Fiduciary Forum March 24, 2008

1. Implementation Plan for Strengthening World Bank Group Engagement on Governance & Anticorruption Fiduciary Forum March 24, 2008

2. Governance and Anticorruption (GAC) Strategy unanimously approved by the Board in March 2007 GAC Implementation Plan Approved October 2007: Based on “learning-by-doing” Covers the initial year of a longer term program Outer year agenda to be based on implementation experience in first year. Focuses on what the Bank itself will do – as distinct from the country-level governance improvements themselves – which are of course the desired outcomes, but ultimately beyond Bank control Context

3. Focus on GAC is based on the Bank’s Mandate to reduce poverty—a capable and accountable state creates opportunities for the poor The Bank’s GAC work must be country driven There is no “one size fits all” – implementation is adapted to individual country circumstances The GAC strategy requires the Bank to remain engaged so that “the poor do not pay twice” The Bank aims to engage in its GAC work with a broad array of stakeholders Work to strengthen, not by-pass, country systems through stronger institutions The Bank will work with governments, donors, and other actors at the country and global levels to ensure a harmonized and coordinated approach The 7 Principles GAC Guiding GAC Implementation

4. Our vision of successful GAC implementation: When governance obstacles to development effectiveness are reduced so that services and growth opportunities are accessible by the poor For this to occur, we envision: More and more countries addressing key governance impediments to development Bank and partner programs and projects increasingly address GAC impediments in a systematic way Countries and global partners value the Bank’s knowledge and capacity in GAC What would successful implementation look like?

5. Interventions at 3 key levels Country Level Increased support to countries to strengthen ‘core’ and sectoral governance Global Level Collaborating with development partners, and addressing transnational issues Project Level Combating corruption in WBG operations

6. GAC Strategy Implementation: Country Level • A country-level governance and anticorruption “CGAC” process that assesses GAC impediments to country development goals • A process whereby country teams engage with government and stakeholders and identify “entry points” for Bank support for governance and anticorruption reforms – not a new World Bank report or TA • A country-tailored approach, not a mandatory format • A ‘systematic and disciplined stock-taking of the GAC environment and its impact on country poverty reduction goals and the Bank’s projects • Informs the CAS, and yields a clear “business plan” for how the country program/CAS will address governance and corruption barriers to country development goals

7. … Country Level • Helping countries improve governance & anticorruption in Country Assistance Strategies (CASs) & sectors • Mainstream governance reform in sectors by systematically addressing sector-specific GAC impediments to delivering outcomes, and by enhancing sector-level transparency, participation, accountability • Strengthen ‘core’ cross-cutting governance and accountability systems including public management systems (e.g., financial and budget management, procurement, public administration, and independent oversight intuitions (e.g., SAI, PAC, judiciary) • Strengthen “demand-side” enabling frameworks and capacity by enhancing transparency/information disclosure (RTI), CSO capacity, use of social audit/accountability tools • Work collaboratively with the private sector and civil society in reform processes (business assoc, chambers, CSOs, media) • Monitor progress via results and governance indicators (including new generation of indicators under development)

8. (#3) Working on the Demand SideCivil Society Monitoring of Service Provision: Bangalore 100 94 96 92 85 90 78 77 80 73 73 73 67 70 60 Percent Satisfied 47 50 42 41 34 34 40 32 32 25 30 16 14 20 9 6 5 10 4 1 n/a n/a 0 Police Electricity City council Telephones Public buses Water supply Land authority Public hospitals Transport authority Agencies 1994 1999 2003 Source: Public Affairs Center, India

9. GAC Strategy Implementation Project Level • Integrating governance and anticorruption in projects: “Governance is everybody’s business” - Mapping corruption ‘vulnerability points’ across the project cycle - Analysis of institutional incentives and capacity, AAA • “Smart project design,” informed by this analysis and systematically incorporating: - Enhanced disclosure - Civil Society oversight /‘Demand-side’ elements - Stronger financial controls - Plan for mitigating collusion & other procurement problems - Clear and consistent approach on sanctions and remedies - Credible complaints handling mechanism … Can be formalized in project-specific anticorruption action plans • Stronger quality management on governance and GAC - Bank Quality assurance processes to ensure coverage GAC issues - Focused review of gov. and anticorruption aspects of projects 4. Implement measures to enhance INT’s effectiveness, building on the Volcker Report (issued September 13, 2007)

10. GAC Strategy Implementation: Global Level The Bank is committed to “not acting alone”. Five areas targeted for increased Bank involvement: Donor coordination, including common response principles, especially where GAC pose serious obstacles to development, Build global consensus on how GAC enhances development effectiveness – biannual conference and support for GAC related research Support global legal conventions (e.g., UN Convention Against Corruption, OECD Anti-Bribery Convention, Stolen Asset Recovery Initiative (Star)) Multi-stakeholder engagement and voluntary codes of conduct (e.g., Extractive Industries Transparency Initiative) Harmonize investigative practices with other MDBs

11. Leadership GAC Steering Committee comprising OVPs / Directors Chaired by Managing Director Secretariat in PREM-PS Organization ‘Focal points’ in each SMU and each country team Informal knowledge networks created on GAC Bank processes and policies revised to incorporate GAC (e.g., Disclosure policy, QAG, OPCS CAS Guidelines, etc) Regional quality management processes fine-tuned to incorporate GAC Resources Additional FY08 BB funding for CGACs and GAC in Projects, and Highest Priority for FY09 Intensified training targeted at task teams Network expertise to support project teams Skill needs assessment – strengthening GAC skills Managing Implementation: Organization, Resources and Leadership

12. Risks and Mitigation

13. Thank you The World Bank1818 H Street, NWWashington, D.C.20433 USA “Working for a World Free of Poverty”For additional information, see:http://www.worldbank.org