Navin Girishankar CSO Forum-Launch Presentation September 22, 2011

1. World Bank Engagement on Governance and Anticorruption: An Evaluation of the 2007 Strategy and Implementation Plan Navin Girishankar CSO Forum-Launch Presentation September 22, 2011 http://ieg.worldbankgroup.org/content/ieg/en/home/reports/gac.html

2. Outline of Presentation • What is “GAC” (Governance and Anticorruption)? • The 2007 Strategy and Implementation Plan • What did IEG evaluate? • Objectives, framework, and approach • Is the World Bank addressing GAC concerns? • Contributions to good governance in countries • What difference is GAC Phase 1 making? • Design factors matter and why • What can the Bank do going forward? • Implications for development partners

3. 1. What is “GAC”? • A core development objective • Long history of World Bank engagement • The 2007 Strategy • Implied “a change in the way the Bank does business” • Principles: GAC as “everybody’s business” • Pillars:GAC in countries, sectors, projects, global efforts • Phase 1 Implementation Plan, FY2008-10 • Aimed for the Bank to be “more systematic in addressing GAC issues” across countries, sectors, and projects • Resourced by incremental budget and donor funds • Linked to a number of corporate initiatives

4. 2. What did IEG evaluate? • Objective: To enhance Bank support for developing effective and accountable states, by evaluating… • Relevance of strategy and IP objectives and design • Effectiveness in enhancing operational response to GAC • Early lessons in improving governance in countries • Framework: Inputs, Outputs, Intermediate Outcomes • GAC Responsiveness of Operations: Selectivity, Signaling, Institutional Strengthening, Smarter Project Design • Scope: Country Operational Focus • Before (FY04-07) and after (FY08-10) the strategy • Methods: Triangulation through Multiple Methods

5. 3a. Is the Bank addressing GAC issues? • A story of continuity….. • Virtually all CASs continue to support GAC pillars, entry points • …and signs of progress post-GAC • 3-fold increase in countries with institutional strengthening plans • Increase in projects with political economy analysis (PEA), “fit” • Increased use of some country systems in Africa, low CPIA • …but important opportunities yet to be seized • Inst’l strengthening plans not matched by project-level solutions • PEA in economic reports not as systematic as in projects • Weakness in risk and results mgt, use of D-side in projects • Need for consistency of Bank responses to governance crises • Need to address perceived tension between GAC & lending

6. 3b. Is the Bank addressing GAC issues?

7. 3c. Is the Bank contributing to good governance in countries? • Few if any country-wide improvements in governance • Targeted support worked better: Long-term commitments with short-term results, realistic entry points, and appropriate instruments • Public sector reform is a mainstay but needs sector focus • Public financial management: Improved assessment but need to prioritize service delivery priorities, focus on natural resource rents • Civil service pay: Attempts to find selectiveapproaches but need better instruments and engagement with sectors • Investment climate efforts work with balanced approach • Improving public services to facilitate private sector development • Managing risks of capture of multi-stakeholder fora • Demand for good governance work can build on experience • Local governance and CDD is tried and tested; transfers to CSOs rare

8. 4a. What difference is GAC Phase 1 making ?Design matters and why • Strategy design issues • Needed to update public sector reform and institution building business • Needed to address perceived tension between lending vs. GAC goals • GAC too loosely defined to set priorities or define value-added • Implementation Plan focused on Bank capacities & risks • Needed to focus on countries • Results and risk frameworks too focused on the Bank • Selective support inconsistent with “systematic improvement”

9. 4b. What difference is GAC Phase 1 making ?Phase 1 Roll-Out • Guidance focus on “GAC-in-projects” and ring-fencing • Emphasized transaction level fiduciary risks, not systems level risks • Reinforced controls based on instruments rather than risk profile • Support to teams needed frontline focus, broader coverage • Lower scores on relevance and utilization of toolkits, manuals, notes • Need to balance bread/depth, support sectors, clarify “innovative” • Incentive impact of incremental resources was muted • $119 m in incremental Bank budget and donor funds • Fragmentation, fungibility, concentration, and weak monitoring • Attempts to develop GAC cadres risk duplication, not affordable • Institutional set-up helped internal dialogue but… • More accountability for operational quality, institutional risks?

10. 5. What can the Bank do going forward? • Shift from focus from…. • Building Bank capacities to enhancing country capacities • Avoiding risks to mitigating risks, promoting results

11. Additional Slides

12. Evaluation Methods • Desk Reviews of GAC Responsiveness of Country Programs and Projects across Sectors pre- and post-GAC (App. C and D) • 50 countries, 200 operations, and 32 ESW/AAA outputs • Statistical Analysis (App. E) • Econometric Analysis of Desk Review Results (Appendix E) • Aid Selectivity and Cap Bldg by Bank and Other (Appendix E) • Analysis of GAC inputs including resources (App B) • Sectoral Reviews of Roads, Education, Acc’ty Institutions • Thematic Reviews of Inputs -- PEA and Resourcing (App. B) • Staff Survey (App. F) • Structured Interviews and Consultations (App. G) • Country Cases (6 countries by region, income level, CPIA)

13. What did IEG evaluate? GAC Results Chain

14. Is the Bank Addressing GAC Issues? Participation, Transparency, Redress

15. What difference is GAC Phase 1 making ? Risk management intensity across instruments Marginal effects reported from an OLS regression.

16. What difference is GAC Phase 1 making ? Delivery of support • Internal comm. paid off • 63% of staff are familiar with strategy • Training workshops work better • Low scores on relevance of guidance/tools >> low usage • Higher marks for GAC-in-projects and from Country Office staff • But few staff received tangible support (in particular, $) • Beneficiaries of CGAC/Window $ said it helped undertake activities • Yet support not associated with systematic improvements

17. What difference is GAC Phase 1 making ? Resourcing of GAC implementation

18. What difference is GAC Phase 1 making ? CGAC/Window • 27 CGAC countries, then 18 Window 1 countries • CGAC and Window countries • Generally not more GAC responsive post-GAC • More likely to focus on institutional strengthening • But less likely to achieve domestic accountability goals • Projects in CGAC and Window countries • Not significantly different in smart design post-GAC • Less likely to support rules-based decision-making and accountability post-GAC • Continued to have more risk management measures relative to projects in other countries post-GAC