the world bank page 1 presented by: the public sector group the world bank our difficult climb:...
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The World Bank Page 1
Presented by:The Public Sector GroupThe World Bank
Our Difficult Climb:Our Difficult Climb:
Initial Progress and the Ascent AheadInitial Progress and the Ascent Ahead
Transparency International—World BankCombating Corruption WorkshopWashington, DC March 21, 2003
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A promising start …
Explosion of activity, cutting-edge diagnostics
Major programs launched, with some early successes
Overview
… but we are also facing formidable challenges
To have major impact, need to tackle deeper issues
Tremendous increase in awareness
Possible Paths …
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The ‘Prohibition’ Era
1970 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)
• 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
Broadening & Mainstreaming
The initial ascent … getting to base camp …
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)
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Institutional Checks & Balances• Independent, effective judiciary
• Legislative oversight
• Decentralization with accountability• Global initiatives: OECD Convention, anti-
money laundering, WCO
Institutional Checks & Balances• Independent, effective judiciary
• Legislative oversight
• Decentralization with accountability• Global initiatives: OECD Convention, anti-
money laundering, WCO
Civil Society Voice & Participation
• Freedom of information• Public hearings on draft laws• Media/NGOs• Community empowerment• Report cards, client surveys
Civil Society Voice & Participation
• Freedom of information• Public hearings on draft laws• Media/NGOs• Community empowerment• Report cards, client surveys
Political Accountability• Political competition, credible political parties• Transparency in party financing• Disclosure of parliamentary votes• Asset declaration, conflict-of-interest rules
Political Accountability• Political competition, credible political parties• Transparency in party financing• Disclosure of parliamentary votes• Asset declaration, conflict-of-interest rules
Competitive Private Sector• Economic policies• Restructuring of monopolies• Effective, streamlined regulation• Robust financial systems • Corporate governance• Collective business associations
Competitive Private Sector• Economic policies• Restructuring of monopolies• Effective, streamlined regulation• Robust financial systems • Corporate governance• Collective business associations
Good governance has many dimensions & “entry” points
Public Sector Management• Meritocratic civil service with adequate pay• Public expenditure, financial management, procurement• Tax and customs• Frontline service delivery (health, education, infrastructure)
Public Sector Management• Meritocratic civil service with adequate pay• Public expenditure, financial management, procurement• Tax and customs• Frontline service delivery (health, education, infrastructure)
GOODGOVERNANCE
GOODGOVERNANCE
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Latvia (anticorruption)
Russia (customs/treasury)
India – Andra Pradesh (power; e-gov); Karnataka (right to info)
Colombia (diagnostics& civil society)
Indonesia(local governance)
Uganda (PRSC; education)
Jordan (civil society)
Explosion of activities: Examples of major programs launched across countries
Pakistan (devolution)
Philippines (transport)
Ghana (PE accountability)
Bolivia: (public admin.)
Albania(public admin.)
Guatemala (diagnostic to action program)
Tanzania (PSR)
Ethiopia (decentralization)
Cambodia (PE; forestry)
Ukraine (tax admin)
Bangladesh(civil society)
Gabon(water/electricity)
Kyrgyz Republic (governance reform)
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Latvia (Anticorruption)
India – Andhra Pradesh (Power; E-governance)
Indonesia(Community Empowerment)
Uganda (Education, Capacity Building-Action Learning/Core AC Course)
Ghana (Public ExpenditureAccountability)
Gabon(Water/Electricity)
Some approaches that appear to be working …
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1
3.5
6
1994 1995 1996 1997 1998 1999 2000 2001
OECD+NIC EMERGING + transition
Source: ICRG, 1994-2002. Subject to margins of error, as it is based on only one source.
Poor
Good
But on average, no evidence of significant improvement on control of corruption …
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Business Environment & Enterprise Survey (BEEPS) in ECABusiness Environment & Enterprise Survey (BEEPS) in ECA
Some signs of initial progress in some regions…
0
Perceived Impact ofState Capture
Frequency of active
capture by firms
Bribe frequency
1999
2002
Low
High
… though variations across different dimensions …
How significant are these obstacles to your business?
