Operationalizing Operationalizing Political Economy: Political - PowerPoint PPT Presentation

Operationalizing Operationalizing Political Economy: Political Economy: Urban Bus Operations in Dhaka Urban Bus Operations in Dhaka Sameer Akbar & Jose Edgardo Campos g p The World Bank GPE in Sectors, London, 5th & 6th Nov 2009

Structure of Presentation CONTEXT & BACKGROUND CONTEXT & BACKGROUND Systemic problems Systemic problems WHAT problems have persisted ? WHAT problems have persisted ? Underlying “rules of the game” Underlying “rules of the game” y g y g g g WHY these problems WHY these problems persist ? persist ? Stakeholder analysis Stakeholder analysis Stakeholder analysis Stakeholder analysis HOW to address the HOW to address the Managing the process of change Managing the process of change problems ? problems ? p GPE in Sectors, London, 5th & 6th Nov 2009 Akbar & Campos

Context & Background g Akbar & Campos GPE in Sectors, London, 5th & 6th Nov 2009

P Projects j t • Failed attempt in the past (1999 2005) to reform • Failed attempt in the past (1999 ‐ 2005) to reform bus operations in Dhaka through a World Bank funded urban transport project • New World Bank project (launched in October New World Bank project (launched in October 2009) proposed initiating reform of bus operations operations • Pilot investments in franchised operations of buses on designated routes d i d Akbar & Campos GPE in Sectors, London, 5th & 6th Nov 2009

Industry Structure & Accountability Industry Structure & Accountability • Bus Fleet of approx. 6700 – Big Buses: 1650 ; Minibuses : 4050 ; Human Haulers: 1000 • Industry Structure – Mostly individual owned buses till mid ‐ 1990’s – More than 60 bus companies now with 10 ‐ 150 buses – Bus companies organized under umbrella associations • Key Institutions of Accountability – Bangladesh Road Transport Authority (BRTA): regulation – Dhaka Metropolitan Police (DMP): enforcement – Dhaka Transport Coordination Board (DTCB): plan & coordinate – BRTA constitutes the Regional Transport Committee (RTC): award g p ( ) of bus route permits GPE in Sectors, London, 5th & 6th Nov 2009 Akbar & Campos

What problems have persisted? p p Akbar & Campos GPE in Sectors, London, 5th & 6th Nov 2009

Governance, Institutional, Service Go e a ce, st tut o a , Se ce • Many operators – Varied ownership competition “in the market” etc – Varied ownership, competition in the market etc. • Ad hoc route network – No franchised routes, individual bus permits etc. No franchised routes individual bus permits etc • Rampant corruption and rent seeking – Rents by DMP, BRTA, RTC, pro ‐ active bribery by bus owners etc. R b DMP BRTA RTC i b ib b b • Poor regulation and lack of enforcement – Unlicensed drivers, illegal vehicles, extra charges for gate ‐ lock etc. • Poor physical and service quality – Broken windows and lights, gender insensitive etc. • Congestion – Average speeds down to 10 kmph Akbar & Campos GPE in Sectors, London, 5th & 6th Nov 2009

Why these problems persist? Why these problems persist? Akbar & Campos GPE in Sectors, London, 5th & 6th Nov 2009

Patriarchy & Patronage y g • Key ruling political party leaders dominate bus owners / company associations company associations • Association leaders are members of the RTC and work as conduits for politicians conduits for politicians • RTC, through its role in route allocations, is the hub for patronage distribution p g • Routes are created to accommodate many clients: “Political government in consideration of politics (i.e. own party g f p ( p y interest) created many routes, issued many route permits, and now there is no space on the road to move.” • In addition to key routes, control of bus terminals is important for politicians since they provide additional rent seeking opportunities ki t iti GPE in Sectors, London, 5th & 6th Nov 2009 Akbar & Campos

Co ‐ opting Industry Associations p g y • The association leadership changes with change in ruling government. This happens because of li t Thi h b f – supply ‐ side factors: forceful takeover and incentives (“carrots and sticks”) ( carrots and sticks ) – but mostly is demand ‐ led by the associations: they change party affiliations for the “larger common good” • But rents continue to be shared with the opposition (albeit in asymmetrical proportions) so as to not “b “burn bridges” completely b id ” l l • For the ruling party, this “duopolistic” control over associations is much needed. i ti i h d d – It helps maintain stability through the chaos of bus operations operations GPE in Sectors, London, 5th & 6th Nov 2009 Akbar & Campos

