1. Public Sector Reform: What Works and Why? An IEG Evaluation of World Bank Support – 1999-2006 September 2008

2. What did we evaluate? Most work of the World Bank supports reforms of the public sector, broadly defined Core Public Sector: –Managing Public Money thru the budget cycle -- PFM –Managing the People—civil service and organization of administration --CSA –Tax Administration agencies –Anticorruption and Transparency— government-wide measures-- AC laws and AC Commission access to information laws 1999-2006, plus retrospectives

3. Lending Projects with Significant PSR Components - 1990-2006

4. How did we evaluate? –Look at whole country program for PSR Lending, Analytic work, non-lending TA Six plus PSR loans in 13 countries, including Pakistan, Peru, Brazil, and Uganda Three plus in 55 countires –Large numbers show tendencies Change in ratings of Country Policy and Institutional Assessments – 1999-2006 –Case studies give insights as to Why 19 cases, including 6 with field visits –Bulgaria, Burkina Faso, Cambodia, India, Russia and Tanzania

5. CPIA—Country Policy and Institutional Assessments –Total of 16, of which four pertain to public sector governance 13: Quality of Budgetary and Financial Management (PFM) 14: Efficiency of Revenue Mobilization 14b: Tax Administration 15: Quality of Public Administration (CSA) 16: Transparency, Accountability and Corruption in the Public Sector

6. Main findings – Successes PFM and Tax Administration –Majority of countries with PFM and tax administration loans improved performance in CPIA –Good diagnosis and monitoring (PEFA) –Strong motivation of Min of Finance Tax administration a key entry point in Eastern Europe –Technical cooperation with IMF and donor community Transparency – access to information –Key component of PFM as well as government wide

7. Finding: UNSuccessful areas Civil Service and Adminstrative reform –Many failures to retrench and to improve pay Problem flagged in 1999 IEG evaluation Cambodia, Honduras, Yemen Labor market conditions facilitated success in Russia –New initiatives for merit-based recruitment and promotion – Albania, some Indian states Anti Corruption – government-wide initiatives –AC laws and commissions rarely successful Lack of sustained Political commitment Lack of Strong judiciary –Relative success in system-building and transparency

8. PSR Success rates lower in low-income countries World Bank often used models too sophisticated for settings with initially weak institutions—typical in low-income countries, especially Africa Middle-income governments more often had the fiscal independence to be selective – choosing what they thought was appropriate– Russia, South Africa, Mexico

9. Rec 1. Recognize complex political and sequencing issues Be realistic about the time needed to get significant results Understand the political context Focus first on the basic reforms that a country needs in its initial situation Balance between investment projects and development-policy lending –institutional change needs sustained support

10. Rec 2. Prioritize Anticorruption efforts Identify corruption that is most harmful to poverty reduction and growth –Aim for improved results Build country systems to reduce the opportunities for corruption Make information public –stimulate popular demand for more efficient and less corrupt service delivery

11. Rec 3. Strengthen Civil Service and Administration components Better analytic framework for CSA –Look beyond fiscal cost –Merit-based incentives Actionable indicators for civil service and administrative performance (like PEFA) Link civil service reforms to financial management CSA reforms needed to sustain improvements in rest of PSR