Francesca Recanatini Leader, AC Thematic Group World Bank XXV Villa Mondragone International Economic Seminar, University of Rome Tor Vergata, June 25-27, 2013
Useful Definitions Governance The manner in which the state acquires and exercises its authority to provide public goods & services Corruption Use of public office for private gain Corruption is an outcome a consequence of weak or bad governance Governance reform helps combat corruption by addressing its underlying causes 2
6
7
8
In practice, a heterogeneous challenge Different country s reality (political, institutional and cultural) Different forms of corruption Different level of skills and resources It involves diverse actors and stakeholders (local, national and international) It requires a significant re-allocation of powers and rents within the country 9
Need to design a strategy that: focuses on incentives is country specific and pragmatic allows to monitor progress and to adjust to new circumstances includes both short term and medium term measures fosters and sustains coordination and collaboration among different actors promotes local capacity building (citizens, civil servants and youth) 10 H S
A participatory process to identify governance challenges and build local capacity Key features: Medium/long term partnership between multiple actors for design and implementation Mechanism to facilitate feedback from different stakeholders (focus groups) Multiple sources of data (from households, firms and public officials) focused on experience Rigorous technical implementation Local institution implements Focus on monitoring results and impact
% citizens reporting bribes used frequently to obtain public services % of public officials reporting frequent purchase of positions in their institutions % of public officials reporting frequent public funds mismanagement Country Diagnostic Results Extent of corruption, (Selected Countries 03-05) 0% 15% 30% 45% 60% 75% 90% Sierra Leone(2003) Guatemala(2004) Zambia(2003) Paraguay(2005) Mozambique(2004) Madagascar(2005)
18 16 14 12 10 8 6 4 2 0 Ecuador(2000) Guatemala(2004) Honduras(2001) Paraguay(2005) Peru(2001) Guinea(2004) Ghana(2000) Sierra Leone(2003) Zambia(2003) Mozambique(2004) Confidential Small Medium Large
Corruption imposes barriers to households to access basic services, Sierra Leone 2003 Sierra Leone Housing Corporation (SALHOC) Sierra Leone Roads Transport Authority (RTA) Cost of Corruption: discouraged users by service Public health services Sierra Leone Housing Corporation high income 0% 10% middle income 20% 30% low income Sierra Leone Roads Transport Authority Public education services Municipal and District Councils 0% 5% 10% 15% 20% 25% Proportion of head of households reporting that they decide to not conduct procedures with these institutions because they couldn't pay the unofficial costs 0% 10% 20% 30%
Public funds are mismanaged by agency (as reported by Public Officials, Sierra Leone, 2003) Min. of Health Min. of Agriculture S.L Police Min. of Justice Min. of Education Min. of Social Welfare Min. of Local Govt. Min. of Finance Para-statals Others Nat. Commissions Min. of Information Min. of Development Min. of Defence 0 10 20 30 40 50 60 70 80 90 % of Public Officials that said irregularities/(misappropriations) are frequent
Lessons learnt What are the likely outcomes? Unbundled evaluation of corruption administrative, state capture, bidding, theft of public resources, purchase of licenses, nepotism Identification of weak and strong institutions Assessment of the impact and costs of corruption on different stakeholders To what extent has this approach helped shape public sector reforms? Only when paired with political will, donor coordination and (true) medium term vision
What are the advantages and disadvantages of this approach? Pros: Greater local capacity, consensus and ownership that can ensure sustainability of reform process; southsouth knowledge sharing (Costa Rica, Zambia, Mozambique, Haiti) Cons: Time consuming and costly; challenging to coordinate many different actors, especially international ones; unforeseen political changes How do we reconcile aggregate indicators with national assessments? Two sides of the same coin with different objectives. Key => the two approaches complement each other
Using responses from public officials Public officials are employees of each agency Public official s responses are rescale (from 0 to 100) and then aggregated by agency using factor analysis technique 0 always meaning the lowest level of quality of governance, corruption, access or service performance
Governance and corruption indicators by province South North East West SIERRA Prov. Prov. Prov. Area LEONE Overall corruption 22 32 35 33 32 Corruption in budget 35 43 48 39 40 Corruption in public contracts 18 35 29 33 30 Corruption in personnel 39 44 55 53 49 Accessibility for poor 85 74 87 74 78 Audit Mechanisms 55 59 66 58 58 Enforcement of rules 70 67 80 73 71 Politicization 21 34 22 34 32 Quality of rules 62 62 70 61 63 Resources 54 51 47 55 52 Transparency 51 55 53 51 55 Citizen voice 70 59 65 66 66 Meritocracy 66 65 70 69 68
Audit Mechanisms Enforcement of Rules Quality of Rules Politicization Resources Transparency Citizen Voice Wage Satisfaction Ministère de la justice 63 51 55 44 37 47 72 19 Ministère de la Sécurité 62 50 57 44 38 47 74 18 Ministère de l Administration et de la Décentralisation 61 53 54 42 39 49 75 29 Ministère des Finances 76 72 60 40 43 58 80 28 Ministère de l Enseignement Supérieurs et Recherche 62 50 56 44 35 46 74 20 Scientifique Ministère de l Urbanisme et Habitat 76 42 33 64 75 Ministère de la Santé Publique 70 63 57 43 35 60 70 30 Service Communal 62 51 34 40 52 64 13 Service Sous Préfectoral 58 43 55 45 32 43 72 13 Ministère de la Communication 52 61 44 38 46 75 42 Ministère de la Jeunesse et Sports 60 52 56 42 42 53 73 11 Ligue Islamique Nationale 62 60 59 41 41 49 75 28 Ministère de l Agriculture 61 58 57 42 38 45 77 30 Ministère de l enseignement Pré Universitaire 67 69 57 41 50 50 72 42 Ministère de la Fonction Publique 44 60 45 44 44 71 25 Organisation Non Gouvernementale (ONG) 59 53 41 48 44 82 8 Entreprise Micro Finance 32 73 8 Ministère de l Energie, Mines et Environnement 70 49 55 52 25 Whole Country 62 50 57 45 34 46 75 20 The indicators above take values between 0-100. To interpret them please keep in mind that: -The higher the value of the governance indicator the better the quality of that dimension. -The higher the value of the corruption index, the more severe the problem.
