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2/16/2006Vinay Bhargava1 Mainstreaming Governance and Anti- Corruption in the CAS and Operations: A Guide for Country Teams with Country Applications By: Vinay Bhargava Director, Operations and International Affairs, EXT Presentation at the Core Course on Public Sector Governance and Anti-corruption February 14-16, 2006 The World Bank
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2/16/2006Vinay Bhargava2 What do you think is the most important problem facing the world? Source: Gallup International – Voice of the People 2005 CORRUPTION Decrease a little Stay the same Increase a little Increase a lot Decrease a lot TI: Global Corruption Barometer 2005 Level of corruption in next three years expected to: In a Voice of the People Survey by Gallup International the responses were:
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2/16/2006Vinay Bhargava3 Outline Five Phases in Mainstreaming Diagnose governance environment and causes/drivers of corruption Choosing entry points and designing anti- corruption program suited to operating governance environment Assessment of risks to the Bank and design of mitigation measures Building coalition of external/internal supporters Monitor progress, evaluate results and adjust
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2/16/2006Vinay Bhargava4 A quick review of the Bank’s Guidelines for addressing governance issues in CASs Upstream Review Significance of corruption/governance issues in the country Risks to country development and the Bank operations Proposed Bank assistance and risk mitigation approaches Downstream CAS preparation and Review Diagnosis of corruption and governance issues Country’s strategy and programs for improving governance Bank’s proposed assistance program and results Analysis of fiduciary, developmental, and reputational risks to country and Bank and mitigation measures
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2/16/2006Vinay Bhargava5 Institutional Checks & Balances Parliament Other accountability institutions Public Sector Management Financial management reforms Civil Service reforms Decentralization of service delivery provision Local government and public expenditure Improve M & E capacity Anatomy of Governance Elements in Ghana 2004-6 CAS Diagnosis: CPIA-3.0. Major structural issues. Risks: to country - high; to Bank - no mention. Country Vision: Strong good governance and accountability program – 1 of 5 PRSP Pillars. Triggers: Triggers: To Stay in the Base Case: Progress on financial management, in particular on the 16 benchmarks (now 28 PEFA indicators) of HIPC Accountability Action Plan. To Move to the High Case: Progress on public sector including civil service reforms. Civil Society Voice & Participation Improve capacity of civil society groups Lending Instruments: PRSCs; M&E components; Community Empowerment loans AAA Instruments: WBI; Development Dialogue sessions; Outreach/media programs; CPAR; CFAA; Community Empowerment study; PER; M&E assessment Results and Performance Indicators: Well specified CAS Objective: CAS Objective: Support to Improve Governance and Empowerment -3rd Pillar of CAS
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2/16/2006Vinay Bhargava6 A Review of 107 CASs produced in FY99-05 shows: However quality issues: Weak diagnostics Generic prescriptions Selection criteria not clear Risk-response not balanced Risks to the Bank not fully assessed/mitigated Success stories scarce Very good coverage…
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2/16/2006Vinay Bhargava7 Phase 1–Diagnosis: Assembling knowledge (Practical Tips) Governance indicators (e.g., KKZ, CPIA, TI, etc.) Political landscape and degrees of freedom for action Summary findings of diagnostics and evaluations (AAA) Government strategy—current and historical Key anticorruption institutions (executive/non-executive branches) Key anti-corruption champions (in and out of government) Legacy issues: past donor assistance; media On-going and recent Bank anti-corruption activities (last CAS) Relatively high risk ministries/public enterprises
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2/16/2006Vinay Bhargava8 Causes: Opportunity to abuse power Source: Transparency International Global Corruption Barometer 2005, http://www.transparency.org/policy_and_research/surveys_indices/gcb/2005
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2/16/2006Vinay Bhargava9 Causes: Ambiguous Laws and Regulations; Weak Rule of Law; and Crime Source: Transparency International Global Corruption Barometer 2005, http://www.transparency.org/policy_and_research/surveys_indices/gcb/2005
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2/16/2006Vinay Bhargava10 Causes: Low Income; Historical; Quality of Public Administration; Political Corruption Source: Transparency International Global Corruption Barometer 2005, http://www.transparency.org/policy_and_research/surveys_indices/gcb/2005
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2/16/2006Vinay Bhargava11 Phase 2: Designing an anti-corruption program suited to local conditions A typical program includes the following elements: Objectives and approach to assistance Proposed entry points Proposed mix of lending and non-lending instruments Expected results (country and CAS/CSP performance indicators) Proposed triggers (if any) associated with CAS/CSP scenarios
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2/16/2006Vinay Bhargava12 Phase 2-Objectives and Assistance Approach: Key Trade-Offs depending upon situation Supporting development imperatives vs. risks to the Bank Balancing help to executive branch with help to non- government institutions of accountability Selectivity of entry points for results and credibility vs. comprehensive approaches Balancing lending vs. non-lending mix and sequence of assistance Prerequisites and Selectivity in When, Where, How and How Much to lend in high risk situations
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2/16/2006Vinay Bhargava13 Phase 2: Choosing Entry Points The range of entry points is very broad Governance systems of actors, capacities, and accountability (supply-side and demand-side relationships) Many dimensions of good governance (a menu of entry points) Criteria to use in selecting entry points
