GAC in Projects: Experience from Bangladesh Charles Undeland, Senior Governance Specialist World Bank Bangladesh

GAC Measures Target Two Purposes 1. Help develop capable and accountable states and institutions ▫ Strengthen, rather than bypass, country systems ▫ Country ownership and tailoring to country context 2. Ensure that funds provided by the Bank are used for their intended purposes ▫ Anticorruption guidelines spell out procurement, FM measures, obligations to investigate, and sanctions regime  Pursuing both at the same time is difficult

Fiduciary Obligations Tend to Have Priority for TTLs Systems improvement frequently beyond the development objective of a project or program Fraud and corruption pose direct threat to implementation whereas systemic issues can be managed/mitigated and the project moves on Focus on implementing agency rather than interface with other public sector agencies or citizens

Bangladesh Country Context Electoral democracy marked by fierce partisanship in political level, politicization and degradation of civil service Continuing high levels of corruption, with improvement in recent years reaching a plateau Several Bank INT investigations ▫ 5 referrals ▫ Cessation of lending to major roads sector 4

Organizing for GAC in Bangladesh Teams established to provide peer support/ review of projects ▫ Operational Risk Management Assessment of Projects (ORMAP) ▫ Use of ORAF ▫ Operations Leadership Team Strong focus on procurement and FM in projects ▫ Ex-post reviews of all projects since 2006 ▫ Staff note that strong controls reduced f&c risks ▫ Bank operations to develop national procurement regime ▫ 4:1 ratio of procurement/FM staff to PSMPS staff ▫ Public sector specialists not usually on task teams

Country Systems Public sector projects have had limited success ▫ PFM, esp procurement, local government, recently right to information and e-governance ▫ Little traction on judiciary, civil service, anti-corruption Synergies between systems reforms and sector projects are beginning to occur, but are difficult and much still to be done ▫ Health sector and PFM ▫ E-governance (ID system), Right to Information ▫ Procurement monitoring

Demand for Good Governance DFGG measures seek to increase/improve ▫ Participation: Community Consultations; Public Hearings; FGDs with End-User Groups; Client Satisfaction Surveys ▫ Accountability: External/Independent Monitoring, Complaints Handling, Citizen/Community Oversight (eg Scorecards); Expenditure Tracking; Minimal Service Standards, Ombudsmen ▫ Transparency : Websites/Newsletters/Notice Boards, Information Disclosure Policy/Practices, Public/Stakeholder Information Meetings; Communication Strategy/Outreach Increase in DfGG measures in across the portfolio (response to 2006 India DIR) ▫ Increased public consultations ▫ Use of ‘third party monitoring’ ▫ Grievance mechanisms usually in place ▫ Newer projects contain more comprehensive communications plans as well as RTI provisions

Are DfGG Measures Working? A few projects (livelihoods, local government) have DfGG methods at the core of design and are successful In most cases TTLs note that ‘too early to tell’ if DfGG measures are effective even after several years ▫ Grievance mechanisms and especially 3 rd Party monitoring/validation are weak and misunderstood by some stakeholders ▫ IA resistance/inertia ▫ Not a priority; has limited supervision from the Bank Example: Secondary Education Quality and Access Project had extensive DfGG measures yet rated poorly on ex-post FM and procurement reviews

DfGG has Potential: Improving Feedback Loops Better feedback should reinforce improved public sector accountability and performance over time Key ingredients to generating feedback loops: ▫ Interest among beneficiaries in issues  NGOs don’t want to monitor ▫ Convenience in accessing information and providing feedback  Use of ICT ▫ Reasonable certainty of response  Use of some country systems for DfGG is practical: Right to Information, budget transparency in PFM at national and local levels

The Padma Bridge Project Governance and Accountability Action Plan Intrusive fiduciary controls: audits of bidders’ accounts; procurement mapping coupled with extensive conflict-of-interest and asset declarations DfGG: communications strategy, use of RTI, ICT, grievance/complaint mechanisms, public consultations External scrutiny/involvement: Independent Panel of Experts, external construction supervision and project management consultants, NGO execution of resettlement, PM-appointed Project Integrity Advisor