Promoting good governance
Thursday, 29 November 2007
ADB in its latest Bangladesh Quarterly Economic Update
GOOD governance has several benefits: (i) economically, it directly contributes to the GDP growth of a country; (ii) politically, it allows service providers to be more accountable for their actions; and (iii) morally, it fulfills a bargain between service users and service providers in that the relationship is based on trust and openness.
In Bangladesh, this notion of good governance has largely been absent. Economic growth and poverty reduction efforts are frustrated by a lack of accountability, transparency, and predictability in the way government operates. Surveys conducted by national and international organisations show that corruption adversely impacts not only the macro economy, but also individuals and households, particularly the poor. Much of the problem in governance is attributed to low internal accountability and transparency in the public sector. In the absence of checks and balances, decisions are not often based on adequate consensus.
Governance challenges: (a) Confrontational politics; In Bangladesh, political governance problems are heightened by low accountability and transparency within the country's political parties. Lack of democratic processes and values has given rise to intolerance, within and between, the parties. Although democracy is firmly entrenched, confrontational politics has been a significant source of potential instability and political uncertainty, which adversely affects the country's international reputation and investment climate.
(b) Corruption: Corruption has been the most telling indicator of poor governance in Bangladesh for a long time. Off-the-record payments by firms result in an annual loss of 2.0%-3.0% of GDP. The country scores poorly in Transparency International's corruption perceptions index. However, the present caretaker Government's reform initiatives have started to improve administrative efficiency in some areas. Public services such as law enforcement agencies, power generation and distribution, ports, and customs have turned around markedly. With the current reforms taking effect and business confidence restored, the corruption perceptions score is expected to improve in the coming years.
(c) Judicial autonomy: Although the formal structure of the judicial system was already in place in Bangladesh, judicial independence was only established on November 01, 2007 with the separation of the judiciary from the executive. The politicisation of the justice agencies has been one of the key causes for system deterioration in Bangladesh. Political parties in power have often appointed their loyalists to key positions as they were unwilling to relinquish their influence over the judiciary and start judicial reforms. Politicising the judiciary has adversely influenced rule-based governance.
(d) Public service reforms: The performance of Bangladesh's public service is constrained by (i) a top-down culture that leaves little space for middle managers to exercise independent authority, (ii) lack of incentives for public officials, (iii) lack of professional development and accountability, (iv) inadequate safeguards for actions taken in good faith, (v) frequent reassignments often driven by political and other considerations, and (vi) pressures faced by reform-minded officials in creating space for change in government agencies. The lack of significant progress in administrative governance is sharpened by the failure of successive governments to pursue the reform agenda.
Aggravating the problem is the culture of official secrecy that undermines public accountability. The traditional practice of closed-door policy development, legal drafting, and public decision-making; and the official practice of classifying all government business as top secret, secret, confidential, or restricted has fostered a culture of secrecy in government. With this classification system, official information cannot be disclosed without authorisation.
The Public Administration Reform Commission, and several other studies, have identified areas undermining efficiency of the bureaucracy. These include (i) outside interference in administrative decision-making, (ii) politicisation of the civil service, (iii) nepotism and favouritism, (iv) lack of delegated authority to mid-level and local public officials, (v) lack of public scrutiny of public administration, and (vi) paucity of citizen demand for improvements in public administration. The highly centralised political and administrative system weakens the Government's capacity to deliver and monitor services. Until recently the Public Service Commission (PSC), the body responsible for civil service recruitment, was accused of political bias, corruption, and lack of transparency.
(e) Public financial management: Weak internal and external control measures, and poor auditing and accounting standards mean that the scope for corruption is high. The Public Accounts Committee is faced with a rising backlog of audits; and in the absence of a parliament, the current Government may be unable to act on the annual audit and other general audit reports. Monitoring and evaluation mechanisms in public sector agencies are also considered weak, thus amplifying financial management weaknesses. A related area of concern is with public procurement processes. Deficiencies in the procurement process that give rise to corruption include an underdeveloped legal framework, complex and often inconsistent procurement rules and procedures among various agencies, poor quality in bidding documents and bid evaluations, and absence of mechanisms for ensuring transparency and accountability. Despite the recent enactment of the Public Procurement Law, weaknesses in public procurement processes continue given that no related rules have yet been framed.
.........................................................
