Pakistan Policy Note—Revamping Governance 79580 Pakistan Policy Note 13 Naseer Ahmad Rana, Iffat Idris, and Irum Touqeer 1 Revamping Governance J une 2 0 1 3 Pakistan faces serious governance challenges that eight categories of the index, Pakistan ranks affect the state’s ability to deliver services to its citi- 121 in governance (Legatum Institute 2012). zens. These challenges are a combination of weak- nesses in the state’s effectiveness, efficiency, and Similarly, Global Integrity’s Global Integrity Report accountability. Effectiveness is hampered by the assigned Pakistan an overall rating of 68 out of 100 patronage-prone political system, frail administrative in 2010, due mainly to weak implementation of laws capacity, weak provincial and local governments, (Global Integrity 2010). The Bertelsmann Stif- and shortcomings in the justice system. Efficiency tung’s Transformation Index ranks Pakistan 110 is constrained by the state’s inability to mobilize rev- of 128 countries due to weak democracy, a poorly enue and manage resources well. And accountability functioning market economy, and weak political is undermined by fragmented and feeble governance management (Bertelsmann Stiftung 2012). The institutions and lack of transparency, allowing for World Bank’s World Governance Indicators 2011 corruption and manipulation of rules. Hence a also ranks Pakistan very low on quality of gov- broad and long agenda of reform is needed, focusing ernance –1.14 (average), lower than the average on improving management of service delivery, bring- rankings of South Asia (–0.69) and Sub-Saharan ing in a broad, simple, and equitable tax system, Africa (–0.64; World Bank 2013). improving budget management and public procure- ment, and ensuring right to information regimes at These findings are echoed by the governance indica- the federal and provincial levels. Further, given that tors of the Global Competitiveness Report 2012– THE WORLD BANK GROUP SOUTH ASIA REGION corruption is often institutionalized, Pakistan needs 2013, which looks at 111 indicators in 144 countries to prepare a new broad-based anticorruption strategy across the world. On this, Pakistan ranks 109 in and ensure that it is implemented well. transparency of government, 116 in property rights, 119 in irregular payments and bribes, How Does Pakistan Perform 127 in reliability of police, 129 in favoritism in on Governance? decisions of public officials, 136 in organized crime, and 143 in business costs of terrorism The findings from numerous international and local (only Colombia is worse). Perhaps because of studies point to serious failings in governance and to this last score, Pakistan ranks 132 in the busi- institutionalized corruption in Pakistan. Consider ness costs of crime. The most problematic Legatum Institute’s in Prosperity Index, which factors for doing business were corruption, defines the concept of national prosperity not inefficient government bureaucracy, policy just in terms of wealth but also well-being, cover- instability, and government instability and ing some 90 indicators to benchmark 142 coun- coups (World Economic Forum 2012). tries.1 On this index, Pakistan ranks 132 of 142 countries (Indonesia 63, India 101, Bangladesh In a recent analysis of the binding constraints to 102, Cambodia 107, and Nepal 108). Among the Pakistan’s economy, bad governance and a poor civil Pakistan Policy Note—Revamping Governance service appear to be undermining economic growth. Effectiveness refers to performance: the abil- Without improving governance, other efforts ity of the state to deliver services and meet the in realizing the country’s growth potential are needs of citizens. Efficiency refers to the man- destined to be less effective than they would ner in which the state functions, specifically to be otherwise (Lopez-Calix and Touqeer forth- its ability to mobilize revenue and its ability to coming). The government also shares these use that money in a way that minimizes waste findings in its recent Framework for Economic and corruption—and that maximizes results. Growth (Government of Pakistan 2011). And accountability refers to the degree of open- 2 ness and transparency with which government And Pakistanis agree. A new large-scale survey operates, and the ability of citizens to hold those asked Pakistanis, “What is the most important in public office accountable. The factors that obstacle to economic progress?� The most prev- hamper these three elements are now discussed. alent answer was corruption (The Herald and SDPI 2013). Running second and third were What hampers state effectiveness? incompetent leadership and poor governance. Four issues stand out. Young entrepreneurs in Pakistan consider cor- ruption a major constraint to industrial and A patronage-prone political system economic development� (ICCI 2012). Pakistan’s political life is characterized by the pre- While it is difficult to give precise figures for the dominance of “patronage� politics over “issues-based� level of corruption in public sectors, available data politics. While the latter differentiates parties show that perceptions of corruption have increased. and their support largely along policy lines (for In 2012, Pakistan ranked 139 of 183 countries example, on the economy, defense, and inter- on this indicator, compared with 79 of 91 coun- national relations), the former is characterized tries in 2001 (Transparency International 2001, by client–patron relationships—politicians are 2012a). About 42 percent of Pakistani business- elected based on pledges to specific groups. men reported losing new business because a Once in office they have to deliver on those competitor paid a bribe to win the contract. pledges, meaning that, rather than working for They see corruption as a widely accepted fact the interests of the population as a whole, they of life, because prosecution for such crimes is disproportionately favor the groups that sup- lacking (Transparency International 2011). ported them. At the same time, politicians must also “recoup� their own investment in campaign- Combined, these