Improving Governance in

Developing Countries

Presented to: Presented by:

Governance & Anticorruption Sanjay Pradhan
Core Course Director
Public Sector
Governance Board

Governance &
The World Bank Anticorruption Core
The World Bank Course, page 1
 Focus for Today: Outline


 Importance
Importance of
of Good
Good
Governance
Governance && Anticorruption
Anticorruption

 Governance:
Governance: Framework
Framework &
&
Measurement
Measurement

 Priority
Priority Areas
Areas for
for Improving
Improving
Governance
Governance

 Operational
Operational Strategy
Strategy on
on
Anticorruption
Anticorruption
Governance &
Anticorruption Core
The World Bank Course, page 2
 Governance – Good and Bad
Lessons from the last 50 years

 Some governments have helped deliver

substantial improvements in income, health
and education outcomes (East Asia)

 In other countries, governmental action has

resulted in wasted resources, weak
investment and growth, and entrenched
corruption

Governance &
Anticorruption Core
The World Bank Course, page 3
 Good Governance matters for
investment and growth
% Investment share in GDP Income per capita Growth Rate
20% 2%

1.5%

1%

0.5%
15%
0%

-0.5%

-1.0%
10% -1.5%
High Medium Low High Medium Low

Governance Quality
Governance Quality measured by perception of 4000 firms in 67 countries on: (i) protection of property rights; (ii) judicial
reliability; (iii) predictability of rules; (iv) control of corruption. World Development Report Survey 1997
Governance &
Anticorruption Core
The World Bank Course, page 4
 The direction of causality …
Growth causes governance to
improve ...
 Burkhart and Lewis-Beck (1994) found
that while higher per capita incomes
foster democracy, democracy in turn
does not foster higher incomes
 B. Friedman (2005) argues that higher
living standards encourage more open,
tolerant and democratic societies
… but the debate on causality continues …
The World Bank
… and better governance causes
growth
 Using measures of rule of law, bureaucratic
quality and corruption, Chong and Calderon
(2000) found significant causality from good
governance to growth and vice versa – i.e.
“good governance” both contributes to and
results from strong economic performance
 Other studies have dealt with the potential for
reverse causation by using exogenous
instruments for the governance indicators and
concluded that good governance has a
significant and strong causal impact on
economic performance …
Governance &
Anticorruption Core
Course, page 5
 Bangladesh
Governance – Growth Conundrum
 Moderate growth rates and high corruption coexist
 Need to unbundle governance – not all bad news
 State allowed civil society to step in and deliver key services
 Is Bangladesh’s governance ‘good enough’?
 Bangladesh needs to move to a higher growth path of 6-7% a year to achieve the
PRSP’s poverty reduction objectives and related MDGs
 Growth rates may not be sustainable – growth is driven largely by garment exports and
phase out of the MFA quota system puts this growth at risk
 Fiduciary and reputational risk to Bank significant
 Improving governance is key to unlocking other sources of growth
 According to the 2005 ICA, corruption is now the greatest obstacle to doing business,
overtaking power
 Bangladesh remains fairly isolated from the world economy and is unable to capitalize
on the growth dividend that globalization might bring. Trade openness is very low
(Bangladesh ranks 175 out of 182 countries), as is FDI (Bangladesh ranks 137 out of
141 countries). Attracting FDI would require significant improvements in the investment
climate
 Improving critical infrastructure, especially power and ports, requires solving
fundamental governance problems in each sector

Governance &
Anticorruption Core
The World Bank Course, page 6
 Focus for Today: Outline


 Importance
Importance of
of Good
Good
Governance
Governance && Anticorruption
Anticorruption

 Governance:
Governance: Framework
Framework

 Priority
Priority Areas
Areas for
for Improving
Improving
Governance
Governance

 Operational
Operational Strategy
Strategy on
on
Anticorruption
Anticorruption

Governance &
Anticorruption Core
The World Bank Course, page 7
Governance & Corruption – Not the same thing!

