dd ee zz riri oo hh utut AA e e rr uu ss oo clcl ss DiDi c c blibli uu PP dd zeze PUBLIC SECTOR riri oo hh GOVERNANCE AND utut AA e e ACCOUNTABILITY SERIES rr uu ss oo clcl ss DiDi PERFORMANCE c c blibli uu PP ACCOUNTABILITY AND COMBATING CORRUPTION dd ee zz riri oo hh utut AA e e Edited by ANWAR SHAH rr uu ss oo clcl ss DiDi c c blibli uu PP dd ee zz riri oo hh utut AA e e rr uu ss oo clcl ss DiDi c c blibli uu PP PERFORMANCE ACCOUNTABILITY AND COMBATING CORRUPTION Introduction to the Public Sector Governance and Accountability Series Anwar Shah,Series Editor A well-functioning public sector that delivers quality public services consistent with citizen pref- erences and that fosters private market-led growth while managing fiscal resources prudently is considered critical to the World Bank’s mission ofpoverty alleviation and the achievement of the Millennium Development Goals.This important new series aims to advance those objec- tives by disseminating conceptual guidance and lessons from practices and by facilitating learning from each others’experiences on ideas and practices that promote responsive(by matching public services with citizens’preferences),responsible(through efficiency and equity in service provision without undue fiscal and social risk),and accountable(to citizens for all actions) public governance in developing countries. This series represents a response to several independent evaluations in recent years that have argued that development practitioners and policy makers dealing with public sector reforms in developing countries and,indeed,anyone with a concern for effective public gov- ernance could benefit from a synthesis ofnewer perspectives on public sector reforms.This series distills current wisdom and presents tools of analysis for improving the efficiency, equity,and efficacy ofthe public sector.Leading public policy experts and practitioners have contributed to this series. The first 14 volumes in this series, listed below, are concerned with public sector accountability for prudent fiscal management;efficiency,equity,and integrity in public service provision; safeguards for the protection of the poor, women, minorities, and other dis- advantaged groups;ways ofstrengthening institutional arrangements for voice,choice,and exit;means ofensuring public financial accountability for integrity and results;methods of evaluating public sector programs,fiscal federalism,and local finances;international practices in local governance;and a framework for responsive and accountable governance. Fiscal Management Budgeting and Budgetary Institutions Public Services Delivery Local Budgeting Public Expenditure Analysis Local Public Financial Management Local Governance in Industrial Countries Performance Accountability and Combating Corruption Local Governance in Developing Countries Tools for Public Sector Evaluations Intergovernmental Fiscal Transfers: Macrofederalism and Local Finances Principles and Practice Citizen-Centered Governance Participatory Budgeting PUBLIC SECTOR GOVERNANCE AND ACCOUNTABILITY SERIES PERFORMANCE ACCOUNTABILITY AND COMBATING CORRUPTION Edited by ANWAR SHAH THE WORLD BANK Washington,D.C. ©2007 The International Bank for Reconstruction and Development / The World Bank 1818 H Street,NW Washington,DC 20433 Telephone:202-473-1000 Internet:www.worldbank.org E-mail:[email protected] All rights reserved 1 2 3 4 10 09 08 07 This volume is a product ofthe staffofthe International Bank for Reconstruction and Development / The World Bank.The findings,interpretations,and conclusions expressed in this volume do not necessarily reflect the views ofthe Executive Directors ofThe World Bank or the governments they represent. The World Bank does not guarantee the accuracy ofthe data included in this work. The boundaries,colors,denominations,and other information shown on any map in this work do not imply any judgement on the part ofThe World Bank concerning the legal status ofany territory or the endorsement or acceptance ofsuch boundaries. Rights and Permissions The material in this publication is copyrighted.Copying and/or transmitting portions or all ofthis work without permission may be a violation ofapplicable law.The International Bank for Reconstruction and Development / The World Bank encourages dissemination