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Governance

Our infrastructure projects can help build many things—including stronger institutions

Pratap Tvgssshrk's picture
Photo: Frederick Noronha/Flickr
Working to finance major infrastructure projects, World Bank teams have seen time and again that the sustainability of investments depends ultimately on the efficiency and capacity of the agencies that manage them. 
 
For that reason, our interventions often have a dual goal: supporting high quality infrastructure, and, at the same time, supporting institutions’ efforts to modernize and become more efficient. That institutional development sometimes comes in the form of stand-alone project components that focus on modernizing processes, governance, and skills. But in other cases, infrastructure investment projects can also provide opportunities to initiate important institutional changes.
 
This is often the case with civil works contracts, and the Tamil Nadu State Road Sector project in India is illustrative of how contracting strategies implemented with Bank support helped a highway agency enhance its implementation capacity, the efficiency of its expenditure, quality of infrastructure, and system sustainability through significantly improved asset management.

Complements or Substitutes? State Presence and the Power of Traditional Leaders -- Guest post by Soeren J. Henn

Development Impact Guest Blogger's picture

This is the twentieth in this year's series of posts by PhD students on the job market.

When we study how institutions affect development, we often focus on the characteristics of national institutions, such as whether a country is democratic, protects property rights, or has inclusive institutions. Yet villages in many developing countries contain almost no trace of these national institutions. Instead, life in rural villages is typically shaped by local leaders. In Sub-Saharan Africa, traditional leaders (namely village chiefs) are an important local institution. They control resources – most notably land – collect informal taxes, influence voting, and implement local development projects. The local importance of traditional leaders also concerns the nation-state. As national institutions attempt to increase their presence in the countryside, traditional leaders could act as complements or substitutes to state presence. They could either cooperate or compete with the public good provision by the state and thus enhance or weaken it.
 
In my job market paper, I study how local leaders and the national state interact. Specifically, I estimate the effect of state presence on the power, legitimacy, and effectiveness of village chiefs. In other words, do village chiefs become more or less influential when the national state is absent (or present) and how does this affect their public good provision? A key institutional feature in this context is that African states have used different strategies of dealing with traditional leaders that primarily vary on one dimension: whether chiefs are formally integrated into the state apparatus. I investigate how this institutional choice shapes the relationship between state presence and chiefs.

What’s keeping Pakistan in the dark?

Fan Zhang's picture
 $18 billion in fiscal year 2015—that is 6.5 percent of the country’s economy.
Nearly  50 million Pakistanis still lack access to grid electricity. Power distortions cost Pakistan’s economy much more than previously estimated: $18 billion in fiscal year 2015—that is 6.5 percent of the country’s economy. Credit: Curt Carnemark/ World Bank

From 1990 to 2010, 91 million people In Pakistan received electricity for the first time.
 
And power outages across the country have gone down drastically over the past few years.
 
Clearly, Pakistan has achieved much progress in expanding its electricity access and production in recent decades.
 
However, nearly  50 million Pakistanis still lack access to grid electricity and the country ranks 115th among 137 economies for reliable power.
 
After peaking in 2006, per capita electricity consumption failed to grow for almost a decade, remaining only one-fifth the average for other middle-income countries in 2014.
 
To boost sustainable energy supply, Pakistan’s power sector needs urgent investments and reforms to target inefficiencies in the entire electricity supply chain.
 
Fittingly, my new report In the Dark analyzes what lies behind these inefficiencies and suggests relevant actions to improve the operation of power plants, cut down on waste and costs, and increase electricity supply in a cost-effective manner.
 
The study sheds new light on the overall societal costs — not merely the fiscal costs as in previous research — of subsidies, blackouts and other distortions in the power sector.
 
To that end, my team and I surveyed Pakistan's entire supply chain from upstream fuel supply to electricity generation, transmission and distribution, and eventually, down to consumers.
 
Put simply, the numbers we found are dire.
 
Power distortions cost Pakistan’s economy much more than previously estimated: $18 billion in fiscal year 2015—that is 6.5 percent of the country’s economy.
 
