Matching governance demand and supply

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For over a decade, the World Bank has emphasized the centrality of good public sector governance and anticorruption efforts in achieving sustainable development impact in low- and middle-income countries.  But more recently the Bank has widened its analytic and operational lens on governance to include what is being called the “demand-side” of governance.  What does this mean, and what are the implications for Bank work in its client countries?

The Bank recently conducted a global consultation process as part of the preparation of its new Governance and Anticorruption (GAC) strategy.  Two core insights emerged from these consultations that form the basis of the new emphasis on the demand-side of governance:

- First, respondents encouraged the Bank to engage as much as possible with the wide range of non-government stakeholders in society—including civil society groups, the media, academics, and the private sector. 

- Second, a resounding consensus emerged that the Bank ought not to “penalize the poor twice” by cutting off ties to countries suffering from poor or corrupt governance. 

Taking these two things together, it seems to make sense to adopt a demand-side strategy that engages with stakeholders in civil society to encourage new, bottom-up mechanisms of social accountability and participation in decision-making.  Put simply, in countries where government is corrupt and unaccountable, the Bank can continue to search for developmental impact through alternative channels.

But demand needs supply to create an equilibrium.  That is why the Bank’s GAC implementation plan continues to stress the importance of core public sector reforms.  These “supply-side activities” remain essential for improving state capacity and strengthening core country systems such as the public financial management framework and the civil service.  Ultimately, it is the state that is responsible for the sensible policy-making and efficient service delivery necessary in achieving salutary development outcomes. 

At the same time, however, government can choose to make these processes transparent to the public and encourage civic engagement in the public sector.  It can, for example, introduce participatory budgeting to give citizens a voice in setting policy priorities through the budget process.  It can also encourage civic monitoring of service delivery—in the very best scenarios, such as the Bangalore “report card” scheme, public feedback can be instrumental in holding government accountable and providing feedback to help it improve its performance. 

These examples illustrate that governance is best when the supply- and demand-side of governance are both strong and are used to complement each other imaginatively to suit different country contexts.  So although we might divide the Bank’s governance work into demand- and supply-sides for heuristic purposes, this should not preclude a holistic approach to understanding and reforming the overall governance environment in which development takes place.

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