Aid and Governance With a focus on Africa Verena Fritz Sr Public - PowerPoint PPT Presentation

Aid and Governance With a focus on Africa Verena Fritz Sr Public Sector Specialist World Bank Group

Context • Major shifts with the end of the cold war • Rising attention to and emphasis on governance – Adoption of the Governance and Anti-Corruption strategy by the WB in 2007 – Principle not to ‘punish the poor twice’ in contexts with poor governance • WBG has no direct link to or engagement on democratic governance – Mandate and incentives are focused on working with any Gov’t • Gradually growing attention to fragile states/fragility challenges – 2011 WDR on Fragility and Conflict • Growing emphasis on poverty reduction as a key goal – Shift from structural adjustment to poverty reduction in the 1990s (PRSPs since 1999) – adoption of the ‘twin goals’ in 2013 (ending extreme poverty & achieving shared prosperity)

Governance in Africa – evolution of overall public sector lending and WBG engagement Composition of Governance and Civil society All DPs, public sector lending & WB share Over time: Assistance to AFR (last 20 years) • Increase and peak in 3500.0 2007 • 3000.0 Fluctuating since then 2500.0 • WB accounts for a significant share of 2000.0 public sector financing 1500.0 1000.0 500.0 0.0 Other Gov and civil society All Donors, Total, Pub Sec Total World Bank, total All other donors, total

The WB in Africa relative to others Public sector policy and public Composition of WBG public sector funding Public Financial Management administration 1600 2000 1400 1400 1800 1200 1200 1600 1000 1400 1000 1200 800 800 1000 600 600 800 400 600 400 400 200 200 200 0 0 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 All Donors, Total World Bank, Total WB/PSR WB/PFM WB/decentral All Donors, Total World Bank, Total WB/anti-corr WB/DRM WB/legal • In PFM, the WB is the dominant source of ODA • Much less so for other public sector governance aspects • Some areas explored: anti-corruption, DRM (v recent years only), decentralization, legal and justice sector • Within PFM, a particular lending element has been the establishment and roll-out of FMIS systems • More recently growing emphasis on ‘adjacent’ areas – procurement reforms, public investment management, DRM, SOE governance

Some positive results achieved in PFM performance earliest PEFA available most recent PEFA data available PFM Quality and Income PFM Quality and Income 3.5 3.5 ZAF ZAF MDA BRA GEO KSV PER MUS BFA RWA CRI AZE ALB PER BTN TUR BTN SLV TUN ARM ARM 3 JOR COL 3 BLR MAR THA MAR CRI NAM ETH MDA KAZ PHL IDN ECU MNE GRD MNE HND IND GEO BFA UZB TUN BWA MKD PAK MOZ MLI SLV SRB UKR COL KGZ ALB AFG DZA BWA JOR TZA AZE SRB VNM MNG NIC WSM NPL MUS PRY 2.5 TMP ETH KSV UKR DMA 2.5 ZMB WSM PAK PRY BLR LBR UGA LKA RUS VCT TZA BGD DOM EGY MWI TJK STP TON JAM MOZ VUT GTM IDN GTM NAM KEN VUT NIC BOL SLE RWA TMP MDG ZMB GUY KHM GMB SLB UGA KEN CIV ZAR BDI NER SLE WBG DMA NPL JAM MLI MRT LCA SWZ ZWE PAN KHM CMR GRD TJK PHL ECU SEN TON MDV TUV 2 NER GHA GMB SEN VCT DOM BEN 2 BGD GAB GAB SUR AFG LCA LBR KGZ WBG SWZ BEN LAO BLZ SDN LSO MRT GIN TGO MDV SLB KIR SUR FSM SSD FJI TCD CIV PNG MDG TUV COG BDI CAF ZAR PNG MWI GIN 1.5 BLZ TGO IRQ COM COG 1.5 COM GNB MHL HTI CAF NGA 6 7 8 9 10 6 7 8 9 10 Log GDP per capita (PPP, lagged 5-year average) Log GDP per capita (PPP, lagged 5-year average) EAP ECA LAC MENA SAR SSA EAP ECA LAC MENA SAR SSA Low income and African countries improved PFM systems as measured by PEFA (since 2005/206)

Evolution of CPIA ratings for PFM – regional averages – 2001-2014 Increase/decrease in Group No. of Countries 2001 (average) 2007 (average) 2014 (average) regional averages 28 3.59 3.68 3.59 0 LAC 8 4.07 3.44 3.38 - - SAR 22 3.50 3.43 3.34 − EAP 47 2.97 3.12 3.17 ++ SSA + 9 3.38 3.38 3.42 MENA 23 3.45 3.71 3.79 ++ ECA

Problem: not so much achieved for wider governance • Overall Governance effectiveness improved only in some cases and worsened or stagnated in others – no change in the region overall • Improving financial management systems (at central and upstream levels) on its own – especially with limited improvements in HRM – is insufficient for improving service delivery • Nonetheless, service delivery indicators have improved in many countries – primarily due to expansion of public systems as well as growth of private services (e.g. various forms of private schools and clinics), as well as NGO delivered services, esp. in fragile and post-conflict contexts • Skepticism, as well as some enthusiasm for ‘trying to do more’ – governance in sectors, tackling HRM, as well as DRM – – WDR 2017 on Governance and the Law as a potential ‘new start’

No change on average over the past two decades