Managing the Politics of Reform: A Case Study on Public Procurement Reform in the Philippines

1. The World Bank Managing the Politics of Reform: A Case Study on Public Procurement Reform in the Philippines Presented by: Ed Campos Coordinator, Governance & Anticorruption Thematic Group Public Sector Governance (PREM) Presented to: Governance and Anticorruption Course PREM and Asia Learning Special Pilot for SAR Washington, D.C. Feb. 14 -16, 2006

2. The initial ascent … getting to ‘base camp’… State in a Changing World (97) O.P. Mainstreaming AC in CAS (99) Governance Strategy (00) Governance Pillar - CDF (98) Strategic Compact (97) • Public Expenditure, Financial Mgt. & Procurement Reforms • Diagnostic/Data/ Monitoring Tools • Administrative & Civil Service Reform • Civil Society Voice, Accountability, Media & Transparency Mechanisms • State Capture/Corporate Governance • Legal/Judicial Reform JDW “Cancer of Corruption” Speech (10/96) WDR on Institutions 1982 Gov/A-C Diagnostics start (98) Anti-corruption Strategy (97) TI CPI (5/95) Broadening & Mainstreaming The ‘Prohibition’ Era Internal AC unit created in WB (98) 1st set of firms Debarred from WB (99) Formalization of INT (01) 1970 1980 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003

3. Cutting Edge Diagnostics PER HIPC E.T. ROSC CPAR EC Audits Public Official Surveys IGR & GAC & Governance Cross-Country Ind. CFAA QSDS SCORE CARDS PETs BEEPS & INVEST. CLIMATE

4. Promoting Reforms: Changing the Landscape Desired State (Good Equilibrium) Status Quo (Bad Equilibrium)

5. Promoting Reforms: Changing the Landscape Desired State (Good Equilibrium) Status Quo (Bad Equilibrium) Conditionality

6. Promoting Reforms: Changing the Landscape Desired State (Good Equilibrium) Status Quo (Bad Equilibrium) “Well Oiled Machine”

7. Background: Corruption in the Philippines

8. From ‘Shot Gun’… The Great Wall of Corruption

9. … to ‘Laser Beam’… The Great Wall of Corruption

10. Background: Why Procurement Reforms? Survey Findings Legal Foundations a Mess Government procurement and tax collection are perceived to be the major sources of corruption: • 4 of the top 5 most corrupt agencies featured prominently in government contracting • Approximately 20% of govt. contracts go to kickbacks/ commissions • Equivalent to P21 B in 2001 just for the national government; much larger if BOT transactions and local government are included Over 100 laws, regulations, executive orders etc. governing public procurement

11. Pre-qualification (5-7 months) 7.5 to 12 months Pre-bidConference (2 weeks) Bid Analysis (1-3 months) Award of contract (1 - 1.5 months)

12. Eligibility Check (1 day) Pre-bidConference (2 weeks) Bid Analysis (1 - 4 weeks) 2 to 3 months Post-qualification (1 - 2 weeks) Award of contract (1 month)

13. Getting from “bad” to good”?:Creating a Well Oiled Machine • How tounify the Executive branch? • How tomobilize civil society groups? • How tolink CSOs and reformers in government? • How torecruit “champions” in the Legislature?

14. Getting from “bad” to good”?:Creating a Well Oiled Machine • How tounify the Executive branch? • How tomobilize civil society groups? • How tolink CSOs and reformers in government? • How torecruit “champions” in the Legislature? • Ownership is critical • “Shoot down” workshop • Formation of TWG • Revival of dormant GPPB • Technical analysis matters

15. Getting from “bad” to good”?:Creating a Well Oiled Machine • How tounify the Executive branch? • How tomobilize civil society groups? • How tolink CSOs and reformers in government? • How torecruit “champions” in the Legislature? • Disparate, diffused CSOs • Formation of PWI • Strategic Bank support

16. Getting from “bad” to good”?:Creating a Well Oiled Machine • How tounify the Executive branch? • How tomobilize civil society groups? • How tolink CSOs and reformers in government? • How torecruit “champions” in the Legislature? PWI became the cog that tied all parties

17. Mobilizing Public Support Transparency and Accountability Network (20+ member groups) Walang Ku-Corrupt Movement (Youth) Drew other civil society groups into the advocacy efforts and coordinated the activities PAGBA & AGAP (w/in Gov’t) CBCP (Church) Philippine Contractors Association (private sector – main stakeholder) Local chambers of Commerce (Private sector)

18. Getting from “bad” to good”?:Creating a Well Oiled Machine • How tounify the Executive branch? • How tomobilize civil society groups? • How tolink CSOs and reformers in government? • How torecruit “champions” in the Legislature? champions:“investing for the future” strategic positions

19. Became the ’Glue’that linked reformers in government, civil society, legislators, and the general public “Public relations drive + advertising blitz + political campaign” Needed local company with special skills to carry this out … Making it All Come Together:The Media Campaign

20. Radio: The swath & the dagger TV: Raising the ante Reaching Out Print Media: Amplifying the problem Advertising: Creating a ‘brand name’ The Media Campaign:The Communications Strategy

21. Go Beyond Old Adage of Forming a Coalition Need to Create a Well Oiled Machine A Few Key Elements… Core group of reformers in Government (a “champion” is not enough …) Technical work absolutely critical Secure allies outside government – CSOs, private sector, churches, youth … Media campaign is the glue that holds the pieces together Conclusion: Managing Politics

22. May need to change the way we provide technical assistance and advice Need to focus more on implementation, steps to make reforms happen in complex political environments -- in addition to technical work Donors have to find additional ways to help finance this process Implications for the Bank

23. Thanks!