How can a country ensure that national policies, budgets and administrative systems respond to realities on the ground – often in local communities and territories far beyond the capital?

This question is at the centre of a series of regional policy dialogues taking Peru’s decentralisation debate beyond Lima.

Held under the banner “The State in the Territory: New Pathways for Decentralisation” (El Estado en el Territorio: nuevas rutas para la descentralización), the dialogues bring regional and local perspectives into the development of national policy proposals for improving decentralised government.

The Basel Institute’s Subnational Public Financial Management Programme (Programa GFP Subnacional) – funded by the Swiss Economic Cooperation since 2015 – is leading the initiative with additional support from the Friedrich Ebert Stiftung. We are happy to partner with three leading Peruvian academic and research institutions: the Institute of Peruvian Studies, Grupo Propuesta Ciudadana (GPC) and Universidad del Pacífico.

The first dialogue took place in the city of Piura in northwestern Peru. Public officials, specialists, academics and civil society representatives held technical discussions on multilevel governance and the coordination of the state’s administrative systems.

Why decentralisation needs local voices

Decentralisation can bring decision-making closer to people and make public services and investment more responsive to local needs. But transferring responsibilities is not enough. Regional and local governments also need adequate resources, institutional capacity and administrative systems that work across different levels of the state.

This is a challenge in many countries. National policies and systems need to provide consistency, while leaving enough room to respond to different regional circumstances. Without that balance, decentralisation can result in fragmented policies and spending rather than more effective government.

Listening to people who work with these systems on the ground is therefore essential. Their experience can reveal where national policies support local delivery, where they create obstacles and what could work better.

Understanding territorios

The word territorio reflects this approach. In Spanish, it means more than a geographical area. It describes the ties between people, institutions and the places in which they live.

It also carries political and social meaning. Local identities, inequalities and economic and environmental conditions all affect how people experience the state.

In the debate about decentralisation, territorio therefore highlights a desire to gain a ground-up understanding of people’s realities in order to inform state reforms.

Concrete outcomes from the Piura dialogue

Piura offers an especially relevant setting for the first regional dialogue. Its major infrastructure needs and its experience of climate-related shocks, reconstruction and disaster risk management illustrate the limits of fragmented public action.

They also underline the need for stronger coordination across sectors and levels of government.

The discussion centred on a policy paper draft by Carlos Vargas, Director of the Basel Institute’s Subnational PFM Programme. It highlighted the need to strengthen coordination across planning, budgeting, public investment, procurement and implementation.

Participants also stressed that decentralisation reform should go beyond the transfer of responsibilities across levels of government. A key priority is to ensure that the State’s administrative systems work together more effectively at the local level. This would enable public institutions to respond in a more coordinated and coherent way to local needs and priorities. As Carlos Vargas said:

Piura shows that decentralisation is not only about transferring functions, it is about connecting systems, resources and capacities so that public action responds to local priorities and citizens’ needs.

How regional experience will inform national policy

The contributions from Piura and other regional dialogues in Arequipa, Cusco, Loreto and Lambayeque will inform a revised version of the policy paper and a wider set of recommendations for Peru’s national policy debate.

Each dialogue will examine a different aspect of the relationship between decentralisation, public management and territorial development.

If decentralisation is to work for people across Peru, regional and local experience must help shape it.