Post on 02-Apr-2015
2/16/2006 Vinay Bhargava 1
Mainstreaming Governance and Anti-Corruption in the CAS and Operations:
A Guide for Country Teams with Country Applications
By: Vinay Bhargava
Director, Operations and International Affairs, EXT
Presentation at the Core Course on Public Sector Governance and Anti-corruption
February 14-16, 2006The World Bank
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What do you think is the most important problem facing the world?
26%
12%
9%
8%
7%
6%
5%
4%
4%
4%
4%
2%
2%
2%
1%
Poverty; gap between rich and poor
Terrorism
Unemployment
Wars and conflicts
Economic problems
Environmental issues
Drugs and drug abuse
Corruption
Crime
HIV/AIDS and other diseases
Globalisation/fairer world trade
Religious fundamentalism
Educational issues
Human rights
Refugees
Source: Gallup International – Voice of the People 2005
CORRUPTION Decrease a lot, 5%
DK/NA, 7%
Increase a lot, 23%
Increase a little, 21%
Stay the same, 30%
Decrease a little, 14%
Decrease a little
Stay the same
Increase a little
Increase a lot
Decrease a lot
TI: Global Corruption Barometer 2005
Level of corruption in next three years expected to:
In a Voice of the People Survey by Gallup International the responses were:
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OutlineFive Phases in Mainstreaming
Diagnose governance environment and causes/drivers of corruption
Choosing entry points and designing anti-corruption program suited to operating governance environment
Assessment of risks to the Bank and design of mitigation measures
Building coalition of external/internal supporters
Monitor progress, evaluate results and adjust
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A quick review of the Bank’s Guidelines for
addressing governance issues in CASs
Upstream Review Significance of corruption/governance issues in the country Risks to country development and the Bank operations Proposed Bank assistance and risk mitigation approaches
Downstream CAS preparation and Review Diagnosis of corruption and governance issues Country’s strategy and programs for improving
governance Bank’s proposed assistance program and results Analysis of fiduciary, developmental, and reputational risks
to country and Bank and mitigation measures
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Institutional Checks & BalancesParliament
Other accountability institutions
Institutional Checks & BalancesParliament
Other accountability institutions
Public Sector ManagementFinancial management reformsCivil Service reformsDecentralization of service delivery provisionLocal government and public expenditureImprove M & E capacity
Public Sector ManagementFinancial management reformsCivil Service reformsDecentralization of service delivery provisionLocal government and public expenditureImprove M & E capacity
Anatomy of Governance Elements in Ghana 2004-6 CAS Anatomy of Governance Elements in Ghana 2004-6 CAS Diagnosis: CPIA-3.0. Major structural issues. Risks: to country - high; to Bank - no mention. Country Vision: Strong good governance and accountability program – 1 of 5 PRSP Pillars.
Triggers:Triggers: To Stay in the Base Case: Progress on financial management, in particular on the 16 benchmarks (now 28 PEFA indicators) of HIPC Accountability Action Plan. To Move to the High Case: Progress on public sector including civil service reforms.
Civil Society Voice & ParticipationImprove capacity of civil society groups
Lending Instruments: PRSCs; M&E components; Community Empowerment loansAAA Instruments: WBI; Development Dialogue sessions; Outreach/media programs; CPAR;
CFAA; Community Empowerment study; PER; M&E assessmentResults and Performance Indicators: Well specified
CAS Objective:CAS Objective: Support to Improve Governance and Empowerment -3rd Pillar of CAS
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A Review of 107 CASs produced in FY99-05 shows:
However quality issues: Weak diagnostics
Generic prescriptions
Selection criteria not clear
Risk-response not balanced
Risks to the Bank not fully assessed/mitigated
Success stories scarce
0102030405060708090
100
MentionACG
ACGTA/LEN
ACGTriggers
AssessACGRisks
FY99-01
FY02-04
FY05
Very good coverage…
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Phase 1–Diagnosis: Assembling knowledge (Practical Tips)
Governance indicators (e.g., KKZ, CPIA, TI, etc.)
