DHAKA UNIVERSITY

NATIONAL MODEL UNITED

NATIONS 2014

Agenda 1:
Balancing Fund for Long-Term Sustainable Development

Agenda 2:
Peoples participation for accountable and transparent
public services and access into public services

MESSAGE FROM THE EXECUTIVE BOARD:

Esteemed Delegates,
Welcome to the World Bank committee of DUNMUN 2014! It is our great pleasure to bring
you this study guide as a first step of our shared journey. On following pages you will read
about the background of the problem we will be discussing in Dhaka and also find some
basic tips for your position papers. We strongly recommend you to research the topic to
greater depth; this study guide should be the starting point for you to get an idea about the
problem. It will gather to discuss the problems concerning developing economies; an
uprising issue, which grew in its importance especially after the financial crisis of 2008 and
has remained a subject to intense debates ever since.
The topic may seem quite complicated, if you do not specialize in economics, however the
more you read the more you will be able to understand it, so dont worry and research on.
This conference will try to live up the true sprit of the delegate live by introducing different
perspectives, learning about other cultures and making new friendships for life. During the
sessions we will encourage you to challenge yourselves and push to your limits.
You should negotiate debate and fight for the values that your country represents without
forgetting the spirit of the United Nations. You should study your countrys policy and
history carefully and write a position paper for preparation. You have great knowledge in
your hands and thus, great responsibility.
Last but not least, try to enjoy your research and writing your position paper, DUNMUN is a
very serious conference but the point of all MUNs is to gain knowledge and to learn, not to
worry too much. Also remember that after all this research, preparation, debates and
negotiation there will be a great social programme planned for you as a reward!
As Model UNers, we are the purest form of the will of the countries we represent and I wish
us an excellent conference as, together, we try to find a working formula to fix one of the
greatest challenges of the past century. Welcome to the World Bank at DHAKA UNIVERSITY
NATIONAL MODEL UNITED NATIONS 2014.
You are the representative of your allotted country and it is our hope that you put in
wholehearted efforts to research and comprehensively grasp all important facets of the
diverse agenda.
We encourage you to go beyond this background guide and delve into the extremities of the
agenda to further enhance your knowledge of a burning global issue.
May the force be with you!
With Regards,
Soumya Basu (Chairperson)
Md. Mahmudul Hasan (Vice Chairperson)

A Delegates ABC (and D)

Attire
In keeping with the spirit of the simulation, delegates are required to wear
professional business attire. Delegates can be asked by the committee staff to
change attire if it is determined to be inappropriate.
Further, national symbols of any kind are forbidden in committee chambers, in
accordance with practices of the UN. Symbols associated specifically with the
United Nations (e.g., the seal of the UN) are allowed in committee chambers
Being a Diplomat
The most important aspect of participating as a delegate to the KIITMUN is
your assumption of the role of a foreign diplomat and/or expert. In this role,
delegates are acting as representatives of the government and the peoples of
the Member State or NGO to which they have been assigned; experts serving
in the Special Court for Sierra Leone and the United Nations Permanent Forum
on Indigenous Issues are entrusted with issues at the heart of the United
Nations and the aims laid down in its Charter. Delegates are reminded that
professional diplomats conduct themselves, and regard one another, with the
utmost dignity and respect, regardless of foreign policy affiliation or personal
feelings. Even those who observe severely conflicting ideological perspectives
will work closely together within the UN on diplomatic matters of mutual
concern. Likewise many delegates are forced to work together despite
personal conflicts.
While in preparation for and throughout the duration of the Conference,
delegates may find personal disagreement with the foreign policy of the
country they are representing or with the policy of the NGO they are
representing. Delegates personal opinions are entirely inapplicable during the
course of the simulation, unless they are serving as a technical expert in a
judiciary committee. Therefore, it is of the utmost importance for all delegates
to arrive well-versed in the dynamics of their States or NGOs or their
role as expert. The simulations quality depends on the collective preparation
of its participants. Delegates should also exhibit the ability to negotiate and
compromise, demonstrate leadership, and the ability to influence by gaining
the professional respect of fellow delegates. Delegations maintain specific and
adaptive policy methods and goals to allow delegates to function in the
negotiation process.

Caucusing
Caucusing is an important and logistically difficult component of the United
Nations simulation. These informal meetings between voting blocs, as well as
between States with positions that are diametrically opposed, often produce
compromises acceptable to all parties. However, delegates are required to
address issues within a weeks time which, in many cases, the international
community has failed resolve after years of debate and negotiation. As a
result, the bulk of informal negotiation and the construction of working papers
will occur within, or in the close proximity of, the committee chambers. In
consideration for the other Conference participants, delegates are asked to
respect the formal proceedings occurring both within and between all
committees participating at the Conference. Finally, given the importance of
decorum within committee chambers, all caucusing should occur outside of
the committee chambers while committee is in session.
Decorum
Decorum is a de facto rule throughout the week of the simulation. In both
large and small committees, the ability to conduct normal business while in
formal session is an arduous task when decorum is not maintained. Delegates
will be asked for their assistance in this endeavour.

INTRODUCTION TO THE COMMITTEE

Today, Member States govern the World Bank through two bodies: the Board
of Governors and the Board of Executive Directors. To become a member of
the International Bank for Reconstruction and Development (IBRD), a country
must first become a member of the International Monetary Fund (IMF).
Subsequent membership to the other four institutions of the World Bank is
contingent upon membership to the IBRD. There are 188 member states of the
IBRD, 172 members of the IDA, 184 members of the IFC, 179 members of
MIGA, and 149 members of ICSID. While most states qualify as members of all
five institutions, a handful of countries only qualify for the IBRD and one or two
of the other five institutions. A states membership to the IBRD allots it a
certain amount of voting power. Additional voting power is allotted based on a
states financial contribution to the World Bank Group (Creation and and
Historical Chronology, World Bank, n.d.) with France, Germany, Japan, the
United States, and the United Kingdom being the five largest shareholders.
The World Bank Group (hereinafter: WBG) is an international financial
institution established on December 27th, 1945, after the international
ratification of the Bretton Woods agreements. The World Bank is a family of
five international organizations: The International Bank for Reconstruction and
Development (IBRD), The International Development Association (IDA), The
International Finance Corporation (IFC), The Multilateral Investment Guarantee
Agency (MIGA), and The International Centre for Settlement of Investment
Disputes (ICSID). While the World Bank Group includes all five organizations
the term World Bank refers to only IBRD and IDA (world bank, 2013). Its top
goal is poverty reduction, with its programs addressing topics ranging from
agriculture or environmental protection to rural development and anticorruption. The means to the WBGs mission is providing financial aid in the
form of loans, grants or insurance and advice to developing countries. The first
loan ever approved by the WBG was the financial aid given to France for
reconstruction after the Second World War. Traditionally the financial aid is
subject to certain political or economic conditions that the recipient has to
fulfill in a certain time frame. This is thought to complement the financial aid
and can consist of various measures such as trade liberalization, goodgovernance or project ligation of funds. The following table gives an overview
of the institutions the WBG is comprised of.

The WBG belongs to the United Nations (UN), its structure however is quite
distinct from the other official UN bodies. Similar to corporations the five WBG
organizations are completely owned by its member nations that hold a certain
share in the respective organization. According to their share the different
countries have different voting power, with the Unites States of America (USA)
being the largest shareholder with currently 16.4% (worldbank, 2013). The USA
also nominates the WGB president. Over the last years the WBGs loan politics
have been criticized for liberalizing markets too rapidly and applying conditions
too uniformly neglecting the recipients individual specifics (globalpolicy,
2013). Furthermore the weighted voting system has been the target of
criticism (Ebrahim & Herz, 2013), which will be further elaborated on in the
description of Topic B. The WBG offers a large international platform
comprising stakeholders, expertise and finances to help tackle global
challenges in development aid. The topics of our committee are current and
controversial focusing on implementation and optimization of approaches in
the WBG.

Agenda 1: Balancing Fund for

Long-Term Sustainable
Development

What is sustainable development?

