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Drilling Down Through Selected Governance
Diagnostic Tools
Francesca Recanatini
Sr. Economist, PRMPS
The World Bank
June 5, 2007
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Objective of this session
Which empirical tools and approaches are already available?
How can we select among them? How can such assessments be used for our
operational work?
Which governance tools are more operationally relevant for our work?
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Governance is the door to anticorruption
The manner in which the The manner in which the statestate acquires acquiresand exercises its authority to provide and exercises its authority to provide public goods & servicespublic goods & services
Use of Use of publicpublic office for office for privateprivate gain gain
GovernanceGovernance
CorruptionCorruption
•Corruption is an outcome – a consequence of weak or bad governance
•Governance reform helps combat corruption by addressing its underlying causes
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Governance receives extra weight in CPIA indicator-based allocations of IDA funds
All Country Assistance Strategies (CASs) are required to address governance issues, including corruption
Increasingly, CAS’s are centered around governance issues
A key focus of the Bank is to help countries to improve their governance systems to mitigate risks for all stakeholders
How does governance fit into ouroperational agenda?
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Existing WB Empirical Tools
BEEPS IGR Public Official
surveys PER and PETS QSDS Score Cards Investment Climate
Surveys
EC Audits CFAA CPAR GAC Case Studies HIPC Exp. Tracking ROSC Life In Transition Survey
(ECA region)
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Existing Non Bank Tools (Sample)
TI Perceptions Index UNDP GAC Freedom House Press
Freedom Indicators MCC ratings Afrobarometer Surveys Global Risk Service Business Enterprise
Environment Survey Latinobarometro Surveys
Media Sustainability Index
Business Risk Service Transition Report Global E-Governance Global Competitiveness Global Integrity Index Human Rights Database Open Budget Initiative Reporters w/o Borders
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Key starting points
1. What is the purpose of the assessment?
Research and analysis Awareness raising Policy and Action planning Capacity building Monitoring
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2. What is the focus of the assessment?
Governance as a whole Corruption Performance of a specific agency/sector Quality of a specific public service delivered
Key starting points
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Linking the Tools to State Institutions
PERHIPC E.T.ROSCCPAREC Audits
CFAA
IGR & GAC & Governance Cross-Country Ind.
BEEPS & INVEST.CLIMATE
SCORE CARDS
QSDS
Public Official Surveys
Political System- Cam paign Finance- Recruitm ent/Patronage
Executive Branch- Core Accountability M echanisms- Key Sectors: Revenue, Expenditure & Regulatory Agencies
Legislative Branch- Parliam entary O versight- Parliam entary Safeguards
Judicial Branch- Judicial Independence- Judicial Predictability- Prosecution & Trial of Corruption Cases
Sub-National Governm ent- Transparency and Responsiveness- Accountability M echanisms
Users- Households- Enterprises
Service Delivery Agencies- Accountability M echanisms- Accessibility and Responsiveness
PETs
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Linking Governance Tools to Accountability
CitizensCitizens
Politicians/Politicians/PolicymakersPolicymakers
Public Public ServantsServants
Deleg
atio
n
Deleg
atio
n/
Voice
Voice
Politi
cal
Politi
cal
Accou
ntab
ilit
Accou
ntab
ilit
yy
Internal
Internal
Accountability
AccountabilityD
elegation of
Delegation of
Implem
entation
Implem
entation
public goods/ servicespublic goods/ services
client power/client power/social social
accountabilityaccountability
PETs
GAC; BEEPS; PETsScorecardsDoing Business
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MonitoringMonitoring
CASCAS
Operations & Operations & Capacity buildingCapacity building
Actionable indicators:PFM indicators (including PEFA, CPAR and CPAA); scorecards; Doing Business; GACs; BEEPS
Political Governance Diagnostics; GAC Diagnostics, LITS
Specialized technical reports:BEEPS; PETs; IGRs;GSDS; ICAs; PERs: GACs
Linking Governance Tools to Accountability
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Governance tools for operational work
Three examples:
Public Expenditure Tracking Survey
BEEPS
Governance and Anti-Corruption Diagnostic Surveys
