1. Initial Progress and the Ascent Ahead
Our Difficult Climb:
Initial Progress and the Ascent Ahead
Core Course on Governance and Anticorruption
PRMPS & WBIGP
Presented by:
Sanjay Pradhan
Director
Public Sector Governance
Presented to:
February 14, 2005
The World Bank

2. Overview
Possible Paths …
A promising start …
Tremendous increase in awareness
Explosion of activity, cutting-edge diagnostics
Major programs launched, with some early successes
… but we are also facing formidable challenges
To have major impact, need to tackle deeper issues

3. Explosion of activities: Examples of major programs launched across countries
Latvia
(anticorruption)
Ukraine
(tax admin)
Russia
(Customs/Treasury)
Albania
(public admin.)
Kyrgyz Republic
(governance reform)
Jordan
(civil society)
Cambodia
(PE; forestry)
Ghana (PE
accountability)
Philippines (transport)
Guatemala
(WBI Core)
Indonesia
(local governance)
Gabon
(Water/Electricity)
Colombia
(diagnostics
& civil society)
Bangladesh
(civil society)
Uganda
(PRSC; education)
Pakistan
(devolution)
India – Andra Pradesh
(power; e-gov); Karnataka
(right to info)
Bolivia:
(public admin.)
Tanzania
(PSR)
Ethiopia
(decentralization)

4. But on average, no evidence of significant improvement on control of corruption …
Good
Source: ICRG, Subject to margins of error, as it is based on only one source.
Poor

5. The challenge of politics:
Some programs that have stalled – and why…
The challenge of politics:
No political ‘buy-in’ – despite plethora of diagnostics and pressure from civil society: Bangladesh
Difficulties in sustainability when there is no political traction: Georgia judiciary
Opposition from powerful vested interests in Cabinet & bureaucracy: India, Karnataka – right to information

6. Lessons learnt, broader implications … a long way to go …
Excellent at diagnostics
Good at technical solutions and design
Good at addressing the ‘surface’ manifestations
These appear to be working when the underlying environment is conducive:
Committed leadership
Coalition for reform
Capacity
Overcome vested interests against reform
Enhance ‘demand’ pressures for reform
Reverse the “culture” of corruption in the public sector
Tackle political drivers of corruption (e.g., party financing)
Within WB, mainstream across sectors and countries
But, struggling to address ‘deeper’ underlying issues

7. The way forward … a long journey …
CORRUPTION
25?
Years

8. ¥ CORRUPTION The way forward … shortening the journey Years
Shrinking the time horizon
Strengthening the “demand” for reform
Improving the “supply” of reform
CORRUPTION
25?
Years

9. ¥ CORRUPTION The way forward … shortening the journey Years
Shrinking the time horizon
World Bank
Lending
AAA
Partners (e.g. TI, bilaterals)
Partnerships
Strengthening the “demand” for reform
Improving the “supply” of reform
CORRUPTION
25?
Years

10. ¥ CORRUPTION The way forward … shortening the journey Years
Shrinking the time horizon
10?
New
New approaches
World Bank
Lending
AAA
CORRUPTION
Strengthening the “demand” for reform
Partnerships
Improving the “supply” of reform
Partners (e.g. TI, bilaterals)
25?
Years

11. The Way Forward: Strengthening the “Demand” for Reform
Media – Philippines Center for Investigative Journalism (PCIJ)
Bank provided assistance through its ASEM grant facility for training on investigative journalism. PCIJ would provide training.
PCIJ investigations instrumental in impeachment trial of then President Estrada and his resignation.
Enhance domestic pressures for reform
Assist civil society in monitoring governance reforms: Slovakia Procurement, Indonesia KDP
Support CSOs & FBOs that mobilize citizens in favor of government performance: PAC, Bangalore
Help SMEs to organize & mobilize against capture by large vested interests: ECA
Strategically support responsible media on anticorruption: Philippines Center for Investigative Journalism
Strengthen international pressure for reform
Use international arena to re-energize the agenda: GOVNET
Say “no” when warranted: Kenya, Coordinated action by OECD-DAC for high-risk countries
Use the international platform and indicators to highlight good and bad governance countries: TI, CPIA, KKZ
Strengthen global initiatives: OECD Convention, Anti-Money Laundering
OECD Convention –
Anti-Money Laundering
The Bank program, developed jointly with the Fund and in collaboration with the Financial Action Task Force (FATF), the regional FATF Style Bodies (FSRBs) and the UN Counter Terrorism Committee focuses on:
Comprehensive assessments of client countries’ compliance with the FATF 40+8 Recommendations, using a global methodology endorsed by the Bank/Fund Boards in September 2002 and adopted by the FATF in October A pilot program of country assessments is now underway in 22 developing countries as part of our Financial Sector Assessment Program (FSAP).
The assessments, which help developing countries to recognize and focus on legal and institutional vulnerabilities, are followed up with the delivery of targeted technical assistance (TA) supplied either by the Bank/Fund or by other providers of TA, in particular, the G7.
In response to the FATF request last month, JDW assured the FATF President that the Bank would respond on a priority basis to countries seeking assistance to combat the financing of terrorism. The first team of Bank/Fund experts are going to Mauritius next week following the authorities request for assistance to enhance their capacity to detect and deter terrorist financing.
To help donors and providers of TA avoid duplication and prioritize the delivery of TA, the Bank developed a global coordination Database that is available to TA providers through the World Bank’s web site. Country requests for TA are collected by the FSRBs (or if the country does not belong to an FSRB the Bank takes responsibility for collecting the requests) and posted on the Database. The Database permits the G7, as well as other TA providers, to view developing country requests for TA on one easily accessible template.
In addition to individualized country TA, the Bank in partnership with the Fund, the FATF and the FSRBs, organized two major technically based workshops covering 30 countries in the ECA and LAC regions. Additional workshops are underway for EAP,SAR, and Africa.
To reach high level country policy makers in every region the Bank initiated a Global Learning Dialogue Series using video conferences for 42 developing countries in FY03. Additional video conferences and sub regional workshops are planned for FY04 along with the publication of an electronic Country Reference Guide that provides practical steps for implementing the FATF 40 plus 8 Recommendations.
The Bank helped the UN-Counter Terrorism Committee to develop a data base (similar to the Bank Database) which they can use to track requests for technical assistance in countering the financing of terrorism.
CORRUPTION

12. The Way Forward: Enhancing the “Supply” of Reform
Better understand and manage political economy of reforms: Political stakeholder analysis (EAP), education reform LAC
Build leadership capacity, change management ethos: Leadership/ethos pilots, LICUS
Support AC efforts that improve service delivery that citizens can observe: e-government, India
Help reformist governments overcome obstacles
Help tackle political drivers of corruption
Address issue of party finance disclosure & regulation: DFID, TI, OECD DAC, national NGOs
Work with media & Parliaments on corruption: Indonesia
Target reforms that can indirectly reduce political corruption: public procurement, Bangladesh
Rebuild ethos of public service
Innovative pilots to re-inculcate commitment to public service: Ceara, Brazil
Support CSOs/FBOs working towards a transformation of values/ethics in the public sector: Global Integrity Alliance
Encourage better corporate governance & codes of conduct: TI business principles for countering bribery

13. Strengthen staff fortitude and incentives to say “no” when warranted
The way forward …
Internal incentives
World Bank
Strengthen staff fortitude and incentives to say “no” when warranted
Deepen and enhance leadership and ownership of anticorruption agenda across sectors – beyond PREM

14. Q&A
and
Discussion