The United Nations World Commission on Environment and Development (WCED) in its
1987 report Our Common Future defines sustainable development: "Development that
meets the needs of the present without compromising the ability of future generations to
meet their own needs." Under the principles of the United Nations Charter the Millennium
Declaration identified principles and treaties on sustainable development, including
economic development, social development and environmental protection. Broadly defined,
sustainable development is a systems approach to growth and development and to manage
natural, produced, and social capital for the welfare of their own and future generations.
The term sustainable development as used by the United Nations incorporates both issues
associated with land development and broader issues of human development such as
education, public health, and standard of living.
The term sustainable development rose to significance after it was used by the Brundtland
Commission in its 1987 report Our Common Future. In the report, the commission coined
what has become the most often-quoted definition of sustainable development:
"development that meets the needs of the present without compromising the ability of
future generations to meet their own needs." The United Nations Millennium Declaration
identified principles and treaties on sustainable development, including economic
development, social development and environmental protection.

Introduction to the Agenda

Over the past two decades, economic growth has lifted more than 660 million people out of
poverty and has raised the income levels of millions more, but too often it has come at the
expense of the environment and poor communities.
Through a variety of market, policy, and institutional failures, Earths natural capital has
been used in ways that are economically inefficient and wasteful, without sufcient
reckoning of the true costs of resource depletion. The burning of fossil fuels supported rapid
growth for decades but set up dangerous consequences, with climate change today
threatening to roll back decades of development progress. At the same time, growth
patterns have left hundreds of millions of people behind: 1.2 billion still lack access to
electricity, 870 million are malnourished, and 780 million are still without access to clean,
safe drinking water.
Sustainable development recognizes that growth must be both inclusive and
environmentally sound to reduce poverty and build shared prosperity for todays population
and to continue to meet the needs of future generations. It is efficient with resources and
carefully planned to deliver both immediate and long-term benefits for people, planet, and
prosperity.
The three pillars of sustainable development economic growth, environmental
stewardship, and social inclusion carry across all sectors of development, from cities facing
rapid urbanization to agriculture, infrastructure, energy development and use, water
availability, and transportation. Cities are embracing low-carbon growth and public
transportation. Farmers are picking up the practices of climate-smart agriculture. Countries
are recognizing the value of their natural resources, and industries are realizing how much
they can save through energy and supply chain efficiency.
The question facing countries, cities, corporations, and development organizations today is
not whether to embrace sustainable development but how.

The World Bank Strategy

The World Bank Group integrates the principles of sustainable development into its work
with clients across all sectors and regions.
Those principles are also at the heart of the World Bank Groups mission statement released
in 2013 and are aligned with its overarching goals to end extreme poverty and promote
share prosperity:

Ending extreme poverty within a generation and promoting shared prosperity must be
achieved in such a way as to be sustainable over time and across generations. This requires
promoting environmental, social, and fiscal sustainability. We need to secure the long-term
future of our planet and its resources so future generations do not find themselves in a
wasteland. We also must aim for sustained social inclusion and limit the size of economic
debt inherited by future generations.
The World Bank Groups work in sustainable development can be found prominently in, for
example, its urban development projects, including support for energy efficiency
improvements in buildings, public transit, and carefully planned development based on lowcarbon growth and social inclusion, including public services.
The Banks Inclusive Green Growth report provided an analytical framework and priority
steps for helping clients design public policies and encourage the investments needed to
strengthen sustainable development and improve standards of living in rapidly developing
countries. Much that is useful can be done now: clean air and water and solid waste
management are basic needs, and many urban planning and environmental policies
enhance productivity and poverty alleviation. Ultimately, sustainable growth hinges on good
growth policy, which aims to get prices right and fix markets, address coordination failures
and knowledge externalities, and assign property rights.
In rural areas, the Bank emphasizes resource-efficient, climate-smart agriculture practices
and a landscape approach that recognizes the interdependence of forests, water supplies,
and food security. The Bank Group is committed to the goals of the Sustainable Energy for
All initiative: achieving universal access to energy, doubling the rate of improvement in
energy efficiency, and doubling the share of renewable energy in the global mix by 2030.
In response to the Turn Down the Heat reports, which spell out the dangers of climate
change, World Bank President Jim Yong Kim has called for a plan equal to the scale of the
climate problem.
Ensuring the success of sustainable development requires indicators to monitor
performance. The Bank Group is working with partners to develop greenhouse gas
accounting standards and tools, measures for green growth, and national accounting
indicators for comprehensive wealth that can help determine if growth is sustainable in the
long run. Helping countries develop natural capital accounting practices also underpins the
transition to greener growth that sustains environmental assetswater, land, air,
ecosystems, and the services they providefor future generations.
There is no single model for sustainable development. Strategies will vary across countries,
reflecting local contexts. But all countries, rich and poor, have opportunities to make their
growth greener and more inclusive without slowing it.

THE post 2015 scenario for

sustainable development :
long term vision
Challenges Post 2015
As we approach the 2015 deadline for the Millennium Development Goals, the international
community is elaborating a new framework to promote sustainable development for all
beyond 2015, which will build on achievements to date and address new challenges arising
from an evolving and complex landscape. Three major trends are emerging: first, most of
the poor live in middle-income countries and many live in high-income countries. Second,
the Eurozone crisis and turmoil in MENA demonstrate that developed and developing
countries alike are confronted with the difficult task of generating growth and creating jobs.
Moreover, beyond the financing needs associated with these protracted crises, the impact
on a number of traditional donors reduces the volume of available official development
assistance (ODA). Third, trade, finance and other links among emerging market and
developing economies are growing. This shift offers opportunities for new, mutually
beneficial partnerships.
The ability to adequately finance a post-2015 development framework depends on many
factors. First, we need global development cooperation that attracts aid from diverse
sources, emphasizes domestic resource mobilization, and capitalizes on the potential of the
private sector. Second, the success of cooperation requires good polices (and the capacity to
implement them), and credible institutions to increase the impact of scarce resources and
leverage additional resources from domestic and foreign, public and private sources. The
relative significance of each source, and the associated leveraging challenges, willdiffer
between low-income countries and fragile and conflict-affected states, middle-income
countries withlimited market access, and middle-income countries with market access.

Current Scenario
Domestic resource mobilization: The ability to mobilize domestic revenues reduces aid
dependency and can raise country creditworthiness. Low-income countries still struggle to
increase domestic revenue mobilization in the face of high levels of capital flight and limited

capacity to collect revenues from multinationals, particularly those engaged in natural

resource extraction.
Inefficient public expenditures and investments further compound the problem. Progress is
needed in expanding tax coverage, strengthening accountability, and increasing expenditure
efficiency.
Emerging donors: A diverse group of countries has been gaining prominence in the aid
landscape, particularly upper middle-income countries. These countries include the BRICS
(Brazil, Russia, India, China and South Africa), which account for 25 percent of global gross
domestic product (GDP) and 40 percent of the worlds population, Saudi Arabia, South
Korea, and Turkey. They are ramping up their development engagements through a broad
range of channels and activities. Their increasing ODA is a relatively small part of a larger
trend in external financial flows to other developing economies. These new partners may
help meet development needs not addressed by traditional donors.
Private finance for development: Achieving development goals will require the mobilization
of resources from private sources, including FDI, bank loans, capital markets, and private
transfers (e.g., remittances). For most developing countries, FDI is the preferred private
financing modality given its potential to strengthen productivity and growth, and help
diversify the economy. Although many developing economies have enjoyed increased
access to international capital markets over the past decade, there is an increasing
mismatch between available financing and investment needs. This is partly due to fragile
market conditions in the wake of the global financial crisis, which constrain the availability
of the type of long-term finance needed to support productivity-enhancing investment.
Accessing long-term finance for infrastructure is critical and will require greater attention to
investment in project preparation and policies and instruments that can lower risk and
strengthen the confidence of investors over a long-term horizon.
Innovative sources of finance. Development partners are helping to develop new tools to
help generate financing for development. The paper discusses a number of these:
1. Pull mechanisms for development, which involve ex-post economic incentives for
innovation to solve a well-defined problem. By linking payments to the actual impact
of an innovation, they can lay the foundations for a self-sustaining, competitive
market for the relevant product.
2. A number of African countries have adopted the resources-for-infrastructure (RfI)
financing model to overcome limited capital market access and domestic capacity
constraints. Under RfI, oil or mineral extraction rights are exchanged for turnkey
infrastructure, complementing standard tax and royalty regimes. Diaspora resources
(via diaspora bonds and remittance- backed bonds) could help finance infrastructure
projects. The annual savings of developing country diasporasUS$400 billion by
some estimatesrepresent a hitherto untapped source of financing for
development.
3. Linking climate finance and development finance can enhance development impact
by allowing the fight against poverty to take climate effects into account and vice
versa. Comprehensive carbon pricing policies, the removal of inefficient fuel
subsidies, and cap-and-trade schemes are promising options to mobilize larger and
higher-return investments.

