Governance Reform: Bridging Monitoring & Action Framework Patterns

1. Governance Reform: Bridging Monitoring & Action Framework Patterns Reforms April 28th.2011

2. The National Governance System Framework Governance and corruption are not the same thing.

3. Governance Trajectories

4. Some Governance Indicators

5. 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. • Way Forward: Match the governance indicator with the purpose of measurement and monitoring; intensified investment in specific indicators

6. Governance patterns: East Asia

7. Patterns: Middle East and North Africa

8. Governance patterns: Africa

9. Patterns: East Europe and Central Asia

10. Patterns: Latin America

11. REFORMS • Strengthening Bureaucratic Quality • Strengthening Checks and Balances • Initiating Reform from the Front-line

12. Strategy – Strengthening Governance Institutions I Five Common Themes 1. Understand the politics: why are a country’s governance strengths and weaknesses what they are? (Kenya vs Sierra Leone; Bangladesh) 2. Focus narrowly, embrace momentum 3. Many opportunities for improving transparency – be proactive everywhere 4. Monitor progress, using specific indicators 5. Initiate dialogue on path to long-run sustainability

13. PFM operations perform satisfactorily regardless of governance starting point,but ACSR operations are successful in stronger settings

14. Trends in PFM can be monitoredNet Change in HIPC Tracking Indicators, 2001-2004 8 7 7 6 6 6 5 4 3 2 2 1 1 0 Decline in Decline in No change Improvement Improvement categories categories in 1-2 in or more categories categories

15. Improving PFM – A Platform Approach Cambodia – Sequence of Platforms Platform 4 Integration of accountability and review processes for both finance and performance management Enables more accountability for performance management Enables focus on what is done with money Platform 3 Improved linkage of priorities and service targets to budget planning and implementation Broad Activities Enables a basis for accountability Platform 2 Improved internal control and public access to key fiscal information to hold managers accountable • Full design of FMIS • Develop IT • Management • Strategy • Initial design of asset register Platform 1 A credible budget delivering a reliable and predictable resource to budget managers Broad Activities • Re-design budget cycle (e.g. MTEF) • Pilot program based budgeting & budget analysis • Further fiscal • Decentralization Broad Activities • Re-design • Budgeting • Classification system • Initial design of FMIS for core business processes • Strengthen external audit and define internal audit function Broad Activities • Integration of budget (recurrent & capital budgets) • Strengthen macro and revenue • Forecasting • Streamline spending processes

16. Strengthening administrative capability Some initial lessons • Ambitious administrative reforms work only in those few countries with strong political commitment and coherence • Latvia: EU accession  market competitive pay, meritocracy, comprehensive administrative restructuring • Tanzania: pay decompression; performance-based agency reforms • Even in these countries, implementation was difficult • In most countries, a more modest administrative reform agenda is more likely to get results: example of Albania • Pay reform and meritocracy targeted at top 1300 civil servants • Underpinned by independent appeals body • Beneficiaries successfully resisted political push-back

17. Building the Demand Side A constellation of checks and balances Broader International Community Civil Society Media Judiciary Legislature Subnational governments and autonomous oversight agencies Executive

18. Strengthening JusticeThree emerging lessons Incentives for effective judicial system: • Incentives of citizens and firms to use • Incentives of politicians to refrain from intervening • Incentives of judges to carry out their roles • Judicial reform requires enabling institutional environment • Reform needs to address political obstacles • Successful implementation remains elusive Independence without accountability results in poor performance • ECA: independent courts, w/o accountability, result: court corruption

19. Decentralization and Local Governance • Effective decentralization needs: • Clear allocation of responsibilities between central and local governments • Assignment of service provision responsibilities • Assignment of fiscal resources (including local tax base) • Central fiduciary and performance oversight over local • Capacity of local governments (and central counterparts • Downward accountability between local governments and citizens • => High risk of institutional limbo • 2. Community  Local government • Opportunity for cumulative gains?

20. Governance --the Many Meanings of ‘Demand-Side’ Reform

21. Strengthening checks & balances through transparency • Strengthening national-level transparency • Supply: Building statistical capacity - Marrakech action plan for statistics • Information availability: Freedom of Information Act; support for media • Participatory poverty reduction strategies (PRSPs) • Strengthening participation and transparency • Citizen Scorecards in Bangalore • Rajasthan India: leverage FOIA to compare official data with actual experiences of hospital patients and food rationing recipients • Philippines: citizen monitoring of textbook distribution • Tanzania: local community tracking of health and education spending • Transparency & competition in public procurement, e-procurement

22. Governance and Poverty Reduction: Orchestrated Imbalance A Governance Virtuous Spiral?

23. Governance from the Front-line I Getting the Priorities Right