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'Decentralization and Local Democracy in the World' constitutes a global reference on decentralization by presenting the contemporary situation of local governments in all regions of the world. The report analyzes local authorities in each continent under three main themes: the evolution of territorial structures; responsibilities and power, management and finances; and local democracy. An additional chapter is dedicated to the governance of large metropolises, where rapid growth presents major challenges, in particular in the fast-developing countries of the South. This report also offers a comparative overview of the different realities concerning the state of decentralization, and how the basic indispensable mechansims for local democracy do, or do not exist in come countries. Relationships between the state and local authorities are evolving toward innovative forms of cooperation. In this context, the role of local authorities in the development of global policies is increasingly recognized. The first Global Observatory on Local Democracy and Decentralization (GOLD) Report is one of the main products of United Cities and Local Governments (UCLG). The GOLD Report is the first of what will be a triennial publication. UCLG represents and defends the interests of local governments on the world stage, regardless of the size of the communities they serve. Headquartered in Barcelona, the organization's stated mission is: To be the united voice and world advocate of democratic local self-government, promoting its values, objectives and interests, through cooperation between local governments, and within the wider international community.

The Independent Evaluation Group (IEG) assessed the effectiveness of Bank support for decentralization between fiscal 1990 and 2007 in 20 countries, seeking to inform the design and implementation of future support. Given the difficulties of measuring the results of decentralization, the evaluation used intermediate outcome indicators—such as strengthened legal and regulatory frameworks for intergovernmental relations, improved administrative capacity, and increased accountability of sub national governments and functionaries to higher levels of government and to citizens—to assess the results of Bank support in these 20 countries. To examine potential lessons at a sectoral level, the evaluation also assessed whether Bank support for decentralization improved intermediate outcomes for service delivery in the education sector in 6 of the 20 countries.

This study investigates the most frequently censored news in China. Existing studies show that the Chinese propaganda authorities are more likely to censor news considered harmful to the legitimate rule of the central state, yet allow news with negative consequences for local levels of government to be published. A content analysis of official propaganda notices ( n  = 728) reveals that the propaganda authorities, indeed, engage in selective news censorship. The selective censorship practice also reveals a structural difference: The central propaganda authority focuses more on news related to national guidelines and policies and the image of the central state and leadership, whereas local propaganda authorities tend to focus more on news that is harmful to social stability and the image of local government. The central authority is found to be more tolerant than its local counterparts, as it allows news media to report a considerable amount of news that have negative consequences for local levels of government—news which, on the other hand, is heavily censored by the local propaganda authorities.

HIV/AIDS continues to take a tremendous toll on the populations of many countries, especially in sub-Saharan Africa. In some countries with high HIV prevalence rates, life expectancy has declined by more than a decade and in a few cases by more than two decades. Even in countries with HIV prevalence of around 5 percent (close to the average for sub-Saharan Africa), the epidemic can reverse gains in life expectancy and other health outcomes achieved over one or two decades.This volume highlights work conducted under the umbrella of a World Bank work program on “The Fiscal Dimension of HIV/AIDS,” including country studies on Botswana, South Africa, Swaziland, and Uganda. It covers four aspects of the fiscal dimensions of HIV/AIDS: First, it aims for a comprehensive analysis of the fiscal costs of HIV/AIDS, with a wider scope than a costing analysis focusing on only the policy response to HIV/AIDS. Second, it embeds the analysis of HIV/AIDS costs in a discussion of the fiscal context, and interprets these costs as a quasi-liability, not a debt de jure, but a political and fiscal commitment that binds fiscal resources in the future and cannot easily be changed, and very similar to a pension obligation or certain social grants or services. Third, it develops tools to assess the (fiscal dimensions of) trade-offs between HIV/AIDS policies and measures that take into account the persistence of these spending commitments. Fourth, most of the fiscal costs of HIV/AIDS are ultimately caused by new infections, and this study estimates the fiscal resources committed (or saved) by an additional (or prevented) HIV infection. Building on these estimates, the analysis here is able to assess the evolving fiscal burden of HIV/AIDS over time.