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2/16/2006Vinay Bhargava14 Governance Systems: Actors, Capacities and Accountability Political Actors & Institutions Political Parties Competition, transparency Executive-Central Govt Service Delivery & Regulatory Agencies Subnational Govt & Communities Check & Balance Institutions Parliament Judiciary Oversight institutions Civil Society & Private Sector Civil Society Watchdogs Media Business Associations Cross-cutting Control Agencies (Finance, HR) Citizens/Firms Sanjay Pradhan Source: Sanjay Pradhan Outcomes: Services, Regulations, Corruption
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2/16/2006Vinay Bhargava15 Sanjay Pradhan Source: Sanjay Pradhan Good Governance has many dimensions Political Accountability Political competition, broad-based political parties Transparency & regulation of party financing Disclosure of parliamentary votes Checks & Balances Independent, effective judiciary Legislative oversight (PACs, PECs) Independent oversight institutions (SAI) Global initiatives: UN, OECD Convention, anti- money laundering Citizens/Firms Decentralization and Local Participation Decentralization with accountability Community Driven Development (CDD) Oversight by parent-teacher associations & user groups Beneficiary participation in projects Civil Society & Media Freedom of press, FOI Civil society watchdogs Report cards, client surveys Private Sector Interface Streamlined regulation Public-private dialogue Extractive Industry Transparency Corporate governance Collective business associations Effective Public Sector Management Ethical leadership: asset declaration, conflict of interest rules Cross-cutting public management systems: meritocracy, public finance, procurement Service delivery and regulatory agencies in sectors
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2/16/2006Vinay Bhargava16 Phase 2: Practical tips for choosing entry points Whether and how effectively the proposed entry point is likely to: Reduce opportunities for corruption Increase risk of exposure and punishment Increase severity of punishment Reduce incentives for corruption Increase public demand/pressure for reducing corruption Strengthen accountability of public sector programs Be feasible under the political landscape, institutional setting, and administrative capacity
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2/16/2006Vinay Bhargava17 Phase 2: Choosing the mix of assistance instruments for an entry point Undertaking and disseminating ESW Grants for institutional capacity building WBI capacity building programs Sponsoring in-country dialogue events Fitting lending operations with anti- corruption plans Free standing lending/TA operations in support of governance improvement
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2/16/2006Vinay Bhargava18 Phase 2: Analysis of entry points and instruments chosen in 21 FY05 CASs Note the dominance of public sector management interventions and none in political accountability
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2/16/2006Vinay Bhargava19 Phase 3: Building partnerships Expectation for cooperation among donors Coalitions are more effective for improving governance Instruments: joint or parallel (coordinated) activities with domestic and/or external partners for: **Studies **Funding **Joint statements**TA projects **Coordination group **Public dialogue events **Mass communications**Dialogues with gov’t.
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2/16/2006Vinay Bhargava20 Phase 3: Build Coalition to shift balance of power between vested interests and reformers Cultivate political support Get the public behind reform NGOs Media Business Associations Donors Students and Academics Cultivate internal supporters Build on scandals and crisis
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2/16/2006Vinay Bhargava21 Phase 3: Involve institutions to limit corruption Judiciary Legislature Decentralization with accountability Constitutionally independent accountability institutions Anti-corruption agency Election Commission Ombudsman Supreme audit institutions Media Disclosure laws, policies and regulations
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2/16/2006Vinay Bhargava22 Sectors and Institutions Most Affected By Corruption Source: Transparency International Global Corruption Barometer 2005, http://www.transparency.org/policy_and_research/surveys_indices/gcb/2005
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2/16/2006Vinay Bhargava23 Phase 4: Assessing Risks to the Bank Country team members to rate the extent (on a scale of 1 to 5, with 5 being highest risk situation) to which the state of corruption and governance can: Undermine results/effectiveness of Bank assistance Reduce the ability to mobilize resources for development Raise concern in public that Bank assistance increases opportunities for corrupt officials Result in corruption seeping into Bank financed projects and Pose personal security risks to Bank staff and counterparts
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2/16/2006Vinay Bhargava24 Phase 4 : Risk Analysis and Mitigation Upstream-Categorize country by risks to the Bank CPIA,governance indicators, and country knowledge assessment Country team self assessment validated by selected external interviews Commonly used mitigation measures to reduce risks to the World Bank: Fiduciary controls (procurement and financial) and INT review Integrating social accounting mechanisms Integrating strong results monitoring framework Screening of new projects for corruption risks; preventive measures Increasing transparency (disclosure, hotline) Strategic communications and partnerships Proactive sanctions enforcement
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2/16/2006Vinay Bhargava25 Phase 5: Monitor progress, evaluate results and adjust Set clear and monitorable results Push beyond Disclosure Policy to supply information to public that make activities transparent Set reporting and independent auditing systems Put in place social accountability mechanisms Encourage beneficiary participation in planning/evaluation
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2/16/2006Vinay Bhargava26 Phase 5: Social Accountability Mechanism Source: Social Development Paper No. 76. World Bank, 2004.
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2/16/2006Vinay Bhargava27 Thank you.
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