World Bank Issues Implementation Plan for Anticorruption Strategy

28 August 2007

The World Bank has released its long-awaited “implementation plan” for its governance and anticorruption strategy, a document much shorter and less specific that the guiding Bank “strategy” set in March.

There are some new revelations, however. The implementation plan issued Aug. 21 for the first time reveals a budget, $14.8 million for fiscal 2008. And in a structural move, the Bank’s managing director, Juan Jose Daboub, was placed in charge of the overall effort, aided by a new internal oversight council.

The plan follows the seven “guiding principles” of the previously issued strategy, and indicates that efforts to fight corruption will occur at the country, project and global levels.

However, the 15-page plan does not get into anywhere near the detail of the 35-page strategy adopted in March. It stresses the need for “country-driven” strategies.

The idea that the Bank might finance nongovernmental organizations to advocate governance reforms is not in evidence in the implementation plan. The apparent disappearance of this notion of expanding funding to third-party reformers may indicate the demise of a concept previously envisioned as one way to implement former president Paul Wolfowitz’s pledge April, 11, 2006, to increase investment in the areas of media development and freedom of information.

Generally speaking, the implementation plan emphasizes the pursuit of “sound country systems of transparency and accountability,” but does not specifically mention media development or support for freedom of information. Separately, a Bank official told to expect further delays in the planned release of a major study and evaluation of freedom of information laws worldwide.

The plan also does not propose amending the Bank’s own disclosure policy, something officials previously have said would occur, without providing the specifics that some expected in the implementation plan.

The World Bank Board of Directors is expected to act on the implementation plan in early October. In the meantime, the Bank has called for public comment, with a deadline of Sept. 20. The Bank also intends to hold a series of focused discussions with stakeholders in Europe and Washington, as well as a cross-section of member developing countries.

The implementation plan for the governance and anticorruption strategy (known as GAC) divides the planned work into three levels: country, project and global.

The overall plan is summarized in an early paragraph stating: “The GAC is rooted in the Bank’s mandate to address poverty reduction, it is not an end in itself; it must be country-driven; it must be adapted to country circumstance–no ‘one size fits all’; it requires the Bank to remain engaged so that ‘the poor do not pay twice’; the Bank would work with many stakeholders; it would not act in an isolated way, but with partners; and it would work to strengthen, not by-pass, country systems through stronger institutions.”

Flexibility Stressed for Country-Level Efforts

The new plan stresses flexibility and tones down the potential for punitive action.

“It presents what should be regarded as a menu of activities, not a list of instructions, with the shape and nature of the Bank’s involvement in any country being determined by country teams and management, and by Regional and Network initiatives.”

In true Bank style, a new acronym, CGAC, has been invented, meaning “Country Governance Strategy”–too new even to make it into the list of abbreviations and acronyms at the front of the report. This will not be a separate document, however; anticorruption strategies will be incorporated via the standard Country Assistance Strategy (the CAS), prepared for all active borrowers on a rotating basis.

According to the plan, “In FY08, it is expected that a significant share of new CASs–for a cross-section of countries across Regions and with different governance situations–would be informed by such a stocktaking and engagement on GAC issues, or CGAC process, and that the quality of treatment of GAC issues in CASs would show a marked improvement. Some country teams may also initiate the process at an interim point during the CAS cycle, responding proactively to entry points that emerge. After a year’s experience and evaluation of results to date, it would be determined how such CGAC processes could be mainstreamed.” The Bank fiscal year runs June 30 to July 1.

The issue of dealing with recalcitrant countries is handled delicately: “For others where GAC issues are judged to be a serious obstacle to poverty reduction, but where the client is not yet ready to address these issues or to have Bank support in these areas, in keeping with the guiding principle of remaining engaged, the CAS would outline potential entry points, seek creative ways of providing support (for example using instruments such as community-driven development or third party delivery systems, so that “the poor don’t pay twice”), and/or propose AAA activities designed to increase awareness of the impact of GAC issues.” AAA means “analytic and advisory activities.”

Project-Level Activity Described Generally

At the project level, the strategy envisions “an emphasis on the appropriate incentives and accountability mechanisms needed at the project and sector levels to make good sector governance a reality. Fundamentally, it also requires developing strong country fiduciary systems and sound country systems of transparency and accountability.”

The plan also states: “It is through the development of such country systems, and reducing opportunities for corruption by streamlining excessive regulation or approval processes and effecting demand-side initiatives (including enhancing information access and developing community and other third-party oversight mechanisms), that the strongest likelihood for effective mitigation can be found.”
Apparently dropped from the plan are specific new elements contemplated at earlier stages, such as writing “anticorruption action plans” for projects in high-risk countries, or “shorter-term Interim Strategy Notes with mandatory anticorruption action plans for projects.”

Anticorruption thinking also will be applied to the Bank’s plans for particular sectors.

Global Partnership Not Cited in Global-Level Plans

In this area, the Bank plan identifies five areas of increased activity: “intensified support for multi-stakeholder engagement,” “improved donor coordination,” “harmonization of investigative practices,” “support of global and regional legal convention,” and “working to build a consensus on how GAC work can enhance development effectiveness.”

