Asian Development Bank 

BANGLADESH COUNTRY GOVERNANCE ASSESSMENTSummary Presentation to the LCG Subgroup on Governance

Royal Danish EmbassySunday, January 25, 2003

I. BACKGROUND TO COUNTRY GOVERNANCE ASSESSMENT

Arjun Goswami, Senior Governance Specialist, Governance,

Finance and Trade Division, South Asia Department, ADB

II. PRINCIPAL FINDINGS AND RECOMMENDATIONS OF CGA

Kim McQuay, Representative, The Asia Foundation

III. NEXT STEPS

Arjun Goswami

IV. OPEN DISCUSSION

Purpose of the Country Governance Assessment:

• Inform ADB governance strategy and program options

• Serve as a resource for the Government of Bangladesh

• Contribute to the process of information sharing and coordination between ADB and other development partners

Research Methodology

The CGA was informed by:

• Existing literature on governance, including government policy papers and task force reports

• ADB policy papers, project documents, and country program performance reviews

• Reports of the World Bank and other development partners and local policy organizations

• Consultations with government officials, civil society organizations, the private sector, and donors

Reflecting on Experience to Date in Governance Reform in Bangladesh

• Weak governance poses a serious impediment to poverty reduction and broader development goals, with particularly severe implications for the poor, women, and other marginalized groups.

• Bangladesh has served as a virtual laboratory for the study of governance practices and the implementation of ambitious reform initiatives since Independence.

• Substantial investments in many areas, over many years, have secured only modest improvements in overall governance standards.

Another Governance Assessment?

Can an additional governance assessment add further value to a field that is already crowded with investment, experience, and a range of results?

The CGA is guided by the modest objective of assisting ADB and the Government of Bangladesh to identify opportunities to collaborate on practical initiatives to strengthen governance in select areas, which will advance shared goals and serve as models and impetus for broader governance reform efforts.

GUIDING CONSIDERATIONS

1. ADB Definition of Governance

ADB defines governance as “the manner in which power is exercised in the management of a country’s economic and social resources for development.”

ADB considers four mutually reinforcing elements of good governance as yardsticks in assessing governance:

• Accountability

• Participation

• Predictability

• Transparency

2. Governance and Poverty Reduction

• The CGA is guided by the relationship between improved governance and poverty reduction—a recurring theme throughout the report.

3. Basis for Assessing the Quality of Governance in Bangladesh

• Important to ground the assessment of governance in Bangladesh in a comparative baseline that will serve both as an immediate standard of measure and as a basis for monitoring change over time.

• Unfair to compare present standards of governance in Bangladesh with those of an industrialized nation that has substantial resources to invest in reform initiatives or a long tradition of democratic governance.

• Assess the quality of governance according to standards that a another nation—whose economic development, physical conditions, and other defining circumstances are comparable to those of Bangladesh—could reasonably be expected to meet.

STRUCTURE AND CONCEPTUAL FRAMEWORK OF THE REPORT

1. Structure of the Report

Broad overview of governance in Bangladesh and an analysis of the basic constitutional and institutional foundations of governance—through the lens of public accountability.

Analysis of development management issues that comprise the core of ADB’s basic CGA framework:

• Public policy-making, planning, and regulatory structures

• Public administration and local government

• Public financial management

• Law and justice (judiciary, criminal justice, citizen access to justice)

• Civil society (regulation, internal governance, role in governance reform, role of the media)

• Corruption in the public sector.

Overview of governance issues in six sectors of interest to ADB:

• Public Finance

• Small and Medium Enterprise Development

• Education

• Health

• Transport

• Energy

Report concludes with a chapter on governance strategy:

Review of current governance reform strategies of the Government of Bangladesh, local policy institutions, and ADB and other development partners;

Recommendations on priority governance reform opportunities through which ADB can collaborate with the Government, local stakeholders, and other donor partners in advancing common goals.

2. Conceptual Framework

Frequent reference to two complementary approaches to governance of particular relevance to the work of ADB in Bangladesh: core governance and sectoral governance.

• Sectoral Governance: To date, ADB support for governance reform in Bangladesh has been undertaken primarily in the context of its work in specific sectors. Sectoral governance initiatives facilitate local solutions to governance constraints that affect work in particular sectors, or slow the achievement of broader sectoral development goals.

• Core Governance: Core governance initiatives address the overarching governance constraints that affect multiple sectors—including weak public financial management, corruption, judicial independence, regulatory issues, or other problems that undermine national development efforts.

