Slide 1Slide 1

Corruption Challenges in Post-Conflict Countries: The Role of Diagnostic Surveys

Presented to:Building Integrity ConferenceMonterey, February 24, 2011

Presented by:Francesca RecanatiniSenior EconomistPREM Public Sector GovernanceWorld Bank

Slide 3Slide 3

A ‘Live’ Test:‘Culture’, Information and Incentives

You are approaching your car in the empty and unattended garage late at night

You see an envelope on the floor, and you pick it up

It contains 20 bills of US $100 each If no possibility that anyone would

know: No cameras, no monitoring, no reporting

What would you do with such envelope full of cash?

Source: Dani Kaufmann, World Bank Institute,, February 2006

Slide 4Slide 4

50% Undecided

33% Report and Return Funds

17% Keep

If no possibility that anyone would know: You are alone, there is no monitoring, cameras, or possibility of

being reported

Option Finder Results: Various AudiencesSource: Dani Kaufmann, World Bank Institute, February 2006

Slide 5Slide 5

If 30% probability that information is shared (e.g. 30% that camera recording info which may be reviewed)

74% Report and Return Funds

22% Undecided

4% Keep

Source: Dani Kaufmann, World Bank Institute, February 2006

Slide 8Slide 8

The role of governance assessments

Will and PoliticalLeadership for

Institutional ReformsOn governance

Strategy and Action Plan

Governance assessment:- Identification of severe obstacles- Vulnerability of each institution- Identification of priorities

Empirical Tools and Data Capacity building and

coalition building

Slide 9Slide 9

Governance diagnostic surveys - Approach A participatory process to identify

governance challenges and build local capacity

Key features: Three surveys: households, firms and public

officials Questions focused on experience, adapted to

local realities and tested in the field Survey instruments and results validated through

focus groups Rigorous technical implementation Local institution implements

Slide 10Slide 10

The power of diagnostic data and key dimensions for analysis:

Unbundle corruption – administrative, state capture, bidding, theft of public resources, purchase of licenses

Identify weak and strong institutions Assess the costs of corruption on different

stakeholders Identify key determinants of good governance Input to develop concrete policy

recommendations

Governance and A-C diagnostic surveys

Slide 11Slide 11

0% 15% 30% 45% 60% 75% 90%

% of public officialsreporting frequentpublic funds mis-

management

% of public officialsreporting frequent

purchase of positionsin their institutions

% citizens reportingbribes used frequently

to obtain publicservices

Sierra Leone(2003) Guatemala(2004) Zambia(2003)Paraguay(2005) Mozambique(2004) Madagascar(2005)

Country Diagnostic ResultsExtent of corruption, (Selected Countries ‘03-’05)

Slide 12Slide 12

Corruption imposes barriers to households to access basic services, Sierra Leone 2003

Cost of Corruption:discouraged users by service

0% 5% 10% 15% 20% 25%

Municipal and District Councils

Public education services

Public health services

Sierra Leone Roads TransportAuthority (RTA)

Sierra Leone Housing Corporation(SALHOC)

Proportion of head of households reporting that they decide to not conduct procedures with these institutions because they couldn't pay the unofficial costs

Sierra Leone Housing Corporation

0% 10% 20% 30%high incomemiddle incomelow income

0% 10% 20% 30%

Sierra Leone Roads Transport Authority

Slide 15Slide 15

Mechanisms to participate to the policy process

0

10

20

30

40

50

60

Association/NGO Direct tie topublic officials

Do not participate

Southern Northern Eastern Western

% of households reporting to use the following channel to participatein the policy process (Sierra Leone, 2003)

Slide 16Slide 16

Bribes to win contracts with Government, (as reported by public officials, 1999-2005)

0% 10% 20% 30% 40% 50% 60% 70% 80%

Colombia(2001)

Guatemala(2004)

Honduras(2001)

Paraguay(2005)

Sierra Leone(2003)

Zambia(2003)

Mozambique(2004)

% of public officials reporting that the practice is frequent

Executive Local Governments

Slide 17Slide 17

0 10 20 30 40 50 60 70 80 90

Min. of DefenceMin. of Development

Min. of InformationNat. Commissions

OthersPara-statals

Min. of FinanceMin. of Local Govt.

