Decentralization Programatic Structural Adjustment Credit II

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The Second Programmatic Structural Adjustment Credit for Decentralization for Bolivia aims to support the Government of Bolivia's ongoing decentralization reform agenda. The proposed operation would be the second in series of Programmatic Structural Adjustment Credits (PSACs). The proposed single-tranche PSAC continues the reform agenda initiated under the first PSAC (report no. P7439), approved by the Board of Directors in May 2001.The comprehensive decentralization reform program aims to adapt the existing institutional framework for improved decentralized public service delivery and governance to implement the Government's poverty reduction strategy. The PSAC program supports the Government in i t s efforts to improve the delivery of public services to the poor and increase the efficiency, transparency and accountability of Bolivia's decentralized government system. Bolivia has taken important steps, including those supported under the first PSAC, but important challenges remain. The present operation supports further deepening of the reform efforts, especially as regards issues of subnational finance and administration. The overall goals of the Government's decentralization reforms are to (i) improve the regulatory and institutional framework for decentralization; (ii) strengthen governance and enhance community participation; (iii) support fiscal discipline at the subnational level; and (iv) continue efforts to strengthen fiduciary management and institutional capacity of all levels of government. Specifically, this project aims to support the critical next steps for a system which has been declared decentralized but in reality remains only partially so. Some of these "next steps" include: (a) the transfer of limited local autonomy for tax policy to the municipalities; (b) clarifying the roles and responsibilities of the levels of the public sector in the important electrification sector and setting the stage for greater clarity across service sectors; and (c) the involvement of international credit rating agencies and auditors in assessing the financial well-being of municipalities. The second PSAC assures the continued progress and visibility of Bolivia's efforts to arrive at a point of fully transparent distribution of responsibilities, accountability, evaluation, and control. Future steps along that path are expected to be supported through subsequent PSACs.

FY17 - Energy and Extractives

World Bank Group

Project

Government