The need for subnational demographic, social, economic, and fiscal data in designing effective intergovernmental fiscal systems is becoming increasingly evident. In Central and Eastern European countries, the legacy of the region’s communist past are information systems rooted in the centralized economy. Such an approach becomes less acceptable as economic issues become more complex and subnational governments in these transition economies become responsible for the delivery of local services. As political imperatives support increasingly democratic forms of governance in which people’s needs must be taken into account in the design of policy options, there is a need for information systems that provide data to allow policymakers and citizens to assess the outcomes of policy choices. Subnational Data Requirements for Fiscal Decentralization summarizes the findings of needs assessment activities in five demonstration countries that are at different stages of fiscal decentralization: Bulgaria, Romania, the Slovak Republic, Slovenia, and Ukraine. These assessments are part of a program on subnational statistical capacity building, launched by the World Bank Institute, the Organisation for Economic Co-operation and Development, and the Economic Development Center of the Soros Foundation.

The study overviews the most relevant, current intergovernmental fiscal issues in the Czech Republic, centered on the options available to prod policy planning. Fragmentation at the lowest tier of government is the most striking feature of the administrative structure. This suggests a strategic direction for further administrative reforms to sustain fiscal decentralization, which includes empowering territorial self-governing units; establishing a multilevel government coordinating body to define autonomous functions on expenditures, and revenues; and by creating financial and legal incentives to facilitate an asymmetric assignment of revenue and expenditure. Specific policy actions should include institutional inter-governmental cooperation and dialogue through a broad based commission to recommend regional expenditures, and the Budget Rules Law should be amended to preempt unfounded mandates to local governments. Revenue autonomy should be boosted by increasing predictability of local budgets, restoring tax-effort incentives, and reviewing the adopted adjustment coefficient for tax-sharing distribution; while a rationalized transfer system should focus on decreasing the number of specific subsidies, and prioritizing programs to stabilize transfers within a medium-term expenditure framework. Institutional framework and prudential rules would ensure fiscally responsible borrowing, and encourage a competitive financial market.

The financial systems of the Latin America and the Caribbean region (LAC) are at a crucial juncture. After a history of recurrent instability and crisis (a trademark of the region), they now seem well poised for rapid expansion. Since the last wave of financial crises that swept through the region in the late 1990s and early 2000s, financial systems in LAC have continued to gain in soundness, depth, and diversity. The size of banking systems has increased, albeit from a low base; local currency bond markets have greatly developed, both in volumes and in reach over the yield curve; stock markets have expanded; and derivative markets particularly currency derivatives have grown and multiplied. Institutional investors have become more important relative to banks, making the financial system more complex and diversified. Importantly, much progress has been made in financial inclusion, particularly through the expansion of payments, savings, and credit services to lower income households and microenterprises. As evidence of their new soundness and resiliency, financial systems in the region, except in some Caribbean countries, weathered the recent global financial crisis remarkably well. The progress in financial development in LAC no doubt reflects substantial improvements in the enabling environment, lower macroeconomic volatility, more independent and better-anchored currencies, increased financial liberalization, lower currency mismatches and foreign debt exposures, enhanced effectiveness of regulation and supervision, and notable improvements in the underlying market infrastructures (for example, trading, payments, custody, clearing, and settlement). This regional flagship report aims at providing such a stocktaking and forward looking assessment of the region's financial development. Rather than going into detail about sector-specific issues, the report focuses on the main architectural issues, overall perspectives, and interconnections. The value added of the report thus hinges on its holistic view of the development process, its broad coverage of the financial services industry (not just banking), its emphasis on benchmarking, its systemic perspective, and its explicit effort to incorporate the lessons from the recent global financial crisis.

