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Governance & Anti-Corruption Diagnostics

Governance & Anti-Corruption Diagnostics. Institutional Governance Reviews (IGRs) Conference on Making Macro-Social Analysis Work for Policy Dialogue Wednesday, May 17, 2006 Doris Voorbraak PREM Public Sector Governance. Governance and Corruption Not the same thing!. Governance.

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Governance & Anti-Corruption Diagnostics

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  1. Governance & Anti-Corruption Diagnostics Institutional Governance Reviews (IGRs) Conference on Making Macro-Social Analysis Work for Policy Dialogue Wednesday, May 17, 2006 Doris Voorbraak PREM Public Sector Governance

  2. Governance and CorruptionNot the same thing! Governance The manner in which theState acquires and exercises its authority to provide public goods & services Corruption Usingpublicoffice for privategain • Corruptionis an outcome– a consequence of the failure of accountability relationships in the governance system • Poor delivery of services and weak investment climate are other outcomes of bad governance

  3. Original Objective of the IGR Diagnostic The Bank began conducting IGRs in 1999 with two key objectives: • Tracing the institutional roots of poor government performance and • Providing options for operational design and country strategy • Surveys and quantitative measures to assess governance performance were developed for analysis of reform recommendations

  4. The World Bank has come a long way in a brief period of time State in a Changing World (97) O.P. Mainstreaming AC in CAS (99) PSG Implementation Update (02) Governance Pillar - CDF (98) Strategic Compact (97) Governance Strategy (00) • Diagnostic/Data/ Monitoring Tools • Public Financial Management and Procurement • Administrative & Civil Service Reform • Civil Society Voice, Transparency, & CDD • State Capture • Legal & Judicial Reform JDW “Cancer of Corruption” Speech (10/96) WDR on Institutions 1982 Anti-corruption Strategy (97) Gov/A-C Diagnostics start (98) TI CPI (5/95) Broadening & Mainstreaming The ‘Prohibition’ Era 1st set of firms Debarred from WB (99) Internal AC unit created in WB (98) Board endorses Integrity Strategy (04) Formalization of INT (01) IGRs developed PDW Bank President (05) 1980 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

  5. Score Cards PET QSDS PER CFAA CPAR IGRs are one of several governance/anti-corruption diagnostics Civil Society IGR Citizens BEEPS INV. CL. surveys Government Officials Enterprises Private Sector The State

  6. Experience and On-Going IGRs

  7. IGRs represent a range of products, and were used for different purposes IGRs cut across many sectors and issues: • Social sectors – e.g., to lay the groundwork for health and education reforms (Argentina) • Political patronage and governance in complex coalition environments. These reviews generated debates on the various incentives for reform. (Armenia, Bangladesh, Bolivia and Peru) • Service delivery – to look into service delivery under decentralization (DRC, Burkina Faso and Guinea)

  8. Challenges • IGRs have covered a broad array of governance issues • Traditional “technical” PSG and insufficient attention to political constraints • IGRs have grown in length and cost • IGRs risk to become stand-alone products separated from operations • More attention is needed for political economy issues • Debate on inclusive internal/external use in view of sensitivities

  9. Governance Framework Actors, Capacities and Accountability Citizens/Firms • Political Actors & Institutions • Political Parties • Competition, transparency Executive-Central Govt • Civil Society & Private Sector • Civil Society Watchdogs • Media • Business Associations • Formal Oversight Institutions • Parliament • Judiciary • Oversight institutions Cross-cutting Control Agencies (Finance, HR) Citizens/Firms Citizens/Firms Service Delivery & Regulatory Agencies Outcomes: Services, Regulations, Corruption Subnational Govt & Communities Citizens/Firms

  10. Governance FrameworkWhen Accountability Breaks Down State Capture Citizens/Firms • Political Actors & Institutions • Political Parties • Competition, transparency Patronage & Nepotism Executive-Central Govt • Civil Society & Private Sector • Civil Society Watchdogs • Media • Business Associations • Formal Oversight Institutions • Parliament • Judiciary • Oversight institutions Cross-cutting Control Agencies (Finance, HR) Citizens/Firms Citizens/Firms Administrative Corruption Service Delivery & Regulatory Agencies Outcomes: Services, Regulations, Corruption Subnational Govt & Communities Citizens/Firms

