Transcript Improving Governance & Public Administration: Frontier Areas of Reform

Improving Governance
& Public
Administration:
Frontier Areas of Reform
Presented to:
The New Reform Agenda of the
New EU Member States
October 19, 2009
Sofia, Bulgaria
Presented by:
Florian Fichtl
Country Manager
The World Bank
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Governance and Corruption
Not the same thing!
Governance
Corruption
The manner in which the State
acquires and exercises its
authority to provide public
goods and services
The use of public office for
private gain
• Corruption is an outcome – a consequence of the failure of accountability
relationships in the governance system
• Poor delivery of services and weak investment climate are other outcomes of
bad governance
• Good governance is the door to less corruption, better services and better
investment climate …
2
Strengthening Governance Systems:
Balancing Supply and Demand
Demand-side
Supply-side
Strengthen the state’s
bureaucratic capability –
leadership, skills, human
& financial resources,
management, monitoring
and evaluation systems –
to deliver public goods
and services
Strengthen accountability
arrangements – elections,
political parties,
parliaments, judiciary,
media, civil society,
business and labor
organizations, local
governments – that enable
citizens and firms to hold
state institutions to account
Transparency
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The Governance System
Citizens/Firms
Political Governance
• Political Parties
• Competition, transparency
Formal
Oversight
Institutions
• Parliament
• Judiciary
• Oversight
institutions
Cross-cutting Control
Agencies (Finance, HR)
Civil Society
& Private
Sector
• Civil Society
Watchdogs
• Media
• Business
Associations
Citizens/Firms
Citizens/Firms
Executive-Central Govt
Service Delivery &
Regulatory Agencies
Subnational Govt &
Communities
Citizens/Firms
Outcomes:
Services,
Regulations,
Corruption,
Informality 4
Good Governance matters
for investment and growth
% Investment share in GDP
Income per capita Growth Rate
2%
20%
1.5%
1%
0.5%
15%
0%
-0.5%
-1.0%
10%
-1.5%
High
Medium
Low
High
Medium
Low
Governance Quality
Governance Quality measured by perception of 4000 firms in 67 countries on: (i) protection of property rights; (ii)
judicial reliability; (iii) predictability of rules; (iv) control of corruption. World Development Report Survey 1997
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The direction of causality …
Growth causes governance to
improve ...
 Burkhart and Lewis-Beck (1994) found
that while higher per capita incomes
foster democracy, democracy in turn
does not foster higher incomes
 B. Friedman (2005) argues that higher
living standards encourage more open,
tolerant and democratic societies
… and better governance causes
growth

Using measures of rule of law, bureaucratic
quality and corruption, Chong and Calderon
(2000) found significant causality from good
governance to growth and vice versa – i.e.
“good governance” both contributes to and
results from strong economic performance

