Transcript Our Difficult Climb: Initial Progress and the Ascent Ahead

Our Difficult Climb:
Initial Progress and the Ascent Ahead
Transparency International—World Bank
Combating Corruption Workshop
Washington, DC
March 21, 2003
The World Bank
Presented by:
The Public Sector Group
The World Bank
Page 1
Overview
A promising start …
Tremendous increase in
awareness
Explosion of activity, cuttingedge diagnostics
Major programs launched, with
some early successes
… but we are also facing
formidable challenges
To have major impact, need to
tackle deeper issues
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Possible Paths …
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The initial ascent … getting to base camp …
State in a
Changing
World (97)
WDR on
Institutions
1982
Strategic
Compact
(97)
TI CPI
(5/95)
Governance
Pillar - CDF
(98)
O.P.
Mainstreaming
AC in CAS
(99)
Governance
Strategy (00)
JDW
“Cancer of
Corruption”
AntiGov/A-C
Speech
corruption Diagnostics
(10/96)
Strategy start (98)
(97)
• Public Expenditure, Financial
Mgt. & Procurement Reforms
• Diagnostic/Data/ Monitoring
Tools
• Administrative & Civil Service
Reform
Broadening &
Mainstreaming
The ‘Prohibition’ Era
• Civil Society Voice,
Accountability, Media &
Transparency Mechanisms
• State Capture/Corporate
Governance
• Legal/Judicial Reform
Internal AC 1st set of
unit created firms
in WB (98) Debarred
from WB (99)
1970 1980 1990
1995
1996
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1997
1998
1999
Formalization
of INT (01)
2000
2001
2002
2003
Page 3
Good governance has many dimensions & “entry” points
Institutional Checks & Balances
• Independent, effective judiciary
• Legislative oversight
• Decentralization with accountability
• Global initiatives: OECD Convention, antimoney laundering, WCO
Civil Society Voice &
Participation
•
•
•
•
•
Freedom of information
Public hearings on draft laws
Media/NGOs
Community empowerment
Report cards, client surveys
Political Accountability
•
•
•
•
Political competition, credible political parties
Transparency in party financing
Disclosure of parliamentary votes
Asset declaration, conflict-of-interest rules
Competitive Private Sector
GOOD
GOVERNANCE
•
•
•
•
•
•
Economic policies
Restructuring of monopolies
Effective, streamlined regulation
Robust financial systems
Corporate governance
Collective business associations
Public Sector Management
•
•
•
•
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Meritocratic civil service with adequate pay
Public expenditure, financial management, procurement
Tax and customs
Frontline service delivery (health, education, infrastructure)
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Explosion of activities: Examples of major programs launched across
countries
Albania
(public admin.)
Latvia
(anticorruption)
Ukraine
(tax admin)
Russia
(customs/treasury)
Kyrgyz Republic
(governance reform)
Jordan
(civil society)
Cambodia
(PE; forestry)
Guatemala
(diagnostic to
action program)
Colombia
(diagnostics
& civil society)
Bolivia:
(public admin.)
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Ghana (PE
accountability)
Philippines
(transport)
Gabon
(water/electricity)
Uganda
(PRSC; education)
Bangladesh
(civil society)
Pakistan
(devolution)
Tanzania
(PSR)
Ethiopia
(decentralization)
Indonesia
(local
governance)
India – Andra Pradesh
(power; e-gov); Karnataka
(right to info)
Page 5
Some approaches that appear to be working …
Latvia
(Anticorruption)
Ghana
(Public Expenditure
Accountability)
Gabon
(Water/Electricity)
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Uganda
(Education, Capacity
Building-Action
Learning/Core AC
Course)
Indonesia
(Community
Empowerment)
India – Andhra Pradesh
(Power; E-governance)
Page 6
But on average, no evidence of significant improvement on control of
corruption …
6
Source: ICRG, 1994-2002.
Subject to margins of error, as
it is based on only one source.
Good
3.5
Poor
1
1994
1995
OECD+NIC
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1996
1997
1998
1999
2000
2001
EMERGING + transition
Page 7
Some signs of initial progress in some regions…
Business Environment & Enterprise Survey (BEEPS) in ECA
… though variations across
different dimensions …
How significant are these
obstacles to your business?
