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Public Sector and Governance

After a sudden summer cloudburst of controversy, welcome clarity on ‘neoliberalism’ and its excesses

Christopher Colford's picture

Hot off the presses, this month’s edition of the journal “Finance and Development” has been generating both heat and light – and is helping propel a welcome reconsideration of some central elements of the long-dominant but now-disputed Washington Consensus.

The always-thought-provoking journal from the International Monetary Fund, the World Bank’s Bretton Woods sibling, sparked some unusually intense debate recently by publishing a well-documented analysis that poses a succinct and straightforward question — “Neoliberalism: Oversold?

That line of inquiry is surely familiar to all those who have been following the debate — supported by meticulous data from such scholars as Thomas Piketty (“Capital in the 21st Century”), Chrystia Freeland (“Plutocrats”) and Branko Milanovic (“Global Inequality: A New Approach for the Age of Globalization”) — over the intensifying economic inequality that is now corroding many societies, in both the developed and developing worlds. Yet the very invocation of the inflammatory term “neoliberalism” seems to have triggered an intense, if brief, summer storm.

Granted, the word “neoliberalism” is somewhat ill-defined, and, as the article’s authors point out, it is “a label used more by critics than by the architects of the policies.” And, true, it’s unusual to see such a freighted question being asked by the IMF, which has often been seen as a main driver of the Washington Consensus. Yet, no doubt about it, putting “neoliberalism” in the headline makes for a mighty arresting article.

​6 things to know about the new World Bank Procurement Framework

Ravi Kumar's picture
Available in Chinese
School children in Lebanon. Photo © Dominic Chavez/World Bank

Students in public schools without textbooks at the start of the year. Health centers in villages without even the most basic medications. Oftentimes procurement is to blame.

An efficient procurement system isn't just a good idea, it's a necessary tool for all governments (local and national) to function properly and deliver public services.

Keeping pace with global trends, on July 1 the World Bank will roll out the new Procurement Framework for countries that procure goods and services under Bank-finance projects. The new framework will be implemented for all investment projects with a Project Concept Note on or after July 1, 2016.  Led by the Global Governance Practice (GGP) with support from Operations Policy and Country Services (OPCS), the framework is designed to increase flexibility, efficiency, and transparency of procurement process, to better meet the needs of client countries.

So, what will the World Bank's new Procurement Framework do?

We know very little about what makes innovation policy work: Four areas for more learning

Xavier Cirera's picture


Photo Credit: Innovation Growth Lab.

Whether in Silicon Valley or Kenya’s furniture sector, innovation is a critical driver of job creation and economic growth. It could be a mobile app to connect farmers and buyers of agricultural products. Or perhaps an efficient and affordable solar roof tile. Innovation comes in many forms, from products and services to business models.

Yet despite the growing investment in policies to support innovation, we know surprisingly little about what makes these policies effective. To advance understanding of what works in innovation policy, Nesta, in collaboration with the Kauffman Foundation and the World Bank Group, organized the recent Innovation Growth Lab (IGL) Global Conference in London. The mission of IGL is to promote evidence-based innovation and entrepreneurship policies by funding randomized controlled trials (RCTs) and testing new policy approaches.
 
The conference was successful in discussing both research and policy challenges — a welcome change from typical innovation conferences, which often focus on either academia or policy.

Chasing shadows: Tax strategies to tackle the shadow economy

Rajul Awasthi's picture
Digital work by Steve Johnson

Tax administrations in developing countries are increasingly concerned about the persistent problem of loss of tax revenues to the shadow economy, and they often deploy a range of strategies to plug tax leaks and augment revenues. The erosion of the tax base prevents governments from collecting the revenue it needs to provide essential services, such as healthcare, road construction, and education. Nonetheless, it’s a sticky problem: how do you convince business owners to pay taxes?
 
Some possible answers, bolstered by evidence, include: simplify tax payment and provide incentives to formalize businesses. The World Bank’s Governance Global Practice will hold a conference between June 27-29 in St Petersburg, Russia, to bring together participants from almost 25 countries of the Europe and Central Asia region to discuss these issues under the aegis of the Tax Administrators eXchange of Global Innovative Practices, a peer-learning network of tax administrators. The event will be hosted by experts from the Public Sector Performance division of the practice.

How Higher Education in Bangladesh Creates Opportunities

Tashmina Rahman's picture
Students hold a discussion. Improved quality of higher education provides an opportunity for better jobs.

A couple of months ago, I visited a few tertiary colleges affiliated with the National University in Bangladesh while preparing the College Education Development Project which aims to strengthen the strategic planning and management capacity of the college subsector and improve the teaching and learning environment of colleges. Almost two-thirds of all tertiary students in Bangladesh are enrolled in these colleges, making them the largest provider of higher education in the country.

