This blog post is part of a series for the 'Bureaucracy Lab', a World Bank initiative to better understand the world's public officials.
“Why? Why do we always fail the people of this country?” So reflects the public official who plays the hero in my graphic novel on governance in the developing world. The story, set in fictional Zanzarim, follows the struggles of the ‘Director’ up to that point, as he labours to implement policy that will help his fellow citizens. His exhausting — and frequently unsuccessful — attempts to succeed mirror the many such struggles I have witnessed in the governments of developing countries across the world.
Public Sector and Governance
Unlike many other places, though, cities in Afghanistan face an added, complex layer of challenge—conflict.
Instability in large areas of the country is forcing refugees and internally displaced people into cities—particularly the capital city of Kabul. The thing is: Kabul doesn’t yet have adequate infrastructure and capacity to effectively host these “newcomers.”
What can be done?
To help Afghan cities better address the “3-way challenge” of urbanization, conflict, and forced displacement, the World Bank is working on a series of projects that aim to:
- Provide basic services to selected—mostly informal—neighborhoods in Kabul, such as roads, sanitation, water, and lighting;
- Support Kabul to improve its municipal finance management systems;
- Support the institutional and policy framework for urban development in Afghanistan;
- Strengthen city planning, management and service delivery in five provincial capital cities.
In this video, you will learn more from World Bank Senior Director Ede Ijjasz-Vasquez (@Ede_WBG) and Practice Manager Catalina Marulanda on to better host refugees and other displaced populations.
Economists tend to agree on the importance of competition for a sound market economy. So what’s the problem when it comes to governments competing to attract investors through the tax treatment they provide? The trouble is that by competing with one another and eroding each other’s revenues, countries end up having to rely on other—typically more distortive—sources of financing or reduce much-needed public spending, or both.
All this has serious implications for developing countries because they are especially reliant on the corporate income tax for revenues. The risk that tax competition will pressure them into tax policies that endanger this key revenue source is therefore particularly worrisome.
An artist’s interpretation of the Attika Schools PPP Project in Greece, which reached financial close in Q2 2014
(Photo: World Fianance)
In 2014, the 24 Schools Public-Private Partnership (PPP) project in the wider Athens area marked the reopening of the Greek PPP market and was only the second PPP project to reach financial close in Greece.
It aimed to address the existing quantity and quality need for schools, covering 6,500 students in 10 municipalities who came from diverse socio-economic backgrounds in the historical region of Attica, which encompasses the city of Athens. Benefits included the timely and enhanced delivery of schools to improve educational outcomes, better maintenance through the lifetime of the project, the highest service standards, the response to user needs, and significant savings in energy cost.
Tunisia’s transformation in the wake of the Arab Spring has been remarkable, and can be seen through a shift in the role and performance of its cities.
[Download report: Tunisia Urbanization Review - Reclaiming the Glory of Carthage]
Prior to the Jasmine Revolution of 2011, the government of Tunisia was extremely centralized, and citizens had limited ways to hold it to account. The revolution created a force to change the concentration of power and the ability of Tunisians to hold the government to account. Specifically, the government created a decentralization program supported by the World Bank’s Urban Development and Local Governance Program for Results (UDLGP), along with support programs from other partners including the European Union, Swiss Cooperation.
One dramatic shift the program has introduced is the development and execution of an annual local government performance assessment. Every year, Tunisian cities’ local governments each get assessed by a semi-autonomous agency on a range of areas, which are critical for their ability to effectively govern as well as to deliver services and infrastructure. In the inaugural assessment (2016), the local government of Krib, a town in one of the most lagging interior governorates called Siliana, outperformed all others and achieved the highest assessment score.
To learn more about the program, watch a video with World Bank Senior Director Ede Ijjasz-Vasquez (@Ede_WBG). Check out Tunisia’s first-ever local government website to track the performance of Tunisia’s local governments over time (the results of the 2017 assessment which will be posted soon).
Foreign direct investment (FDI) is often considered by economists and policymakers as integral to economic growth – a cornerstone of modernization, income growth and employment.
Yet for many countries, FDI can be elusive, and chasing it can lead policymakers to frustration.
Even economies built by FDI – for example, Singapore – are on this continuous chase, aware that attracting and retaining FDI is not an easy task. They also know that the benefits of FDI do not accrue automatically and evenly across all countries, sectors and local communities.
But first, there must be a realization of the importance of FDI. Singapore – a country once called a “political, economic and geographic absurdity” by its first Prime Minister, Lee Kuan Yew – never doubted the centrality of FDI, promoting it from the outset of its independence. Singapore saw in FDI an opportunity to develop a substantial industrial base, to create new jobs for its then-poor and low-skilled workforce, and to generate crucial tax revenues for its nascent government to spend on education and infrastructure.
Two decades after that initial strategic acceptance of FDI, Singapore emerged as a newly industrialized economy.