data and analyses paint a bleak pic- ing, buying support, and distributing largesse. ture of governance in Pakistan. But it is not all bad They do so through corruption, kickbacks, and news. The Global Competitiveness Report 2012–2013 rent seeking. This system makes it very hard for found that on some measures like judicial inde- politicians to focus on policy issues, economic pendence and strength of investor protection growth, and development, or even to have a Pakistan actually performs much better than long-term vision for the country­ —their focus is some far more developed countries, like Austra- on short-term, personal gains. lia, Brazil, Finland, the Republic of Korea, Spain, and Turkey (World Economic Forum 2012). Weak administrative capacity The challenge is reversing the governance slip- An important determinant of weak administrative page and enabling Pakistan to realize its full capacity is the quality of people in the civil service, yet potential. Pakistan has seen a steep decline in the service’s abil- ity to attract and retain qualified, talented personnel. Key Issues Part of this relates to low incentives and gener- ally opaque selection and promotion processes, A useful way to categorize and understand the gover- which favor less qualified people with connec- nance challenges is through their impact on effective- tions over trained, educated, and hardworking ness, efficiency, and accountability of service delivery. men and women.2 The drop in overall service quality is reflected in rising inefficiency, poor Shortcomings in the justice sector performance, and corruption (Husain 2009; NCGR 2008). As part of good governance, the police and the courts are the two principal entities charged with uphold- Weak provincial and local governments ing the rule of law. The police, responsible for investigating crimes and protecting citizens, is The 18th Constitutional Amendment transferred most widely seen as corrupt, oppressive, and manip- state functions and responsibilities from the federal to ulative—an agency to be feared and avoided provincial governments. But the provincial govern- rather than sought out for help and protection 3 ments do not seem to have complete control over (Figure 1). The failings of the police can, in the functions assigned to them for several rea- turn, be attributed to lack of resources, train- sons. First, they lack capacity to exercise all the ing, and proper systems, as well as a tendency functions assigned to them: some require skills of governments and politicians to use the that may not currently exist at the provincial police to further their personal interests. level. Second, there is confusion over account- ability roles. Although the 18th Amendment has The courts, too, lack resources, trained staff, and facil- brought greater clarity in government account- ities. Weaknesses in the court system are mani- ability (public service accountability now starts fested in huge caseloads and backlogs with long and ends with provincial governments, which is delays in hearing cases. It is common for prop- a strong incentive for them to improve the qual- erty disputes, for example, to drag on for years ity of services), a large number of functions of and even decades. The problems in the court three main federal ministries—agriculture, system create space for corruption—those with health, and education—are retained by the fed- connections and money can influence judg- eral government (Mukhtar 2013). ments. For the ordinary citizen, the time, effort, and expense involved effectively mean that After elections in 2008, the provincial governments “access to justice� does not exist, whereas for embarked on rolling back 2001’s devolution, reassum- firms it affects their investment decisions. The ing many of the functions and powers previously del- Investment Climate Assessment finds that more egated to local governments. Despite pledges, new than a third of Pakistani firms perceive the low local government systems have still not been fully quality of courts as an obstacle, compared with defined or established, resulting in overlapping about a fifth of firms in comparator countries responsibilities between provincial and local (such as Bangladesh and Chile; Figure 2, left governments and diminishing ability of local panel). The World Bank’s Enterprise Survey governments to deliver services. The incomplete finds courts system as a major for about 38 per- administrative decentralization has created dual cent of the firms in Pakistan (Figure 2, right accountabilities of local government officials panel). (to both provincial and local governments) that undermine incentives to perform (Husain 2009). What hampers state efficiency? Conversely, there are asymmetric responsibilities between provincial and district governments. Revenue mobilization is one of the major challenges. After establishment of the local government sys- Pakistan has declining tax revenues and one tem in 2001, health and education employees of the world’s lowest tax to GDP ratios, stem- continued to function as provincial employees, ming from five main tax policy and adminis- with the district nazim having little authority tration weaknesses: complexity, a narrow tax over the hiring, firing, evaluation, or placement base, low compliance, inefficient tax adminis- of these employees. Similarly, the salary budget tration, and low and declining provincial tax was transferred to the districts but nonsalary revenues. Complexity provides scope for dis- recurrent and development budgets were inade- cretion and corruption. A narrow tax base and quately transferred, which affected the ability of low compliance are outcomes of inequitable district governments to improve service delivery exemptions and preferential treatments, low (Mukhtar 2013). tax registration, and massive tax evasion by Pakistan Policy Note—Revamping Governance Figure Perception of corruption in Pakistan, India, and Indonesia, 2010/11 1 Pakistan India Indonesia Police Public of cials Political parties Parliament Businesses Nongovernmental organizations Judiciary institutions 