Truck and Barter

Wacky Ideas

If I was a better blogger, I would have posted about the nutty conspiracy theory of a North American Union some have talked about. Since, I have been in a blogging mood I'll link to John Hawkins piece about this issue. I hope all those mentioned as pushing this theory got their tinfoil hats for Christmas.

The Story of Transparency International

Ashoka’s video, ‘Champion of Accountability; The Story of Peter Eigen and the founding of the Transparency International’ is available for download on Google Video. The interview gives an interesting overview of how the anticorruption agenda came to the forefront of international development agencies and reflects a personal story of courage and commitment to making this world a better place. A must see.

Related;
Q & A with Peter Eigen
Clean sheet: Transparency International’s new chapter
West failing to curb bribery overseas
Bribe Payers Index 2006
Fukuyama, Indrawati join the WB anti-anti-corruption corps
Corrupting practices
Using the Right to Information as an Anti-corruption Tool
Governance matters V

Multimedia (Radio National- Australia);
High Court decides on FOI and conclusive certificates; The High Court decision upholding the government's use of a conclusive certificate to snuff out a Freedom of Information request for tax figures on bracket creep and the first home buyer's scheme is being criticised as a dark day for democracy.

Inside Indonesia's media

Wolfowitz’s Second War

NYT reviews Wolfowtiz’s focus on corruption at the World Bank;

“In his first 15 months as president of the World Bank, Paul D. Wolfowitz has made the fight against corruption in poor countries a hallmark issue, waging an aggressive campaign that has led to the suspension of hundreds of millions of dollars in loans and contracts to nations including India, Chad, Kenya, Congo, Ethiopia and Bangladesh.

It is a new incarnation for Mr. Wolfowitz, a neoconservative intellectual who was a primary architect of the Iraq war during four years as deputy secretary of defense…..

“Anticorruption efforts are an essential part of development finance,” said Roberto Dañino, a senior vice president of the bank until early this year. “But getting rid of corruption is not a silver bullet. The bank should not overemphasize its anticorruption agenda at the expense of other policies required for development.”….

He has begun firing back at the critics at internal meetings and in public statements. He notes, for example, that the bank’s lending under his leadership actually rose slightly last year, to nearly $23 billion.

Mr. Wolfowitz says he has tried to rebut what he calls the myth that combating fraud is “somehow at odds with development or becomes an excuse not to provide assistance.” While no one knows how much of the bank’s resources have been improperly diverted, informal estimates range from 10 percent to the 25 percent that Mr. Wolfowitz says went to corrupt cronies and family members of Indonesia’s leadership in the 1990’s…..

The doubts center on Mr. Wolfowitz’s role as a leading advocate of the American invasion of Iraq, with many critics contending that his zeal on corruption reminds them of what they say was his messianic but unrealistic faith that installing democracy by force in Iraq, and by other means through the Middle East, would bring stability to the region.

The criticism has been especially sharp among Europeans at the bank, where many officials say that judgments about what constitutes “good governance” could rupture the bank’s delicate relationships with aid recipients, especially if the judgments are based on information gathered from dissidents and other critics in those countries…

Several longtime bank officials say they cannot remember when board members wrangled over the wording of a policy paper with a bank president. At recent meetings, directors demanded that Mr. Wolfowitz agree to a greater role for the board in any future decisions on cutting off aid.

In addition, members forced the deletion of language suggesting that the United Nations’ goal of reducing world poverty 50 percent by 2015 would have to take second place to the bank’s drive against corruption…

“I think some of the board members,” Mr. Wolfowitz said, “are legitimately afraid that as soon as you start criticizing, the next thing you’re going to do is wag your finger and say, ‘You’re not going to get money unless you behave.’ That’s not our objective. Our objective is to make the lending go up.”…

Mr. Wolfowitz’s management style also grates on some bank officials, with a number of them complaining that he has relied on a small coterie of loyal aides. “He presumes,” said Mr. Dañino, the former bank senior vice president and once prime minister of Peru, “that anyone who opposes him is either incompetent or corrupt.”