Political landscape and degrees of freedom for action
Summary findings of diagnostics and evaluations (AAA)
Government strategy—current and historical
Key anticorruption institutions (executive/non-executive branches)
Key anti-corruption champions (in and out of government)
Legacy issues: past donor assistance; media
On-going and recent Bank anti-corruption activities (last CAS)
Relatively high risk ministries/public enterprises
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Causes: Opportunity to abuse power
A Bribe was directly asked for
0
10
20
30
40
50
60
70
80
90
100
Bo
livi
a
Cam
ero
on
Do
min
can
Eth
iop
ia
Gh
ana
Gu
atem
ala
Ind
ia
Key
na
Lit
hu
ania
Mex
ico
Mo
ldo
va
Nig
eria
Pak
ista
n
Par
agu
ay
Per
u
Ro
man
ia
Ru
ssia
Ser
bia
To
go
Ukr
ain
e
Per
cen
tag
e o
f res
po
nd
ents
Source: Transparency International Global Corruption Barometer 2005, http://www.transparency.org/policy_and_research/surveys_indices/gcb/2005
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Causes: Ambiguous Laws and Regulations; Weak Rule of Law; and Crime
A bribe was offered to avoid a problem with the authorities
0
10
20
30
40
50
60
70
80
90
100
Bo
livi
a
Cam
ero
on
Do
min
can
Eth
iop
ia
Gh
ana
Gu
atem
ala
Ind
ia
Key
na
Lit
hu
ania
Mex
ico
Mo
ldo
va
Nig
eria
Pak
ista
n
Par
agu
ay
Per
u
Ro
man
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Ru
ssia
Ser
bia
To
go
Ukr
ain
e
Per
cen
tag
e o
f res
po
nd
ents
Source: Transparency International Global Corruption Barometer 2005, http://www.transparency.org/policy_and_research/surveys_indices/gcb/2005
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Causes: Low Income; Historical; Quality of Public Administration; Political Corruption
A bribe was offered for a service entitled to
0
10
20
30
40
50
60
70
80
90
100
Bo
livi
a
Cam
ero
on
Do
min
can
Eth
iop
ia
Gh
ana
Gu
atem
ala
Ind
ia
Key
na
Lit
hu
ania
Mex
ico
Mo
ldo
va
Nig
eria
Pak
ista
n
Par
agu
ay
Per
u
Ro
man
ia
Ru
ssia
Ser
bia
To
go
Ukr
ain
e
Per
cen
tag
e o
f res
po
nd
ents
Source: Transparency International Global Corruption Barometer 2005, http://www.transparency.org/policy_and_research/surveys_indices/gcb/2005
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Phase 2: Designing an anti-corruption program suited to local conditions
A typical program includes the following elements:
Objectives and approach to assistance
Proposed entry points
Proposed mix of lending and non-lending instruments
Expected results (country and CAS/CSP performance indicators)
Proposed triggers (if any) associated with CAS/CSP scenarios
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Phase 2-Objectives and Assistance Approach: Key Trade-Offs depending upon
situation
Supporting development imperatives vs. risks to the Bank
Balancing help to executive branch with help to non-government institutions of accountability
Selectivity of entry points for results and credibility vs. comprehensive approaches
Balancing lending vs. non-lending mix and sequence of assistance
Prerequisites and Selectivity in When, Where, How and How Much to lend in high risk situations
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Phase 2: Choosing Entry Points
The range of entry points is very broad
Governance systems of actors, capacities, and accountability (supply-side and demand-side relationships) Many dimensions of good governance (a menu of entry points)
Criteria to use in selecting entry points
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Governance Systems: Actors, Capacities and Accountability
Political Actors & Institutions• Political Parties
• Competition, transparency
Executive-Central Govt
Service Delivery & Regulatory Agencies
Subnational Govt & Communities
Check & Balance
Institutions• Parliament• Judiciary• Oversight institutions
Civil Society & Private
Sector•Civil Society
Watchdogs•Media
•Business Associations
Cross-cutting Control Agencies (Finance, HR)
Citizen
s/Firm
s
Citizens/Firms
Cit
izen
s/F
irm
s
Citizens/Firms
Source: Sanjay PradhanSanjay Pradhan Outcomes: Services,
Regulations, Corruption
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Source: Sanjay PradhanSanjay Pradhan
Good Governance has many dimensionsGood Governance has many dimensions
Political Accountability• Political competition, broad-based political parties• Transparency & regulation of party financing• Disclosure of parliamentary votes
Checks & Balances• Independent,
effective judiciary• Legislative oversight
(PACs, PECs)• Independent
oversight institutions (SAI)
• Global initiatives: UN, OECD Convention, anti-money laundering
Citizen
s/Firm
s
Citizens/Firms
Cit
izen
s/F
irm
sCitizens/Firms
Decentralization and Local Participation• Decentralization with accountability• Community Driven Development (CDD)• Oversight by parent-teacher associations & user groups• Beneficiary participation in projects
Civil Society & Media• Freedom of press, FOI• Civil society watchdogs• Report cards, client surveys
Private Sector Interface• Streamlined regulation• Public-private dialogue• Extractive Industry