4 Media Education institutions Military Religious bodies 0 1 2 3 4 5 Global Corruption Barometer Note: 1 is not at all corrupt, 5 extremely corrupt. Source: Transparency International 2012b. Figure Quality of the courts 2 Firms’ perceptions of quality of the courts Share of rms identifying the Pakistan Comparator countries courts system as a major constraint 60 Pakistan Percent of rms 40 All countries 20 South Asia 0 Quick Affordable Impartial Able to 0 10 20 30 40 enforce decisions Percent Source: World Bank 2007, 2009. potential taxpayers who prefer to stay informal. What hampers state accountability? Poor management, weak human resources, Two main issues are apparent. and a lack of effective key supporting informa- tion technology (IT) systems are constraining Fragmented and weak institutions of accountability the tax administration. These issues are also pronounced among provinces, as provincial Pakistan possesses an extensive institutional setup for tax collection efforts fall short of their expen- accountability (Box 1). However, the functioning diture responsibilities under the 18th Amend- of many of these institutions is hindered by the ment, affecting their ability to deliver services following constraints. (Lopez-Calix and Touqeer 2013). • Lack of financial and functional autonomy. Direct government control or involvement Weak public financial management also hurts Paki- in the day-to-day affairs of accountability stan, as available resources are not used as efficiently institutions affects their autonomy. The or effectively as they should be. There are under- National Accountability Bureau faces politi- lying problems with planning and budgeting cal interference, which affects its author- systems and procurement, all of which provide ity to conduct unbiased investigations.4 scope for corruption through weak monitoring The financial dependence of these institu- and accountability.3 tions on other departments or ministries Box The accountability framework 1 The accountability framework consists of different institutions that cater to the supply and demand sides of accountability and sup- port different accountability mechanisms. On the supply side are public institutions established under the constitution, laws, regulations, cabinet resolutions, notifications, and orders of the government. The main public institutions in Pakistan are the Public Accounts Committee, Judicial Commission, Election Commission of Pakistan, Ombudsman institutions, Federal Investigation Agency, National Accountability Bureau, provincial anticorruption establishments, Auditor General of Pakistan, Procurement Regulatory Agencies, and institutions of market governance (State Bank of Pakistan, Competition Commission of Pakistan, and Securities and Exchange Commission of Pakistan). Demand for accountability comes from the media, nongovernmental institutions, professional organizations, and private sector 5 bodies (such as Transparency International). Freedom of the press, proliferation of electronic media, and increasing assertiveness and activism of the judiciary in recent years show strengthening demand and some supply response of accountability (enforcement) in Pakistan. Stories and investigative reports compiled by the media have been picked up in many cases by the judiciary. Suo moto cases have been initiated based on these reports against those alleged to have been corrupt or to have misused their public offices. The Annual Corruption Perception Index has also stirred up action on the part of the Public Accounts Committee and the executive branch. Source: Husain, Rana, and Touqeer forthcoming. is another constraint. For example, expen- procedures streamlined. The general pub- diture by the Federal Services Tribunal lic (or even senior officers) are unaware of depends on approvals from the Ministry of these rules as they are not widely dissemi- Law. The authority of some accountability nated, which works to the advantage of those institutions is limited, restricting implemen- who store this knowledge and interpret the tation of rules and regulations. For instance, rules (generally, patwari and thanedar 6) and the ability of the Auditor General of Paki- provides scope for corruption. All of this has stan to conduct the full range of audits of conferred enormous discretionary powers all government entities is restrained due to on officials. resistance from government entities. Simi- • Weak human and physical capacity and internal larly, provincial anticorruption establish- accountability mechanisms. The relevant insti- ments lack the authority to initiate cases. tutions generally fail to carry out regular Moreover, some legal provisions, such as performance monitoring, reporting, and the provision for appeal against the deci- auditing. In most cases, there are no set sions of the Federal Ombudsman to the performance indicators and related data President, and provisions for term appoint- to assess institutional performance against ment of senior and management positions those indicators. Further, the institutions (as in the case of the Competition Commis- lack physical (especially IT) infrastructure sion of Pakistan) provide scope for political and human capacity. capture. 