In his first 15 months as president of the World Bank, Paul D. Wolfowitz has made the fight against corruption in poor countries a hallmark issue, waging an aggressive campaign that has led to the suspension of hundreds of millions of dollars in loans and contracts to nations including India, Chad, Kenya, Congo, Ethiopia and Bangladesh.….”

Via Foreign Policy Blog

Wolfowitz’s focus on corruption should be lauded, it is one of the biggest impediments to the poverty reduction agenda. However pompous releases of reports, (see the latest release of governance indicators ) doesn’t help the poor person on the street. IFIs need to take a broader view of corruption.

Related;
Strengthening Bank Group Work in Governance and Anticorruption
World Bank Releases Largest Available Governance Data Source
Uses and Abuses of Governance Indicators
Rescuing the World Bank
Tackling Corruption is Essential in Making Poverty History
UK withholds World Bank donation

The Norwegian Model

Avoiding Dutch Disease and investing ethically- Norway shows the way;

“The central bank administers the country's pension fund, which is financed mainly by Norway's booming oil and natural gas industries. As the world's third-largest oil exporter, the fund has a king's ransom at its disposal. The last time the the books were balanced, the fund disposed of €196 billion ($250 billion) in assets. Analysts predict it will grow this year to become the second-largest pension fund in the world.

Roughly four percent of the fund's financial resources have gone into the state budget every year since 2001. The money is used to cover shortages and finance projects that benefit the well-being of country's citizens. Most of the remaining sums are invested for future generations -- for the time when Norway's oil and natural gas reserves will have been used up.

The fund is responsible for no less than 0.3 percent of all the stocks traded worldwide, it holds shares in more than 3,200 corporations and its portfolio reads like a "Who's Who" guide to the world of international investment. It includes Blue Chip corporations such as Accor, Adidas, BASF, Porsche, Siemens, Volvo and Zürich Financial. Norway has shown great acumen with its portfolio -- in 2005, it had a return on investment of 11.1 percent, or about €20 billion ($26 billion)….

In November 2004, the government established ethical guidelines for the investment policy of its pension fund. Since then, an Ethical Council has overseen the various investments and separated the good from the bad. Seven corporations -- among them BAE Systems, Boeing and Honeywell -- were recently removed from the portfolio. Norwegian stocks worth 3.3 million Norwegian krona or €420 million ($535 million) have been sold as part of the ethical clean-up effort.

The corporations were blacklisted because of their involvement in arms production -- for producing components that go into the production of nuclear weapons that clash with the "fundamental humanitarian principles" of the Norwegian codex. Overall, 17 arms corporations have been declared off limits by Norway's ethics guardians.
In order to avoid similar investments in the future, Norges Bank has armed itself with a strong condex and team of ethicists. "We want to combine economic and ethical interests," investment director Knut Kjaer says. "We are powerful and we can invest in ethical values."

Related;
A Policymakers' Guide to Dutch Disease
Dutch Disease: Too much wealth managed unwisely
Initiatives; EITI, Revenue Watch, Publish What You Pay

The devil's excrement-Is oil wealth a blessing or a curse?;Tricky as this problem is, oil economies such as Norway and Alaska have come up with a clever (though still imperfect) solution: they hive off much of the oil income into “stabilisation” funds, disbursing “dividends” to citizens slowly—directly in Alaska, via social spending in Norway—so that the economy does not overheat. Chile, one of the world's more successful developing countries, has a similar fund for its copper revenues

Fuelling poverty - Oil, war and corruption

Aid, Cost Inflation and 'Dutch Disease': Effects and Implications

Links on Oil, Environment and Human Rights

How to Invest $200 Billion ... Ethically

Norwegian Government Pension Fund Dumps Wal-Mart and Freeport on Ethical Exclusions

Ethical Guidelines; Norwegian Government Pension Fund - Global

Paradise re-arranged; The recent conference in Singapore — CSR in the Travel, Tourism and Hospitality Industries 25-26 July 2006, has sparked some debate about commitment to CSR between one of the speakers — Tricia Barnett, representing Tourism Concern (a UK based NGO that works with communities in destination countries to reduce social and environmental problems and with the out-going tourism industry in the UK) and Hilton International, specifically Hilton operations in the Maldives.

