The World Bank GroupThe World Bank Group

Working for a world free of povertyWorking for a world free of poverty

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Millennium Development GoalsMillennium Development Goals

Endorsed by 189 countries at

the UN Millennium General

Assembly in Sept 2000.

Aim to halve the proportion of

people in extreme poverty by

2015.

Set targets for reductions in

poverty, improvements in health

and education, and protection of

the environment.

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Paul Wolfowitz, President, The World Bank

Developed countries must boost foreign aid to the developing world, remove barriers to the exports of developing countries, encourage private investment, and make the benefits of science and technology available to all the world's peoples.

Developing countries, meanwhile, must put in place the right economic policies, work to improve governance, invest in their people, and create an enabling environment that is conducive to growth and development.

The Millennium Development Goals offer concrete targets for everyone to rally around in the global fight against poverty. But reaching the goals will require action from both developed and developing countries.

Millennium Development GoalsMillennium Development Goals

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Governance and Poverty ReductionGovernance and Poverty Reduction

Governance impacts on poverty reduction

Weak governance has blighted development

Good governance:

requires robust government-wide systems to promote efficient and effective use of all public resources

a target under MDG 8

Improving governance: a major challenge

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Political Accountability• Political competition, broad-based political

parties• Transparency & regulation of party financing• Disclosure of parliamentary votes

Formal Oversight Institutions

• Independent, effective judiciary

• Legislative oversight (PACs, PECs)

• Independent oversight institutions (SAI)

• Global initiatives: UN, OECD Convention, anti-money laundering

Citizen

s/Firm

s

Citizens/Firms

Cit

izen

s/F

irm

s

Citizens/Firms

Decentralization and Local Participation• Decentralization with accountability• Community Driven Development (CDD)• Oversight by parent-teacher associations & user groups• Beneficiary participation in projects

Civil Society & Media• Freedom of press, FOI• Civil society watchdogs• Report cards, client surveys

Private Sector Interface• Streamlined regulation• Public-private dialogue• Extractive Industry

Transparency• Corporate governance• Collective business

associations

Effective Public Sector Management

• Ethical leadership• Public finance

management & procurement

• Civil service meritocracy & adequate pay

• Service delivery and regulatory agencies in sectors

Good Governance has many dimensionsGood Governance has many dimensions

Outcomes: Services,

Regulations, Corruption

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Governance and Corruption Governance and Corruption Not the same thing!Not the same thing!

The manner in which the StateStateacquires and exercises itsauthority to provide public goods and services

Using publicpublic office for privateprivate gain

GovernanceGovernance

CorruptionCorruption

•Corruption is an outcome – a consequence of the failure of accountability relationships in the governance system

•Poor delivery of services and weak investment climate are other outcomes of bad governance

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Reputational RiskReputational Risk

That Bank lending in countries with corrupt leaders will tarnish the

Bank’s reputation

Fiduciary RiskFiduciary Risk

That Bank resources will not be used for the purposes intended

Development Effectiveness Risk

Development Effectiveness Risk

That corruption will undermine the impact of development

efforts in general and in Bank-supported projects

Corruption Poses 3 Key RisksCorruption Poses 3 Key Risks

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Public Financial Management and GovernancePublic Financial Management and Governance

Improved PFM capacity is at

the core of good governance

and lies at the heart of

achieving the MDGs:

ensuring that public and donor

resources are used efficiently,

effectively and transparently for

the intended purposes.

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Diagnosis of Country PFM SystemsDiagnosis of Country PFM Systems

Emerging cross-cutting issues?

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PFM Diagnostics: Emerging Cross-cutting IssuesPFM Diagnostics: Emerging Cross-cutting Issues

Incomplete Budget Information

Inadequate Accounting Systems

Obsolete Legal Framework

Ineffective Internal and External Audit

Poor dissemination of PFM information

Shortage of qualified PFM Professionals

Barriers to IFMIS

Mostly due to weak capacity

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How do we get there?How do we get there?

From compliance to

capacity development

Going Forward:Going Forward:From Diagnostics to ImplementationFrom Diagnostics to Implementation

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Supporting and Strengthening SAIsSupporting and Strengthening SAIsWorld Bank Strategy: 3 Key Dimensions World Bank Strategy: 3 Key Dimensions

Using policy dialogue, TA funding and Bank operations

to strengthen SAI’s capacity and impact

Promoting SAIs global, regional and bilateral p’ships

Enhancing Bank staff skills to effectively support

strengthening of SAIs

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Guiding Principles: PFM Capacity BuildingGuiding Principles: PFM Capacity Building

Country leadership and ownership

Tailor-made capacity development design

Comprehensive programme design and

implementation

Coherent and coordinated donor support

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Poverty Reduction: Global ChallengePoverty Reduction: Global Challenge

“ In this new century, millions of people in the world’s poorest countries remain imprisoned, enslaved and in chains. They are trapped in the prison of poverty. It is time to set them free.”

Nelson MandelaInternational Global Call For Action (Make Poverty

History) Campaign, London, February 2005