The manner in which the State

acquires and exercises its
Governance authority to provide public
goods and services

Using public office for

Corruption
private gain

Corruption is an outcome – a consequence of the failure of

accountability relationships in the governance system

Governance &
Anticorruption Core
The World Bank Course, page 8
Governance Systems: Supply and Demand

 Supply-side:
Supply-side Capacities and organizational
arrangements – leadership, skills, human resource
and financial management systems – embodied in
state institutions to deliver public goods and
services

 Demand-side:
Demand-side Institutions and accountability
arrangements – elections, political parties,
parliaments, judicial systems, free press, civil
society organizations, accountable local
governments – that enable citizens and firms to
hold state institutions to account

Governance &
Anticorruption Core
The World Bank Course, page 9
 Governance Systems:
Actors, Capacities and Accountability
Citizens/Firms

Political Actors & Institutions

• Political Parties
• Competition, transparency

Executive-Central Govt
Civil Society
Citizens/Firms

Check &

Citizens/Firms
& Private
Balance
Sector
Institutions Cross-cutting Control
• Civil Society
• Parliament Agencies (Finance, HR)
Watchdogs
• Judiciary
• Media
• Oversight
• Business
institutions
Associations
Service Delivery &
Regulatory Agencies

Subnational Govt &

Communities Outcomes:
Services,
Regulations,
Citizens/Firms
Corruption
Governance &
Anticorruption Core
The World Bank Course, page 10
 Governance Systems:
When Accountability Breaks Down
Citizens/Firms
State
Political Actors & Institutions Capture
• Political Parties
• Competition, transparency

Executive-Central Govt
Patrona Civil Society
Citizens/Firms

Check &

Citizens/Firms
Balance ge & & Private
Sector
nepotis • Civil
Institutions Cross-cutting Control
Agencies (Finance, HR) Society
• Parliament
• Judiciary m Watchdogs
• Media
• Oversight
• Business
institutions
Associations
administrat
Service Delivery &
ive Regulatory Agencies
corruption

Subnational Govt &

Communities Outcomes:
Services,
Regulations,
Citizens/Firms
Corruption
Governance &
Anticorruption Core
The World Bank Course, page 11
Governance Problems: Some Examples
 Grand Corruption: State Capture
 Leaders plundering state assets (Mobutu, Abacha)
 Powerful “oligarchs” buying state officials (CIS)
 Corrupt leaders colluding with corrupt investors: non-
competitive, non-transparent award of contracts (oil & gas)

 Nepotism and Patronage in Public Service

 Political pressure for award of contracts, appointments
 Politicized transfers (South Asia)

 Administrative (Petty) Corruption & Inefficiency:

 Bribes for licenses, permits, government services
 Diversion of funds for public programs
 Inefficient and ineffective service delivery

Governance &
Anticorruption Core
The World Bank Course, page 12
 Two Governance Patterns

 Good (enough) governance: Developmental

orientation of political leadership, functional check
& balances, system not highest performing but
mutually reinforcing and self-correcting

 Clientelist: Political leaders use authority to

maintain their power base or are captured by
powerful private interests. Leaders bypass check
and balance institutions and use bureaucracy for
patronage.

Governance &
Anticorruption Core
The World Bank Course, page 13
 Good Governance has many dimensions
Citizens/Firms

Political Accountability
• Political competition, broad-based political parties
• Transparency & regulation of party financing
• Disclosure of parliamentary votes

Checks & Balances Effective Public Civil Society & Media

• Independent, Sector Management • Freedom of press, FOI
effective judiciary • Ethical leadership: asset • Civil society watchdogs
• Legislative oversight declaration, conflict of • Report cards, client surveys

