Actionable Governance Indicators AGIs Presentation to the Public

Actionable Governance Indicators (AGIs) Presentation to the Public Sector Governance Board (PSGB) November 8, 2007 The World Bank

Contents n n n Why? What? How? Who? When? The World Bank 2

Contents n Why? The World Bank 3

"Effective implementation, including further development of actionable and disaggregated indicators, will now be critical to achieving the GAC strategy's desired results. In this context, we welcomed the agreed Board engagement and oversight during implementation. " –Development Committee Communiqué, Washington, DC, 15 April, 2007 The World Bank 4

Actionable Governance Indicators are the “Missing Middle” Inputs and outputs n n Bank operations consistently track project inputs and outputs A growing number of Bank operations and client countries have begun to track program and policy outputs The Missing Middle: n Direct impacts of institutional reform efforts on how each of the major aspects of governance actually functions n Outcomes n Many agents, both Bank and others, have over the last decade or so developed and begun tracking policy outcomes (TI, WGI, Freedom House, Global Integrity Index) The World Bank They capture institutional arrangements, procedures and, most importantly, practices within each of the five major aspects of governance, for example: • WB examples include PEFA, CPIA and DB sub-indicators • Other examples include Global Integrity sub-indicators, Open Budget Index sub-indicators, OECD procurement index 5

AGIs Are Actionable n n Actionability implies greater clarity regarding the steps governments can take to improve their score on an indicator Actionability requires that indicators have narrow and explicit definitions Narrow and explicit definitions not only facilitate actionability, but also contestability of indicators, permitting meaningful discussion regarding the appropriateness of any given rating Objective vs. subjective, or perceptions-based vs. experience-based, are not critical distinctions for “actionability” The World Bank 6

AGIs Capture Governance n Indicators should capture institutional arrangements, procedures and practices of one or more of the five broad aspects of governance emphasized in much of the Bank’s work on governance: • Effective public sector management • Decentralization and local participation • Political accountability • Checks and balances • Civil society, media and the private sector oversight and input into public sector activities and decision-making The World Bank 7

Monitoring for Results A Typology of Available Governance Indicators Measuring Quality of Processes, Rules, Practices Specific Measures Broad Measures PEFA indicators* CPIA sub-indicators* Global Integrity Index (GII) subindicators* Open Budget Index (OBI) subindicators* OECD Procurement Index* Doing Business Overall CPIA* Overall GII* Overall OBI* Overall DB Index* Polity IV (executive constraints)* Sources: *Expert assessments **Surveys Measuring Outcomes Investment Climate Assessments** Business Environment & Enterprise Surveys (BEEPS)** Worldwide Governance Indicators (WGI) - selected sub-indicators)*** Transparency International*** WGI*** Freedom House* ***Combination n Use aggregate governance indicators to indicate extent & mix of governance problems n Use actionable governance indicators to monitor progress in implementing priority GAC reforms The World Bank Frontier challenge: Improve menu of AGIs 8

Monitoring Progress vs. Comparing Across Countries n Dialogue with governments in relation to public sector reform • Comparative position • Tracking changes over time n Ideally both, but not always welcome by the client or feasible due to other reasons, e. g. • • CPIA - IDA vs. IBRD Difficulty with release of PEFA scores and reports Scaling up HRM indicators Country specifics vs. comparability The World Bank 9

Contents n What? The World Bank 10

Different Dimensions of Good Governance Are Measured Differently Citizens/Firms Checks & Balances • Independent, effective judiciary • Legislative oversight (PACs, PECs) • Independent oversight institutions (SAI) • Global initiatives: UN, OECD Convention, anti-money laundering Effective Public Sector Management • Ethical leadership: asset declaration, conflict of interest rules • Cross-cutting public management systems: meritocracy, public finance, procurement • Service delivery and regulatory agencies in sectors Civil Society & Media • Freedom of press, FOI • Civil society watchdogs • Report cards, client surveys Private Sector Interface • Streamlined regulation • Public-private dialogue • Extractive Industry Transparency • Corporate governance • Collective business associations Citizens/Firms Political Accountability • Political competition, broad-based political parties • Transparency & regulation of party financing • Disclosure of parliamentary votes Decentralization and Local Participation • • The World Bank Decentralization with accountability Community Driven Development (CDD) Oversight by parent-teacher associations & user groups Beneficiary participation in projects Citizens/Firms 11