The morality of tourism?

Dictators for Life?

A new report from Freedom House ‘Countries at the Crossroads: A Survey of Democratic Governance’ finds;

“The countries of the Middle East and North Africa received the lowest scores in this survey. Yemen saw a significant drop, owing chiefly to severe restrictions on press freedom. During the two years covered in the survey, Yemeni journalists faced numerous incidents, including "violence, death threats, arbitrary arrests, and convictions under weak laws governing the freedom of the press." In Jordan, freedom of association and assembly became even more restricted after Interior Minister Samir Habashneh demanded that professional associations completely halt all activities deemed political, and after the governor of Amman announced that "any kind of event, gathering or meeting, save for weddings, should obtain prior approval."

However, there were some signs of modest progress in the MENA region. Morocco has enjoyed gains since the last review, principally in the spheres of Accountability and Public Voice and Civil Liberties. In a significant development, the country's interior commission in the Chamber of Deputies approved new legislation to reform the process involved in the formation of political parties and the campaign finance law, including providing parties with an annual subsidy.”

“America faces decades of red ink”

“The nearest thing to eternal life we’ll ever see on this earth is a government program.”
- President Ronald Reagan

I wonder why Americans politicians are not listening to their Comptroller General. Following are excerpts from a recent speech David Walker gave World Future Society conference (emphasis mine);

“But, first, I think it’s important to understand how myopia or shortsightedness can undermine a nation’s willingness and ability to act. In the case of the United States, strong economic growth, modest inflation levels, relatively low interest rates, and our current superpower status have given many policymakers and the American public a false sense of security about our nation’s current position and future prospects. Even though we know a demographic tsunami is building silently offshore—I’m referring to the impending retirement of our baby boom generation—America continues to party on and pile up record levels of debt….

In this spirit and in an effort to lead by example, GAO has published an unprecedented report called “21st Century Challenges” that asks a series of probing, sometimes provocative, questions about current government policies, programs, and operational practices. The report brings home how much of the U.S. government reflects organizational models, labor markets, life expectancies, transportation systems, security strategies, and other conditions that are rooted in the past…

The same goes for many tax policies. For example, just this summer, the U.S. government announced it will stop collecting a 3-percent tax on long-distance telephone calls. This doesn’t seem particularly startling until you realize that the tax had been introduced in 1898 to help pay for the Spanish-American War—a war that lasted only a few months!..

To better meet Congress’ information need on these emerging issues, GAO has developed an approach we call “grounded foresight.” We believe that to be credible, foresight work must have a strong factual and conceptual basis. Such work needs to ground all trends in evidence. After all, everyone’s entitled to their own opinion but not to their own facts! At the same time, such work also needs to clearly convey the uncertainty that’s inherent in foresight analysis.

Several key tools are available to encourage a forward focus. These tools include strategic planning, key national indicators, and scenario planning. Unfortunately, not all governments, including my own, have taken full advantage of these tools…

So what themes or trends does GAO expect to concentrate on in the coming years? Perhaps the most urgent issue is America’s worsening financial condition and growing long-term fiscal imbalance. Long-term fiscal analyses by GAO and our sister agency in the legislative branch, the Congressional Budget Office, show that federal deficits will grow to unsustainable levels in as little as two decades. At that point, without significant policy changes, federal deficits could reach 10 percent or more of our economy. States and local governments face increasing future fiscal pressures as well. Largely because of our aging population, rising health care costs, and relatively low revenues as a percentage of the economy, America faces decades of red ink.

Clearly, a crunch is coming and eventually all of government will feel its impact. If America continues on its current course, it’s only a matter of time before our ship of state hits the rocks. To put us on a more prudent and sustainable long-term path, the federal government must begin to make tough choices in connection with budget systems, legislative processes, entitlement programs, spending patterns, and tax policies. There’s no way we will grow our way out of our fiscal hole. The sooner we begin to act, the better because, as the world’s largest debtor nation, time is working against us.

