Terms of Reference for the Production of Policy Studies on:

- Efficiency of Donor Programs in the field of Local Self-Government and their Coordination Mechanisms.
- Policy mechanisms for stimulation of territorial administrative reform.
- Analysis of the Expenses of Local Self-Government Units in Implementing Delegated Functions and Policy Recommendations.

Background Information:

In order to promote local self-government reform in the Kyrgyz Republic, the Open Society Institute / Local Government and Public Service Reform Initiative wishes to contract the preparation of 3 studies on:

- Efficiency of Donor Programs in the field of Local Self-Government and their Coordination Mechanisms.
- Policy mechanisms for stimulation of territorial administrative reform.
- Analysis of the Expenses of Local Self-Government Units in Implementing Delegated Functions and Policy Recommendations.

The background information on each study is attached as Annex I, II and III.

Objectives:

The studies are being commissioned in order to achieve the following objectives:

- To promote democratic local self-government reforms in the Kyrgyz Republic, by offering a high quality independent analysis on ways to implement these reforms and promoting a discussion in this field.
- To present technical information, expertise judgment and tools necessary for the adoption of respective decisions by the Government of the Kyrgyz Republic.

Scope of the Studies:

Each study shall offer an in-depth analysis of the situation in the field, define policy options and policy recommendations and draft Action Plan for the Government and partner organizations. The intermediate results of each study shall be presented in a public event, to which representatives of the Government, donor community and civic society shall be invited.

In particular:

The study on "Efficiency of Donor Programs in the field of Local Self-Government and their Coordination Mechanisms" shall present an in-depth analysis of the programs which international donors have been implementing directly or through their local partners/affiliates in the Kyrgyz Republic within recent years, assess the accomplishments and evident failures of these programs, draw upon opportunities lost due to absence of co-ordination and present policy recommendations on how to improve donor coordination.

The researcher shall contact all the major donors working in the Kyrgyz Republic, obtain from them information necessary for the study, interview the beneficiaries and develop clear and practical recommendations (details in Annex I).

The Study "Policy mechanisms for territorial administrative reform" shall evaluate the Government's intentions to merge small municipalities. The Researcher should meet with major stakeholders and experts, analyze initiatives implemented to date and develop recommendations on conducting territorial - administrative reform (details in Annex II).

The Study "Analysis of the Expenses of Local Self-Government Units in Implementing Delegated Functions" shall be focused on the assessment of mechanisms of delegation of state functions to the local self-governance bodies, their funding, efficiency of performance and reporting. The Researcher shall conduct desk analysis of existing legislation, meet with major stakeholders (Ministry of Finance, NALSG, Association of Municipalities) and a number of selected municipalities and come up with policy recommendations for enforcing adequate financing and implementation of delegated functions (details in Annex III).

ALL STUDIES ARE TO BE PRODUCED IN THE RUSSIAN LANGUAGE.

However, a project proposal needs to be submitted in the English language, in accordance with the indicated template.

Each study will have to be presented by the Researcher in a public event, to be arranged in the middle or during the final stages of the project. Representatives of the Government of the Kyrgyz Republic, donor organizations, NGO leaders interested in local self-government shall be invited to attend. Respective budget needs to be included into the proposal.

Each study shall widely refer, where appropriate, to international practice.

Eligibility:

Well established think tanks registered in the Kyrgyz Republic with proven record of work in the field of local governance and administrative reforms, or consortiums of such think tanks can apply. Due to the importance of international experience, the usage of reputed international experts in the team would be an asset.
Think tanks shall be understood as all forms of non-governmental organizations which are specialized in policy analysis, including Universities, academic establishments, other private institutions.

Timing:

Applications accepted by 10 February 2010.

Decision taken by 15 February 2010.

Contracts shall be ready in the 2nd half of February 2010.

The work shall be performed:

The Study "Analysis of the Expenses of Local Self-Government Units in Implementing Delegated Functions" initial draft of the study must be available till 01 June 2010 and the final draft - by 31 August 2010.

Other studies - till 01 December 2010.

