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Timor-Leste

Fiscal decentralisation and water, sanitation and hygiene services - Case study: Timor-Leste (December 2024)

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1. Introduction

1.1 Background

This study is a country-level assessment undertaken by WaterAid to understand the extent of fiscal decentralisation for the local delivery of Water, Sanitation and Hygiene (WASH) in Timor-Leste. This study forms a part of WaterAid’s global study to contribute to a global paper and global analysis of the effectiveness and trends of fiscal decentralisation of WASH services.

WaterAid hopes that this country-level study will contribute to the longer-term outcomes:

  • Relevant stakeholders in Timor-Leste (line Ministries responsible for WASH, subnational governments, funders, NGOs, CSOs) collectively understand the critical bottlenecks to the availability of local finance for WASH and have identified actions that can be taken to improve the availability of this financing within the context of existing upstream policies and institutional arrangements.
  • Ministries of Finance (and other relevant stakeholders) in Timor-Leste understand the critical upstream bottlenecks to fiscal decentralisation and have identified actions that can be taken to improve the quality and quantity of finance available for local WASH service delivery.

1.2 Study objectives

The primary purpose of the study is to generate country-level evidence to identify possible improvements for the effectiveness of fiscal decentralisation for WASH in Timor-Leste.

The main study objectives are:

  1. To gain a deeper understanding of fiscal decentralisation and how it impacts the effective delivery and sustainability of WASH services in Timor-Leste.
  2. To perform a deep-dive analysis in the WASH sector in 3 municipalities in Timor-Leste, including in the Special Autonomous Region of Oecusse-Ambeno (RAEOA), in the Municipal Authority Baucau (AM Baucau), and in the Municipal Administrator Manufahi (AM Manufahi), to identify financial flows and fiscal decentralisation, the factors that impact its effectiveness and how this impacts the delivery and sustainability of WASH services.
  3. To develop a country-specific and a sector-wide advocacy plan informed by the outcome of the research to address key improvements for more effective service delivery through broader fiscal decentralisation efforts in the WASH sector.

1.3. Scope

The study covers:

  • WASH budget and investment in the nation.
  • WASH budget and investment in 3 municipalities, including in the Special Autonomous Region of Oecusse-Ambeno (RAEOA), in the Municipal Authority Baucau (AM Baucau), and in the Municipal Administrator Manufahi (AM Manufahi). The 3 municipalities are selected because they have different administrative structures. RAEOA is a special region, while AM Baucau is a municipality headed with a president and AM Manufahi is a municipality headed with only an administrator.
  • The period from 2016 to 2020.

1.4. Research Questions

The following research questions are utilised as guidance that will help the preparation and completion of the study.

a. What is the current state of the fiscal decentralisation in the WASH sector in Timor-Leste?

  • To what extent do the political and administrative systems in the place support fiscal decentralisation for WASH service delivery?
  • What level of WASH finance is allocated and spent at different levels, from where do these funds originate and what are they spent on?
  • What is the level of stated (de Jure) and actual (de facto) fiscal decentralisation in the WASH sector?

b. What are the factors that support or hinder fiscal decentralisation in the WASH sector?

  • Do actors have clearly articulated fiscal responsibilities and are these followed?
  • What accountability mechanisms are in place to enable fiscal decentralisation, and increase engagement of local stakeholders?
  • Are there systems in place to enable effective resource management, planning and monitoring?

c. How does fiscal decentralisation impact WASH service delivery?

  • Does fiscal decentralisation contribute to greater effectiveness (technical efficiency and preference matching) in the WASH service delivery?
  • Does fiscal decentralisation negatively impact WASH service delivery or introduce new risks?

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