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A wealth of opportunities: Public real estate management as a tool for good governance

Eguiar Lizundia's picture

Also available in Spanish

Public works in Sixth Avenue, zona 1, besides the National Palace, Guatemala City, Guatemala. Photo: Maria Fleischmann / World Bank

How much are the government buildings, lands and other publicly-owned real estate of your country worth?  According to recent publications, a lot. A 2013 IMF study estimated that non-financial assets are worth an average of 67 percent of the GDP of a selection of 32 countries.

More recently, a book by Dag Detter and Stefan Fölster underscored the incredible potential of improving public wealth management. According to their calculations, a one percent increase in returns to public assets worldwide (including real estate) would generate gains equal to roughly one percent of global GDP!  In the United States, a one percent increase in yields from federal assets would be equivalent to the revenue raised from a four percent tax increase. But why are governments sitting on so much unused wealth?  And what can they do to make better use of what they have?

Seeking to reap the fruits of smarter public real estate management, representatives from twenty countries from around the world met in Mexico last September. Participants discussed how to turn the management of public real estate assets into a tool for good governance, including strategies to optimize the use of government property and generate savings in maintenance. The conference was organized by The Workplace Network (TWN), an international public real estate management network, with participation of the World Bank and the Inter-American Development Bank.

How a professor started a campaign to fight everyday corruption in India

Alice Lloyd's picture
Also available in Spanish,  French and Arabic
Photo credit: 5th Pillar

An expatriate Indian physics professor, when traveling back home to India, found himself harassed by endless extortion demands. As a way to fight corruption by shaming the officials who ask for bribes, the professor created a fake currency bill: the zero-rupee note.

The notes are identical to Indian banknotes, but carry the slogan, "Eliminate corruption at all levels," and the pledge, "I promise to neither accept nor give bribe".

Vijay Anand, president of the non-governmental organization 5th Pillar, thought the idea could work on a larger scale. Initially, the NGO printed 25,000 zero-rupee notes and distributed them to students in the southern state of Tamil Nadu. Since 2007, the NGO has distributed more than one million bills in five languages, covering 600-plus institutions. Volunteers hand them out near places where officials often solicit bribes, such as railway stations and government hospitals. 

How is the conditional cash transfers program changing the politics of service delivery in Philippines?

Motoky Hayakawa's picture
Photo: Kenneth Pornillos / World Bank

Vote buying has shaped much of Philippine politics throughout history. For many politicians, distributing private goods and cultivating patronage to individual supporters is one of the most effective electoral strategies.

While the line between public and private is traditionally blurry, people who are used to this relationship with those who hold positions in government tend to measure politicians’ performance in terms of how much they provide private goods as opposed to broad public goods.
But though it may have been prevalent, vote buying has been a serious constraint in the country. Research has shown that practices such as vote buying and political dynasties undermine public service delivery and poverty reduction. How can these practices, which are so deeply embedded in Filipinos’ political way of life, begin to change?

Government could cheaply encourage citizens to save water by doing this

Laura De Castro Zoratto's picture
 Photo: Curt Carnemark / World Bank

Crises in access to water are making headlines around the world. Among difficult policy pathways to respond, convincing people to change their behavior and reduce their consumption can be one of the hardest.

This post gives us a promising picture from Belén, a small town in Costa Rica.  Of Belén’s 21,633 inhabitants, 99.3% have access to water service, but shortages are anticipated by 2030. Our recent study demonstrated that the government could cheaply encourage citizens to save water by enabling them to compare their consumption with that of their peers. 

This is a timely lesson, as the United Nations estimates that more than two-thirds of the world’s population will live in water-stressed regions by 2025.  Demographic and economic pressures make water management an increasingly urgent policy priority even in water rich areas like Latin America, home to nearly 31% of the world's freshwater resources. 

While Costa Rica is relatively well-endowed with water resources, current demand virtually matches production capacity  Risks of water deficits and existing shortages are heightened by overdevelopment of areas with limited water supply. To help address these challenges, we partnered with local authorities in the small municipality of Belén to conduct a randomized control trial, capturing an innovative approach that can help conserve water across the country, and in similar contexts around the world.

The project built on insights from the growing field of behavioral economics, which challenges the underlying, intentionally simplified assumption of standard models: that people make rational decisions based on a self-interested cost-benefit analysis. Behavioral economics borrows from other sciences to consider the full scope of social and psychological influences on human decision-making.

