francesca recanatini leader, ac thematic group · pdf file · 2013-07-02francesca...

XXV Villa Mondragone International Economic Seminar,

University of Rome Tor Vergata, June 25-27, 2013

Francesca Recanatini Leader, AC Thematic Group

World Bank

The World Bank The World Bank

Useful Definitions

The manner in which the state acquires

and exercises its authority to provide

public goods & services

Use of public office for private gain

Governance

Corruption

•Corruption is an outcome – a consequence of weak or bad governance •Governance reform helps combat corruption by addressing its underlying causes

2

The World Bank 6

The World Bank 7

The World Bank The World Bank 8


In practice, a heterogeneous challenge ◦ Different country’s reality (political, institutional and cultural)

◦ Different forms of corruption

◦ Different level of skills and resources

It involves diverse actors and stakeholders (local, national and international)

It requires a significant re-allocation of powers and rents within the country

The World Bank 9


Need to design a strategy that: focuses on incentives

is “country” specific and pragmatic

allows to monitor progress and to adjust to new circumstances

includes both short term and medium term measures

fosters and sustains coordination and collaboration among different actors

promotes local capacity building (citizens, civil servants and youth)

Heterogeneity

Sustainability

The World Bank 10


A participatory process to identify governance challenges and build local capacity

Key features: ◦ Medium/long term partnership between multiple

actors for design and implementation ◦ Mechanism to facilitate feedback from different

stakeholders (focus groups) ◦ Multiple sources of data (from households, firms

and public officials) focused on experience ◦ Rigorous technical implementation ◦ Local institution implements ◦ Focus on monitoring results and impact


0% 15% 30% 45% 60% 75% 90%

% of public officials

reporting frequent

public funds mis-

management

% of public officials

reporting frequent

purchase of positions

in their institutions

% citizens reporting

bribes used frequently

to obtain public

services

Sierra Leone(2003) Guatemala(2004) Zambia(2003)

Paraguay(2005) Mozambique(2004) Madagascar(2005)

Country Diagnostic Results

Extent of corruption, (Selected Countries ‘03-’05)

0

2

4

6

8

10

12

14

16

18

Ecu

ador

(200

0)

Guat

emal

a(20

04)

Hon

duras(

2001

)

Par

aguay

(200

5)

Per

u(200

1)

Guin

ea(2

004)

Ghan

a(20

00)

Sierr

a Leo

ne(2

003)

Zam

bia(2

003)

Moz

ambi

que(20

04)

Small

Medium

Large

Confidential

Corruption imposes barriers to households to

access basic services, Sierra Leone 2003

Cost of Corruption:

discouraged users by service

0% 5% 10% 15% 20% 25%

Municipal and District Councils

Public education services

Public health services

Sierra Leone Roads Transport

Authority (RTA)

Sierra Leone Housing Corporation

(SALHOC)

Proportion of head of households reporting that they decide to not conduct procedures with these

institutions because they couldn't pay the unofficial costs

Sierra Leone Housing Corporation

0% 10% 20% 30%

high income

middle income

low income

0% 10% 20% 30%

Sierra Leone Roads Transport Authority

0 10 20 30 40 50 60 70 80 90

Min. of DefenceMin. of Development

Min. of InformationNat. Commissions

OthersPara-statals

Min. of FinanceMin. of Local Govt.

Min. of Social WelfareMin. of Education

Min. of JusticeS.L Police

Min. of AgricultureMin. of Health

% of Public Officials that said irregularities/(misappropriations) are frequent

Public funds are mismanaged by agency (as reported by Public Officials, Sierra Leone, 2003)


What are the likely outcomes? ◦ Unbundled evaluation of corruption –

administrative, state capture, bidding, theft of public resources, purchase of licenses, nepotism

◦ Identification of weak and strong institutions

◦ Assessment of the impact and costs of corruption on different stakeholders

To what extent has this approach helped shape public sector reforms? ◦ Only when paired with political will, donor

coordination and (true) medium term vision

Lessons learnt


What are the advantages and disadvantages of this approach? ◦ Pros: Greater local capacity, consensus and ownership

that can ensure sustainability of reform process; “south-south” knowledge sharing (Costa Rica, Zambia, Mozambique, Haiti)

◦ Cons: Time consuming and costly; challenging to coordinate many different actors, especially international ones; unforeseen political changes

How do we “reconcile” aggregate indicators with

national assessments?

◦ Two sides of the same coin with different objectives.

Key => the two approaches complement each other


Using responses from public officials

Public officials are employees of each agency

Public official’s responses are re-scale (from 0 to 100) and then aggregated by agency using factor analysis technique

0 always meaning the lowest level of quality of governance, corruption, access or service performance

South North East West SIERRA

Prov. Prov. Prov. Area LEONE

Overall corruption 22 32 35 33 32

Corruption in budget 35 43 48 39 40

Corruption in public contracts 18 35 29 33 30

Corruption in personnel 39 44 55 53 49

Accessibility for poor 85 74 87 74 78

Audit Mechanisms 55 59 66 58 58

Enforcement of rules 70 67 80 73 71

Politicization 21 34 22 34 32

Quality of rules 62 62 70 61 63

Resources 54 51 47 55 52

Transparency 51 55 53 51 55

Citizen voice 70 59 65 66 66

Meritocracy 66 65 70 69 68

Governance and corruption indicators by province


Audit

Mechanisms

Enforcement of

Rules

Quality of

RulesPoliticization Resources Transparency

Citizen

Voice

Wage

SatisfactionService

State

Capture

Overall

Corruption

Ministère de la justice 63 51 55 44 37 47 72 19 67 44 39

Ministère de la Sécurité 62 50 57 44 38 47 74 18 69 38 35

Ministère de l’Administration et de la Décentralisation 61 53 54 42 39 49 75 29 70 45 45