5 • Some overlapping and duplication of mandates, Lack of transparency leading to turf issues. This is seen, for exam- ple, in the reversal of the earlier decision The lack of transparency restricts external account- to merge the Economic Crimes Wing of ability—for example, in the budget process. Trans- the Federal Investigation Agency with the parency in the budget process serves as a National Accountability Bureau to avoid mechanism for external accountability to overlap. This reversal has strained the rela- ensure sound budget decisions—geared to tionship between the two institutions and delivering services and growth—and proper weakened the process of holding those in implementation of them. Yet Pakistan scores public office accountable. just 58 on the Open Budget Index 2012, the • Low levels of implementation or enforcement. same as Bangladesh and Columbia, but lower This may be explained by outdated laws, than Indonesia (62), India (68), and Brazil opaque rules, and cumbersome procedures. (73), pointing to a lack of fiscal transparency Some of the laws need to be updated and (International Budget Partnership 2012). Pakistan Policy Note—Revamping Governance Over the past two decades, the number of countries Improve management of service delivery with right to information (RTI) or freedom of infor- Four key reforms can improve the delivery of mation (FOI) laws has expanded.7 Pakistan was basic services. the first country in South Asia to pass such legislation, in the form of the FOI Ordinance Strengthen provincial administration 2002. However, its introduction by a military ruler (President Musharraf) undermined its To properly execute the assigned functions and legitimacy and credibility. Various other factors responsibilities, subnational governments should 6 have also impeded its effectiveness, including have complete control over their functions. This can shortcomings in the law itself and bureaucratic be achieved with the help of the following: resistance to RTI. As a result, public bodies • Adequate staffing, training, and technical have poorly implemented FOI laws, such as resources, which would entail, for example, requirements for proactive disclosure, designa- capacity building at the provincial level for tion of FOI officers, awareness raising among public financial management functions. the public, and so on. At the provincial level, • Clearly defined accountability roles with Balochistan and Sindh have “copycat� FOI leg- complete control of subnational govern- islation to the federal law, which suffers from ments over their staff (and less or no inter- the same shortcomings and has been equally ference from federal government). ineffective, while Punjab seems closer to having • Clearly defined roles and functions of each one than the Khyber Pakhtunkhwa. tier of government to avoid overlapping functions. The demand for RTI has been equally weak due to • Adequate financial resources based on suf- insufficient support from civil society and lack of pub- ficient subnational tax powers to raise bud- lic awareness of RTI and its relevance to their needs. getary flexibility, with fiscal transfers from As a result, the total number of FOI requests in higher levels of government mainly for fis- Pakistan is only a few hundred. cal equalization and national and provincial objectives. Policy Recommendations Establish a local government system The governance reform agenda for Pakistan is substantial. The country needs to further It is important to define and establish a viable and strengthen its democratic governance by effective system of local government in each prov- strengthening the Election Commission of ince. While the ground realities will determine Pakistan to help carry out its mandate, intro- the extent and form of devolution to the third ducing more transparency in political-party tier, to be effective, local governments should functioning, and building capacity of new legis- be given significant service delivery functions, lators. Pakistan also needs to enhance revenue commensurate finances, and a fair degree of mobilization and address key public financial autonomy. The decentralized system should management issues, nationally and subnation- also allow for citizen voice and participation ally, to enhance state efficiency.8 Strengthen- in local planning and development and should ing the rule of law through legislative reforms build subnational and local capacity to ensure that focus on police service and the justice effective implementation. system is also important.9 Other areas need to be addressed to improve service delivery, but The passage of local government legislation by all everything cannot be done at once. So where provinces (based on consultation with all stakehold- should Pakistan start? Based on available ers) will be an immediate measure for this. Again, opportunities and drawing on lessons from the roles and functions of each government international experience, priority areas are should be further defined with clear account- identified in which reforms are feasible and ability roles. Local governments should have results are achievable, thus strengthening Paki- complete financial autonomy for making and stan’s overall governance.10 executing their budgets according to their priorities, irrespective of whether the funds are But such legislation on its own will not work. What transferred by provincial government or raised is needed is a transformation of the entire by local government. At the same time, the service delivery chain for effectiveness. So provincial government should be responsible Pakistan should implement a multipronged for building fiscal and financial management strategy, focusing not only on improving capacity at the local level. Further, to strengthen frontline access to service delivery but also the financial autonomy of local government, on developing a monitoring mechanism, stan- some buoyant revenue bases should be consid- dardizing and simplifying back-end processes, ered for devolving to larger local governments addressing capacity constraints, and generat- 7 (for example, urban immovable property tax, ing awareness among citizens. The innovative calling tax, and entertainment tax).11 use of ICT-based performance management and grievance redressal systems will be ben- Promote information and communications technology eficial. ICT-based management improves per- formance and service delivery with a focus The third reform is to build on the innovative uses of on quality, productivity, and evidence-based information and communications technology (ICT) planning. being pioneered in Punjab to improve governance. The rapid spread of mobile phone use and even Enhance transparency Internet access across Pakistan, and the declin- ing costs of this technology, means that ICT There is a need to prioritize RTI reform to promote can be an extremely rapid and cost-effective transparency. There is already momentum for mechanism to bring about tangible