Problems begin upstream, where gas underpricing encourages waste and reduces incentives for gas production and exploration.
 
And with no recent significant gas discoveries, higher gas usage has widened the gap between growing demand and low domestic supply.
 
On top of that, the volume of gas lost before reaching consumers reached 14.3 percent in fiscal year 2015. By comparison, this number is about 1 to 2 percent in advanced economies.
 
Public power plants use 20 percent more gas per unit of electricity produced than private producers.
 
Poor transmission contributed to 29 percent of the electricity shortfall in fiscal year 2015, while weak infrastructure, faulty metering and theft cause the loss of almost a fifth of generated electricity.
 
Electricity underpricing and failure to collect electricity bills have triggered a vicious “circular debt” problem, leading to power outages.
 
A lack of grid electricity also leads to greater use of kerosene lamps that cause indoor air pollution and its associated respiratory infections and tuberculosis risks.
 
Lack of access to reliable electricity also adversely impact children’s study time at night, women’s labor force participation, and gender equality.
 
Connecting all of Pakistan’s population to the grid and increasing the supply of electricity to 24 hours a day would increase total household income by at least $4.5 billion a year and avoid $8.4 billion in business losses.

Out of Power? Political Capture of the Indian Electricity Sector -- Guest post by Meera Mahadevan

Development Impact Guest Blogger's picture

This is the eighteenth in this year's series of posts by PhD students on the job market.

In 2012, 700 million people in India suddenly found themselves without power for over 10 hours. At the time of the incident, political parties blamed each other for mismanagement and failing infrastructure. Such incidents reflect the extensive dysfunction in the sector, with technical problems and billing leakages that are among the worst in the world, amounting to 20% of electricity generated. The poor quality of electricity supply imposes major costs on the Indian economy; electricity shortages, for example, reduce manufacturing plant revenues by 5-10%. Why do these problems persist despite exponentially growing power generation? My job market paper shows that political corruption is one of the root causes behind unreliable electricity supply.

What is the link between political corruption and poor electricity supply? In democracies, incumbent politicians may consolidate power by favoring their voters with better access or lower prices. In India’s electricity sector, where politicians do not have direct control over electricity pricing, they may resort to illicit means in order to do this. Lower prices may actually benefit targeted consumers.  But such patronage is costly: it hurts the revenues of electricity providers, inhibiting their ability to invest in infrastructure, and lowering electricity reliability for all consumers. While subsidies and increased access benefit consumers in targeted constituencies, the resulting underinvestment by providers may lead to unreliable supply.

Estimating the often-ambiguous welfare implications of corruption is, therefore, a challenge. Especially since detecting corruption is hard: corruption is frequently concealed, complicating the task of making causal inferences and identifying mechanisms of corruption. In this research, I develop novel methods to address these challenges, and find that political corruption in the electricity sector leads to large revenue losses for electricity providers, worsening their ability to reliably provide electricity.

Is GovTech the missing ingredient to curb corruption?

Renaud Seligmann's picture



Along with other leaders from the World Bank Group, I am traveling back from a trip to Silicon Valley where we explored the links between technology and government, or GovTech, and their impact on developing countries and curbing corruption.

Good Fathers & Lemon Sons: Why Political Dynasties Cause “Reversals of Fortune” -- Guest post by Siddharth George

Development Impact Guest Blogger's picture

This is the seventeenth in this year's series of posts by PhD students on the job market.

Aquinos, Bhuttos, Trudeaus, Yudhoyonos, Gandhis, Lees, Fujimoris: political dynasties remain ubiquitous in democratic countries.  Though many societies democratised to end hereditary rule, nearly half of democratic countries have elected multiple heads of state from a single family.  Politics is significantly more dynastic than other occupations in democratic societies.  Individuals are, on average, five times more likely to enter an occupation their father was in.  But having a politician father raises one's odds of entering politics by 110 times, more than double the dynastic bias of other elite occupations like medicine and law.  Despite their prevalence and influence, we know little about the economic effects of political dynasties.