The role of the World Bank Group and regional development banks: The World Bank Group
and its regional counterparts can add value through a combination of technical expertise,
prudent risk management policies, application of clear standards to project design,
execution, and corporate governance, a long-term perspective, and cross-country
experience. Multilateral development banks (MDB) can bring financing partners into specific
deals, for example, in the form of syndications or through co-financing arrangements.
Generally, the MDBs stamp of approval and role as an honest broker in disputes can help
to reassure investors and contribute to a projects viability, which in turn reduces the cost of
engagement, including to private investors. MDBs can also contribute to extending
maturities of private flows to finance productive investments.

What Will It Take

Development Outcomes?

to

Achieve

A Global Development Cooperation Framework

The United Nations development agenda beyond 2015 calls for a renewed global
partnership to foster a number of transformative and mutually reinforcing actions that
apply to all countries, including: poverty eradication, tackling exclusion and inequality,
women and girls empowerment, the provision of quality education and lifelong learning,
better health, climate change mitigation and adaptation, managing environmental
challenges, inclusive and sustainable growth and decent employment, the end of hunger
and malnutrition, addressing demographic challenges, enhancing the positive contribution
of migrants, meeting the challenges of urbanization, peace building and effective
governance. Given concerns with the availability of financing from many of the traditional
providers of ODA, what is needed is an integrated discussion of development goals and the
associated financing framework. Will there be enough resources for safety nets,
infrastructure, health, and education? Are the resources available sufficient to address
current problems of food security, water scarcity, water pollution, land degradation, access
to energy? To what extent will climate adaptation increase the cost of achieving new goals
and maintaining progress on existing goals? The new framework for development
cooperation should also provide means to improve the mobilization and allocation of
resources for sustainable development.
In his report to G20 Leaders in 2011, Bill Gates addresses the mismatch between needs and
government and donor resources by arguing that all stakeholders governments, civil
society, and the private sectorneed to cooperate and take action to activate new, reliable
sources of financing (Box 1.1). A similar conclusion can be found in the report prepared by
the Secretariat of the Post-2015 High Level Panel, which highlights the pitfalls of trying to
assess financing at the recipient country level from a needs approach, without also
considering policy changes, institutional improvements, and other parts of the development
strategy. Instead, financing must be understood as one component of a strategy that
includes private sector efficiency and public sector productivity improvements.

Good Policies and Sound Institutions

Targeted, evidence-based policies and sound institutions help determine progress on each
of the MDGs. A decade of Global Monitoring Reports7 by the IMF and World Bank, provides
compelling evidence that with the right policy and institutional reforms, ODA can be used
more effectively to make progress towards MDGs.
The cost of achieving any development goal depends on the efficiency with which the
objective is pursued, taking into account the quality of underlying policies and practices.
For instance, the undersupply of infrastructure in developing economies has been estimated
at around US$1 trillion per year through 2020, with an additional US$200 to US$300 billion
per year to ensure that infrastructure investments are low emitting and climate resilient8
(Figure 1.1). But these costs can be reduced by making more efficient use of existing
infrastructure and improving project quality and management. The McKinsey Global
Institute and McKinseys infrastructure practice have outlined practical steps to boost
productivity in the infrastructure sector by as much as 60 percent, thereby lowering
spending by 40 percent for an annual saving of US$1 trillion. Over the next 18 years, this
would be the equivalent of paying US$30 trillion for US$48 trillion worth of infrastructure.
Similar lessons on cost efficiency emerge from other sectors. In human development, for
instance, recent World Bank research notes that there is considerable scope to improve
social protection outcomes without increasing the overall fiscal deficit. This can be achieved
by reallocating untargeted and inefficient energy subsidies to social safety net programs.
Box 1.2 provides another illustration, in the case of education, of how learning outcomes
can be improved with the right institutions without increasing spending.
Simply increasing public spending is unlikely to lead to better outcomes in countries
suffering from poor governance. Improved fiscal transparency, for example, can have a
positive impact on government budgets in several ways. Transparency can facilitate
taxpayer compliance and willingness to pay and contribute to a better investment climate. It
also has a significant and positive impact on FDI flows, sovereign spreads and credit ratings,
thereby having a multiplier effect on the volume of resources available for development.

Financing Global Public Goods

Global public goods (GPGs) are at the intersection of national development priorities and
global interests, where common opportunities and shared risks increase mutual
interdependence.
While the development community should work cooperatively to produce GPGs, it must
also identify how financing can be mobilized to ensure adequate supply of GPGs. Many
donor countries have increased the portion of their ODA dedicated to global public goods.
There have been recent discussions about a transition of ODA to global public
investments, particularly to address climate change and fight infectious diseases, and
recent innovations in financing GPGs (section 5). However, funding remains short of needs.
Under provision of GPGspreserving the environment, controlling communicable diseases,
enhancing developing country participation in the global trading system
disproportionately impacts the poor. They must be considered in national and regional
development strategies.
Infectious disease is an excellent example of a case where the social benefits of addressing
challenges of a global nature exceed their cost. Neglected vaccines (e.g. against malaria),
limited access to affordable essential medicines, overuse of antibiotics, the disincentives of
drug companies to develop new more resistant antibiotics, all threaten the global fight
against poverty. Innovative mechanisms can be introduced to finance purchases and expand
local production of medicines.
An open, transparent, and rules-based multilateral trading system is a GPG, and most
countries will benefit from liberalization. With supporting capacity building efforts,
increasing developing country access to markets for agricultural goods and other products
of importance and removing non-tariff measures with discriminatory restrictive impact have
significant developmental and poverty reduction potential, particularly for low-income
countries (LIC). In particular, full Duty-Free Quota Free (DFQF) access to the markets of G20
countries could increase national incomes in LICs on average by 0.5% of GDP. These income
gains could rise to 1% of GDP if a DFQF initiative were complemented by transparent and
simple rules of origin. A DFQF access initiative could lift three million people in least
developed countries (LDC) above the poverty line.
Open access to knowledge, technology and ideas from the rest of the world to be able to
adapt them to local conditions is another global public good. A critical aspect of success in
development strategies over the last few decades has been the ability for some countries to
develop knowledge to meet local needs and the use of new technology to produce and
interpret big data. Without relevant development data, no evidence based policy making
or managing for results can be undertaken. While the availability of data has improved in
many developing countries, there is still scope at the country level to build and improve
statistical capacity.

Mobilizing Domestic Resources

Developing countries need to take the lead in mobilizing the financing necessary for their
development. Earlier this year, the Post-2015 HLP Secretariat16 noted that: Domestic
revenues mobilization of emerging and developing economies amounted to US$7.7 trillion in
2012, having grown by 14 percent annually since 2000. That is to say there is over US$6
trillion more each year coming into developing country Treasuries compared with 2000.
These buoyant domestic revenues have also lowered aid dependency and raised country
creditworthiness for official and private non-concessional loans, thereby having a multiplier
effect on the volume of resources available for development. In 2010, for example, SubSaharan African countries collected nearly US$10 in own-source revenue for every dollar of
foreign assistance received.

Improving Taxation Capacity

Broadening the tax base, improving tax administration, and closing loopholes could make
a significant difference in lower-income countries, where tax revenues account for only
about 10 to 14 percent of GDP, one-third less than in middle-income countries and far
below the 2030 percent of GDP reached in high-income countries.

Low-income countries differ from their high-income counterparts in their formal tax
structures and tax collection capacity. LIC tax bases tend to be quite narrow, reflecting the
smaller share of the formal sector in employment and business activity. Large informal
economies and agricultural sectors are rarely taxed. LICs have the lowest tax-to-GDP ratio,
although there has been some improvement over the last two decades. For this group, the
average ratio of taxes to GDP increased from 10 percent in 1998 to 13.6 percent in 2009.
The share of taxes as a percentage of GDP is almost 6 percentage points higher and rising
for MICs. High-income countries have the highest tax-to-GDP ratio, collecting two to three
times more taxes as a share of GDP than LICs.

