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	<title>The Kaufmann Governance Post &#187; Public Financial Management</title>
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	<description>Transparency, corruption and governance matters, evidence-based</description>
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		<title>What Happens in Cancun Shouldn&#8217;t Stay in Cancun: Toward Transparency at the Inter-American Development Bank</title>
		<link>http://thekaufmannpost.net/what-happens-in-cancun-shouldnt-stay-in-cancun-toward-transparency-at-the-inter-american-development-bank/</link>
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		<pubDate>Fri, 19 Mar 2010 20:32:34 +0000</pubDate>
		<dc:creator>Kaufmann</dc:creator>
				<category><![CDATA[Aid Effectiveness]]></category>
		<category><![CDATA[Corruption]]></category>
		<category><![CDATA[G-20]]></category>
		<category><![CDATA[Measurement Frontiers]]></category>
		<category><![CDATA[Public Financial Management]]></category>
		<category><![CDATA[Transparency]]></category>
		<category><![CDATA[financial crisis]]></category>
		<category><![CDATA[America Latina]]></category>
		<category><![CDATA[Asian Development Bank]]></category>
		<category><![CDATA[Banco Interamericano de Desarrollo]]></category>
		<category><![CDATA[BID]]></category>
		<category><![CDATA[Cancun Meetings]]></category>
		<category><![CDATA[disclosure policies]]></category>
		<category><![CDATA[Haití]]></category>
		<category><![CDATA[Haiti donor conference]]></category>
		<category><![CDATA[IaDB]]></category>
		<category><![CDATA[IDB]]></category>
		<category><![CDATA[IDB capital increase]]></category>
		<category><![CDATA[IFIs]]></category>
		<category><![CDATA[Inter-American Development Bank]]></category>
		<category><![CDATA[Latin America]]></category>
		<category><![CDATA[Luis Alberto Moreno]]></category>
		<category><![CDATA[MDBs]]></category>
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		<description><![CDATA[ This weekend the Inter-American Development Bank (IaDB*) will hold its annual meetings in the popular Mexican resort city of Cancun. Much of the focus will be on the capital increase for the Bank, which made an original request for an increase that topped US$ 180 billion. Subsequent estimates of what the main shareholders may [...]]]></description>
			<content:encoded><![CDATA[<p><img class="alignnone" title="IDB Annual Meetings in Cancun" src="http://events.iadb.org/calendar/images/idbdocscache/35033841.jpg" alt="" width="158" height="231" /> This weekend the Inter-American Development Bank (IaDB*) will hold its annual meetings in the popular Mexican resort city of Cancun. Much of the focus will be on the capital increase for the Bank, which made an original request for an increase that topped US$ 180 billion. Subsequent estimates of what the main shareholders may be able to stomach include a lower figure of around US$ 60 billion, while more optimistic estimates are around twice that figure&#8230;</p>
<p><span id="more-2105"></span>Ultimately, a final commitment that is well below US$ 100 billion would not only restrict the Bank’s ability to lend to Latin American and Caribbean countries at its current very high levels, but it could also be interpreted as a vote of no confidence on its leader, Luis Alberto Moreno from Colombia (even if government shareholders are now tightening the purse strings anyway, in the aftermath of the financial crisis).  All of the focus on capital increase commitments and their perceived value on the IaDB’s leadership will draw even more attention and prominence at the Cancun meeting since it will take place against the backdrop of the impending decision of whether to renew Mr. Moreno’s term for another five years when it expires in a few months.</p>
<p>Yet, a crucial issue that will get much less attention at the annual meeting than it deserves is transparency, of course.  Let us hope that it gets at least some attention at this weekend’s meeting.</p>
<p>Transparency has never been one of the IaDB&#8217;s strong points, in fact. The standards of public disclosure and access to information about basic financial information of the Bank, the projects it funds, and its dealings with its client countries has been generally low. But there are four reasons why the issue of enhanced transparency should get some prominence in Cancun.</p>
<p>First, enhanced transparency should get some attention at the IaDB meeting because of the controversy regarding the requested capital increase from the member countries and the reckless financial losses by the Bank’s treasury last year. As a result, some member governments may demand commitments to some internal transparency reforms by the Bank leadership before pledging capital.</p>
<p>Second, at their own headquarters a few blocks away in downtown Washington, DC, the World Bank has just adopted a <a href="http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22426851~pagePK:64257043~piPK:437376~theSitePK:4607,00.html"><em>new disclosure policy</em></a>, following years of internal debate, work and consultation.</p>
<p>Whether due to the customary competition among financial aid institutions or as a result of pressure from overlapping shareholder governments, regional development banks tend to follow suit after reforms at the World Bank take place.</p>
<p>In fact, some work toward a new disclosure policy is already taking place at the Asian Development Bank. Even the IMF, historically a secretive organization, has been making some strides regarding its own disclosure standards.  And some developing countries already have higher standards of disclosure than the development banks.</p>
<p>At the World Bank, the challenge of implementing this new disclosure policy still lies ahead. And its new transparency policy has some drawbacks, such as the ability by member governments to veto public disclosure of important documents and information. But by having moved away from excessive confidentiality to a policy of presumption of disclosure, the World Bank has taken a transparency leap forward compared with its previous standards &#8212; at least in paper.  As usual, the devil will be in the implementation details, but the World Bank is now far ahead the IaDB in terms of disclosure.</p>
<p>Third, in the coming years, the IaDB will have to step up its work on supporting many Latin American countries on their own institutional reforms related to improved governance, anti-corruption and transparency. The region is falling behind others in this respect, and neglecting this dimension would be costly.</p>
<p>While the Latin American region has made inroads in terms of macro-economic policies over the past decade, as we observe in the chart below, on average Latin America has fallen behind the industrializing countries in East Asia, as well as the former Eastern European socialist countries (now part of the new Europe), in terms of key dimensions of governance. Yet to be credible in these important areas of pending reforms, the IaDB will need to implement transparency reforms – the example starts at home.</p>
<p><a href="http://thekaufmannpost.net/wp-content/uploads/2010/03/LAslide.jpg"><img class="alignnone size-medium wp-image-2106" title="Quality of Governance lags in Latin America" src="http://thekaufmannpost.net/wp-content/uploads/2010/03/LAslide-300x225.jpg" alt="" width="458" height="321" /></a> And the fourth reason for enhanced transparency is Haiti. The vast aid package that Haiti will require is already the subject of much homework and debate among donors who will congregate at the UN in <a href="http://www.haitispecialenvoy.org/relief_and_recovery/international_donors_conference"><em>New York</em> for a major meeting</a> on March 31st. Some bilateral aid donors will demand satisfactory transparency and accountability from the Haiti side before making firm commitments. As important, however, will be to observe the initiatives that donors themselves take regarding making its own programs and funding details in Haiti much more transparent than customary.</p>
<p>The Inter-American Development Bank covets having some leadership role in the Haiti reconstruction effort. To consolidate such a role in the eyes of the rest of the donor community, it can’t afford to stay far behind in terms of its own transparency.</p>
<p>For these reasons, it may make sense for the Inter-American Development Bank to publicly commit this weekend to the design of a far-reaching disclosure policy, one which could build on (and even improve upon) the World Bank’s and which would be consistent with modern transparency standards in such organizations.</p>
<p>In particular, the IaDB ought to pledge working toward very concrete mechanisms for access to detailed financial and technical data on all its projects. And it could pledge to make its operations in Haiti as an early model test case of the broader and deeper transparency policies and disclosure measures to come.</p>
<p>For good measure, the IaDB may also wish to disclose the price tag of the Cancun meeting.</p>
<p>* IaDB en castellano es el BID, o Banco Interamericano de Desarrollo.</p>
<p>[Note:  this is a cross-<a href="http://www.brookings.edu/opinions/2010/0319_transparency_kaufmann.aspx" target="_blank">posting from the <em>Upfront blog at Brookings, here</em></a>].</p>
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		<title>Desastres Naturales y Deberes Nacionales: El Terremoto de Chile en una Perspectiva Internacional</title>
		<link>http://thekaufmannpost.net/desastres-naturales-y-deberes-nacionales-el-terremoto-de-chile-en-una-perspectiva-internacional/</link>
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		<pubDate>Tue, 09 Mar 2010 21:55:46 +0000</pubDate>
		<dc:creator>Kaufmann</dc:creator>
				<category><![CDATA[Aid Effectiveness]]></category>
		<category><![CDATA[Corruption]]></category>
		<category><![CDATA[Measurement Frontiers]]></category>
		<category><![CDATA[Public Financial Management]]></category>
		<category><![CDATA[Regulation & Security]]></category>
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		<category><![CDATA[capture]]></category>
		<category><![CDATA[Armenia]]></category>
		<category><![CDATA[Brookings]]></category>
		<category><![CDATA[Chile]]></category>
		<category><![CDATA[Chile Buena Gobernabilidad]]></category>
		<category><![CDATA[Concepcion]]></category>
		<category><![CDATA[Desastre Chile]]></category>
		<category><![CDATA[desastre nacional]]></category>
		<category><![CDATA[desastre natural]]></category>
		<category><![CDATA[EEUU]]></category>
		<category><![CDATA[FEMA]]></category>
		<category><![CDATA[Gobernabilidad]]></category>
		<category><![CDATA[gobernanza]]></category>
		<category><![CDATA[Katrina]]></category>
		<category><![CDATA[maremoto]]></category>
		<category><![CDATA[Mexico]]></category>
		<category><![CDATA[Monitoría Sísmica]]></category>
		<category><![CDATA[Monitoría Sísmos]]></category>
		<category><![CDATA[Nueva Orleans]]></category>
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		<category><![CDATA[Richter]]></category>
		<category><![CDATA[Santiago]]></category>
		<category><![CDATA[sismo]]></category>
		<category><![CDATA[Terremoto Chile]]></category>
		<category><![CDATA[tsunami]]></category>
		<category><![CDATA[Turquía]]></category>
		<category><![CDATA[victimas terremoto]]></category>

		<guid isPermaLink="false">http://thekaufmannpost.net/?p=2008</guid>
		<description><![CDATA[  Un enfoque amplio de gobernabilidad comparativa conlleva a nuestra conclusión de que Chile ha respondido relativamente bien al mega-terremoto, a pesar de errores serios en la etapa inicial.  Identificamos logros, errores, y desafíos en la reacción frente al terremoto, los cuales constituyen una oportunidad de reforma para el país.
Traducción del artículo &#8220;Natural Disasters, National Diligence: The Chilean Earthquake in Perspective&#8221;, por D. Kaufmann y [...]]]></description>
			<content:encoded><![CDATA[<p><a href="http://thekaufmannpost.net/wp-content/uploads/2010/03/chile-earthquakejpg.jpg"><img class="alignnone size-medium wp-image-2027" title="chile earthquake,jpg" src="http://thekaufmannpost.net/wp-content/uploads/2010/03/chile-earthquakejpg-200x300.jpg" alt="" width="139" height="181" /></a>  Un enfoque amplio de gobernabilidad comparativa conlleva a nuestra conclusión de que Chile ha respondido relativamente bien al mega-terremoto, a pesar de errores serios en la etapa inicial.  Identificamos logros, errores, y desafíos en la reacción frente al terremoto, los cuales constituyen una oportunidad de reforma para el país.</p>
<p><em>Traducción del artículo &#8220;Natural Disasters, National Diligence: The Chilean Earthquake in Perspective&#8221;, por D. Kaufmann y J. Tessada,  </em><a href="http://www.brookings.edu/opinions/2010/0305_chile_earthquake_kaufmann.aspx" target="_blank"><em>publicado en la página web</em></a><em> de The Brookings Institution, el 5 de Marzo de 2010 (</em><a href="http://www.brookings.edu/opinions/2010/0305_chile_earthquake_kaufmann.aspx" target="_blank"><em>link</em></a><em>).  </em>El artículo en inglés también se encuentra en este espacio <em><a href="http://thekaufmannpost.net/natural-disasters-national-diligence-the-chilean-earthquake-in-perspective/" target="_blank">blog (here</a></em>)&#8230;</p>
<p><span id="more-2008"></span>El terremoto que afectó a Chile en la madrugada del 27 de Febrero nos ha entregado <a href="http://www.nytimes.com/interactive/2010/03/01/world/20100301-chile-earthquake-photos.html" target="_blank"><em>imágenes</em> </a>de profunda destrucción.  Además, la cobertura de los medios de prensa, a nivel internacional, ha mostrado escenas de saqueo y de ataques incendiarios ocurridos en los días y horas inmediatamente después del terremoto.</p>
<p>En Chile, la crítica a la respuesta del gobierno es generalizada. Muchos se preguntan cuántas muertes y daño se hubieran podido prevenir, si la respuesta del gobierno y los esfuerzos de rescate ante este terremoto hubiesen tenido la rapidez y eficiencia necesaria, y por qué el orden público se perdió luego de ocurrido el terremoto.</p>
<p>Las críticas se han enfocado en la inhabilidad de las autoridades centrales en enviar una alerta de maremoto a las localidades costeras, en la tardía y tímida reacción al desorden en las zonas más devastadas del sur de Chile (que es donde ha ocurrido la mayor parte de los saqueos), y la demora en el envío de materiales y víveres más esenciales.  [<a href="http://www.youtube.com/watch?v=tUZOaEZL8As&amp;NR=1" target="_blank"><em>Aquí</em> testimonio de un inocente sobreviviente del tsunami, en Iloca</a>]</p>
<p>Nosotros sugerimos que cuando uno mira la magnitud del desastre natural y las características de <em>gobernabilidad<a href="http://thekaufmannpost.net/wp-admin/post-new.php#_ftn1"><strong>[1]</strong></a></em> de Chile en comparación a otros eventos, uno encuentra que a pesar de los serios errores el país ha respondido relativamente bien. En este artículo identificamos algunos errores en la reacción frente al terremoto, los cuales constituyen también oportunidades de reforma y mejora para Chile.</p>
<h3>Desastres Naturales y su Costo en Vidas</h3>
<p>La información entregada por el gobierno hasta el 5 de Marzo mencionaba 279 víctimas identificadas, pero el número final probablemente sea varios centenares mayor dado que existen víctimas no identificadas y la cantidad de gente desaparecida. Aún así, es muy poco probable que las víctimas lleguen a contarse por millares. Sin embargo, la muerte de cientos de compatriotas es profundamente dolorosa y enluta a un número aún mayor.</p>
<p>Pero debemos recordar que el reciente terremoto en Chile es mundialmente el quinto más poderoso en más de cien años, con una magnitud de 8,8 grados. Esto lo coloca en la infame lista de los mega-terremotos, lo que significa que fue cientos de veces más poderoso que otros terremotos que han ocurrido cerca de zonas pobladas en los últimos años, con la excepción de los terremotos ocurridos en Indonesia en los años 2004 y 2005.  [<em><a href="http://www.iris.edu/dms/seismon.htm" target="_blank">Monitoría Sísmica aquí</a></em>]</p>
<p>Aún tenemos frescas en nuestras mentes las imágenes de destrucción en Haití, donde un terremoto de magnitud 7,0 causó la muerte de más de 220.000 personas. Más lejanos son los recuerdos de los terremotos de Pakistán el año 2005 (magnitud 7,6 y 86.000 muertos), México en 1985 (magnitud 8,0 y 9.500 muertos), Japón en 1995 (magnitud 6,9 y 5.502 muertos), Armenia en 1988 (magnitud 6,8 y 25.000 muertos), Turquía en 1999 (magnitud 7,6 y 17.118 muertos), o el caso algo más reciente, y dramático, de China el año 2008 (magnitud 7,9 y 87.587 muertos), entre otros. El número de víctimas en estos casos supera con creces la del reciente terremoto, como se puede ver en la Tabla 1 al fin de esta columna.</p>
<p>La pregunta de fondo entonces es por qué en Chile el número de víctimas no es mayor. El hipocentro del mega terremoto chileno fue relativamente profundo, ayudando a reducir en la superficie el efecto de la gran energía liberada. Pero no sólo el terremoto tuvo una larga duración, sino también el epicentro estuvo localizado cerca de zonas altamente pobladas. El resultado de esto es que al área afectada fue extensa, abarcando desde el sur de Chile donde está la segunda ciudad más grande del país, Concepción, hasta la capital Santiago en la zona central e incluso zonas más al norte.</p>
<p>Adicionalmente, el terremoto no solamente causó destrucción en la superficie, sino también generó un maremoto y una larga secuencia de réplicas, algunas de ellas de magnitud superior a 6,0.</p>
<p>Sin duda no es ningún consuelo para los que viven en Chile, pero si un desastre natural de esta magnitud hubiera ocurrido en prácticamente cualquier otro lugar del mundo uno hubiera esperado un número mayor de víctimas.</p>
<h3>El Impacto del Terremoto: La Gobernabilidad Es Fundamental</h3>
<p>La buena calidad de gobernabilidad de Chile tiene un rol importante en la baja cantidad de víctimas. Dos dimensiones de gobernabilidad son particularmente relevantes: la eficacia del gobierno (la eficiencia del sector público) y el control de la corrupción. A lo largo de los años diversas instituciones chilenas han sido eficientes en el diseño y adopción de mejores códigos de construcción y edificación, que han sido revisados con el tiempo, reflejando la experiencia de terremotos previos, las innovaciones tecnológicas en prevención y el mayor nivel de riqueza del país (en parte también relacionado a los buenos niveles de gobernabilidad).</p>
<p>Igualmente importante es el hecho que se supervisa y exige la aplicación de estas normas. Los medios han dado a conocer al mundo el caso de un edificio de departamentos que colapsó en Concepción y de otro en Santiago que fue declarado inhabitable por estar inclinado como la Torre de Pisa. Lo esencial es que estos ejemplos indican que las violaciones de los códigos (y potencialmente la corrupción) son probablemente casos individualizados y no sistemáticos.</p>
<p>Naturalmente, muchas estructuras tienen daños, especialmente, aunque no exclusivamente, construcciones de mayor antigüedad. Es cierto que hay una gran cantidad de gente damnificada o sin hogar en las zonas cercanas al epicentro, pero el número total de casas no fue diezmado y el número de víctimas ocasionado por colapsos de edificaciones no es enorme. De hecho, buena parte de las víctimas del terremoto habrían sido causadas por el maremoto.</p>
<p>Sin lugar a dudas, y como ha sido el caso después de otros terremotos, se obtendrán muchas lecciones al evaluar los daños y los códigos de construcción serán mejorados, pero el sistema existente en esta área si funcionó. </p>
<p>Aún más, y a diferencia de los efectos devastadores que tuvo la corrupción en el sector de la construcción en otras ciudades afectadas por terremotos como en los casos de Turquía (donde muchos edificios residenciales nuevos colapsaron) y China (donde escuelas llenas de alumnos colapsaron), los bajos niveles de corrupción imperantes en Chile, en conjunto con instituciones efectivas, ayudan a entender la razón por la cual los códigos fueron efectivamente implementados.</p>
<p>Esta conclusión no es específica a los casos particulares que mencionamos, de hecho la evidencia empírica, como la presentada en el estudio de Kahn sobre los efectos de <a href="http://www.mitpressjournals.org/doi/abs/10.1162/0034653053970339">desastres naturales (<em>publicación</em></a>), sugiere que gobernabilidad y control de la corrupción son determinantes de la cantidad de víctimas. Una mirada a los terremotos más recientes, como se ve en la Tabla 1 al fin de este artículo, y a indicadores de gobernabilidad (medida como eficacia del gobierno y control de la corrupción) apuntan en esa dirección, tal como se ve en la Figura 1 aquí.</p>
<p><a href="http://thekaufmannpost.net/wp-content/uploads/2010/03/figure1-pdftojpg2.jpg"><img class="alignnone size-medium wp-image-2025" title="figure1-pdftojpg" src="http://thekaufmannpost.net/wp-content/uploads/2010/03/figure1-pdftojpg2-300x231.jpg" alt="" width="287" height="248" /></a></p>
<p><strong>           </strong><strong>                                   .  </strong></p>
<h3>La Respuesta del Gobierno: Errores y el &#8220;Test de Gobernabilidad&#8221;</h3>
<p>La preparación para enfrentar terremotos, simulacros incluidos, es parte integral de la educación de adultos y niños en Chile. Pero hubo serios errores en la respuesta inmediata a la crisis.</p>
<p>Primero, la alerta de maremoto fue manejada inadecuadamente por la unidad de la Armada responsable que no logró coordinarse con la Oficina Nacional de Emergencia (ONEMI). Pero incluso si la amenaza de un maremoto se hubiera identificado inicialmente por los organismos encargados, lo que de todas maneras no ocurrió, es poco probable que la información hubiera sido traspasada a tiempo a las autoridades locales. La razón es simple, el sistema de alarma descansa en el uso de teléfonos e internet, y estos estaban desconectados por la caída del suministro eléctrico.</p>
<p>Segundo, el gobierno reaccionó lentamente en la distribución de artículos esenciales a las ciudades sureñas más afectadas, en parte porque sin electricidad no podía evaluar las necesidades locales.</p>
<p>Tercero, enfrentado al dilema de enviar las fuerzas armadas para asistir en las tareas de ayuda y en la mantención del orden el gobierno titubeó, demorando la decisión &#8211;en parte por cálculo político y por una sensibilidad al uso de la fuerza a raíz de la experiencia durante el régimen militar. Los saqueos y los incendios si ocurrieron, y la prensa reportó ampliamente aquéllos incidentes.</p>
<p>Después de los retrasos durante los primeros días, el gobierno central, mejor organizado, con más información y mayor decisión, ha hecho fluir la ayuda hacia las zonas afectadas, entregando provisiones de emergencia y restaurando el orden público.</p>
<p>Estos errores, aunque serios, también deben ser puestos en perspectiva. La perfección es imposible de alcanzar en una situación de crisis de esta magnitud y complejidad, con miles de decisiones críticas que deben ser tomadas de manera coordinada por un gran número de personeros geográficamente separados en un breve período.</p>
<p>Por ejemplo, equivocaciones más serias ocurrieron en Estados Unidos durante la respuesta al Huracán Katrina en Nueva Orleans. Más de 1.800 personas murieron y decenas de miles quedaron atrapadas por días peligrosamente en sus hogares inundados, estadios y centros de convenciones. Los saqueos, la violencia y el desorden aparecieron y duraron hasta el tardío arribo, casi una semana después, de 40.000 tropas para asegurar el orden. </p>
<p>Hoy en día la ciudad tiene apenas dos tercios de su población antes del huracán. Esta cadena de equivocaciones ocurrió en un país con un gobierno que es generalmente eficaz. Pero también serios errores se cometieron en la evaluación y mantención de las defensas fluviales antiguas, la evacuación de los habitantes, en el acopio de provisiones y víveres antes del huracán, y en la coordinación de las tareas de rescate y recuperación después del huracán.</p>
<p>Como podemos ver en la Figura 1 (arriba), Estados Unidos tiene altos niveles de control de corrupción; aunque en Estados Unidos, Nueva Orleans no era conocida como un gran ejemplo de probidad. Una conclusión de esta breve comparación entre Chile y Estados Unidos es que errores serios ante crisis ocasionadas por desastres naturales no son necesariamente signo de subdesarrollo. Tampoco lo son los disturbios.</p>
<p>El verdadero &#8220;test de la gobernabilidad&#8221; reside en la habilidad y flexibilidad de las instituciones para enfrentar y corregir los errores. Aún es temprano para tener los primeros análisis cuando aún se está en medio de la operación de rescate y ayuda en Chile. Sin embargo, la evidencia ya es promisoria y consistente con buena gobernabilidad: se han reconocido errores, que están siendo corregidos y se han potenciado las capacidades ya existentes. El resultado es la recuperación de cierta calma al aumentar la ayuda y asegurar el orden.</p>
<p>Otro componente crucial del test de gobernabilidad, son las reacciones e iniciativas a nivel local. Los esfuerzos heroicos de personeros de los gobiernos locales, líderes locales y pobladores a menudo no llaman la atención de las cámaras de la misma manera que un edificio en llamas, una tienda saqueada o una construcción derruida. Estos esfuerzos terminan muchas veces siendo anónimos y desconocidos, pero son fundamentales complementando y, a veces, sustituyendo los esfuerzos del gobierno central. Un excelente ejemplo de estos esfuerzos son los casos de oficiales locales en poblados costeros, que megáfono en mano lograron impartir las instrucciones de evacuación inmediatamente después del terremoto, reemplazando de esta manera el &#8220;sofisticado&#8221; sistema de alarma.</p>
<h3>Desafíos de Gobernabilidad para Chile</h3>
<p>En estos momentos es claro que la prioridad debe ser el envío expedito de ayuda, de manera decidida, coordinada y focalizada. Sin embargo, es importante empezar a planificar para la fase de reconstrucción.   </p>
<p>Relativamente hablando, Chile está en buena posición para este desafío por sus buenos niveles de gobernabilidad. En clara diferencia con Haití, no requerirá de un enorme programa de ayuda internacional (aún cuando requerirá de ayuda técnica y de equipamiento focalizada de otros países), ni tampoco requerirá la creación de grandes instituciones nuevas (particularmente, no serán necesarias instituciones manejadas por extranjeros).</p>
<p>La resistente economía chilena y un desempeño macroeconómico estelar, garantizan la existencia de espacio para financiar un esfuerzo de reconstrucción,  que requerirá miles de millones de dólares sin tener que depender excesivamente de financiamiento a través de deuda (o de fuentes inflacionarias). Aún más, se espera que el dinámico sector privado juegue un rol fundamental.</p>
<p>Durante la reconstrucción será importante aplicar las lecciones aprendidas durante este terremoto, tales como la necesidad de mejorar el sistema de alerta de maremoto, asegurar suficiente respaldo en caso de fallas en electricidad y establecer un sistema de comunicación de emergencia, y determinando ubicaciones a lo largo del país para recursos humanos y depósitos de materiales.</p>
<p>También puede requerirse aplicar las lecciones acerca de los estándares para ciertas edificaciones, como reforzamiento de estructuras antiguas y hospitales. Y el moderno y transparente sistema de compras y licitación del Estado será testeado por la magnitud y la urgencia de los proyectos de infraestructura que serán requeridos. También se requerirá de medidas, y fiscalización de de la sociedad civil, para atenuar el riesgo de captura por parte de firmas poderosas, el cual se incrementa cuando hay aumentan el número de contratos más atractivos.</p>
<p>Hay desafíos más generales también que deben ser atendidos. Entre las instituciones, tanto Carabineros como las fuerzas armadas necesitan algunas reformas y modernización. Y medidas que generen al menos un mínimo de descentralización deberían ser consideradas dada la experiencia reciente.</p>
<p>Aún más generalmente, los saqueos y ataques incendiarios son un poderoso recordatorio de que existen tensiones que pueden ser explosivas, inherentes a una sociedad con alta desigualdad. De hecho, los niveles de criminalidad aparecían dentro de la lista de prioridades en cuanto a desafíos de gobernabilidad, lo que responde en parte a la necesidad de profesionalizar aún más a Carabineros, a la desigualdad social y económica y a los bajos niveles de empleo entre los más pobres. Los enormes procesos de reconstrucción y de generación de empleo que se necesitarán en el sur de Chile ofrecen una oportunidad para intentar responder a estos desafíos pendientes.</p>
<p>De hecho, un desastre natural tan trágico como éste puede transformarse en oportunidades para que Chile emerja tanto o más fuerte que antes. Un buen liderazgo es y será crucial.</p>
<p>                                                           ***</p>
<p><a href="http://thekaufmannpost.net/wp-content/uploads/2010/03/earthquakes-table1.jpg"><img class="alignnone size-large wp-image-2019" title="earthquakes table" src="http://thekaufmannpost.net/wp-content/uploads/2010/03/earthquakes-table1-854x1023.jpg" alt="" width="451" height="734" /></a></p>
<hr size="1" /><a href="http://thekaufmannpost.net/wp-admin/post-new.php#_ftnref1">[1]</a> &#8220;Gobernabilidad&#8221; es el término utilizado generalmente en castellano para referirse al concepto inglés de &#8220;governance&#8221;, aunque el término de &#8220;gobernanza&#8221;, que no se utiliza en general, es quizás más adecuado. Según el diccionario de la Real Academia Española, gobernanza es el &#8220;Arte o manera de gobernar [para] el logro de un desarrollo económico, social e institucional duradero, promoviendo un sano equilibrio entre el Estado, la Sociedad Civil y el Mercado de la Economía.&#8221;</p>
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		<title>Natural Disasters, National Diligence: The Chilean Earthquake in Perspective</title>
		<link>http://thekaufmannpost.net/natural-disasters-national-diligence-the-chilean-earthquake-in-perspective/</link>
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		<pubDate>Sat, 06 Mar 2010 18:05:12 +0000</pubDate>
		<dc:creator>Kaufmann</dc:creator>
				<category><![CDATA[Aid Effectiveness]]></category>
		<category><![CDATA[Corruption]]></category>
		<category><![CDATA[Measurement Frontiers]]></category>
		<category><![CDATA[Public Financial Management]]></category>
		<category><![CDATA[Regulation & Security]]></category>
		<category><![CDATA[Rule of Law]]></category>
		<category><![CDATA[capture]]></category>
		<category><![CDATA[Armenia]]></category>
		<category><![CDATA[Brookings]]></category>
		<category><![CDATA[Brookings Institution]]></category>
		<category><![CDATA[Chile]]></category>
		<category><![CDATA[Chile earthquake]]></category>
		<category><![CDATA[China earthquake]]></category>
		<category><![CDATA[earthquake]]></category>
		<category><![CDATA[earthquake death toll]]></category>
		<category><![CDATA[FEMA]]></category>
		<category><![CDATA[Global Seismic Monitoring]]></category>
		<category><![CDATA[good governance]]></category>
		<category><![CDATA[Haití]]></category>
		<category><![CDATA[Hurricane Katrina]]></category>
		<category><![CDATA[Mexico]]></category>
		<category><![CDATA[natural disaster]]></category>
		<category><![CDATA[New Orleans]]></category>
		<category><![CDATA[ONEMI]]></category>
		<category><![CDATA[Richter scale]]></category>
		<category><![CDATA[Seismic Monitoring]]></category>
		<category><![CDATA[tsunami]]></category>
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		<description><![CDATA[ The Chilean earthquake that hit during the early morning hours of February 27 has brought searing images of devastation; and international news coverage has shown scenes of looting and arson incidents occurring in its immediate aftermath.  In Chile, criticism of the government’s response is widespread.
