Mainstreaming%20Governance%20and%20Anti-Corruption%20in%20the%20CAS%20and%20Operations:%20A%20Guide%20for%20Country%20Teams%20with%20Country%20Applications

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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,
2006 The World Bank
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What do you think is the most important problem
facing the world?
In a Voice of the People Survey by Gallup
International the responses were
TI Global Corruption Barometer 2005Level of
corruption in next three years expected to
Decrease a little
CORRUPTION
Decrease a lot
Increase a lot
Stay the same
Increase a little
Source Gallup International Voice of the
People 2005
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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 Banks 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
• Countrys strategy and programs for improving
  governance
• Banks proposed assistance program and results
• Analysis of fiduciary, developmental, and
  reputational risks to country and Bank and
  mitigation measures

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CAS Objective Support to Improve Governance and
Empowerment -3rd Pillar of CAS
Public Sector ManagementFinancial management
reformsCivil Service reformsDecentralization of
service delivery provisionLocal government and
public expenditureImprove M E capacity
Institutional Checks BalancesParliament Other
accountability institutions
Lending Instruments PRSCs ME components
Community Empowerment loansAAA Instruments WBI
Development Dialogue sessions Outreach/media
programs CPAR CFAA Community Empowerment
study PER ME assessmentResults and
Performance Indicators Well specified
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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

Very good coverage
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Phase 1Diagnosis 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 strategycurrent 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
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
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
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
Citizens/Firms

• Political Actors Institutions
• Political Parties
• Competition, transparency

Executive-Central Govt

• Civil Society Private Sector
• Civil Society Watchdogs
• Media
• Business Associations

• Check Balance Institutions
• Parliament
• Judiciary
• Oversight institutions

Cross-cutting Control Agencies (Finance, HR)
Citizens/Firms
Citizens/Firms
Service Delivery Regulatory Agencies
Subnational Govt Communities
Outcomes Services, Regulations, Corruption
Source Sanjay Pradhan
Citizens/Firms
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Good Governance has many dimensions
Source Sanjay Pradhan
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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
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 govt.

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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
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.