Citizens/Firms
(PACs, PECs) interest rules
Citizens/Firms

• Independent • Cross-cutting public Private Sector Interface

oversight institutions management systems: • Streamlined regulation
(SAI) meritocracy, public • Public-private dialogue
• Global initiatives: finance, procurement • Extractive Industry
UN, OECD • Service delivery and Transparency
regulatory agencies in • Corporate governance
Convention, anti- • Collective business
money laundering sectors associations

Decentralization and Local Participation

• Decentralization with accountability
• Community Driven Development (CDD)
• Oversight by parent-teacher associations & user groups
• Beneficiary participation in projects

Citizens/Firms Governance &

Anticorruption Core
The World Bank Course, page 14
 The Bank operations focus only on some
Citizens/Firms

Political Accountability
• Political competition, broad-based political parties
• Transparency & regulation of party financing
• Disclosure of parliamentary votes

Civil Society & Media

• Freedom of press
Checks & Balances Effective Public • Freedom of information
• Independent, Sector Management • Civil society watchdogs
effective judiciary • Ethical leadership: asset • Public hearings of draft
• Legislative oversight declaration, conflict of laws

Citizens/Firms
(PACs, PECs) interest rules • Report cards, client surveys
Citizens/Firms

• Independent • Cross-cutting public • Participatory country

oversight institutions management systems: diagnostic surveys
Private Sector Interface
(SAI) meritocracy, public • Streamlined regulation
• Global initiatives: finance, procurement • Public-private dialogue
UN, OECD • Service delivery and • Break-up of monopolies
Convention, anti- regulatory agencies in • Extractive Industry
money laundering sectors Transparency
• Corporate governance
• Collective business
associations

Local Participation & Community Empowerment

• Decentralization with accountability
• Community Driven Development (CDD)
• Oversight by parent-teacher associations & user groups
Primary focus • Beneficiary participation in projects
of WB
operations in
governance Citizens/Firms Governance &
Anticorruption Core
The World Bank Course, page 15
Operational Implication: Unpack Governance
 What are the specific governance problems of
concern?
 Corruption? If so, where is it concentrated? Health? Education? Financial
sector? Procurement?
 Poor delivery of public services? If so, which one?
 Weak credibility for private investment?

 What are the specific drivers of poor outcomes?

 Powerful interests purchasing state policy for private interest
 Kick-backs in public procurement
 Lack of citizen voice to influence service delivery
 Weak checks and balances to constrain arbitrary action

 What are the priorities for governance reform?

 Public regulation and financing of political parties
 Transparent, competitive procurement
 Strengthened legislative oversight, independent judiciary
 Meritocracy in public administration
Governance &
Anticorruption Core
The World Bank Course, page 16
 Focus for Today: Outline


 Importance
Importance of
of Good
Good
Governance
Governance && Anticorruption
Anticorruption

 Governance:
Governance: Measurement
Measurement

 Priority
Priority Areas
Areas for
for Improving
Improving
Governance
Governance

 Operational
Operational Strategy
Strategy on
on
Anticorruption
Anticorruption

Governance &
Anticorruption Core
The World Bank Course, page 17
Two Approaches to Measuring Governance

 Broad and Aggregated: Broad

measures to measure governance at more
aggregated levels. Help reveal systematic
patterns – and basis for monitoring trends
over time.
 Specific and Disaggregated: Specific
measures of quality of key governance
subsystems, including using “actionable
indicators” to benchmark and track reforms.

Governance &
Anticorruption Core
The World Bank Course, page 18
Control of Corruption: one Aggregate Indicator
(selected countries from 204 worldwide, for illustration, based on 2004 research
2.5 data)
Margins
Good of Error
Governance
Governance
Level

