Strengthening World Bank Engagement on Governance and Anticorruption
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Semelhante a Strengthening World Bank Engagement on Governance and Anticorruption
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Strengthening World Bank Engagement on Governance and Anticorruption
- 1. Sanjay Pradhan Director, Public Sector Governance Poverty Reduction & Economic Management The World Bank Strengthening World Bank Group Engagement on Governance & Anticorruption
- 2. Outline Entry Points for Governance Reform Why Focus on Governance & Corruption? Discussion 1. 3. 2. Background The World Bank’s Strategy: Moving Forward 4.
- 5. GAC Consultations (Nov. 2006 – Feb. 2007) AFR Burkina Faso, Botswana, Cameroon, Kenya, Mauritania, Mozambique, Republic of Congo, Rwanda, Senegal, Tanzania, Uganda LAC Argentina, Bolivia, Dominican Republic, El Salvador, Guatemala, Mexico, IACC EAP Australia, Cambodia, China, Japan, Indonesia, Lao PDR, Mongolia, New Zealand, Philippines, Thailand, Vietnam MNA Egypt, Jordan (planned), Morocco, Tunisia (planned), Yemen ECA Albania, Bulgaria, Georgia, Moldova, Russia Europe Brussels, the Hague, London, Madrid, OECD, Paris, Rome, Stockholm North America Ottawa, Washington DC (IMF, MDBs, US Government, CSOs, private sector, unions) SAR Bangladesh, India, Nepal Consultations were held in 35 developing countries, 12 donor countries, and four global events, reaching more than 3,200 stakeholders worldwide.
- 8. Outline Entry Points for Governance Reform Discussion 1. 3. 2. The World Bank’s Strategy: Moving Forward 4. Background Why Focus on Governance & Corruption?
- 9. Where is the development ‘nexus’? Policies? Governance? Business climate? Institutions? Productivity?
- 11. Policies matter for aid effectiveness and growth Good policies enable aid to have an impact on growth Source: Burnside, Dollar, 2004.
- 12. Outline Background Why Focus on Governance & Corruption? Discussion 1. 3. 2. Entry Points for Governance Reform The World Bank’s Strategy: Moving Forward 4.
- 13. The World Bank is helping countries to improve governance through various ‘entry-points’ Public Management Public financial management & procurement, monitored by PEFA Administrative & civil service reform Governance in Sectors Transparency & participation Competition in service provision Sector-level corruption issues (EITI, forestry) Civil Society, Media & Oversight Institutions State oversight institutions (parliament, judiciary, SAI) Transparency & participation (FOI, asset declaration, user participation & oversight) Civil society & media Local Governance Community-driven development Local government transparency Downward accountability Private Sector Competitive investment climate Responsible private sector Coalition building across stakeholders B2,
- 15. Tackling Corruption in Key Sectors Manufacturing Registration Selection Procurement Distribution Prescription & Disbursement Random inspections Monitoring based on transparent & uniform standards Tracking systems User surveys Media coverage of drug selection committee meetings Transparency Reference: Jillian Clare Cohen, Assistant Professor, Faculty of Pharmacy and Director, Comparative Program on Health & Society, University of Toronto Tracing Vulnerabilities in Pharmaceuticals
- 16. Corruption in the Health Sector Source: Chapter in Ed Campos and Sanjay Pradhan, The Many Faces of Corruption: Tracking Vulnerabilities at the Sector Level (World Bank, forthcoming) Members of the Board of Directors of the Caja Costarricense de Seguro Social (CCSS), skimmed $39 million Finnish government loan and $40 million Spanish loan Grand corruption in Costa Rica Quantified leakage at different levels of government (greater at the higher levels); evidence that poorer municipalities affected the most; diversion of funds to cover operational costs Corruption in local governments in Peru 2.4% of all workers on the payroll at health facilities considered ‘ghosts’. Absenteeism estimated at 27% Corruption and weak controls at central agencies in Honduras Citizens “audits” in Mexico revealed that 90% of government transfer to Provida as part of the women’s health program had been inappropriately used Administrative corruption in Mexico Embezzlement and theft from the health budget or user-fee revenue; corruption in procurement; payment systems; pharmaceutical supply chain; and health service delivery.