Other studies have dealt with the potential for
reverse causation by using exogenous
instruments for the governance indicators and
concluded that good governance has a
significant and strong causal impact on
economic performance …
… but the debate on causality continues …
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Improving Governance & Public Administration:
Examples from Bulgaria
• Business climate
–
–
–
–
Regulatory Reform, RIA
Review of State Fees
ROSC A&A
ROSC Corporate Governance; adoption of Corporate Governance Code by Stock
Exchange
– ROSC on Financial Services and Consumer Rights
• Public services / managing public resources
– Education: per capita financing and delegated budgets; accountability for outcomes
(independent assessments; PTA); tertiary education reform: governance structures incl.
private sector involvement; resource management; appointments;
– Science / R&D: transparency and competition; evaluations; private sector orientation
– Health: NHIF IT system; private payments; pharmaceutical policy; collective bargaining
– Judiciary: PEIR
– Agriculture: PER
– MoF: PBB and PFM
– Infrastructure: Institutional capacities (Roads, Railways); performance based contracts;
information for maintenance and repairs
– Forestry: policy note
– Revenue Administration: Information system; institutional strengthening;
– Cadastre and Registration: Information system
– Social Sector: multi-topic hh surveys to analyze impact of social spending; piloting new
strategies with rigorous impact evaluations
– Cross-cutting: strengthening evaluation to allow outcome-based policy dialogue
• New priorities
– Customs
– Forestry
– Administrative Reform
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60
Concern: % of firms identifying corruption
as a major constraint in the New EU Member
States (2009)
52.34
50
38.61
40
33.91
33.52
33.11
30
25.12
24.07
20.38
20
9.76
10
5.43
0
Bulgaria
Czech
Republic
Estonia
Hungary
Latvia
Lithuania
Poland
Romania
Slovakia
Slovenia
Source: World Bank Enterprise Survey 2009
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Concern: % of firms believing the court
system is fair, impartial and uncorrupted
(2009)
70
66.45
60
57.73
50
40.6
38.45
40
35.15
37.51
33.89
29.8
30
20.67
20
17.07
10
0
Bulgaria
Czech
Republic
Estonia
Hungary
Latvia
Lithuania
Poland
Romania
Slovakia
Slovenia
Source: World Bank Enterprise Survey 2009
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Concern: % of firms identifying practices
of competitors in the informal sector as a
major constraint (2009)
35
30
29.42
28.08
26.56
27.58
27.08
24.87
25
21.54
20
17.67
15
12.17
10
8.17
5
0
Bulgaria
Czech
Republic
Estonia
Hungary
Latvia
Lithuania
Poland
Romania
Slovakia
Slovenia
Source: World Bank Enterprise Survey 2009
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Concern: % Senior management time spent
in dealing with requirements of government
regulation
16
2009
14
2005
12
10
8
6
4
2
0
Bulgaria
Czech
Republic
Estonia
Hungary
Latvia
Lithuania
Poland
Romania
Source: World Bank Enterprise Surveys (2005, 2009).
Slovakia
Slovenia
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Frontier Areas for Reform
• Ensure rule-based public administration practices
are in place:
– Internal audit & control
– Monitoring of merit-based recruitment, promotion, transfers
– Indicators for rule-based compliance: Public Expenditure
and Financial Accountability or PEFA indicators; Human
resource management (HRM); Actionable Governance
Indicators (AGIs)
• Strengthen ethical responsibility:
– Asset declaration requirements
– Codes of ethics for public officials
– Strengthen commitment to values and ethics in public service:
transformational leadership at individual & collective levels
– Coalitions of integrity to combat entrenched networks and
attitudes towards corruption
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Frontier Areas of Reform (cont.)
• Enhance availability of information
– Monitoring and posting of information on activities, outputs and results
– Right-to-Information
• Enhance participation & monitoring by civil society & media
–
–
–
–
–
Stakeholder consultations in policy development process
Bring state closer to people: Decentralization
Posting of information on organizational budgets, standards and performance
CSO monitoring of public sector performance (e.g., Report Cards)
Media monitoring of asset declarations
• E-Government
– Online tax payment reduces corruption and increases overall tax compliance
– Computerized cadastre and land registration records
– E-Procurement
• Multistakeholder coalitions for reform
– Needed to combat entrenched networks of corruption
– Examples: EITI, FLeG
– Global collective action to combat transnational corruption (e.g. StAR)
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Improving Governance & Public
Administration:
Frontier Areas of Reform
Thank you for your attention.
Sources: http://go.worldbank.org/SGO4LFRSS0
• The Many Faces of Corruption: Tracking Vulnerabilities at
the Sector Level, Edited by J. Edgardo Campos and Sanjay
Pradhan, English Paperback 480 pages 7 x 10, Published April
2007, Washington, D.C. The World Bank, ISBN: 0-8213-6725-0,
ISBN-13: 978-0-8213-6725-4
• Budgeting and Budgetary Institutions, Edited by Anwar Shah,
http://go.worldbank.org/G4D6J4X5Z0
• Governance Matters 2009, Worldwide Governance
Indicators, 1996-2008,
http://info.worldbank.org/governance/wgi/index.asp
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