Harnessing Sustainable Streams of Natural Resource Revenue

Capacity constraints often prevent developing countries from effectively and efficiently
obtaining revenues from extractive industries. Investments in natural resources commonly
involve high sunk costs for a project that can last decades. Rents can be substantial and
represent a large share of the home countrys GDP and government revenue.23 Moreover,
governments are usually dealing with large multinational companies, with recourse to highly
qualified lawyers and the capacity to engage in transfer pricing and aggressive tax

planning.24 Tax and royalty-based regimes negotiated with mining companies, are
frequently perceived as unfair to the home country. Raising taxes and royalty rates is not
always easy, especially given that developing countries need to take into account
investment promotion objectives and often have limited capacity to negotiate the licensing
of extraction rights.
Natural resource-rich developing countries could improve their capacity to negotiate fair
contracts in extractive industries. To help developing countries retain more of their natural
resource rents, governments could pursue initiatives like the Extractive Industries
Transparency Initiative (EITI) that promote greater transparency in revenue flows and
contract disclosure. Governments will require support to: (i) build capacity for qualified
negotiation of the licensing of extraction rights, whether in-country or outsourced; (ii)
establish well-equipped large taxpayer offices, or separate tax units for the extractive
industries, offering conditions that are competitive in recruiting and retaining highly
specialized staff; (iii) deepen cooperation and information sharing with tax administrations
of resource-rich developing countries, in order to confront aggressive tax planning by
multinationals in the extractives sector; and (iv) ensure that relevant ministries have the
specialist capacity and laboratory equipment to undertake physical verification of ore
grades, quantity, and price.

Subsidy Reform
Subsidy reform is one of the main areas in which public resources can be redirected to
more effective uses. It is not only important for mobilizing domestic resources but also for
getting incentives right. While it is important to remove harmful subsidies, increasing
subsidies for activities with positive externalities might be the proper course of action. An
extensive body of research has demonstrated that food and fuel subsidies are often poorly
targeted and end up disproportionately benefiting the wealthy and middle class. The IEA has
noted, for example, that only an estimated eight percent of the fossil fuel subsidies
throughout the developingworld in 2010 went to the poorest 20 percent of the
population.26 Earlier analysis noted that the bottom 40 percent of the income distribution
received on average no more that 1520 percent of the total value of these subsidies.
A first step requires removing harmful subsidies, thereby freeing public resources that can
then be directed towards investments with higher social returns. Energy subsidies
particularly fossil fuel subsidies are costly, and these costs are quantifiable and can be
measured. According to the IMF, pre-tax subsidies for petroleum products, electricity,
natural gas, and coal reached US$480 billion in 2011 (0.7 percent of global GDP or 2 percent
of total government revenues). Total subsidies amounted to US$1.9 trillion (2.5 percent of
global GDP or 8 percent of total government revenues). Despite their negative
environmental impacts, in many countries subsidies artificially increase the incentives for
using fossil fuels. The main beneficiaries often have political power and lobbying capacity to
oppose reforms. Furthermore, the removal of subsidies needs to be complemented by
safety nets, new pricing solutions or compensatory transfer to avoid adverse impacts on the
poor.

Curbing Illicit Financial Flows

Illicit financial flows (IFFs) are outward cross-border capital flows of illegal origin. IFFs
encompass:
(i)
funds obtained through drug trafficking, smuggling, fraud and any other serious
crime;
(ii)
the proceeds from corruption, bribery and embezzlement; and
(iii)
tax evasion. The term can also refer to practices such as transfer pricing (or
mispricing), which falls in a gray area, but is not illegal.
Estimates of the magnitude of IFFs from developing countries vary. One widely cited
estimate places the flow from developing or transitional countries between US$539 and
US$778 billion annually.
According to Global Financial Integrity (GFI), a Washington-based NGO, IFFs from developing
countries in 2010 ranged from US$859 to US$1,138 billion. GFI maintains that the
developing world lost a staggering US$5.86 trillion in the decade from 20012010, although
such figures are disputed. According to GFI, Asia accounted for 61 percent of total illicit
flows from the developing world during this period, followed by the Western Hemisphere
(15 percent); the Middle East and North Africa (10 percent); developing Europe (7 percent);
and Sub-Saharan Africa (7 percent). Even if the actual funds were only a fraction of this
magnitude, the sums involved are huge. IFFs could be larger than official development
assistance and foreign direct investment combined.

Aid Effectiveness: An Ongoing Effort

Aid has become increasingly fragmented and earmarked, increasing its complexity,
volatility, and the administrative burden for aid recipients, potentially decreasing its
effectiveness.46 The average size of donor-funded transactions has declined from close to
US$3 million in 1997 to about US$1.3 million in 2009, while the number of donor activities
reached about 120,000 in 2009.47 Earmarked multilateral and bilateral ODA is estimated to
account for over 40 percent of total ODA. Earmarking can help raise financing for specific
issues that may be high priority for donors and rally public support for aid, but it is less
predictable than performance-driven aid, may reduce reform incentives, skew resources
towards specific items and away from other, more critical priorities, and undermine country
ownership by altering the priorities that countries place on specific programs.48 At the
same time, an estimated 70 percent of all ODA channelled through multilateral institutions
remains core, i.e. is not earmarked.49 According to several external assessments of
multilateral institutions, the effectiveness of core multilateral aid continues to improve,
including in areas such as value for money and a focus on results and development impact.
Relative to traditional donors, new actors operate according to a very different set of
motivations, interests, and experiences. As a result, their approach generally involves
mutually beneficial, integrated package combining ODA with trade, investment, and other
commercial deals.

In this context, improving aid effectiveness plays an important role in attracting new
sources of development finance. Global aid effectiveness principles and objectives have
been defined in the Paris Declaration (2005), the Accra Agenda for Action (2008), and the
Busan Outcome Document (2011), all sharing a focus on improving country ownership,
transparency, and results. Reflecting the growing share of non-ODA actors, the international
aid effectiveness architecture has evolved from a focus on donor harmonization and
alignment to a broader approach of inclusive development partnerships. The Global
Partnership for Effective Development Co-operation (GPEDC) created at the 4th High Level
Forum on Aid Effectiveness in Busan (2011) brings together multi- and bilateral donors,
emerging economies that are both recipients and providers of development cooperation,
recipient countries (including fragile and conflict affected states), the private sector, CSOs,
and parliamentarians.
Since 2005, several analyses of aid effectiveness at the global and institutional levels have
been conducted. At the global level, the Paris Declaration Monitoring Survey 20052010
assessed progress on 13 indicators against their 5-year target. While only one indicator met
its target at the global level (strengthen capacity by coordinated support), country
ownership (evidenced by the number of countries with sound national development
strategies and results-oriented monitoring frameworks) increased substantially. The survey
identified the need for further progress in using country systems, harmonizing donor
procedures, reducing aid fragmentation, and improving aid predictability. Building on the
Paris Declaration indicators, the GPEDC is developing a Monitoring Framework of the Global
Partnership for development effectiveness, including updated targets for 2015 on selected
indicators of the Paris Declaration survey and additional indicators for private sector and
civil society participation, gender equality, and transparency.
Significant progress has been achieved in aid transparency and accountability, notably
since the creation of the International Aid Transparency Initiative (IATI) in Accra in 2008.
Based on an open data standard, IATI aims to increase the transparency and accountability
of aid by publishing aid data from aid providers, aid users, and civil society on a timely basis.
To date, 116 organizations have published their aid information to the IATI registry.50
Ongoing work aims to strengthen links between IATI and partner countries aid information
management systems, publish detailed geographical information on aid projects (geomapping), and develop a common, open transparency standard51 in line with Busan
commitments.