Colonizing Institutions of Accountability g y • Institutions of Accountability (BRTA, RTC, and DMP) serve a key function for the politicians in a “patron serve a key function for the politicians in a “patron ‐ client” relationship – Appointment of BRTA chairman is carefully managed f h f ll d – The RTC membership is rigged – DMP uses its muscle and acts as facilitator – DTCB is deliberately kept as a weak institution DTCB is deliberately kept as a weak institution • Examples: – Resisting enhancement in transparency: e.g. failure of i i h i f il f ADB’s VIC center – Parallel de facto rules for getting a bus route permit Akbar & Campos GPE in Sectors, London, 5th & 6th Nov 2009

A Perverse Equilibrium A Perverse Equilibrium • Dhaka has not seen frequent agitations by the bus Dhaka has not seen frequent agitations by the bus owners and employees perhaps due to the perverse consensus of the leaders of all shades who tend to benefit from the de facto rules of the game • Such perverse consensus or equilibrium does not Such perverse consensus or equilibrium does not enhance welfare of the citizen, but ensures huge rents for all politicians linked to this sector rents for all politicians linked to this sector • It has serious negative implications in terms of generation of incentives for reform among the generation of incentives for reform among the political actors even in a seemingly competitive political setting political setting Akbar & Campos GPE in Sectors, London, 5th & 6th Nov 2009

How to address the problems? p Akbar & Campos GPE in Sectors, London, 5th & 6th Nov 2009

Understanding Stakes & Holders Understanding Stakes & Holders • Power of the most influential anti ‐ reform stakeholders (politicians, leaders of bus association) is essentially derived from the broader nature of the political governance structure of the country • Stakes in preserving the status quo are very high for them (massive rents, political compulsion for for them (massive rents, political compulsion for distributing patronage etc) • Any reform initiative without proper assessments • Any reform initiative without proper assessments of how to handle such incentives would enhance risk of reform being stalled or abandoned risk of reform being stalled or abandoned Akbar & Campos GPE in Sectors, London, 5th & 6th Nov 2009

Reform: Influence ‐ Interest Matrix Politicians High Influence of Stakeholders Bus Owners Association DMP DCC BRTC World Bank World Bank BRTA Rickshaw Media Human Haulers RTC 3 wheelers DTCB 3 ‐ wheelers Civil Society High Interest Low Interest in i R f in Reform R f Reform Bus Staff Union Large Bus Companies Progressive Bus Companies Low Influence Bus Commuters Bus Commuters of Stakeholders Akbar & Campos GPE in Sectors, London, 5th & 6th Nov 2009

Political Economy Grounded Strategy Political Economy Grounded Strategy • Short/Medium term: / – Promote collective action of those in the lower left quadrant – Get some in the upper right quadrant (CNG, Rickshaw) to join in the collective action efforts – Targeted communication efforts should be launched Targeted communication efforts should be launched – Media and civil society to play a major role • Long term: Long term: – Reduce the power and influence of those in the top right hand quadrant q – Ensure autonomy, integrity and capacity of BRTA and RTC – Empower DTCB to play an active role in planning and coordination di i Akbar & Campos GPE in Sectors, London, 5th & 6th Nov 2009

Impact on Project Design Impact on Project Design • The scope of the Bus component was modified and made much more modest • Focus shifted from – Hardware: piloting investments ; to H d il ti i t t t – Software: institutional strengthening and consensus building Akbar & Campos GPE in Sectors, London, 5th & 6th Nov 2009

Thank You! Thank You! This study was conducted by Mirza Hassan and Abul Hossain (Consultants) in 2007 under the guidance of Sameer Akbar (Task Team Leader) and Jose Edgardo Campos . It was part of a two ‐ part study on political economy, the other focusing on the Brick Manufacturing industry in Bangladesh The study was financed using DFID Trust Fund resources Bangladesh. The study was financed using DFID Trust Fund resources. Akbar & Campos GPE in Sectors, London, 5th & 6th Nov 2009