Application procedure:

The interested entities shall submit, by 10 Fenruary 2010, to This e-mail address is being protected from spambots. You need JavaScript enabled to view it , the following documents:

1. A copy of the enterprise registration sheet.
2. The filled full project proposal and the budget sheet available from http://lgi.osi.hu/documents.php?m_id=31
3. List of relevant projects implemented
4. CVs of proposed researchers.

An entity interested to apply for conducting more than 1 study can do so, but needs to fill separate proposals and budget sheets for each study.

Remuneration:

The entity submitting the proposal can offer its own price for conducting the study.
As a rule, a maximum of 30 per cent of the total costs can be paid as advancement. The remaining 70 per cent would be paid upon the acceptance of the work.

Follow up:

Proposals will be evaluated in accordance with the following criteria:

The final decision on funding a proposal shall be taken by the LGI Steering Committee.

Annex I:
Background information for the study
Efficiency of Donor Programs in the field of Local Self-Government and their Coordination Mechanisms

International donor organizations play an important role in building local democracy in the Kyrgyz Republic. The World Bank, the European Union, the USAID, the Asian Development Bank, the UNDP and a range of other donor organizations have been implementing programs and projects in the field of local self-government. These programs have been ranging from advisory and training services to providing small scale infrastructural support.

However, many donor programs in this field remain uncoordinated. This task is vested in the National Agency of Local Self-Government Affairs. At the present time the Agency is not in possession of the necessary information data base and resources to fulfill the task.

Meanwhile, the uncoordinated approach of donor driven initiatives sometimes produces undesired results.

For example, the municipality of Teploklyuchenka has 7 different development strategies, developed by different donor projects. Efforts to introduce the electronic systems of document flows resulted in the appearance and dissemination of two different incompatible systems - GTZ sponsored ‘Berkut' and UNDP sponsored ‘Electronic Ayil Okmotu'. Training initiatives on various topics of self-government sometimes result in the same municipal council or administration being trained on the same issue several times, but from different angles. The quality of trainings sometimes remains questionable.

There are two main inter-related overall objectives which the study shall achieve: 1- Increased efficiency of donor funded programs. 2- Creation of a ‘donor activity inventory' enabling the existing and new donors to plan their activities.

In August 2008, the Agency of Local Self-Government Affairs organized the 1st donor coordination meeting in Bishkek, during which the necessity to improve donor coordination was recognized. However, due to the absence of necessary skills and personnel at the Agency, this work was postponed for an undefined period of time.

The Open Society Institute / Local Government and Public Service Reform Initiative recognizes the importance of international donors' contribution to building democratic self-government in the Kyrgyz Republic and believes that the commissioned study shall suggest concrete tools and mechanisms for effective donor coordination..

Thus the study on "Efficiency of Donor Programs in the field of Local Self-Government and their Coordination Mechanisms" shall present an in-depth analysis of the programs which international donors have been implementing in the Kyrgyz Republic within the recent years, assess the accomplishments of these programs and present policy recommendations on how to improve donor coordination.

The researcher shall contact all the major donors working in the Kyrgyz Republic, obtain from the information necessary for the study, interview the beneficiaries and refer to international best practice in the field.

The research result shall be:

- Inventory of the on-going or planned programs and projects in the field of local self-government by all major donor organizations. The Inventory shall contain a description of each program, its major objectives, geographical coverage and, if applicable, achievements; and
- An assessment study on the efficiency of donor programs, presenting analytical judgement on whether donor programs are efficient and policy recommendations on how to improve coordination efforts. The study shall be approximately 30-50 pages (A4, singlespaced, times new roman) in length

Annex II
Background information for the Study
Policy mechanisms for territorial administrative reform

Administratively, the Kyrgyz Republic is sub-divided into 7 oblasts, and oblasts are sub-divided into rayons (40 rayons in total). Both oblast and rayon is run by Local State Administration, subordinated to Central Government. Everything below - cities, towns, villages etc. are self-governed municipalities. There are 2 major cities, 25 towns and 459 Ayil Okrug and Posyolok, which are countryside self-governed administrative-territorial units, consisting of one or several villages.

The territorial - administrative reform is under consideration for a few years. Options under consideration have included the creation of Okrugs, reduction in the number of ayil okmotu, re-definition of their functions.

