1. Measuring Progress with Governance Indicators: Wizards, Words, or Wisdom?
Governance Flagship Course
Poul Engberg-Pedersen
PRMPS, April 23rd 2003

2. Using Governance Indicators
The politics and industry of governance indicators: Different purposes and multiple actors – The risk of capturing indicators for inappropriate purposes
Public sector governance = PEM + PAR + CAB; but a moving target with both processes and outcomes
Strategic choices on how to monitor progress:
Local / national / global level?
Purpose-specific or general indicators?
Linking reforms, aid and capacity in country monitoring?
Methodology: Assessments / Approximations / Perceptions?
Ownership: Client / Bank / Development community?
Time perspective: Basic governance change, or right direction?
PSG monitoring in CAS results framework
4/30/2019
Governance Flagship Course, April 2003

3. The Politics of Governance Indicators: Different Purposes
Diagnostics without politics: Identifying problems in public sector management
Diagnostics with politics: Identifying state capture & political drivers of corruption
Decisions on aid allocation and debt relief: The need vs. performance paradox
Designing PSG operations and reforms
Accountability and results management: Progress monitoring and lessons learned
4/30/2019
Governance Flagship Course, April 2003

4. GOVERNANCE INDICATORS AND TOOLS TO FIT EVERY PURPOSE
National public sector governance
structures and processes
GOVERNANCE INDICATORS AND TOOLS TO FIT EVERY PURPOSE
HIPC
CPIA
SURVEYS
PERCEPTION-BASED
GOVERNANCE INDICATORS
INSTITUTIONAL AND
GOVERNANCE REVIEWS
GOPIs
Purpose:
Designing reforms in
public sector governance
Understanding challenges
in public sector governance
Allocating aid / relief based
on governance performance
Mobilizing public opinion
& action against corruption
Enhancing accountability and demonstrating
results in development cooperation
4/30/2019
Governance Flagship Course, April 2003

5. The Business of Governance Indicators: Multiple Actors
MDGs: UN and IFIs compete – with governance as the unknown factor
Aid, debt, global deals: Bilaterals, IFIs, WTO – with good governance as part of deal
FDI, loans: Private risk assessments, ICRG
Politics: TI, Freedom House, WBI
Accountability: IDA outcome monitoring and results management (HIPC tracking)
Client countries: Need for PSG diagnostics
4/30/2019
Governance Flagship Course, April 2003

6. Governance: A moving target
MDGs
Governance
National
politics
Results
Governance
Implemen-
tation
PRSP
Governance
Governance progress is about process and outcome
4/30/2019
Governance Flagship Course, April 2003

7. Multiple success levels / types
Outcomes, e.g. people’s good health and education
Events, e.g. policies/legislation or establishment of institutions
Processes & standards, e.g. budgeting, accounting, hearing
Impact, e.g. empowerment
4/30/2019
Governance Flagship Course, April 2003

8. The Bank’s Country Policy and Institutional Assessment, CPIA
20 indicators in four clusters (economic management; structural policies; social inclusion/equity; public sector management and institutions).
Scored 1-6 (low->high) for each client country, annually by Bank staff. So far, not made public or shared with clients.
#16: Property-rights and rule-based governance
#17: Quality of budgetary and financial management
#18: Efficiency of revenue mobilization
#19: Quality of public administration
#20: Transparency, accountability and corruption in the public sector
4/30/2019
Governance Flagship Course, April 2003

9. Three fields of public sector governance
Public financial management
Aggregate fiscal discipline
Allocative efficiency: Strategic prioritization
Operational / technical efficiency
Public admin. reform:
External accountability to oversight bodies and partners
Internal accountability within the Executive
Human & institutional capacity
Structural coherence and alignment within Executive
Institutional checks and balances:
Constitutional balance of power
Oversight by legislature and supreme audit institutions
Rule of law and legal / judicial reform
Institutionalized stakeholder participation
4/30/2019
Governance Flagship Course, April 2003

10. PUBLIC FINANCIAL MANAGEMENT Regional administrations
JUDICIARY
LEGISLATURE
DONORS: AID
Supreme audit inst.
President / Cabinet
ALLOCATIVE
EFFICIENCY &
PRIORITIZATION
AGGREGATE
FISCAL
DISCIPLINE
Core ministries
LINE MINISTRIES
SERVICES
Regional administrations
TECHNICAL /
OPERATIONAL
EFFICIENCY
LOCAL GOVERNMENTS
SOCIETY: TAXES & FEES
4/30/2019
Governance Flagship Course, April 2003

11. PUBLIC ADMINISTRATION REFORM
STRUCTURAL
ALIGNMENT
DONORS: AID
CIVIL SOCIETY: DEMANDS
SERVICES
POLICIES
LEGISLATURE
President / Cabinet
Core ministries
LINE MINISTRIES
Regional administrations
LOCAL GOVERNMENTS
JUDICIARY
Supreme audit inst.
EXTERNAL
ACCOUNTABILITY
HUMAN AND
INSTITUTIONAL
CAPACITY
INTERNAL
ACCOUNTABILITY
4/30/2019
Governance Flagship Course, April 2003

