March 2012
Decentralization in Lebanon

In the last few weeks, the political institutions in the country have taken interest in decentralization once again. It is said that the President is keen on it, the Parliament wants to pass a decentralization law, and the Minister of Interior is rushing to put forth his own draft law. Although no specific details have surfaced, no decentralization law is considered progressive unless it establishes elected regional councils and re-allocates expenditure and fiscal responsibilities among the municipalities, municipal unions, and regional councils. 
Since municipal elections were reinstated in 1998, they have no doubt reinvigorated municipal life, engaged citizens at the local level, and provided an impetus for decentralization in the country.  According to the 1977 Decree-Law, municipalities are entrusted with a broad range of tasks. The law stipulates that any work having a public character or utility within the area of the municipality falls under the jurisdiction of the Municipal Council. 
However, municipalities remain constrained administratively and fiscally: Most of the 985 municipalities, of which 70% are small, do not have the administrative capacity to provide many of the designated services. In fact, small municipalities with less than 4,000 registered people  have a small economic base to start with. Almost 400 municipalities do not have one single employee and another 400 have very weak municipal administration; they are subject to oversight by several authorities which have reduced their ability to respond to the needs of their constituents. For instance, it takes three years to hire a municipal staff. There are at least five ministries and agencies – Ministry of Interior and Municipalities, Court of Account, Civil Service Board, General Directorate of Urbanism at the Ministry of Public Works, and Ministry of Finance - that govern the sector; and most do not have the fiscal resources to launch developmental projects or plans.  A proxy of their capability to collect taxes is the total municipal revenue as percentage of total government revenue which is almost 6% in 2008. This is much lower than many comparable countries like Chile of 15%. 
Yet, many municipalities have formed municipal unions which have become important actors in the context of decentralization. As of today, there are effectively 48 unions, of which 36 were established in the last 10 years. These unions include a total of around 660 municipalities as members (two thirds of the total number of municipalities) and they are home to two thirds of the resident population of the country.  Some of these unions have pooled their resources in order to fund regional development projects. Others have become recipients for donors’ money.  However, the performance of many unions is hampered by several challenges among which include: weak administrative capabilities, inability to collect membership fees, high dependence on the Independent Municipal Fund for revenues, and overlapping competencies with municipalities resulting in conflict. In addition, the unions’ performance is impeded by sectarian politics. For one, the municipalities of 21 unions are non-contiguous which effectively makes developmental planning impossible. Furthermore, only 13 out of the 26 qadas have one union and the rest have between two and seven unions. This makes coordination on the qada level much harder. 
In this vein, a new decentralization law that predominantly focuses on municipalities misses the point as unions have become major actors but yet are unable to promote regional development because of their geographical constraints. The new law must correct for that by reallocating the roles, responsibilities, and fiscal resources between municipalities on one hand and unions and elected regional councils on the other hand. Five key issues must be addressed in the law: 
1.Redraw the boundaries of regional councils so they serve developmental needs.   The Taef Accord stipulates that they should be on the qada level. However, it is not evident that this would serve developmental needs. The borders of regional councils must be based on several criteria including geographical, topographical, economic, and social concerns. 
2.Ensure that the regional councils are elected directly which will strengthen accountability and participation. One of the major problems in Lebanon is the inability to directly elect the head of the major political institutions which leaves more room for political bickering at the expense of addressing peoples’ needs.
3.Reexamine the role of municipal unions vis-à-vis elected regional councils. To avoid overlap between these two bodies, there is a need to have a clear delineation of responsibilities between them. For one, regional councils should be in charge of developing and executing a planning strategy including infrastructure and economic projects. Unions, once they are compelled to have contiguous borders, must be in charge of delivering services that promote welfare of citizens. An alternative option is to annul the existence of unions and re-assign their responsibilities to regional councils.
4.Identify the responsibilities of municipalities in light of those assigned to regional councils and unions so they are complementary. Since many municipalities are too small to provide services stipulated by law, their responsibilities ought to be confined to a set of services. 
5.Distribute fiscal authority, which includes the right to tax, as well as the Independent Municipal Fund resources among municipalities, unions, and elected regional councils in such a way that enhances service delivery and developmental objectives.  
The over-emphasis on municipalities, most of which have no capabilities to provide services, are unable to collect local taxes, or have no taxes to collect in the first place because they are so small, will not be in the best interest of decentralization.