Effects of dynastic politics are theoretically ambiguous

Economic theory makes ambiguous predictions about how dynastic politics affects development.  On the one hand, bequest motives might lengthen politicians’ time horizons  and encourage them to make long-term investments. These founder effects could be good for economic development.  However, if some political capital is heritable (e.g., a prominent name or a powerful network), dynastic politics may render elections less effective at selecting good leaders and disciplining them in office.  These descendant effects are likely bad for development.  The overall impact of dynastic politics is ambiguous, because it is the net result of founder and descendant effects.

Shining a light on asset-disclosure practices at the International Anti-Corruption Conference

Laura Pop's picture



In October, hundreds of representatives of civil society organizations, public and private sector representatives, journalists and international organizations gathered in Copenhagen for the 18th International Anti-Corruption Conference. This annual conference is viewed by many as a leading forum in the field of anti-corruption.

Moving Afghanistan’s Bamyan province forward

Mohammad Tahir Zuhair's picture
View of Bamyan Province, Afghanistan
View of Bamyan city, Bamyan Province. Photo Credit: Rumi Consultancy​/ World Bank

When people think of Afghanistan, what comes to their minds are images of decades of war and insecurity.

True, Afghanistan has suffered a long history of upheaval

But there has been significant progress in rebuilding a strong, independent, and modern nation since 2001.

And in light of our nation’s turbulent history, it is sometimes easy to forget how far Afghanistan has come.

Just two month ago in October, over four million voters cast their ballots in parliamentary elections—with millions more looking forward to voting in the upcoming presidential election in 2019.

Unforgettably, 2018 also brought the unprecedented three-day ceasefire during Eid, a rare glimpse of complete peace that continues to give hope to many of us.

As Governor of Bamyan Province, one of my goals is to present a different image of my country to the world—one of progress and possibility in the face of adversity.

Many people have never heard of Bamyan. Neither do they know its longstanding and well-deserved reputation as one of Afghanistan’ safest provinces.

Our residents take pride in the fact that we haven’t experienced chaos, war, or insurgency against the government in 17 years.

And as Governor, I have witnessed the importance residents put on civil society, which has been vital to implementing successful development projects in the province.

Fighting tax evasion: notes from the International Anti-Corruption Conference

Anders Hjorth Agerskov's picture



The irony was hard to miss.

Last month, leaders from the public and private sectors, civil society, international organizations, academia, and the media met at the International Anti-Corruption Conference (IACC) in Copenhagen.

Reclaiming India's wastelands to fight climate change

Abel Lufafa's picture
 Abel Lufafa
Indian farmers showing off former wasteland that now produces crops. India's agriculture is highly vulnerable to climate threats. Reclaiming and bringing into production some of India’s wastelands could partially offset some of the projected crop production declines expected because of climate change. Credit: Abel Lufafa

About 15 minutes after we turn off the highway at Fatehpur, a roadside trading center located 120 km from Lucknow, the capital of Uttar Pradesh, a mild haze blankets the sky.

As we drive deeper into the increasingly bare and desolate landscape, the wind blows stronger, and the haze thickens into dust plumes.

I lower the car window and find the source of the dust:  patches of abandoned land, coated with very fine powder in various shades of white and grey.

We are in a village with salt-affected soils, part of the millions of hectares of India’s wastelands.

Characterized by dense, impermeable surface crusts and accumulation of certain elements at levels that are toxic to plants, these sodic wastelands no longer support crop growth – they have been abandoned by farmers.

Our journey continues for another 30 minutes, the wind still blows strong, but dust plumes have given way to clearer skies.

We have reached Mainpuri, where, with World Bank support, sodic wastelands have been reclaimed and brought back to life, rolling back the unsavory spectacle of ecological destruction that once was the hallmark of the village.

Now in its third phase, the Uttar Pradesh Sodic Lands Reclamation Project (UPSLRP) has supported the reclamation of over 400,000 ha of such sodic wastelands and 25,000 ha of ravinous wasteland.


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