Fighting corruption in Lebanon — time to take on municipalities

The bottom line: It is time to re-think our approach to fighting corruption in Lebanon— there is a compelling case to scale up our efforts in monitoring municipalities.

Beirut Municipality Building (Source: Wikipedia)

Some 1,108 municipalities and 51 municipal unions constitute a key pillar of the democratic life in Lebanon. Together, they accounted for some USD 213 Mn of spend in 2008 and control an increasingly broad array of services to residents (sources: Ministry of Interior and Municipalities, LCPS “About Administrative Decentralization in Lebanon).

There are three reasons why transparency organizations should double down on monitoring municipalities.

#1 SCALE The scale of spend controlled by municipalities and municipal unions is set to expand with time. In fact, the growth of municipal expenditures outpaced central government spend in the past decades. In the period between 1999 and 2008, municipal expenditures grew at an average annual rate of 10.6%, double the 5.3% growth rate of central government expenditures (excluding debt, and in real terms).

In the period between 1999 and 2008, municipal expenditures grew at an average annual rate of 10.6%, double the 5.3% growth rate of central government expenditures.

Decentralization policies and the failures of the ailing central government have naturally increased the scope of activities handled by municipalities. In the past couple of years for example, international organizations and aid agencies channeled a substantial amount of assistance to local governments to help in coping with Syrian refugees. A large number of municipalities also stepped up to take charge of trash collection following the expiration of Sukleen’s contract and the resulting trash crisis.

Municipal expenditures in Lebanon only represent around 6% of total government spend in Lebanon. That is well below the world’s average of 27% (and Denmark’s 85%!), indicating the potential for municipal councils to take on more spend (sources: Ministry of Interior and Municipalities, LCPS “About Administrative Decentralization in Lebanon).

#2 OPACITY Municipalities have (at least until the 2016 elections) not been subject to extensive scrutiny and continue to operate under very opaque systems. The General Accounting Law — introduced in 1963 to increase transparency — only applies to a small set of municipalities, which are effectively selected by the Council of Ministers. In 2010, only 45 municipalities were subject to the law’s requirements (source: MoIM “Municipal Finance Studies Program”). And the law imposes limited controls on the selected municipalities.

In 2010, only 45 municipalities were subject to the requirements of the General Accounting Law.

#3 IMPACT and ACCOUNTABILITY Corruption and mismanagement are pervasive in local governments. But municipal councils are actually subject to a strong level of accountability — not the least because they handle services essential to our day to day lives (from construction permits to road lighting), and because they are directly elected. This provides transparency organizations with a strong ground to expose corrupt acts and mismanagement of public funds.

The fight against corruption at the central government is essential — but it has proven difficult. Even willing ministers have to face bureaucratic hurdles, limited resources, let alone dismantling well oiled schemes. Municipal boards have much more power to act at the level of their administrative unit — they should be subject to a much higher level of scrutiny.