An Integrated Approach to LED Promotion and the Critical Role of Local Government

Challenges & Opportunities

CLGFEnergising Local Economies: Partnership for Prosperous Communities

Cardiff, March 2011

UNCDF is the UN’s capital investment agency for the world’s least developed countries, established in 1966 by the General Assembly

Flexible instruments: investment capital (grants, credits and guarantees), capacity building support and technical advisory services to promote: Inclusive Financial Sectors. Decentralization and Local Development.

Interventions: Catalytic Investment and Policy Impact contributing to Sustainable Local Development.

Active portfolio: $200m in 38 LDCs; 10 post-conflict countries.

UNCDF: An Overview

Local GovernmentSystem

Policies &Regulations

Institutions& Capacities

Investment

Basic Service

Infrastructure

UNCDF

Local GovernmentSystem

Local E

con

om

ic D

evelo

pm

en

t

Food

Secu

rity

Oth

er

Stage 1 LDPStage 2 LDP

Specialized Sector & Thematic Outputs

Clim

ate

Ch

an

ge A

dap

tatio

n

Basic S

ocia

l Serv

ices

Policies & RegulationsSector Specific Policy, Legal & Regulatory Inputs

Institutional CapacitiesSector Specific Systems & Capacities

InvestmentSector Earmarked Development Funds

M D G

Structure & Stages of the UNCDF Local Development Programme

LED PolicyAdvise

LED Promotion(through LG)

Capacity & Finance

National Context for LED Promotion• National Economic Context • Macroeconomic Policy Context • Institutional Context

Local Capacity for LED Promotion• LED Governance • Enhancing the Enabling Environment• LED Catalytic Interventions

National/Sub-NationalChannels of Coordination

& Communication for LED Promotion

The Scope of the Local Economic Development Programme

Institutionalizing LED Promotion Functions at the National and Local Levels

Institutionalizing the LED Promotion Function at the National Level;

• In Relation to the Lead LED Promotion & Harmonization Agency (Ministry or Inter-ministerial Body)

• In Relation to the LG Support and Supervision Agency

Institutionalizing the LED Promotion Function at the Local Level;

• Activate the LED focused department/unit (or create a pilot entity) at Target LG Tier

• Consolidate/introduce the LED promotion staff at target LG

Institutionalizing the Function

Activating the LED Promotion Function of Local Governments

• Conduct the Quantitative Assessment of the Local Economy;

- the Local Economy and Business Enabling Environment Assessment (LEBA) - In-depth/focused quantitative assessment of specific sectors, clusters or value/supply chains

• Establish and Activate the LED Forum; Membership – Local Economic Actors Objective: Obtain a nuanced understanding of the dynamics of the local economy

• Establish and Activate an LED Promotion Committee; Membership: LED Promotion Actors; Objective: Harmonize and coordinate the actions of all LED Promotion Actors

• Conduct the Qualitative Assessment of the Local Economy;

- the Participatory Appraisal of Competitive Advantage (PACA) - In-depth/focused quantitative assessment of specific sectors, clusters or value/supply chains

• Introduce and Populate the Local Economy MIS

The Scope of the LED Governance Function at Target LG

Project Development

LED Governance Process

Loca

l Eco

nom

y As

sess

men

t

LED

For

um

LED

Str

ateg

y

Loca

l Ec

onom

yM

IS &

G

IN

Stra

tegy

Dev

elop

men

tInfrastructure

Productive Projects

Regulations

Capacity Development

Technical Assistance

Macroeconomic Policy

Project Finance

Project Implementation

&Coordination

Local Government

Private Sector

Public-Private Partnership

Public-Public Partnership

Development Partner Programs

The Scope of the LEDP at the Local Level

The LED Fund

The Potential Scope of the Economic Development Strategy; Macroeconomic Policy Reform Regulatory Reform Institutional Reform Economic Infrastructure Development Strategic Sector Development - Financial Services - Business Development Services - Communication - Transportation - Other Sector, Cluster & Value/Supply Chain Development - Finance & Financial Services - Business Development - Technology Transfer, Product Development and Market Access - Skills Development - Other

Catalytic Interventions

The LED through LG Package; Deploying the Economic Development Strategy Formulation Process

LED Strategy Implementation StagesImplementation of Investments & Interventions

Project Development

LED Needs Assessment & Strategy Formulation

(Focus options of Assessment)