High
1999
Financing
4
Corruption
2002
Infrastructure
0
Rule of Law
Tax
Judiciary
Worst case
Regulations
ALL 1999
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ALL 2002
Low
0
Perceived Impact of
State Capture
Frequency
of active
capture by firms
Bribe
frequency
Page 8
Some programs that have stalled – and why…
 The challenge of politics:
 No political ‘buy-in’ – despite plethora of
diagnostics and pressure from civil society:
Bangladesh
 Difficulties in sustainability when there is no
political traction: Georgia judiciary
 The need to anticipate political obstacles: Action
Oriented Learning Program in AFR – Malawi vs.
Uganda
 Opposition from powerful vested interests in
Cabinet & bureaucracy: India, Karnataka – right to
information
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Lessons learnt, broader implications … a long way to go …
These appear to
be working when
the underlying
environment is
conducive:
Excellent at
diagnostics
Good at
addressing the
0
‘surface’
manifestations
Good at technical
solutions and
design
Committed
leadership
Coalition for
reform
Capacity
But, struggling to address ‘deeper’ underlying issues





Enhance ‘demand’ pressures for reform
Overcome vested interests against reform
Reverse the “culture” of corruption in the public sector
Tackle political drivers of corruption (e.g., party financing)
Within WB, mainstream across sectors and countries
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Page 10
7. The way forward … shortening the journey
Shrinking the time horizon
• New
World Bank
• Lending
• AAA
Strengthening
the “demand”
for reform
Partnerships
Improving
the “supply”
of reform
• New
Partners
(e.g. TI,
bilaterals)
10?
25?
Years
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
Page 11
The Way Forward: Strengthening the “demand” for reform
Enhance domestic
pressures for reform
• Assist civil society in
monitoring governance
reforms: Slovakia, TI
• Support CSOs & FBOs that
mobilize citizens in favor of
government performance:
PAC, Bangalore; Action
Learning Programs, LAC
• Help SMEs to organize &
mobilize MNCs against
capture by large vested
interests: ECA
• Strategically support
responsible media on
anticorruption: Philippines
Center for Investigative
Journalism
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Strengthen international
pressure for reform
• Use international bully
pulpit to re-energize the
agenda: JDW
• Say “no” when warranted:
Indonesia? Kenya?
• Use the international
platform to highlight good
and bad governance
countries: TI, CPIA, KKZ,
BEEPS indicators
• Strengthen global
anticorruption initiatives:
OECD Convention, AntiMoney Laundering
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The way forward: Enhancing the “supply” of reform
Help reformist
governments
overcome obstacles
Reverse the “culture” of
corruption afflicting the
public & private sectors
Strengthen capacity
building & institutional
reform efforts: More
robust lending & AAA
Strengthen evaluation
for ‘scaling up’: DEC,
OED, WBI; partners
Emphasize change mgt
& design programs to
defuse opposition:
Education reform, LAC
Support AC efforts that
improve service
delivery that citizens
can observe: Jordan
Understand the norms
permeating public-private
corruption networks &
how to combat them: Peru
Support CSOs/FBOs
working towards a
transformation of
values/ethics in the public
sector: AP, India
Support enforceable
conflict of interest rules:
Latvia
Promote better corporate
governance & codes of
conduct: TI business
principles for countering
bribery
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Help tackle
political drivers
of corruption
Address issue of party
finance disclosure &
regulation: UK DFID, TI?
Work with media &
Parliaments on political
corruption: WBI, others
Develop better tools to
understand state
capture, market for
influence & networks
DEC, WBI, others
Work with future
leaders: WBI Youth
Program
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The way forward …
Internal incentives
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Strengthen staff
fortitude and
incentives to say
“no” when
warranted
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Deepen and
enhance leadership
and ownership of
anticorruption
agenda across
sectors –
beyond PREM/ WBI/
OPCS/ LEG
Page 14
Q&A
and
Discussion
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Page 15