Poor Gov-
ernance
-2.5
EQUATORIAL GUINEA

UNITED KINGDOM
KOREA, NORTH

NETHERLANDS
KOREA, SOUTH
BANGLADESH
TURKMENISTAN

SOUTH AFRICA

NEW ZEALAND
UZBEKISTAN

GREECE
VENEZUELA

FRANCE

FINLAND
BOTSWANA

NORWAY
MAURITIUS
TAJIKISTAN

SLOVENIA

CHILE
RUSSIA

SPAIN
ZAMBIA

ITALY

Source for data: : 'Governance Matters IV: Governance Indicators for 1996-2004’, D. Kaufmann, A. Kraay and M. Mastruzzi,
(http://www.worldbank.org/wbi/governance/govdata/); Colors are assigned according to the following criteria: Dark Red, bottom 10th percentile rank; Light
Red between 10th and 25th ; Orange, between 25th and 50th ; Yellow, between 50th and 75th ; Light Green between 75th and 90th ; Dark Green above 90th.
Governance &
Anticorruption Core
The World Bank Course, page 19
 PEFA’s Performance
Measurement Framework
Budget
BudgetRealism:
Realism: Accountability
Accountabilityand
and
IsIsthe budget
the budget Transparency:
Transparency:
realistic,
realistic,and
and
implemented Are
Areeffective
effectiveexternal
implementedas as financial
external
intended
intendedininaa financialaccountability
accountability
predictable and
andtransparency
predictablemanner?
manner? Six PFM transparency
arrangements
arrangementsininplace?
place?
System
Comprehensive,
Comprehensive,
Policy-based,
Policy-based,budget:budget:
Aspects
Does
Doesthethebudget
budget Control:
capture Control:
captureall
allrelevant
relevant IsIseffective
fiscal
fiscaltransactions,
transactions,andand effectivecontrol
controland
and
isisthe stewardship
stewardshipexercised
theprocess,
process,giving
giving ininthe
exercised
regard
regardtotogovernment
government theuse
useofofpublic
public
policy? funds?
funds?
policy?

Comprehensive
ComprehensiveFiscal
Fiscal
oversight:
oversight: Information:
Information:
Are
Arethe
theaggregate
aggregatefiscal IsIsadequate
fiscal adequate fiscal,revenue
fiscal, revenueand
andexpenditure
expenditure
position
positionand
andrisks
risksare information
are information produced and disseminatedtotomeet
produced and disseminated meet
monitored
monitoredand
andmanaged?
managed? decision-making and management purposes?
decision-making and management purposes?

Governance &
Anticorruption Core
The World Bank Course, page 20
 The “Bribe Fee” List
Unofficial payments by firms in Ukraine
Enterprises
Type of License/Service/”Favor” Average fee required admitting need to pay
(1996) “unofficially”

Enterprise registration $176 66%

Each visit by fire/health inspector $42 81%
Tax inspector (each regular visit) $87 51%
Telephone line installation $894 78%
Lease in state space (square ft. per month) $7 66%
Export license/registration $123 61%
Import license/registration $278 71%
Border crossing (lump sum) $211 100%
Border crossing (percent of value) 3% 57%
Domestic currency loan from bank on 4% 81%
preferential terms (percent of value)
Hard currency loan on preferential 4% 85%
terms (percent of value)
Governance &
Anticorruption Core
The World Bank Course, page 21
 Citizen Report Card of Government Services:
Latvia

Post Office

State Educational Institutions

Office of Social Benefits

Polyclinic/Health Services
Agency of Immigration &
Citizenship
Prosecutor

Customs Service
Courts

Local Housing Authority

Police

0 10 20 30 40
Percent giving favorable rating Governance &
Anticorruption Core
The World Bank Course, page 22
 The Challenge of State Capture

Proportion of firms
affected by capture of …

30
Parliamentary Votes
Presidential Admin. Decrees 25

Civil Court Decrees 20

15

10

Hungary Estonia Russia Ukraine

Governance &
Anticorruption Core
The World Bank Course, page 23
 Focus for Today: Outline


 Importance
Importance of
of Good
Good
Governance
Governance && Anticorruption
Anticorruption

