1. The World Bank Presented at: World Bank, March 26, 2009 Presented by: Brian Levy Advisor PREM Governance Zambia: Governance, Political Economy and Development Strategy

2. The World Bank Page2 Brian Levy PREM Public Sector Governance RELEVANCE FOR ZAMBIA: I “ By and large, agreeing on policies and programs was the easy part of the Bank’s relations with the government. The really difficult part was and continues to be implementation.”. - Completion Report for 1999-2003 CAS => why?

3. The World Bank Page3 Brian Levy PREM Public Sector Governance SECTORAL REFORM IN ZAMBIA: PROPOSALS AND RESULTS

4. The World Bank Page4 Brian Levy PREM Public Sector Governance ZAMBIA: GOVERNANCE DRIVERS OF DEVELOPMENT DECISION-MAKING  Authority is centralized in the presidency, which enjoys wide discretion.  Checks and balances institutions create enough space for citizen voice to ensure that impunity is not unbounded  An extreme tilt to the status quo is a consequence of Zambia’s ‘bounded impunity’  Elite economic nationalism is a resurgent part of Zambia’s developmenet discourse

5. The World Bank Page5 Brian Levy PREM Public Sector Governance ZAMBIA: HOW GOVERNANCE CONSTRAINTS INHIBIT SECTORAL REFORM

6. The World Bank Page6 Brian Levy PREM Public Sector Governance FEASIBLE WAYS FORWARD 1: GENERAL PRINCIPLES  Seek out incremental POLICY reforms that are feasible given a country’s political economy realilties  Stakeholder interests are key, and….  Stakeholders want better results for concrete goals that matter to them  Draw on knowledge of economically ‘optimal’ policies  …as a ‘north star’ to help navigate change…  ….with the best route not necessarily the most direct one…  Consider options for strengthening INSTITUTIONS  ….institutions mediate between private interests and public goals…  ….better policy and implementation with stronger capacity and accountability  …. feasibility is also key for institutional reform

7. The World Bank Page7 Brian Levy PREM Public Sector Governance FEASIBLE WAYS FORWARD 2: ZAMBIA GOVERNANCE-ALIGNED SECTORAL REFORMS  Focus engagement narrowly – targeting very specific interventions where development goals are aligned with incentives of Zambian elites  Electricity generation: incentives of mining companies  Telecommunications: cost-based interconnection  Build local coalitions for change – organized around very specific interventions  Urban water and electricity distribution o Engage consumer groups and business associations

8. The World Bank Page8 Brian Levy PREM Public Sector Governance RELEVANCE FOR ZAMBIA II: A DIFFERENT APPROACH TO WBG ENGAGEMENT FROM…. …… ”should” ………… (prescription) TO ……. ….. ”why?” ………….(seek to understand) TO… “feasible next steps”.. (for poverty reduction),..an approach, NOT a prescription …( more humility) …but not a recipe for inaction!!!