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Goal: Assess fiscal leakages given significant share of intended resources do not reach the frontline
Country Year Sample Leakage Estimate
Ghana 2000 200Clinics
80 % Non-Salary
Ghana 2000 200Schools
49 % Non-Salary, 35% Salary (primary)52% Non-Salary, 25% Salary (secondary)
Honduras 2000 805 staff;35 Clinics
2.4% of all workers on the payroll considered ‘ghosts.’ Absenteeism estimated at 27%. 5.2% of workers were not actually in the assigned post but had moved to other location (5.2%)
Madagascar 2003 185Schools
8-10% of cash transfers
Source: World Bank (2005) PETS Review
Public Expenditure Tracking Surveys (PETS)
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The PETS Cycle
1. Define Objectives Sector Identify Flow(s) Scope/ Complements
2. Map Flows Begin/ Endpoint # Layers/ Junctures Admin.Level
3. Measure Leakages Specify Leakage Types Sampling
4. Present Findings “Headline” Leakages Leakages patterns/ junctures
5. Inform Policy PFM Reform Accountabil.-Actionable Measures
The Prototype: Uganda Education PETS Remains Most Successful Case “Leakages” of Funds Going to Schools Reduced Significantly
(~ 13% (1996) to 82 % (1999) Methodologically Relatively Straightforward Flow
Central Government Disbursed Capitation Grant to Districts, Districts On-ward disburse to Schools.
Allocations Largely Reached Districts, But Allocations Did Not Reach Facilities
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PETS Coverage
PETS have now been conducted in 24 countries, almost exclusively in health and education.
Source: Chaudhury, N et. al. 2004
Country YearEducation Health Water Transport/
RoadsAgriculture/
Rural
Albania 2004
Azerbaijan planned
Cambodia planned
Cameroon 2003
Ghana 2000
Honduras 2000
Madagascar 2003
Mozambique 2001
PNG 2002
Peru 2001
Rwanda 2000
2004
Senegal 2002
Tanzania 1999
2001
2003 (pilot
)
Uganda 1996
1999
Zambia 2001
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Is corruption in Eastern Europe and the former Soviet Union getting better or worse?
What explains the changes? What motivates reform? Are there lessons for other regions?
Goal: Analyze how corruption, regulatory burden, and public sector factors affect the business environment
“Business Environment and Enterprise Performance Survey” (BEEPS)
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“Business Environment and Enterprise Performance Survey” (BEEPS)
Joint initiative with EBRD 20,000 firms in 3 rounds (1999, 2002, 2005) 26 transition countries 6 European comparators in ‘05: Ireland, Germany, Greece, Portugal, Spain,
Turkey (+ Korea and Vietnam) Focus on corruption in enterprise-state interactions
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31%
26%
20%
10%
0%
10%
20%
30%
40%
50%
1999 2002 2005
pe
rce
nt
of
firm
s s
ay
ing
bri
be
s a
re f
req
ue
nt
Transition Countries
Comparator Countries
BEEPS Results
Corruption is falling for the region as a whole (though not yet to W.Europe levels)
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… and not all sectors saw improvement.
0%
5%
10%
15%
20%
Fire andBlg Insp.
Courts Customs Bus.Licenses
Taxes Gov.Contracts
per
cen
t "f
req
uen
t"
comparator countries
2005
transition countries
2002-2005
BEEPS Results
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Governance and A-C diagnostic surveys
A demand-driven process to improve governance and build local capacity
Key features: Three surveys: households, firms, and public officials Questions focus both on experience and perceptions Questions are tested and adapted to local realities Rigorous technical requirements in implementation Local institution implements, with guidance from
international experts
Goal: Greater local capacity, baseline governance data, & action plan for policy reform
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The power of diagnostic data and key dimensions for analysis:
Unbundle corruption – administrative, state capture, bidding, theft of public resources, purchase of licenses
Identify weak and strong institutions Assess the costs of corruption on different
stakeholders Identify key determinants of good governance Input to develop concrete policy
recommendations
Governance and A-C diagnostic surveys
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1. Establishment of Steering Committee
2. Diagnostic surveys + analysis
3. Draft of the NAS
4. Public dissemination + discussion
5. Revision of the NAS
6. Implementation by Government
7. Monitoring and Evaluation of NAS
Challenge: poor governance and corruption
WB
I T
ech
nic
al A
ssis
tan
ce
Key Partnership: Government + Civil Society
Country Implemented
The study as part of a larger process
CAPACITY BUILDING
• Local firm collects data• Local enumerators trained• Local supervision by
technical cmte.