 Governance:
Governance: Framework
Framework &
&
Measurement
Measurement

 Priority
Priority Areas
Areas for
for Improving
Improving
Governance
Governance

 Operational
Operational Strategy
Strategy on
on
Anticorruption
Anticorruption
Governance &
Anticorruption Core
The World Bank Course, page 24
Priority Areas for Improving Governance
 Strengthening Public Management Systems
 Strengthening public finance management & accountability
 E-procurement for greater transparency and competition

 Improving front-line service provision

 Instituting citizen report cards and monitoring
 Strengthen community monitoring and oversight

 Strengthening Leadership & Ethics for good

governance

 Strengthening global checks and balances:

 Instituting transparency in extractive industries
 Strengthening global initiatives to curb transnational corruption
Governance &
Anticorruption Core
The World Bank Course, page 25
Strengthening PFM Systems a key priority

The new Important benefits from

international aid
architecture
using country's own
emphasizes the systems -- but need to
principle of mutual strengthen capacity and
accountability accountability of PFM

Scaling up of donor
assistance requires Increasing
sound PFM systems recognition that
and reduced "ringfencing"
corruption in partner projects will not work
countries
Governance &
Anticorruption Core
The World Bank Course, page 26
 Bank interventions to build capacity:
multiple targets and tools (AFR)
Budget realism Tanzania MTEF

Budget AAA support merging planning and budgeting in

Lesotho
Comprehensiveness
IFMIS in Sierra Leone, accounting training in
Information Africa

Control Internal control and audit support in HIPCs

Oversight by CSOs & Civil society monitoring of Chad Oil Fund,

Professional Accountancy Institutions in DRC,
Professional groups Mali, Guinea and Kenya

Parliamentary Support for Parliamentary oversight in Ghana,

Kenya and Zambia; Supreme Audit Institutions in
Oversight Cape Verde, Sierra Leone and Senegal

Governance &
Anticorruption Core
The World Bank Course, page 27
 ‘Demand-side’ interventions to
strengthen accountability in PFM
Civil Society Oversight; Strengthening Supreme
Transparent, transparent, competitive Audit Institutions
competitive e- procurement (Hungary)
procurement (Slovakia)
(LAC)
Strengthening Public
Accounts Committees
of Parliament
(Kenya, Ghana, Zambia -- Procurement
AFR)
oversight by
CSOs
(Philippines)

Strengthening Public
Accounts Committees of
Participatory Parliament
Budgeting,
Puerto Alegra (India)
(Brazil) Public Expenditure Tracking & Information Campaigns
(Cambodia, Cameroon, Ghana, Madagascar, Mozambique, Papua New
Guinea, Peru, Rwanda, Senegal, Tanzania, and Zambia and on-going in
Azerbaijan and Yemen)
Governance &
Anticorruption Core
The World Bank Course, page 28
Chile’s Internet-based Public Procurement:
Transparency and Competition

 All supplier companies register, indicating areas

of business (e.g., IT, construction, furniture)
 Public agencies submit tenders through internet
 Automatic e-mail to all companies in selected area
 Online information on name, position of official in-charge
 Online information on results: who participated,
proposals made, scores received, who won bid, historical
record of agency’s purchases and contracts

Governance &
Anticorruption Core
The World Bank Course, page 29
 Civil Society Monitoring for Improved
Service Provision: Bangalore
100 94 92 96
90 85
78 77
80 73 73 73
67
70
% satisfied

60
47
50 41 42
40 34 34 32 32
30 25
20 16 14
6 9
10 5 4
n/a 1 n/a
0
il ity
c i ty ply es al
s
l ic
e
ri ty es r
un ri c
up
n it
ho
s o
o t ho sp P o bu th
c
lec r s p o ut ic u
ity E at
e le h a
bl t a
C Te lic nd P u or
W b La p
Pu an
s
Tr

1994 Agencies
1999 2003

Source : Public Affairs Center, India Governance &

Anticorruption Core
The World Bank Course, page 30
 Transparency & Community Monitoring:
Primary Education in Uganda
US$ per
Student
3.5

