A few weeks ago, The Economist published an article on economic governance that discussed the importance of public sector accounting. It recognized the importance of maintaining existing public-sector assets and investment in new ones. These assets, according to an IMF study, account for a significant portion of GDP. But, the article asserts, filling potholes and repairing bridges are not as politically appealing as flashy new infrastructure, and few economies engage in robust public-sector accounting that demonstrates the net worth of these assets.
Maybe if governments and citizens understood the value of their public assets, they’d be inclined to invest in their maintenance – avoiding waste and even catastrophic accidents when poor infrastructure fails?
Europe and Central Asia
I get stirred up by all types of governance data, so in honor of the International Day for Universal Access to Information, I though I’d highlight a few efforts to measure access to information. Information on access to information, if you will.
Editor's note: This blog post is part of a series for the 'Bureaucracy Lab', a World Bank initiative to better understand the world's public officials.
In many developing countries, this remains a remote aspiration. Corruption, lack of staff motivation and poor performance are both popular stereotypes and real-world facts. For many decades, international aid programmes have invested in civil service reform to change this reality. The track record of these reform programs has unfortunately been poor.
We also want to thank you for reading, contributing and engaging on what it will take to help governments build capable, efficient, open, inclusive and accountable institutions.
The idea that economic growth needs good governance and good governance needs economic growth takes us to a perennial chicken-and-egg debate: Which comes first in development—good governance OR economic growth? For decades, positions have been sharply divided between those who advocate “fix governance first” and others who say “stimulate growth first.”
As the world is increasingly interconnected, international taxation – traditionally more of a niche issue for tax lawyers – is receiving more and more attention in wider discussions on economic development: Double tax treaties, or agreements that two countries sign with one another to prevent multinational corporations or individuals from being taxed twice, have become more common, with more than 3,000 in effect today. And while they may contribute to investment, some have also become an instrument for aggressive tax planning.
The saying goes, ‘water is life’, and how so true! But water also drives economic and social development. Clean water supply is vital for health, hygiene and livelihood. Water is essential for agriculture and critical to energy production – and much, much more.
However, more than a billion people currently live in water-scarce regions, and as many as 3.5 billion could experience water scarcity by 2025. Water scarcity is a recognized cause of conflict and migration and is among the top global risks. To be sure, conflict and migration likewise contribute to scarcity of water!
Photo credit: Dmitry Karyshev
Armenia was faced with a slowing economy, sinking remittances, and inefficient tax administration. At the same time, ordinary taxpayers had to navigate arduous processes when paying taxes. The Armenian government was eager to reform its tax administration. Below is a transcript of what we learned when we spoke to World Bank experts working with Armenian tax officials to make things better.
Julia: I’m Julia Oliver.
Maximilian: I’m Maximilian Mareis.
Julia: And we have been talking with tax experts around the World Bank to find out about what they do.
Maximilian: So, let’s start with this project in Armenia. Why did we get involved?
Julia: Well, the global financial crisis hit Armenia and its three million people pretty hard. In 2012, when the World Bank began working with policymakers to improve the country’s tax administration, the country faced a pretty bleak picture. Foreign remittances were low, and the domestic economy was slowing. In addition the country had high levels of informal employment.
The invitation for new SAFE Trust Fund applications is now open until 7 March 2016
What is SAFE?
A recent World Bank report “The Small Entrepreneur in Fragile and Conflict-Affected Situations” looked into the motives and challenges of small entrepreneurs in FCS countries and made a number of interesting discoveries. They found that compared to entrepreneurs elsewhere, entrepreneurs in FCS have different characteristics and face significantly different challenges. FCS enterprises tend to be small, informal and to be engaged in sectors that are trade and service oriented.
Three other things they found are illustrated in the charts below. These findings came as quite a surprise to us.