As a citizen, a senior government official, and a father and grandfather, I take America’s fiscal imbalance very seriously. It’s not just a matter of numbers, it’s also about values. It’s easy to forget that deficits eventually have real-life consequences for real people, including our own children and grandchildren….

In the 21st century, an effective governance structure recognizes that more and more policy challenges require multilateral action. We’re also going to need greater coordination among various levels of government and the private and citizen sectors both domestically and internationally. The plain but simple truth is that no nation in today’s world, including the United States, can or should go it alone.

Beyond changing our governance approaches, we also need to consider how we keep score. In my view, key national and outcome-based indicators can help policymakers better assess a nation’s status, its progress over time, and its position relative to other nations on issues like public safety, health care, housing, education, and the environment. Such indicators can help guide strategic planning, facilitate foresight, inform agenda setting, enhance performance and accountability reporting, and encourage more informed decision making and oversight, including much-needed and long-overdue efforts to reengineer the base of our federal government….

If we expect to successfully tackle the tough issues I’ve described tonight, we’ll need more leaders in the United States and elsewhere with four key attributes. These attributes are courage, integrity, creativity, and stewardship.

By courage, I mean people who state the facts, speak the truth, and do the right thing even if it isn’t easy or popular. By integrity, I mean people who practice what they preach and lead by example. People who understand that the law and professional standards represent the floor of acceptable behavior. People who set their sights higher and strive to do what’s right. By creativity, I mean people who can think outside the box and see new ways to address old problems. Individuals who have foresight and can help others see the way forward. Finally, by stewardship, I mean people who don’t just generate positive results today but who also leave things better positioned for the future when they depart their jobs and this earth. That’s what real stewardship is all about, and we don’t have enough of it today.”

I think the Mr. David Walker should be invited for next year’s TED conference. Going over the World Future Society’s website I wasn’t impressed. They can learn a thing or two from the TED conference.

Related;
World Future Society conference review
Top 10 Forecasts from Outlook 2006
Why Sustainability, not Terrorism, Should Be Our Real Security Focus

Reinventing the IMF - Renewing the Commitment to Poor Countries

Some highlights from a major speech by IMF Managing Director at Center for Global Development today;

“Earlier this year, I set out a road map for implementing the International Monetary Fund's Medium-Term Strategy. This afternoon I want to talk about a particular aspect of the strategy: the Fund's relationship with low-income countries…

The Medium-Term Strategy is based on the premise that the Fund needs to adapt to help all of its members deal with the challenges of 21st century globalization. The strategy covers all areas of the Fund's activities, including the way we conduct surveillance of individual members' economies and of the global economy; our instruments for preventing and dealing with crises in emerging markets; and the Fund's own governance. The measures proposed in the strategy are important not only for systemically important countries and emerging markets, but also for low-income countries. Tackling global imbalances will reduce the risk of chaotic exchange rate movements, abrupt shifts in financial markets, and crippling protectionism. Avoiding crises in emerging markets will help keep down the cost of low-income countries' borrowing and maintain demand for their exports. And low-income countries as well as clearly underrepresented emerging markets have reason to be concerned about their voice and representation in the Fund.

Telling countries to avoid debt is likely to be most effective if we can offer them alternative sources of finance. As the Irish playwright George Bernard Shaw wrote, "I can't talk religion to a man with bodily hunger in his eyes." It is therefore important that the international community address the urgent needs of low-income countries by offering sufficient grants and highly concessional loans to enable them to finance development without relying on expensive debt. This leads me to the second part of the Gleneagles compact: a significant increase in aid.

The Fund has also been a consistent advocate of the effective use of aid. Better outcomes from increases in aid flows will depend not only on the amount of the support, but on its effective use. This depends partly on macroeconomic policies, and one of the Fund's responsibilities is to help countries manage their macroeconomic policies in ways that maximize their capacity to absorb aid and debt relief.

The Fund is also strongly committed to making sure that countries have the fiscal space they need to expand social programs, especially in health and education. I want to remove any misconceptions about our views on this. I have repeatedly heard concerns expressed, especially by NGOs, about budgetary ceilings limiting social sector outlays.

The first concerns trade. Most of the discussion of trade policy in recent months has focused on the WTO negotiations on the Doha Round. This is appropriate: increased trade, bolstered by multilateral agreements, has been a cornerstone of growth in the global economy for many years, and is fundamental to the prospects of low-income countries….

Before concluding, I would like to also say a few words about a policy area where it is particularly important that the Fund cooperate with donors and low-income country governments. This is governance. Paul Wolfowitz made a speech focusing on this issue earlier today, and I very much agree with his comments. Governance was a key element of the Monterrey compact and it is an area where the Fund has a well-defined and important role to play. When governance issues are macroeconomically relevant and threaten the success of a program, we set conditions to address them. We also promote good governance through broader initiatives. For example, we promote transparency through the General Data Dissemination System, a framework to develop national statistical systems to which over 90 countries have subscribed. In some countries we are developing action plans to improve the transparency of Public Expenditure Management systems. We also support the Extractive Industries Transparency Initiative and give advice on transparent use of revenues from natural resources. Underlying this work is the belief that more public accountability and more transparency can raise the quality of public expenditure, cut corruption, and reduce poverty..”

Related;
IMF to Propose Greater Representation for Developing Countries- see the event online

Corruption declining in lot of transition countries, Except

World Bank has published a new report, “Anticorruption in Transition 3-Who is Succeeding … And Why?” which suggests that incidence of corruption has declined in quite a few of transition economies- Russia seems to be an exception;

“Most observers believe that corruption in Russia has worsened in recent years, although the exact magnitude of recent changes and the severity of the current situation are subjects of continued debate. The Executive Opinion Survey carried out annually by the World Economic Forum (2005) confirms a worsening in experts’ perceptions of the governance environment in Russia from 2004 to 2005. Most notable is a decline in perceptions of judicial independence and protection of property rights and an increase in the burden of organized crime on business. Surveys of small businesses undertaken by the Center for Economic and Financial Research (CEFIR, 2005), a Russian think tank, indicate that corruption fell from 2001 to 2002 but then worsened again by 2004. Russian firms that participated in the BEEPS also showed a similar pattern—a dip in assessments of corruption as a problem for business from 1999 to 2002 followed by an increase through 2005. (Reported bribe frequency rose to 2002 and then stayed level.) However, the BEEPS firms—500 in 2002 and nearly 600 in 2005—also reported a decrease in the bribe tax from 1.4 percent of revenues in 2002 to 1.1 percent in 2005.The most negative picture of corruption in Russia was painted last year by another Russian think tank, Information Science for Democracy (INDEM, 2005), which reported that bribes had increased tenfold in the four years from 2001 to 2005.

These various results point in a similar direction—that corruption in Russia may have improved somewhat in the early 2000s but has grown as a problem in recent years.The decline in the bribe tax as measured by the BEEPS is not inconsistent with growth in corruption overall. The bribe tax measures the share of annual revenues paid in bribes, while the INDEM study reports on the aggregate dollar amount of bribes paid per firm per year. Given the rapid growth in the Russian economy in recent years, the declining bribe tax would still translate into a larger volume of bribery, and appreciation of the currency would increase the dollar-equivalent value even further. While the two sources may agree on the direction of change, however, the magnitude of the BEEPS and INDEM results do differ markedly. The BEEPS results imply an approximate increase in the volume of bribery of 50 percent from 2002 to 2005, while the INDEM study reports a staggering growth of nearly 900 percent from 2001–2005.

These worsening trends occurred despite a number of reforms undertaken by the Russian government to streamline public administration. For example, to ease the entry of new firms the government sponsored new legislation in February 2002 that cut the number of activities that required licensing and lowered the cost of obtaining licenses. Similarly, to improve the system of tax administration, the government lowered corporate tax rates and widened tax bases in 2001.Tax revenues increased and compliance clearly improved as a result (Ivanova, Keen, and Klemm, 2005).Yet the BEEPS results indicate that neither the easing of licensing rules nor reductions in tax rates have led to reductions in the frequency of bribery in these areas. Indeed, unofficial payments for business licenses are among the highest in Russia of any transition country, and Doing Business ranks Russia 143 worst out of 155 countries in “dealing with licenses.”

One explanation for the seeming failure of policy reforms to reduce corruption may be inconsistent or ineffective implementation of these reforms in practice. As Russia spans two continents and eleven time zones, it is not surprising that both the impacts of specific reforms and trends in corruption appear to vary significantly among regions. The CEFIR report (2005) claims that many business licenses “do not seem to be legitimate” even if they may have gotten cheaper. A second explanation focuses on deterioration in external oversight. Expanding restrictions on the media and some nongovernmental organizations in recent years may have reduced the ability of these groups to disseminate information about government activities and thereby help to hold public officials accountable. A vibrant and diversified civil society with ready access to information is an essential building block for accountability in government.

The results for Russia underscore the fact that policy reforms may be necessary but are not always sufficient to reduce corruption in and of themselves. Fundamental institutional strengthening to ensure policy implementation, build checks and balances, and promote accountability in government is also essential.”

- Box 3.1 Trends in corruption in Russia, p.38

Chart above, Figure 4.15 Clusters based on relative frequency of bribes in specific areas, p.71

For Comment; Why isn't there more demand for better governance in Russia? Is it all beacause of Putin? Or more of cultural thing?

Related;
Business Associations; Good for Development or Not
Moscow Gets Mortgaged

Better than Trial and Error

A recent article in the Forbes magazine on randomized trials of development projects (via PSD blog);

“The Indian antipoverty group Seva Mandir runs an educational program that teaches 4,000 kids ages 7 to 10 math and reading and writing in Hindi. Seva Mandir had a problem: The teachers, recruited from the villages, often with only a tenth-grade education, would show up at the school only 60% of the time. While a teacher could be fired for excessive absenteeism, the remote locations throughout the impoverished state of Rajasthan ruled out regular monitoring.

A classic way of dealing with this problem is to throw money at it--which is what officials at Seva Mandir proposed to do. They would hire an additional teacher for each classroom, doubling the cost. But in stepped a group of development economists from the Massachusetts Institute of Technology. For a few years now the group has been testing antipoverty programs using the same scientific technique pharmaceutical researchers use to evaluate new drugs: the comparison of a randomized test group with a control group.

The idea is to divide a targeted population into two groups, then give the aid--microcredit, computers, textbooks, teacher incentives, health care programs--to one group but not the other and compare the results. "We aren't really interested in the more-aid-less-aid debate. We're interested in seeing what works, and what doesn't," says Abhijit Banerjee, a development economist at MIT who (with Esther Duflo of MIT and Sendhil Mullainathan of Harvard) helped found MIT's Poverty Action Lab.”

Abhijit himself was an ‘activist’as a student in India. There course on Evaluating Social Programs is also conducted at Centre for Micro-Finance in Chennai as well.

Corruption of Legitimacy

“The debate on corruption is truly difficult and complicated. Even though we should be pleased that such an index exists, I am worried that the mere fact that we are trying to reduce corruption to terms of a measurable dimension may lead us to oversimplify the problem dangerously.

The index, in principle, only measures the perception of corruption in general terms. This is defined in ample terms as “the abuse of public office for private gain.” In this sense, and because of the nature of the problem, I am sure that when using the term “gain” we are referring mostly to a monetary benefit. This avoids measuring other aspects of corruption that could be just as important or more.

For instance, I believe that the appointment of someone to public office for reasons other than his or her capacity or professional integrity is a corruption that is even more pernicious and costly to the country than the sum of all monetary corruption put together.”

Per Kurowski, former World Bank Executive Director, in his book, “Voice and Noise”, pp.98-9.

