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Ministry of Federal Affairs and Local
        Development




                                                      Nepal
                                        Changing Performance Incentives
                                                       for
                                               Local Government
                                   Chakra Pani Sharma
                 Under Secretary/Environment Management Section Chief
                    Ministry of Federal Affairs and Local Development
Performance Incentives for Local Government : the
                          Click to edit Master title style
Ministry of Federal Affairs and Local
        Development
                                     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
                          Click to edit Master title style
Ministry of Federal Affairs and Local
        Development




         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
                          Click to edit Master title style
Ministry of Federal Affairs and Local
        Development




         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…..
                          Click to edit Master title style
Ministry of Federal Affairs and Local
        Development




                    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
                          Click to edit Master title style
Ministry of Federal Affairs and Local
        Development




         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

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Changing performance incentives for local governments in Nepal

  • 1. Click to edit Master title style Ministry of Federal Affairs and Local Development Nepal Changing Performance Incentives for Local Government Chakra Pani Sharma Under Secretary/Environment Management Section Chief Ministry of Federal Affairs and Local Development
  • 2. Performance Incentives for Local Government : the Click to edit Master title style Ministry of Federal Affairs and Local Development 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)
  • 3. Incentive Based Management at Local Level Click to edit Master title style Ministry of Federal Affairs and Local Development 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
  • 4. Environmental Consideration in MCPM-Manual Click to edit Master title style Ministry of Federal Affairs and Local Development 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
  • 5. Environmental Consideration in MCPM continue….. Click to edit Master title style Ministry of Federal Affairs and Local Development 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.
  • 6. Future Course of Action/Way Forward Click to edit Master title style Ministry of Federal Affairs and Local Development 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