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Governance

Employees and Government Ministry Win in Reform Project in Afghanistan

Shahenshah Sherzai's picture
Rumi Consultancy
Students studying at Dunya University, supported by the Public Financial Management Reform Program (PFMR). Rumi Consultancy/World Bank

Armed with only a high school certificate, Daoud Shah Noor, 42, started working at the Ministry of Finance in 2012. The sole supporter of his family, he was unable to attend university because of prohibitively high tuition prices. Just four years on, Daoud is studying for his Master’s degree at the Dunya University, where he had graduated with a Bachelor’s degree in Business Administration.
 
“Before university I was not professional in my work. Now I am doing the job more professionally and in a better way,” says Daoud, who comes from Parwan Province. Daoud is a beneficiary of the Public Financial Management Reform (PFMR), a project that aims to strengthen public financial management through effective procurement, treasury and audit structures, and high standards of financial monitoring, reporting, and control.

Integrated Financial and Procurement Audits for Bank Financed Projects - The China Experience

Jingrong He's picture
Supreme Audit Institutions (SAI) for Bank financed projects have carried out financial and procurement audits. In Poland, this initially started more than a decade ago and there have been several other examples over the past years in other countries.

By the end of FY16, China National Audit Office (CNAO), the SAI in China, had successfully completed its third year of integrated financial and procurement audits for 27 Bank financed projects and accounting for 28% of the total active portfolio of China. This is a big leap from only 3 projects in the first year of FY14.

Rome was not built in a day. CNAO has been the external auditor of all Bank-financed projects in China since 1984. It conducts project audits in accordance with the Government Auditing Standards of the P.R. China and the International Standards on Auditing. The Foreign Funds Application Audit Department and the Audit Service Center of CNAO, and the Provincial Audit Institutions conduct audits on Bank financed projects and issue the audit reports in their names. There are about 120-130 financial audit reports submitted to the Bank every year. CNAO's audit reports not only include the auditor's opinion on project financial statements, they also include opinions on procurement compliance as this is an important aspect of the review of the eligibility of expenditures. This procedure is in full compliance with the Audit Law of P. R. China, which requires auditing of authenticity, legality and beneficial results of the budgetary revenues and expenditures or financial revenues and expenditures of public funds. It was under this context that in FY 14, we started piloting the use of CNAO for integrated financial and procurement audits in some Bank-financed projects.

Tax treaties: Boost or bane for development?

Jim Brumby's picture
  Tax treaties are like a bathtub; a single leaky one is a drain on a country’s revenues.  Photo: Kris Schroeder 


Tax officials and experts grappled with the issue of tax treaties several weeks ago at the IMF-World Bank Annual Meetings. This arcane subject has now emerged as a new lightning rod in the debate on fairness in international taxation. As citizens demand that corporations pay their fair share of taxes and some governments struggle to raise enough revenues for basic services, tax treaties present difficult issues.

Beyond rationalisation of Centrally Sponsored Schemes

Suvojit Chattopadhyay's picture

In August this year, the Government of India approved the recommendations made by the Sub-Group of Chief Ministers on Rationalisation of Centrally Sponsored Schemes (CSS). The rationalisation plan would first prune the existing 66 CSSs to 28, and then further divide them into three categories – six ‘core of the core’ schemes, 20 core schemes, and two optional schemes. The ‘core of the core’ schemes include the pension schemes, MNREGA, and four umbrella schemes targeting “vulnerable sections” of the population. Further, the flexi-funds component of the CSSs would be increased to 25% for the state governments to programme. Another set of recommendations were made around the modalities of release of funds. For instance, the release of a tranche of funds would no longer be dependent on producing an Utilisation Certificate of the previous instalment; and instead, it would be based on the submission of the instalment preceding the last one.

This is another step in the process of improving the governance of CSS in India, with the specific rationalisation exercise being prompted by the ongoing fiscal reorganisation between the centre and state governments. Starting last year, transfers from the centre to state governments went up by approximately INR 1.8 lakh crores. This was a result of the 14th Finance Commission recommendations which increased the devolution of the centre’s tax receipts to state governments from the prevailing 32% up to 42%. This reduced the ability of the central government to continue funding CSSs at their previous levels, and at the same time, provided state governments a greater measure of flexibility in financing its own priority development schemes.

England’s warrior kings, extractive institutions, and tax policy

Theresa Osborne's picture

When the Plantagenet kings ruled England (1154-1485), their primary means of securing wealth, prestige, and power was through territorial conquest. Fighting endless wars in France and dispatching armies as far as Jerusalem, the crown often had to finance foreign adventures through taxation -- sometimes crushing taxation – of subjects.  The illegitimacy of such taxation only intensified the recurrent threat of domestic revolt.  And through their demands for more accountable and inclusive governance, the English nobility succeeded, albeit with much blood shed over a span of centuries, to establish institutions and public policies conducive to economic development.

Taking a tour of a ‘Competitive City’

Megha Mukim's picture

Do you want to take a walk through a competitive city? Since today, October 31, has been designated as World Cities Day by the United Nations, today is an especially good day to explore that idea. 

Have you ever noticed how mayors and city leaders experience life alongside their citizens? It forces them to be more focused on the local manifestations of their policy decisions. They connect with what their citizens see and experience on a day-to-day basis. Numbers are crucial, because policies need to be supported by evidence – but what if the numbers and experiences could be brought to life? What does a 5 percent annual GDP growth rate look like? For that matter, what does a “competitive city” look like?