Private Finance for Development

Achieving Post-2015 development goals will require the mobilization of resources from
private sources including FDI, bank loans, bond issuance, institutional investors and
private transfers (notably remittances, estimated to be approximately US$400 billion in
2012). The good news is that globally, there are ample savings, amounting to US$17 trillion,
and liquidity is at historical highs. The challenge will be to direct savings to support the
achievement of global development objectives.
FDI is a dominant private financing modality in most developing countries. It is vital for
private sector productivity and growth and can help to diversify the economy. By

comparison, official inflows, net of debt repayment, only accounted for 1 percent of
international capital inflows in 2012. Net FDI inflows to developing countries are projected
to rebound by 17 percent to US$697 billion in 2013 and reach close to US$800 billion in
201453 as global economic growth is anticipated to accelerate modestly.
Over the past decade, many developing economies have demonstrated an increasing
ability to access international capital markets. International long term debt flows to
developing countriesbonds and syndicated bank-lending with at least five years of
maturity increased four-fold from 2000 to 2012. However, the global financial crisis led to
a sharp contraction in long-term international debt flows, with a protracted retrenchment in
global banking lending, particularly affecting MICs (by 2009, private capital flows to MICs
were at about half their 2007 level). As a group, LICs have seen an increase in private capital
flows, with flows reaching their highest level, nearly 4.5 percent of aggregate GDP, in 2011,
despite a 17 percent cut in FDI inflows and a sharp contraction in bank lending, as financial
market volatility spread globally.

Sources of Funding
Emerging Sources
Given the scarcity of bank lending for infrastructure, the development of non-bank financing
for infrastructure is now emerging as the new imperative. International financial markets
present a largely untapped pool of capital to finance infrastructure; and institutional
investors have the potential to provide an additional source of long term finance.

Bond Financing and Local Currency Bond Markets

International bond flows to developing countries with maturity of at least five years have
increased steadily since 2009 as conditions for bond financing have become particularly
favourable for middle-income countries. Bond flows rebounded after the global financial
crisis, especially in Latin America and emerging Europe, more than offsetting the reduction
in bank lending. The surge in bond issuance was partly the result of policy-induced low
interest rates and quantitative easing in high-income countries, which prompted a search
for yield by global investors. It also arose from the recognition of the economic potential of
many developing countries with improved credit-quality, which induced many institutional
investors to buy securities issued by adequately rated emerging markets, and benefit from
long-term returns from infrastructure. The World Banks 2013 Global Development Horizon
Report (Figure 5.1) expects bond financing to grow rapidly as a source of development
finance for countries securing a credit rating at or above investment grade.

In emerging market and developing economies, local-currency bond markets (LCBMs)

present a potentially important vehicle for developing the domestic investor base and
mobilizing domestic savings to support public and private sector investment in productive
assets. The development of LCBMs can help promote a deeper and more efficient financial

sector, reducing transaction costs and facilitating risk management. LCBMs in these
countries have shown resilience in the midst of capital volatility and international market
instability and have been among the best performing asset classes over the last few years
(Figure 5.2). The viability of LCBMs for long-term investment depends critically on policy
credibility and commitment, including through the establishment of the right
macroeconomic, institutional, and regulatory preconditions.

Institutional Investors, including Sovereign Wealth Funds

With their growing assets under management and their ability to provide long-term finance,
institutional investors, such as pension funds, insurance companies, mutual funds, or
sovereign wealth funds have potential as pools of non-bank capital for emerging markets
infrastructure.
In OECD countries, institutional investors held over US$70 trillion in assets as of December
2011 (Figure 5.3). Many of these investors are moving towards socially and environmentally
responsible investment strategies. Also growing rapidly are Sovereign Wealth Funds (SWFs),
with assets under management at end 2011 exceeding US$5 trillion. Emerging markets are
home to some of the largest SWFs in the world.
Traditionally, institutional investors have been considered sources of long-term capital with
investment portfolios built around the two main asset classes, bonds and equities, and an
investment horizon tied to the often long-term nature of their liabilities. Investor exposure
to alternative assets has been growing, reflecting an appetite for diversification, a search for

yield, and the attraction of valuation methods for unlisted assets. Despite this, it is
estimated that less than 1 percent of institutional investors portfolios are allocated to
infrastructure investments.
Some of the explanations for this situation include: weaknesses in the enabling environment
and lack of bankable projects; the capacity of institutional investors, which often lack the
experience to analyse infrastructure investments; and a lack of suitable investment vehicles
structured to provide institutional investors with the risk-return profile they require.
Infrastructure investment in developing markets poses an additional set of challenges
from sovereign risk to regulatory issues. Moreover, the global economic downturn is likely
to have had a lasting impact on the fund management industry and the long-term asset
allocation strategies of institutional investors by encouraging more cautious investment
strategies and a greater focus on portfolio risk management in the coming years .

Diasporas
Global diaspora resources represent another key source of funding for development. There
are an estimated 215 million migrants in the world, and in 2012, they sent about US$529
billion in officially recorded remittances to their countries of origin. Of this, developing
countries received over US$401 billion in remittances, and the figure is projected to grow to
US$515 billion by 2015. Actual remittances are much higher, as many resources are
transferred through informal channels. These resource flows are more than three times
ODA, acting as a lifeline to the poor and boosting growth and development.

DELEGATES ARE REQUEST TO THOROUGHLY RESEARCH ON THIS AGENDA AND GO

THROUGH THE FOLLOWING DOCUMENTS:

http://www.worldbank.org/en/topic/environment
http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/ORGANIZATION/EXTSD
NETWORK/EXTUNITFESSD/0,,contentMDK:20639137~pagePK:64168427~piPK:64168
435~theSitePK:1633788,00.html
http://www.worldbank.org/en/topic/sustainabledevelopment/overview#3
http://www.worldbank.org/en/news/feature/2012/05/09/inclusive-green-growthpolicies-real-world-challenges
http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/ORGANIZATION/EXTSD
NETWORK/EXTUNITFESSD/0,,contentMDK:22766521~menuPK:5990985~pagePK:641
68445~piPK:64168309~theSitePK:1633788,00.html
http://en.wikipedia.org/wiki/Sustainable_development

QUESTIONS A RESOLUTION MUST ANSWER:

(i)
(ii)
(iii)
(iv)
(v)
(vi)

Who should be the ones funding the majority of the sustainable developments
post 2015?
Where and in which form the funding should take place?
How would The World Bank define sustainable development in accordance to
the various geographical and political conditions of a nation?
What should be the appropriate measures to ensure the security of the funds for
sustainable development only?
What would be the various domestic and international resources at stake?
What extent of a role would private bodies and NGOs play in funding for the
sustainable development of a nation?

AgendA 2: PeoPles PArticiPAtion

for accountable and
transparent public services
and access into public services
Introduction
As ambitious data and information disclosure initiatives are launched with aspirations of
creating transparency, participation, collaboration, and accountability, investigating and
assessing the impact of these initiatives is critical to assess if investments are being made in
the right set of tools to achieve the intended set of outcomes. Making information publicly
available through openness initiatives is the beginning, not the end of a results chain that
links openness to better governance and development outcomes, and requires looking at a
number of issues. Whether openness leads to accountable governance depends on the kind
of information that is released. Transparency initiatives could release a goldmine of
information in various formats, and of tremendous interest to academics, businesses, and
other communities, but if this is not information that enables scrutiny of the decisionmaking, budget allocation, expenditures, performance, contracting, or other such functions
of government it will have little bearing on improving accountability.

Citizens' Charters in India

The Citizens Charter (CC) is a written, voluntary declaration by service providers that
highlights the standards of service delivery that they must subscribe to, availability of choice
for consumers, complaints mechanisms, and other related information. A CC can be
regarded as a public agreement between citizens and service providers that clearly codifies
expectations and standards in the realm of service delivery.
A national CC program was first introduced in the United Kingdom by the conservative
government of John Major in 1991. The program was initiated in the wake of growing public

dissatisfaction with the provision of public services, a large but often non-responsive
bureaucracy, and the need to cut public expenditure (Government of UK, 1999).

Policy intervention
CCs were first introduced in India in 1994 when consumer rights activists drafted a charter
for health service providers at a meeting of the Central Consumer Protection Council in
Delhi. In 1996, Prime Minister Gujral introduced the CC program on a national level. In 1997,
a CC program was initiated on the state level as part of the Action Plan for Effective and
Responsive Government. The Department of Administrative Reforms and Public Grievances
(DARPG) was responsible for the implementation of the CC program. According to a
Handbook authored by DARPG, These charters were to include first, standards of services
as well as time limits that the public could reasonably expect for service delivery, avenues of
grievance redress, and a provision for independent scrutiny through the involvement of
citizens and consumer groups.
Following the UK model, the components that had to be included in a CC are the following:
1) Vision and mission statements; 2) Details of business transacted by the organization; 3)
Details of clients; 4) Details of services provided to each client group; 5) Details of grievance
redress mechanisms and how to access them; 6) Expectations from clients. Since 1997,
more than 850 CCs have been drafted by various agencies around the country. A special
web portal (http://goicharters.nic.in) has been created, listing out the names of 131 central
and 729 state government organizations that have adopted CCs, and providing information
and documents on CCs from across the country.

