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Slide 1Slide 1
Drilling Down Through Selected Governance
Diagnostic Tools
Francesca Recanatini
Sr. Economist, PRMPS
The World Bank
April 23, 2007
Slide 2Slide 2
Objective of this session
Which empirical tools and approaches are already available?
How can we select among them? How can such assessments be used for our
operational work?
Which governance tools are more operationally relevant for our work?
Slide 3Slide 3
Governance is the door to anticorruption
The manner in which the The manner in which the statestate acquires acquiresand exercises its authority to provide and exercises its authority to provide public goods & servicespublic goods & services
Use of Use of publicpublic office for office for privateprivate gain gain
GovernanceGovernance
CorruptionCorruption
•Corruption is an outcome – a consequence of weak or bad governance
•Governance reform helps combat corruption by addressing its underlying causes
Slide 4Slide 4
Governance receives extra weight in CPIA indicator-based allocations of IDA funds
All Country Assistance Strategies (CASs) are required to address governance issues, including corruption
Increasingly, CAS’s are centered around governance issues
A key focus of the Bank is to help countries to improve their governance systems to mitigate risks for all stakeholders
How does governance fit into ouroperational agenda?
Slide 5Slide 5
Existing WB Empirical Tools
BEEPS IGR Public Official
surveys PER and PETS QSDS Score Cards Investment Climate
Surveys
EC Audits CFAA CPAR GAC Case Studies HIPC Exp. Tracking ROSC Life In Transition Survey
(ECA region)
Slide 6Slide 6
Existing Non Bank Tools (Sample)
TI Perceptions Index UNDP GAC Freedom House Press
Freedom Indicators MCC ratings Afrobarometer Surveys Global Risk Service Business Enterprise
Environment Survey Latinobarometro Surveys
Media Sustainability Index
Business Risk Service Transition Report Global E-Governance Global Competitiveness Global Integrity Index Human Rights Database Open Budget Initiative Reporters w/o Borders
Slide 7Slide 7
Key starting points
1. What is the purpose of the assessment?
Research and analysis Awareness raising Policy and Action planning Capacity building Monitoring
Slide 8Slide 8
2. What is the focus of the assessment?
Governance as a whole Corruption Performance of a specific agency/sector Quality of a specific public service delivered
Key starting points
Slide 9Slide 9
Linking the Tools to State Institutions
PERHIPC E.T.ROSCCPAREC Audits
CFAA
IGR & GAC & Governance Cross-Country Ind.
BEEPS & INVEST.CLIMATE
SCORE CARDS
QSDS
Public Official Surveys
Political System- Cam paign Finance- Recruitm ent/Patronage
Executive Branch- Core Accountability M echanisms- Key Sectors: Revenue, Expenditure & Regulatory Agencies
Legislative Branch- Parliam entary O versight- Parliam entary Safeguards
Judicial Branch- Judicial Independence- Judicial Predictability- Prosecution & Trial of Corruption Cases
Sub-National Governm ent- Transparency and Responsiveness- Accountability M echanisms
Users- Households- Enterprises
Service Delivery Agencies- Accountability M echanisms- Accessibility and Responsiveness
PETs
Slide 10Slide 10
Linking Governance Tools to Accountability
CitizensCitizens
Politicians/Politicians/PolicymakersPolicymakers
Public Public ServantsServants
Deleg
atio
n
Deleg
atio
n/
Voice
Voice
Politi
cal
Politi
cal
Accou
ntab
ilit
Accou
ntab
ilit
yy
Internal
Internal
Accountability
AccountabilityD
elegation of
Delegation of
Implem
entation
Implem
entation
public goods/ servicespublic goods/ services
client power/client power/social social
