decentralization is having on the SP sector.
Implications for access to SP. It is suggested that relationships at the local level will support access to the program. Carraro and Lakhey (2018) argue that closer links between people eligible for social security and the local government responsible for its implementation should help lower exclusion errors. Schjødt (2017) describes how people previously depended on personal relationships and
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networks that the “decentralized system uses the informal social relations in communities to bridge the gap between citizens and the state.”
In practice, at this specific moment, these benefits are not yet realized. The period of transition is certainly creating delays and confusion in the delivery of SP. At the time of this report, the division of power, roles, and responsibilities had been set but the distribution of human and financial resources was very much a work in progress. We found a number of staff had been deployed to local governments, mainly officials below section officer, but many were awaiting instructions from the central government, and others had been borrowed back from municipalities and rural municipalities to deliver essential roles in service delivery. For SP, Carraro and Lakhey (2018) note that only once staff are in place at the local government level can adjustments and improvements be made to programs that will allow ASP.
Implications for roles and responsibilities. Once deployed, it is also not evident that everyone is clear on roles and responsibilities. As it stands, the roles and responsibilities are there on paper but less so in practice. Central-level agencies (specifically Ministry of Federal Affairs and General Administration [MoFAGA]) are primarily responsible for the main social assistance programs—the SSAs and both the KEP and RCIW until their closure. Under federalism, they have a specific mandate for overarching policy and program design (for example eligibility). For the SSAs, local governments are largely viewed by respondents as implementing arms of the central government rather than SSAs being devolved to local governments, but this may change over time as local government take on more independent programming. A number of areas of confusion remain, entangled in the opaque differentiation between exclusive and concurrent powers of different parts of the government. As Khadka (2017, 5) notes: “There can be duplication of resource allocation in some areas, and weak allocation of resources in others. It is also likely to create confusion over the role of each level of government. Shared responsibility can result in conflicting policies, lack of mutual coordination and reduced performance. Therefore, the responsibility of every level of government needs to be clearly demarcated and subject to a coordinating mechanism (and/or partnerships) to enforce accountability and encourage fiscal efficiency.”
In practice this means overcoming the lack of clarity among stakeholders about operational responsibilities. For example, although on paper it is clear that beneficiary lists for SSAs require data entry at the local level and overall management at the center, it is less clear who owns (or holds master copies) and who maintains the lists among stakeholders. At the local level, respondents reported not having lists, but sending new entries to the central level to be added to the list. The current lack of clarity appears to lead to gaps in functions: in particular, there is no clarity on responsibility for checks and balances in the system. A further opaque area is responsibility for new registrations; while it is clear that the future plan is for this to take place at the local government level, perhaps even at the ward level (and there are clear advantages to that, including for incorporating disaster mitigation, preparedness, response, and recovery into SSA programming), some programs—disability and single women—were registering beneficiaries at district level offices in some places.
Implications for locally appropriate SP. The extent to which local governments can develop their own SP policies and programs remains a moot point among key stakeholders. It is recognized that the SSAs are nationally defined programs. The situation for PWPs is more complex. Decisions about
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the activities undertaken in PWPs and, to some extent, about targeting are taken at the local level. We found evidence in Humla of targeting criteria being adapted at the rural municipality level to adjust to new funding allocations.
Khadka (2017, 6) highlights the roles that different levels of government play in SP: “central government has responsibility to determine the overall policies and standards and provide the budget to ensure delivery of all services, the subnational governments are responsible for implementation, particularly the determining of beneficiaries of welfare programmes.” The central overarching role is critical where SP meant to achieve redistribution, especially to avoid inequitable benefit levels and coverage in different areas (Carraro and Lakhey 2018). However, there is also acceptance that the substantial geographical variation in social and economic vulnerability across Nepal means that local knowledge can be applied in specific locations to better tackle particularities of vulnerability. Finding an appropriate and equitable balance between central and locally defined eligibility and benefits will be challenging for Nepal—particularly given the limited fiscal space in equalization budgets. There are risks in devolving SP responsibilities to the local level. Carraro and Lakhey (2018) note the risk that some local governments have lower capacity and resources to implement locally appropriate programs and without careful management of equalization grants, inequalities could be reinforced, rather than reduced. Schjødt (2017) stresses that local processes do not always support local citizens—particularly excluded groups. In Saptari, there were highly diverging views on how far the newly elected politicians and the local government secretaries were supporting them.
Implications for implementation capacity. Before the transition to federalism, Khanal (2014, 6) had argued that “weak coordination between agencies, poor information management systems and a lack of institutional capacity are all critical problems.” There are substantial investments, including through support from international development agencies, in improving institutional capacity to deliver SP, but progress appears to be currently in limbo, as the new institutional arrangements emerge at central, provincial, and, especially, local government levels.
Our findings suggest that while the potential for greater citizen and community-based organization engagement at the local level is widely recognized (see, for example, Schjødt 2017), early indications are that the new local government institutions will likely face the same capacity challenges as the VDCs and wards that preceded them. Kardan et al.’s (2017) assessment of capacity in Kenya and Zambia suggests that the political premium placed on SP led to “additional tasks being carried out by already stretched and understaffed local administrations, and often at the expense of their staff not carrying out other important statutory functions related to social services.” The ways forward are including administrative resources to be matched to expansion and geography; revising the job descriptions to cover realistic workloads for staff at the local level—especially those that are covered alongside other roles; assessing whether separate functional units are required; and whether elements of program delivery can and should be outsourced (and what the capacity implications of this would be). Much of this is a priority in Nepal.
A more positive finding is that decentralization, particularly moving technical staff from district to local government level, may allow more integrated working at the local level—particularly of staff who contribute to the implementation of PWPs. Whereas previously, the KEP was implemented through a district-level office, it is likely now that staff at the rural municipality level—for example
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engineers—will work on numerous infrastructure projects in road construction, irrigation, agriculture, and so on, and thus there is an opportunity to create more meaningful and effective assets through public works at the local level. Although the KEP has ended, this logic applies to the new Prime Minister’s Employment Programme (PMEP).