Outcomes and effects

Despite the promising premises of the CC policy, the effects of CCs in India have been mixed.
An evaluation conducted by DARPG in 2003 indicated that existing CCs were not designed
through a participatory consultative process, service providers were often unfamiliar with
the objectives and main features of the CC policy, and end-users were largely unaware of it
(Public Affairs Centre 2007, p. 3-4). In a formal letter, DARPG admitted that over the years,
while many public service delivery organizations have formulated Citizens Charters, there
was no corresponding improvement in the levels of citizens satisfaction and quality of
services being developed. (PAC 2007, p. 4). In 2007, a decade after the launch of the CC
program, the Indian Public Affairs Centre (PAC) conducted an extensive analysis of 554 CCs
and a nationwide survey of 1,200 citizens and 335 public officials, testing the effectiveness
of the CC policy across India and revealing some illuminating patterns (PAC 2007; Paul
2008).

Quality of information. The study showed that none of the analyzed CCs contains
the full information required by DARPG. The CCs generally include a mission
statement and an outline of the primary function of the relevant agency or
department, but many charters do not specify the procedures citizens have to follow
to apply for a service. Further, almost 50% of the charters do not indicate the basic

service standards and grievance redress mechanisms available to customers. Less

than 5% provide information about compensation for deficient services. Many
charters even lack basic contact details of service providers. Furthermore, charters
seem to be weak in places where they matter mostthe spread and quality of CCs
appear to be better in the more developed states, and CCs are less frequent in poor
states (PAC 2007).

Improvement of service delivery. PACs nationwide survey showed that government

agencies that adopted a CC by and large did not regard it as an opportunity to
improve the quality of their services. Many agencies that adopted a CC did not
display it and did not adjust their services to reflect the CCs contents. In fact, almost
50% of citizens who received services from agencies that adopted a CC (but did not
display it) grade the performance of the agency as average to poor. Further, the PAC
survey shows that dissatisfied citizens were not likely to file complaints, even if such
option was available to them.

Low awareness. One possible explanation for such poor performance can be the low
awareness of CC. Government agencies only rarely consulted lower-level officials or
citizens before drafting a charter and did not aim to assess the feasibility of its
implementation in various locations. Almost 75% of citizens who took part in the PAC
survey were unaware of the CCs policy. Only 7% of the surveyed citizens indicated
that they had seen and read a charter (but the vast majority of these citizens had
never been asked to provide feedback on the CC). Furthermore, the study revealed
that many officials were only vaguely aware of the concept of a CC and the majority
of them have never been trained in CC drafting or implementation. (Paul 2008).

While the general picture seems to be quite grim and the implementation of the CC policy
appears to be a failure, two factors stand out: publicity and the role of civil society.

Publicity.The PAC study indicated that the public display of a CC in the agencys
office did have a positive impact on service delivery. Citizens who were interviewed
in agencies that displayed a charter were more satisfied with the overall
performance of the agency and the behavior of its public officials, compared to
citizens interviewed in offices that did not display CCs. However, despite these
promising results, the causal link between the display of a CC and the quality of
services is not necessarily direct. It is possible that agencies that are better prepared
to deliver a service and confident about their performance, are also more likely to
display their CCs to the public.

Capable civil society. The effects of CCs were strikingly different when CSOs
informed and educated citizens about the contents and functions of these CCs. One
illustrative example comes from Tamil Nadu. The Catalyst Trust, an NGO working in
the field of good governance and citizenship led a network of other CSOs to raise
awareness of CCs among local citizens. The CSOs established 167 Citizen Centers
across Tamil Nadu, aiming to provide guidance and facilitate the monitoring of public
service providers in the region. As part of this, they compiled, displayed, and
distributed to local communities the charters of all the agencies and departments of
Tamil Nadu. This led to high levels of awareness of CCs in Tamil Nadu (64% of the
interviewed citizens were aware of CCs and 29% read them) (PAC 2007, p. 24, 34).

The survey, however, does not provide data on citizens satisfaction with service
provision in the state.

Public Expenditure Tracking System

(PETS)
Background
Policymakers, CSOs, and citizens in developing countries often possess limited information on actual
public spending at the service facility level or by program. The Public Expenditure Tracking Survey
(PETS) was designed to fill this gap. The PETS consists of randomized surveys that track the flow of
resources through the administrative system in order to determine how much of the originally
allocated resources reach each level. The difference between PETS and a conventional audit is the
use of statistics and averages. Rather than physically visiting schools to determine how much funds it
received, a PETS selects a statistically representative sample of schools in the country and relies on
findings from these schools for its analysis. PETS may be useful for locating and quantifying political
and bureaucratic capture, leakage of funds, and problems in the deployment of human and in-kind
resources such as staff, textbooks, and drugs.

PETS in Uganda
After the findings of the PETS survey became known, the Ugandan government conducted a high
level public information campaign. Additionally, the Ministries of Local Government and Finance
started to publish data on the monthly transfers of the capitation grants in national and local
language newspapers (this transparency provision was incorporated in the Local Government Act of
1997). In 1997, the Ministry of Education went a step further by requiring district headquarters and
schools to publicly post notices informing local communities when they receive funds from central
government (Hubbard 2007).
In 2002, a follow up PETS by the World Bank showed that there had been a dramatic improvement in
getting the capitation grant out to the schools. More than 80% of the funds transferred to the
schools from central government had now been received by the schools (Reinikka and Svensson
2003). Based on a statistical analysis of the variance among the sample schools, the researchers
concluded that the leakage reduced significantly more in schools that were closer to the nearest
newspaper vendor. Hence, they suggested that the general decrease of leakage in the system from
74% to less than 20% can be attributed to the information dissemination policy of the Ugandan
government (Reinikka and Svensson 2003).
Following these results, the PETS method garnered worldwide acclaim as a highly effective anticorruption mechanism. However, subsequent implementations of PETS in other countries did not

replicate Ugandan accomplishments. Furthermore, researchers began questioning the PETS

experience in Uganda itself and suggested alternative explanations to the evidence presented by
Reinikka and Svensson. For instance, Hubbard showed that a large number of systemic reforms were
implemented in Uganda between the first and the last PETS. These reforms contained measures that
significantly improved the transparency of public funds allocation to primary schools and
strengthened governmental and donors control over these expenditures (Hubbard 2007, Sundet
2008). The dramatic reduction of leakages documented by PETS in 2002 may therefore sign the
success of the public finance management reforms and not only the effectiveness of the information
dissemination policy.

PETS IN TANZANIA
Tanzania was one of the first countries after Uganda to apply the PETS methodology. Its first PETS
was conducted in 1999 and tracked a certain type of expenditures in the education and health
sector. The survey revealed that only 43% of the education funds were transferred to schools, and
only 12% of health funds made it to their intended destination (PWC 1999). A second Tanzanian
PETS was conducted in 2001 and largely confirmed the findings of the first survey-- less than 50% of
the allocated funds reached service delivery units (Sundet 2008). Although the results of both PETS
were shared with the Tanzanian government and discussed by policymakers, international donors
and civil society, the government was not willing to commit to the measures that were implemented
in Uganda (Sundet 2008).
A third PETS, conducted in 2004, was more ambitious than the first ones. It tracked the flow of the
Primary Education Development Project (PEDP) funds from the national level, through district
offices, and down to primary schools. The survey was based on a randomly selected sample of 210
schools and 21 districts (Sundet 2008). PEDP provided substantial funding for the building of
classrooms and prior governmental analyses indicated a minimal leakage in its disbursement. When
the PEDP PETS indicated significant leakages of 40%, the Tanzanian government questioned its
methodology and declined to recognize the results (Sundet 2008, REPOA 2004).