- 17. Forestry Sector: The Life of a Log From illegal to legal Local logger: $2.20 Local broker: $20.00 Foreign middle man: $160.00 Foreign lumber processor: $710.00 Exporter of sawn timber: $800.00 US trader: $1,000.00
- 18. Satellite monitoring Local communities/ third party Tracking system: timber cut for export vs. exported lumber (value) IKEA Model: Log Certification International Code of Conduct Increase Supply thru Fast Growing Trees Forestry Sector: The Life of a Log
- 21. A constellation of checks and balances Executive Subnational governments and autonomous oversight agencies Legislature Judiciary Civil Society Media Broader International Community Building the “Demand-Side”
- 22. Strengthening Demand for Public Financial Accountability Participatory Budgeting, Puerto Alegra (Brazil) Civil Society Oversight; transparent, competitive procurement (Slovakia) Strengthening Supreme Audit Institutions (Hungary) Public Expenditure Tracking & Information Campaigns (Ghana, Madagascar, Mozambique, Peru, Senegal, Tanzania, Zambia ) Procurement oversight by CSOs (Philippines) Strengthening Public Accounts Committees of Parliament (India) Transparent, competitive e-procurement (LAC) Strengthening Public Accounts Committees of Parliament (Kenya, Ghana, Zambia -- AFR) Accountability, Transparency & Integrity Project (Tanzania) Key Issue: Instrument to Support Demand-side Interventions
- 23. Empowering Citizens with Information Can Reduce “Leakages” 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 1990 1991 1993 1994 1995 Equiv. US$ per student Intended grant Actual grant received by primary school (means) 1999 Source: Uganda Public Expenditure Tracking Surveys Tracking Education Dollars in Uganda Public info campaign
- 24. Civil Society Monitoring Service Provision: Bangalore Source: Public Affairs Center, India 5 6 4 9 25 1 14 41 47 42 67 34 34 16 32 32 73 94 73 92 73 78 85 96 77 n/a n/a 0 10 20 30 40 50 60 70 80 90 100 City council Electricity Water supply Telephones Public hospitals Police Land authority Public buses Transport authority Agencies Percent Satisfied 1994 1999 2003
- 25. “ BIR [Tax Collector] Officials Amass Unexplained Wealth” By Tess Bacalla , Philippine Center for Investigative Journalism CAR MODEL BENEFICIAL OWNER REGISTERED OWNER Nissan Patrol Edwin Abella BIR Reg'l Director, Quezon City Sulpicio S. Bulanon Jr. 1817 Jordan Plains Subd., Quezon City (listed address of Abella in his SALs) Suzuki Grand Vitara Ditto Merrick Abella (son of Abella) 24 Xavierville, Loyola Heights, Q uezon City Nissan Cefiro Ditto Elizabeth S. Buendia 152 Road 8, Pag - asa, Quezon City BMW Lucien E. Sayuno BIR Reg'l Director, Makati City Limtra Dev. Corp. Zone 4, Dasmariñas, Cavite BMW Ditto Marie Rachel D. Mene ses c/o Metrocor and Holdings, G&F, Makati City Honda Accord Danilo A. Duncano BIR Reg'l Director, Quezon City Daniel Anthony P. Duncano 2618 JP Rizal, New Capital Estate, Quezon City Mitsubishi L200 Corazon P. Pangcog Asst. Reg'l Director, Valenzuela City Alberto P. Pangcog (husband) B2 L23 Lagro Subd., Quezon City Honda CR - V Ditto Alberto P. Pangcog 9 Ricardo St., Carmel 1 Subd., Quezon City Owner: Regional Director in the Bureau of Internal Revenue; forced to resign; currently facing corruption charges; other officials suspended, also facing charges Media, Transparency & Combating Corruption
- 27. Corruption is not just a developing country problem Source: “Are Foreign Investors and Multinationals Engaging in Corrupt Practices in Transition Economies?” by Kaufmann, Hellman, Jones, in Transition , May-June 2000. Note: Survey Question was “How often nowadays do firms like yours need to make extra, unofficial payments to public officials to gain government contracts?” Firms responding “sometimes” or “more frequently” were classified as paying kickbacks. These figures are subject to significant margins of error and thus should be regarded as approximate. Percentage of firms that pay public procurement kickbacks by country of origin of foreign direct investment (2000)
- 28. Media Private Sector Municipal Government Military State (Bureaucracy) Political Parties Civil Society International Legislative Branch Judiciary Entrenched Corruption Networks: The Case on Montesinos in Peru Source: “Robust Web of Corruption: Peru’s Intelligence Chief Vladimiro Montesinos,” Kennedy School of Government Case Program, Case C14-04-1722.0, based on research by Professor Luis Moreno Ocampo; Peru: Resource Dependency Network, 2000 Vladimiro Montesinos Alberto Fujimori 1
- 29. Outline Background Why Focus on Governance & Corruption? Discussion 1. 3. 2. 4. Entry Points for Governance Reform The World Bank’s Strategy: Moving Forward
- 30. Project Level Combating corruption in World Bank Group operations Country Level Deepening support to countries to strengthen governance Global Level Working with development partners, sharing experience & addressing transnational issues Key Elements of World Bank’s Strategy
