Modernisation and decentralisation

Project description

Title: Modernisation and decentralisation (PROMODE)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Ecuador
Lead executing agency: Secretaría Nacional de Planificación y Desarrollo (SENPLADES)
Overall term: 2004 to 2013

Waste management project in Cayambe ©  GIZ


A number of issues are delaying the modernisation and decentralisation of public administration in Ecuador. These include the centralisation of administrative tasks, an absence of well-defined responsibilities, the duplication of structures and the resultant weakness of local authorities. Local governments often lack the organisational, technical and financial resources and competences they would need to perform their current and future duties effectively. This has a negative impact on the scope and quality of state services, and also on the living conditions of the poorer members of society. In 2008, more than a third of the population were classed as poor with over 15 % living in extreme poverty. The poverty rate in rural areas was considerably higher (almost 60 %), with more than 30 % living in extreme poverty (source: INEC – National Institute for Statistics and the Census in Ecuador, December 2008).

The new constitution approved in 2008 paved the way for a comprehensive reform process. One of the objectives of this process is the systematic realisation of all human rights. Public services are to be demand-driven, transparent, efficient and effective. The reforms focus on overcoming regional, social and economic inequalities and encouraging greater civil society participation in social policy decisions. All policy areas are to contribute to the democratisation of government actions, poverty reduction and to overcoming discrimination on the basis of gender or cultural background. The general legal framework underpinning the reform process has largely been established. The key factors that will determine the success of the process are the willingness and ability of the actors involved to reach a consensus, engage in political dialogue and ensure conflict sensitivity.


Public administration is significantly modernised and decentralised. Downstream local authorities, such as provincial and municipal administrations and village councils, perform the duties entrusted to them efficiently and transparently with the participation of citizens and in line with the needs of the population.


PROMODE has two components:

  • State reform
    Redistribution of public-sector responsibilities and duties within a decentralised state structure, corresponding reform of administrations at centralised and decentralised levels, institutionalisation of civil society involvement in development planning
  • Decentralised and transparent fiscal policy
    Allocation of budget resources on the basis of equal opportunities criteria, providing citizens with information about the management of public finances

PROMODE provides advisory services and training, moderates dialogue and conciliation processes, and systematically combines policy, technical and organisational advisory services. The support is designed with the participation of the partners within the context of projects for change. Support is provided to develop the partners’ policy analysis and drafting capacities and to promote coordination and cooperation between the different levels of government. The project also aims to reconcile existing tensions surrounding the deconcentration of national authorities and the strengthening of autonomous local authority bodies.

The focus is on ensuring that, when the programme comes to an end, all the results achieved can be sustained and have a broad impact. The consulting firm ODCP has assumed this task. Through service networks, it carries out knowledge management and product development and distribution.

Results achieved so far

Transparency in public administration. The Ministry of Economy and Finance has updated its website to include information about the duties and functions of public bodies. The Ministry has also produced materials (Cómics Fiscales) that explain the concepts and processes of fiscal policy in a straightforward way. These were distributed as a newspaper supplement and also used by the Ministry of Education and Culture in schools. Fiscal statistics have been published for the entire public sector.

Greater equality of opportunities. All public budgets must now lay out how they intend to foster gender equality. In 2010, the Ministry of Economy and Finance, the United Nations Development Fund for Women (UNIFEM) and PROMODE were awarded the GTZ (now GIZ) Gender Prize for this approach. The competition is open to entries from across the world. The Ecuadorian National Secretariat for Planning and Development (SENPLADES) and the Ministry of Economy and Finance have developed a fairer formula for transfer payments to local authorities. This formula takes into account the basic public services delivered at regional and local level as well as relevant data on poverty. These new transfer payments increase the funds available to provinces and municipalities by almost a quarter and also enhance the borrowing capacity of municipalities.

Institutionally enshrined civic participation in development planning. With support from PROMODE, 14 provincial governments and municipalities have planned their budgets on a participatory and gender-orientated basis. The actors involved agreed on investments based on the particular needs of the citizens.

Improved public services. Eight municipalities have introduced cost-covering tariff systems for drinking water supply and sanitation services. They have also improved the quality of the water supply system and introduced an environmentally sound system of solid waste management. Based on the experience of PROMODE, the University of Cuenca has established an advisory centre, which provides technical support to local authorities in the surrounding area thus helping them improve their services.

Analysing development potential. The provincial governments in Tungurahua and Manabí are using a diagnostic instrument to produce a participatory analysis of economic development potential. They are using this to elaborate and update economic development strategies and boost their competitiveness.

Citizens are very satisfied with their local administration. According to a survey carried out in the areas where PROMODE is supporting the municipal administrations, over 60 % of the public is satisfied with the drinking water supply, sanitation and waste management services provided, as well as with customer service and the transparency of the work carried out by the government.

Additional information