Many are wondering whether numerous deaths and severe destruction could [...]]]></description>
			<content:encoded><![CDATA[<p><img class="alignnone" title="Chile Earthquake, Saturday, February 27th, 2010" src="http://www.24con.com/files/image/46/46240/4b891ed2d60b3.jpg" alt="" width="199" height="255" /> The Chilean earthquake that hit during the early morning hours of February 27 has brought searing <em><a href="http://www.nytimes.com/interactive/2010/03/01/world/20100301-chile-earthquake-photos.html" target="_blank">images</a></em> of devastation; and international news coverage has shown scenes of looting and arson incidents occurring in its immediate aftermath.  In Chile, criticism of the government’s response is widespread.</p>
<p>Many are wondering whether numerous deaths and severe destruction could have been prevented; whether the government’s emergency response and rescue to this natural disaster was speedy and effective; and why law and order broke down in the earthquake’s aftermath.</p>
<p>Criticism has focused on the failure by the central authorities to alert coastal populations of the impending tsunami, its delayed and timid reaction to unrest in the most devastated region in the south (where most of the looting has taken place), and its slow initial distribution of essential supplies.</p>
<p><span id="more-1985"></span>By providing a comparative perspective that considers both the magnitude of the natural disaster and Chile’s governance characteristics, we suggest that in spite of some important mistakes Chile has thus far fared relatively well. We identify selected shortcomings, which present an opportunity for further reform and progress in Chile.</p>
<p><strong>Natural Disasters and the Death Toll</strong></p>
<p>As of March 5, the Chilean government had confirmed 279 identified victims, although the death toll is likely to increase by the hundreds considering many have not yet been identified or are deemed missing. Yet the death toll is highly unlikely to reach thousands. Nonetheless, the tragic death of hundreds of people is enormously saddening and brings grief to many others.</p>
<p>Yet, the Chilean earthquake was the fifth strongest quake for over a hundred years, measuring 8.8 on the Richter scale. This propels it to the nefarious elite &#8220;mega-earthquake&#8221; league, which means that it was hundreds of times stronger than other earthquakes near populated areas in recent years, with the exception of the 2004/5 Indonesian earthquakes. [<em><a href="http://www.iris.edu/dms/seismon.htm" target="_blank">Global Seismic Monitoring here</a></em>]</p>
<p>Fresh in our minds are the images of recent disaster in Haiti, with an earthquake magnitude of 7.0 and a death toll of over 220,000 people. More distant are the memories of earthquakes in Pakistan in 2005 (magnitude of 7.6; 86,000 dead), Mexico in 1985 (8.0; 9,500), Japan in 1995 (6.9, 5,502), Armenia in 1988 (6.8; 25,000), Turkey in 1999 (7.6; 17,118), or more recently the infamous earthquake in China in 2008, (7.9; 87,587), among many others.  The death toll in these cases far surpasses that of Chile, as seen in the Table at the bottom of this article.</p>
<p>The real question then is why the death toll in Chile is not vastly larger. Chile’s mega-earthquake was relatively deep, which may have partially mitigated its monstrous force at the surface.  Not only did the earth shake for a long time, but the earthquake’s epicenter was also very close to several highly populated centers. </p>
<p>As a result, a vast area was affected—from the south where Chile’s second largest city, Concepción, lays very near the epicenter, to Santiago at the country’s center and further north.  And additionally, not only did the earthquake cause massive surface destruction, it also triggered a tsunami and numerous and severe aftershocks (often exceeding a magnitude of 6).</p>
<p>It may be of little consolation for those in Chile, but when a natural disaster of this magnitude hits, the number of expected deaths would have been vastly higher in most other countries.</p>
<p><strong>Earthquake’s Impact: Governance Matters</strong></p>
<p>Chile’s good governance played a significant role in limiting the death toll resulting from this earthquake. In particular, two dimensions of governance stand out—government effectiveness (the efficacy of the public sector), and control of corruption. Over the years, Chile’s effective institutions succeeded in designing and adopting better building codes, which have been periodically upgraded, to take into account previous earthquake experience, innovations in preventative technologies and the country’s growing wealth (made possible in part by good governance).</p>
<p>Equally noteworthy is that these building codes are enforced. The media has brought to international public knowledge a new high-rise that has collapsed in Concepción and an apartment building near Santiago that has been rendered inhabitable since it is leaning more than the Tower of Pisa.</p>
<p>Notably though, these examples indicate that non-compliance with building codes (and possibly corruption) is likely individualized, rather than systemic. Naturally, there are many damaged structures, particularly (but not exclusively) those built long ago.  Even though there are many people close to the epicenter who are now homeless, the overall stock of houses was not decimated and the number of fatalities due to buildings collapsing was limited. In fact, a very large portion of deaths resulted from the tsunami instead.</p>
<p>Undoubtedly, as with past earthquakes, lessons will be drawn from damage assessments and building codes will be improved; but overall the existing system did work. In contrast with the devastating effects that corruption in the construction sector had on the cities affected by the earthquakes in Turkey (where many new residential buildings collapsed) and China (where many schools full of pupils collapsed), the low levels of corruption in Chile, coupled with effective institutions, help explain why building codes were largely enforced.</p>
