Vertical Co-Ordination In Transport Infrastructure
In infrastructure provision, including transport, the actual construction of the infrastructure and the government policies and regulatory framework under which it is developed are equally important. In addition to infrastructure policy co-ordination among different government agencies at the same level of government, co-ordination between different levels of government is also needed. Central government dominates transport infrastructure policy planning. The results of the survey of policy makers cast light on certain phenomena identified in case studies in other regions.23 Although this may be explained by the type of infrastructure (e.g. primary networks and railways), the results show that there is little involvement of sub-national governments throughout the project cycle. It is therefore necessary to strengthen co-ordination between different levels of government.
Heterogeneity in responsibilities at different stages of the infrastructure process points to bottlenecks that limit the effectiveness of public transport policies. In all the countries participating in the survey, sub-national governments were found to carry out a wide variety of responsibilities. These range from policy design to performance monitoring and infrastructure maintenance. Such is the case of Peru, where sub-national governments are legally obliged to report on compliance with transport policy. However, their partial involvement limits the effectiveness of these joint measures.
Clearly defining the responsibilities of each level of government allows a greater level of co-ordination. For example Brazil’s Growth Acceleration Programme, a vast infrastructure plan now in its second stage (PAC2), provides for the selection of projects by the federal government in consultation with its regional and local counterparts.
Defining technical plans at a sub-national level facilitates territorial co-ordination of investment. Shared objectives among the different levels of government can generate strong incentives for the transfer of resources. In nearly half of the surveyed countries there are such plans, which are usually aligned with national development plans or investment plans. Otherwise, a decoupling of public spending programmes in infrastructure among different levels of government can lead to wasted resources, duplication of efforts, and, in the worst case scenario, conflicting priorities. A greater link between different government levels exists in countries that have sub-national transport policies. In the surveyed countries that have such plans there is greater co-ordination with the national government. This is evidenced by shared responsibilities for implementation. However, due to the small size of some countries in the region, especially in the Caribbean and Central America, it is not necessarily desirable to have explicit sub-national transport infrastructure plans because it eliminates the economies of scale inherent to large investment projects. Even so, the inclusion of sub-national strategic plans in national investment plans makes more effective co-ordination possible.
The unitary character of public finance in many countries in the region hampers sub-national infrastructure spending, as it often depends on the transfer of resources from the central government. This, coupled with limitations in the technical competencies of sub-national governments, makes the transfer of responsibilities impossible due to financial, operational and administrative factors. This situation allows the central government to concentrate subsidy funding in land transport networks. In this regard, the formulation of medium-term fiscal and investment frameworks that clearly and expressly define the policies to be implemented in each region/ territory can be a useful tool. These frameworks can provide a benchmark for both national and sub-national governments on how to manage public spending. Improvements in the use of multi-year budgeting, a product of institutional reforms aimed at increasing the effectiveness of public spending, have brought about greater transparency and communication in the formulation of these plans.