PETS in Malawi
A new system of free primary education, introduced by Malawi in 1994, did not translate into
improved education outcomes (IBP 2008). Corruption and leakages were often blamed for these
poor results, as the control of the Malawian government over funds allocation at the district level is
limited. In response, a coalition of over 60 civil society groups, the Civil Society Coalition for Quality
Basic Education (CSCQBE), decided to adopt the PETS methodology to monitor the expenditure of
these funds at district and school levels. The Coalition has conducted three PETSin 2002, 2005, and
2007. As part of the process, CSCQBE administered a series of standardized questionnaires to
teachers and education officials around the country, aiming to obtain information on students
(enrollment, test results, drop-out rates, etc.), teachers (qualifications, absenteeism, etc.), textbook
availability, condition of school facilities, and more (IBP 2008).

Recovery Transparency in the US

Background
Aiming to address the deepening economic recession, the new Obama Administration introduced in
February 2009 a stimulus bill titled the American Recovery and Reinvestment Act (Recovery Act). The
stated purposes of the act were to preserve and create jobs and promote economic recovery,
assist those mot impacted by the recession, provide investments needed to increase economic
efficiency by spurring technological advances in science and health, and to stabilize State and local
budgets

Policy intervention
According to Section 1512 of the Recovery Act, recipients of any Recovery funds are required to
submit quarterly reports on the progress of the funded project to a newly established, independent
Recovery Accountability and Transparency Board (Recovery Board). The reporting requirement
applied to any entity receiving recovery funds, including state governments. To fulfill the
transparency requirements of the Recovery Act, the Recovery Board disclosed all information
collected from recipient reports on a designated web-based platform Recovery.gov.
The transparency provisions of the Recovery Act aimed to achieve several objectives. First, the
online efforts associated with the Recovery Act were supposed to actively engage the public in the
oversight of the disbursed funds. According to this logic, millions of Citizen Inspectors General
who live in the neighbourhoods where Recovery dollars are being spent [would] join in the oversight
effort and hold the government accountable for every dollar spent by participating on the
Recovery.gov website and reporting instances of fraud, waste, and abuse (Recovery Accountability
and Transparency Board 2009, Orzag 2009). In order to pursue this goal, the format and content of
data on Recovery.gov prioritized geospatial mapping and data visualizations that invited people to
plug in their zip code and locate projects in their immediate area (Rojas 2012). To enable more
sophisticated and professional users to use the data, the Recovery Acts website also allowed
downloading machine-readable spread-sheets of data and summaries of expenditures in static (PDF)
document formats.

Outcomes and Effects

An in-depth analysis of the Recovery transparency policy conducted in 2012 (Rojas) demonstrates a
mixed degree of success in accomplishing its stated objectives. First, the policy managed to achieve a
remarkable and unprecedented degree of transparency in the expenditure of federal funds.
Recovery.gov was launched in September 2009, containing vast data about the allocation of
recovery funds: the amount of the reported award, its general purpose and precise location, number
of jobs created or retained by the award, and more (GAO 2010, p. 10-11). The website offers a wide
variety of custom search and visualization options, including the possibility to track the money to
the street level and see which organizations in a certain zip code area receive federal funds and for
what purpose, compare between recipients in different states, or examine agencies and recipients
statistics for jobs creation. By 2012, more than 250,000 primary and secondary recipients of funds
had submitted quarterly reports to the Recovery Board that reflect project spending, completion

status, and the amount of jobs created as a result of it. Further, states and many state agencies
voluntarily followed suit and created their own data portals. Journalists and CSOs also created
multiple online platforms facilitating public access to Recovery spending data.
As the Recovery Act transparency policy matured over three years of implementation, it sustained
an exceptional level of spending disclosure compliance and triggered an array of voluntary
transparency efforts. Nearly every recipient of federal funds reported their expenditures on a
quarterly basis starting in September 2009, as required (Rojas 2012). Indeed, recipients compliance
with spending disclosure was very high. In the quarter ending December 2011, 171,304 recipients
filed reports with the Recovery Board and 413 recipients failed to do so, mostly first-time offenders.
Only nine recipients failed to report to the Recovery Board over three or more reporting cycles
(Rojas 2012). Further, the quality of the reported data has been consistently improving since the
launch of the policy. Rates of fraud, waste, and abuse of Recovery Act funds appears to be relatively
low, with just 298 criminal convictions and $7.2 million in lost funds out of over $200 billion in
federal contracts, grants and loans received by the statesa 0.004% rate over two years (Rojas
2012).
The objective of providing public officials with tools to track the flow of federal funds to the
individual project level was also accomplished. State officials were principal users of Recovery Act
data as it allowed them to manage and track federal spending in near real time (Rojas 2012). Rojas
argues that state officials had strong incentives to track the rate of expenditures: Funds were
meant to be deployed quickly and effectively, and came with a use it or lose it conditionality. If the
data revealed potential barriers in certain pipelines of funds, managers could adjust and redeploy
funding for more rapid and impactful outcomes.

D-Brain in South Korea

Background
According to the Open Budget Index of 2010, South Korea is one of the top performers in budget
transparency in the Asia Pacific Region (OBI 2010). As noted by the International Budget Partnership,
South Koreas OBI 2010 score indicates that the government provides the public with significant
information on the central governments budget and financial activities during the course of the
budget year. While some deficiencies remain, the amount of information published is generally
sufficient for citizens to assess how their government is managing public funds.
The Korean road to these accomplishments has been far from easy. The democratic transition of
Korea in 1987 underscored the need for fiscal transparency, but progress was at first limited because
of a divided government and convoluted inter-party politics (You & Lee 2011). The first transparency
reforms were implemented in the beginning of the 1990s, when Kim Young-sam, a former
opposition leader and the first civilian president, assumed office and led several ambitious
transparency initiatives, including a law that mandated high-level public officials to disclose their
assets (in 1993) and the Information Disclosure Act (in 1996).

Policy Intervention
The primary objective of the D-Brain System was to enable an accurate analysis of the fiscal data and
information, providing policymakers with real time support for policy formulation. The system also
aimed to improve the credibility of the national budget by introducing double-entry book-keeping
and accrual accounting that include assets, debt, and cost information as well. It also tried to
integrate and connect fiscal information systems in line ministries, local governments, and public
enterprises. D-Brain was meant to enhance efficiency, transparency, and public participation in the
national fiscal management. It introduced the following features (Kuriyan et al. 2011):

Transparency. Integrated web-based system providing real time analysis on governments

fiscal activities including all documents related to the preparation, execution and reporting
of the budget, the budget guidelines that are distributed by the central budget agencies to
the ministries, information on account settlement and performance management.
Citizen participation. The website enables citizens to engage in budget monitoring from
preparation and execution of the budget spending to the auditing and account giving phases
of policy cycles. Citizen participation is enabled throughout the budgeting process through
Internet surveys, an online bulletin board, online bidding, a cyber forum, and d-budget
participation corner. Further, citizens can report on budget waste to the Budget Waste
Report Center of D-Brain. The reporting citizens can receive budget saving rewards up to
$30,000 in case their reports prove to be correct and lead to budget savings.

Outcomes and Effects

Comprehensive transparency policy. The main advantage of the D-Brain platform is that
fiscal information is now easily available for both public officials and the general public. This
information can then be used for monitoring progress on nationwide projects and making
improvements to them as the project unfolds. Also this provides the public detailed
information on what the governments expenditure are on different major nationwide
projects. (Kuriyan et al. (2011), p. 38).
Budget efficiency. Similarly to Recovery.gov, D-Brain appears to be particularly useful for
public officials. As Kuriyan et al. (2011) explain The dBrain acts as the middleman for the
central government, local government and public agency to exchange information about the
respective processes of fiscal activity and provide them the basis for strategic planning. (p.
38) The system makes treasury operations more efficient and help agencies to collect
payments easier and faster. (p. 38). The system seems to be beneficial for the political
system in generalit made it considerably easier for public representatives to review the
budget process and receive information on a variety of budget allocations. It also made it
the budget analysis conducted by the Korean Budget Authority more effective (Kuriyan et al.
2011, Chambers 2012).
Corruption. According to surveys conducted by the Korea Institute of Public administration,
the percentage of citizens who believed bribes were common when dealing with public
officials declined from 69 percent in 2000 to 57 percent in 2008. Further, the percentage of
citizens who reported that they paid a bribe to public officials during the last year fell from
25 percent in 2000 to 5 percent in 2008 (Jang 2008).
Citizen participation. Despite the high ICT capacity of Korea, and similarly to the situation
with Recovery.gov, it seems that citizen participation is the weakest part of the D-Brain

project. As noted by Kuriyan (2011), although the public participation rate has increased, it
has shown that they have the tendency to remain as a passive user only making electronic
payments and transfers.
Civil society participation. There are no documented accounts of how civil society used the
D-Brain system to hold government accountable for its activities or budget decisions. While
the literature that analyzes budgetary transparency in Korea does refer to several
accomplishments of CSOs that used governmental information to expose cases of
corruption, this information did not originate from the D-Brain system (Ramkunar 2008, You
& Lee 2011).

