1. Indonesia: Governance Partnership Initial Participant Survey Results and Selected Issues for Discussion Background Handout Prepared by World Bank as input to participatory discussions during October 10th Video-Link and subsequent discussions
The final results of this participant survey (once all entries are in) and further materials on governance can be found at:

2. Corruption can change Over Time
(Selected Countries; ICRG index, rescaled 0-10) 10
High corruption
Indonesia
El Salvador 8
Russia
Indonesia 6
Russia 4
Firm’s Senior Management Time Spent with Officials
Do the bribes paid by firms make life easier for them? Not necessarily; as it turns out, firms that pay more bribes end up spending more (not less) time with bureaucrats. In Russia, various estimates suggest that senior managers/owners of SMEs end up spending between percent of their time negotiating with officials.
Excessive control by officials over enterprise translates into excessive regulations, inordinate amounts of time spent by the enterprise’s owner with bureaucrats, and bribery.
Our evidence suggests a very close association throughout the world between the extent of bribery and (higher) senior management time wasted with officials on licenses, as well as a close association between bribery and higher cost of investing and cost of capital for firms.
Thus, we find no empirical support for the traditional “grease” argument, which suggested that petty bribery can help oil the squeaky wheels of commerce in developing countries. To the contrary, the business community ends up losing by bribing.
El Salvador
Poland 2
Poland
Low corruption
Finland
Finland
1992
1993
1994
1995
1996
1997
1998 7

3. Respondents’ Occupation
Governance Partnership Participant Survey
Initial Results (IGOPASU; as of October 9th, subtotal of 40 responses)
Respondents’ Occupation
IGOPASU
Initial Analysis of Participant Responses from survey (IGOPASU) for
Indonesia Governance Partnership Workshop. Based on 40 responses.

4. Extent and Cost of Corruption
IGOPASU

5. Most Vulnerable Institution (misgovernance)
% of respondents
IGOPASU

6. Most Vulnerable Institution(by occupation)
IGOPASU

7. Main Obstacle to Transparent Justice
IGOPASU
% of respondents
IGOPASU
Note: no respondent chose lack of training or job security

8. Main Obstacle to Transparent Justice (by occupation)
IGOPASU
Note: no respondent chose lack of training or job security

9. Key Focus in Short Term (Likely Early Wins)?
% of respondents
IGOPASU

10. Most Important Short Term Focus/Measure (by occupation)
IGOPASU

11. Main Governance Partnership Ally?
% of respondents
IGOPASU

12. Main Ally for Governance Partnership (by occupation)
IGOPASU

13. Best Role for Donors?
% of respondents
IGOPASU

14. A simple Formula synthesizing Governance/Anticorruption:
National Governance: Challenges in Integrating Anti-Corruption Into Institutional Change
A simple Formula synthesizing Governance/Anticorruption:
IG and AC = KI + LE + CA
Improving Governance and Anti-Corruption =
= Knowledge/Info.Data …
...+ Leadership (incl. Political)
Collective Action (change)

15. Anticorruption: 8 common myths
Complementing previous Survey Results, from other materials...
Anticorruption: 8 common myths
Government the ‘driver’ in Anti-Corruption (A-C)
Awareness-Raising and Educating population is key
Need to study the full situation anew before any action
It is perfectly well known what needs to be done
Paramount: A-C Autonomous Agencies/Commissions
High Pay to public service for combating corruption
It is central to fight bureaucratic corruption
Strict Enforcement approach: ‘A-C campaigns’

16. Control of Corruption: Aggregate Research Indicators (Out of 155 worldwide, selected countries, 1998)*
POOR
GOOD
Source: ‘Governance Matters’, PRWP 2196 by Kaufmann, Kraay and Zoido; based on data from 1998.
For details and data, visit There is a margin of error (thin line); extreme care in interpretation is needed.

17. Broadening our Perspective: Assessing Governance
Control of Corruption (or Graft)
Rule of Law
Absence of Regulatory Burden
Government Effectiveness
Voice and Accountability (Civil Liberties)
Political Stability and lack of Violence

18. Civil Liberties Corruption/Absence of Rule of Law & Civil Liberties
High
Corruption [and Absence of Rule of Law]
Low
Not Free
Partly Free
Free
Civil Liberties
Based on averages of data from 160 countries.

19. Parliamentary legislation Central Bank Influence
Firms Reporting Negative Impact of High Level Corruption ‘State Capture’ Source: WBES Survey 1999, 20 transition countries 50 % 45 % 40 % 35 % 30 %
%of all Firms report negative impact of grand corruption 25 % 20 % 15 % 10 % % 5
Hungary
Estonia
Russia
Azerbaijan
Adverse Impact of ‘Purchases’ of:
Parliamentary legislation
Decrees
Central Bank Influence

20. % Firms that pay public procurement kickbacks (of those that trade with the state)

21. Enormous Social/Economic costs of state capture: Much lower growth in sales and investment in economy

22. Another bad result: weak property rights
Firms reporting insecure property and contract rights % 80 70 60 50
% of All Firms 40 30 20 10
Lit
Est
Uzb
Pol
Sln
Hun
Azer
Cro
Slk
Geo
Bul
Arm
Bel
Rom
Cze
Kaz
Kyr
Rus
Ukr
Mol

23. Lower Income Households ‘Pay’ Disproportionally
Bribe/Total Income ratio % ( A Latin American Country )

24. In diagnostic in Latin American Country it is found that lower Public Sector Salary does not Increase Bribery
15.5%
15%
Bribe* =
3MS
12%
8.4% 9%
7.7%
Bribe*
Bribe* = 6% = 0.
2MS 0.
5MS 3% 0%
Monthly Salary
Monthly Salary
Monthly Salary
Less than
3MS
Between 3 & 13 MS
More than 13 MS
* Average bribe to public officials

26. Implications for Further Participatory Discussion
Anti-corruption efforts should also focus on ‘grand’ corruption and state capture
Use Broader Governance framework
Incentives and Systemic Reforms vs. pure enforcement
Collective responsibility and Collective Action
Judiciary part of the problem or the solution?
Build on work already done; no ‘wheel-reinventing’
The ‘power’ of Information and Data-Empirics
Consensus and Coalition-Building is key
For details, survey, and data:

27. 1

28. Data Presented for Analysis and informing Policy Advise, not for Precise Rankings
The data contained in this presentation originates from various enterprise surveys (as well as outside expert rating agencies) and are subject to a margin of error. The purpose is therefore not to present precise comparative rankings across countries, but instead to illustrate characteristics of governmental and corporate performance in order to assist in drawing implications for action. No ranking of countries or official endorsement is intended in presenting results from these external sources.
Further details and data, visit: