Business and Development Stories

Published during Dubai 2003 – the meeting of the Board of Governors of the World Bank and IMF in Dubai.

People empowerment key to efficient services, WB report
The World Bank has pegged the focus of welfare efforts squarely on people in its new development report presented in Dubai on Sunday.
An evidence-based document on key services failing the poor, the World Development Report (WDR) 2004: Making Services Work for People, warns that ‘broad improvements in human welfare will not occur unless poor people receive wider access to affordable, better quality services in health, education, water, sanitation and electricity.’
“Services work when they include all the people. They work when societies can curtail corruption, and when we take a comprehensive view of development. Services work when we recognise that resources and their effective usage are inseparable,” observes James D Wolfensohn in the foreword to the WDR.
Presenting the report at Dubai 2003, the Annual Meetings of the World Bank and International Monetary Fund, Nicholas Stern, chief economist and senior vice president, Development Economics, who steps down from the position in a fortnight to assume charge with the British Treasury, said: “The big picture with this report is the participation of poor people in the whole story of development. For people to have a chance to participate in and help drive growth, it is crucial that they have access to the basic services.”
“We have learnt from our successes and failures, and the evidence is set out systematically in the WDR. It is a strong example of what evidence-based policy making is all about,” he said.
The central message of the 217-page report is that “by involving poor people in the process of services, you actually generate much better services,” Stern added.
Placing the WDR in the perspective of the Middle East and North Africa (Mena) region, Jean-Louis Sarbib, senior vice president and head of Human Development Network, said: “Though the countries in Mena have made generous investments in health, education and water, the results have not always been commensurate with the efforts made. This underlines the importance of efficient services. As we look through the region, we have more evidence that the participation of people makes a difference in the efficiency and delivery of services.”
Shanta Devarajan, chief economist, Human Development Network, and director, WDR 2004 team, who introduced the report, said the messages of the report are both positive and negative. “Key services such as health, education, water, sanitation and electricity fail poor people in quality and affordability. We also have strong examples of where services do work for poor people.”
He said the common feature is they all have to do with empowering poor people in three ways: “To give them the ability to monitor, encourage and, where necessary, discipline service providers; to raise their voice in policy making; and finally to give incentives to service providers to serve poor people.”
Public spending in health and education typically benefits the non-poor, he observed. “In a poor country like Guinea, 48 per cent of health spending benefits the richest fifth of the population, and less than 8 per cent reaches the poorest fifth.”
Devarajan said that money often fails to reach the service provider. “In a study in Uganda, for every dollar due to primary schools, only 13 cents arrived. Even if you raise this, as Uganda has done, the quality of services is low. An example is the high degree of absenteeism in the schools and hospitals in Bangladesh. These are all symptoms of a fundamental failure of accountability.”
Presenting the case for government participation in public services, the WDR observes that while there are frequent problems with public services, “it would be wrong to conclude that the government should give up and leave everything up to the private sector. If individuals are left to their own devices, they will not provide levels of education and health, they collectively want. No country has achieved significant improvement in child mortality and primary education without government involvement.”
“Most of our loans are to governments and in support of government activities. There have been clear examples, where we help support privatisation like telecommunications; there are other areas where the arguments for privatisation depend on the circumstances of the country. Privatisation must be looked on country by country and case by case. A dogmatic approach is wrong; an evidence-based approach, as adopted in WDR, is right,” said Stern.
“Many of the services are already privatised. People in countries like India pay 5 to 16 times than the metre rate to water vendors. The people are already thrust into the private sector and because water services is a fundamental service, we must make sure they don’t pay exorbitant prices,” said Devarajan.
“Societies have decided that key services should not be provided through competitive market transactions. Because they are fundamental public responsibilities, they are assured through intellectual accountability, wherein poor people influence policy makers or politicians, who influence the providers,” he added.
Information holds a key in assuring efficient service, said Devarajan. “Making information available to people is one of the biggest weapons. In Bangalore, India, an organisation went about surveying what people’s perceptions were about the public services and then publicised it on the newspapers. This created pressure on the local government and there has been an actual improvement in services.”
The WDR asserts how profoundly political the public services are. “In many societies, including electoral democracies, politicians use public services as the currency of political patronage,” Devarajan said.
Highlighting the Cambodian example of introducing government control groups in a health project that ensured desired results, he said the policy makers must actually get the provider to deliver the service. The clients themselves too can monitor the services.
“Evidence shows that if we allow, enable and empower clients to be active participants in the service provision process, it reinforces the direction of accountability between clients and providers in the long route,” he said.
The WDR does not prescribe ‘one size that fits all.’ “The type of service delivery mechanism needs to be tailored to the characteristics of the service and the circumstances of the country,” it notes.

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