Local development II [LD II], 263-0182

The first purpose of the project was achieved through 16,011 subprojects (SP"s), financed by block grants, which improved the quality of life for 52 million Egyptians. SPs in provincial governorates improved water systems in 1,473 villages, constructed 3,250 km of roads, added 2,793 classrooms to existing schools, supplied 25 villages with wastewater treatment plants, and implement 1,059 small environmental projects, most for solid waste and sewage collection. SPs in urban governorates paved 2,354 streets; installed 634 km of street lighting; installed 58,496 meters of water distribution lines and 44,422 meters of sewers (mostly in unserved neighborhoods in Giza, Shoubra El Kheima, and rural Suez); provided garbage collection carts and trucks and manual tools; constructed and renovated public toilets, markets, bakeries, abattoirs, and classrooms; installed toilets in schools; and procured school equipment, primarily desks and tables. Local governments were provided with TA in planning, management, budgeting, and training; with equipment and facilities; with more than 92,000 person-days of technical and managerial training; and with block grants for governorate-initiated training of PVO and governorate staff. The result was an impressive increase in planning and implementation abilities at all levels in the governorates. Management information systems were established in all 26 governorates. In addition, operations and maintenance capabilities were upgraded, with numerous maintenance centers, garages, and workshops established. The LRM component did not achieve its objective, however. There were two main reasons for this. First, project designers had falsely assumed that the Government of Egypt (GOE) would support fiscal decentralization; they had failed to understand the history of centralization in Egypt and overlooked a legal environment which ensured that the central government retain control of all revenues collected locally. As a result, efforts to promote local revenue and fee collection and retention and to help the GOE develop a block-grant financing system of its own failed. Second, the project suffered from its unwieldy size and multipurpose approach for solving constraints in all of the governorates. A major lesson learned is that projects to promote local governance should not adopt comprehensive institutional development objectives unless the existence of supportive host country policies is confirmed. In the present case, project designers failed to understand that fiscal centralization is so deeply entrenched in Egypt as to make efforts to alter it infeasible. Rather than rely on policy reforms at the national level, the project should have focused on promoting local initiatives. Other lessons include the following. (1) Despite the failure of its decentralized LRM scheme, the project did prove that it is possible, even under the inhibiting conditions of Egypt"s regulatory environment, to develop some local income-generation activities. (2) The project approach of operating outside Egypt"s administrative structure had advantages and disadvantages. In its favor, it allowed governorates and localities, through the expeditious provision of block grants, to move funds between sectors and between projects. However, sustainability of the system is not likely; had it been integrated into Egypt"s administrative structure it would have had a better chance of survival. (3) Most decisionmakers will not use MIS data to its fullest advantage without TA to demonstrate how MIS data can facilitate decisionmaking. (4) The decentralized approach to training, financed by the training block grants, was an effective strategy for improving the skills and performance of governorate staff. The risk of losing newly trained local governorate staff to higher-paying employment is relatively small, particularly in provincial governorates. (5) The project proved that Egyptian local institutions, when given resources, flexible systems, and training, deliver basic services effectively. The Mission criticized the evaluation on several counts, including, inter alia, a failure to base conclusions, recommendations, and lessons learned on findings, and an ambiguity regarding the value of future USAID efforts in Egyptian local development.