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    Transparency to the People: Using Stakeholder Participation to Support Public Sector Reform in Nauru and the Republic of the Marshall Islands
    Transparency to the People: Using Stakeholder Participation to Support Public Sector Reform in Nauru and the Republic of the Marshall Islands
    Transparency to the People: Using Stakeholder Participation to Support Public Sector Reform in Nauru and the Republic of the Marshall Islands
    Ebook107 pages1 hour

    Transparency to the People: Using Stakeholder Participation to Support Public Sector Reform in Nauru and the Republic of the Marshall Islands

    By Asian Development Bank

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    About this ebook

    The publication tells the story of the use of stakeholder participation to support public sector reform in Nauru and the Republic of the Marshall Islands (RMI). The report provides important lessons for donor agencies, for Nauru and the RMI, and for other Pacific island nations that mainly live off aid and other rents. The lessons concern what has gone wrong with governance and why, and what can be done to improve governance under existing conditions. The three pilot projects described show that by taking transparency directly to the people, donors can help create more favorable conditions under which local citizens themselves can more readily press for reform. Whether the modest gains achieved in the pilot projects will prevail remains to be seen, but in all three cases, the future looks more promising than the past.
    LanguageEnglish
    PublisherAsian Development Bank
    Release dateJan 1, 2010
    ISBN9789290920946
    Transparency to the People: Using Stakeholder Participation to Support Public Sector Reform in Nauru and the Republic of the Marshall Islands

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      Transparency to the People - Asian Development Bank

      Abbreviations

      The Question of Governance

      Encouraging Reform of Governance

      The Asian Development Bank (ADB) and most other aid agencies hold that good governance is one of the pillars of development, a primary mechanism of social development and pro-poor, sustainable economic growth. These agencies cannot, of course, act directly in the political arena in recipient countries to improve governance. They can provide only assistance that host governments request and approve. Change and reform of governance is difficult for any country, encountering legitimate opposition as well as unscrupulous government officials who have stronger personal and political interest in maintaining rather than reforming governance practices. To encourage host governments to adopt policy and institutional reforms aimed at improving governance, aid agencies often provide technical assistance (TA) and loan projects with host-country receipt of some project benefits conditional upon adoption of specific policy and institutional reforms—so-called conditionalities. Although policy and institutional conditionalities have been a common feature of aid programs for some time, they are not always effective.

      Policy and institutional conditionalities aimed at reform of governance may be ineffective for a number of reasons. Within funding agencies, political, institutional, and career incentives often engender more enthusiasm for incentives and rewards than for penalties for not fulfilling project conditionalities. Instead of fostering reform, aid incentives may ease domestic pressure for reform by shoring up failing public services, making development of local capacity less necessary, or by providing discretionary goods and services that can be dispensed by unscrupulous politicians as patronage. Because project conditionalities are external to the social and political processes of the host country, local opponents can generate resistance or even backlash by labeling reforms as foreign and imposed from outside. Reforms associated with conditionalities may be approved and passed into law by host governments, but the laws may not be enforced and the reforms reversed once aid incentives run out. Governments may eventually opt out of a reform program after implementing it for a time simply because conditionalities applied from the outside led to its approval and implementation.

      Incentives within aid agencies and host governments alike lead to reiteration of critical reform recommendations in project reports if they are not fully implemented or are approved then revoked. An analysis by the Economic Policy, Planning, and Statistics Office (EPPSO) of the Republic of the Marshall Islands’ (RMI) 113 ADB TA project reports prepared for the RMI between 1993 and 2005 (the 12-year period) found this to be true for a large number of recommended policy and institutional reforms. Nineteen core recommendations concerning fiscal responsibility and public service reform appeared in more than 10 project reports, each without significant or lasting uptake. A core recommendation to enforce critical Public Service Commission (PSC) laws and regulations appeared in 17 project reports over more than a decade but was not implemented (EPPSO 2006).

      A recent ADB assessment concluded that ADB loan projects that employ policy and institutional conditionalities generally succeed in countries with policy and institutional environments that are amenable to reform. In countries with policy and institutional environments not amenable to reform, however, the host governments’ commitment to reform was outside ADB’s influence (ADB 2007, iii). But is the commitment of local citizens’ to reform also outside ADB’s influence? Citizens of a country can initiate reform in at least two ways: they can motivate their leaders to make desired changes, or they can change their leaders. Citizens themselves must press for reforms. What ADB and other funding agencies can do is make it easier for them to do so.

      The Challenge of Good Governance in the Pacific

      We know that Pacific islanders want aid and other public resources to be used for public benefit rather than for private patronage. People say so when asked. Usually hidden from public view, patronage is socially inefficient and diverts resources away from large public benefits toward smaller private benefits. The checks and balances, and transparency and accountability associated with good governance diminish patronage and boost public benefits. People always prefer more benefits overall to less, and Pacific island voters can change their representatives and their governments if they want. So why does patronage and weak governance remain a common problem in the Pacific?

      While levels of education and literacy have risen steadily in Pacific countries, additional improvement is needed and will have broad benefits. A crucial benefit will be increasing the often inadequate understanding at present of national laws, political processes, and the rights and responsibilities of citizens. Such increased understanding can be

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