3.0 Public info campaign

2.5

2.0

1.5

1.0

0.5

0.0
1990 1991 1993 1994 1995 1999
Intended Grant Amount Received by School (mean)
Governance &
Anticorruption Core
The World Bank Course, page 31
Media,Transparency, and Combating Corruption
“BIR Officials Amass Unexplained Wealth”
By Tess Bacalla , Philippine Center for Investigative Journalism
Owner: Regional Director in the Bureau of Internal Revenue; forced to resign;
currently facing corruption charges; other officials suspended, also facing charges
CAR MODEL BENEFICIAL OWNER REGISTERED OWNER
Nissan Patrol Edwin Abella Sulpicio S. Bulanon Jr.
BIR Reg'l Director, 1817 Jordan Plains Subd.,
Quezon City Quezon City (listed address of
Abella in his SALs)
Merrick Abella (son of Abella)
Suzuki Grand Ditto
24 Xavierville, Loyola Heights,
Vitara Q uezon City
Nissan Cefiro Ditto Elizabeth S. Buendia
152 Road 8,- asa,
Pag Quezon City
BMW Lucien E. Sayuno Limtra Dev. Corp.
BIR Reg'l Director, Zone 4, Dasmariñas, Cavite
Makati City
BMW Ditto Marie Rachel D.ses
Mene
c/o Metrocor and Holdings, G&F,
Makati City
Honda Accord Danilo A. Duncano Daniel Anthony P. Duncano
BIR Reg'l Director, 2618 JP Rizal, New Capital Estate,
Quezon City Quezon City
Mitsubishi L200 Corazon P. Pangcog Alberto P. Pangcog (husband)
Asst.Reg'l Director, B2 L23 Lagro Subd., Quezon City
Valenzuela City
Honda-VCR Ditto Alberto P. Pangcog
9 Ricardo St., Carmel 1 Subd.,
Quezon City
Honda-VCR Ditto Ditto
BMW FlordelizaVillegas
P. Charito P. Sico
Revenue District Of’cer 8 Ma.Elena St., Carmel 1 Subd.,
Cabanatuan City Quezon City

Governance &
Anticorruption Core
The World Bank Course, page 32
 Leadership & Ethics
 Beyond accountability systems, leadership and
ethics in public service shape standards of
governance and anticorruption
 Leaders set standards for integrity, catalyze
politically difficult change
 Way forward is to empower and develop critical
mass of reform-minded leaders committed to
integrity
 Innovative pilots in transformational leadership to
engender paradigm shift: Madagascar, Burundi,
Kenya
 Global Integrity Alliance: Peer support network of
public officials committed to ethics in public
service
Governance &
Anticorruption Core
The World Bank Course, page 33
 Strengthening Public Service Ethics
5 Cs to Counter Corruption

Connectedness Care & Compassion

Creating a sense of
belonging to society Creating a sense of
Compassion to care for the
more needy in society
Strengthen
Values & Ethics:
Counter
Corruption
Courage Cosmology

Overcoming insecurity & Broaden vision by seeing

incessant quest for life in the context of
material acquisitions the huge universe
Commitment to
Contribute

Creating a commitment to public

service – to give v/s take
Source: H.H. Sri Sri Ravishankar (Founder, IAHV) @ The International Anticorruption Conference, Korea Governance &
Anticorruption Core
The World Bank Course, page 34
 Recent global initiatives to curb
transnational corruption
 OECD Convention on Combating Bribery of Foreign
Public Officials (1997)
 UN Convention Against Corruption Treaty (2003) – 94
countries join
 Financial Action Task Force on Money Laundering
(FATF) (1989) -- 40 Recommendations (2003)
 Recovery of proceeds from corruption (Nigeria 2005)
 Publish What You Pay, Extractive Industries
Transparency Initiative
 World Bank blacklists corrupt firms
 Transparency International Principles for countering
bribery
 Governance Network of OECD DAC (GOVNET)
 Norway’s ‘Doers’ Network on Anticorruption (2004)
Governance &
Anticorruption Core
The World Bank Course, page 35
 Extractive Industries Transparency
Initiative: Key Principles
 Independent review of payments made to the
government by oil, gas and mining companies and
of revenues received by government from those
companies by a reputable third party (i.e. audit firm).
 Publication in a readily accessible form of payments
made by the companies and of revenues received by
government.
 Extension of all of the above to companies including
state owned enterprises.
 Active engagement of all stakeholders in the design,
monitoring, and implementation process.
 Commitment to a work plan and timelines for
implementation.
Governance &
Anticorruption Core
The World Bank Course, page 36
 Focus for Today: Outline