Different Dimensions of Good Governance Are Measured Differently (examples of existing AGIs) Citizens/Firms Political Accountability • Political competition, broad-based political parties • Transparency & regulation of party financing • Disclosure of parliamentary votes PSG public acc. indicators Public official surveys Global Integrity Index Freedom House indicators Afro/Latino/Asia. Barometer The World Bank 12

Different Dimensions of Good Governance Are Measured Differently (examples) PSG public acc. indicators Human rights database Reporters Without Borders Media sustainability index Private Sector Interface • Streamlined regulation • Public-private dialogue • Extractive Industry Transparency • Corporate governance • Collective business associations Citizens/Firms Civil Society & Media • Freedom of press, FOI • Civil society watchdogs • Report cards, client surveys Doing Business sub-indicators BEEPS ICA and accompanying surveys Business Risk Service TI index Global Competitiveness index The World Bank 13

Different Dimensions of Good Governance Are Measured Differently (examples of existing AGIs) PER and PETS PEFA (e. g. PEFA 8) QSDS Score cards Decentralization and Local Participation • • Decentralization with accountability Community Driven Development (CDD) Oversight by parent-teacher associations & user groups Beneficiary participation in projects Citizens/Firms The World Bank 14

Different Dimensions of Good Governance Are Measured Differently (examples of existing AGIs) Citizens/Firms LEG. : Ro. L and human rights ind. PEFA TI perception index Global Integrity indicators Open Budget Initiative Checks & Balances • Independent, effective judiciary • Legislative oversight (PACs, PECs) • Independent oversight institutions (SAI) • Global initiatives: UN, OECD Convention, anti-money laundering The World Bank 15

Different Dimensions of Good Governance Are Measured Differently (examples of existing AGIs) PSG public acc. indicators PSG country-specific projects Score cards PEFA Global Integrity index OECD procurement indicators Effective Public Sector Management • Ethical leadership: asset declaration, conflict of interest rules • Cross-cutting public management systems: meritocracy, public finance, procurement • Service delivery and regulatory agencies in sectors The World Bank 16

Examples n n n n n PEFA Decentralization AGIs HRM AGIs Public Accountability Indicators Global Integrity Indicators OECD Government at a Glance PSG Governance at a Glance OECD Procurement Indicators PSG Support to Indicators Projects The World Bank 17

PEFA • 31 high-level indicators measuring performance of PFM systems (28 Performance Indicators + 3 for Donor Practices) • A performance report based on the indicators • Used in around 75 countries and by 19 donors (WB+EC=80%) • Common pool of information to promote country leadership, coordinated and aligned donor support = the Strengthened Approach • Unfortunately, only a small number of reports are publicly available through websites – WB and EC have promised to take action, with little results so far The World Bank 18

Decentralization AGIs (examples) n Local Fiscal Monitoring • Indonesia’s Fiscal Information System (SIKD), Village Finance Statistics • South Africa’s Periodic Intergovernmental Fiscal Review n Intermediate PFM Benchmarking • • • n Public Expenditure Tracking Surveys (PETS) (e. g. , Uganda) Sub-National Public Expenditure and Financial Accountability (PEFA) Performance Indicators (e. g. , Bosnia, Indonesia) Brazil’s “Random” Public Audits for Municipalities Assigned by Lottery SN Credit Ratings Other Process Indicators • • Public Integrity Indicators (e. g. , Colombia, Turkey) World Bank Institute (WBI) Surveys – corruption diagnostics India’s Bangalore Citizen Score Cards – implemented in all Indian states Indonesia’s Evolving Local Governance “Platform” Monitoring n n • • Governance & Decentralization Surveys (2002, 2004, 2006) National Household Survey (SUSENAS) significant at district level Colombia ¿Como Vamos? (How Are We Doing? ) Turkey Municipal Performance Measurement Project (BEPER) Australia’s Productivity Commission On-Going Surveys in China… Bottom line: While “decentralized” PFM AGIs are widely used and relatively well defined, the work on decentralization AGIs outside of The World Bank PFM is lagging and needs a boost. 19

HRM AGIs n Global Integrity sub-indicators on HRM issues (40+ countries in 2006, 55 in 2007) • Depoliticization • Ethical conduct n Country-specific HRM indicators • • Fiscal sustainability of the wage bill Depoliticization Attracting and retaining required human capital Merit-based, performance-oriented HRM practices The World Bank 20