By focusing too much on the economic measurement of corruption, we might be forgetting the real cause of corruption in the first place; ruling elite may not have any popular legitimacy in the first place.

Related;
- Mr. Githongo goes to Washington
- Excessive Anti-Corruption Drive Hurting the Economy?

Note: the photo I stole from this post at Mahalanobis

Advice to Mr. Wolfowitz on Fighting Corruption

This time from Ruth Levine at CGD;

“Evaluating the impact of anti-corruption programs may seem far-fetched. How, after all, could one measure the prevalence or cost of corrupt practices, which by definition are hidden from view? Moreover, how could the effects of specific programs be assessed? While not easy, such evaluation is indeed possible. For instance, in path-breaking research completed last year, Ben Olken of Harvard University compared the impact of audits and grass-roots participation on “missing funds” in a road-building project in Indonesia using a randomized field experiment. Earlier work by Harvard’s Rafael di Tella and others estimated the cost of kick-backs for procuring medical supplies by comparing variation across public hospitals in Latin America…

The U.S. and other countries that own the World Bank have a rare opportunity to fix this problem. As corruption-fighting programs are put into place, donor and recipient countries can request and fund careful, credible and independent third party evaluation of Bank and other agencies’ programs. Collect information about starting conditions, roll out programs so that sensible comparisons can be made, conduct rigorous evaluations and, when the results are in, publish them regardless of whether or not they make the funders and implementers look good. If Mr. Wolfowitz and his friends really want honesty and transparency, they could start by closing the evaluation gap.”

Related:

- Measuring Corruption in Road Building Projects in Indonesia

- Business Against Corruption – Case Stories and Examples ( recent UN publication via CIPE Development Blog )

The Right to Tell

“There has never been a famine in any country that has been a democracy with a relatively free press.”- Amartya Sen

Today is the World Press Freedom Day. Pablo has a set of links on their blog. I would add the World Bank publication ‘The Right to Tell’ to the list.

In Maldives the day was celebrated with;

“…riot police assaulted three international press freedom monitors on Wednesday evening, following a government crackdown on World Press Freedom Day celebrations in Male’.

At least six people were also arrested including Minivan sub-editor Nazim Sattar, who was detained while translating for the foreign delegation as they spoke with ‘Star Force’ police.

Vincent Brossel from Reporters Without Borders, Thomas Hughes from International Media Support and Sadaf Arshad from the South Asia Press Commission are part of an international delegation currently in Maldives to assess the state of the media.”

There is large gap between rhetoric and reality when it comes to press freedom in a lot of places across the world.

IMF Data Standards Initiatives – Lessons to Others

IMF has a new working paper evaluating their initiative to urge countries to standardize macroeconomic data and enhance greater transparency.

“Since the IMF launched the data standards initiatives a decade ago, 145 of its 184 member countries have participated. This 80 percent participation rate reaffirms the importance countries place on data transparency in the globalized economy, which the initiatives promote. The wide participation can be attributed to the consultative process that has allowed for the development of a coherent program that takes account of countries’ capabilities, delineates clear responsibilities between the IMF and participating countries, and establishes effective monitoring procedures to ensure the credibility of the standards for policymakers, capital markets, and the general public. The approach has also provided checks and balances and fostered accountability. The initiatives may provide insights for the promotion of similar international standards”

Adhering to the standards have had financial benefits as well.

“Empirical studies suggest that adhering to the SDDS or the GDDS, to varying extents, helps improve a country’s access to international capital markets. For instance, an STA econometric study on the borrowing costs of emerging market and developing countries over the past decade and a half found strong and consistent evidence of discounts for sovereign bond issuers participating in the GDDS, as well as for countries subscribing to the SDDS. The discounts amounted to about 8 percent for GDDS participants and 20 percent for SDDS subscribers, or the equivalent of about 20 and 50 basis points, respectively.”

