The wave of mass protests that started in October 2019 starkly brought the dire state of Lebanon’s infrastructure and public services to the public’s attention. In a country where subnational governments (SNGs) are already chronically underfunded, the ongoing economic, financial, and monetary crisis in Lebanon has further hampered the capabilities of SNGs to provide services and plan for long-term project development. This situation is further exacerbated by the catastrophic repercussions of the covid-19 pandemic on the economy and the health sector, as well as the Beirut explosion in August 2020 that killed more than 200 people and destroyed thousands of businesses.
This report reviews the structural conditions that keep Lebanon’s SNGs from being financially sustainable. Drawing on theoretical research, quantitative and qualitative data, we argue that a new framework for enhancing the efficiency of public goods provisions should be put in place.
This study also reviews the literature on the effects of decentralised governance and determines the preconditions which must be satisfied for a novel SNG framework to achieve its goals:
- the central government authorities must develop their institutional and technical capabilities to oversee and support the work of SNGs
- the central and regional governments’ financial standing must be improved by enhancing tax collection and the efficiency of service delivery
- any new SNG framework must include strong transparency and accountability mechanisms to minimise the risk of state capture of public funds and to improve the efficiency of public spending
- regional governments must have the institutional capacity to efficiently carry out their responsibilities