World Bank report on education in Bangladesh

A recent World Bank report estimates that around 1.6 million tertiary students in Bangladesh are enrolled in around 1,700 government and non-government colleges affiliated under the National University. This piece of information underpins a huge economic opportunity in context with Bangladesh’s quest to become a middle-income country over the next few years. There is a strong demand for graduates with higher cognitive and non-cognitive skills and job-specific technical skills in the country. This requires an improvement in the quality and relevance of tertiary education to ensure graduates have more market relevant skills. The National University student enrolment size combined with its sheer number of colleges network all over the country make it the critical subsector for making a qualitative dent in the higher education system.

Using country procurement systems in China and Vietnam to improve efficiency, transparency and competition

Ba Liu Nguyen's picture
Chongqing, China. Photo: Li Wenyong / World Bank

Procurement is an essential aspect of World Bank operations and international development projects worldwide. The World Bank’s policy on procurement encourages the use of country systems in procurement implementation process while ensuring the consistency with the Bank’s regulations . 

Making procurement information publicly available promotes openness and transparency and creates a level playing field for bidders. This, in turn, fosters competition and potentially decreases corruption risks. 

With this in mind, World Bank teams in East Asia and the Pacific successfully collaborated with government procurement agencies to increase and improve the publication of procurement information and to pilot e-procurement portals for Bank-funded operations. 

The following story shares our experiences and successes in both China and Vietnam. 

The staircase of relationships – and P2P partnerships

Malcolm Morley's picture

In my previous two blogs: Developing Public to Public Partnerships (P2Ps) that Improve Infrastructure’s Social and Economic Value and 10 tips for Implementing a Public to Public Partnership (P2P), I sought to highlight the importance of organizations working together within the public sector if they want to maximize the value from Public Private Partnerships (PPPs). Regrettably, it’s too frequently the case that the potential of the public sector to maximize the value it achieves from PPPs remains unfulfilled because of relationships within the public sector preventing or inhibiting organizations working effectively together.
 
If public sector organizations can’t develop effective partnership working among themselves, how can they maximize value from partnerships with the private sector?

The false debate: choosing between promoting FDI and domestic investment

Cecile Fruman's picture

Should we focus our efforts on foreign investment or domestic investment?” Policymakers in developing economies often ask this question when the World Bank Group advises them on how to improve their countries’ investment climate or investment promotion efforts. Our answer is: They do not need to choose one over the other. In order to grow and diversify, an economy needs both domestic investment and foreign direct investment (FDI).  The two forms of private investments can be strong complements.
 
Recognizing the Potential Benefits of FDI
 
The economic benefits of FDI were identified a long time ago. A Harvard Business School paper published 30 years ago summarized the benefits of FDI based on an extensive review of economic literature (Wint, 1986). In short: Benefits traditionally attributed to FDI include job creation, transfer of technology and know-how (including modern managerial and business practices), access to international markets, and access to international financing.

Granted, some of these benefits also occur thanks to domestic investment. For instance, domestic investments create jobs in a host economy – usually many more than FDI. However: What FDI does well is enhance or maximize some of the benefits already generated by domestic investments in a developing economy.
 
To stay with the example of job creation: Foreign firms might not create as many jobs as the domestic private sector, but they often create better-paid jobs that require higher skills. That helps elevate the skills level in host economies. The same can be said for other FDI benefits. For instance, more advanced technologies and managerial or marketing practices can be introduced in a developing economy through foreign investment, and at a much faster rate than would be the case if only domestic investment were allowed. Moreover, through partnerships with foreign investors who have existing distribution channels and commercial arrangements around the world, developing countries’ firms can benefit from increased market access.



In China, millions of rural residents each year migrate to cities to seek work. As they find jobs in modernizing industries, they gain the skills they need to earn higher incomes. In this photo, an employe in Chongqing is learning higher-level computer skills. Photo: Li Wenyong / The World Bank
 

All’s fair in love and (the global tax) wars?

Jim Brumby's picture




The mishmash of overlapping and incoherent national tax policies and systems, which together comprise the global tax architecture, used to be a niche topic relegated to the fringes of global policy debates and the domain of a small number of technical experts. But the leak of the “Panama Papers” in April thrust these issues into the spotlight anew.

This added fuel to the fire that was started by the 2012 Amazon and Google cases and subsequent initial high-profile leaks that first brought international tax policy under public and legislative scrutiny. The technicalities of issues such as transfer pricing, offshore financial centers, aggressive tax planning and tax minimization, and illicit financial flows involving public officials have gained the attention of the media and taxpayers around the world.

Imminent! Transformation of the World Bank’s Procurement Framework

Robert Hunja's picture
World Bank. Photo © Dominic Chavez/World Bank

In keeping with recent global trends in the procurement arena, the World Bank is transforming and modernizing its procurement framework. 

In the private sector, companies have long viewed maximizing of supply chains as key to healthier bottom lines.  In the public sector, many governments have been moving from overly rule-based procurement systems to systems that focus on performance and achievement of development goals. 


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