 Importance
Importance of
of Good
Good
Governance
Governance && Anticorruption
Anticorruption

 Governance:
Governance: Framework
Framework &
&
Measurement
Measurement

 Priority
Priority Areas
Areas for
for Improving
Improving
Governance
Governance

 Operational
Operational Strategy
Strategy on
on
Anticorruption
Anticorruption
Governance &
Anticorruption Core
The World Bank Course, page 37
 Corruption pose three significant risks

Development
Development
Effectiveness Risk
Effectiveness Risk

That poor governance-

corruption will
undermine the impact of
development efforts in
general and in donor-
supported projects

Reputational Risk
Reputational Risk
Fiduciary Risk
Fiduciary Risk

That large amounts of

That donor
aid in countries with
resources will not
corrupt leaders will
be used for the
tarnish donors’
purposes intended
reputation

Governance &
Anticorruption Core
The World Bank Course, page 38
 Challenges in Identifying High-Risk
Countries
1 Afghanistan 21 Kyrgyz Rep. Country Country 2005
2 Angola 22 Lao, PDR Rank Source: TI Corruption CPI
3 Azerbaijan 23 Lebanon Perceptions Index (CPI) 2005 Score
4 Bangladesh 24 Liberia 117 Afghanistan, Bolivia, Ecuador 2.5
5 Belarus 25 Libya Guatemala, Guyana, Libya
6 Cambodia 26 Myanmar Nepal, Philippines, Uganda
7 Central African. Rep. 27 Nigeria 126 Albania, Niger, Russia, Sierra 2.4
Leone
8 Chad 28 Paraguay
9 Comoros 29 Sierra Leone 130 Burundi, Cambodia, Congo 2.3
(Republic), Georgia, Kyrgyzstan,
10 Congo, Dem. Rep. 30 Somalia Papua New Guinea
11 Cote D'Ivoire 31 Sudan 137 Azerbaijan, Cameroon, Ethiopia, 2.2
12 Djibouti 32 Swaziland Indonesia, Iraq, Liberia, Uzbekistan
13 Equatorial Guinea 33 Tajikistan 144 Congo (Democratic Republic), 2.1
14 Gambia, The 34 Togo Kenya, Pakistan, Paraguay,
Somalia, Sudan, Tajikistan
15 Guinea 35 Turkmenistan
16 Guinea-Bissau 36 Uzbekistan 151 Angola 2.0
17 Haiti 37 Venezuela 152 Cote d’Ivoire, Equatorial Guinea, 1.9
Nigeria
18 Iraq 38 Yemen, Rep.
19 Kazakhstan 39 Zimbabwe 155 Haiti, Myanmar, Turkmenistan 1.8
20 Korea, North (Countries in blue are inactive
158 Bangladesh, Chad 1.7
WB borrowers)

Notes: Data on left: Countries listed in alphabetical order using 2004 data. These countries scored in the bottom quartile on the main corruption question in the World Bank’s 2004
CPIA which covered 135 countries AND scored in the bottom quartile on the 5 questions on broader governance issues in the 2004 CPIA OR scored in the bottom quartile on the 2004
Control of Corruption component of the WBI/DEC Kaufmann-Kraay Aggregate Governance Indicator. Countries not included in the 2004 CPIA but included in the WBI/DEC index are
here if they fell in the bottom quartile of that index (Afghanistan, Iraq, North Korea, Liberia, Libya, Myanmar, and Somalia). This list includes inactive borrowers and ineligible countries.
Inactive countries are defined as those with no lending/grants in SAP for FY04-06.
Governance &
Anticorruption Core
The World Bank Course, page 39
 Anti-Corruption Strategy