improve- this in Pakistan, particularly with the approval ments in basic services for citizens (Box 2). of a strong Punjab FOI Bill by the last Punjab cabinet on March 12, 2013.12 The new fed- Implement a multipronged strategy for providing citi- eral and provincial governments should build zens’ right to services on this momentum to establish effective RTI regimes. This will require measures on the sup- Following other countries, Pakistan could establish ply side (reforming or passing RTI legislation, citizens’ right to public services in law. Such legisla- and properly implementing and enforcing such tion would raise awareness among citizens of legislation) and on the demand side (raising their entitlements and—more important—put awareness, making RTI relevant to the needs pressure on service providers to deliver. Kar- of ordinary citizens, and helping them use it; nataka’s Right to Service Act 2011 guarantees Box 3). Four key reforms are put forward. time-bound delivery of public services to citi- zens and provides mechanisms to punish the Reform or pass FOI and RTI legislation public servants deficient in providing those ser- vices. This has greatly helped control corrup- The federal FOI Ordinance 2002, Balochistan tion among government officials and increase FOI Act 2005, and Sindh FOI Act 2006 need to be transparency and accountability. reformed to bring them into line with accepted best Box Advantages of information and communications technology in government 2 Information and communications technology (ICT) can be used for gathering data and mapping services and assets—all of which can inform better decision making, planning, and resource allocation. It can also be used to maximize operational efficiency, track the performance of service delivery providers, and enhance accountability—promoting better performance generally. ICT can be employed to get feedback from citizens on the quality of services they obtained and any problems they encountered­—this too can act as a check on corrupt or poorly performing officials and identify areas where service provision needs to be improved. It can also be used to enhance transparency, such as in public procurement as piloted in Gujranwala. Finally, ICT can be used to promote e-services: enabling citizens to obtain application forms, submit applications for licenses and permits, make pay- ments, obtain information, and so on. E-government, once established, reduces transaction costs to both service provider and citizen, and—critically—reduces opportunities for rent seeking and corruption. Pakistan Policy Note—Revamping Governance International examples of citizens using freedom of information and right to Box information reforms to secure rights and services 3 Improving service delivery in Mexico. In 2006, Maderas del Pueblo del Sureste—a nongovernmental environmental organization sup- porting indigenous people and rural communities in Chiapas, Mexico—filed access to information requests using the federal transpar- ency law, seeking information about a sewage project hurting a village that was receiving waste from a neighboring town and had no access to clean water. Information released through these requests showed that the water treatment system was not properly designed and needed a filter system that had not been installed. The Cintalapa sewage project was halted, and authorities publicly acknowledged that changes had to be made to ensure water was properly treated. 8 Enhancing service delivery in South Africa. Villagers in Emkhandlwini had no water, whereas neighboring villages were receiving water deliveries from municipal tankers. With the help of a civil society organization, the villagers filed a right to information (RTI) request for minutes from the council meetings at which water programs had been discussed and agreed on for the council’s integrated develop- ment plan and the associated budget. This information showed that there were plans to deliver water throughout the region, but that somehow Emkhandlwini had been left out. Armed with this information, the villagers were able to assert their claims for water. Achieving rights in India. A 2008 report by the Indian nongovernmental organization, Participatory Research in Asia, highlighted a case where police refused to accept a “first information report� from an individual who had been assaulted in a land dispute, even after the individual had produced a medical certificate attesting to his injuries. When he returned a few days later with an RTI request asking for information about why his first information report had not been accepted, the police immediately registered the assault claim. Achieving rights in Thailand. In early 1998, shortly after the Thai RTI law was adopted, a parent, Sumalee Limpa-owart, used it to fight corruption in the education system. Her daughter had been refused entry to a prestigious state-funded school. Admission was supposed to be based on a competitive entrance examination. However, the student body was largely composed of children from elite families, leading to a widely held perception that some form of bribery was involved. Sumalee sent a letter to the school requesting the marks and answer sheets of her daughter and the 120 students who were admitted. When she received no reply, she filed a petition under the Official Information Act and eventually appealed the case to the Official Information Commission, which ordered disclosure of the information. Sumalee was eventually given access to the answer sheets and marks in March 1999. By that time, the school had already admitted to corrupt practices in processing admissions of 38 students. Source: Dokeniya 2013; Mendel 2011. practice on RTI legislation. The Punjab FOI Act Strengthen FOI and RTI enforcement should be passed into law by the newly elected Punjab Assembly. The government of Khyber Enforcement of FOI and RTI legislation is critical. Pakhtunkhwa should introduce RTI legislation Without strong enforcement mechanisms, it based on accepted best practice. will be all too easy for public officials to deny information to citizens—a