Estimating financing needs for local services in Madagascar

239 Poverty Reduction and Economic Management June 2004 Findings reports on ongoing operational, economic, and sector work carried out by the World Bank and its member governments in the Africa Region. It is published periodically by the Knowledge and Learning Center on behalf of the Region. The views expressed in Findings are those of the author/s and should not be attributed to the World Bank Group. http://www.worldbank.org/afr/findings Estimating Financing Needs for Local Services in Madagascar T his note presents the meth- search that includes geographic odology and findings of a field mapping of social spending and a study on the financing review of opportunities and ob- needs of Madagascar's com- stacles to fiscal and sectoral de- munes--the country's lowest but centralization. This research gen- most institutionally advanced level erated the following analysis of lo- of subnational government. Follow- cal and cross-sectoral service ing a first round of municipal elec- needs and available financing. tions in 1995, more than 1,500 communes are now formally re- The approach sponsible for maintaining basic administrative services and social Local financing gap analysis offers and economic infrastructure, in- a rapid assessment of local service cluding local waste disposal and needs and available financing by sanitation. In addition, communes comparing estimates of local fi- are responsible for identifying and nancing needs with available re- coordinating local investments and source flows within a given year. for supporting implementation of This tool is not designed to mea- the national Poverty Reduction sure leakage in resource flows, Strategy at the local level. which is analyzed through public To finance these activities, com- expenditure tracking surveys for munes receive population-based health and education. The ap- transfers and small conditional proach has three steps: transfers, and can collect revenue