Actionable Governance Indicators: Purposes, Concepts and Measurement

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Actionable Governance Indicators Purposes,
Concepts and Measurement

• April 22, 2008

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Outline

• What are Actionable Governance Indicators (AGIs)?
  
• Why Should We Care About AGIs?
• How Can We Actually Measure AGIs?
• AGI Sources
• AGI Illustrations
• AGI and You Finding AGI Resources

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What Are AGIs?

• Actionable governance indicators (AGIs) provide
  evidence on the characteristics and functioning
  of particular elements and sub-elements of the
  various dimensions of governance.

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Governance Dimensions
Citizens/Firms

• Political Accountability
• Political competition, broad-based political
  parties
• Transparency regulation of party financing
• Disclosure of parliamentary votes

• Effective Public Sector Management
• Ethical leadership asset declaration, conflict
  of interest rules
• Cross-cutting public management systems
  meritocracy, public finance, procurement
• Service delivery and regulatory agencies in
  sectors

• Checks Balances
• Independent, effective judiciary
• Legislative oversight (PACs, PECs)
• Independent oversight institutions (SAI)
• Global initiatives UN, OECD Convention,
  anti-money laundering

• Civil Society Media
• Freedom of press, FOI
• Civil society watchdogs
• Report cards, client surveys

• Private Sector Interface
• Streamlined regulation
• Public-private dialogue
• Extractive Industry Transparency
• Corporate governance
• Collective business associations

Citizens/Firms
Citizens/Firms

• Decentralization and Local Participation
• Decentralization with accountability
• Community Driven Development (CDD)
• Oversight by parent-teacher associations user
  groups
• Beneficiary participation in projects

Citizens/Firms
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Governance Systems

• Elements and sub-elements of the various
  governance dimensions identified in the above
  diagram.
• Example from PSM dimension
• Cross-cutting public management systems (element)
• Public finance management systems
• Human resource management systems
• Policy management systems

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Why Should We Care About AGIs?

• Design Guide the design of specific governance
  systems reforms.
• Implementation Hold such governance systems
  reform efforts accountable for achieving their
  objectives.
• Learn from Experience Facilitate systematic
  empirical research on
• Determinants of governance systems performance
• Determinants of governance systems impacts
• government outputs
• governance quality
• policy outcomes

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AGIs in Indicators Perspective

• Conventional range of indicators
• Inputs
• Outputs
• Outcomes
• Governance systems unique features
• Influence input productivity (on outputs)
• Influence output impacts (on outcomes)

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AGIs in Indicators Perspective (cont.)

• AGIs must provide evidence on
• Determinants Design features of governance
  systems
• Performance Extent to which governance systems
  meet their functional objectives
• Exogenous factors Other factors that can
  condition the impacts of
• Governance systems design features on the extent
  to which they achieve their functional objectives
• Governance systems functional performance on
  outputs and outcomes of government policies and
  programs.

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Actionable Governance Indicators are the Missing
Middle

• Inputs and outputs
• Bank operations consistently track project inputs
  and outputs
• A growing number of Bank operations and client
  countries have begun to track program and policy
  outputs

• Outcomes
• Broad governance outcomes are measured by Freedom
  House, ICRG, etc. and by TI, WGI aggregate indexes

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How Can We Actually Measure AGIs?

• What must be measured?
• Governance Systems Features (performance-determina
  nts) r-indicators
• Governance Systems Performance Y-indicators
• Exogenous factors s-indicators
• Illustrations of AGIs

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Governance Systems Features r-indicators

• Rules of the game
• circumscribing the behavior and actions of agents
  within a particular governance dimension
• defining responsibilities
• assigning responsibilities, rights and authority
• requiring tracking, monitoring and disclosure of
  evidence on the exercise of particular
  responsibilities, rights and authorities
• creating checks and balances
• Capacity features
• types of resources, including their quality
  dimensions
• quantities of each type of resource
• production technologies employed and their
  defining characteristics

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Governance Systems Performance Y-indicators

• Aspects of organizational behavior and practices,
  whose variance reflects the extent to which a
  particular governance system is achieving its
  various performance objectives

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Exogenous Factors s-indicators

• Contextual factors that alter the impacts of
  governance systems features on either the outputs
  or outcomes of government policies and programs

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Illustrations of AGIs

• PEFA Indicators
• HRM Indicators

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PEFA Indicators

• Capture both features/determinants and
  performance evidence along six broad dimensions
  of Public Finance Management systems
• Credibility of the budget
• Comprehensiveness and transparency
• Policy-based budgeting
• Predictability and control in budget execution
• Accounting, recording and reporting
• External scrutiny and audit