More voices mean smarter cities

Stephen Davenport's picture
Urban cityscape.  Photo: © Curt Carnemark / World Bank

With the ink barely dry on the Sustainable Development Goals, naturally the just-completed Open Government Partnership annual summit focused on how greater openness can accelerate progress toward the goals.
The open government agenda is most closely linked to the ambitious Goal 16 on Peace, Justice and Strong Institutions, which among other targets includes the objective of ensuring “responsive, inclusive, participatory and representative decision-making at all levels.” Though progress in this area is maddeningly difficult to quantify, evidence increasingly shows that participation, the next transparency frontier, matters to development outcomes. Making the target explicit, it is hoped, will galvanize efforts in the right direction.
There are many issues one could propose to tackle with citizen engagement strategies, but to narrow the topic of discussion, let’s consider just one: enabling smart growth in the world’s exploding cities and megacities.  Estimates suggest that by 2035 most of the world’s extreme poor will live in urban areas.

A conference to improve public finance management in Francophone Africa

Samia Msadek's picture

Also available in: French

Photo © Dominic Chavez/World Bank.

This week, officials from finance ministries and leaders of the accounting profession from across Francophone Africa will gather in Dakar, Senegal from Oct 28 to 30 to chart a path forward in their countries’ development. They will focus on an area that is often ignored, but is vital to national success and prosperity: public financial management. They will focus on financial reporting, which is also known as “the way governments keep track of your money.”

This topic is important to you, citizens of the world, of the African continent. How governments manage their taxes, their borrowing, their spending, and the ways they account for these forms of transactions – income, borrowing and expenditure – are essential to economic growth, to poverty-reduction, and to ensuring that the region’s poorest can improve their lives.

In many parts of Francophone Africa, accounting practices have a lot of room to improve. In particular, financial reporting and auditing need reforms, according to ongoing research by the World Bank and others. Policy-makers do not always have accurate information about the money available to provide vital and quality public services, such as school-teachers or the construction of health clinics or roads.

Governance and sovereign risk in resource rich emerging markets

Michael Jarvis's picture
Brazil: Resource Rich Emerging Market - World Bank photo collection

Does governance matter?

Yes. Intuitively to many development practitioners, the link between governance and growth is established in the literature. But, what about hard-nosed financial investors? Is there a link between governance and financial returns? Initial cutting-edge research suggests that there is a link. And investors are increasingly paying attention to governance. 

According to a study conducted by Global Evolution, an asset manager that specializes in emerging and frontier market sovereign investments, shows that governance may be a significant driver of sovereign bond returns. According to Ole Hagen Jørgensen, Research Director of Global Evolution, “improvements in a country’s Environmental, Social, and Governance (ESG) scores – and particularly the “G” of governance – significantly correlate to pricing of risk, credit ratings and return generation of sovereign bond funds in emerging and frontier markets.”

​For governments, this can mean cheaper to access to credit, helping create fiscal space.

Doing development differently: what does it mean in the roads sector?

David Booth's picture

There is no sign that the revival of interest in adaptive and entrepreneurial approaches to development work is going tail off soon.

That’s why the demand is growing for indications of how the broad principles, as summarised in the Doing Development Differently Manifesto, apply to the various sectors where interested practitioners are found.
Fred Golooba-Mutebi and I have just published an ODI working paper that begins to fill that gap for one particular economic infrastructure sector, road construction and maintenance. The country is Uganda. The purpose of the study was to revisit a 2009 paper on the political economy of reform in the sector, which was followed by the launching of a DFID-funded programme called CrossRoads.

What does it take to be a good citizen?

Alice Lloyd's picture

Recently I was asked what does it take to be a good citizen? 

As I was coming up with my list, I realized that the basic rules of being a good citizen were taught to me at a young age – in kindergarten, actually.  Here’s my partial list:
  • Share everything.
  • Play fair.
  • Don't hit people.
  • Put things back where you found them.

STEPing ahead with procurement reform

Robert Hunja's picture

As part of the Bank’s ongoing effort to adapt to the changing needs of client countries, the Bank is modernizing its procurement framework. This will help us deliver stronger project results while maintaining the integrity and high standards of our procurement framework.

The two key elements of this transformation in Bank procurement involve the Procurement Policy Reform, to take effect in 2016, and STEP, the Bank’s new electronic procurement planning and tracking platform.
On July 21, 2015, the World Bank’s Board of Executive Directors approved the new Procurement Framework, which will go into full implementation during 2016. This new framework allows the Bank to better and more effectively meet the varying needs of clients by ensuring greater flexibility and choice of methods. Alongside the new framework, an electronic platform, Systematic Tracking of Exchanges in Procurement, branded as STEP, is being rolled out and will be implemented worldwide in the coming months.

This system jointly developed by Operations Risk Management (OPSOR) within Operations Policy and Country Services (OPCS), the Global Governance Practice (GGP), and Information Technology Services (ITS) departments, is a cornerstone of the World Bank Group’s procurement reform efforts and goes hand-in-hand with policy and procedural changes.