Local Economy Assessment

LED Forum

Local Economy MIS

LE

D

Str

ate

gy

Cata

lyti

c P

roje

ct

Iden

tifi

cati

on

Value Chain Analysis

Cluster Analysis

Sector & Sub-Sector Analysis

SME Analysis

Informal Sector Analysis

Private Sector Analysis

Sector & Sub-Sector Analysis

Post Conflict Economy Analysis

Project Finance

Project Coordination &Implementation

Economic Infrastructure Projects

Productive Projects

Regulatory Improvement Interventions

Capacity Development Programmes

Technical Assistance Programmes

Service Sector Development Programmes

Macro Policy Development Programmes

The Scope of the LEDP at the Local Level

Diagnosing the National Context for LED Promotion

The National Level

The Sub-National Economies

Macro Policies – LED Relevant

Trade LaborMonetary TaxLand

National Development Strategies – LED Relevant

Agriculture Industry

Private SectorSME

The National Macroeconomic Policy ContextThe Alignment Challenge

PRS

Export/Trade

Oth

er

Sect

ors

Com

munic

ati

on

Transp

ort

ati

on

Labor

Voca

tional

Educa

tion

Agri

cult

ure

Trade

Indust

ry

Assignment of LED Sector Functions at the Local Level

De-Concentrated LED Related Functions

Institutional

Delegated LED Related Function

LG System Devolved LED Related Functions

Centrally Performed LED Related Functions

Devolved Function

Delegated Function Centrally Performed Function

De-Concentrated Function

Developing the National LED Promotion Vision, Policy & Strategy

LEDStrategy

Create National Institutional ArrangementsFor Guiding a Process of LED Policy & Strategy

Formulation, Implementation & Monitoring

Analysis of the National and Regional Economy

Review of LED RelatedMacroeconomic Policies

Review of LED related Thematic & Sector Strategies

Map-out LED relevantPublic & Private Agencies at

Central and Local Levels

Map and Analyze the Distributionof LED Related Mandates and

Functions and Resource Among all relevant central and

Local Agencies

Articulation of the LED Vision & Policy

Develop LED PromotionStrategy

Implement the NationalProgramme forLED Promotion

The Legal/Regulatory and Institutional Context for LED

Promotion

Definition of the Comparative/Competitive

Advantages of the National/Regional Economies

The Macroeconomic Policy ContextFor LED Promotion

Mapping of LED PromotionInterventions/Programmes

Undertaken by National & DonorActors

The LED Policy & Strategy Articulation & Application ProcessThe National LED Promotion Framework

LEDStrategy

LEDStrategy

LEDStrategy

LEDStrategy

LEDStrategyLocalities

Reform & AlignmentOf the LED

Institutional Context

Reform & AlignmentOf the LED

Policy Context

1

42

3

7

65

Map the Central Level Institutional Landscapefor LED Promotion

The LED Policy & Strategy Articulation & Application ProcessInstitutional Arrangements for LED Policy Development & Implementation

Create a Multi-Sector Body for Guiding the Articulationof the LED Promotion Vision and Policy

Identify the Lead LED Promotion Agency/Ministry andAccurately Define & Activate its LED mandate/Functions

Apply the LED Promotion Policy & Manage

the Implementation ofThe Strategy

Guide the Process of Articulation of the LED PromotionVision Policy and the Development of the Strategy

1

4

3

2

5

The Structure and Characteristics of the National and Regional Economy

The LED Vision & Policy

The LED Promotion Strategy

The Comparative/Competitive Advantages of the National/Regional Economies

The National ProgrammeFor

LED Promotion

The LED Policy & Strategy Articulation & Application ProcessThe Analysis of the National Economy

The LED Policy Context

The LED Institutional Context

LED Related National Strategies & Interventions

Local Economic Development Strategies

Scope of NP for LED Promotion

1

6

2

3

4

5

Document & Review the Scope and Main Features of LED Related Macroeconomic Policies

The LED Policy & Strategy Articulation & Application ProcessThe National Macroeconomic Policy Context

Assess Impact of LED Related Macroeconomic Policieson Economic Activities and on LED Outcomes

LED-Aligned/Responsive Macroeconomic Policies

LED-Responsive Macroeconomic Policy

Reforms

Preliminary Policy Review Phase

Feedback FromField

Policy Impact Assessment Phase

Policy Reform & Alignment Phase

1

3

5

4

2

Mapping of on-going or Planned LED Promotion InterventionsMap and Document National LED Related

Thematic & Sector Strategies

Map LED Promotion Interventions/Programmes Implemented byNational Actors & Donor Partners

The LED Policy & Strategy Articulation & Application ProcessMapping and Aligning the LED Promotion Intervention Landscape

Align LED Promotion Strategies & other Interventions withthe LED Promotion Vision and Policy

Local Economic Development Strategies

Feedback FromField

LEDPromotionVision &Policy

Integrate & Align LED Promotion Strategies

& other Interventions with Sub-National/Locality

LED Strategies

1

6

5

4

3

2

Map the Distribution of LED Promotion Mandates & FunctionsAmong Central and Local Institutions/Actors

The LED Policy & Strategy Articulation & Application ProcessThe National Institutional Context for LED Promotion

Assess the Coherence of the Institutional Context &Distribution of Mandates and Functions for LED Promotion

A Realigned Institutional Context for LED Promotion

Recommended InstitutionalRealignment & Redistribution

of Mandates and FunctionsFor LED Promotion

Mapping the Institutional Context & the Distribution of Mandates & Functions for LED Promotion

Feedback FromField

Assessment of the Coherence of the Context

Realignment of mandates and functions

1

5

4

3

2

Articulation of the macroeconomic policy reform requirements

Articulation of the regulatory reform requirements Articulation of the institutional reform requirements

Redefining/Modifying the Mandate, Functional and Resource

Assignment of Local Government for LED Promotion

Alignment of LED Relevant National sector and Thematic

Strategies & Programmes

Alignment of LED Relevant Donor Sponsored Interventions

The Scope of LED Promotion Policy and Strategy