ABOUT THE DISCUSSION PAPER
The District Development Authority Act of 2014 established District Development Authorities (DDAs) as the mechanism for disbursing development funds in districts and local-level governments (LLGs), replacing the Joint District Planning and Budget Priorities Committees. DDAs retain the planning functions of the earlier committees but are also responsible for service delivery. They were rolled out in most districts across Papua New Guinea in 2015.
This devolution in revenues and expenditures to the district level raises two important issues that have not been researched in detail. First, the existing DDAs differ in their administrative arrangements and capacities. What are these arrangements and how well are they working? Second, a considerable burden is now placed on staff at the district and local levels to deliver the services for which the DDAs are responsible. Therefore, one of the main challenges facing provincial and district administrators is to build the human resource capacity needed at these levels.
This initial PNG National Research Institute (PNG NRI) study of DDAs focused on four districts in two provinces. Its objectives were to:
- assess administrative arrangements, expenditures, recurring costs, and service delivery at the district and local levels;
- analyse human resource needs, constraints to building capacity at the district and local levels, and ways that such constraints may be overcome;
- establish a conceptual framework for future research on DDAs.
In August 2016, the study team carried out interviews in the Central Province districts of Rigo and Abau and the East
New Britain Province districts of Kokopo and Gazelle. Interviews were also conducted in national government departments and other relevant organisations in Port Moresby.
A literature review was also undertaken to learn from decentralisation thinking and processes in other parts of the world and to develop a view of how the latest decentralisation reform in Papua New Guinea (PNG) fits with previous attempts.
The introduction of DDAs has coincided with significant budget cutbacks in PNG, which has made their introduction particularly difficult, with vital grant funding seriously delayed in 2015 and 2016. The uncertainty arising from the budget cutbacks has been compounded by the delay in finalising the new inter-governmental arrangements. A Ministerial Determination setting out the functional responsibilities for service delivery and development activities of DDAs and other subnational agencies is still being developed, as are the standards by which service delivery outcomes will be measured. To add to the uncertainty, legislation needed for full implementation of the DDA Act has not yet been passed. The responsibilities of provinces, districts, and LLGs need to be understood and agreed on if service delivery is to be efficient and duplication avoided.
In the absence of such guidelines, DDAs are being rolled out in different ways. A benefit of this diversity is that it allows districts to adapt implementation to their diverse geographic, economic, and other circumstances. However, the lack of a solid foundation fo implementation is eerily similar to the roll-out of the Organic Law on Provincial Governments and Local-Level Governments in 1995, during which there was also insufficient attention given to ensuring that the reform was properly undertaken.
For DDAs to be successful, they will require the right staff at the right location to coordinate and implement district and local-level service delivery programs and development activities. Staffing gaps are evident. Some districts have commenced reviews of their staffing establishments and some have submitted proposals for staffing changes. The fiscal viability of these proposals will be important, particularly in the current fiscal context with salaries, wages, and administrative costs making up more than 70 percent of total expenditures, leaving little for operational expenses such as transport. The hiring of new staff and/or relocation of existing staff will have significant non-salary implications, including the need for housing and leave entitlements. These will need to be factored into decision-making, perhaps between districts and key national-level line departments (such as Education and Health) and between districts and central agencies (especially Treasury and Personnel Management).
The capacity of the national government to monitor DDAs will be critical to their success, but is likely to present a significant challenge, given the problems that exist in communicating with PNG’s 89 districts. Indicators of outcomes that show how effectively service delivery is being performed need to be developed. These should be as capable of objective measurement as possible and be available quickly on a regular basis, say half-yearly. Monitoring information will need to be analysed, synthesised, and communicated to the full range of stakeholders.
The intergovernmental funding arrangements introduced in 2009 to support the 1995 Organic Law on Provincial and Local Level Governments remain in effect. Under these arrangements, recurrent operational funding was transferred to the provincial level. DDAs will require access to this funding to discharge their service delivery responsibilities. Under the existing arrangements, these monies sit at the provincial level as function grants (for defined purposes) and provincial internal revenue. Analysis and discussion are needed on how to shape the intergovernmental financing system so that it can best support the introduction of DDAs and government service delivery.
With the implementation of DDAs, subnational coordination becomes even more important. Capital projects undertaken by districts and LLGs will often have recurrent cost implications. New infrastructure often requires more staff, more recurrent funding, and/or an increased maintenance burden. Thus, coordinated planning and consultative decision-making are critical between DDAs, provinces, and LLGs, together with key national departments and agencies.
The implementation of DDAs coincides with the introduction of city authorities (effectively, DDAs at city level) in Hagen, Kokopo, and Lae. Urban centres have been identified by government as critical elements of PNG’s economic and social development. However, urban development has particular challenges, including access to land for residential and economic development; the advent of city authorities provides an opportunity to work directly on these challenges.
Staff and funding shortages were common complaints in the provinces and districts. However, efforts are being made to cope with these constraints, such as the hiring of experts on a short-term basis in Kokopo District. East New Britain Province has also moved quickly to relocate staff to LLGs—something that should have been encouraged even without the DDA reform.
Another initiative that could have relevance for other districts is the holding of DDA board meetings in different parts of a district during the year. This was said to have a positive impact on local ownership of the DDA concept and the projects being considered. Another worthwhile idea is to actively involve technical staff in the DDA meetings, rather than having them attend only as observers.
Research recommendations: In its future research on these new intergovernmental arrangements, the NRI should consider the following issues, presented in order of timing and priority:
- Given the uncertainty surrounding the DDAs both in government and in the wider community as well as the need for an effective implementation strategy and clarity on the relationships between the various levels of government, the NRI should undertake research as soon as possible on several issues, including the rationale for the establishment of DDAs and the supporting legislation needed to implement them. Once the Determination on functional responsibilities is finalised, intergovernmental financing arrangements need to be reviewed and recommendations made for aligning them in support of the new administrative arrangements.
- Once the DDAs are operational, other questions will need to be studied: whether the intergovernmental functions and responsibilities as defined in the revised Determination have been understood and properly implemented, so that there is full consultation between all governmental parties and district plans are fully integrated with national and provincial plans; whether there is clarity over the roles and responsibilities of the provincial health authorities and DDAs (and other actors) with respect to health services; whether there is clarity over the provincial and district responsibilities for the village courts, transport, and works; whether the division of responsibilities between the DDAs and the city authorities (where applicable) are appropriate to the circumstances; and whether the new city authorities are receiving the support they require in critical areas related to urban development, such as land acquisition.
- More information is needed about human resource needs and constraints to capacity building at the district and local levels. But for meaningful research to be carried out on this issue, greater clarity is needed about roles and responsibilities under the new DDA arrangements—in particular, whether these are to be uniformly prescribed or adapted to local contexts. Once the DDAs’ mandate has been further clarified, the NRI should return to this question.
- Appropriate indicators of service delivery and development outcomes will need to be identified in order to enable effective reporting from the districts to the identified monitoring authority (the PLLSMA). The NRI can assist in developing and implementing these indicators. The NRI could also study whether incentive schemes can be devised to improve service delivery under the DDAs, while minimising the principal/agent and moral hazard problems associated with service delivery. The national government–sponsored Consultative Implementation and Monitoring Council is doing valuable work in beginning to foster community involvement in district project priority setting and monitoring. The NRI should see what can be done to increase the scope of this work and improve its impact.