Transparency• Corporate governance• Collective business
associations
Effective Public Sector Management
• Ethical leadership: asset declaration, conflict of interest rules
• Cross-cutting public management systems: meritocracy, public finance, procurement
• Service delivery and regulatory agencies in sectors
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Phase 2: Practical tips for choosing entry points
Whether and how effectively the proposed entry point is likely to:
Reduce opportunities for corruption
Increase risk of exposure and punishment
Increase severity of punishment
Reduce incentives for corruption
Increase public demand/pressure for reducing corruption
Strengthen accountability of public sector programs
Be feasible under the political landscape, institutional setting, and administrative capacity
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Phase 2: Choosing the mix of assistance instruments for an entry point
Undertaking and disseminating ESW Grants for institutional capacity building WBI capacity building programs Sponsoring in-country dialogue events Fitting lending operations with anti-
corruption plans Free standing lending/TA operations in
support of governance improvement
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Phase 2: Analysis of entry points and instruments chosen in 21 FY05 CASs
02468
101214161820
AAA TA Lending
Public SectorMangement
InstituionalRestraints
CompetitivePrivate Sector
Civil SocietyParticiaption
Politcalaccountability
Note the dominance of public sector management interventions and none in political accountability
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Phase 3: Building partnerships
Expectation for cooperation among donors
Coalitions are more effective for improving governance
Instruments: joint or parallel (coordinated) activities with domestic and/or external partners for:
**Studies **Funding **Joint statements **TA projects **Coordination group **Public dialogue events**Mass communications **Dialogues with gov’t.
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Phase 3: Build Coalition to shift balance of power between vested interests and reformers
Cultivate political support
Get the public behind reform NGOs Media Business Associations Donors Students and Academics
Cultivate internal supporters
Build on scandals and crisis
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Phase 3: Involve institutions to limit corruption
Judiciary Legislature Decentralization with accountability Constitutionally independent accountability
institutions Anti-corruption agency Election Commission Ombudsman Supreme audit institutions Media
Disclosure laws, policies and regulations
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Sectors and Institutions Most Affected By Corruption
4
3.7
3.6
3.5
3.4
3.4
3.3
3.2
3.2
3
3
2.9
2.9
2.8
2.6
Political Parties
Parliament/Legislature
Police
Legal system/Judiciary
Business/Private sector
Tax revenue
Customs
Media
Medial services
Utilities
Education system
Military
Registry and permit services
NGOs
Religious bodies
Source: Transparency International Global Corruption Barometer 2005, http://www.transparency.org/policy_and_research/surveys_indices/gcb/2005
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Phase 4: Assessing Risks to the Bank
Country team members to rate the extent (on a scale of 1 to 5, with 5 being highest risk situation) to which the state of corruption and governance can:
Undermine results/effectiveness of Bank assistance
Reduce the ability to mobilize resources for development
Raise concern in public that Bank assistance increases opportunities for corrupt officials
Result in corruption seeping into Bank financed projects and
Pose personal security risks to Bank staff and counterparts
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Phase 4 : Risk Analysis and Mitigation Upstream-Categorize country by risks to the Bank
CPIA ,governance indicators, and country knowledge assessment
Country team self assessment validated by selected external interviews
Commonly used mitigation measures to reduce risks to the World Bank: Fiduciary controls (procurement and financial) and INT review Integrating social accounting mechanisms Integrating strong results monitoring framework Screening of new projects for corruption risks; preventive
measures Increasing transparency (disclosure, hotline) Strategic communications and partnerships Proactive sanctions enforcement
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Phase 5: Monitor progress, evaluate results and adjust
Set clear and monitorable results
Push beyond Disclosure Policy to supply information to public that make activities transparent
Set reporting and independent auditing systems
Put in place social accountability mechanisms
Encourage beneficiary participation in planning/evaluation
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Phase 5: Social Accountability Mechanism
Source: Social Development Paper No. 76. World Bank, 2004.
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Thank you.