Changing performance incentives for local governments in Nepal

Click to edit Master title styleMinistry of Federal Affairs and Local Development

Chakra Pani SharmaUnder Secretary/Environment Management Section Chief

Ministry of Federal Affairs and Local Development

NepalChanging Performance Incentives

for Local Government


Performance Incentives for Local Government : the Case of Nepal in areas of Environment

• Government of Nepal introduced the system of allocating minimum and additional grants to Local Bodies (LBs) to carry out assigned duties as per the Local Self Governance Act (LSGA), 1999.

• Government through Local Governance and Community Development Programme (LGCDP) implemented performance based grant system to provide additional grant to LBs since 2008

• The performance based grant allocation system was introduced to improve LBs performance and meet the compliance with rules/regulations, to improve service delivery and to improve accountability, transparency, good governance, etc.

• The performances of LBs are assessed annually on the basis of indicators of Minimum Conditions (MCs) and Performance Measures (PMs).

• Environmental consideration introduced in Performance Measures in 2011 (latest version MCPM)


Incentive Based Management at Local Level

Enabling Environment• Local Self Governance Act authorize local bodies for managing natural

resources • Minimum Condition and Performance Measures Manual (MCPM) of local

bodies includes pro-poor, climate and environmental sensitive indicators as a performance measure and condition for accessing future grants

• MCPM Focuses on Enhancing Planning and Programme Management capacity of local bodies in:

– Fund Management– Resource Mobilization– Investing for safeguarding sources of revenue generation and

environment services– Allocating budgets to ensure sustainability of infrastructure


Environmental Consideration in MCPM-Manual

MCPM tries to integrate social inclusion, gender equality, children, poverty, environment conservation and climate change into development planning. •Two main criteria and performance indicators in the MCPM include: 1. Energy and environment management condition

• Prepare environment managements plans for infrastructure projects

• Develop and implement projects for enhancing access to renewable energy services

• Plan and implement local adaptation programme to minimize climate change impact

• Develop and implement a policy for use of heavy equipment in road construction


Environmental Consideration in MCPM continue…..

2. Cross sectoral subjects like climate change, environment protection, disaster management, child friendly governance, open defecation free area are to be addressed from planning to approval process by District Development Council

• District Development Committees mandated for approving projects of cross sectoral nature ( climate change, environment protection, disaster management, child friendly governance, open defecation free area)

• DDC includes activities in line with the aforementioned policies • DDC allocates budget to implement activities from the DDC fund.


Future Course of Action/Way Forward

Incentivize climate change adaptation and environment work•Local Bodies adopt incentive measures for climate change adaptation work•Institutionalize performance based incentive mechanism in management of natural resources by the community groups •Provision of incentives for environment friendly climate proof infrastructure development

Ensure efficient and effective management of climate funds at local level•Capacity of local bodies enhanced to:

– Expand the mandates and strengthen capacity of District Energy and Environment Units to work on climate change adaptation

– Ensure planning and budgeting process is responsive to climate, environment and poverty issues reflected in annual plans

– Improve reporting, monitoring and evaluation

Technology

Changing performance incentives for local governments in Nepal