Public Accountability Indicators n Legal and institutional frameworks as of July 2006 for Asset Disclosure, Conflict of interest, Freedom of Information, and Immunity n 78 Countries (53 IDA) from 5 continents n Demand: n n Presentations and evaluations in ECA for Ukraine, Turkey, Bulgaria, Macedonia, Georgia, Moldova n n CASs Monitoring progress of Mauritania, Vietnam, Uganda & Kenya Possible products that PSG could market n Cross-country comparative database available on the web n Laws and regulations n Analysis of the strengths & weaknesses n Indicators n Methodological guidelines including international best practice n PREM Note & Other Publications including working papers The World Bank 21

Global Integrity Index The Global Integrity Index (GII) assesses the existence and effectiveness of anti-corruption mechanisms that promote public integrity. Prepared by a lead researcher in the country and then blindly reviewed by additional incountry and external experts, the Integrity Indicators assess the existence of laws, regulations, and institutions designed to curb corruption but also their implementation, and the access that average citizens have to those mechanisms. In 2006 GII was calculated for 40+ countries (55 countries in 2007). All information and Global Integrity Country Reports are available on-line. The World Bank Unbundling GII: Overall Index Government Accountability (1 of 6 major categories) Executive Accountability (1 of 23 sub-categories) Conflict of interest rules for executive branch (1 of 75 questions) Asset disclosure requirement for executive branch (1 of 290 sub-questions)

OECD Government At A Glance n OECD currently developing a comprehensive database on disaggregated governance indicators 'Government At A Glace‘. First dataset will be released in 2009. • The tool will be administered by countries themselves. • The dataset intended to provide insights into sector-level efficiency and institutional effectiveness, observed relationships among process and outcomes, and absorptive capacity of governments • The dataset will measure variables along six categories across sectoral boundaries n n n Revenues Inputs Processes Outputs Outcomes Antecedents or constraints • Use existing indicators to the extent available, and develop new indicators in some areas such as Central Government Revenues, Budgetary Quality, HRM Indicators, and Management and Regulatory Quality n OECD Working paper is a comprehensive survey of existing indicators. 3 technical papers on framework for project, output measures, and outcome measures have been released. The World Bank 23

PSG ‘Governance at a Glance’ The World Bank 24

OECD Procurement Indicators Pillar 1: Legislation Pillar 2: Central institutional capacity Pillar 3: Capacity to execute procurement Pillar 4: Integrity and transparency of the procurement process The World Bank 25

PSG support to indicators projects n Grants • • Global Integrity • • Gallup International Afro. Barometer, Asian Barometer OECD Budget Practices Database • BNPP-funded regional initiatives n Technical assistance • Global Integrity • Afro. Barometer, Asian Barometer • African Governance Indicators (UNECA) • PEFA • Legal Dept. : rule of law and human rights indicators • Doing Business (annual peer review) • Worldwide Governance Indicators (incl. support for data sources) • CPIA (content, and reviews of ratings) The World Bank 26

Contents n How? The World Bank 27

Two-Pronged Approach to Increasing the Use of AGIs 1. Ramp up usage of existing PSG AGIs in the Bank’s work • Better package available AGIs resources - make them more accessible and user-friendly • Encourage systematic application of already developed and tested AGIs to operational work in order to achieve quick and easy wins 2. Develop new AGIs resources • Develop and test new AGIs for cross -cutting governance dimensions • Support and encourage development of governance AGIs in sectors The World Bank Σ (1, 2) = development of an AGI toolkit(s) 28

Ramp-up Usage of Existing AGIs n User-friendly “map” of available AGI via web-site with drill-down menus that includes • Purposely PSG AGIs (e. g. PEFA, Open Budget indicators, GII, DAC OECD, PSG transparency and public acc. indicators, etc. ) and • AGIs developed by others sectors (e. g. governance aspects of DB, Business Environment Snapshots, firm/enterprise surveys, etc. ) n Promote use of PEFA and other well-developed, tested and easy adoptable "sets" or AGIs through • • n n n Development of user-friendly AGI website Learning events, BBLs, etc. One-on-one work with task/country teams CAS review process. Offer help/guidance on how to systematically apply sets of AGIs in various upcoming regional products (CASs , DPLs, SIL/TAL) Create a “PSG actionable governance indicators team” of experts in specific indicator areas willing to advise, advocate and disseminate practical use of AGIs at country, CAS and project levels. Inventory Bank’s use of AGI in CASs and Projects • To systematically document the limitations of existing approaches to monitoring PSG impacts • To show (with examples) why and how the use of “mapped” AGIs could help the WB teams to improve quality of Bank PSG interventions The World Bank 29

