Abstract

The World Bank financed the Gujarat State Highway Project (GSHP) during 2001-07. The project development objective was to enhance the capacity of the Government of Gujarat (GOG) for effective and efficient planning and management of road infrastructure, while concurrently maximizing existing road infrastructure asset productivity through priority investments and increased maintenance funding. The project not only achieved its objective and targets successfully, but also was implemented with a significant cost reduction (about 23 percent). The GSHP resulted in a reduction in the backlog of major maintenance and an improved network to meet rapidly growing transport demand in the state. The project had the unique distinction of no contract disputes, a rarity among the highway development projects in India. The project also set best practices in developing and managing a very comprehensive asset management system, state of the art quality assurance framework and a very comprehensive training and capacity building program. The annual road sector allocation has grown from USD 30 million in 1995-1996 to an impressive USD 610 million in 2010-11, currently the second largest among all the Indian states. This study attempts to identify the key elements of the Gujarat road sector reforms and explores whether and, if so, how such reforms can be replicated across other Indian states and possibly even in other countries in the region. Document type: Book

Abstract

This study investigates the impact of World Bank development policy lending for public sector governance on the quality of public sector management and institutions. The World Bank’s Country Policy and Institutional Assessments (CPIA) are used to measure the latter, the study considers only policy conditions targeted at improvements in those areas. The analysis uses a comprehensive country-year panel data set of aid receiving-countries and finds a significant and inverse U-shaped effect of public sector conditions on the quality of public sector governance. For most observed values in the data, the impact is positive, but it turns negative beyond a value of 80 conditions. At that point, the predicted CPIA score is about 0.25 point (0.3 standard deviation) higher than with zero conditions. For most observations, the number of cumulative conditions is below 80, so the estimated effect of more conditions is generally positive. The analysis corrects for potential endogeneity and shows that the results are robust to sample restrictions, the use of an alternative governance measure, and the inclusion of an extended set of control variables. Falsification tests are also consistent with a causal interpretation from conditions to quality of public sector governance. The paper shows that conditions related to public financial management and tax reforms are more effective than those related to anti-corruption or civil service and administrative reform, where progress requires changing the behavior of a larger set of “deconcentrated” actors. The paper concludes by describing some innovative ideas in the Bank’s ambitious new public sector management strategy that could improve the effectiveness of its support for public sector governance reform. Document type: Book

Abstract

This policy paper is motivated by the Government’s “Pakistan: Framework for Economic Growth (FEG) 2011” which places weak corporate governance at the top of the “software” constraints to growth. The efforts to reform the State-Owned Enterprises (SOEs) have stalled in Pakistan for almost five years—with significant negative implications not only in terms of fiscal losses, but also deteriorated and cost-ineffective service delivery. The paper suggests a number of urgent policy measures designed to improve the efficiency and effectiveness of SOEs. These include basic governance reforms, revamped commercialization processes and enhanced market regulations. The paper also provides some perspectives on international experience on SOE reforms combined with some suggestions on how the Government can move forward. The Policy Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development / World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. SOE Reform: Time for Serious Corporate Governance Document type: Book