Building Strong Institutions for Sustained Results
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- Jerome Bridges
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2 Building Strong Institutions for Sustained Results Good governance and strong and accountable institutions are crucial for poverty reduction and development impact. The International Development Association (IDA), the World Bank s fund for the poorest, builds the systems that make assistance more effective. IDA works with ministries, agencies, and departments of the executive branch on managing public institutions and finances. On broader governance issues, IDA works with the legislative and judicial branches and other institutions that promote public accountability and greater engagement with society. As a result, governments become more transparent, more accountable to their citizens, less susceptible to corruption, and better at delivering services. From improving people s access to the justice system in Honduras to removing ghost workers in Malawi, an effective public sector means better services for people and greater citizen participation. IDA s emphasis on long-term growth and capacity helps ensure that results are sustained and that countries are on a path where they can fund their own development. Learn more about how IDA supports country efforts to build strong institutions for sustained results, and be sure to see our other ABCs of IDA, including an overarching ABCs fact sheet, as well as highlights of our work in Africa, on gender, and conflict and fragility at Key Achievements by Country IDA 1
3 Examples of Results in Institutional Strengthening A Afghanistan Customs revenue collection increased twenty-fold in 2011, rising to $1 billion, compared with $50 million in customs declarations were processed per customs staff per year in 2011, up from 3 per staff per year in Armenia B Bangladesh Bolivia C Cameroon Central African Republic D Dominica Communication within the government now takes only a few seconds, compared with 1 3 business days in 2008, following a civil service-wide rollout of an electronic document management system. 20 of tax returns were filed electronically in 2011, up from 0 in Approximately 60 of contract awards in 2012 were published on the Central Procurement Technical Unit website, up from only 15 in 2007, and invitations for bids published in the newspaper increased to almost 100 in 2012, up from 70 in More than 2,900 officials attended three weeks of procurement training over the last three years. After the pilot phase, four key agencies rolled out the e-government procurement across all of their procuring entities. As a result of reform of the tax agency, internal revenue collection rose to 6.2 of GDP in 2006 from 4.9 of GDP in 1998 and is being sustained. Port clearance times sharply decreased, the level of port activity rose 17, and revenues increased 22 in the first quarter of 2011, following the signing of individual performance contracts by staff in the two largest custom offices. Budget execution reports for 2010 were released publicly through the Ministry of Finance website. Only 1 paper copy is now required for customs declaration forms, instead of 4, and cargo manifests are now processed as electronic documents, streamlining overall customs procedures. Customs clearing time was reduced from 7 days to 1 day, and the number of days to process investments was reduced from 4 weeks in 2006 to 2 3 weeks in AFGHANISTAN $1 billion increase in customs revenue in Afghanistan in 2011 a twenty-fold increase over the amount collected in KENYA 132 increase in revenue raised by Kenya s revenue authority in Key Achievements by Country IDA 2
4 GEORGIA Ghana 92 of business tax returns were submitted via e-filing by 2011, just two years after e-filing was introduced. 100 mandatory disclosure of oil and gas contracts by extractive companies in Ghana. E Ethiopia 2,021,087 businesses had been issued computerized tax identification numbers (TIN) by 2012, up from 15,611 in 2005, which helped to broaden the tax base. Ethiopia s ranking for online services improved from 80 to 126, and its ranking for e-participation from 19 to 170 (out of 174 countries) between 2004 and 2012, thanks in part to the business process review (BPR) of more than 20,000 offices across the nation. G Georgia Program-based budgeting was adopted in the 2009 budget code, and the format was adopted by Parliament in its 2012 Budget, including performance indicators developed by all line ministries. Accounting reform included adoption of the International Public Sector Accounting Standards (IPSAS) implementation plan in 2009; establishment of the Georgia Public Sector Accounting Standards Board in 2010; and piloting IPSAS-based modified cash-basis public sector accounting standards in of business tax returns were submitted via e-filing by 2011, thanks to the introduction of e-filing in 2009 and the issuance of standardized procedural guidelines for tax offices. By the end of 2011, a risk-based tax audit system was introduced, replacing the discretionary and subjective selection of firms to be audited. Ghana The principles of the Extractive Industries Transparency Initiative have been adopted for mandatory disclosures of oil and gas contracts by extractive companies, and with an independent oversight committee to manage the implementation of the Petroleum Revenue Management Act of Grenada It took 30 days to process investment applications in 2012, compared with 90 days in H Honduras 100 of central government expenditure has been included in a single treasury account since 2010, and internal audit units now cover the entire central government. 40 of the population had better access to the courts in K Kenya There was a 2.4 disparity between budget allocations and actual expenditures in , compared with 11 in KSh billion was raised by Kenya s revenue authority in , up from KSh billion in , through the automation of business processes. Voluntary tax compliance improved from 88 in 2005 to 98.3 in L Lao People s Democratic Republic Civil servants, including teachers and doctors, were being paid on time via bank transfers in Previously, their monthly salaries could be delayed by more than five months. Budget execution improved from in to in through improved procurement planning and streamlining of payment processes. Key Achievements by Country IDA 3