Widely speaking, the territorial-administrative reform must respond to several needs:

- Reduction in bureaucracy. Simplification of administration. Exclusion of the duplication of functions.
- Optimum distribution of functions among the tiers of Government, to ensure that each tier performs in accordance with its capacities and the vital functions are performed as closely as possible to the citizens.
- Optimum definition of new territorial units' territories, to ensure that all environmental factors, communal infrastructure available within the territory is sufficient for the territorial unit's efficient functioning.
- Ability of the newly created territorial units to perform efficient regional policy (i.e. policy aimed at developing that particular region).

However, at the present time, 2 issues are under particular consideration on the Government's agenda: options and criteria for enlarging small municipal units and options for regional policy (fostering economic growth).

Change of Territorial-Administrative Set Up / Enlargement of Territorial Units

A large number of Ayil Okrugs, difference in their size and capabilities is one of the Government's concerns. For example, ayil Okrug Enilchek has around 410 inhabitants, while another one - Nariman - has more that 38000 inhabitants. More than half of Ayil Okrugs in Chui oblast have population of less than 5000 people, while almost half of Ayil Okrugs in Osh oblast have more than 10000 people. According to the Government, small size results in weak economy, lack of qualified staff in municipal administration, incapability to foster growth.

In line with the recent President's call for optimization and raising effectiveness of public bodies, this section of future administrative territorial reforms aims at establishing the municipalities with sufficient human, financial, economical and other resources. These resources must be sufficient to implement functions of self-government. There is a presumption that larger municipalities deliver services to a larger number of population, may have more ground for sound local economic development, may be able to hire more competent staff. At the same time, according to the Government of the Kyrgyz Republic, any municipal consolidation should be implemented based on the following principles:

1. Non-reduction of revenues. Total revenues (per capita) of a newly created municipality shall not be less than a sum of revenues of previously existing separate municipalities. As one of the key reasons of merger is to achieve economy of scale, such a reform should never lead to cut off in resources.
2. Services stay close. Even if an official center of municipality get's farer from certain village, the sources of municipal services should stay as close as possible. Namely a person should not travel 50 km to get a document stamped or to pay a land tax. In this regard, any particular enlargement initiative should be accompanied by internal decentralization schemes, where provision of services would be drawn as down as possible.
3. Wide awareness raising campaigns. It is a key to developing a wide public discussion among interested communities before actual legislative decision to change administrative-territorial set up are made.

The Open Society Institute / Local Government and Public Service Reform Initiative recognizes the importance of territorial-administrative reform to fostering democratic governance in the Kyrgyz Republic and believes that the proposed study shall offer policy tools to strengthen local self-governing units in line with the principles of open society.

Regional policy

Besides the issue of the territorial-administrative reform as such, the issue of regional policy has also emerged. On 11 March 2009 the Government of the Kyrgyz Republic adopted a resolution No. 171 defining the concept of the country's regional policy. This policy is aimed at solving issues of economic growth of each region. The ways to introduce regional policy mechanisms have not been defined yet. However, one of the options is to assess the potential of each region and classify it in accordance to certain criteria. This classification should allow both the regional authorities and the Government to prepare more effective programs and tools aimed at the region's needs and, most importantly, its competitive advantages.

The Agency of Local Self-Government Affairs preliminarily developed a methodology of classification based on economic, specific, national, administrative and geographic criteria.

Economic criteria are expected to take into account economic, agricultural, industrial factors. According to this criterion, the region's specialization should be in those fields which offer the best competitive advantages.

Specific criteria are expected to take into consideration linkages between rural and urban settlements. Each Okrug should have at least one urban settlement with the concentration of food processing industries, in order to ensure the internal demand for agricultural production.

National criteria are expected to reflect ethnic composition, traditions of different ethnicities, including labour traditions.

Administrative criteria are expected to ensure the unity of economic typology and territorial-administrative set up of the regions.

Geographic criteria should assess the differences in geographical terrain and the accessibility of services for the residents.