Collects EXPERIENCE& PERCEPTIONS data from serviceUSERS & PROVIDERS(3 sources)
End WB T.A.
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CountrySurvey
InstrumentsData Collection Report Dissemination A-C Strategy
BeninFinalized in
2005Completed, 2006
In Progress (Summer 2007)
Pending Pending
HaitiFinalized in
2005Completed, 2006
Completed (release
May/June 2007)
Planned
Summer 2007Pending
Malawi(Completed
independently by Country)
(Completed independently by
Country)
(Completed independently by
Country)
Completed (w/WB) February 2006
In Progress
Kenya Under reviewPending
(Summer 2007)Pending Pending Pending
Mauritania
In Development Pending (Summer 2007)
Pending Pending Pending
El Salvador
In DevelopmentPending
(Fall 2007)Pending Pending Pending
Burundi Finalized 2007Pending
(Summer 2007)Pending Pending Pending
Governance and Anti-Corruption Diagnostics2006-2007
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0% 15% 30% 45% 60% 75% 90%
% of public officialsreport frequent public
funds mis-management
% of public officialsreport frequent
purchase of positionsin their institutions
% public officialsreport frequent casesof corruption in public
administration
Sierra Leone(2003) Guinea(2004) Guatemala(2004) Zambia(2003)
Paraguay(2005) Mozambique(2004) Madagascar(2005)
Country Diagnostic Results
Extent of corruption, (Selected Countries ‘03-’05)Extent of corruption, (Selected Countries ‘03-’05)
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Corruption penalizes especially the poorest citizensCorruption penalizes especially the poorest citizens (% of monthly income paid for bribes as reported by households who sought a public service, 2000-2005)
0.0
5.0
10.0
15.0
20.0
25.0
Ecuador
(200
0)
Perú(2
001)
Hon
duras(2
001)
Guatem
ala(2
004)
Zambia
(200
3)
Sierra
Leo
ne(200
3)
Ghana(
2000)
Guin
ea(2
004)
Paragu
ay(2
005)
Madaga
scar (
2005
)
Moza
mbiq
ue(200
4)
Low Income Middle income High income
Country Diagnostic Results
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Country Diagnostic Results
Corruption imposes barriers to households to Corruption imposes barriers to households to access basic services,access basic services, Sierra Leone 2003
Cost of Corruption:discouraged users by service
0% 5% 10% 15% 20% 25%
Municipal and District Councils
Public education services
Public health services
Sierra Leone Roads Transport Authority(RTA)
Sierra Leone Housing Corporation(SALHOC)
Proportion of head of households reporting that they decide to not conduct procedures with these institutions because they couldn't pay the unofficial costs
Sierra Leone Housing Corporation
0% 10% 20% 30%
high incomemiddle incomelow income
0% 10% 20% 30%
Sierra Leone Roads Transport Authority
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WB Governance on the Web
About Governance Diagnostics and Statistical Capacity Building: http://www.worldbank.org/wbi/governance/capacitybuild/about.html
Governance Diagnostic Surveys Country Sites: http://www.worldbank.org/wbi/governance/capacitybuild/d-surveys.html
Worldwide Governance Indicators 1996-2002: http://www.worldbank.org/wbi/governance/govdata2002/index.html
The Business Environment and Enterprise Performance Survey (BEEPS) 1999-2000: http://info.worldbank.org/governance/beeps/
The Business Environment and Enterprise Performance Survey (BEEPS II) 2002: http://info.worldbank.org/governance/beeps2002/
Courses and Surveys: Governance Diagnostic Capacity Building: http://www.worldbank.org/wbi/governance/capacitybuild/courses.html
Step by Step Guide to Governance Diagnostic Empirical Tools Implementation: http://www.worldbank.org/wbi/governance/capacitybuild/diagnostics.html