This is the first part of the article, carried in the latest Bangladesh Quarterly Economic Update. The second part appears tomorrow
GOOD governance has several benefits: (i) economically, it directly contributes to the GDP growth of a country; (ii) politically, it allows service providers to be more accountable for their actions; and (iii) morally, it fulfills a bargain between service users and service providers in that the relationship is based on trust and openness.
In Bangladesh, this notion of good governance has largely been absent. Economic growth and poverty reduction efforts are frustrated by a lack of accountability, transparency, and predictability in the way government operates. Surveys conducted by national and international organisations show that corruption adversely impacts not only the macro economy, but also individuals and households, particularly the poor. Much of the problem in governance is attributed to low internal accountability and transparency in the public sector. In the absence of checks and balances, decisions are not often based on adequate consensus.
Governance challenges: (a) Confrontational politics; In Bangladesh, political governance problems are heightened by low accountability and transparency within the country's political parties. Lack of democratic processes and values has given rise to intolerance, within and between, the parties. Although democracy is firmly entrenched, confrontational politics has been a significant source of potential instability and political uncertainty, which adversely affects the country's international reputation and investment climate.
(b) Corruption: Corruption has been the most telling indicator of poor governance in Bangladesh for a long time. Off-the-record payments by firms result in an annual loss of 2.0%-3.0% of GDP. The country scores poorly in Transparency International's corruption perceptions index. However, the present caretaker Government's reform initiatives have started to improve administrative efficiency in some areas. Public services such as law enforcement agencies, power generation and distribution, ports, and customs have turned around markedly. With the current reforms taking effect and business confidence restored, the corruption perceptions score is expected to improve in the coming years.
(c) Judicial autonomy: Although the formal structure of the judicial system was already in place in Bangladesh, judicial independence was only established on November 01, 2007 with the separation of the judiciary from the executive. The politicisation of the justice agencies has been one of the key causes for system deterioration in Bangladesh. Political parties in power have often appointed their loyalists to key positions as they were unwilling to relinquish their influence over the judiciary and start judicial reforms. Politicising the judiciary has adversely influenced rule-based governance.
(d) Public service reforms: The performance of Bangladesh's public service is constrained by (i) a top-down culture that leaves little space for middle managers to exercise independent authority, (ii) lack of incentives for public officials, (iii) lack of professional development and accountability, (iv) inadequate safeguards for actions taken in good faith, (v) frequent reassignments often driven by political and other considerations, and (vi) pressures faced by reform-minded officials in creating space for change in government agencies. The lack of significant progress in administrative governance is sharpened by the failure of successive governments to pursue the reform agenda.
Aggravating the problem is the culture of official secrecy that undermines public accountability. The traditional practice of closed-door policy development, legal drafting, and public decision-making; and the official practice of classifying all government business as top secret, secret, confidential, or restricted has fostered a culture of secrecy in government. With this classification system, official information cannot be disclosed without authorisation.
The Public Administration Reform Commission, and several other studies, have identified areas undermining efficiency of the bureaucracy. These include (i) outside interference in administrative decision-making, (ii) politicisation of the civil service, (iii) nepotism and favouritism, (iv) lack of delegated authority to mid-level and local public officials, (v) lack of public scrutiny of public administration, and (vi) paucity of citizen demand for improvements in public administration. The highly centralised political and administrative system weakens the Government's capacity to deliver and monitor services. Until recently the Public Service Commission (PSC), the body responsible for civil service recruitment, was accused of political bias, corruption, and lack of transparency.
(e) Public financial management: Weak internal and external control measures, and poor auditing and accounting standards mean that the scope for corruption is high. The Public Accounts Committee is faced with a rising backlog of audits; and in the absence of a parliament, the current Government may be unable to act on the annual audit and other general audit reports. Monitoring and evaluation mechanisms in public sector agencies are also considered weak, thus amplifying financial management weaknesses. A related area of concern is with public procurement processes. Deficiencies in the procurement process that give rise to corruption include an underdeveloped legal framework, complex and often inconsistent procurement rules and procedures among various agencies, poor quality in bidding documents and bid evaluations, and absence of mechanisms for ensuring transparency and accountability. Despite the recent enactment of the Public Procurement Law, weaknesses in public procurement processes continue given that no related rules have yet been framed.
.........................................................
This is the first part of the article, carried in the latest Bangladesh Quarterly Economic Update. The second part appears tomorrow