Thus the Study "Policy mechanisms for local self-government reform" shall be focused on the analysis of existing state of affairs and options for reform. The Researcher shall be obliged to contact all the major stakeholders (The Central Government, the Oblast, Rayon and Ayil levels of administration), assess economic, cultural, ethnic, geographical factors, as well as factors related to efficient service provision to the citizens (communal economy, administrative services). As a result of the study, the Researcher shall propose well elaborated, independently formulated, well substantiated policy recommendations with concrete tools and schemes. Within the proposed solutions, the Researcher shall demonstrate cost-effectiveness of these solutions and assess how these proposed solutions shall fit into the existing political and economic framework. The Researcher shall also propose a system of key criteria to assess the feasibility of enlargement initiatives, which would include political, social, economical, geographical and other factors.

The research result will be:

A well elaborated policy study (together with Annexes - up to 100 pages in length, A4, single spaced, Times new roman) with clearly explained policy options that could be used in the Kyrgyz Republic. The study shall contain the set/system of key criteria to assess feasibility of initiatives in the field of administrative-territorial setting of municipalities.

Due to large volume and strategic importance of the issues addressed in this study, preference will be given to consortia which will be able to demonstrate strength of research capacities and ability to present international experience. Participation of foreign experts is welcomed.

Annex III
Background information for the Study
"Analysis of the Expenses of Local Self-Government Units in Implementing Delegated Functions and Policy Recommendations"

Article 7 of the Constitution of the Kyrgyz Republic defines functions and powers of the Government and units of self-government. According to Article 96 of the Constitution, units of self-government can exercise functions of the state and when these functions are authorized, the material resources for their implementation must be granted as well.

The Law of the Kyrgyz Republic of 29 May 2008 "On Local Self-Government and Local State Administration" defines the range of functions of local significance which can be delegated to units of local self-government. Delegation of state functions is allowed only in such cases when the state simultaneously foresees transfers from the state budget to the local budgets, or foresees other funding mechanisms.

The costs of the implementation of functions (both own and delegated ones) depend on the economic situation at the particular time and in a particular territory. Since local tax bases are weak, the situation when the municipality would be required to fund delegated functions from its own tax base is inadmissible. Such a situation might result in the postponement of the implementation of certain functions for a long time.

In order to identify the levels of necessary funding for the implementation of delegated functions, it is necessary to conduct an in-depth analysis of these functions and the needs of funding for their implementation. Such an analysis should reveal the optimum levels of funding of each delegated function.

The Government already foresaw such an analysis in paragraph 611 of the Strategy of Country's Development for 2009-11, in which both the autonomous and delegated functions should be analyzed in terms of their costs. Also, item 3.1.3 of the Activity Plan for 2008-2010 of the National Strategy "Decentralization of State Governance and Development of Local Self-Government until 2010" obliges the Ministry of Finance, the Ministry of Economy and Trade and other institutions to analyze the costs of delegated functions and assess sources of funding. This analysis has not been conducted yet.

The Open Society Institute / Local Government and Public Service Reform Initiative believes that the implementation of an in-depth independent study in this field would offer a contribution to strengthening the financial autonomy of units of local self-government.

Thus the Study "Analysis of the Expenses of Local Self-Government Units in Implementing Delegated Functions and Policy Recommendations" shall be focused on the assessment of the efficiency of the performance of delegated functions by the Kyrgyz municipalities. The Researcher shall be obliged to contact the major stakeholders (The Central Government, the units of local self-government) and assess whether the units of local self-government are efficiently spending the funds earmarked for the implementation of delegated functions, whether funding is sufficient to fulfill the range of delegated functions and what should be the optimum funding.

The Researcher is expected to produce a policy study which shall assess the costs and efficiency of the implementation of each delegated function in at least 14 units of self-government (2 in each Oblast). Units of self government shall be chosen to reflect different Oblasts of the country, different geographical terrains and bases of industry/agriculture.

The research result will be:

A well elaborated study (30-50 pages, single spaced A4, Times new roman) and 14 Annexes reflecting the findings in each analyzed unit of self-government. The study should contain the proposed methodology or alternative methodologies of the cost assessment and, if possible, policy recommendations on the mechanisms of funding the delegated functions. The Researcher is expected to come up with conclusions on the patterns of average municipality's activity - what share of it's resources (including human) are spent for its own functions, delegated state functions, to what extend those functions are funded and how etc. These data should become a basis to lobby for more adequate funding of delegated functions.