It is little surprise, then, that Singapore’s experience was highlighted at a recent World Bank Group peer-to-peer learning event here in the city-state. Responding to strong demand from client countries, two teams from the Trade & Competitiveness Global Practice – the Investment Policy and Promotion (IPP) team and the Singapore Hub team – co-hosted the learning forum entitled "Promoting Investment Policy and Promotion Reform in Times of Uncertainty."
Supported by SPIRA – the Support Program on Investment Policy and Related Areas – the forum enabled some 80 government officials from East Asia, South Asia and Africa to share their experiences in economic and export diversification; to discuss the role of international trade and investment agreements as leverage toward domestic reforms; and to discuss how to translate investment policy and promotion strategies into measurable results. SPIRA, implemented by the IPP team, supports client countries across all regions in attracting, facilitating and retaining different types of FDI.
(Photo: Getty Images)
There is a huge need for new and upgraded infrastructure around the world, particularly in emerging markets. Policy makers like to talk about raising trillions of dollars to fund infrastructure, but the truth is that capital for good projects exists. Regulation and lack of policy clarity are inhibitors.
What lacks is a strong pipeline of projects that meet societal needs and are financeable. If we can increase the quality of projects, and encourage smart and efficient regulations, the money to fund them will follow.
We identified several areas that should be prioritized by the international community and local governments.
In Afghanistan, decades of violence, common discriminatory practices, and cultural barriers, including restrictions on mobility, have denied women job opportunities and left them severely underrepresented in all sectors of society.
Despite considerable achievements in the last decade, such as the national Constitution guaranteeing equal rights as well as increased enrollment in public schools and universities, achieving gender equality will require widespread social changes.
Yet, change is happening and Da Afghanistan Breshna Sherkat (DABS), Afghanistan’s national power utility, is showing the way.
With a workforce of about 7,000, the company employs only 218 women, most of whom at a junior support level. However, under the leadership of its new CEO, DABS management has committed to promoting gender equality.
The Planning and Capacity Support Project of the Afghanistan Reconstruction Trust Fund (ARTF), managed by the World Bank, is helping DABS deliver on that commitment. The project organized awareness sessions for DABS staff on gender-related issues and provided specialized training to female employees. DABS has committed to providing internships to female university graduates to ensure women can find job opportunities and fully participate in the energy sector.
Realizing that the majority of its female staff lacked the confidence to compete with men, DABS is facilitating access to new job opportunities for women employees and has taken steps to ensure that women are involved in all business operations within the organization.
- South Asia
- Social Development
- Law and Regulation
- Labor and Social Protection
- Public Sector and Governance
- Private Sector Development
- Conflict and Fragility; fragile and conflict affected states; fragile states; fragility; FCV
- Sustainable Communities
As infrastructure projects are increasingly decentralized to sub-national governments (SNGs) in many countries, policymakers are keenly interested in developing sub-national bond markets to open up access to private-sector financing. However, the transaction costs of bond issuance are still prohibitive for small SNGs.
Pooled financing—through regional infrastructure funds, municipal funds, or bond banks—is being explored as a solution. Yet, many questions remain:
Yet despite these difficulties, the country rebounded strongly with growth at 7.5 percent in Fiscal Year 2017 and was able to achieve significant progress in business through a series of seemingly modest yet important steps.
Over the course of four years, Nepal’s Ministry of Industry, the country's Office of the Company Registrar (OCR) and IFC’s Investment Climate Team implemented a series of reforms to encourage business registration online. In 2013, a new mandatory online registration service was launched. Help desks in the Kathmandu OCR office, extensive training for business owners, a media campaign, and an enabling legal directive eased the speed and efficiency of the registration process for businesses.
Within a short period of time, almost 100 percent of companies – as opposed to 10 percent during the initial phase of launch – were registered online. Registration became simpler, saving money for both businesses and the government. Online registration also addressed the challenges of the government's limited capacity and poor technology readiness through extensive training and peer-to-peer learning. The processes became more transparent with online file tracking.
In the year following the launch of the online registration system, Nepal’s ranking for "Starting a Business" in the World Bank Group’s 2014 Doing Business Report rose by 6 places. The number of days it took to start a business dropped by 45 percent and led to a 24-percent increase in the number of new companies registered annually.
In Nepal, an employee of the Trade and Export Promotion Centre works on the Nepal Trade Information Portal. The portal, financed under the Nepal-India Regional Trade and Transport Project, provides information that traders need to import and export goods, including information on permits, laws and taxes. Photo Credit: Peter Kapuscinski / The World Bank
These successes produced broader lessons for Nepal and others facing similar challenges. These include:
- Make change compulsory, easy and durable. People adapt to new circumstances only if they feel compelled to do so, and only if they fel that the change is not going to disrupt their businesses.
- Ensure coordination between government offices in supporting initiatives. There must be "buy-in" from all government agencies involved at all levels. ICT changes must be fully coordinated with business staff.
- Nurture trust and cooperation between the WBG and government teams. Study and learn about previous experiences, communicate how the current project will be carried out, and keep talking to partners in government.