Related Links:

- Dissemination Standards Bulletin Board

- Does SDDS Subscription Reduce Borrowing Costs for Emerging Market Economies

- An earlier post on IMF’s Disclosure Policy

Disclosure Helps Reduce Pollution

Key Findings from a World Bank collaborated research on an approach to fighting pollution through empowering communities to exert pressure on polluters by giving the general public access to emissions information.

-In developing countries where pollution information has been scarce, disclosure can make a firm’s emissions more costly because it increases penalties from regulators, local communities, consumer organizations and market agents.

-Significant factors influence the ‘pricing’ of pollution by local communities. These include income, education, level of civic activity, legal or political recourse, media coverage, NGO presence, efficiency of existing formal regulation, local employment alternatives, and the total pollution load faced by a community in relation to its environmental capacity to absorb pollution.

-Disclosure promotes useful learning across firms. A good rating for one firm among many competitors establishes the feasibility of cleaner production and encourages other firms to invest more in reducing their harmful impact on the environment.

-Disclosure promotes managers’ awareness of their own firms’ pollution. A survey of Indonesian firms that have participated in PROPER suggests an important impact for information to plant managers and owners about their own plants’ emissions and abatement opportunities.

Related Links:

- The truth about the environment

- Economic man, cleaner planet

- Greening industry; new roles for communities, markets, and governments

- World development report 2003 - sustainable development in a dynamic world : transforming institutions, growth, and quality of life

- "Confronting the Environmental Kuznets Curve," 2002, Journal of Economic Perspectives, Vol. 16, No. 1, Winter (with Susmita Dasgupta, Benoit Laplante and Hua Wang).

- Shakeb Afsah, Allen Blackman, and Damayanti Ratunanda, "How Do Public Disclosure Pollution Control Programs Work? Evidence from Indonesia", RFF Discussion Paper 00-44, October 2000

-“Environmental performance rating and disclosure, China's GreenWatch program,” 2004, Journal of Environmental Management, vol. 71, no. 2, June, 123-133 (with Hua Wang)

- Greening of Development Economics: A Survey

- The China Syndrome and the Environmental Kuznets Curve

- The Green TV and China's Environmental Protection Agency - SEPA

IMF Improves Disclosure Policy

The IMF is taking steps to reduce the number of deletions made in the publicly disclosed versions of its key reports about member countries;

“About one-quarter of published reports contain substantive corrections going beyond what is permitted under existing guidelines. In most cases, these changes related not only to the presentation of the authorities’ views, but also to the staff’s analysis and views. This procedure was also used, not infrequently, to add or delete information. In about 25 percent of published reports, corrections were made after the Board discussion of the report.

The transparency policy appears to have had subtle, but noteworthy effects on candor. About 9 percent of reports are published with deletions that entail some diminution of candor and 16 percent of reports with corrections that blur or tone down staff’s analyses and assessments. Only in five percent of cases was a key message significantly altered. However, the survey of mission chiefs suggests that concerns remain about potential losses of candor, regarding both the policy dialogue and staff’s reporting to the Executive Board.”

The report also tries to ‘name and shame’ (you have to read between the lines) those countries that don’t publish the Article IV reports. The members not publishing any Article IV or UFR reports in the period from July 1, 2003, to Feb. 28, 2005, were: Bahrain, Brazil, Brunei Darussalam, Cote d'Ivoire, Dominican Republic, Egypt, El Salvador, Eritrea, Fiji, Guyana, Honduras, Lebanon, Malaysia, Maldives, Marshall Islands, Mauritius, Myanmar, Oman, Panama, Saudi Arabia, Seychelles, St. Kitts & Nevis, St. Vincent and The Grenadines, Swaziland, Syrian Arab Republic, Thailand, Togo, Tonga, Turkmenistan, Uzbekistan, Venezuela, Yemen.

Not surprisingly Middle East is the worst performer in terms of share of reports published (47 %, see Table 2).

The IMF review also includes a literature review of pros and cons of transparency.

Interesting Related Link:

- The Art of Information Access Project -it’s anthropologist’s version of the
practices involved in gaining access to government-held documents through the Freedom of Information Act (FOIA) in the United States