Legal and Regulatory Corruption Corruption in Personnel Corruption in Budget Administrative Corruption Corruption in Public Procurement UDIT -0.09-0.14-0.36-0.14-0.14 (0.048)* (0.055)*** (0.061)*** (0.056)** (0.055)** ERIT -0.15-0.33-0.10-0.19-0.09 (0.040)*** (0.045)*** (0.051)** (0.046)*** (0.045)** PENNESS -0.11-0.02-0.25-0.17-0.15 (0.054)** (0.062) (0.069)*** (0.063)*** (0.061)** bservations 928 928 928 928 928 djusted R- quared 0.847 0.889 0.876 0.897 0.914 Weighted SUR regressions with regional Fixed Effects Standard errors in parentheses * significant at 10%; ** significant at 5%; *** significant at 1% 28
2SLS OLS Total Corruption Total Corruption Internal Organization -1.4603-0.5767 (0.7649)* (0.0419)*** Obs. 909 915 First Stage Regression Average Internal Organization Internal Organization 0.2237 Obs. 909 (0.1279)* Weighted SUR regressions with regional Fixed Effects Standard errors in parentheses * significant at 10%; ** significant at 5%; *** significant at 1% 29
Governance and Anti-corruption: www.worldbank.org/anticorruption Anti-Corruption Authorities Portal: www.acauthorities.org World Bank Public Sector Group: http://web.worldbank.org/wbsite/external/topics/ex TPUBLICSECTORANDGOVERNANCE/0,,menuPK:286310~ pagepk:149018~pipk:149093~thesitepk:286305,00.html Governance Diagnostic Surveys Country Sites: http://go.worldbank.org/p8pt8ak4p0 Actionable Governance Indicators Website: www.agidata.info (internal) www.agidata.org (external) Additional material available upon request: AskGov@worldbank.org 30
31
Institutional structure of the sectors under study How does transport work in Mauritania? What needs to happen at the implementation level? Possible vulnerabilities Internal to the sector: transporters, officials and regulations. External to the sector: linked to banking sector? International issues? Mechanisms of poor governance Is it difficult to get a trucking license? Are bribes required to cross borders with freight? Do civil servants have necessary capacity? Are rules clear? Costs of poor governance What price do transporters and customers pay to facilitate antiquated or inadequate processes? What is the mark up on contracts due to fraud? How many roads are narrower than they should be because of corruption? Who are the major players and what are their policy needs? Potential entry points for reform? Who plays a role in the reform process? Who can be a potential deal breaker? How can we understand the political landscape to ensure policy outcomes are politically viable?
Tools & Info Desk Study: history, sector structure, current context In-Depth Interviews 3 Surveys (Experience Based) Audit & Project Data Iterative process: 8-12 months Outcomes: 1. Governance Baseline 2. Agency Specific Indicators Sector Level Governance 3. Public Dissemination Assessment & Participatory Policy Process Cross-Sector Team (PREM, WBI, SDV,PDS, Procurement) Country Ownership Political Economy Assessment Process Needs Transparent Process Local Partnership Gov t + Civil Society Donor Partnership w/active Donors Partnership w/ Bank Country Team Broad Peer Review Team Capacity Needs
Sector-specific focus: Apply methodology and solutions to country and sector realities Mixed methods: Focus groups & In-depth Interviews Surveys (households, businesses & civil servants) Desk study Project cost data Active participation of civil society and government to contribute to policy making process. Close collaboration with donors colleagues. Active links to on-going sector projects WB transport and port projects EU transport ministry aid project