Å·ÃÀÈÕb´óƬ

Challenge

In spite of recent economic growth in Russia, poverty, unemployment, and low-quality social services and infrastructure continue to be major challenges in rural areas, which contain over a quarter of the population and 42 percent of the poor. Only 32 percent of rural residents have centralized water supply systems, barely 5 percent have sewerage, and over 28 percent have no hard-surfaced access roads.

The predominant centralized approach to public resource management has been inefficient in addressing local issues. Most funds are collected at the higher levels and then channeled down to finance expensive infrastructure projects in big cities and rayon (district) centers, a ¡°top-down¡± approach that does not adequately identify local budget priorities. As a result, big budget allocations fail to contribute to improving living conditions in small rural settlements, and also discourage trust between the population and local authorities.

Regional officials acknowledge the issue but do not have the experience and capacity to establish a mechanism to identify and address real community needs.  

Solution

During 2007¨C13, several regions in the Russian Federation requested World Bank assistance in introducing international best practices for managing social investment funds and identifying key areas of improvement in LISP design and implementation. The main objective is to support local social and economic development through the utilization of community resources, and encourage citizen involvement in resolving social and economic issues¡ªan innovative approach to the provision of local social services in Russia. The municipal governments provide small grants to settlements to finance microprojects, jointly prepared by citizens and municipal authorities, for the development of local social and communal infrastructure and services. The subsidies are competitively granted based on the level of local population involvement and expected impact on beneficiaries.

By end-2013, the World Bank team had delivered 12 programs in five regions by assisting the regional governments in program design, engaging the population in program activities, and supporting capacity building for municipal authorities and community leaders. 

Results

By end-2013, the program was implemented in over 500 rural communities. Results achieved during 2009¨C13 included:

Capacity building

• Over 50 training courses for approximately 1,500 local stakeholders on community involvement in decision making, oversight, and monitoring of service delivery.
• The facilitation of community hearings in more than 1,000 villages.
• Eleven analytical reports on program implementation, with recommendations for improvement.
• Ten conferences attended by federal and regional officials on LISP¡¯s progress, as well as issues and lessons learned.
• A management information system (MIS) developed in 2010 for Kirov and in 2013 for Tver to effectively select, implement, and monitor projects. Now, members of the Coordination Council, government, and LISP management can view project information online.

Outcomes

• Over 100,000 people in over 1,000 villages participated in community meetings on social development priorities in 2013.
• More than 1,000 municipalities successfully identified LISP microprojects with the broad participation of the local population. The selected projects reflected community priorities, as the size of the total contribution from the municipality, sponsors, and community amounts to between 16 and 43 percent of the project budget. The average in-cash contribution from communities is about 10 percent of the project cost; from municipal budgets, about 15 percent; and from other sources, roughly 7 percent.
• Over 3,000 members of community initiative groups were responsible for population outreach, organization of local cofinancing, and preparation of microproject proposals (jointly with municipal heads).
• About 1,250 microprojects were successfully delivered. 

The results of the impact assessment conducted in Kirov oblast in 2010 and 2013 demonstrated improved population satisfaction in the quality of local social services; increased confidence in all levels of government; and improved transparency of spending of local funds (a majority of the population in LISP participating territories claimed confidence in the transparency of local budget spending). Moreover, the vast majority of the population (90 percent) believes that the problems solved under LISP were ¡°important¡± or ¡°very important.¡±

All the participating regions have moved from pilot LISP activities to full-fledged program implementation. Kirov LISP financing was increased by 15 times (from 2010 to 2013), Tver LISP by 2.5 times (from 2013 to 2014), and Stavropol LISP by 2 times (from 2009 to 2013). 

Bank Group Contribution

The budgets of full-fledged regional LISPs vary from rub 60¨C300 million (US$1.5¨C9 million), annually allocated from regional budgets. Å·ÃÀÈÕb´óƬ provides technical assistance on a reimbursable advisory services basis.

Partners

LISP is implemented by regional ministries to help strengthen local capacity. Given its multisectoral nature, a wide range of agencies are involved, from the ministries of social protection (in Kirov oblast) to the ministries of economic development (in Khabarovsk krai), the ministries of finance (in Tver oblast and Stavropol krai), and the ministries of territorial development (Nizhegorodskaya oblast).

In 2009¨C10, the Bank closely collaborated with the United Kingdom¡¯s Department for International Development (DFID) on the implementation of the pilot programs in Stavropol krai and Kirov oblast, as well as other preparatory activities. DFID, through a World Bank-supported Trust Fund amounting to approximately US$930,000, financed the baseline survey, capacity-building efforts, and training.

Moving Forward

Successful implementation of LISP in the pilot regions has resulted in a huge and growing demand for LISP and corresponding Bank services in other regions in the Russian Federation, and has also generated an interest to LISP at the federal level. LISP was included in various federal strategic policy documents, including the ¡°Strategy for the Socio-Economic Development of the North Caucasus Federal Okrug until 2025¡± and the Federal Targeted Program ¡°On the Sustainable Development of Rural Territories until 2020.¡±