The MDP is a ground breaking new effort in development and reform. designed by the Municipal Development and Lending Fund (MDLF) under the guidance of the Palestinian National Authority, the MDP recognizes that the first step toward improving municipal services is well managed and more accountable local governments.

The MDP is unique because it not only provides infrastructure grants to Palestinian municipalities, it improves performance by building operational, planning and financial capacity. its cornerstone is the Grant Allocation Mechanism, a formula - based method for distributing funds to municipalities for capital investments based on need, population and good management practices.

How does the MDP works
The MDP is a phased developmental program, with the first phase lasting about three years. MDP Phase I is expected to reach all 132 municipalities, large and small in both the West Bank and Gaza.

The MDP has four "windows" which include:

WINDOW 1  -  Provides municipalities with performance based grants for municipal service delivery, using the newly created Grant Allocation Mechanism. Municipalities decide on how to use the funds based on their Strategic Development and Investment Plans (SDIP) and consultation with citizens.

WINDOW 2  -  Promotes learning and innovation to facilitate municipal development, including implementation of national policy directives. The MDP supports the PNA in its goal to encourage amalgamation of local governments to achieve better effiencies and economies of scale. it also establishes pilot programs to improve revenue collection, responsiveness and community involvement.

WINDOW 3  -  Helps municipalities improve their performance ranking and designed to compliment the Grant Allocation Mechanism. Provides technical assistance to improve financial management, planning capacities and technical capabilities, particularly in operations and maintenance.

WINDOW 4  -  Provides funding for program management, client and citizen satisfaction assessments, technical assistance for municipalities, and outreach programs to make sure citizens and municipal leaders have a full understanding of the Grant Allocation Mechanism and the MDP development objectives. Help citizens understand where their municipality is ranked, and encourages leaders to meet higher performance levels.