particular danger Promote FOI and RTI implementation by public in Pakistan with its bureaucratic culture of bodies secrecy. Current FOI legislation in Pakistan designates the Ombudsman as responsible for Implementation of FOI and RTI legislation requires hearing appeals and enforcing FOI provisions. several measures. They include raising awareness The Ombudsman offices need to be supported among public officials, appointing and train- to carry out this role. International best prac- ing designated information officers, develop- tice recommends a dedicated independent ing systems and procedures to handle FOI information commission to deal with RTI and RTI requests, ensuring that public bodies appeals (and to support oversight and improve- disclose information, improving records man- ments in RTI implementation). Such a body agement (ideally, automating records manage- should have the required specialist skills to ment systems), and engaging citizens to help handle RTI cases, as well as time and resources them access information. All of this requires to focus on RTI (something the already over- heavy resource allocations as well as time and burdened Ombudsman offices cannot do). effort. If independent information commissions are set up in Pakistan (through reform of federal, General of Pakistan should be strengthened to Balochistan, and Sindh laws and passage of extend its jurisdictions to all government con- the Punjab FOI Act, which already provides trolled or owned entities. Institutions like the for such a commission), adequate resources, Securities and Exchange Commission of Paki- staff, and infrastructure need to be allocated stan, the Ombudsman, and the Competition to them. Commission of Pakistan should be empowered for decision making and implementation. Strengthen demand for RTI Implement an appropriate system for the selection 9 Supply-side measures alone will not bring about and appointment of institution heads strong RTI regimes. These measures have to be complemented by strong demand for RTI, Senior management positions should be filled by which is very weak in Pakistan. Raising aware- qualified professionals, and security of tenure should ness among civil society groups, the media, and be ensured. One option could be for the selec- the general public is needed to change this, tion process of heads of institutions such as with special focus on highlighting how FOI and the Auditor General of Pakistan, the National RTI legislation can empower ordinary citizens Accountability Bureau, and the Ombudsman and help them secure their rights. to follow the recent example of the appoint- ment of the caretaker Prime Minister of Paki- Strengthen accountability stan in March 2013, which entailed consultative The following measures can strengthen account- decision making with a defined timeline and ability. courses of action in the event of a decision not being reached. Prioritize reforms of accountability institutions Build up human and physical capacity to improve A selective approach is recommended. It should start the functioning of institutions with a few priority institutions—that is, those that not only have important individual roles The accountability institutions should hire staff pro- but also have accountability links with other fessionally and transparently. There should be institutions, citizens, and local communities structured capacity-building programs, includ- that, if functioning well, can affect service ing focused training and learning opportuni- delivery and outcomes. Possibilities include the ties from international experience, customized Auditor General of Pakistan, Public Procure- to the needs of each institution. The institu- ment Agencies, Ombudsman offices, the three tions should also invest in physical infrastruc- institutions of market governance, the National ture, especially business process automation Accountability Bureau, and subnational anti- (Box 4). corruption establishments. In the medium to long term, attention should be given to the Prepare a broad-based anticorruption strategy Election Commission of Pakistan, Federal Pub- lic Service Commission, and some important Pakistan should consider preparing a new broad- sectoral authorities and commissions, such as based and pragmatic anticorruption strategy led by the Oil and Gas Regulatory Authority and the the government and supported by other political par- National Electric Power Regulatory Authority. ties, civil society, and the international community (Box 5).13The main steps in this new anticorrup- Strengthen autonomy, authority, and accountability tion approach include undertaking a thorough of institutions diagnosis of corrupt systems, devising carefully deliberated strategies, ensuring proper imple- The functioning and financing of accountability mentation of the strategies, and reaching out institutions should be freed from excessive government to the international community to make the control or interference. For example, the Auditor progress visible and widely appreciated. Pakistan Policy Note—Revamping Governance Box International examples of strengthened accountability institutions 4 Hong Kong SAR, China One of the top anticorruption institutions is the Independent Commission Against Corruption (ICAC) of Hong Kong SAR, China. Backed by the strict Prevention of Bribery Ordinance, the ICAC was established as an independent multidisciplinary body with the mandates of pursuing the corrupt through effective detection and investigation; eliminating opportunities for corruption by introducing corrup- tion-resistant practices; and educating the public on the harms of corruption and fostering their support in fighting corruption. The ICAC reports directly to the head of the government. It has strong legal powers. And it employs professional staff to fulfill its mandate. Further, it provides a favorable working environment, including appropriate salaries for civil servants, a high degree of professionalism 10 and pride among officials, and an environment in which people caught offering bribes or manipulating the system find it hard