- 34. Coalitions with civil society, private sector, parliamentarians, and others to combat entrenched corruption networks Donor Collaboration MDB harmonization in high-risk settings to avoid ‘mixed-signals’; coordinated donor action to support demand-side initiatives Global Collective Action Against Corruption Global & Regional Conventions (UNCAC, OECD, AU, OAS, Asia-Pacific Action Plan) need to be enforced to curb transnational corruption & facilitate asset recovery
- 38. Thank You The World Bank 1818 H Street, NW Washington, D.C. 20433 USA “ Working for a World Free of Poverty” For additional information, see: http://www.worldbank.org
Notas do Editor
- This presentation should be viewed as a resource, to help guide consultation teams. We strongly encourage consultation teams to adapt the presentation to country context, so that it is useful both in advancing the country dialogue on governance and in collecting feedback on the Bank’s strategy. Out of the 19 slides, there are only five core slides, to communicate the essence of the strategy, as it currently stands 6: 3 levels of strategy 9: actions at the country level 12: actions at the project level 15: actions at the global level 18: questions on which the Exec Board specifically asked for feedback There is a great deal of flexibility in shaping the presentation so that it is appropriate given the country setting.
- Key messages: to reassure participants that poverty reduction is still the main mission of the Bank to explain why governance matters for development
- One main finding of the Lessons from the 1990s was that there is no one reform “formula”-- reforms that yield growth in one country don’t always work in others. The study also showed that what ignites growth is different than what sustains it. Research on growth determinants (Rodrik) Fundamentals matter: well developed institutions, technological innovation, access to markets, financial market development Sound economic principles: competition, property rights, appropriate monetary policy, fiscal solvency Provides little guidance on specific reforms
- The effect of aid on growth appears to depend on the level of policy . When policy is bad, the level of aid seems to have little impact on growth (if anything, a slightly negative impact). For countries with good policies, aid increases growth. Burnside, Craig, David Dollar, Aid, Policies, and Growth: Revisiting the Evidence, World Bank Policy Research Paper 3251, March 2004 The chart presents results from OLS regressions. The dependent variable is unexplained growth , the residual from regressing per capita GDP growth on controls other than aid and policy. In the regression used for this chart, the right hand side variables are nine dummy variables that represent 33- and 67-percent histogram bins for unexplained aid and policy, both obtained by regressing these variables on the other righthand-side variables (controls) in the full regression equation. For the original regression the following variables were used: Dependent variable : log of net aid receipts of each developing country (annual average in the 1980s); Independent variables : log per capita income in 1980 (and its square); log population in 1980 (and its square); and the averages, in the 1980s, of two institutional quality measures : the ICRG rule of law index (which ranges from 1 to 6, where higher number indicates better rule of law) and the Freedom House democracy index (ranging from 1 to 3, where a higher number is more authoritarian).
- CORE SLIDE Key messages: to clarify that there are many entry points for governance reform, and the choice depends on country context while there are many examples of good work in all these areas, the Bank has historically focused within governance primarily on public management The Bank wants to scale up work in the other four areas, as appropriate and in partnership with other donors: these are the frontiers building multistakeholder constituencies for reform are a critical aspect of managing the reform process
- Implications of underestimates for governance work There is a need for development of institutional checks and balances - including financial, professional, or even criminal penalties – to ensure production of less deceptive cost estimates. The work on such checks and balances should focus, among other things, on increasing transparency at all project stages; use of performance indicators; explicit formulation of regulatory regimes for project development and implementation; and Involvement of private risk capital, even in public projects
- Uganda’s struggle to get its substantial education spending to the intended targets was for many years a frustrating exercise, until 1998, when the government made an important decision…. As the new education budget was announced for 1999, details were given to the press about how much money was to go to each school district. Suddenly, when the public was armed with information, the results improved dramatically.
- Dramatic improvements across nine city agencies between 1994 and 2003. Improvement even in city council, electricity, telephones across three report cards. Other services, hospitals, police, land, buses see huge improvements between 1999 and 2003. BATF tell similar story.