5 Lao PDR 100 of civil servants are now paid on time via bank transfers, compared with previous delays of more than five months. Pakistan 118 increase in the number of new registered taxpayers in Pakistan, bringing the total tax base to more than 3.7 million. Liberia Revenues increased more than threefold, from $85 million in 2006 to $275 million in The value of noncompetitive procurement was substantially reduced from approximately 80 to 30 in one year from 2008 to of vouchers now are approved on receipt by the Ministry of Finance, up from 60 in 2006, with processing times decreasing from 14 days in 2009 to 7 days in Liberia became the first African country to achieve compliant status (2009) with the Extractive Industries Transparency Initiative. M Malawi Moldova N Nepal 4,878 ghost workers were removed from the payroll in 2011 when payroll control was strengthened, and wage bill discrepancies were reduced from 5 in to About 90 of national public budget balances were consolidated into a single treasury account at the National Bank of Moldova in 2011, up from 15 in More than 12,000 out of 14,000 separate government bank accounts have been closed. In 2012, the single treasury account reported in real time on government revenues and expenditures. Electronic bidding in the Department of Roads, first introduced in 2007, was extended to other line ministries in E-bidding is now required for any procurement over Rs 2 million (approximately $23,000). More than 16,000 families and victims of conflict received state assistance through bank accounts, as part of the 2010 transparency improvements for deliveries of cash transfers and safety nets. Nicaragua The land administration policy and legal framework was modernized between 2003 and microfinance offices and 320 supervised financial institutions were in operation at the end of A new microfinance law was enacted in 2011, and a regulatory body established in More than 20 microfinance institutions and 100 cooperatives received training and technical support in accounting, finance, and risk management areas, from 2007 to Niger Payment processing to government suppliers took 7 days in 2012, compared with 33 days in The ratio of government payment arrears to total expenditures was reduced from 15 in 2008 to 10 in Nigeria Between , the number of registered taxpayers increased from 7,000 to 125,000 in Bauchi state, and from 30,000 to 100,000 in Kaduna State. From , the number of federally registered taxpayers corporate, small and medium enterprises, and individuals increased from 475,725 to 941,901. Tax collections in Bauchi state increased from Naira 1.2 billion in 2007 to Naira 4.5 billion in 2011, and in Kaduna state collections increased from Naira 3.7 billion in 2007 to Naira 9.2 billion in A procurement regulatory body was established at the federal level, following the enactment of the Federal Public Procurement Law in Key Achievements by Country IDA 4
6 P Pakistan R Rwanda S Sierra Leone Submission times were reduced from 23 months to 8 months during for annual financial statements and audit reports to the legislature, for all levels of governments (federal, provincial, and district). PEFA ratings increased from D+ to a B, with audits at all tiers of the government carried out in accordance with International Organisation of Supreme Audit Institutions (INTOSAI) standards as of June Annual financial statements of the federal, provincial, and district governments were prepared and submitted to the auditors within 2 months of the close of fiscal years , down from 12 months in fiscal years National revenue collection increased by 94 between , and registered taxpayers increased by 213 from 20,535 to 64, of budget agencies produced complete annual financial reports within the stipulated time frame in 2011, up from 16 in Public financial management was improved by adopting a modern regulatory framework based on the Government Budget and Accountability Act and Public Procurement Act. 73 of procurement transactions used open competition in 2011, compared with approximately 49 in Some 96 of ministerial departments and agencies had dedicated procurement officers and functional procurement units in 2011, compared with an estimated 20 in of taxpayers filed income tax returns on time in 2012, compared with 19 in In 2012, the government launched an online repository of all mining and exploration license details and associated nontax payments (broken down by license, company, mineral, date, and tax/levy type). Sri Lanka 100 of state-owned enterprises were covered in the Auditor General s Annual Audit Report in 2011, up from 50 in 2008; and the timeliness of audits improved from delays of 2 4 years to 1 year by annual financial statements were prepared within three months of year s end by local authorities in the north and east in 2011, up from 28 in T Tajikistan On September 1, 2011, the new civil service wage grid was extended to the entire civil service, removing all nontransparent bonuses, linking pay to outside market compensation, and reconciling pay for similar jobs across the government. In 2010, 82 of vacancies in the civil service were filled through a competitive recruitment process. Before 2006, there had been no competitive recruitment system in place. 