ofits work and will normally grant permission to reproduce portions ofthe work promptly. For permission to photocopy or reprint any part ofthis work,please send a request with complete information to the Copyright Clearance Center Inc.,222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office ofthe Publisher,The World Bank,1818 H Street,NW,Washing- ton,DC 20433,USA;fax:202-522-2422;e-mail:[email protected]. ISBN-10:0-8213-6941-5 ISBN-13:978-0-8213-6941-8 eISBN-10:0-8213-6942-3 eISBN-13:978-0-8213-6942-5 DOI:10.1596/978-0-8213-6941-8 Library ofCongress Cataloging-in-Publication Data Performance accountability and combating corruption / edited by Anwar Shah. p.cm. ISBN-13:978-0-8213-6941-8 ISBN-10:0-8213-6941-5 ISBN-10:0-8213-6942-3 (electronic) 1. Total quality management in government.2. Political corruption—Prevention. I.Shah,Anwar. JF1525.T67P43 2007 352.3'4–dc22 2006101263 Contents Foreword xv Preface xvii Acknowledgments xix Contributors xxi Abbreviations and Acronyms xxv Overview 1 Anwar Shah Part I Ensuring Integrity and Improving the Efficiency of Public Management CHAPTER 1 Performance-Based Accountability 15 B.Guy Peters Central Place ofAccountability in Governing 15 The Shift to Performance-Based Accountability 19 A Strategy for Change 21 v vi Contents Barriers and Perverse Consequences 27 Conclusions 30 Notes 31 References 31 2 Efficiency, Integrity, and Capacity: An Expanded Agenda for Public Management? 33 Willy McCourt Generating Commitment to Public Management Reform 34 Creating the Conditions for Public Management Reform 40 How Should Reforms Be Introduced and Sequenced? 52 Conclusion:Embedding Reforms 55 Notes 55 References 55 3 Can E-Government Make Public Governance More Accountable? 59 Helmut Drüke Accountability in Public Governance 60 E-Government as a Comprehensive Concept of Modernization 62 Fostering E-Government and Accountability 78 Conclusions 81 Notes 84 References 84 Networks and Collaborative Solutions to 4 Performance Measurement and Improvement in Sub-Saharan Africa 89 Mark A.Glaser The Need for a Systems Approach to Community Improvement 90 From Government to Governance:Networks and Collaborative Solutions 107 Goals and Performance Targets 113 Performance-Based Budgeting 116 Tools for Engaging Citizens and Respecting Public Values 122 Contents vii Improving Government Performance in Sub-Saharan Africa 124 Redefining Performance through Collaborative Networks 125 Notes 127 References 127 Part II Strengthening Oversight and Combating Corruption 5 The Role of Political Institutions in Promoting Accountability 135 Rob Jenkins Key Concepts in Accountability Systems 136 Institutions:Functions,Pitfalls,and Innovative Remedies 148 Key Trends Affecting Efforts to Improve Accountability Systems 170 Diagnosing Accountability Failures in Political Institutions 176 Notes 179 References 179 Legal and Institutional Frameworks Supporting 6 Accountability in Budgeting and Service Delivery Performance 183 Malcolm Russell-Einhorn The Importance ofEffective Citizen Voice to Budgeting and Service Delivery Performance 185 Cross-Country Experience with Legal and Institutional Frameworks That Support Citizen Voice Mechanisms 188 What Kinds ofMechanisms and Conditions Create Effective Citizen Voice? 205 Case Studies on Strengthening Citizen Voice Mechanisms to Improve Service Delivery 212 Conclusions 224 Annex: The ARVIN Framework 225 Notes 227 References 229 viii Contents 7 Tailoring the Fight against Corruption to Country Circumstances 233 Anwar Shah What Is Corruption? 234 What Drives Corruption? 236 What Can Policy Makers Do to Combat Corruption? 243 Conclusions:Don’t Use the “C”Word 249 Notes 250 References 250 8 Disrupting Corruption 255 Omar Azfar Dealing with Incidental Corruption:Principal-Agent Theory versus the Economics ofCrime 256 The Sale ofJobs and Its Effect on Mechanisms of Accountability 258 Dealing with Systemic Corruption 260 Case Study Evidence on Systemic Corruption 272 Elections and Revolutions 276 Recommendations 277 Notes 281 References 282 9 Corruption in Tax Administration 285 Mahesh C.Purohit Causes ofCorruption in Tax Administration 286 Administering Tax Policy 288 Impact ofCorruption 290 Combating Corruption in Tax Administration 292 Conclusions and Policy Recommendations 298 Notes 300 References 301