Check My School in the Philippines

Background
The Department of Education (DepEd) is one of the biggest bureaucracies and public service
providers in the Philippines. It employs over a half million teachers, administrative officials, and
school personnel, and oversees a significant procurement budget. After long-lasting struggles with
inefficiencies and leakages, the Philippine public education sector has been undergoing in the past
decade a major decentralization reform. As part of this, DepEd has been implementing since 2006
the Basic Education Sector Reform Agenda (BESRA), which aims to improve the performance of the
public education system by pursuing a decentralized, participatory, and community-centered
approach.
Two major objectives pursued by BESRA involve the delegation of decision-making authorities to the
school level and engagement of local communities in school management operations. First, BESRA
aims to empower school administrators by enabling them to independently identify education
priorities and take decisions related to curriculum design, teacher hiring, facilities maintenance, and
other management aspects.

Outcomes and effects

As part of the on-the-ground monitoring activities, ANSA-EAP mobilized 20 infomediaries and more
than 1,000 volunteers who validated the DepEd data in 243 schools across 14 regions in the
Philippines. Almost all validations identified some discrepancies between the official school data
provided by DepEd and the data collected by volunteers as part of the validations. Furthermore,
infomediaries identified a variety of shortages and issues of concerns as part of their validation
activities in schools. Typical problems included lack of classrooms, lack of textbooks, facilities that
required repair, and more (over 230 problems were identified in 84 schools). Many of these
problems did not result from a discrepancy between the official DepEd data and the data collected
by infomediaries, but these were well known problems that did not receive a satisfactory response

from DepEd officials or local divisions. ANSA-EAP then relied on its connections with DepEd officials
to draw their attention to the identified problems and request their solution.
The online aspects of CMS were more challenging. ANSA-EAP created a web-based platform that
consolidates all the available government data on the public education system in the Philippines in
one source. Overall, the data received from DepEd covered more than 44,000 public schools in the
Philippines. However, as DepEd did not possess GPS coordinates for all of these schools, the
interactive map for the first phase of the project covered 8,684 schoolsthe ones for which GPS
coordinates were known. The platform was supposed to include key indicators and measures of
performance, and present official DepEd information alongside with data validated by CMS in an
easily accessible and user-friendly way. Further, the CMS platform aimed to facilitate community
engagement around education issues, encouraging users to post feedback about different schools
and respond to emerging issues. However, during the first year of CMS operation, the website was
not fully functional. Infomediaries relied on Facebook to post news and photos from their
monitoring activities, and the general potential of ICT was not fulfilled.

Open Data in the United Kingdom

Objectives
The major objective of the UK open data policy is to release to the internet governmental datasets
under an open license. The working assumption is that private developers and programmers will
access the data and develop applications that analyze and visualize the datasets that they are
interested in. The major objectives of the open data policy are the following:

Accountability: The expectation is that modern, democratic government shares

information with the society it governs to demonstrate freedom from corruption and
appropriate use of public funds (HM Government 2011);
Choice: For the public sector, Transparency and Open Data are about helping people find
the right doctor for their needs, or the best teacher for their child, or helping a victim of
crime track whether justice is done. It is about giving people the data on local authority
spending and delivery that they need to challenge the value of a service provided.
Productivity: Public sector bodies are not easily able to benchmark their costs and the
quality of their services against their peers and may have falsely highor low
understandings of their performance (HM Government 2011). Open data is supposed to
facilitate such benchmarking.
Economic growth: Open Data across government and public services would allow a market
in comparative analytics, information presentation and service improvement to flourish (HM
Government 2011).

E-Procurement in Russia
Background
Transparency International classified Russia as the 143rd most-corrupt country out of the 182
countries surveyed in 2011 (Transparency International 2011). This was a slight improvement from
Russias 154th ranking the previous year. State procurement is one of the largest segments of the
Russian economy, and it is also highly prone to corruption. Estimates by Transparency International
place Russias annual losses to bribery at $300 billion, much of it related to corruption in large
transactions such as state tenders (Krylova 2011). The major industries where corruption prevails are
construction of building and roads, medicine (procurement of pharmaceuticals and medical
equipment) and scientific research services (Sirotkina 2011).

Websites. Initially three levels of official web portals were created: federal, regional,
municipal. These portals provided access to a variety of bidding documents and procedures.
In 2011, a single Russian-wide portal http://www.zakupki.gov.ru/was launched. The
creation of a single information source was supposed to reduce manipulations with tenders
and consolidate all the procurement data on one centralized platform. The information
available on the website includes all governmental tenders, contracts, and purchase
catalogues. It allows potential bidders to participate in government tenders and also enables
interested individuals to monitor the different stages of the procurement process.
Elimination of pre-qualification. The pre-qualification stage allows public officials to
determine the competence of a bidder to take part in the advertised tender. While this
practice is widespread in procurement systems around the world, in Russia it was a source of
corruption, as public officials were at times biased and could use their discretion to prevent
potential bidders from participating in tenders (Sirotkina 2011; Yakovlev, Yakobson &
Yudkevich 2009). Eliminating the pre-qualification stage the drafters of the law aimed to
avoid this situation, enabling more bidders to take part in the procurement process and
attempting to make it more competitive.
Introduction of auction procedures. Before the implementation of the law, the Russian
procurement system revolved around tenders. The introduction of auctions was supposed to
improve the process, as auctions allow a relatively easy comparison between the price
offered by a bidder and the market price of the relevant service.

Outcomes and effects

The new procurement law was supposed to increase competition and reduce the corruption of the
procurement process. However, this desired outcome has not been achieved. While it is impossible
to estimate the full financial effects of the reform, existing evidence suggests that competition over
governmental contracts is still low and corrupt practices prevail. Studies that measured the
effectiveness of the law showed that the average number of bidders remained low and there was
little difference between the initial and the final price of governmental procurement contracts
(Sirotkina 2011). Further, public officials and private actors developed strategies to game the system,
continuing to grant contracts to connected bidders, overprice tenders, and pay bribes (Krylova
2011).

In light of the failure of the official procurement reforms, transparency interventions by civil society
became particularly important. Alexey Navalny, a lawyer, anti-corruption activist, and a popular
blogger announced in December 2010 the launch of RosPil (http://rospil.info/)a central anticorruption initiatives in Russia (the name RosPil means a Russian sawin Russian slang, taking a
kickback is called to saw off a piece of the contract). RosPil takes advantage of the public
procurement law discussed above. It encourages citizens to monitor the tenders and contracts
posted on the official procurement website and report information on suspicious tenders and other
violations. The reports are then forwarded to a team of public interest lawyers who work with
Navalny and examine the details of the reported tenders. If needed, the lawyers turn to experts in
the field or solicit public help on the specific details of each case (for instance, Navalny asks the
readers of his blog to send him expert advice on a specific construction technique or the market
prices of a particular service). In cases where tenders appear to be illegal, RosPil lawyers take
advantage of the available legal mechanisms to file complaints and require the cancelation or
amendment of the tenders.

QUESTIONS A RESOLUTION MUST ANSWER:

1. What falls under the definition of accountable and public services?
2. How is transparency being violated for the said services?
3. How can World Bank mobilize funds so that information is kept secure and transparency of
deals is achieved?
4. How can the transparency be maintained?
5. Who would fund the required programmes and how would the funds reach the desired
destination untarnished?

DELEGATES ARE ADVISED TO TAKE REFERENCE FROM THE STUDY GUIDE FOR FURTHER RESEARCH.