12. INSTITUTIONAL CHECKS AND BALANCES
INSTITUTIONALIZED PARTICIPATION:
CIVIL SOCIETY, COMMUNITIES
ELECTORATE, STAKEHOLDERS,
LEGISLATURE:
OVERSIGHT
JUDICIARY:
RULE OF LAW
CONSTITUTIONAL BALANCE OF POWER
Supreme audit inst.:
Oversight
President / Cabinet
Core ministries
LINE MINISTRIES
Regional administrations
LOCAL GOVERNMENTS
THE EXECUTIVE
4/30/2019
Governance Flagship Course, April 2003

13. Strategic questions on progress measuring
Are ‘universal’ benchmarks available? Do countries have to go through ‘stages’ of PSG reform?
Shall we look at the reforms or also at the reformers? How do we capture political reform processes?
Is there a difference between PEM, PAR, and CAB with respect to benchmarks and indicators?
Can survey- and perception-based indicators be used in progress measuring?
If recurrent assessments are needed to capture governance outcome of Bank-supported operations, who can and should do them?
4/30/2019
Governance Flagship Course, April 2003

14. Basic and advanced public administration reforms
PSG reform issues
Basic: Enhancing discipline
Advanced reforms
Aggregate cost reductions
Hardening budget constraints
Block or frame budgeting
Efficiency improvements
Line-item budgeting: Inputs
Plan-oriented budgets
Accounting reforms
Cash accounting
Double-entry book-keeping
Auditing reforms
Compliance auditing
Performance auditing
Career management
Enhancing job security
Decreasing tenure
Unity of the civil service
Cadre with common terms
Diversify pay arrangements
Individual incentives
Standard promotion / reward
Annual performance targets
Openness
Closed career development
Lateral entry in career system
Public agency size
Simplify ministry structures
Single-purpose agencies
Contractualization
Few performance contracts
Extensive use of contracts
Political decentralization
Few changes in responsibility
Reallocation to sub-national
Service shredding
Minor reductions in services
Shredding government tasks
Contracting out
Easy support tasks only
Strategic tasks, too
Is this possible? How does it relate to reform processes / drivers of reform?
4/30/2019
Governance Flagship Course, April 2003

15. Contents and drivers of PSG reforms
CONTENTS OF PSG REFORMS
Advanced Reforms:
Block / frame budgeting
Diversify pay and tenure
Performance targets
Major decentralization
Basic Reforms:
Discipline in budgets
Enhanced job security
Simplified gov. structure
Security / Survival:
Effective service delivery
DRIVERS OF PSG REFORMS
National Organizations:
Central/local civil service
Parliament
Nation-wide political parties
Interest organizations
Champions of Reform:
Reform entrepreneurs
Networks of reformers in and outside bureaucracy
“Doers”
All authorities / CS / private
4/30/2019
Governance Flagship Course, April 2003

16. Governance capacities
Linking PSG reforms, aid and capacity: Need for country-specific progress monitoring
Implementation organizations
Reform champions outside government
Reform champions inside government
Basic public sector reform
Basic and advanced public sector reform
Advanced public sector reform
Governance reforms
Good
<->
Medium
Bad
Governance capacities
Effective types of aid
Budget support to government
Basket funding, e.g. SWAPs
Programs for social services delivery
Zero-generation reforms
Support through civil society
Humanitarian assistance projects
4/30/2019
Governance Flagship Course, April 2003

17. PSG monitoring in CAS results framework
Globally available governance indicators:
Perception-based (WBI, TI, ICRG, Freedom House); CPIAs; PEM tracking; 2nd generation.
Client
develop-ment objectives
CAS objectives
PSG objectives and activities
PSG features and challenges
 Monitoring of PSG progress
Progress within CAS framework
CAS revisions: New PSG objectives
 New PSG objectives, activities
PSG objectives within CASs, e.g.:
Effective services;
Accountability;
Anti-corruption;
Decentralization and voice
PSG challenges in three fields:
*Public fin. man.
*Public admin.
*Institutional checks&balances
Info. for GOPIs:
*Independent assessments
*Quantitative indicators
*Existing assessments
4/30/2019
Governance Flagship Course, April 2003

18. Governance Flagship Course, April 2003
Governance Operations Progress Indicators: Three options – or a mixture?
Independent assessments
Quantifiable proxies
More detailed CPIAs
Extend PEM benchmarking to more countries
Establish similar benchmarks for public admin. reform, checks & balances
Establish joint assessment system with clients – Who?
Add supplementary questions to each of CPIA #16-#20
Apply 1-6 ratings for each of the more detailed questions
Establish joint assessment with clients and/or publicize ratings?
Regulation of entry
Budget volatility
Revenue source volatility
Trade tax
Telephone faults
Telephone waiting
Contract enforcement
4/30/2019
Governance Flagship Course, April 2003