to obtain business. Thus the commission makes corruption a high-risk activity. Based on its multidisciplinary institutional setup, the ICAC has been pivotal to the success of transparent public procurement and effective completion and implementation of public projects in Hong Kong SAR, China. One of the most noted ICAC projects was the construction of the new airport. The Airport Core Programme was designed involving substantial reclamation of land and construction of the airport itself, associated bridges and railway systems, a cross-harbor tunnel, expressways, and a new town. The ICAC adopted a proactive approach to preventing corruption in this mega-size public development project. ICAC involvement started early, at the legislation stage, to ensure that corruption prevention safeguards were incorporated in the systems. And ICAC staff maintained close liaison with the senior management of the implementing agencies to provide advice during the procedure-formulation stages as well as during project implementation. Malaysia The Malaysian Anti-Corruption Act 1997 introduces preventive measures against corruption in the civil service and statutory boards and authorizes investigation of complaints meriting disciplinary actions against civil servants. The chief public prosecutor, the Attorney General, is the final decision-making authority. The Attorney General and the Director General of Anti-Corruption Agencies are appointed by the King on the advice of the Prime Minister. A parliamentary select committee represented by all major political parties maintains a check on anticorruption agencies. The Attorney General enjoys certain tenure of service, and removal requires following a prescribed and open procedure. The Public Accounts Committee of Malaysia ensures that accounts of federation and states be examined by the Auditor General. The National Integrity Plan and Integrity Institute of Malaysia strives to stamp out corruption and patronize good governance and ethical values. The Malaysian government has established a 17-member Royal Commission to enhance the operations and manage- ment of the Royal Malaysia Police. The Public Complaints Bureau lodges complaints against government officials to hold them account- able. All this institutional setup is supported by a courageous Malaysian media that pinpoints corrupt practices. The Securities Commission in Malaysia is a statutory body established under the Securities Commission Act 1993 to regulate and develop the Malaysian capital market. The commission’s functions, powers, and various governance arrangements are set out in the Act. The Minister of Finance appoints commission members. The commission members comprise an Executive Chairman together with seven other members, of whom four represent the government and the remaining three represent the private sector. Source: World Bank forthcoming; ICAC 2013; OECD 2008; Abdullah 2008. Box A new approach to fighting corruption 5 Pakistan should consider preparing a new broad-based anticorruption strategy. The usual approaches to fighting corruption are insuf- ficient, though they pass new laws, dictate codes of conduct, train public administrators, and build capacity. These approaches do not, however, guarantee the implementation of laws, which is Pakistan’s dilemma. The new approach should be based on right leadership from government, support from civil society, and the right help from the international community. It should recognize that: • Corruption is a problem of political cultures as well as bad laws and poor policies. • Corruption involves informal systems that work parallel to the ostensibly legal systems. • Reformers have to build credibility and momentum by “frying big fish� and achieving some quick, highly visible successes. • The business community and civil society must participate in diagnosing and healing corrupt systems. The main steps include undertaking a thorough diagnosis, devising carefully deliberated strategies, ensuring proper implementation of the strategies, and reaching out to the international community to make the progress visible and widely appreciated. Diagnosis. This should use a variety of country-level indicators of governance and competitiveness to analyze corruption, see where the country stands against other nations, and estimate the impact of governance improvements on investment, job creation, and (continued) Box A new approach to fighting corruption (continued) 5 growth. The diagnosis should cover the profiling of anticorruption apparatus and corrupt systems (not people) and consider citizens’ views and experience at all levels (local, provincial, and national). The diagnosis will raise interest if it also identifies “big leaks� through a frank assessment of the sources, amounts, and destinations of outflows and the chances of getting them back. Strategy for transformation. Using findings of the diagnosis, the next step is to convene leaders to devise practical ideas (including local solutions) for fighting corruption. This will require an understanding of the economics and weaknesses of corrupt systems. The economic calculations of the corrupt can be changed by using the formula: corruption = monopoly + discretion − accountability. Thus reducing scope for discretion, or strengthening accountability, will help curb corruption. 