Min. of Social WelfareMin. of Education

Min. of JusticeS.L Police

Min. of AgricultureMin. of Health

% of Public Officials that said irregularities/(misappropriations) are frequent

Public funds are mismanaged by agency(as reported by Public Officials, Sierra Leone, 2003)

Slide 18Slide 18

Agency-level Indicators Using responses from public officials Public officials are employees of each

agency Public official’s responses are re-scale

(from 0 to 100) and then aggregated by agency using factor analysis technique

0 always meaning the lowest level of quality of governance, corruption, access or service performance

South North East West SIERRA Prov. Prov. Prov. Area LEONE

Overall corruption 22 32 35 33 32Corruption in budget 35 43 48 39 40Corruption in public contracts 18 35 29 33 30Corruption in personnel 39 44 55 53 49           

Accessibility for poor 85 74 87 74 78Audit Mechanisms 55 59 66 58 58Enforcement of rules 70 67 80 73 71Politicization 21 34 22 34 32Quality of rules 62 62 70 61 63Resources 54 51 47 55 52Transparency 51 55 53 51 55Citizen voice 70 59 65 66 66Meritocracy 66 65 70 69 68

Governance and corruption indicators by province

Slide 24Slide 24

Lessons learnt How do we balance global (ranking)

measurement tools with national assessments?Two sides of the same coins, but with different objectives. Important that the two approaches complement each other

Who should be involved in measuring?It depends on the country reality. Our experience: the country as a whole. But donors, INGOs can play a very important role (Sierra Leone, Mozambique, Haiti). NSOs should also be involved to promote sustainability (Peru, Paraguay)

Slide 25Slide 25

Lessons learnt, cont. What are the advantages and disadvantages of

the approach used?Pros: Greater local capacity, consensus and ownership that can ensure sustainability of reform process; south-south knowledge dissemination (Costa Rica, Zambia, Mozambique, Haiti)Cons: Time consuming and costly; challenging to coordinate many different actors, especially international ones; unforeseen political changes

To what extent have measurement tools helped shape public sector reforms?Only when paired with political will, donor coordination and medium term vision

Slide 28Slide 28

THANK YOU!

Q & A

Slide 29Slide 29

Extra slides

Slide 30Slide 30

Peru and Colombia: extent of "State Capture" by elites (as reported by public officials, 2001)

30 50 70 90

Central Bank decisions

Regulatory Agencies

High Officials (influencing presidentialdecrees/decisions)

Judiciary (influencing major courtdecisions)

Parliamentarians (to influence laws)

ColombiaPeru Confidential

% public officials report bribes to agency influence business climate

Capture by Vested Interests of:

Slide 31Slide 31

Peru: Sources of Undue Private Influence on the State

10

40

70

100

DrugConglomerates

EconomicGroups

FDI/TransnationalCorporations

OrganizedCrime

ProfessnlAssociations

Labor Unions

% re

porti

ng a

gent

is h

ighl

y in

fluen

tial

Firms Public officials

Confidential

Based on governance diagnostic surveys of public officials and enterprises

Responses by:

Slide 32Slide 32

Sector Level Diagnostic Surveys: Key questions (e.g. transport)

Institutional structure of the sectors under study How does transport work in Mauritania? What needs to happen at the

implementation level? Possible vulnerabilities

Internal to the sector: transporters, officials and regulations. External to the sector: linked to banking sector? International issues?

Mechanisms of poor governance Is it difficult to get a trucking license? Are bribes required to cross

borders with freight? Do civil servants have necessary capacity? Are rules clear?

Costs of poor governance What price do transporters and customers pay to ‘facilitate’ antiquated or

inadequate processes? What is the mark up on contracts due to fraud? How many roads are narrower than they should be because of corruption?

Who are the major players and what are their policy needs? Potential entry points for reform? Who plays a role in the reform

process? Who can be a potential deal breaker? How can we understand the political landscape to ensure policy outcomes are politically viable?

Slide 33Slide 33

Methodological Approach

Sector LevelGovernance Assessment

Tools & Info

Desk Study: history,

sector structure, current context

In-Depth Interviews

3 Surveys(Experience Based)

Audit & Project Data Cross-Sector Team

(PREM, WBI, SDV,PDS, Procurement)Country Ownership

Political Economy Assessment

Team Capacity Needs

Transparent Process

Local PartnershipGov’t + Civil Society

Donor Partnership w/Active Donors

Partnershipw/ Bank Country Team

Broad PeerReview

Process Needs

Outcomes:

1. Governance Baseline

2. Agency Specific Indicators3. Public Dissemination &

Participatory Policy Process

Iterative process: 8-12 months

Slide 34Slide 34

Innovative features Sector-specific focus:

Apply methodology and solutions to country and sector realities Mixed methods:

Focus groups & In-depth Interviews Surveys (households, businesses & civil servants) Desk study Project cost data

Active participation of civil society and government to contribute to policy making process.

Close collaboration with donors’ colleagues. Active links to on-going sector projects

WB transport and port projects EU transport ministry aid project