PRINCIPLE FINDINGS

Lessons Learned

 

1. Bangladesh has experienced a combination of progress and persistent constraints in national development and governance reform efforts

2. Weak governance has particularly severe implications for the poor, women, and other marginalized groups

3. A spectrum of governance constraints have coalesced in five areas of particular concern:

• Deteriorating law and order situation and the failure of the justice sector and law enforcement agencies to check crime, corruption and impunity;

• Weak public administration (overly large, inefficient, prone to corruption);

• A regulatory environment that is overly complex or invasive in some sectors and inadequately defined in others;

• Inadequate national policy and resource commitments to local government reform-constant experimentation and change, but little opportunity for any single reform initiative to take hold;

• Impact of intensifying partisan tensions on every dimension of life in Bangladesh.

4. Successful governance reforms in select areas offer a foundation on which to build

5. Variations in the bases of opposition to governance reform call for different strategies and approaches

6. Public institutions do not reform themselves

What factors, or combination of responses, have been most conducive to governance reform in Bangladesh or in other countries that face similar problems in comparable circumstances?

Experience attests that public institutions, left to their own devices, do not reform themselves. Reform initiatives are invariably driven by a combination of internal and external forces and incentives of various kinds.

7. Governance reforms are advanced by appropriate incentives, public participation, and collaboration between government and various stakeholders Reform initiatives have a better chance of success where those responsible for implementing them are provided with incentives that stimulate their interest, commitment, and pride of ownership in designing and implementing the activity.

While the success of governance reform initiatives is dependent on the commitment of responsible public agencies and officials, public understanding and confidence through participation is equally important.

Some of the most encouraging governance reform initiatives in Bangladesh have been seeded at the local level, through opportunities for citizens to engage with local government bodies and for local officials to better understand and take account of constituent interests.

Collaboration between government, civil society, and the private sector in governance reform presents an optimal pairing of reform-minded public officials and stakeholders to pursue common goals—some examples to date in Bangladesh, but the potential has yet to be adequately tapped and facilitated.

8. Governance reform is a long-term process that rarely proceeds on a linear course, has no single formula for success, and is notoriously difficult to measure

• Slow progress of reform efforts in Bangladesh has raised justifiable frustration among a variety of stakeholders—not least in the donor community.

• Some tendency to set unrealistic time lines for governance reform and to sharply criticize government partners when targets are missed. Tensions of this kind may undermine relationships that are as important to the long-term success of reform efforts as short-term progress.

• Important to balance expectations with a clear appreciation of the local context and to hold reasonable expectations for what is possible in the short term.

• Insufficient investment of time and resources in empirical research in the field of governance, particularly as a prelude to large-scale reform initiatives. Empirical data serves as a reliable baseline and as a means of understanding the needs, expectations, and perceptions of different stakeholders.

Guiding Considerations:

1. Governance strategies should take account of the varying nature and context of governance problems facing Bangladesh

2. Reflect on experience to date

3. Determine strategies on the basis of comparative strengths and capacities

4. Acknowledge and advance the role and comparative advantages of the State

• Until recently, many governance reviews were critical of the commitment or capacity of the Government and public officials. Some went so far at to insist that the Government abandon its regulatory, management, or oversight roles and devolve full responsibility to the private sector and civil society.

• Today, the most compelling governance reform prescriptions acknowledge the role and comparative strengths of Government agencies and aim to enhance their capacity in certain areas in which the State has an important regulatory, oversight, or management role.

RECOMMENDATIONS FOR ADB

Drawing on the assessment findings and preceding reflections on lessons learned, it is recommended that ADB adopt a three-pronged

governance strategy that combines:

• A primary focus on new and ongoing sectoral governance initiatives that address fresh challenges by building on experience to date;

• Complementary core governance initiatives in select areas, with an initial focus on corruption prevention and a gradual expansion to other areas; and

• A higher profile role for the Bangladesh Resident Mission (BRM) in engaging the Government of Bangladesh on governance reform issues, promoting greater public dialogue on governance reform, and collaborating with donor partners.

EXPANDED FOCUS ON SECTORAL GOVERNANCE

• Build on existing experience and goodwill relations

• Include explicit reference to governance reform objectives in all project documentation, including performance plans and objectives of local partners

• Strike the optimal balance between enforcement and incentives

• Engage a broad mix of stakeholders

BROADER ADB INSTITUTIONAL ENGAGEMENT IN GOVERNANCE REFORM

• Establish a governance unit within ADB’s Bangladesh resident mission

• Convene local advisory groups on governance

• Disseminate Bangla language translations of ADB policy papers and resource materials, highlighting lessons learned from work in other countries that face governance challenges similar to those facing Bangladesh, with comparable resource and other constraints.

• Invest in empirical research on governance

• Place increased emphasis on monitoring and evaluation

• Engage in regular dialogue and partnerships with other donors.

Thank You