Managing the Politics of Reform: A Case Study on Public Procurement Reform in the Philippines The World Bank Governance and Anticorruption Course PREM and Asia Learning Special Pilot for SAR Washington, D.C. Presented by: Ed Campos Coordinator, Governance & Anticorruption Thematic Group Public Sector Governance (PREM) Feb , 2006 Presented to:

The World Bank PREM Public Sector Governance 2 The ‘Prohibition’ Era WDR on Institutions 1982 JDW “Cancer of Corruption” Speech (10/96) State in a Changing World (97) Public Expenditure, Financial Mgt. & Procurement Reforms Diagnostic/Data/ Monitoring Tools Administrative & Civil Service Reform Civil Society Voice, Accountability, Media & Transparency Mechanisms State Capture/Corporate Governance Legal/Judicial Reform Broadening & Mainstreaming The initial ascent … getting to ‘base camp’… TI CPI (5/95) Anti- corruption Strategy (97) Governance Strategy (00) 1st set of firms Debarred from WB (99) Formalization of INT (01) Strategic Compact (97) O.P. Mainstreaming AC in CAS (99) Governance Pillar - CDF (98) Internal AC unit created in WB (98) Gov/A-C Diagnostics start (98)

The World Bank PREM Public Sector Governance 3 Cutting Edge Diagnostics PER HIPC E.T. ROSC CPAR EC Audits CFAA IGR & GAC & Governance Cross- Country Ind. BEEPS & INVEST. CLIMATE SCORE CARDS QSDS Public Official Surveys PETs

The World Bank PREM Public Sector Governance 4 Promoting Reforms: Changing the Landscape Status Quo (Bad Equilibrium) DesiredState (Good Equilibrium)

The World Bank PREM Public Sector Governance 5 Promoting Reforms: Changing the Landscape Status Quo (Bad Equilibrium) DesiredState (Good Equilibrium) Conditionality

The World Bank PREM Public Sector Governance 6 Promoting Reforms: Changing the Landscape Status Quo (Bad Equilibrium) DesiredState (Good Equilibrium) “Well Oiled Machine”

The World Bank PREM Public Sector Governance 7 Background: Corruption in the Philippines

The World Bank PREM Public Sector Governance 8 From ‘ Shot Gun ’ … The Great Wall of Corruption

The World Bank PREM Public Sector Governance 9 … to ‘ Laser Beam ’ … of Corruption The Great Wall

The World Bank PREM Public Sector Governance 10 Background: Why Procurement Reforms? Government procurement and tax collection are perceived to be the major sources of corruption:  4 of the top 5 most corrupt agencies featured prominently in government contracting  Approximately 20% of govt. contracts go to kickbacks/ commissions  Equivalent to P21 B in 2001 just for the national government; much larger if BOT transactions and local government are included Survey Findings Legal Foundations a Mess Over 100 laws, regulations, executive orders etc. governing governing public procurement

The World Bank PREM Public Sector Governance 11 Pre-bid Conference Pre-qualification (5-7 months) (2 weeks) Bid Analysis (1-3 months) Award of contract ( months) 7.5 to 12 months

The World Bank PREM Public Sector Governance 12 Eligibility Check (1 day) Pre-bid Conference (2 weeks) Bid Analysis (1 - 4 weeks) Award of contract (1 month) Post-qualification (1 - 2 weeks) 2 to 3 months

The World Bank PREM Public Sector Governance 13 Getting from “bad” to good”?: Creating a Well Oiled Machine How tounify the Executive branch? How to unify the Executive branch? How tomobilize civil society groups? How to mobilize civil society groups? How tolink CSOs and reformers in government? How to link CSOs and reformers in government? How torecruit “champions” in the Legislature? How to recruit “champions” in the Legislature?

The World Bank PREM Public Sector Governance 14 Getting from “bad” to good”?: Creating a Well Oiled Machine How to unify the Executive branch? How to mobilize civil society groups? How to link CSOs and reformers in government? How to recruit “champions” in the Legislature? Ownership is critical “Shoot down” workshop Formation of TWG Revival of dormant GPPB Technical analysis matters

The World Bank PREM Public Sector Governance 15 Getting from “bad” to good”?: Creating a Well Oiled Machine How to unify the Executive branch? How to mobilize civil society groups? How to link CSOs and reformers in government? How to recruit “champions” in the Legislature? Disparate, diffused CSOs Formation of PWI Strategic Bank support

The World Bank PREM Public Sector Governance 16 Getting from “bad” to good”?: Creating a Well Oiled Machine cog PWI became the cog that tied all parties How to unify the Executive branch? How to mobilize civil society groups? How to link CSOs and reformers in government? How to recruit “champions” in the Legislature?

The World Bank PREM Public Sector Governance 17 Mobilizing Public Support Transparency and Accountability Network (20+ member groups) Walang Ku-Corrupt Movement (Youth) (Youth) PAGBA & AGAP (w/in Gov’t) CBCP (Church) Philippine Contractors Association (private sector – main stakeholder) Local chambers of Commerce (Private sector) Drew other civil society groups into the advocacy efforts and coordinated the activities

The World Bank PREM Public Sector Governance 18 Getting from “bad” to good”?: Creating a Well Oiled Machine champions:“investing for the future” champions: “investing for the future” strategic positions How to unify the Executive branch? How to mobilize civil society groups? How to link CSOs and reformers in government? How to recruit “champions” in the Legislature?

The World Bank PREM Public Sector Governance 19 Making it All Come Together: The Media Campaign ’Glue’ Became the ’Glue’ that linked reformers in government, civil society, legislators, and the general public “Public relations drive + advertising blitz + political campaign” Needed local company with special skills to carry this out …

The World Bank PREM Public Sector Governance 20 Reaching Out Radio: The swath & the dagger The Media Campaign: The Communications Strategy Advertising: Creating a ‘brand name’

The World Bank PREM Public Sector Governance 21 Conclusion: Managing Politics Go Beyond Old Adage of Forming a Coalition Need to Create a Well Oiled Machine A Few Key Elements… Core group of reformers in Government (a “champion” is not enough …) Technical work absolutely critical Secure allies outside government – CSOs, private sector, churches, youth … glue Media campaign is the glue that holds the pieces together

The World Bank PREM Public Sector Governance 22 Implications for the Bank May need to change the way we provide technical assistance and advice Need to focus more on implementation, steps to make reforms happen in complex political environments -- in addition to technical work Need to focus more on implementation, steps to make reforms happen in complex political environments -- in addition to technical work Donors have to find additional ways to help finance this process Donors have to find additional ways to help finance this process

The World Bank PREM Public Sector Governance 23 Thanks!