A Sourcebook - UN-Water

More documents

Recommendations

Info

Example of a simple, narrow approach versus a broad, systems-based approach A sector practitioner might identify that utility managers are accepting kickbacks from certain suppliers in return for sole-sourcing contracts to them (at inflated prices). The practitioner could intervene by establishing procurement rules that decrease the threshold for sole-sourcing, and require more competitive bidding processes. This would provide a control to stop corruption from happening in the same way as it had been previously, but would not change the utility manager or supplier’s incentives. The utility could get around the contracting requirement by awarding multiple contracts just below the threshold, or by rigging “competitive” bidding processes. As long as the probability of detection, multiplied by the costs of detection, are lower than the benefits of continuing the corrupt behavior, the utility and supplier will continue to find ways around the procurement rules. Of course, this does not mean that the sector practitioner should abandon procurement controls as a means of deterring corruption. Rather, the practitioner should think about the other weaknesses in the sector accountability system that create incentives for corrupt behaviour. These weaknesses might include a lack of monitoring and detection of corrupt activity, minimal and uncertain punishment when corruption is detected, and few incentives for utility mangers to run the utility efficiently. These weaknesses suggest that the practitioner should not take a “narrow” strategy of establishing strict procurement rules, but rather should stake a “broad” strategy of enhancing procurement controls, increasing penalties when bribery and kickbacks are detected, improving channels for the public to report corruption, and undertaking management reforms to give utility managers an incentive to reduce the costs of their contracts and operate the utility more efficiently. Figure 11.3 below illustrates this contrast between a narrow problem definition, which leads to a narrow pro-probity approach, and a broad or systems-based problem definition, which leads to a broad (and ultimately more effective) pro-probity approach. As Figure 11.3 illustrates, simplistic interventions at the project or provider level (such as establishing stricter procurement rules) are unlikely to significantly change incentives and governance. To achieve a change in governance, a range of complementary interventions that act to change incentives and encourage greater probity are required. Thus, it is important that practitioners package together interventions that create such systemic change, rather than just addressing a narrow, localized problem. In Indonesia, the World Bank has identified six areas in which all in World Bank programs should aim to improve governance (see Box 11.5) 11.3.2 Starting with simple foundations, building over time Box 11.5 Six Key Areas of Intervention Recommended for Indonesia The six areas of intervention for all World Bank programs recommended by the Anti Corruption Committee for Indonesia are: • Enhanced information disclosure • Civil Society oversight • Mitigation of collusion • Mitigation of forgery and fraud • Complaint handling systems • Sanctions and remedies. The Committee believes that interventions that cover all six of these areas will help to strengthen systemic good governance, by causing appropriate shifts in incentives at different levels in the sector. Source: World Bank. (2007). Project Paper: Indonesia 3rd Kecamatan Development (Phase 2) Project. 4 April 2007. pp.27–32. As Section 11.2 acknowledged, reforming governance structures can be difficult in the face of political resistance and low capacity. This highlights the need to begin with simple changes and small gains, focusing on areas where there is support for reform (for instance, where officials or stakeholders are willing to be reform “champions”). 138
Figure 11.3 Narrow (Top) versus Broad, Systems-based (Bottom) Approaches Sole-source contract Competitive bidding rules Rig bid, award contract Utility official Private supplier Utility official Private supplier Utility official Private supplier Bribe Kick-back on contract payment, cost hidden in expense claim Narrow problem definition: lack of procurement rules Narrow strategy: establish stricter procurement rules Long-term result: parties find other ways to engage in corrupt behavior Sole-source contract Government/ Utility board Provide incentives for efficiency Blacklist bribers Award contract to best bidder Utility official Private supplier Utility official Private supplier Utility official Private supplier Bribe Report corruption Public Competitive bidding rules Systems-based problem definition: benefits of corruption outweigh costs Broad strategy: increase costs of corrupt behavior & benefits of probity Long-term result: level of corrupt behavior reduced Just as existing governance structures and willingness to reform differ from country to country, so too does the appropriate starting point for pro-probity interventions. One potential entry