Municipalities are an important engine for economic and social development at the local level. City, town, and village governments are closer to their constituencies, and thus have a better understanding of citizens’ needs and concerns. Despite their importance, Lebanon’s central government only allocates 6 percent of its budget for local governments, while most countries spend on average around 27 percent.
While the idea of decentralization was first introduced in Lebanon with the 1989 Taif Accord, which ended the country’s brutal civil war, no government has successfully introduced or passed a decentralization law. But this is finally changing. CIPE’s partner, the Lebanese Center for Policy Studies (LCPS), is addressing the challenge of local governance at a crucial moment in the nation’s history.
With an increasing number of Syrian refugees (now totaling more than a quarter of the country’s population) and the lack of an effective central government for a year (between March 2013 and February 2014, there was no leadership in the central government), the expectations and responsibilities put on to local governments have greatly intensified.
This has created an opportunity for Lebanese policymakers and civil society organizations to work together in addressing this problem by drafting a decentralization law. In March 2014, Lebanese President Michel Sleiman officially launched a draft bill for administrative decentralization, indicating that the new government is serious about this issue.
In particular, LCPS is leading the effort to improve the delivery and distribution of the Independent Municipal Funds (IMF), which are allocated from the central government to municipalities. There is an implementation gap in the current system because the IMF system lacks transparency, thus breeding corruption and unfair distribution of resources. As a result, local municipalities often do not receive the full amounts allocated to them in the budget.
LCPS is heading an advocacy coalition with other civil society organizations (such as the Arab NGO Network for Development) to reform the IMF under the draft decentralization law. They have presented several policy recommendations including: improving transparency, securing IMF independence, reforming the tax collection system for municipalities, and encouraging investment into local governments by allowing local municipalities to obtain loans from commercial banks.
These developments add up to a promising start. As the new Lebanese central government strategizes about how to manage the spillover effects of Syria’s civil war, the country should seriously consider reforming its municipal funding system to strengthen local governance and improve the country’s socio-economic development.
Maiko Nakagaki is a Program Officer for Global Programs at CIPE.