0
4Financing
Infrastructure
Tax
RegulationsJudiciary
Rule of Law
Corruption
Worst case ALL 1999 ALL 2002
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Some programs that have stalled – and why…
The challenge of politics: No political ‘buy-in’ – despite plethora of
diagnostics and pressure from civil society: Bangladesh
Difficulties in sustainability when there is no political traction: Georgia judiciary
The need to anticipate political obstacles: Action Oriented Learning Program in AFR – Malawi vs. Uganda
Opposition from powerful vested interests in Cabinet & bureaucracy: India, Karnataka – right to information
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Lessons learnt, broader implications … a long way to go …
These appear to be working when the underlying environment is conducive:
Committed leadership
Coalition for reform
Capacity
Enhance ‘demand’ pressures for reform Overcome vested interests against reform Reverse the “culture” of corruption in the public sector Tackle political drivers of corruption (e.g., party financing) Within WB, mainstream across sectors and countries
Enhance ‘demand’ pressures for reform Overcome vested interests against reform Reverse the “culture” of corruption in the public sector Tackle political drivers of corruption (e.g., party financing) Within WB, mainstream across sectors and countries
Excellent at diagnostics
Good at technical solutions and
design
00
Good at addressing the
‘surface’ manifestations
But, struggling to address ‘deeper’ underlying issues
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Shrinking the time horizon
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• New
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New approaches
• New
Strengthening the “demand” for reform
Improving the “supply” of reform
World BankWorld Bank
Partners Partners (e.g. TI, (e.g. TI, bilaterals) bilaterals)
Partnerships
• Lending • AAA
7. The way forward … shortening the journey
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25?Years
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The Way Forward: Strengthening the “demand” for reformStrengthening the “demand” for reform
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Strengthen international pressure for reform
Strengthen international pressure for reform
• Use international bully pulpit to re-energize the agenda: JDW
• Say “no” when warranted: Indonesia? Kenya?
• Use the international platform to highlight good and bad governance countries: TI, CPIA, KKZ, BEEPS indicators
• Strengthen global anticorruption initiatives: OECD Convention, Anti-Money Laundering
Enhance domestic pressures for reform
Enhance domestic pressures for reform
• Assist civil society in monitoring governance reforms: Slovakia, TI
• Support CSOs & FBOs that mobilize citizens in favor of government performance: PAC, Bangalore; Action Learning Programs, LAC
• Help SMEs to organize & mobilize MNCs against capture by large vested interests: ECA
• Strategically support responsible media on anticorruption: Philippines Center for Investigative Journalism
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The way forward: Enhancing the “supply” of reformEnhancing the “supply” of reform
Help tackle political drivers
of corruption
Address issue of party finance disclosure & regulation: UK DFID, TI?
Work with media & Parliaments on political corruption: WBI, others
Develop better tools to understand state capture, market for influence & networks DEC, WBI, others
Work with future leaders: WBI Youth Program
Reverse the “culture” of corruption afflicting the public & private sectors
Understand the norms permeating public-private corruption networks & how to combat them: Peru
Support CSOs/FBOs working towards a transformation of values/ethics in the public sector: AP, India
Support enforceable conflict of interest rules: Latvia
Promote better corporate governance & codes of conduct: TI business principles for countering bribery
Strengthen capacity building & institutional reform efforts: More robust lending & AAA
Strengthen evaluation for ‘scaling up’: DEC, OED, WBI; partners
Emphasize change mgt & design programs to defuse opposition: Education reform, LAC
Support AC efforts that improve service delivery that citizens can observe: Jordan
Help reformist governments
overcome obstacles
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Strengthen staff fortitude and incentives to say “no” when warranted
Internal incentivesInternal incentivesThe way forward …
Deepen and enhance leadership and ownership of anticorruption agenda across sectors – beyond PREM/ WBI/ OPCS/ LEG
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Q&A and
Discussion