11 Implementation. Step three is to create confidence and momentum by giving priority to highly visible examples of improvement and learning from international experience. The analysis of big leaks should be continuously followed up with programs of plugging leaks and retrieving the stolen assets. Besides other things, this will depend largely on improving coordination among government entities. Also, building partnership across the public-private divide and enhancing the scope of social networks to add further infusions of transparency (and thus commitment) will be helpful. For effective implementation of strategies, there is a need to strengthen capa- bilities by providing hands-on training in ethics, leadership, and management and to build better systems in such vital areas as internal audit, procurement, tax bureaus, and public works. Success stories at implementation should be recorded in a checklist at the level of individual government offices, which should help spread effective practices. Outreach. The above steps will have a broader impact on pride and professionalism of the civil service, on citizens’ confidence in government, and on international perceptions of Pakistan. Donors can help the country share its success stories internationally with opinion leaders and investors. Donors and others can also help the government learn from international experience in teaching eth- ics and civics in schools. A promising example is Indonesia, where student-run “honesty stores� in middle and high schools give stu- dents a chance to practice what they learn in their civics curriculum, which explicitly includes anticorruption education. Unlike the usual approaches to anticorruption, the approach recommended here takes seriously the economic and political forces that reinforce corrupt practices. It emphasizes implementation and outreach. And it recognizes the central importance of participatory processes that encourage local problem solving abetted by the best of international experience and knowledge, as most of the above steps involve participation of government, civil society (citizens at large, the business community), and donors. The four steps of a new anticorruption approach for Pakistan 4 Outreach 3 Implementation Strategy for • Indices of progress 2 transformation 1 Diagnosis • Reorganizing the ght • Motivating examples • Convenings against corruption • International opinion • Where we stand • “Laboratories� • Credible signals of leaders effective change • Platforms • “Parallel systems� • Public-private-citizen collaboration • Changing outcomes and • “The anticorruption perception apparatus� • Priority actions—and what to leave for later • Strengthening • Analysis of the “big capabilities leaks� Source: Klitgaard 2013. Pakistan Policy Note—Revamping Governance Notes of countries RTI has indeed brought about The paper benefited immensely from infor- open government and empowered citizens. mal discussions with Robert Klitgaard as well Mexico and India are examples: in both, as from the overall guidance of Rachid Ben- people have used it in poorer and rural messoud and Antonius Verheijen and individ- communities as a tool to access basic ser- ual contributions from Ishrat Husain, Zubair vices (Idris 2010, 2013). Bhatti, Sher Shah Khan, Grace Morgan, Ana 8. See Lopez-Calix and Touqeer (2013), Bellver Vazquez-Dodero, and Roland Lomme. Rashid (2013), and Mukhtar (2013) for spe- 1. See “The 2012 Legatum Prosperity cific recommendations on these issues. 12 Index: Pakistan,� Legatum Institute, 9. Some development partners (such as the w w w.prosper it y.com/C ount r yProf ile. United Nations Development Programme aspx?id=586, for a summary for Pakistan. and the U.S. Agency for International 2. This also determines their attitudes toward Development) have or had engagements new, efficient and open systems, such as with the Election Commission of Paki- transparency and business automation. stan, police department, and the justice 3. For details, see Rashid (2013), identifying sector. key public financial management issues: 10. For examples of governance reforms in excessive centralization of budget man- Georgia, Korea and Vietnam, consider agement, which limits the flexibility of World Bank (2010, 2012), Hwang (2011), provinces in executing their budget; weak Cheema (2010), and Snyder and others cash management due to weak internal (2010). controls, which affects accuracy, complete- 11. See Mukhtar (2013) for detailed discussion ness, and timeliness of the information; on decentralization reforms in Pakistan and lack of implementation capacity in for accountability and service delivery. procurement regulatory bodies. 12. For an overview of the bill, see Transpar- 4. A recent example of trying to restrict the ency Advisory Group (2013). functioning and authority of the National 13. The current anticorruption strategy (see Accountability Bureau was the introduc- Government of Pakistan 2002) needs to be tion of a new Accountability Commission renewed, taking into consideration politi- Bill (which did not pass). cal ownership and using an innovative and 5. The Recent Federal Ombudsman Insti- problem-solving approach. tutional Reform Ordinance (passed on March 1, 2013) will help strengthen References enforcement and other reforms. It has Abdullah, Nik R. W. 2008. “Eradicating Corrup- the potential to significantly improve the tion: The Malaysian Experience.� Journal of effectiveness of the Ombudsman insti- Administration and Governance 3 (1): 42–53. tution in Pakistan. Key improvements Bertelsmann Stiftung. 2012. “BTI 2012 include response standard of 15 days, —Pakistan Country Report.� Gütersloh, Ger- improved organizational structure, better many. www.bti-project.org/country-reports/ enforcement, and greater consistency. This aso/pak. ordinance has opened an opportunity to Dokeniya, Anupama. 2013. Implementing Right to establish an Ombudsman institution in Information: Lessons from Experience. Washing- Pakistan that can become an international ton, DC: World Bank, Poverty Reeducation best practice. and Economic Management. 6. Patwari is an administrative government Cheema, G. Shabbir. 2010. “Building Trust in position of a village accountant. Thanedar Government: An Introduction.� In Build- is a police officer. ing Trust in Government: Innovations in Gover- 7. Two decades ago only 13 countries had nance Reform in Asia, ed. G. Shabbir Cheema RTI legislation; today 93 countries have and Vesselin Popovski. Tokyo: United some form of it. 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The findings, interpretations, and conclusions expressed herein are those of the authors and do not necessarily reflect the views of the World Bank’s Board of Executive Directors or the countries they represent. The report was designed, edited, and typeset by Communications Development Incorporated, Washington, DC.