89227 A briefing of good practices and lessons learned from the Europe and Central Asia region June 2014 > Volume 71 Empowering Communities: The Local Initiatives Support Program in Russia Authors: Ivan Shulga, Anna Sukhova, and Gagik Khachatryan Development Challenges for Russia’s Rural Communities In spite of recent economic growth in Russia, poverty, unem- ployment, 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. Among Russia’s rural residents: • only 32 percent have centralized water supply systems, • only 5 percent have sewerage, and • over 28 percent have no access to hard-surfaced roads.1 The predominant centralized approach to public resource management has been inefficient in addressing local issues. KEY MESSAGES Most funds are collected at the higher levels and then channeled down to finance expensive infrastructure projects in • Prosperity from economic growth is not shared big cities and rayon (district) centers, a “top-down” approach evenly among Russia’s population and regions. that does not adequately identify local budget priorities. As Local communities and rural territories face serious a result, big budget allocations fail to contribute to improving development challenges: including poor living living conditions in small rural settlements, and also discourage conditions, infrastructure, and services and lack of trust between the population and local authorities. The over- citizens’ participation in decision-making processes. centralized approach to local governance also has resulted • The Russian Federation Local Initiatives Support in weak self-governance capacity at the level of settlement Program (RF LISP) aims to address community authorities and exclusion of local populations from the challenges by introducing a participatory approach to decision-making processes. the development and rehabilitation of local-level social The LISP Response to Community Challenges infrastructure. Specifically, LISP channels funds from regional budgets to finance participatory projects in In 2009, Stavropol Krai was the first Russian region to launch poorer local communities. the Local Initiatives Support Program (LISP) and sign a Reim- bursable Advisory Services (RAS) agreement with the World • For the period 2009–14, LISP has been implemented in Bank for technical assistance in LISP preparation and imple- six regions and has resulted in more than 1,200 projects mentation. LISP has been designed as a community-driven with over 1 million beneficiaries. development (CDD) project aimed to improve local social • Key factors for LISP success are the following: (i) infrastructure on a participatory basis. LISP has been based mainstreaming of LISP into the national administrative on international best practices and aims to support develop- system and budget process, and (ii) providing the ment utilizing community resources and encouraging citizen Bank’s technical assistance at all stages of project involvement in resolving social and economic issues. It also has implementation to share international experience in aimed to support regional governments in the design, capacity- community-driven development (CDD) projects, and ensuring transparency and quality of LISP procedures. 1 Federal State Statistics Service, Russian Statistical Yearbook – 2013 (Moscow: Federal State Statistics Service, 2014). EUROPE AND CENTRAL ASIA KNOWLEDGE &LEARNING building, and monitoring of LISP to ensure greater involvement implementation, are similar to those in other Social Investment of the population in the decision-making process, and quality Fund (SIF)/CDD-type projects (Figure 1). At the same time, and transparency of LISP procedures. Russia’s LISP has an important distinctive feature by having Currently, LISP is being implemented in six Russian regional LISPs completely built into the state administrative regions: Stavropol and Khabarovsk Krais; Kirov, Tver, and and budgetary system and operating under legislation and Nizhegorodskaya Oblasts; and the Republic of Bashkortostan. regulations of the Russian Federation. The regional grants have Successful implementation in those regions has resulted in a been transferred from regional to municipal budgets; financial huge and growing demand for LISP and corresponding Bank resources from all other sources, including community and services in other regions of Russia. Since its launch in 2010, the local business co-financing, are also registered on the budget biggest regional LISP program for Kirov Oblast has an annual accounts of the municipalities, which are responsible for budget of about US$10 million, and already resulted in over contract procurement according to Russia’s legislation. 