47 government bodies now have access to an automated the Civil Service Register, listing all approved posts, grades, and their occupants. Tanzania There was a 34 increase in taxpayer awareness of tax education programs between 2006 and Value added tax refunds made within one month increased from 62 in 2006 to 80 in of court cases were outstanding for two years or more in 2011, compared with 70 in Timor-Leste National accounts covering the period were published for the first time in The budget (including three-year fiscal forecasts) has been routinely submitted to Parliament on time, since the introduction of a budget calendar in Budget execution was strengthened and rates increased to 84 from 75 between , even while the budget increased to $1,092 million (2011) from $72 million (2005). Domestic tax collections increased from $53 million in 2008 to $111 million in 2011 (projected), from 9.0 of non-oil GDP in 2009 to 10.4 in Key Achievements by Country IDA 5
7 Nigeria 941k+ the number of federally registered Nigerian taxpayers in 2011, double the amount in Vietnam 75 reduction in the time taken in Vietnam to record spending on concessionally funded projects. V Vietnam Y Yemen, Republic of The computerized Financial Management Information System was put in place nationally in 2012; it is used for budget execution, accounting, and fiscal reporting for the central area and all 63 provinces and 700 districts. Budget recording of concessional foreign-financed project expenditures took 3 months in 2011, down from 12 months in An Accounting and Financial Management Information System was rolled out in 13 new central government ministries and 3 central government departments in 2010; a Loans and Grants Management Information System (LGMIS) was rolled out to 17 new project management units. 8.5 days of lead time were taken by line ministries for disbursements in 2012, compared with 40 days in 2011 the result of the roll out of the LGMIS. The government budget is now prepared using Global Financial System economic, administrative, and functional classifications, and is published on the government website to obtain public feedback. This led to a 15-point increase (5th largest in the world) in the Open Budget Index (OBI) between 2008 and PUBLISHED BY the Concessional Finance & Global Partnerships Vice Presidency of the World Bank - Spring 2013 Photo credits: cover: Jonathan Ernst/World Bank; clockwise for pages 2-4: page 2: Fardin Waezi/World Bank and Georgina Goodwin/World Bank; page 3: World Bank and Jonathan Ernst/World Bank; page 4: Stanislas Fradelizi/World Bank and Visual News Associates / World Bank; page 6: Arne Hoel/ World Bank and Simone D. McCourtie/World Bank. Key Achievements by Country IDA 6
8 The International Development Association The International Development Association (IDA) is a game-changer in the field of development, paving the way for others in the most difficult and complex situations to help hundreds of millions of people escape the cycle of abject poverty. IDA provides leadership on global challenges. From its support for climate resilience to the creation of jobs to get combatants back into society, IDA rallies others on tough issues for the common good and helps make the world more secure. IDA is transformational. IDA helps countries develop solutions that have literally reshaped the development landscape from its history-changing agriculture solutions for millions of South Asians who faced starvation in the 1970s to its pioneering work in the areas of debt relief and the phase-out of leaded gasoline. IDA is there for the long haul. IDA stays in a country after the cameras leave, emphasizing long-term growth and capability to make sure results are sustained. When the poorest are ignored because they re not profitable, IDA delivers. IDA provides dignity and quality of life, bringing clean water, electricity, and toilets to hundreds of millions of poor people. IDA makes the world a better place for girls and women. IDA works to reverse millennia of gender discrimination by getting girls to school, helping women access financing to start small businesses, and ultimately helping to improve the economic prospects of families and communities. Working with the World Bank Group, IDA brings an integrated approach to development. IDA helps create environments where change can flourish and where the private sector can jump-start investment. IDA Results at a Glance, million teachers recruited and/ or trained 496 million children immunized 116,000 kms of roads constructed or rehabilitated 123 million people with access to improved water sources 188 million pregnant women receiving prenatal care during a visit to a health provider 65 million people with access to a basic package of health, nutrition, or population services 7 million people with access to improved sanitation facilities Members of the World Bank Group The International Bank for Reconstruction and Development (IBRD): The International Development Association (IDA): The International Finance Corporation (IFC): The Multilateral Investment Guarantee Agency (MIGA): The International Centre for Settlement of Investment Disputes (ICSID): icsid.worldbank.org #endpoverty
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