Reflections on the Bank's updated Governance and Anti-Corruption Strategy

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ImageThis week the Executive Board endorsed the Updated Governance and Anti-Corruption (GAC) Strategy. It is perhaps inevitable that at the end of a corporate strategy process one reflects a little on how it went, what one would do differently next time (not that I can contemplate for one moment any such 'next time' right now), and indeed, how things have changed since 2007.

Board members this week were remarkably and genuinely supportive. It is easy to forget just how contentious the preparation of the first GAC Strategy was. At that time I was Head of Governance at DFID and it fell to me to follow what was going on, do the briefing, and draft the 'line to take'. We were all pretty aghast at the degree of—what seemed to us at least—outright hostility and ill-feeling in the debate. But reason prevailed and the Bank came through with a pretty good document (five years later it stands up well).
There is little doubt that the circumstances surrounding the birth of the Strategy spilt over into staff attitudes and perceptions of GAC in the first couple of years of its implementation. The 'G' was battling with the 'AC'; the 'AC' bit was perceived as little more than the policing of Bank funds, and there seemed scant evidence of the Bank moving to a common corporate sense of what this GAC business was all about. Today those days seem long gone. The context of 2012 is fundamentally changed—for the better. In preparatory discussions with staff across the Bank the issues which now constitute the core of the Updated Strategy were quickly identified—in those early days we called it 'the shift from transactions to institutions'. The language may have changed but the message remains the same. Also highlighted early on was the need to measure results and  improve risk management in different environments. These issues were further underlined in the IEG Evaluation of July last year. Clearly we were on the right track, but we did not quite foresee the level of support that these three rather dry priorities would garner: They resonated with staff; senior management was strongly supportive; and this week Board members, without exception, endorsed them.
So far so good. But all the Update does is lay down a framework. Implementation remains a hugely challenging agenda in many ways. Two predominate: First is the challenge of the results chain. This requires us to be able to design an appropriate set of metrics by which we can judge the effectiveness and efficiency of country systems (let alone judge the Bank's contribution to their strengthening). The only real success in this area to date are the PEFA indicators. They now have been used in over 120 countries—but it has taken almost 12 years to get this far and  for them to gain widespread acceptance and legitimacy. And this is in the area—finance—most susceptible to indicator work. Can we replicate this with other country systems, such as HR, procurement, information management, etc? We shall see. But even this may end up being the easy part. A further challenge of the GAC results chain is to identify how, and in what ways, 'better performing' institutions lead to better development outcomes. This throws up major empirical, conceptual, and methodological questions (still, we have DEC to rely on so we should be fine!)
The second challenge remains the internal transformation of the Bank and there are a host of questions here: Do we have sufficient skills (some would say the desire) to embed governance thinking into our work? How can we incentivize front-line staff to be less risk averse? Can we put in place management and supervision systems that tolerate higher levels of risk and are flexible and agile enough to respond when "stuff happens"? Are we capable—as one Executive Director queried in one of our pre-Board informal meetings—of acknowledging and even publicizing failures and learning from them?
However, despite these, and other, challenges, I am pretty sure that if, in 2007, we had been offered this scenario for 2012 we would have taken it.

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