Strengthening Democratic Local Governance: An Investigation into the Roles and Authorities of Local Governments in Bangladesh

1. Introduction

Bangladesh has a long history of local government, both rural and urban. Although the purpose of having local governments is to help taking services close to the people, in reality, the purpose has not been achieved satisfactorily, mainly because of the absence of a proper system of decentralization. However, while many studies have accurately and repeatedly identified the broad issues either on legal framework or on the practice at the local governments, there remains a lack of in depth probing into the effects of intervening factors and actors that play critical roles in creating current state of implementation.

The SDLG project funded by USAID and implemented by Tetra Tech ARD initiated a focused research to identify the core issues and cause that lead to ineffectiveness of the LGs in strengthening public services. The Center for Urban Studies (CUS), Dhaka conducted a study on Paurashavas, as urban local government institution. The scope of the field level investigation, however, was limited to Paurashavas of four divisions. These are Dinajpur, Barisal, Sylhet and Chittagong (excluding the Hill districts). The study covered 8 Paurashavas in A, B and C categories from the four regions. The study was conducted during 12 September, 2011 to 11 September, 2012. The study was led by Professor Nazrul Islam, Honorary Chairman of CUS, with Architect –Planner Salma A. Shafi as the Deputy Leader and Professor Amirul Islam Chowdhury, Professor Aktar Hossain, Professor Farzana Islam, Prof. Dr. Nurul Islam Nazem as Advisory Member.

This paper gives a brief overview of the study objectives, methodology and findings and high lights issues which are important concerns for improvement of urban local governance in Bangladesh as well as directives for progress of decentralization.

1.1. Objectives
The primary objective of the SDLG project is to improve transparent and participatory local governance at the sub-national level and to enhance legal and policy reform at the national level in order to promote and expand decentralization in a real sense. In this context the study focused on three major areas of concern and examined how decentralization has been ensured at the Paurashava level particularly with reference to three areas of concern i.e.
a) Financial management and revenue generation
b) Participatory Planning and budgeting, and
c) Service delivery and service monitoring
In each area some key issues were selected for investigation and analysis.

1.2 Methodology
The study was designed to have a multi-level approach and included both literature review and field level data collection and opinion survey. More specifically the following steps were taken;
i. Literature review: This involved review of (a) Legal documents like the Constitution relevant Act. Rules and Circulars, and (b) books, research papers, dissertations consultancy and Commission Reports.
ii. Expert level Consultations, Focused Group Discussions and Close door Policy Dialogues
iii. The findings of the literature review and consultations, discussions and dialogues were shared and exchanged at two Regional Conferences and 2 National Conferences. Each was participated by a large number of participants representing national, regional and local level stakeholders, experts and policy makers.
This paper includes a brief description of the study details and presented as per the methodology mentioned above.

1.3 Evolution of Urban Local Government System and the role of LGs in effective governance And decentralization needs.
Municipal administration system was formally introduced in 1793 through a Charter of the British Parliament. The Bengal Act of 1842 first established the Paurashava. The Bengal Municipality Act in 1884 further improved the law and this law continued till creation of the Bengal Municipal Act 1932 which is an improvement of the former law. After Partition town committees were created in 1959 in urban areas where a municipal Board constituted of at least 15000 populations in a given urban area. In 1960 Municipal Administration was adopted and the Bengal Municipal Act 1932 was repeated.

Notable features in the 1960 Ordinance were the introduction of Municipal Committee, town committees, and ward committees.

After liberation the Bangladesh Government passed the President Order No. 7 in 1972 and cancelled local administration bodies. In 1977 the Paurashava Ordinance was declared and after a long gap of more than 30 years and two commission reports the Local Government Paurashava Act, 2009 No.58 was passed in the Parliament. Currently Paurashava functions are being administered in accordance with this act. But effective decentralization is yet to be achieved as many of the core functions related to the three LG issues of this paper are still handled by the central government.

1.4 The Contemporary Paurashava Structure
At the time of the 1991 census 20.15 percent and 2001 census 23.81 percent of the urban population lived within Paurashava boundaries. The proportion is probably much higher now as a result of boundary extensions and creation of many Paurashavas. At present there were about 309 Paurashavas in Bangladesh in 2009 (GoB, 2009). Paurashavas are categorized for administrative purposes in three classes A, B and C on the basis of three years average of their own generated revenue.

1.5 Personnel Management of Paurashavas
In Bangladesh, for urban areas there are two types of local government institutions, namely, the city corporation and the municipalities or Paurashavas. The executive powers of a Paurashava are vested in and exercised by the Mayor. Policy matters are decided by the Paurashava as a body consisting of the Mayor and councilors.

1.6 Standing Committees
Under the new Act 0f 2009 (Article 55), Paurashavas can constitute 10 standing committees on different subject matters. In addition, other Standing Committees could be formed by the Paurashavas. The membership criterion of these committees has been specifically spelled out in the Act. However, experts on relevant subjects may be coopted in these standing committees.

