Insights and Analysis

Local Development Funds Shift Decision-Making Power to Mongolia’s Citizens

May 18, 2016

By Ariunaa Norovsambuu

Many stories about Mongolia lead with the economic “boom” the country has experienced from its vast mineral resources. While the economic windfalls have certainly driven the country’s rapid development over the last decade, Mongolia has struggled to shift its highly centralized governance structure to a more participative one. However, signs of change are under way. Under President Elbegdorj’s leadership, a series of initiatives toward decentralization and increased public participation at the local level in the country’s budget priorities and decision-making are beginning to take hold.

The Integrated Budget Law (IBL) of Mongolia that came into effect in January 2013 is the first law that specifically prescribes public consultations and inputs to government budget-related decision-making. The law also introduced the Local Development Fund (LDF), monetary assistance provided directly to local governments both in rural areas and in Ulaanbaatar for projects that improve the living standards of local residents. We’re now seeing some tangible results in terms of local development since its start.

Together with local NGO GER Community Mapping Center, last year The Asia Foundation began mapping out all of the LDF projects implemented in 33 project khoroos.

Together with local NGO GER Community Mapping Center, last year The Asia Foundation began mapping out all of the LDF projects implemented in 33 project khoroos.

“We are happy that these funds have provided lighting for our streets. We’re now less worried about the safety of our kids coming back from school because the streets are no longer dark as they were a few years ago,” said one kheseg (local) leader from Bayangol district, khoroo (sub-district) BGD 23, one of target khoroos under The Asia Foundation’s Urban Governance Project, which since September 2015 has worked with the Municipality of Ulaanbaatar to support urban governance and decentralization efforts at the subnational level. From 2013 to 2015, more than 280 new street lights were put in BGD 23 funded by the LDF in accordance with what residents identified as their most pressing development needs.

While this is good news, citizen participation in how the funds are allocated remains insufficient. According to an Asia Foundation survey, 82 percent of respondents in the 33 project khoroos do not know about the LDF, and many are not aware of its legal framework and their participation rights. Consulting with citizens, especially on the selection and prioritization of LDF projects, remains largely symbolic at khoroo offices. Since the majority of residents are not well informed about the benefits of being engaged in LDF processes, they tend to not attend public consultation meetings.

Building on our community mapping project that started in 2013 (read more about that work here), in 2014, the Ulaanbaatar City Municipality and The Asia Foundation launched a new online community website, manaikhoroo, as an interactive resource for citizens and city officials to find information and download maps with indicators about the accessibility and availability of various public services in the city’s districts. One of the site’s main features is the Google Maps interface with which users can interact and display the indicators in various ways as selected by the user.

Using this tool, together with local NGO GER Community Mapping Center, last year we began mapping out all of the LDF projects implemented in the 33 project khoroos targeted by the UGP project between 2013-2015. After verification was completed, we organized community meetings to present the end results and to gather feedback and comments on the quality, benefits, and use of the maps during community consultation meetings on LDF projects.

Community members examine maps to decide where Local Development Funds should be allocated.

Community members examine maps to decide where Local Development Funds should be allocated.

Even though there were certain limitations in the mapping process, it revealed a number of improvement areas for policymakers to consider. Firstly, after several meetings with khoroo and community representatives, it became evident that they did not have sufficient information on LDF, especially on the projects that had been implemented through the LDF. As a result of the community mapping exercise, the information about the exact location, budget, and implementing agency for each LDF project became available on maps. Knowing the details of the project enables residents to be better informed about the benefits of LDF projects for their community and to monitor the implementation and maintenance of each of the projects in their khoroos.

The maps, which will soon be available on the manaikhoroo website, also helped to identify whether the LDF fund had been distributed evenly throughout the khoroo territory or not. There were examples where the LDF-funded projects were accumulated only in certain khesegs of the khoroo, benefiting only the people in those specific khesegs, whereas in some khoroos the LDF was used to fund projects outside the boundaries of that khoroo. For community representatives, it is important to know that projects are selected and implemented after careful examination of their relevance, impact, and usefulness for all khoroo residents that is, the local community on the whole.

Community maps also have potential to be a useful tool for LDF project selection and prioritization during local community consultation meetings. The maps show the status of LDF projects implemented in previous years, but also provide useful information on where and which projects could be developed for the coming years given the information on khoroo territory, population size by khesegs, and the location and type of projects of previous years.

The Asia Foundation will continue to work with the Ministry of Finance (MoF), Municipality of Ulaanbaatar (MUB), district and khoroo offices to improve the LDF legal framework, streamlining the management of LDF processes at all levels of city government, and increasing the transparency of LDF budget prioritization and implementation through innovative mechanisms such as community mapping. Such work will enable citizens to play a direct and active role in deciding how and where resources should be spent.

The Urban Governance Project is funded by the Swiss Agency for Development and Cooperation and supported by the Municipality of Ulaanbaatar under the Governance and Decentralization Programme Phase II.

Ariunaa Norovsambuu is The Asia Foundation’s deputy manager of the Urban Governance Project in Mongolia and can be reached at [email protected]. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation or its funders.


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