World Bank
Anticorruption as
key filter in design Support international
of country efforts to reduce
assistance corruption
strategies

Prevent fraud and Help countries that

corruption in request support in
donor-financed their efforts to
projects reduce corruption

Governance &
Anticorruption Core
The World Bank Course, page 40
 Addressing Corruption in CAS’s

Systematic diagnosis of the nature & drivers of corruption

Aid amount linked to level of corruption
Actions to address the most significant development risks
posed by corruption:
Reducing corruption in key sources of growth, service delivery
Actions to mitigate reputational risk from grand corruption:
Transparency in major procurement deals, asset declaration,
Actions to mitigate fiduciary risk:
Enhanced fiduciary safeguards in projects, PFM assessment for
using budget support
Political economy assessments to identify feasible actions
Coordinated donor action for complementarities and collective
impact
Governance &
Anticorruption Core
The World Bank Course, page 41
 Major programs launched…
…with some evidence of success
Russia
Latvia (customs/treasury)
Ukraine
Albania (inspections) Kyrgyz Republic
(tax admin)
(public admin.) (governance reform)

Jordan
(civil society)

Cambodia
Ghana (PE (PE; forestry)
Guatemala accountability) Philippines
(procurement)
(diagnostic
to action Gabon Indonesia
program) (water/electricity)
(local
governance)
Bangladesh
Colombia Uganda
Pakistan (NGOs in
(diagnostics (education) social sectors)
(devolution)
& civil society) Tanzania India – Andra Pradesh
(PSR) Ethiopia (power; e-gov); Karnataka
(decentralization) (right to info)
Governance &
Anticorruption Core
The World Bank Course, page 42
 Lessons learned:
Deeper challenges in high-risk countries

Strong
Strong on
on PFM
PFM Good
Good at
at technocratic
technocratic Emphasis
Emphasis on
on core
core public
public
diagnostics
diagnostics solutions
solutions and
and design
design management reforms
management reforms

These
These appear
appear to
to be
be working
working when
when the
the
underlying environment is conducive:
underlying environment is conducive:

Committed
Committedleadership
leadership

 Coalition forreform
Coalition for reform

Capacity
Capacity

Deeper underlying challenges

State
Statecapture
captureand
andcorrupt
corruptleadership
leadershipininclientelistic
clientelisticstates
states
Powerful
Powerfulvested
vestedinterests
interestsand
andpolitical
politicalobstacles
obstacles
Weak
Weak‘demand’
‘demand’pressures
pressuresforforreform
reform––limited
limitedvoice,
voice,media
mediafreedoms,
freedoms,civil
civilrights,
rights,etc.
etc.
Political
Politicaldrivers
driversof
ofcorruption
corruption(e.g.,
(e.g.,lack
lackofofpolitical
politicalcompetition,
competition,party
partyfinancing)
financing)

Governance &
Anticorruption Core
The World Bank Course, page 43
 Reducing corruption in high-risk countries:
Priorities for action in the next stage
Better understanding and management of
political economy of reforms

Develop operational strategies to engage with

corrupt leadership in clientelist, captured states

Tackle political drivers of governance challenges

in sectors (e.g., power, ports, EI)

Tackling political corruption (e.g. party finance,

electoral corruption, etc. ) with partners

Partnerships and new instruments to support

demand-side initiatives: working with civil
society, media, parliamentarians
Governance &
Anticorruption Core
The World Bank Course, page 44
Q&A
The World Bank
Governance &
Anticorruption Core
Course, page 45