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HRM Indicators Performance (Y)

• Performance HRM indicators capture evidence on
  four core HRM objectives
• Depoliticized personnel management
• Merit-based, performance-encouraging personnel
  management
• Attract and retain qualified staff
• Fiscal sustainability of the wage bill

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AGI Sources
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Different Dimensions of Good Governance Are
Measured Differently (examples of existing AGIs)
Citizens/Firms

• Political Accountability
• Political competition, broad-based political
  parties
• Transparency regulation of party financing
• Disclosure of parliamentary votes

PSG public acc. indicators Public official
surveys Global Integrity Index Freedom House
indicators Afro/Latino/AsiaBarometer
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Different Dimensions of Good Governance Are
Measured Differently (examples)
PSG public acc. indicators Human rights
database Reporters Without Borders Media
sustainability index
Citizens/Firms
Doing Business sub-indicators BEEPS ICA and
accompanying surveys Business Risk Service TI
index Global Competitiveness index
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Different Dimensions of Good Governance Are
Measured Differently (examples of existing AGIs)
PER and PETS PEFA (e.g. PEFA8) QSDS Score cards

• Decentralization and Local Participation
• Decentralization with accountability
• Community Driven Development (CDD)
• Oversight by parent-teacher associations user
  groups
• Beneficiary participation in projects

Citizens/Firms
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Different Dimensions of Good Governance Are
Measured Differently (examples of existing AGIs)
LEG. RoL and human rights ind. PEFA TI
perception index Global Integrity indicators Open
Budget Initiative

• Checks Balances
• Independent, effective judiciary
• Legislative oversight (PACs, PECs)
• Independent oversight institutions (SAI)
• Global initiatives UN, OECD Convention,
  anti-money laundering

Citizens/Firms
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Different Dimensions of Good Governance Are
Measured Differently (examples of existing AGIs)
PSG public acc. indicators PSG country-specific
projects Score cards PEFA Global Integrity
index OECD procurement indicators

• Effective Public Sector Management
• Ethical leadership asset declaration, conflict
  of interest rules
• Cross-cutting public management systems
  meritocracy, public finance, procurement
• Service delivery and regulatory agencies in
  sectors

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AGI Website

• http//agi.worldbank.org

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AGI Illustrations
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Public Finance Management AGIs
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PEFA PFM Performance Measurement Framework

• 31 high-level indicators measuring performance of
  PFM systems (28 Performance Indicators 3 for
  Donor Practices)
• A performance report supporting the assessment of
  the indicators and providing an analytical
  summary
• Used in approx 75 countries with gt20 donors
  involved (WBEC leading 80-90 of assessments)
• Common pool of information on PFM systems
  performance to promote country reform leadership,
  with coordinated aligned donor support the
  Strengthened Approach

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Global access to and use of PEFA assessments

• 26 assessment reports made public so far
  (available on www.pefa.org)
• Tracking of changes in PFM performance in HIPCs
  2001-2006 (report available on website)
• Reports in final stages of preparation
• PEFA global monitoring of roll-out and quality
  2007
• Study of the impact of the PEFA Framework on
  implementation of the Strengthened Approach
• Study of what PEFA assessments tell about PFM
  systems across countries

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Use of PEFA at country level(Ghana, Bank-led
assessment)

• Updated PFM action plan 2006-09 directly related
  to PEFA baseline assessment 2006
• Assessment update 2009 agreed as part of overall
  PFM monitoring system
• All donors mapped on how their assistance is
  incorporated in this action plan
• All budget support donors agree to use the PEFA
  assessment for their internal fiduciary risk
  considerations

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Use of PEFA at country level(Norway,
self-assessment)

• Presented findings to OECD-DAC in December 2007
• The assessment showed low scores for six areas of
  PFM system performance
• Government reaction
• Weaknesses in procurement and follow-up to
  external audit findings need to be addressed.
• Limited extent of internal audit is mitigated by
  strong performance in related areas.
• Multi-year program/sector budgeting is not a
  priority at present.
• Two indicators scored low but are municipal
  responsibilities central government will not get
  involved.

