Resource rich developing countries face challenges in ensuring that revenues from Extractive Industries (EI) are used to foster economic development, reduce poverty and promote shared prosperity.
Effective governance of extractive revenue is a precondition for ensuring that the ‘development dividend’ that is meant to flow from the decision to extract becomes a reality. Good governance of the sector requires sufficient participation, transparency, and accountability across the entire EI value chain.
A wide range of stakeholders can contribute to these governance objectives, whether they be government agencies, private sector, civil society, and formal accountability institutions, such as parliaments.
Parliaments are coming to the fore as key stakeholders in ensuring that extractive revenues are equitably shared. That means making sure that extractive revenues are accurately captured in budget forecasts and estimates, appropriations are focused on delivering services to affected communities, and effective oversight of governments’ management of the sector is provided.
I participated in the recent 2015 Helsinki Parliamentary Seminar, hosted by the Parliament of Finland as part of the World Bank-Finnish Parliamentary Partnership, which brought together parliamentary delegations from Ghana, Iraq, Kenya, Mongolia, Somalia, South Sudan, Tanzania, Timor Leste, and Zambia to explore how parliaments could better contribute to the governance of revenues from extractive industries.
The majority of the poor in the world are gaining access to these technologies for the first time. The real question remains: does having access to a cell phone, the Internet, or social media have any tangible benefits for the living conditions of the most marginalized among the poor?
Is the “digital divide” widening or narrowing the “economic divide”?
“This dengue has become a calamity,” Saad Azeem said in September 2011. He wasn’t exaggerating. Azeem, a 45 year-old police officer, was “at home suffering from the fever and mourning the death of his elderly father.”
Sadly this wasn’t the case just for Azeem. Everyone was affected in Lahore, the capital of Punjab, the most populous province of Pakistan. The fever didn’t discriminate. Dengue mosquitoes were affecting the poor and the rich, the old, and the young. Out of more than 12,000 people who were infected in Pakistan, at least 10,000 resided in Lahore.
It was a disaster.
Two weeks ago, we launched an exciting new Massive Open Online Course (MOOC) on Citizen Engagement hosted on Coursera and in partnership with the London School of Economics, the Overseas Development Institute, Participedia, and CIVICUS.
To date, over 15,000 people from 192 countries (45% women) have enrolled in the course and our digital footprint continues to be strong: the launch event page has had over 2,500 unique visitors while many continue to use the hashtag #CitizensEngage on Twitter.
These healthy metrics are a strong indication of just how timely and significant this issue has become and is the latest reason why I firmly believe in the power of engaging citizens to build good governance. This MOOC therefore is a key component of the World Bank Group’s commitment to develop a citizen perspective on governance to improve the contribution of institutions to development.
Yet let me offer six compelling reasons why it is necessary, feasible and useful to do it:
“There has been a broad recognition amongst economists that “institutions matter”: poor countries are not poor because they lack resources, but because they lack effective political institutions”. Francis Fukuyama, the Origins of Political Order, Vol 1 (2009)
For development professionals, there is no getting away from the fact that politics shapes the environments in which we work—that our programs can and do fail when we don’t take politics into account. But despite growing evidence that political economy analysis (PEA) can contribute to new ways of working and ultimately better results, the politics agenda remains what Thomas Carothers calls an “almost revolution” in mainstream development practice.
There are many factors at play: limited staff capacity to engage with politics, bureaucratic incentives to meet lending targets, a preference for best practice solutions and institutional blueprints. Many continue to argue that it is not the business of development banks or aid agencies to analyse politics, let alone act on key findings. This resistance is posited on several arguments—or myths—which I address below.
With the support of the World Bank, the Government of Vietnam is making strides in addressing fraud and corruption risks in the management of development loans more broadly than before. Thanks to a new strategic action plan that cuts across the national, sectoral, and project levels.
The World Bank’s Governance Global Practice is working with the government of Vietnam to design and implement this new strategic action plan on how to make the management of Official Development Assistance (ODA) loans less liable to fraud and corruption. As a result, a healthy public policy debate around the risks surrounding ODA loans and how best to address them has arisen in Vietnam, as shown by the last session of its National Assembly in 2014.
In August 2014 the Public Integrity and Openness Department (PIO) of the Governance Global Practice (GGP) established a Task Force to design a comprehensive and actionable strategy to rebalance implementation support and institutional development and capacity building. The Transition Strategy is a culmination of dialogues, contributions, and advice from World Bank colleagues.
It is bold and ambitious while remaining grounded in reality and what is feasibly possible. It seeks to demonstrate that procurement is a powerful tool that, when executed well, can have profound, positive repercussions for governance and inclusive economic growth in countries. The Transition Strategy envisions that this will be realized through mainstreaming four Transformational Engagements and creating Global Talent Pools (GTPs).
The ideas set forth in the Transition Strategy are under the backdrop of the four trends at the World Bank: the new twin goals, the new structure which allows for a global approach, the emphasis on output and results-based aid, and the new Procurement Policy Framework. This is an opportune time to implement the Transition Strategy!
Managing large civil works contracts can be a challenge.
In Vietnam, while most large infrastructure projects are financed by multilateral and bilateral development partners under the form of Official Development Assistance (ODA), their implementation is contracted out and often delayed by cost overruns and quality concerns.
Give people the ability to engage, and they will change the world. Or will they?
The massive expansion of political voice and social activism over the past several decades -- ranging from the mushrooming of citizen-led initiatives for transparency and accountability, to the uprisings in the Middle East and North Africa, and the eruption of protest movements in countries as diverse as Brazil, India, Turkey and Mexico – has generated great enthusiasm about the transformational potential of popular participation.
The reality, however, is more complex than that.
Think back to the Arab Spring and the extraordinary mobilization of so many people who managed to topple one authoritarian regime after another. The streets were theirs, but in most of these countries ousting dictators has turned out to be much easier than building political systems that are more democratic and open for citizens to engage. While much in demand,
I recently prepared a module on Citizen Engagement and Development Outcomes for a Massive Online Open Course (MOOC) on “Engaging Citizens: A Game Changer for Development?”, just launched by the World Bank Group and partner organizations in both Washington, DC and London.
Two decades ago, when I interned at the French Embassy’s economic mission in Moscow, I was asked to look into bankruptcy laws and their implementation. The Embassy wanted to advise French companies on how to get business done in the new Russia—we are talking mid-1990s—when there were no reliable guidebooks on how to navigate the transition to a market economy.
So I was asked to read recently approved, Western-inspired bankruptcy laws, given a phone book and asked to find two dozen companies around Moscow. I was to meet with their CEOs and find out how insolvency and bankruptcy procedures actually worked in practice.
I came away with one key finding: In fact, the distortions brought about by hyperinflation, bartering and the transition from Soviet to Western accounting meant the liquidity and solvency ratios that underpinned the institution of bankruptcy had essentially become meaningless.