1. Social Development Department The World Bank Scaling Up the Bank’s Multi- stakeholder Engagement Linking the “Demand” and “Supply” of Good Governance Rob Chase and Andy Norton (SDV)

2. Social Development Department GAC Strategy & Multi-stakeholder Engagement Guiding Principle #5: Engaging systematically with a broad range of government, business and civil society stakeholders is key to GAC reform and development outcomes – so, consistent with its mandate, the WBG will scale up existing good practice in engaging with multiple stakeholders in its operational work, including by strengthening transparency, participation and third-party monitoring in its own operations. “Multi-stakeholder engagement”  ”Demand for Good Local Governance”

3. Social Development Department “Supply” and “Demand” for governance Exploring the Analogy Supply curve: Agent: producer Production function: q = q(technology, inputs) Optimization: Given prices, find profit maximizing quantity to produce Q = S(P, technology, inputs) More supply at higher price Cost, Price (P) Quantity Supply

4. Social Development Department “Supply” and “Demand” for governance Exploring the Analogy Demand Curve Agent: consumer Utility function: U = U(preferences) Optimization: Given prices, find utility maximizing quantity to consume Q = D(P, preferences, other goods) Less demand at higher price Cost (AC), Price (P) Quantity Demand

5. Social Development Department “Supply” and “Demand” for governance Exploring the Analogy Equilibrium quantity and price results from supply and demand intersection Changes in quantity require shifts in either demand or supply curves, i.e., changes in other factors for producers or consumers Cost (AC), Price (P) Quantity P q* Supply Demand

6. Social Development Department “Demand for Good Governance” Consumers  citizens Demand for good governance depends on citizen’s preferences Citizens get maximum utility when they can decide what (public) goods they want, given prices and budget constraints Transactions to express demand: accountability mechanisms for local authorities

7. Social Development Department Break-out Groups Discussion Questions What “market failures” exist in the interaction between the supply and demand for good governance? What instruments does the World Bank have at its disposal to correct these market failures? What are the elements that shift demand curves? What instruments does the World Bank have at its disposal to promote these shifts?

8. Social Development Department Scaling up existing good practice Bank already engages with multiple stakeholders Strengthening transparency, participation and third-party monitoring Supporting the enabling environment Engagement with non-central government actors Table 1 gives examples of demand for good governance work http://dfgg gives more examples http://dfgg

9. Social Development Department Participatory Budgeting “Participatory prioritization of policies and public spending” Enabling environment: PRSPs Broader engagement: participatory budgeting E.g., Rural poverty reduction project – Rio Grande do Norte

10. Social Development Department Transparency “Strengthening transparency and oversight over the use of budgetary resources” Enabling environment: E-procurement Improving quality and transparency of budgets Engagement: Civil society monitoring of procurement Expenditure tracking surveys

11. Social Development Department User participation and oversight Enabling environment: Reforms to empower users Eg., INDH Morocco Engagement: Service delivery scorecards E.g., Uganda

12. Social Development Department Participatory local governance Enabling environment: Intergovernmental reforms to create incentives for local government to respond to citizens Engagement: Community driven decision-making of local public infrastructure Indonesia Kecamatan Development Project

13. Social Development Department Strengthening formal oversight Enabling environment: Publishing income & asset declarations EG. Engagement: Judicial and public defenders capacity Eg., Guatemala Judicial Reform Project

14. Social Development Department Summary Supply and demand for local governance an evocative metaphor Consider supply and demand jointly World Bank has extensive experience with supporting the demand for good local governance PRSPs CDD operations Innovative pilots and ad-hoc efforts need to be scaled up and made more systematic