Drilling Down Through Selected Governance Diagnostic Tools

1. Drilling Down Through Selected Governance Diagnostic Tools Francesca Recanatini Sr. Economist & Colum Garrity, Public Sector Specialist Public Sector Governance The World Bank Presented at the “Controlling Corruption and Improving Governance for Thailand” Sept. 9, 2008 - The Ellipse Room

2. Which empirical tools and approaches are already available? How can we select among them? How can such assessments be used for our operational work? Objective of this session Which governance tools are more operationally relevant for our work?

3. Governance is the door to anticorruption Governance The manner in which the state acquires and exercises its authority to provide public goods & services Use of public office for private gain Corruption • Corruptionis an outcome– a consequence of weak or bad governance • Governance reform helps combat corruption by addressing its underlying causes

4. BEEPS IGR Public Official surveys PER and PETS QSDS Score Cards Investment Climate Surveys EC Audits CFAA CPAR GAC Case Studies HIPC Exp. Tracking ROSC Life In Transition Survey (ECA region) Existing WB Empirical Tools

5. Existing Non Bank Tools (Sample) • TI Perceptions Index • UNDP GAC • Freedom House Press Freedom Indicators • MCC ratings • Afrobarometer Surveys • Global Risk Service • Business Enterprise Environment Survey • Latinobarometro Surveys • Media Sustainability Index • Business Risk Service • Transition Report • Global E-Governance • Global Competitiveness • Global Integrity Index • Human Rights Database • Open Budget Initiative • Reporters w/o Borders • Public Affairs Center’s Score Cards

6. 1. What is the purpose of the assessment? Research and analysis Awareness raising Policy and Action planning Capacity building Monitoring Key starting points

7. 2. What is the focus of the assessment? Governance as a whole Corruption Performance of a specific agency/sector Quality of a specific public service delivered Key starting points

8. PER HIPC E.T. ROSC CPAR EC Audits Public Official Surveys IGR & GAC & Governance Cross-Country Ind. CFAA QSDS SCORE CARDS PETs BEEPS & INVEST. CLIMATE Linking the Tools to State Institutions

9. Linking Governance Tools to Accountability Politicians/ Policymakers PETs Delegation of Implementation Delegation/ Voice Internal Accountability Political Accountability Citizens Public Servants client power/ social accountability public goods/ services GAC; BEEPS; PETs Scorecards Doing Business

10. CAS Operations & Capacity building Monitoring Linking Governance Tools to Accountability Political Governance Diagnostics; GAC Diagnostics, LITS Actionable indicators: PFM indicators (including PEFA, CPAR and CPAA); scorecards; Doing Business; GACs; BEEPS Specialized technical reports: BEEPS; PETs; IGRs; GSDS; ICAs; PERs: GACs

11. Four examples: Public Expenditure Tracking Surveys BEEPS Governance and Anti-Corruption Diagnostic Surveys Human Resource Management Tools Governance tools for operational work

12. Public Expenditure Tracking Surveys (PETS) Goal: Assess fiscal leakages given significant share of intended resources do not reach the frontline

13. “Business Environment and Enterprise Performance Survey” (BEEPS) Goal: Analyze how corruption, regulatory burden, and public sector factors affect the business environment • Is corruption in Eastern Europe and the former Soviet Union getting better or worse? • What explains the changes? • What motivates reform? • Are there lessons for other regions?