accountabilityaccountability
PETs
GAC; BEEPS; PETsScorecardsDoing Business
Slide 11Slide 11
MonitoringMonitoring
CASCAS
Operations & Operations & Capacity buildingCapacity building
Actionable indicators:PFM indicators (including PEFA, CPAR and CPAA); scorecards; Doing Business; GACs; BEEPS
Political Governance Diagnostics; GAC Diagnostics, LITS
Specialized technical reports:BEEPS; PETs; IGRs;GSDS; ICAs; PERs: GACs
Linking Governance Tools to Accountability
Slide 12Slide 12
Governance tools for operational work
Three examples:
Public Expenditure Tracking Survey
BEEPS
Governance and Anti-Corruption Diagnostic Surveys
Slide 13Slide 13
Goal: Assess fiscal leakages given significant share of intended resources do not reach the frontline
Country Year Sample Leakage Estimate
Ghana 2000 200Clinics
80 % Non-Salary
Ghana 2000 200Schools
49 % Non-Salary, 35% Salary (primary)52% Non-Salary, 25% Salary (secondary)
Honduras 2000 805 staff;35 Clinics
2.4% of all workers on the payroll considered ‘ghosts.’ Absenteeism estimated at 27%. 5.2% of workers were not actually in the assigned post but had moved to other location (5.2%)
Madagascar 2003 185Schools
8-10% of cash transfers
Source: World Bank (2005) PETS Review
Public Expenditure Tracking Surveys (PETS)
Slide 15Slide 15
The PETS Cycle
1. Define Objectives Sector Identify Flow(s) Scope/ Complements
2. Map Flows Begin/ Endpoint # Layers/ Junctures Admin.Level
3. Measure Leakages Specify Leakage Types Sampling
4. Present Findings “Headline” Leakages Leakages patterns/ junctures
5. Inform Policy PFM Reform Accountabil.-Actionable Measures
The Prototype: Uganda Education PETS Remains Most Successful Case “Leakages” of Funds Going to Schools Reduced Significantly
(~ 13% (1996) to 82 % (1999) Methodologically Relatively Straightforward Flow
Central Government Disbursed Capitation Grant to Districts, Districts On-ward disburse to Schools.
Allocations Largely Reached Districts, But Allocations Did Not Reach Facilities
Slide 16Slide 16
PETS Coverage
PETS have now been conducted in 24 countries, almost exclusively in health and education.
Source: Chaudhury, N et. al. 2004
Country YearEducation Health Water Transport/
RoadsAgriculture/
Rural
Albania 2004
Azerbaijan planned
Cambodia planned
Cameroon 2003
Ghana 2000
Honduras 2000
Madagascar 2003
Mozambique 2001
PNG 2002
Peru 2001
Rwanda 2000
2004
Senegal 2002
Tanzania 1999
2001
2003 (pilot
)
Uganda 1996
1999
Zambia 2001
Slide 17Slide 17
Is corruption in Eastern Europe and the former Soviet Union getting better or worse?
What explains the changes? What motivates reform? Are there lessons for other regions?
Goal: Analyze how corruption, regulatory burden, and public sector factors affect the business environment
“Business Environment and Enterprise Performance Survey” (BEEPS)
Slide 18Slide 18
“Business Environment and Enterprise Performance Survey” (BEEPS)
Joint initiative with EBRD 20,000 firms in 3 rounds (1999, 2002, 2005) 26 transition countries 6 European comparators in ‘05: Ireland, Germany, Greece, Portugal, Spain,
Turkey (+ Korea and Vietnam) Focus on corruption in enterprise-state interactions
Slide 19Slide 19
31%
26%
20%
10%
0%
10%
20%
30%
40%
50%
1999 2002 2005
pe
rce
nt
of
firm
s s
ay
ing
bri
be
s a
re f
req
ue
nt
Transition Countries
Comparator Countries
BEEPS Results
Corruption is falling for the region as a whole (though not yet to W.Europe levels)
Slide 20Slide 20
0%
25%
50%
75%
100%
Geo Lat Slk Tur Bul Rom Aze Rus Alb Kyr
pe
rce
nt
"fre
qu
en
t"
… more in some countries than others … Bribe Frequency, 2002-2005
BEEPS Results
Slide 21Slide 21
… and not all sectors saw improvement.
0%
5%
10%
15%
20%
Fire andBlg Insp.