2.0 Areas of Concern in the CUS Research and Key Findings

The present Research Report has reviewed the status of decentralization with respect to (a) Financial Management and Resource Generation, (b) Participatory Planning and Budgeting, and (c) Service Delivery and Service Monitoring.
In addition the situation of personnel management has also been considered from the point of view of decentralization.

2.1 Paurashava Financial Management and Revenue Generation
The area of management includes fiscal management and fiscal relationships with the central government. Paurashava constitutes in its first meeting 10 Standing Committees of which three are directly connected with finance. These are
a. Establishment and Finance Committee
b. Tax assessment and Collection Committee
c. Accounts and Audit Committee

2.2 Participatory Planning and Budget
Paurashavas as local level planning and development institution is obligated to conduct all development functions with proper delegation of authority and in a participatory way. However in the existing process systematic planning is not practiced. Increased population has put tremendous pressure on the service delivery and other functions. Though development plans for all Paurashavas have been prepared but they are not followed. It is also stated by experts that inhabitants of the Paurashavas are not enlightened about planning and proper guidelines for development i.e. land use plans, building codes, building control, encroachments etc. The lack of financial capacity of the government to support planning activities and reinforce Paurashava for execution of planning functions is also a cited reason for lack of development.
For revenue there are 26 authorized sources of revenue and classified as Tax, Fees, Rates. In terms of revenue earning, highest is in holding tax, lighting, conservancy and water Rates.

2.3 Service Delivery and Monitoring
Functions have been specified in the 1977 Ordinance as compulsory and optional. Performance of all functions is found to be contingent upon availability of funds. Also the range of functions listed in the 1977 ordinance is very wide and till its revision in 2009 few service additions were made.
Of the listed eleven mandatory functions Rule 3, 4 mention that Paurashavas must deliver the functions to the citizens in spite of any technical and financial shortcomings.
Long lists of obligatory functions are included in Rule 50-71 as detailed functions. Though most of the functions listed in 1977 Ordinance have been repeated in the Local Government, Paurashava Act, 2009 (No. 58) certain changes and additions are made in the latter. These are for example,

2.4 Personnel Management
• There are mainly three categories of Paurashavas A, B and C and they receive allocated human resources by the Central Government accordingly in terms of human resources. Of these three, the C type receives no grant or assistance and minimum personnel support.
The Local Government (Paurashava) Act 2009 (NO. 58) provided for the creation of Paurashava Service in Rule NO. 72 and 73. But this is not enacted rather the old service rule 1992 is continued.

• Paurashavas are managed by a combination of elected people and appointed personnel. These personnel are either determined by the government or appointed on secondment.
The Act of 2009 provides for the inclusion of experts and citizens to attend meetings of the standing committees. How much this is exercised needs to investigated.

3.0 Key Findings of CUS Research

3.1 Financial Management and Resources Generation

Paurashavas are highly dependent on the Central Government for finance. They have also only limited power to generate resources locally, in reality they are constrained by law for exploiting whatever avenues they may have. Moreover, the Paurashavas generally lack drive and initiative to generate new sources of revenue. Field research of the CUS study findings on this topic are analyzed as;

 Table: Financial management and resource generation

Study Findings Stated Problems Areas for Intervention
Revenue generation is not satisfactoryPSA lacks own land/propertyGovernment support for development in not satisfactory Undervaluation of propertyHoldings are not assessed regularly for tax purposeIrregular tax collectionSometimes Mayor and Councilors forgo the taxes and also reduce them for fare of losing the elections.Government establishments do not pay taxes

Paurashavas are not allowed to impose new taxes or increase rates

Cannot construct markets and terminals without permission of LG

Lack of fund do not permit increase of staff.

Reassessment of propertyRegular assessment o holding tax.Freedom for tax impositionConstruction of markets, bus, truck and water terminalskhas land under government ownership to be transferred to the paurashava for increase of income

Paurashava land or property should not be leased out.


  • The local Government/ Paurashava/ Act 58 of 2009 (clause 89-clause 94) clearly depicts the area of fiscal management and fiscal relationship lies with the Central Government.
  • However 10 standing committees directly connected with finance are given in the Act. These are given in Rules 55 (PP. 6723)

a)     Establishment and finance committee

b)     Tax assessment and collection committee

c)     Accounts and Audit committee

The third schedule of Paurashava Act 58, 2009 has listed 29 different sources for tax collection in Rule 98 of the third schedule (pp. 6775). Of these particularly mentionable is the 2 percent tax charge on land development to be levied to the Paurashava by the Ministry of Land.

Literature review from Chowdhury, World Bank study observes that, the potential of holdings tax in the Paurashavas remain untapped. There is also mention of ineffectiveness in the decision making powers of the local governments due to lack of decentralization.