point would be the “weakest links” in the accountability chain—those that stop an effective flow of accountability from taking place. For example, a lack of transparency or information disclosure may be preventing the public from being able to exercise demand for better services. By working on improving these links, practitioners may be able to ensure that at least a weak pro-probity signal starts to be transmitted through the entire system. If all the links in the accountability chain are functioning, but all need to be improved, an alternative approach is to start with basic improvements across a spectrum of accountability links, and to use success in initial stages to build momentum for further reform. Figure 11.4 provides an example of strengthening an entire governance system, starting with a simple “foundation intervention” that creates a self-sustaining drive for progressive improvements. In the il- 139
Page 1 and 2:
Public Disclosure Authorized 46829
Page 3 and 4:
PREFACE In 1996, then World Bank Pr
Page 5 and 6:
TABLE OF CONTENTS 1 INTRODUCTION ..
Page 7 and 8:
Tables Table 1.1: How to Use the So
Page 9:
Box 11.1: Five Key Elements of an A
Page 12 and 13:
In each section, corruption and gov
Page 14 and 15:
2 UNDERSTANDING CORRUPTION AND GOVE
Page 16 and 17:
Box 2.2 Governance in the Literatur
Page 18 and 19:
Corruption often involves a “mora
Page 20 and 21:
When these conditions hold, a virtu
Page 22 and 23:
This suggests that sector practitio
Page 24 and 25:
spur increased local demand for acc
Page 26 and 27:
Source List 2.1 Framework for Think
Page 28 and 29:
• P rovider - Section 5 discusses
Page 30 and 31:
That said, the interpretation of na
Page 32 and 33:
Source List 3.1 Country Level Gover
Page 34 and 35:
4 SECTOR ASSESSMENT This section in
Page 36 and 37:
4.3 Informal Service Provision In m
Page 38 and 39:
Media coverage of corruption can se
Page 40 and 41:
Opportunities for corruption arise
Page 42 and 43:
Table 4.2 Some Corruption and Poor
Page 44 and 45:
Source List 4.1 Sector Assessment S
Page 46 and 47:
Source List 4.1 Sector Assessment (
Page 48 and 49:
Source List 4.1 Sector Assessment (
Page 50 and 51:
Figure 5.1 Corruption in Procuring
Page 52 and 53:
5.1.3 Problems with quality As disc
Page 54 and 55:
• Utility unable to link billing
Page 56 and 57:
5.3.1 Detecting corruption in human
Page 58 and 59:
• Travel by utility staff at the
Page 60 and 61:
6 PLANNING AND IMPLEMENTING CAPITAL
Page 62 and 63:
transferred from the government or
Page 64 and 65:
sector staff might schedule mainten
Page 66 and 67:
Practitioners can detect corruption
Page 68 and 69:
• Increase the price of the contr
Page 70 and 71:
7 IMPLICATIONS OF DIFFERENT SECTOR
Page 72 and 73:
Table 7.1 Five Variants of Private
Page 74 and 75:
Box 7.2 An Example of Related Party
Page 76 and 77:
• A reputation for corruption in
Page 78 and 79:
Indicators of corruption risk in co
Page 80 and 81:
• Management processes, for examp
Page 82 and 83:
PART II INCREASING PROBITY AND IMPR
Page 84 and 85:
Box 8.1 Improving Probity in Capita
Page 86 and 87:
Applying the rules effectively is c
Page 88 and 89:
sors and auditors can be appointed
Page 90 and 91:
Box 8.6 Procurement Outsourcing to
Page 92 and 93:
fective deterrents include debarrin
Page 94 and 95:
Source List 8.1 Improving Project P
Page 96 and 97:
Source List 8.1 Improving Project P
Page 98 and 99: Source List 8.1 Improving Project P
Page 100 and 101: 9 INCREASING PROBITY AT THE PROVIDE
Page 102 and 103: Linking management controls to corr
Page 104 and 105: Box 9.2 Performance Incentives for
Page 106 and 107: Box 9.5 Performance Evaluation in a
Page 108 and 109: Source List 9.1 Improving Provider
Page 110 and 111: 10 STRENGTHENING WATER SECTOR GOVER
Page 112 and 113: Government responses to citizen dem
Page 114 and 115: Methods for increasing information
Page 116 and 117: can at any time direct that provide
Page 118 and 119: Box 10.3 Internally Delegated Manag
Page 120 and 121: To overcome some of these constrain
Page 122 and 123: vider from the political directorat
Page 124 and 125: Box 10.7 Cooperative Management of
Page 126 and 127: Source List 10.1 Reforming Water Se
Page 134 and 135: technology in selected areas”, bu
Page 136 and 137: mission (the CRA) sets out rules fo
Page 138 and 139: surrounding area, to small schemes
Page 140 and 141: works and planning in public agenci
Page 142 and 143: 11.2 Second Best Options for Improv
Page 144 and 145: Table 11.1 Summary of “Second-Bes
Page 146 and 147: good strategy. One way to identify
Page 150 and 151: lustration, a practitioner with som
Page 152 and 153: Source List 11.1 Improving Probity
Page 154 and 155: Source List 11.1 Improving Probity
Page 156 and 157: 12 REVIEWING PROGRESS Monitoring an
Page 158 and 159: • Indicators chosen should relate
Page 160 and 161: Box 12.2 Using Objective Cost Measu
Page 162 and 163: on the program’s success had been
Page 164 and 165: Source List 12.1 Reviewing Progress
Page 166 and 167: threats). Competitive bidding proce
Page 168: Other Water Working Notes Water Wor
show all

A Sourcebook - UN-Water

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?