The PEFA Experience n Current challenges • Measuring progress over time: still a promise • How to enhance publication of reports and accessibility of data? • How to use the Framework as a capacity building tool and also respond to donors’ fiduciary concerns? • How to monitor increased use at sub-national and sector levels (baby-PEFA, PEFA-like indicators) and development of drill-down indicators (De. PMA, OECD-DAC procurement, audit standards gap analysis, etc. )? n Lessons/needs • Need for a strong back office support • Need for training, dissemination and marketing strategies • Need to bring meaning to indicator ratings and monitor impact towards a Strengthened Approach to PSG The World Bank 30

Develop and test new AGI resources n Areas where new AGIs are seen to be most needed n Proposed AGI collection tools n Some pilots are already under development • ACSR • Decentralization (beyond fiscal) • • • PEFA-like indicators and data collection methods Expert surveys/polls Household surveys (via “Barometers”, Global Gallop Poll) • Timely, targeted indicators (e. g. LCR-led initiative on Bank-paid consultants); • Web-based instrument for HRM and policy management • Country-specific HRM AGIs • Support to sector-based initiatives, e. g. n n n Indicators in health and education (in the context of harmonization of PETS methodologies, initiated by AFR region) Work on AGIs in Bangladesh and Mauritania in transport/ procurement and public works sectors amongst others Governance diagnostics in Mali on transport and energy, and possibly later on financial sector strive to come up with some indicators in these sectors which can be monitored over time The World Bank 31

Issues, Challenges and Priorities n Issues • To get countries and country teams to collect these indicators and actually use them in their operations to monitor progress in governance reforms • More operational utility is not in cross-country comparison, but in tracking progress in specific reform areas in a country, although for newly developed indicators there is a very high return in n Challenges • Build a community of practice on indicators so staff are aware of who exists and good operational practice in how to use them • Encourage our country partners to implement and publish the indicators in their country, i. e. greater public disclosure of these indicators n Priorities • • • Provide aggressive training and guidance to country teams Improve web-access to AGIs Cover gaps in the areas of HRM/PSM, sub-national governance and governance of service delivery in sectors The World Bank 32

Contents n Who? The World Bank 33

Different tasks n PSG anchor • • • n Work with selected regional PSG and sectoral teams on development of demand driven AGIs (country-specific and with cross-country applicability) PSGB members/regional PSG Sector Managers • • n Marketing of existing AGIs Development of limited number of new AGIs in HRM and decentralization “Help desk” and advisory team Clearinghouse Promote use of AGIs in their units' products and operations Help to identify activities (projects, CASs) for scaling up usage of AGIs Governance Secretariat • • Work at the RVP level Encourage scaling up of the AGI work in other sectors The World Bank 34

The Role of the Governance Secretariat The Governance Secretariat will support a Governance Council (GC) which is scheduled to be formally launched by the President on December 6, 2007. The GC will consist of high-level management from the Regions and Networks and other units to oversee GAC implementation, and will be Chaired by the responsible MD. The Governance Secretariat would: n n Inform RVPs that PRMPS is working to mainstream use of existing and tested AGIs in CASs and relevant operations Encourage other SBs to identify (or develop when necessary) AGIs capable of monitoring the governance dimensions of progress in their sectors n n Expected results – a collection/list of sector specific AGIs that may be not "PSG" in the narrow sense (e. g. actual vs. contract quality of pavement materials, teacher absenteeism, etc. ) This list will be featured as a part of the AGIs web-site and regularly updated The World Bank 35

Contents n When? The World Bank 36

FY 08 Deliverables PAG AGI team created Dec. 2007 Regional activities for scaling-up AGIs use selected Public Accountability Indicators Dec. 2007 • documents (laws, regulations, etc) • ratings Learning events (first clinic) Web-based HRM tool • developed • pilots AGI Web-site becomes operations The World Bank Jan. 2008 April 2008 Jan. 2008 Feb. 2008 April 2008 May 2008 37

Thank You The World Bank 38

Issues for Discussion n n How can we enhance engagement with regional and sectoral staff? What countries/activities do you suggest as pilots? Monitoring vs. cross-country comparison or how to reach a balance between the two? Are decentralization and HRM the most needed sets of AGIs? How best to divide responsibilities among anchor, PSG groups in regions and the Governance Secretariat? The World Bank 39