Members of the Competitive Cities team at the World Bank Group traveled to Bucaramanga, Colombia to find out. Here, amid the city’s famously rugged topography – with no ports or railroads nearby, and almost 10 hours away from the nation’s capital, Bogota – economic development seemed to be a tough proposal. Bucaramanga, however, managed to reinvent itself and become a globally competitive city – with the fastest rates of GDP growth and job growth in Colombia, and one of the fastest growth rates in the Western Hemisphere. As part of the Competitive Cities for Jobs and Growth initiative, we had already looked at Bucaramanga’s success in numbers and had analyzed qualitatively how they managed to get things done. Now we wanted others to experience how it felt to walk through a secondary city that blossomed into a dynamic economic center.

Thanks to a donated helicopter, the use of hobbyist drone technology, a motorcycle and a hugely enthusiastic local chamber of commerce, the team captured images and videos of the places that were central to Bucaramanga’s growth story. Bucaramanga’s transformation began with the creation of a regional competitiveness commission, a public- private alliance spearheaded by the private sector. As you’ll see in the accompanying video, one single block within the city hosts the chamber, an industrial university, the enterprise center, the commerce association and important regional banks.



In Bucaramanga, Colombia, Erick Ramos Murillo (left) and Rómulo Cabeza (right) prepare to fly a 3-D camera rigged to a drone. 

Strengthening governance through the World Bank’s Fund for the 77 poorest countries

Deborah Wetzel's picture
Photo credit: Graham Crouch/World Bank

In my blog “The Governance Gap – can we bridge it?”, I stressed that strengthened institutions and improved governance are especially critical for the world’s most vulnerable countries in IDA, the World Bank’s Fund for the 77 poorest countries.

IDA is the single largest source of funds for basic social services for these governments and every three years, members representing IDA’s 173 donor and borrowing member countries meet to replenish its resources and refine its priorities.

Citizen Engagement in Kenya: From law to practice

Tiago Carneiro Peixoto's picture
Citizens mapping projects at ward level in Makueni County
Citizens mapping projects at ward level in Makueni County


The introduction of “citizen engagement” into law is an idea that is gaining popularity around the world.

New provisions in Kenya’s recent Constitution enshrine openness, accountability and public participation as guiding principles for public financial management. Yet, as citizen engagement practitioners know, translating participation laws into meaningful action on the ground is no simple task. Experience has shown that in the absence of commitment from leaders and citizens and without appropriate capacities and methodologies, public participation provisions may lead to simple “tick the box” exercises.
 
Thanks to the support from the Kenya Participatory Budgeting Initiative (KPBI)* and the commitment from West Pokot and Makueni** County leaders, participatory budgeting (PB) is being tested as a way to achieve more inclusive and effective citizen engagement processes while complying with national legal provisions. The initial results are quite encouraging.

The silent ‘change agents’ in government

Syed Akhtar Mahmood's picture

Sometimes, the drive comes from the senior echelons of government – a reform-minded government leader, an important minister or an agency head. At times, there is pressure from donors. Often, the two combine: The initial idea comes from a donor, which a powerful person in government then takes up as an agenda.

Many reforms happen in this top-down way. But, often, there are questions about their sustainability. Commitment to reforms may not be widespread. Once donor pressure wears off, or once the bold reformer at the top moves on (or loses interest or energy), reform initiatives dissipate. Sometimes, the reforms happen on paper, but implementation remains deficient. Top-down reform initiatives often fail to take on board the front-line officials. Implementation thus suffers, especially when the attention of the top-down driver shifts elsewhere.

The 2015 World Development Report, Mind, Society and Behavior, thus points to the need to understand the motivations and behavioral characteristics of different players, such as politicians and government bureaucrats, and how these affect their decisions and actions. The WDR argues that such an understanding helps design policy interventions and reforms that stand a chance of success even in seemingly intractable situations.

This brings us to a third way of reform, less common but potentially more powerful – one that is driven by the middle tiers of bureaucracy. Reforms initiated in the trenches enjoy, almost by definition, the commitment of those responsible for implementation. Reforms may also be better designed, since the officials know exactly what is feasible and where there are pitfalls. A single bottom-up reform may not be very bold.  But one reform may lead to another, and the cumulative impact may make a big difference.

Donor programs usually don’t regard mid-level officials as key drivers of reforms. It is often assumed that such officials will oppose reforms and they should thus be bypassed or, at best, co-opted in some fashion. Such assumptions lead to many lost opportunities. Mid-level officials can often be good initiators of reform if they are properly inspired and engaged. The attitudes and perceptions of this important tier of the bureaucracy have an important bearing on the formulation of policies and regulations, as well as on their implementation. These attitudes are shaped by an awareness of business-related issues, or a lack of it.

It’s possible to end poverty in South Asia

Annette Dixon's picture



October 17 is the international day to end poverty. There has been much progress toward this important milestone: the World Bank Group’s latest numbers show that since 1990 nearly 1.1 billion people have escaped extreme poverty. Between 2012 and 2013 alone, around 100 million people moved out of extreme poverty. That’s around a quarter of a million people every day. This is cause for optimism.
 
But extreme poverty and the wrenching circumstances that accompany it persist. Half the world's extreme poor now live in sub-Saharan Africa, and another third live in South Asia. Worldwide nearly 800 million people were still living on less than $1.90 a day in 2013, the latest year for which we have global numbers. Half of these are children. Most have nearly no education. Many of the world's poor are living in fragile and conflict afflicted countries. In a world in which so many have so much, it is unacceptable that so many have so little. 


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