Observation by several study reports that tax efforts are low and varies across Paurashavas enormously. In recent times under ADB project and World Bank Supported MDF project Paurashavas are contract bound to improve their collection efforts up to 80% (UGIIP – II) and 70% (MDF). These are very positive signs according to experts.

3.2   Participatory Planning and Budget

The study finds from literature review that participatory planning and budget is not followed in the execution of Paurashava development. Experts have stated that through Paurashavas are mandated to conduct planning and development in a participatory way but committees do not function properly and there is not much sharing of information on development projects and budgets. One key finding is that in spite of being large section of the Paurashava residents the Urban poor are not given adequate attention in the Ordinance or in any participatory process of Planning and Budget. In general the CUS study findings are;

Table: Participatory planning and budgeting

Study Findings Stated Problems Areas for Intervention
Paurashava bodies lack participatory planningBudget lacks participatory planning Lack of consultation with citizens in making infrastructure and other improvements.TLCC, WLCC and standing committees do not regularly meet and take planning decisions.For budget preparation and finalization process people do not get the opportunity to give their decisions or opinions prior to its formulation.The budget is brought before the committees for approval only. Transparent budget process with more time given for decisions from the people.TLCC and WLCC needs to be more interactive in the development process.People’s consultation  in the planning process

3.2   Service Delivery and Service Monitoring

In both Paurashava Ordinance, 1977 and Act, 2009 service delivery functions are specified as mandatory and obligatory. The listings of service details are quite similar in both except for the following differences;

  • The deliveries of services are grouped into 11 broad categories with 64 specified functions in the Act, 2009. But as many of the services are being delivered by Central Governments departments, autonomous public agencies. Paurashavas have practically no control on these functions.
  • In the area of Public Health in the 2009 Act there are gaps in the law regarding provision of health centers, maternity centers etc. and promotion of family planning.
  • In water supply provision control and monitoring of private sources of water by the Paurashavas have been taken out from the Local Government Paurashava Act, 2009 (No. 58).

The provision of fire brigades existed in the 1977 Ordinance but has been deleted in the Paurashava 2009. Specific findings of the CUS study and analysis are given below;

 Table: Service delivery and monitoring

Study Findings Stated Problems Areas for Intervention
Many aspects of service delivery and monitoring  of the Paurashava Law 2009 is not covered in the day to day functionsServices are limited and reach few citizens Pourashavas provide few servicesAll residents of PSA do not have access to services. There is deficiency and imbalance in distribution.The poor citizens in paurashavas are neglected. More emphasis on service delivery specially the compulsory ones.Improvement of service conditionsEmphasis on physical and social planning for infrastructure improvement.

General Opinion from Paurashava bodies related to the issues are;
 Central government should pay salaries of paurashava officers and staffs.
 Some paurashavas do not have provision for payment of pension and gratuity for paurshava officers and staffs.
 Limit (cost) of works without tender must be increased from Taka one lacs.
 Some female councilors and panel mayors claim that they do not get proper respect and opportunity to serve the people.

4.0 High Lights of CUS research Findings and further Recommendation:

In the light of the research findings by CUS on strengthening local governments the following recommendations are made for improving the law and also for further research and advocacy on the topic.
(A) The 2009 Act is a well drafted document but there is need for awareness about the law for proper implementation.
(B) Advocacy is needed among Local Government Officials at the Ministry level, the Municipal Association of Bangladesh (MAB) and Paurashava Mayors to utilize the law.
(C) The Advocacy for implementation of the law in 3 concern areas should continue. Higher levels of political, administrative and civil groups must be included in the stakeholder group.

The strategies envisaged by CUS for the overall advancement of decentralization of urban local government are recommended to be if the following nature;

The SDLG study for Paurashavas by CUS was conducted for brief period of 1 year only. For future CUS has the following guidelines for further action research;

SL Broad Objectives Target Groups Achievements envisaged
Improve relationship among local government stake holders at the policy level –     MP’s-     Mayor’s-     Councilor’s-     Bureaucrats –     Resolve gaps in dministration-     Plugging gaps in the law.
2. Investigate best and worst examples of municipal governanceExample Best Case : Feni PaurashavaWorst Case : Matlab/ Chagalnaiya
  • ·Examples from A, B, C category
  • ·CUS surveyed paurashavas in SDLG
Sharing learning from best and worst case on how to improve relationship between central and local government.
3. Organize / Roundtable with spokes Persons from selected paurashavas Representatives from all levels of stakeholder group Participation of the group to;- Share findings-Gather Suggestions /opinions


5.0.  Concluding Remarks

The CUS  study on Strengthening Democratic Local Governance: An Investigation into the Roles and Authorities of Local Governments in Bangladesh supported by USAID and implemented by Tetra Tech ARD was completed exactly on schedule (12 September 2011 to 11 September 20012) with full satisfaction of the sponsors.