14. “Business Environment and Enterprise Performance Survey” (BEEPS) • Joint initiative with EBRD • 20,000 firms in 3 rounds (1999, 2002, 2005) • 26 transition countries • 6 European comparators in ‘05: Ireland, Germany, Greece, Portugal, Spain, Turkey (+ Korea and Vietnam) • Focus on corruption in enterprise-state interactions

15. BEEPS Results … and not all sectors saw improvement.

16. A demand-driven process to improve governance and build local capacity Key features: Three surveys: households, firms, and public officials Questions focus both on experienceandperceptions Questions are tested and adapted to local realities Rigorous technical requirements in implementation Local institutionimplements, with guidance from international experts Governance and A-C diagnostic surveys Goal: Greater local capacity, baseline governance data, & action plan for policy reform

17. Unbundle corruption – administrative, state capture, bidding, theft of public resources, purchase of licenses Identify weak and strong institutions Assess the costs of corruption on different stakeholders Identify key determinants of good governance Input to develop concrete policy recommendations Governance and A-C diagnostic surveys The power of diagnostic data and key dimensions for analysis:

18. Country Diagnostic Results Extent of corruption, (Selected Countries ‘03-’05)

19. Country Diagnostic Results Corruption penalizes especially the poorest citizens(% of monthly income paid for bribes as reported by households who sought a public service, 2000-2005)

20. Country Diagnostic Results Managers and bribes to obtain public services, Guatemala 2004 Note: Thin lines represent margins of error (95% confidence intervals) for each value. They show the range where the true (population) proportion would lie with probability 0.95 if we had drawn a random sample from this population. Figures are calculated for those managers who contacted the agency btwn July ‘03 and July ‘04. Selected services.

21. Country Diagnostic Results Corruption imposes barriers to households to access basic services,Sierra Leone 2003 Sierra Leone Roads Transport Authority

22. Practice of Purchasing Jobs(as reported by public officials, Zambia 2003) Country Diagnostic Results % of public officials reporting purchase of jobs is a very common practice among...

23. Public funds are mismanaged by agency(as reported by Public Officials, Sierra Leone, 2003) Country Diagnostic Results % of Public Officials that said irregularities/(misappropriations) are frequent

24. Governance and corruption indicators by province, Sierra Leone, 2003

25. Government Employment, as % of population 9 Early 1990s 8 7 3.4 6 5 5.1 Percentage of population 4 1.6 2.5 3 1.1 1 2 0.9 Source: World Bank Policy Research Working Paper No 1806 0.8 0.7 0.8 0.7 0.3 1 1.8 1.4 1.2 1 0.9 0.9 0 Africa Asia ECA LAC MENA OECD Central Government Local Government Teaching and Health

26. Central Government Wages & Salaries Early 1990s Source: World Bank Policy Research Working Paper No 1806

27. Attract and retain required staff Fiscally sustainable wage bill Depoliticized, meritocratic HRM practices Ethical behavior Performance-focusing HRM practices Effective working relationships with other cadres Human Resource Management Six key objectives

28. Attract and retain required staff Remuneration policies and practices, including pension policies and practices Non-remuneration policies and practices Policies and practices for attracting and retaining staff in unattractive locations Fiscally sustainable wage bill Establishment control policies and practices Wage bill control policies and practices Design and Implementation Features: Rules

29. Depoliticized, meritocratic HRM practices Recruitment and selection policies and practices (entry vs. non-entry level) Competition Criteria Screening procedures Decision steps (long-listing, short-listing, final selection) Equal opportunity policies and practices (if applicable) Disciplinary procedures and practices Redress mechanism Ethical behavior Conflict of interest requirements Code of ethics Asset declaration requirements Design and Implementation Features: Rules (cont.)

30. Merit Based Civil Service Management Source: The World Bank, Gary Reid (2007)

31. Albania: Meritocratic CS Management Source: The World Bank, Gary Reid (2007)

32. Performance-focusing HRM practices Performance accountability of organizational units Personnel performance appraisal policies and practices Promotion policies and practices Competition Criteria Checks Performance-related pay practices Mobility options for certain types of positions Design and Implementation Features: Rules (cont.)

33. Effective working relationships with other cadres Policies and practices aimed at achieving clear differentiation in roles, responsibilities, authority and accountabilities Policies and practices aimed at ensuring buy-in to those differentiations Design and Implementation Features: Rules (cont.)

34. Discussion