Courts Customs Bus.Licenses
Taxes Gov.Contracts
per
cen
t "f
req
uen
t"
comparator countries
2005
transition countries
2002-2005
BEEPS Results
Slide 22Slide 22
Governance and A-C diagnostic surveys
A demand-driven process to improve governance and build local capacity
Key features: Three surveys: households, firms, and public officials Questions focus both on experience and perceptions Questions are tested and adapted to local realities Rigorous technical requirements in implementation Local institution implements, with guidance from
international experts
Goal: Greater local capacity, baseline governance data, & action plan for policy reform
Slide 23Slide 23
The power of diagnostic data and key dimensions for analysis:
Unbundle corruption – administrative, state capture, bidding, theft of public resources, purchase of licenses
Identify weak and strong institutions Assess the costs of corruption on different
stakeholders Identify key determinants of good governance Input to develop concrete policy
recommendations
Governance and A-C diagnostic surveys
Slide 24Slide 24
1. Establishment of Steering Committee
2. Diagnostic surveys + analysis
3. Draft of the NAS
4. Public dissemination + discussion
5. Revision of the NAS
6. Implementation by Government
7. Monitoring and Evaluation of NAS
Challenge: poor governance and corruption
WB
I T
ech
nic
al A
ssis
tan
ce
Key Partnership: Government + Civil Society
Country Implemented
The study as part of a larger process
CAPACITY BUILDING
• Local firm collects data• Local enumerators trained• Local supervision by
technical cmte.
Collects EXPERIENCE& PERCEPTIONS data from serviceUSERS & PROVIDERS(3 sources)
End WB T.A.
Slide 25Slide 25
CountrySurvey
InstrumentsData Collection Report Dissemination A-C Strategy
BeninFinalized in
2005Completed, 2006
In Progress (Summer 2007)
Pending Pending
HaitiFinalized in
2005Completed, 2006
Completed (release
May/June 2007)
Planned
Summer 2007Pending
Malawi(Completed
independently by Country)
(Completed independently by
Country)
(Completed independently by
Country)
Completed (w/WB) February 2006
In Progress
Kenya Under reviewPending
(Summer 2007)Pending Pending Pending
Mauritania
In Development Pending (Summer 2007)
Pending Pending Pending
El Salvador
In DevelopmentPending
(Fall 2007)Pending Pending Pending
Burundi Finalized 2007Pending
(Summer 2007)Pending Pending Pending
Governance and Anti-Corruption Diagnostics2006-2007
Slide 26Slide 26
0% 15% 30% 45% 60% 75% 90%
% of public officialsreport frequent public
funds mis-management
% of public officialsreport frequent
purchase of positionsin their institutions
% public officialsreport frequent casesof corruption in public
administration
Sierra Leone(2003) Guinea(2004) Guatemala(2004) Zambia(2003)
Paraguay(2005) Mozambique(2004) Madagascar(2005)
Country Diagnostic Results
Extent of corruption, (Selected Countries ‘03-’05)Extent of corruption, (Selected Countries ‘03-’05)
Slide 27Slide 27
Corruption penalizes especially the poorest citizensCorruption penalizes especially the poorest citizens (% of monthly income paid for bribes as reported by households who sought a public service, 2000-2005)
0.0
5.0
10.0
15.0
20.0
25.0
Ecuador
(200
0)
Perú(2
001)
Hon
duras(2
001)
Guatem
ala(2
004)
Zambia
(200
3)
Sierra
Leo
ne(200
3)
Ghana(
2000)
Guin
ea(2
004)
Paragu
ay(2
005)
Madaga
scar (
2005
)
Moza
mbiq
ue(200
4)
Low Income Middle income High income
Country Diagnostic Results
Slide 28Slide 28
Percentage of household income spent on bribes to obtain services, by income status (as reported by households), Sierra Leone, 2003
0% 5% 10% 15% 20%
Public health services
Public education services
Income Tax Department
Judges/Courts officials
Municipal/Dist. Councils
Surveys and Lands
percentage of household income spent on bribeshigh income
middle income
low income
Corruption increases inequalityCorruption increases inequality
Country Diagnostic Results
Slide 29Slide 29
Managers and bribes to obtain public services, Managers and bribes to obtain public services, Guatemala 2004
0% 5% 10% 15% 20% 25% 30% 35%
Registry of property
Construction permits
Water Service Providers
Customs
Tribunals
Ports
Vehicle inspection
National Police
% of managers reporting that they were asked for a bribe when seeking these servicesNote: Thin lines represent margins of error (95% confidence intervals) for each value. They show the range where the true (population) proportion would lie with probability 0.95 if we had drawn a random sample from this population. Figures are calculated for those managers who contacted the agency btwn July ‘03 and July ‘04. Selected services.
