OPEN SOCIETY INSTITUTE
LOCAL GOVERNMENT AND PUBLIC SERVICE REFORM INITIATIVE
Nador utca 11, H-1051 Budapest, Hungary
Tel: (36 1) 327-3104, Fax: (36 1) 327-3105, http://lgi.osi.hu
LGI's Policy Development Program

Call for Proposals
Public policy analysis, policy design and advocacy

LGI launches its multi-year "Policy Development Program" by inviting expert groups and institutions to work on major public policy projects. Policy development should cover policy analysis, design, active campaign and advocacy in countries from the eligible regions. In year 2003 preferred projects should focus on the areas listed in this call for proposals.

Background

LGI's mission is to support decentralization, democratization and good governance and to promote effective public administration through policy development projects. Based on our accumulated knowledge, expertise and established professional networks, we are able to actively contribute to policy formulation. There are two critical conditions for LGI to be involved in the policy process:

1. availability of professional capacity in the target country and
2. willingness of policy makers, primarily national governments to launch and implement reform programs.

1. During the previous years LGI staff and invited experts, working on our projects have completed several policy studies and they implemented some development activities. In the future we shall be able to build on this local and regional professional capacity. Our extended networks (e.g. PPCI, LGPP, LOGIN, MMCP) might serve as a good basis for policy development.
2. Raising the need for policy reforms and establishment of contacts with governments primarily depends on our local partners. Policy windows for major reforms usually occur in the first years after a new government comes into office, or after crisis situations, but sometimes new ideas can be spread during the pre-election period, as well. LGI's direct impact on the policy process might be increased through well positioned professional network members. The cooperation with the Open Society Institute partner organizations (national foundations, spin-offs, other network programs) under favorable political climate might also support LGI activities.

Expected outputs

Policy Development Program (PDP) projects are expected to cover several stages of the policy cycle: Identification of issues for policy debate and selecting actors to be invited for policy development. Support to policy makers to set the agenda for policy design by prioritizing the most burning issues. Applied research on selected topics, formulating policy options. Facilitating debate on investigated topics, support to policy dialogue and dissemination of findings. Helping governments to manage policy implementation (legislative changes, enforcement mechanism, structural and management changes in public administration, changing procedures and practices, etc.). Evaluation and assessment of already introduced policy reforms.

The supported PDP projects should help policy makers deliberate policy choices and manage well-targeted implementation actions. Those initiatives are preferred that bring closer the decision makers, who many times are separated by diverging interests due to their institutional grounding (e.g. working on the same policy issues at different ministries; belonging to different political alliances; affiliated with national versus sub-national levels of governance, etc.).

Partner institutions are to rely on already available policy papers, reports, and analyses written in local languages and international languages such as English, French and Russian. The project may sharpen and fine-tune the recommendation elements of these materials. The objective is to make these materials accessible and known for decision makers.

Preferred policy areas

In 2003, when PDP projects are launched for the first time, LGI plans to offer professional cooperation, guidance and financial support for selected partners in preferred subject areas, as follows:

1. Fiscal decentralization
   In countries of our region decentralization is a rather broad policy effort, aiming to reform administrative and political systems, targeting property devolution, organizational and management mechanisms. Fiscal decentralization is one of the basic conditions of these wide ranging reforms. The most important component of fiscal decentralization is the assignment of own source revenues to elected local governments. This would provide the basis for autonomous decisions and increase local accountability, as well. However, the major part of local budget revenues usually provided through intergovernmental transfers and tax sharing mechanisms. So the methods of defining the scale of these local budget resources, techniques of allocation are also important elements of vertical and horizontal equalization. Mechanism of capital investment funding is usually regulated separately. Development of administrative and management conditions for fiscal decentralization is also critical part of reforms.
2. Reform of public utilities and regulatory mechanisms
   Devolution of property, allocation of infrastructure (networks), operational assets among local governments and service organizations are the bases of reforms in locally managed public utilities and communal services. Transformation of ownership rights will create the ground for reforms in organizational forms and management practices of service delivery. Parallel to these changes, the regulatory roles of the national governments in utility service delivery should be also developed. Critical elements of reform are funding mechanisms: subsidies of current and capital expenditures, pricing authority and mechanism of public utilities. Solutions for managing social policy consequences of transforming urban services should be also integral parts of policy design.
3. Financial and management components of structural reforms in public education
   Public education is under reform almost permanently in most of the countries of our region. Beyond professional changes (e.g. curriculum development, teacher qualification) assignment of public education functions among different levels of government is the critical element of reforms. Balancing of three basic objectives (effectiveness, efficiency and equalization) is the most important goal of transformation. LGI's contribution to these policy debates might be to highlight the conditions for policy changes and to design specific elements of these broad reforms. The following issues are in the focus of public education reforms: financing teachers' salaries; mixed (central, local and private) funding of current expenditures and educational programs; financing capital investments; changes in school management and funding; linkages between decentralized management and unified inspection, legal supervision.

Timeframe

LGI will encourage development projects, which could show some visible results in a relatively short time span, but also promise long-term impacts. The duration of a project is expected to range from 6-12 months, but in exceptional cases different timeframes could also be considered.

Geographical scope

Target countries are in the following regions:

1. Southern Eastern Europe
2. countries of former Soviet Union (with the exception of the Baltic countries)
3. selected countries from LGI's "geographical expansion" program (e.g. Indonesia, Turkey).

Who should apply?

We seek partners who have experience in policy analysis, advice, advocacy and project implementation. We prefer to work with "home-grown" policy centers, think tanks, groups of consultants, independent or government-supported agencies. Potential partners should have a thorough understanding of the policy making environment, a track record of working with legislative bodies, governments and state administration. LGI wants to support those initiatives that create complementary and synergic - and by no means competitive - links to recent and ongoing developmental and technical assistance projects supported by other international agencies (WB, USAID, ADB, DfID, etc.). A thorough knowledge on these agencies' work in the related country is essential.

Selection criteria

Requirements of a successful project proposal are as follows:

1. Justification of the selected policy issues: highlighting the significance and relevance of the planned changes, assessment of needs and constrains, analysis of previous domestic and international reform efforts;
2. Confirmed willingness of the government or other major policy actors to cooperate during the policy reform process. Written expression of interest of domestic parties, preferably local co-funding (cash or in-kind) for PDP projects;
3. Implementation plans for the major stages of the policy cycle, specification of project outputs;
4. Tested professional capacity and technical expertise in policy development. Sound project management capacity;
5. Realistic financial plans for project implementation;
6. Cooperation with LGI experts in professional control and accepting local external monitoring during project implementation;
7. Transfer of knowledge within the CEE/fSU countries, through publications and other forms of information dissemination.

There will be a two-stage selection process: Submission of a written proposal will be required in the first step. In 15 days after receiving the proposals to this call, LGI evaluation team will shortlist maximum 10 applicants. In the second stage LGI experts (staff and hired consultants) will assess the feasibility and relevance of the suggested policy development programs of the shortlisted proposals. LGI experts will be involved in designing the action plan for the shortlisted projects. Following this detailed planning and evaluation, 3-4 full proposals will be presented to the LGI Steering Committee for final approval.

Expected content of bids

In the first stage submitted proposals should:

• highlight the most important aspects of the policy issue (max. 10 pages).
• present the methods and timing of the proposed policy development project (max. 5 pages)
• include institutional capability statement, with CVs of the experts working on the planned project
• propose the budget .

Application procedures

Applications should be submitted to LGI via e-mail (lgprog@osi.hu, with "PDP project: X country, Y team/institution" in the subject line) and regular mail (OSI/LGI; Nador utca 11, Room 308, Budapest, H-1051, Hungary).

Deadline: September 15, 2003