Slide 1 Implementation Plan for Strengthening World Bank Group Engagement on Governance & Anticorruption Fiduciary Forum March 24, 2008

Slide 2 The World Bank  Governance and Anticorruption (GAC) Strategy unanimously approved by the Board in March 2007  GAC Implementation Plan Approved October 2007: Based on “learning-by-doing” Covers the initial year of a longer term program Outer year agenda to be based on implementation experience in first year. Focuses on what the Bank itself will do – as distinct from the country-level governance improvements themselves – which are of course the desired outcomes, but ultimately beyond Bank control Context

Slide 3 The World Bank The 7 Principles GAC Guiding GAC Implementation 1.Focus on GAC is based on the Bank’s Mandate to reduce poverty—a capable and accountable state creates opportunities for the poor 2.The Bank’s GAC work must be country driven 3.There is no “one size fits all” – implementation is adapted to individual country circumstances 4.The GAC strategy requires the Bank to remain engaged so that “the poor do not pay twice” 5.The Bank aims to engage in its GAC work with a broad array of stakeholders 6.Work to strengthen, not by-pass, country systems through stronger institutions 7.The Bank will work with governments, donors, and other actors at the country and global levels to ensure a harmonized and coordinated approach

Slide 4 The World Bank What would successful implementation look like? Our vision of successful GAC implementation: –When governance obstacles to development effectiveness are reduced so that services and growth opportunities are accessible by the poor For this to occur, we envision: –More and more countries addressing key governance impediments to development –Bank and partner programs and projects increasingly address GAC impediments in a systematic way –Countries and global partners value the Bank’s knowledge and capacity in GAC

Slide 5 The World Bank Project Level Combating corruption in WBG operations Country Level Increased support to countries to strengthen ‘core’ and sectoral governance Global Level Collaborating with development partners, and addressing transnational issues Interventions at 3 key levels

Slide 6 The World Bank GAC Strategy Implementation: Country Level A country-level governance and anticorruption “CGAC” process that assesses GAC impediments to country development goals –A process whereby country teams engage with government and stakeholders and identify “entry points” for Bank support for governance and anticorruption reforms – not a new World Bank report or TA –A country-tailored approach, not a mandatory format –A ‘systematic and disciplined stock-taking of the GAC environment and its impact on country poverty reduction goals and the Bank’s projects –Informs the CAS, and yields a clear “business plan” for how the country program/CAS will address governance and corruption barriers to country development goals

Slide 7 The World Bank … Country Level Helping countries improve governance & anticorruption in Country Assistance Strategies (CASs) & sectors 1.Mainstream governance reform in sectors by systematically addressing sector-specific GAC impediments to delivering outcomes, and by enhancing sector-level transparency, participation, accountability 2.Strengthen ‘core’ cross-cutting governance and accountability systems including public management systems (e.g., financial and budget management, procurement, public administration, and independent oversight intuitions (e.g., SAI, PAC, judiciary) 3.Strengthen “demand-side” enabling frameworks and capacity by enhancing transparency/information disclosure (RTI), CSO capacity, use of social audit/accountability tools 4.Work collaboratively with the private sector and civil society in reform processes (business assoc, chambers, CSOs, media) 5.Monitor progress via results and governance indicators (including new generation of indicators under development)

Slide 8 The World Bank (#3) Working on the Demand Side Civil Society Monitoring of Service Provision: Bangalore Source: Public Affairs Center, India n/a City council Electricity Water supply Telephones Public hospitals Police Land authority Public buses Transport authority Agencies Percent Satisfied

Slide 9 The World Bank GAC Strategy Implementation Project Level 1.Integrating governance and anticorruption in projects: “Governance is everybody’s business” - Mapping corruption ‘vulnerability points’ across the project cycle - Analysis of institutional incentives and capacity, AAA 2.“Smart project design,” informed by this analysis and systematically incorporating: - Enhanced disclosure - Civil Society oversight /‘Demand-side’ elements - Stronger financial controls - Plan for mitigating collusion & other procurement problems - Clear and consistent approach on sanctions and remedies - Credible complaints handling mechanism … Can be formalized in project-specific anticorruption action plans 3.Stronger quality management on governance and GAC - Bank Quality assurance processes to ensure coverage GAC issues - Focused review of gov. and anticorruption aspects of projects 4. Implement measures to enhance INT’s effectiveness, building on the Volcker Report (issued September 13, 2007)

Slide 10 The World Bank Donor coordination, including common response principles, especially where GAC pose serious obstacles to development, GAC Strategy Implementation: Global Level The Bank is committed to “not acting alone”. Five areas targeted for increased Bank involvement: Multi-stakeholder engagement and voluntary codes of conduct (e.g., Extractive Industries Transparency Initiative) Harmonize investigative practices with other MDBs Support global legal conventions (e.g., UN Convention Against Corruption, OECD Anti- Bribery Convention, Stolen Asset Recovery Initiative (Star)) Build global consensus on how GAC enhances development effectiveness – biannual conference and support for GAC related research

Slide 11 The World Bank Managing Implementation: Organization, Resources and Leadership Leadership –GAC Steering Committee comprising OVPs / Directors –Chaired by Managing Director –Secretariat in PREM-PS Organization –‘Focal points’ in each SMU and each country team –Informal knowledge networks created on GAC –Bank processes and policies revised to incorporate GAC (e.g., Disclosure policy, QAG, OPCS CAS Guidelines, etc) –Regional quality management processes fine-tuned to incorporate GAC Resources –Additional FY08 BB funding for CGACs and GAC in Projects, and Highest Priority for FY09 –Intensified training targeted at task teams –Network expertise to support project teams –Skill needs assessment – strengthening GAC skills

Slide 12 The World Bank RiskMitigation Action WBG reverts to "business as usual" Sustained Senior Mgt and OVP attention to GAC, leadership of ‘focal points’, and pressure from interested stakeholders GAC appears to be just about ring-fencing Bank projects Clear communication of developmental goals of the GAC. Genuine increased focus on strengthening country systems WBG won't have the capacity to support implementation Regional management organizes staffing appropriately and provides budget Failure to learn GAC- related lessons of the past Develop learning programs and the proposed biannual conference on governance and development Risks and Mitigation

Slide 13 The World Bank Thank you The World Bank 1818 H Street, NW Washington, D.C USA “Working for a World Free of Poverty” For additional information, see: