"In Albania, consumers with guns stolen from the government threatened to shoot the utility officials who attempted to disconnect defaulting customers." This situation and others less dramatic, but every bit as corrupt, aggravated the utility non-payment issue and pushed it into the foreground. This study reviews the non-payment problem in the electricity sector in Eastern Europe and the former Soviet Union during 1990-1997. In addition to non-payment, the review also covers the problem of low cash collections and the preference in some countries for the use of cash substitutes such as barters, offsets, and promissory notes. The objective of the study is to identify which policies and measures addressing the problem of non-payment in the electricity sector worked in practice and which did not. Therefore, it includes stories of both success and failure. It is aimed at equipping Bank staff and decision makers with a set of practical tools that can be of use when the political will exists to tackle the problem.
The old Russian saying of 'kto kovo' (Who will get whom?) has become 'kem skhvachena eto?' (Who has captured this?) under the new transition economy. Instead of one major figure, such as a Stalin or Lenin, vanquishing lesser personages to advance their political aims, many people are taking over corporations to increase their market domination. Their methods are no less brutal, ruthless, or corrupt. In turn, corporations are 'capturing' the state to influence legislation and regulation to their advantage. The advantages for the corporations create disadvantages for the general public and the poor in particular. In many countries, the public perceives corruption to be woven into the basic institutional framework, undermining governance, and weakening the credibility of the state. Recognizing that corruption is one of the most serious obstacles to development, the World Bank has made combating it a central institutional priority. This report analyzes corruption across transition countries and its potential repercussions on their country strategy. The report places primary emphasis on the distinction between state capture and administrative corruption while presenting strategies to avoid both forms of corruption. These strategies recognize and address distinctions in the levels and patterns of corruption in transition countries.
The three forces of democratization, decentralization, and development have swept the world over the last decade and redrawn the maps of politics, power, and prosperity. Modern Mexico has been fully engaged in the trio, making it a rich case study. In recent years, enhanced political competition has redistributed decisionmaking across all levels of government, making the government more accountable to the average citizen. It has also given subnational governments a renewed role as economic agents. The taxation, spending, borrowing, and institutions of Mexican states and municipalities are now increasingly under the rigor of market discipline. The combined, closer scrutiny of voters and financiers is creating a new incentive framework for policymakers-a framework where necessary reforms become both inescapable and, more importantly, a perceived source of potential reward. This book is the product of the analytical work of a large number of experts, Mexican and foreign. In the book, the experts document Mexico's decentralization experience; conceptualize its main trends, policies, and options; and bring it into the light of international comparison. They distill critical lessons and challenges that are of relevance for Mexico, for Latin America and, generally, for countries that are embarking on far reaching decentralization efforts. This renders the volume a major contribution to our knowledge and thinking in this area; and a timely one, since decentralization is an irreversible process that is likely to continue occupying policymakers for years to come.
The movement toward decentralization, accountability, and democratic forms of government at the local level is gathering momentum and the enormous costs of corruption are being explicitly recognized. Corruption is an entrenched symptom of misgovernance often reflected in patronage, red tape, ineffective revenue-generating agencies, large-scale bribery in procurement, and failure to deliver services to city dwellers. But when local officials are accountable to their citizens, decisionmaking can become participatory. In turn, a participatory process can be the cornerstone of a strategy to reform 'sick' institutions and improve the welfare of city dwellers. 'Corrupt Cities' is an important contribution to this emerging field, addressing the historical, traditional, and cultural contexts that create perverse incentives for corruption to exist. At the same time, this book provides practical solutions and a set of incentives charting a path away from misgovernance toward effective local governance. The authors present case studies of both success and failure to underscore that addressing corruption is only an entry point to deeper public-sector reforms. The book serves as a guide for local reformers and citizen groups intent on changing corrupt systems by introducing practical strategies to combat corruption and to reform local institutions. Practical tools and approaches are presented, including fiscal transfers, systems to track public revenues and expenditures, simplified rules to improve the procurement process, diagnostics, and participatory techniques for developing and monitoring local budgets.
As the ongoing political and economic transition in the Central and Eastern Europe countries (CEE) moves into the next century, the most advanced countries in the region are preparing to deal with their prospective entry into the European Union. More a process than an event, joining the EU is likely to place heightened demands on public administrations throughout the region. To assist these countries with their efforts, the Bank conducted a study of the regions. The results of that study are included in this volume.'Ready for Europe' specifies and clarifies the administrative requirements of accession. The author uses in-depth case studies for three pre-accession countries, Estonia, Hungary, and the Czech Republic to make these specifications. The book defines the performance level countries will need to attain for a range of administrative tasks so the countries may reach a minimal threshold for EU membership. It applies selected standards to determine each country's readiness for accession and for the longer-term transition agenda. The author focuses on these three critical areas of administrative performance in the context of EU accession: How advanced is the development of a politically neutral, professional human resource cadre in the civil service? Do countries have the necessary institutional infrastructure at the government's core (that is, cabinet level) to formulate and coordinate policymaking in an efficient and democratic manner? How well are the dedicated institutional structures and processes established to shepherd countries through the accession process working?