1,000 successfully completed projects. LISP Key Outputs LISP provides subsidies to settlements to finance subprojects LISP has proven to be successful in addressing key community – jointly prepared by citizens and municipal authorities – to development challenges by directly improving social develop local social and communal infrastructure2. Project funds infrastructure, engaging the population in decision-making aim to: processes, and building trust within the community, as well as • Improve local social services, including construction or reno- between communities and local authorities. vation of community centers, and local cultural and sports Improving Local Infrastructure. In Russia, over 1,200 projects facilities; have been delivered by RF LISP to date (Table 1). Projects • Develop local-level social, communal, and economic infra- including the rehabilitation of roads, water supply systems, and structure, including roads and bridges, water supply, gas cultural centers are the most popular. distribution networks; and Project typology varies by region, revealing its specific needs and • Promote the rehabilitation and/or development of natural priorities. In Stavropol Krai, with large settlements, the popula- resource and environmental protection, including sewage tion gives priority to community centers. Many of the centers and waste treatment plants, soil-protecting measures, and built in Soviet times have not been renovated for many years garbage removal and disposal. and are currently completely degraded. In the poorest region, Kirov Oblast, rural roads and water supply systems are consid- The subsidies are competitively granted based on the level of ered priority issues. In the better-off regions, there is no specific local population involvement and expected impact on benefi- outstanding problem, thus the distribution of projects by type is ciaries. The set of criteria has been determined for each of the more even. participating regions to capture their specific conditions and needs, level of local citizen participation, estimated social and Table 1: Number of Implemented Subprojects up to 2013, by Typology and economic impact, investment effectiveness, and micro-projects’ Region sustainability. Type of sub- Stavropol Kirov Oblast Nizhegorod- Tver Oblast projects Krai skaya Oblast (pilot) (pilot) Water supply 16 259 3 15 Roads 24 317 7 6 Community 110 52 2 15 centers Sport facili- 18 48 1 5 ties Settlements 21 93 2 1 improvement Playgrounds 20 - 3 4 Pavement 10 - 2 - Street light- 2 47 - 1 ening Other types 21 104 12 6 Total 242 920 32 53 The Russian Federation (RF) LISP mechanism and procedures, including the cycle of LISP project identification, preparation, and 2 The upper limit for these regional subsidies vary from roughly US$17,000 to $100,000, depend- ing on the region, year of implementation, and specific design of the project; on average, the cost is about US$50,000–$60,000. KNOWLEDGE BRIEF > www.worldbank.org/eca Improved infrastructure directly resulted in the population’s of LISP activities with 89 percent saying the program should increased satisfaction with the quality of the social services. be continued (Source: Kirov Oblast LISP Sociological Survey, For instance, in Kirov Oblast in 2013, the population’s satisfac- 2010–13.). tion level with roads, street lighting, and water supply services in LISP-participating territories was significantly higher than in Table 2: Share of LISP Subproject Co-financing by Region nonparticipating areas.3 Financing Source Stav- Kirov Oblast Tver Nizhe- ropol Oblast gorodskaya Krai Oblast Regional budget 84.5% 71% 56% 63% Local co-financing, 15.5% 29% 44% 37% including • population contri- 1.7% 10% 6% 13% bution • municipal budget 9.8% 12% 30% 19% • legal entities 4% 7% 3% 5% • deputies of repre- - - 4% - sentative bodies Total, % 100% 100% 100% 100% Residents of LISP implementing regions have particularly ap- preciated the project to solve the most critical social needs of the population, improve the transparency of budget funds, and Engaging Citizens. Up to 18 percent of the adult population monitor the quality of social services (Figure 3). in participating settlements has been directly involved in LISP decision-making processes through community hearings. Even more people have participated in other joint activities, including neighborhood and other smaller group meetings, public opinion surveys, and mandatory community meetings – which, in some cases, have attracted up to 70 percent of the adult population. Moreover, more than 4,000 people have been involved in the work of community initiative groups, which, in cooperation with the municipal authorities, helped to prepare project applications, mobilize beneficiaries and safeguarding the local contribution, monitor project implementation, and organize activities aimed at project sustainability. The practical involvement of the population has resulted in a change in the people’s attitude toward participatory decision- making. For example, in Kirov Oblast, the share of people in LISP-participating communities who see meetings as a mere formality significantly declined during the period of LISP im- plementation from 54 percent in 2010 to 25percent in 2013 (Source: Kirov Oblast LISP Sociological Survey, 2010–13.). Growing Trust. An important indicator of