This report evaluates the outcomes of World Bank Group support to Afghanistan from 2002-11. Despite extremely difficult security conditions, which deteriorated markedly after 2006, the World Bank Group has commendably established and sustained a large program of support to the country. The key messages of the evaluation are:•While World Bank Group strategy has been highly relevant to Afghanistan’s situation,beginning in 2006 the strategies could have gone further in adapting ongoingprograms to evolving opportunities and needs, and in programming activities sufficientto achieve the objectives of the pillars in those strategies.•Overall, Bank Group assistance has achieved substantial progress toward most ofits major objectives, although risks to development outcomes remain high. Impressive results have been achieved in public financial management, public health,telecommunications, and community development; substantial outputs have alsobeen achieved in primary education, rural roads, irrigation, and microfinance—allstarted during the initial phase. Bank assistance has been critical in developingthe mining sector as a potential engine of growth. However, progress has beenlimited in civil service reform, agriculture, urban development, and private sectordevelopment.•The Bank Group’s direct financial assistance has been augmented effectively byanalytic and advisory activities and donor coordination through the AfghanistanReconstruction Trust Fund. Knowledge services have been an important part ofBank Group support and have demonstrated the value of strategic analytical work,even in areas where the Bank Group may opt out of direct project financing.•With the expected reduction of the international presence in 2014, sustainabilityof development gains remains a major risk because of capacity constraints andinadequate human resources planning on the civilian side.To enhance program effectiveness, the evaluation recommends that the Bank Group help the government develop a comprehensive, long-term human resources strategy for the civilian sectors; focus on strategic analytical work in sectors that are high priorities for the government; assist in the development of local government institutions and, in the interim, support the development of a viable system for servicedelivery at subnational levels; assist in transforming the National Solidarity Program into a more sustainable financial and institutional model to consolidate its gains; help strengthen the regulatory environment for private sector investment; and scale up IFC and MIGA support to the private sector.Chapter AbstractsChapter 1This chapter examines the country context, including continuing conflict and insecurity, poverty, and the role of development partners and non-state actors (civil society and humanitarian organizations) in Afghanistan. It examines coming transitions in security arrangements, including political and economic transitions. It outlines the evaluation methods used, as well as limitations. Chapter 2This chapter deals with the World Bank Group strategy and program, the Bank Group’s operational program, portfolio performance, analytic and advisory activities review, the Afghanistan Reconstruction Fund, and the new Interim Strategy Note, as well as previous Transitional Support Strategies and ISNs.Chapter 3This chapter examines the building of state capacity and state accountability to its citizens, specifically issues such as results and shortcomings in public financial management, public sector governance, and health and education. The World Bank Group contribution is highlighted. Risks to development outcomes are discussed. Chapter 4This chapter examines the issue of promoting growth in the rural economy and improving rural livelihoods, including sectors such as rural roads, agriculture and water. The National Solidarity Program and the Bank Group’s contribution to it are discussed. Risks to development outcomes arenoted.Chapter 5This chapter concerns support for the formal private sector, examining the overall investment climate and financial sector. It looks at possibilities for growth in the mining and hydrocarbons sector, information and communications technology, and power sectors. Urban development is also examined. The World Bank Group contribution is highlighted.Chapter 6This chapter provides an overall assessment (relevance, efficacy) of the Bank Group’s program in Afghanistan, outlining the internal and external drivers of success (knowledge services, staff capacity, customization of program design to country context, alignment of donor objectives, etc) and weakness. Chapter 7This chapter outlines the lessons for fragile and conflict-affected situations drawing on the specifics of the Afghanistan evaluation case. Recommendations are offered in areas such as labor markets, human resources, strategic-level analytical work vis-a-vis long-term development strategies, and strengthening of the regulatory environment for private sector investment.

Leadership and Innovation in Subnational Government takes stock of promising innovations that began to appear in local government across the region of Latin America and the Caribbean during the 1990s. The purpose of this work—in contrast to many reports which document best practice—is to deepen our understanding of the genesis and evolution of change as local leaders cope with the challenges of governing in decentralized democracies. One of the most striking features exhibited by the cases in this volume is that local authorities have been change makers often without help from outside, from national or international agencies. The authors, Tim Campbell and Harald Fuhr, call these local enterprising risk takers an \"engine of change.\" Twenty specific cases of innovation have been documented in the study covering the core business areas of cities—finance, popular participation, service delivery, privatization, and personnel management. The book aims to show, in policy and practice, how to sustain this engine of change. One of the central messages of this work is that by supporting key steps in the process of innovation, donors can enjoy cost-effective impacts and help to achieve the next stages of reform in the region. But to do so, donors must focus on management and learning at the local level, building on the foundations of broad participation in public choice and working more actively to help local actors learn from each other.

Recent protests against police brutality in Nigeria and the Arab Spring, which was sparked by an incident of police brutality in Tunisia, led to public demands that brought political reforms. This paper explores the question, how do citizens evaluate their government in regards to corruption? Using the Afrobarometer Wave 6 dataset, I investigate the relationship between the public's perception of police and upper-level government officials’ corruption in African countries. Due to lack of transparency, the public has no direct information from upper-level bureaucracy but can evaluate corruption of upper-level government officials through direct experience with police. My finding demonstrates that regardless of regime type, the corruption perception of police influences the corruption perception of upper-level government officials. The public cues to evaluate their government quality are likely derived from interactions with police. Therefore corruption perception of police can affect government legitimacy.