Ministère des Finances 76 72 60 40 43 58 80 28 67 51 30

Ministère de l’Enseignement Supérieurs et Recherche

Scientifique62 50 56 44 35 46 74 20 69 47 42

Ministère de l’Urbanisme et Habitat 76 42 33 64 75 38 5

Ministère de la Santé Publique 70 63 57 43 35 60 70 30 58 40 44

Service Communal 62 51 34 40 52 64 13 49 49

Service Sous Préfectoral 58 43 55 45 32 43 72 13 64 52 37

Ministère de la Communication 52 61 44 38 46 75 42 65 69

Ministère de la Jeunesse et Sports 60 52 56 42 42 53 73 11 71 52 42

Ligue Islamique Nationale 62 60 59 41 41 49 75 28 64 43 33

Ministère de l’Agriculture 61 58 57 42 38 45 77 30 65 36 36

Ministère de l’enseignement Pré Universitaire 67 69 57 41 50 50 72 42 76 45 31

Ministère de la Fonction Publique 44 60 45 44 44 71 25 56 10

Organisation Non Gouvernementale (ONG) 59 53 41 48 44 82 8 70 54

Entreprise Micro – Finance 32 73 8 80 13

Ministère de l’Energie, Mines et Environnement 70 49 55 52 25 74

Whole Country 62 50 57 45 34 46 75 20 68 42 37

The indicators above take values between 0-100. To interpret them please keep in mind that:

-The higher the value of the governance indicator the better the quality of that dimension .

-The higher the value of the corruption index, the more severe the problem.


Legal and

Regulatory

Corruption

Corruption

in

Personnel

Corruption

in Budget

Administrative

Corruption

Corruption in

Public

Procurement

AUDIT -0.09 -0.14 -0.36 -0.14 -0.14

(0.048)* (0.055)*** (0.061)*** (0.056)** (0.055)**

MERIT -0.15 -0.33 -0.10 -0.19 -0.09

(0.040)*** (0.045)*** (0.051)** (0.046)*** (0.045)**

OPENNESS -0.11 -0.02 -0.25 -0.17 -0.15

(0.054)** (0.062) (0.069)*** (0.063)*** (0.061)**

Observations 928 928 928 928 928

Adjusted R-

squared

0.847 0.889 0.876 0.897 0.914

Weighted SUR regressions with regional Fixed Effects

Standard errors in parentheses * significant at 10%; **

significant at 5%; *** significant at 1%


2SLS OLS

Total Corruption Total Corruption

Internal Organization -1.4603 -0.5767

(0.7649)* (0.0419)***

Obs. 909 915

First Stage

Regression

Internal Organization

Average Internal

Organization

0.2237

(0.1279)*

Obs. 909

Weighted SUR regressions with regional Fixed Effects

Standard errors in parentheses * significant at 10%; **

significant at 5%; *** significant at 1%


Governance and Anti-corruption: www.worldbank.org/anticorruption

Anti-Corruption Authorities Portal: www.acauthorities.org World Bank Public Sector Group:

http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPUBLICSECTORANDGOVERNANCE/0,,menuPK:286310~pagePK:149018~piPK:149093~theSitePK:286305,00.html

Governance Diagnostic Surveys Country Sites: http://go.worldbank.org/P8PT8AK4P0

Actionable Governance Indicators Website: ◦ www.agidata.info (internal) ◦ www.agidata.org (external)

Additional material available upon request:

[email protected]

The World Bank 30

http://www.worldbank.org/anticorruption

http://www.acauthorities.org/




http://go.worldbank.org/P8PT8AK4P0

http://www.agidata.info/

http://www.agidata.org/

mailto:[email protected]


Institutional structure of the sectors under study ◦ How does transport work in Mauritania? What needs to happen at the

implementation level?

Possible vulnerabilities ◦ Internal to the sector: transporters, officials and regulations. External to the

sector: linked to banking sector? International issues?

Mechanisms of poor governance ◦ Is it difficult to get a trucking license? Are bribes required to cross borders

with freight? Do civil servants have necessary capacity? Are rules clear?

Costs of poor governance ◦ What price do transporters and customers pay to ‘facilitate’ antiquated or

inadequate processes? What is the mark up on contracts due to fraud? How many roads are narrower than they should be because of corruption?

Who are the major players and what are their policy needs? ◦ Potential entry points for reform? Who plays a role in the reform process?

Who can be a potential deal breaker? How can we understand the political landscape to ensure policy outcomes are politically viable?


Sector Level Governance Assessment

Tools & Info

Desk Study: history,

sector structure, current context

In-Depth Interviews

3 Surveys (Experience Based)

Audit & Project Data

Cross-Sector Team

(PREM, WBI, SDV,PDS, Procurement)

Country Ownership Political Economy Assessment

Team Capacity Needs

Transparent Process

Local Partnership Gov’t + Civil Society

Donor Partnership w/Active Donors

Partnership w/ Bank Country Team

Broad Peer Review

Process Needs

Outcomes:

1. Governance Baseline

2. Agency Specific Indicators

3. Public Dissemination &

Participatory Policy Process

Iterative process: 8-12 months


Sector-specific focus: ◦ Apply methodology and solutions to country and sector realities

Mixed methods: ◦ Focus groups & In-depth Interviews

◦ Surveys (households, businesses & civil servants)

◦ Desk study

◦ Project cost data

Active participation of civil society and government to

contribute to policy making process.

Close collaboration with donors’ colleagues.

Active links to on-going sector projects ◦ WB transport and port projects

◦ EU transport ministry aid project

francesca recanatini leader, ac thematic group · pdf file · 2013-07-02francesca...

Documents