The section does not raise the prospect of arms-length donations to multilateral funds, “global partnerships,” which in turn would support pro-governance activities by civil society groups. One staffer thought this concept, in which the Bank has dabbled, held greater promise to finesse restrictions on direct Bank funding and advance the anticorruption agenda.

The Bank’s by-laws have always presented a constraint on funding civil society groups, because, as one Bank official put it at an April briefing for nongovernmental organizations, “we work at the discretion of governments.” The proposed strategy policy had sought to subtly circumvent this, but the final document was modified by the Board at the insistence of China and about 10 other nations. The constraints imposed, an official admitted, present “a fundamental problem” of “what instruments can we devise.”

From the beginning, this approach, enthusiastically embraced by the staff, touched sensitive nerves with the Board. The proposed language was carefully couched and was modified at the final Board meeting to underscore that such Bank efforts should only be done “in consultation with government.”

Another area of disagreement during the writing of the strategy concerned potential Bank support for the media, a stated goal of former president Wolfowitz. In his April 11, 2006, Singapore speech kicking off his anticorruption drive, he stated, “We will increase our investments in such key areas as judicial reform, civil service reform, the media and freedom of information, and decentralization of public service delivery.”

The March 21 strategy reflects this priority, stating in section 30 that efforts to increase government transparency can be achieved by increasing participatory development of policies, strengthening civil society, and specifically “Enabling the development of independent and competitive media that can investigate, monitor and provide feedback on governmental performance, including corruption.”

According to Bank insiders, the inclusion of the pro-media sentence was opposed by some countries, but strongly supported by management.

The implementation strategy does not amplify on this goal.

Interim Budget Set

The section on staffing and budgeting emphasizes that this fiscal year is a start-up period and seems to espouse a decentralized approach.

The document notes the need to identify “a group of staff to act as focal points in the Regions and Networks to focus on GAC issues, ask the relevant questions at the right time, and support management and task teams.” The paper further states that there will be a need for “incremental staffing.” It says the Bank will proceed “cautiously” on a variety of staffing issues.

The $14.8 million “to support the build-up of the implementation process” is an increase of 8 percent on the estimated $167 million spent on governance activities. Further increases are “anticipated” depending on results, demand and lessons.
The projected budget is allocated for the CGACs ($2.6 million); immediate skills gaps ($7.2 million); for governance work by several Bank units, Poverty Reduction and Economic Management, Development Economics, and the World Bank Institute ($2.8 million); and for global initiatives and communication ($2.2 million).

FOI Strategy Emerging, Delay Encountered

Regarding freedom of information, there are a variety of hints that the Bank will expand its work, with the goal of “helping states become transparent.” Some thought this would be elaborated on in the implementation policy.

More concretely, the institution had been expected in April, and then in August, to release its own survey of openness laws around the world, and to provide its ideas on what constitutes good practice.

Those plans have been delayed again because quality control is taking longer than originally anticipated. The survey of laws may be posted in the fall, but the evaluative summaries and ratings may not be available until early next calendar year.

Several Bank sources have said the Bank is considering conducting an unprecedented retrospective review of its scattered past activities on FOI. The Bank now cites FOI-related work in a dozen countries, not all of it disclosed. Last year the Bank lacked a tally of its efforts. (See previous report on this subject.)

The Bank’s interest in helping civil society groups could potentially have benefited pro-FOI campaigns.

There appears to be strong staff-level support for emphasizing greater country-level transparency as a key component in any anticorruption strategy. “I would rather focus on FOI than corruption,” said one World Bank official, who heads a Bank office in one very poor country with significant corruption issues. The official persuaded other major donors to make FOI a top priority and lobbied the government to pass a law, buttressing an otherwise poorly-endowed campaign in a country where major media figures oppose FOI, perhaps because it might lead to disclosure of government retainers paid to journalists.

Support for more Bank activity in this area is mentioned several times in the strategy. A section on transparency states, “Building on a growing track record of success in this area, the Bank will scale-up its work with interested governments to strengthen transparency in public policymaking and service provision.”

In section 12 of Annex C, a discussion of “entry points for governance and anticorruption reform,” the advantages of strengthening transparency in governance are reviewed. The conclusion states, “Working with partners, the Bank will push for a significantly greater focus on assuring greater access by citizens to information on how government operates, including expanded production of information that can allow citizens to assess the services they are getting from government.”

Bank Disclosure Policies Under Review, Maybe

In its implementation plan, the Bank has not indicated what elements of its own transparency policies will be reconsidered. Early hints of change emerged in late 2006.

The “guiding principles” of the strategy state that the Bank “will scale up existing good practice in engaging with multiple stakeholders in its operational work, including by strengthening transparency, participation, and third-party monitoring in its own operations.”

Also mentioned, in a section on improving participation in project design, is “timely disclosure of project information.”

Further along, the strategy is stated: “The Bank will revise its own disclosure policy to improve the Bank’s own transparency, and will enhance current guidance to staff in order to consistently apply best practices on consultation and participation in Bank operations.”

However, specifics on the possible changes, or on the procedures to be followed in conducting the review, have not yet emerged.

By Toby McIntosh

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Filed under: IFTI Watch


In this column, Washington, D.C.-based journalist Toby J. McIntosh reports on the latest developments in information disclosure in International Financial and Trade Institutions (IFTI).
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