Country Diagnostic Results
Slide 30Slide 30
Cost of corruption, by firm sizeCost of corruption, by firm size (as reported by managers, Guatemala 2004)
0% 10% 20% 30% 40% 50%
Sanitary Inspections
Customs
Vehicle Inspection
National Police
% of managers reporting that they were frequently asked for a bribe when seeking attention at these agencies
Small Medium Large
Note: Figures are calculated for those enterprises that sought attention at the institution between July 2003 and July 2004. Services selected out of 12 for which data are available.
Country Diagnostic Results
Slide 31Slide 31
Country Diagnostic Results
Corruption imposes barriers to households to Corruption imposes barriers to households to access basic services,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 incomemiddle incomelow income
0% 10% 20% 30%
Sierra Leone Roads Transport Authority
Slide 32Slide 32
Corruption affects differently Urban and Rural Corruption affects differently Urban and Rural areasareas (as reported by managers, Zambia 2003)
0% 10% 20% 30% 40% 50%
Rural
Urban
To obtain licenses and permits
To speed up legal proceedings in the judicial branch
To obtain basic public services
To update/revise tax status
To obtain contracts with state institutions
% of managers reporting that bribes are very frequent…
Country Diagnostic Results
Slide 33Slide 33
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Guatemala(2004)
Guinea(2004)
Paraguay(2005)
Sierra Leone(2003)
Zambia(2003)
Mozambique(2004)
% of public officials reporting that the practice is frequent
Executive Legislative Judicial Local Governments
Purchase of positions in their institutions among Purchase of positions in their institutions among co-workersco-workers , as reported by public officials, 2003-2005
Country Diagnostic Results
Slide 34Slide 34
Practice of Purchasing JobsPractice of Purchasing Jobs (as reported by public officials, Zambia 2003)
0% 10% 20% 30% 40% 50% 60%
Min. of Finance and National Planning
Zambia Revenue Authority (ZRA)
Min. of Health
Min. of Education
Min. of Works and Supply
Min. of Mines and Minerals Development
Traffic Police
Zambia Telecommunications Company -ZAMTEL
Zambia Postal Services- ZAMPOST
Municipal government
Judiciary
superiors collegues at the same level
% of public officials reporting purchase of jobs is a very common practice among...
Country Diagnostic Results
Slide 35Slide 35
0 10 20 30 40 50 60 70 80 90
Min. of Defence
Min. of Development
Min. of Information
Nat. Commissions
Others
Para-statals
Min. of Finance
Min. of Local Govt.
Min. of Social Welfare
Min. of Education
Min. of Justice
S.L Police
Min. of Agriculture
Min. of Health
% of Public Officials that said irregularities/(misappropriations) are frequent
Public funds are mismanaged by agencyPublic funds are mismanaged by agency (as reported by Public Officials, Sierra Leone, 2003)
Country Diagnostic Results
Slide 36Slide 36
South North East West WHOLE
Prov. Prov. Prov. Area COUNTRY
Corruption in budget 35 43 48 39 40
Overall corruption 22 32 35 33 32
Corruption in public contracts 18 35 29 33 30
Corruption in personnel (2) 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, Sierra Leone, 2003
Slide 37Slide 37
To sum: a few salient lessons
Governance and A-C (GAC) studies affect the policy debate and serve as an input in the design of a National A-C Strategy
Transparency and public dissemination of the results are key
The approach must be participatory at each stage of the process
Slide 38Slide 38
A Few Salient Lessons, cont.
To unbundle corruption and institutional weaknesses allows to identify key areas for reform
Quality control and use of rigorous analytical methods enhance the credibility of the results
Slide 39Slide 39
WBI Governance on the Web
About Governance Diagnostics and Statistical Capacity Building: http://www.worldbank.org/wbi/governance/capacitybuild/about.html
Governance Diagnostic Surveys Country Sites: http://www.worldbank.org/wbi/governance/capacitybuild/d-surveys.html
Worldwide Governance Indicators 1996-2002: http://www.worldbank.org/wbi/governance/govdata2002/index.html
The Business Environment and Enterprise Performance Survey (BEEPS) 1999-2000: http://info.worldbank.org/governance/beeps/
The Business Environment and Enterprise Performance Survey (BEEPS II) 2002: http://info.worldbank.org/governance/beeps2002/
Courses and Surveys: Governance Diagnostic Capacity Building: http://www.worldbank.org/wbi/governance/capacitybuild/courses.html
Step by Step Guide to Governance Diagnostic Empirical Tools Implementation: http://www.worldbank.org/wbi/governance/capacitybuild/diagnostics.html