- Key messages: corruption is a transnational problem, and must be addressed through global collective action donor countries bear responsibility for ensuring that businesses originating in their countries do not undermine governments in aid recipient countries by engaging in corruption
- CORE SLIDE Key messages: the strategy is not only about anticorruption in Bank projects it is about helping countries strengthen governance to enable development as well as transnational issues, such as asset recovery and the role of multinationals from developed countries in corruption
- Country-specific questions can be modified, as appropriate For example, if a particular sector is an issue, the consultation team may want to feature a question on it if country has been engaged in governance reform for a long time, the team may want to ask what has worked and why?
- Main messages: Before sanctions reform, the sanctions regime only covered fraud and corruption that occurred in the course of procurement. This left out a number of project participants who may not go through the procurement process, such as NGOs or financial intermediaries. The World Bank has introduced new Anti-Corruption Guidelines , which set out the basic requirements for preventing and combating fraud and corruption in Bank-financed projects. These Guidelines will be incorporated by reference into the Bank’s legal agreements with its borrowers. The anti-corruption provisions in the Bank’s General Conditions , the standard terms and conditions that govern its lending, have been strengthened. It is important to note that, while sanctions reform is clearly closely related to the GAC initiative, it was on a separate track . Sanctions reform was developed by Bank staff over a period of about 2 years and was extensively discussed with the Bank’s Executive Directors over the course of several months before it was approved by a consensus of the Bank’s Board on August 1, 2006. Sanctions reform became effective on October 15, 2006 . It applies to all new Bank financed projects for which a “Project Concept Note”—the document that begins the process of preparing a Bank financed project—is issued on or after that date. Sanctions reform is not part of these consultations —but we thought it would be important to let you know about it, as it is an important pillar of the Bank’s efforts to prevent and combat corruption in Bank financed projects. NB: See talking points for more detail on the above, plus background on what the sanctions regime is.
- CORE SLIDE Key messages: donor coordination is vital, especially in more challenging settings, so that donors do not undermine progress in governance at the country level; the MBD harmonization is presently focusing on harmonizing investigative procedures to facilitate cross-debarment, but this is not enough; venues such as the OECD-DAC GovNet, where bilateral and multilateral donors come together to share practice and coordinate approaches, are critical global conventions, such as the OECD Anti-bribery Convention and the UN Convention Against Corruption, are important, but to have impact they also need to be implemented; the OECD ABC is largely unimplemented and UNCAC is too new to assess; the Bank is very open to helping countries that request assistance in implementing UNCAC the regional dimension of the multi-partner, multi-country collaboration strategy is also of high importance, such as working closely with New Partnership for Africa's Development (NEPAD), the African Union, the UN Economic Commission for Africa (UNECA), regional bodies under the FATF, the Asia-Pacific Economic Cooperation Forum (APEC), and the Organization of American States (OAS), (in particular, in their regional peer review and related anticorruption and good governance mechanisms and initiatives). multi-stakeholder coalitions in support of reform are critical for battling entrenched networks of corruption – leaders in government, civil society, and private sector need to be connected up and empowered For a list of global and regional conventions, see: http://www.transparency.org/global_priorities/international_conventions. International anti-corruption conventions and selected instruments include the following: At the global and inter-regional level: i) UN Convention against Corruption (UNCAC); ii) United Nations Convention against Transnational Organized Crime (UNTOC); iii) OECD Convention on the Bribery of Foreign Public Officials in International Business Transactions (OECD Convention); iv) Revised Recommendation of the Council of the OECD on Combating Bribery in International Business Transactions. In Africa: i) AU Convention on Preventing and Combating Corruption (AU Convention); ii) SADC Protocol against Corruption (SADC Protocol); iii) ECOWAS Protocol on the Fight against Corruption (ECOWAS Protocol); in the Americas: i) The Inter-American Convention against Corruption (OAS Convention); in Asia: i) ADB-OECD Action Plan for Asia-Pacific (Action Plan); and in Europe: i) Council of Europe Criminal Law Convention; ii) Council of Europe Civil Law Convention; iii) Resolution (99) 5 of the Committee of Ministers of the Council of Europe: Agreement Establishing the Group of States against Corruption; iv) Resolution (97) 24 of the Committee of Ministers of the Council of Europe: Twenty Guiding Principles for the Fight against Corruption; v) European Union Convention on the Protection of the Communities' Financial Interests and the Fight against Corruption and two Protocols; and vi) European Union Convention on the Fight against Corruption involving officials of the European Communities or officials of Member States.
- Country-specific questions can be modified, as appropriate For example, if a particular sector is an issue, the consultation team may want to feature a question on it if country has been engaged in governance reform for a long time, the team may want to ask what has worked and why?