the world bank governance & anti-corruption diagnostics institutional governance reviews (igrs)...

The World Bank

Governance & Anti-Corruption Diagnostics

Institutional Governance Reviews

(IGRs)

Conference on Making Macro-Social Analysis Work for Policy Dialogue

Wednesday, May 17, 2006

Doris VoorbraakPREM Public Sector Governance

The World Bank Page2Doris Voorbraak

PREM Public Sector Governance

Governance and Corruption Not the same thing!

The manner in which the StateStateacquires and exercises its authority to provide public goods & services

Using publicpublic office for privateprivate gain

GovernanceGovernance

CorruptionCorruption

•Corruption is 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



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



The ‘Prohibition’ Era

1980 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003

WDR on Institutions 1982

JDW “Cancer of Corruption” Speech (10/96)

State in a Changing World (97)

• Diagnostic/Data/ Monitoring Tools

• Public Financial Management and Procurement

• Administrative & Civil Service Reform

• Civil Society Voice, Transparency, & CDD

• State Capture

• Legal & Judicial Reform

Broadening & Mainstreaming

The World Bank has come a long way in a brief period of time

TI CPI (5/95)

Anti-corruption Strategy (97)

Governance Strategy (00)

1st set of firms Debarred from WB (99)

Formalization of INT (01)

Strategic Compact (97)

O.P. Mainstreaming AC in CAS (99)Governance

Pillar - CDF (98)

Internal AC unit created in WB (98)

Gov/A-C Diagnostics start (98)

2004 2005

Board endorses Integrity Strategy (04)

PSG Implementation Update (02)

PDW Bank President (05)

IGRs developed



IGRs are one of several governance/anti-corruption

diagnostics

CitizensCitizens

Government Government OfficialsOfficials EnterprisesEnterprises

Civil SocietyCivil Society

Private

Private

SectorSector

The State

The State

PETQSDSPERCFAACPAR

Score Cards

IGR

BEEPSINV. CL. surveys



Experience and On-Going IGRs

Region Completed On-Going

AFR Burkina Faso, Nigeria,Benin, DRC, Cape Verde, Chad, Cameroon, Ethiopia, Tanzania, Zambia

Burkina Faso, Ethiopia, Guinea

ECA Armenia, Romania

EAP Indonesia

LAC Argentina, Bolivia, Eastern Caribean, Paraguay

Argentina, Bolivia, Colombia, Mexico, Haiti

MNA Regional, Egypt Gaza

SAR Bangladesh, Pakistan Bangladesh, NepalSource: Business Warehouse and Public Sector staff.



IGRs represent a range of products, and were used

for different purposesIGRs 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)



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



Governance Framework Actors, Capacities and

AccountabilityPolitical Actors & Institutions

• Political Parties• Competition, transparency

Executive-Central Govt

Service Delivery & Regulatory Agencies

Subnational Govt & Communities

Formal Oversight

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

sCitizens/Firms

Outcomes: Services,

Regulations, Corruption



Governance FrameworkWhen Accountability Breaks

Down

Outcomes: Services,


Political Actors & Institutions• Political Parties

• Competition, transparency

Executive-Central Govt

Service Delivery & Regulatory Agencies

Subnational Govt & Communities

Formal Oversight

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

sCitizens/Firms

State Capture

Patronage &

Nepotism

Administrative

Corruption



Political Accountability• Political competition, broad-based political

parties• Transparency & regulation of party financing• Disclosure of parliamentary votes

Formal Oversight Institutions

• 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

surveysPrivate Sector Interface

• Streamlined regulation• Public-private dialogue• Extractive Industry

Transparency• Corporate governance• Collective business

associations

Effective Public Sector Management

• Ethical leadership• Public finance

management & procurement

• Civil service meritocracy & adequate pay

• Service delivery and regulatory agencies in sectors

Good Governance has many dimensions

Outcomes: Services,




Political Accountability• Political competition, broad-based political parties• Transparency & regulation of party financing• Disclosure of parliamentary votes

Formal Oversight Institutions

• Independent, effective judiciary

• Legislative oversight (PACs, PECs)

• Independent oversight institutions (SAI)

• Global initiatives: UN, OECD Convention, anti-money laundering

Citizen

s/F

irms

Citizens/Firms

Cit

izen

s/F

irm

sCitizens/Firms

Local Participation & Community Empowerment• Decentralization with accountability• Community Driven Development (CDD)• Oversight by parent-teacher associations & user groups• Beneficiary participation in projects

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

Private Sector Interface• Streamlined regulation• Public-private dialogue• Break-up of monopolies • Extractive Industry

Transparency• Corporate governance• Collective business

associations

Effective Public Sector Management

• Ethical leadership• Public finance

management & procurement

• Civil service meritocracy & adequate pay

• Service delivery and regulatory agencies in sectors

The Bank operations focus only on some

Primary focus of WB operations in governance

Outcomes: Services,




• 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

GovernanceAn Overall Operational Approach



Purchasing of public positions

Source: Kaufmann, Pradhan, Ryterman (1998)

Percent of public officials

believed to have purchased their

positions

Cutting-edge diagnostics and research helps to identify entry

points

Public expenditure tracking (Uganda)

Source: Reinikka and Svensson (2004)

Public info campaign (1999)

Control of corruption, 2004: World map

Colors are from Dark Red - the worst bottom 10th percentile rank to Dark Green - the best above 90th percentile. Source: Governance Matters IV: Governance Indicators for 1996–2004, D. Kaufmann A. Kraay, and M. Mastruzzi (2005)

5

10152025

30

Proportion of firms affected by capture of …

HungaryHungaryEstoniaEstoniaRussiaRussia UkraineUkraine

Parliamentary VotesParliamentary VotesPresidential Admin. DecreesPresidential Admin. Decrees

Civil Court DecreesCivil Court Decrees

The Challenge of State Capture



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



Q&A

the world bank governance & anti-corruption diagnostics institutional governance reviews (igrs)...

Documents

governance strategy

governance performance

public sector staff

governance pillar cdf

public office

changing world

political constraints

guinea slide