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Decentralization AGIs
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Decentralization AGIs (examples)

• Local Fiscal Monitoring
• Indonesias Fiscal Information System (SIKD),
  Village Finance Statistics
• South Africas Periodic Intergovernmental Fiscal
  Review
• Intermediate PFM Benchmarking
• Public Expenditure Tracking Surveys (PETS) (e.g.,
  Uganda)
• Sub-National Public Expenditure and Financial
  Accountability (PEFA)
• Performance Indicators (e.g., Bosnia, Indonesia)
• Brazils Random Public Audits for
  Municipalities Assigned by Lottery
• SN Credit Ratings
• Other Process Indicators
• Public Integrity Indicators (e.g., Colombia,
  Turkey)
• World Bank Institute (WBI) Surveys corruption
  diagnostics
• Indias Bangalore Citizen Score Cards
  implemented in all Indian states
• Indonesias Evolving Local Governance Platform
  Monitoring
• Governance Decentralization Surveys (2002,
  2004, 2006)
• National Household Survey (SUSENAS) significant
  at district level
• Colombia Como Vamos? (How Are We Doing?)
• Turkey Municipal Performance Measurement Project
  (BEPER)
• Australias Productivity Commission

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HRM AGIs
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Albania Depoliticization

Table 1 Average Quarterly Turnover Rates

1 Data exist for 2000Q2 through 2003Q4 for
civil servants 2000Q3 through 2003Q1 for
political appointees and other public employees.
The civil servants data encompasses two changes
in political leadership, while the other data
encompasses only one change in political
leadership. Changes in political leadership
occurred in September 2001 (new Parliament, new
Cabinet, no change in Prime Minister) and August
2002 (new Prime Minister, new Cabinet).
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Albania Meritocratic CS Management
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1 Ratio of average total remuneration for staff
in the highest rank to average total remuneration
for staff in an entry level position.
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Albania Attracting Qualified Civil Servants
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Albania Fiscally sustainable wage bill
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HRM Indicators Features/Determinants (r)

• HRM diagnostic tool captures evidence on HRM
  system features/determinants along six broad
  dimensions
• Legal and ethical framework
• Institutional framework
• Employment and pay policy management
• Human resource management policies and practices
• Training and career development
• Management practices and culture

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Corruption AGIs

• Business Enterprise Environment Surveys (BEEPS)

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Survey-based Indicators for Monitoring Regional
TrendsBribe Frequency, 2002-2005
Source Anticorruption in Transition 3 Who is
Succeeding and Why?
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Tax and Customs Administration
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Monitoring the Impact of Tax ReformSlovakia
Source Anticorruption in Transition 3 Who is
Succeeding and Why?
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Monitoring the Impact of Customs Reform -- Romania
Source Trade and Transport Facilitation in
Southeast Europe.
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Time it takes South African Revenue Service
(SARS) to issue a tax registration number (weeks)

• None of the provinces has SARS issuing
  registration number according to the service
  charter time limits
• If done consecutively, it takes a total of 18.3
  weeks to get three registrations from SARS in
  Kwazulu Natal and half of this time in Northern
  Cape

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Time taken by SARS to process tax returns (weeks)
VAT Income tax

• Only two provinces N. Cape and Limpopo - have
  IT return processing time above SARS charter
  specified limit,
• All provinces have VAT return processing time
  below SARS charter limit

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Time it takes to receive a tax refund on a
clients bank account (weeks)

• W. Cape is the only province where receiving VAT
  refund takes less time than specified in the
  SARS charter, in North West it takes 3 times
  longer
• IT refund takes between 1.5 to 2.5 times longer
  than stated in the SARS charter

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AGI and You

• Finding AGI Resources

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To-date dissemination and outreach activities

• AGI presentation at the first CGAC workshop
• BBLs on AGIs took place in ECA and Africa and
  are being scheduled with other regions
• VC with country teams Ethiopia and Paraguay
• Inter-donor collaboration collaboration on
  popularization/deployment of AGIs (GII) in the
  DataGob IADB on-line governance indicators
  database
• BNPP-funded regional projects integrating AGIs
  into operational work (sector specific and
  cross-country)
• Development of new HRM AGIs a working group
  within AGI Group is working on development and
  roll-out of AGIs for HRM practices in the client
  countries (2-5 AGI group-pilots are planned for
  FY08).
• Identification and classification of AGIs in
  projects and CASs, including a follow-up analysis
  of their use and usefulness

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What we can offer to the CGAC countries

• Advisory clinics on whats and hows of AGIs
• Clinics on application of existing and
  development of new AGIs for projects, programs
  and CASs
• Supporting specific information collection
  initiatives (AGI team support to development of
  cross-country and country specific methodologies
  and applications)
• Governance-at-a-Glance initiative (a sample
  hand-out is a part of this sessions materials)

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AGI Regional Contacts

• SAR Ranjana Mukherjee
• EAP Naazneen Barma, Deb Perlman
• LAC Jeffrey Rinne
• ECA Gary J. Reid, Jim Anderson
• MNA Bob Beschel
• AFR Helene Grandvoinnet

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AGI Anchor Contacts

• Gregory Kisunko
• Gary J. Reid
• Steve Knack

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Thank you

• Questions and Comments?