  11. Good Governance has many dimensions Citizens/Firms • Political Accountability • Political competition, broad-based political parties • Transparency & regulation of party financing • Disclosure of parliamentary votes • Civil Society & Media • Freedom of press, FOI • Civil society watchdogs • Report cards, client surveys • Effective Public Sector Management • Ethical leadership • Public finance management & procurement • Civil service meritocracy & adequate pay • Service delivery and regulatory agencies in sectors • Formal Oversight Institutions • Independent, effective judiciary • Legislative oversight (PACs, PECs) • Independent oversight institutions (SAI) • Global initiatives: UN, OECD Convention, anti-money laundering • Private Sector Interface • Streamlined regulation • Public-private dialogue • Extractive Industry Transparency • Corporate governance • Collective business associations Citizens/Firms Citizens/Firms • Decentralization and Local Participation • Decentralization with accountability • Community Driven Development (CDD) • Oversight by parent-teacher associations & user groups • Beneficiary participation in projects Outcomes: Services, Regulations, Corruption Citizens/Firms

  12. The Bank operations focus only on some Citizens/Firms • Political Accountability • Political competition, broad-based political parties • Transparency & regulation of party financing • Disclosure of parliamentary votes • Civil Society & Media • Freedom of press • Freedom of information • Civil society watchdogs • Public hearings of draft laws • Report cards, client surveys • Participatory country diagnostic surveys • Effective Public Sector Management • Ethical leadership • Public finance management & procurement • Civil service meritocracy & adequate pay • Service delivery and regulatory agencies in sectors • Formal Oversight Institutions • Independent, effective judiciary • Legislative oversight (PACs, PECs) • Independent oversight institutions (SAI) • Global initiatives: UN, OECD Convention, anti-money laundering Citizens/Firms • Private Sector Interface • Streamlined regulation • Public-private dialogue • Break-up of monopolies • Extractive Industry Transparency • Corporate governance • Collective business associations Citizens/Firms • Local Participation & Community Empowerment • Decentralization with accountability • Community Driven Development (CDD) • Oversight by parent-teacher associations & user groups • Beneficiary participation in projects Outcomes: Services, Regulations, Corruption Primary focus of WB operations in governance Citizens/Firms

  13. GovernanceAn Overall Operational Approach • Unbundle governance – What are the specific governance problems of concern? • Corruption? If so, where is it concentrated? Health? Education? Financial sector? Procurement? Grand corruption and capture? Administrative corruption? • Poor delivery of public services? If so, which one? • Weak credibility for private investment? • Analyze underlying dynamics – What are the specific drivers of poor outcomes? • Powerful interests purchasing state policy for private interest • Lack of citizen voice to influence service delivery • Weak checks and balances to constrain arbitrary action • Sequence reforms and donor strategies – How to support drivers of change? • Analyze and support drivers of change • Develop appropriate sequencing of public management and checks & balances • Balance supply side interventions with demand side pressures • Rely on multi-donor partnerships, based on mandate & comparative advantage

  14. Cutting-edge diagnostics and research helps to identify entry points The Challenge of State Capture Control of corruption, 2004: World map Purchasing of public positions Proportion of firms affected by capture of … Percent of public officials believed to have purchased their positions 30 Parliamentary Votes 25 Presidential Admin. Decrees Colors are fromDark Red- the worstbottom 10th percentile rank toDark Green- the best above 90th percentile. Source: Governance Matters IV: Governance Indicators for 1996–2004, D. Kaufmann A. Kraay, and M. Mastruzzi (2005) Source: Kaufmann, Pradhan, Ryterman (1998) Civil Court Decrees 20 Public expenditure tracking (Uganda) 15 Public info campaign (1999) 10 5 Hungary Estonia Russia Ukraine Source: Reinikka and Svensson (2004)

  15. Moving forward • Increased demand for governance/political economy and anti-corruption diagnostics which are problem-driven, can be applied flexibly and relatively quickly • Country Governance Assessment - linked to strategy workshops with country-teams in advance of a CAS or to address major strategic challenge • Country anti-corruption assessments: diagnostics to assess corruption/judiciary risks and mitigation strategies, with a focus on high-risk countries • Governance of service delivery diagnostics: instruments to identify key bottlenecks and reform options

  16. Q&A

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