trust is the level of local co-financing of program activities. The average beneficiary in-cash contribution in Kirov, Tver, and Nizhegorodskaya Oblasts is about 10–12 percent of project cost. In some cases, beneficiaries contribute up to 50 percent of the In Kirov Oblast, the vast majority of the population believes project cost. The share of other contributions is also high; the that the problems solved under LISP are “important” or “very average share of the municipal budget in project cost varies important” with 55 percent stating “very important” and 35 from 10 to 30 percent, and the average co-financing from other percent stating “important” in the 2013 survey (Source: Kirov sources varies from 4 to 7 percent. On whole, the average local Oblast LISP Sociological Survey.). co-financing share amounts from 16 to 44 percent (Table 2). 3 The impact of LISP was assessed in Kirov Oblast through a LISP impact assessment study carried out in accordance with the Kirov LISP RAS agreement. The Bank team worked out the design and Overall, the majority of the population is highly appreciative contracted an independent private company to implement the study, which was carried out in 2010 (basic survey) and 2013 (follow-up survey). KNOWLEDGE BRIEF > www.worldbank.org/eca ABOUT THE AUTHORS Moreover, most people believed that community meetings helped to identify and address their real needs and an overwhelming majority of the population have regularly utilized LISP project deliverables. Overall, in Kirov Oblast, the results of the survey have shown that LISP projects have clearly had Ivan Shulga is a Social Protection a positive impact on many key aspects of local communities’ well-being. Specialist in the Human Key Factors of Success/Lessons Learned Development Sector of the Europe and Central Asia Key factors in LISP success are the following: (i) mainstreaming of LISP into the national region. administrative system and budget process, and (ii) technical assistance by the Bank at all Anna Sukhova stages of LISP project cycle. is a Consultant in the Human Development Sector of the Compared to other World Bank Social Investment Fund (SIF)/CDD-type projects, Russia’s Europe and Central Asia LISP has an important distinctive features. As previously mentioned, the regional LISPs region. are embedded into the state and budgetary systems. These systems in turn feed into and Gagik Khachatryan operate under legislation and regulations of the Russian Federation. This mainstreaming of is a Consultant in the Human regional grants affords municipal budgets to use a wide range of financial resources-including Development Sector of the community and local business co-financing-easy access and control of contract procurement. Europe and Central Asia region. The Bank’s ongoing technical assistance to the local stakeholders and monitoring at all stages of project implementation are additional factors in LISP success. In addition to the team’s regular monitoring visits to the regions, the Bank’s local consultants visit all the participating communities and report back to the Bank and the regional governments at each important stage of project implementation. The success of the project has been ensured and enhanced by public awareness activities that are built into the project design. LISP as a program and its community programs are completely transparent, which is of tremendous importance from the local stakeholders’ perspective. Another important factor of LISP success is that the Bank has supported a process of permanent knowledge sharing between the participating regions. This involves the organization and delivery of annual regional LISP conferences, seminars, and training, with the participation of representatives of both implementing and interested regions of the RF; and the dissemination of LISP lessons and results on the federal level and in the interested regions (for example, The findings, interpretations, and conclusions expressed herein are through various analytical notes and papers, brochures, etc.). The best practices and lessons those of the author(s), and do not learned from the projects already implemented are widely used and incorporated into the necessarily reflect the views of the International Bank for Reconstruction project designs of the newcomer LISP regions. and Development /The World Bank and its affiliated organizations, or All the above-mentioned factors have ensured both the increased number of LISP regions and those of the Executive Directors of The World Bank or the governments communities that have been involved in each of the participating regions. they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgement on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. “ECA Knowledge Brief” is a regular series of notes highlighting recent analyses, good practices, and lessons learned from the development work program of the World Bank’s Europe and Central Asia Region http:/ /www.worldbank.org/eca KNOWLEDGE BRIEF > www.worldbank.org/eca