<p>More broadly, empirical evidence, such as that presented by an <a href="http://www.mitpressjournals.org/doi/abs/10.1162/0034653053970339" target="_blank">academic<em> article</em> by Mathew Kahn</a> on natural disasters, suggests that among other factors, governance and corruption control are determinants of the death tolls. A review of recent earthquakes, as shown in the more detailed Table at the bottom of the article, and of the quality of governance (in terms of governance effectiveness and control of corruption) is also suggestive, as depicted in this Chart here, exhibiting two of the <a href="http://www.govindicators.org" target="_blank"><em>WGI</em>&#8217;s Governance Indicators</a> for some countries.</p>
<p><img class="alignnone" src="http://www.brookings.edu/~/media/Files/rc/opinions/2010/0305_chile_earthquake_kaufmann/20100305_chile_earthquake_kaufmann_figure_small.jpg" alt="" width="400" height="300" /></p>
<p>                                                .                                                                                                                                       </p>
<p><strong>Government’s Response: Pitfalls and the “Governance Test”</strong></p>
<p>Advance planning for earthquakes, including training drills, is an integral part of adult and child education in Chile. In terms of immediate crisis response, however, serious mistakes occurred.</p>
<p>First, the tsunami alert was mishandled apparently by a responsible unit in the Navy, which failed to coordinate with the national emergency office. Even if the tsunami threat would have been identified in a timely fashion by the responsible authorities (which it was not), it is unlikely that the information would have been relayed in time to the affected localities. This is because the warning system relied on the internet and telephony, both of which were disabled during the power grid failure.</p>
<p>Second, the government was initially slow in dispersing essential supplies to the most afflicted cities in the south, partly due to its inability to assess local needs as a result of the power failure.</p>
<p>Third, the government hesitated and delayed the deployment of the army to assist in the relief effort and to maintain law and order<strong>—</strong>partly as a result of narrow political calculations and latent sensitivity to the use of armed force given the memories of the Pinochet regime. Looting and arson did take place in some localities, while the press widely reported those incidents that did occur.</p>
<p>After these initial delays in the first few days, the central government, armed with better organization, more information and increased decisiveness has streamed help into affected areas, providing emergency supplies and restoring law and order.</p>
<p>The mistakes made, while not trivial, need also to be put into perspective. Perfection is wholly unrealistic in any crisis situation of this magnitude and complexity, where thousands of critical decisions and steps need to be taken in a coordinated fashion by many officials in disparate locations and in a very short period of time.</p>
<p>For instance, more serious blunders occurred during the U.S. response to 2005 Hurricane Katrina in New Orleans. Over 1,800 people died and tens of thousands were perilously stranded in their flooded homes, stadiums and convention centers for days. Looting, violence and disorder erupted and lasted nearly a week until 40,000 troops arrived belatedly to restore law and order. Today the city has only about two-thirds its pre-Katrina population.</p>
<p>This serious string of mishaps took place in a country with a generally effective government. Serious mistakes were made regarding the evaluation and maintenance of the old levees, the evacuation of citizens, availability of sufficient stocks of supplies before the hurricane, and in the coordination of rescue and recovery efforts in its aftermath.</p>
<p>As we observe in the chart, the U.S. also exhibits high levels of control of corruption; although within U.S. cities, New Orleans has not historically been known for excelling in probity. A corollary of this comparison between Chile and the U.S. is that a serious mistake by the government in times of a sudden crisis brought by a natural disaster is not a symptom of underdevelopment. Neither is the eruption of riots.</p>
<p>The real “governance test” is the ability and flexibility of a country’s institutions to address and contain crisis, which does include learning and acting quickly to address and correct mistakes.</p>
<p>In the ongoing rescue and relief operation in Chile, it is obviously too early to have a definitive assessment, but the evidence is already encouraging, and consistent with good governance:  while building on its strengths, the government has already acknowledged mistakes made and has been moving decisively to correct them. As a result, some modicum of calm is being restored as relief efforts are broadened and order is restored.</p>
<p>Another crucial component of the “governance test” is the local-level response. The heroic efforts by many local government officials, community leaders and villagers often do not entice the TV cameras the same way that a building ablaze, a looted store, or a collapsed structure does. </p>
<p>Those good deeds may go largely untold and uncounted (as of yet), but they do play a key role in complementing, and at times, supplanting the central government’s efforts.  A powerful example was the life-saving efforts by local officers in some coastal towns who blared evacuation instructions through bullhorns once the earthquake struck, supplanting the failed “sophisticated” tsunami alert from the center.</p>
<p><strong>Some Governance Implications for Chile</strong></p>
<p>Clearly right now the priority ought to be the continued expediting of the relief effort in a decisive, well-coordinated and targeted fashion. Yet, it is important to start planning for the reconstruction phase as well.</p>
<p>Relatively speaking, Chile will be well positioned for that challenge given its high level of governance. In sharp contrast to Haiti, it will not require a massive international aid effort (although it will require targeted technical and equipment support from other countries), nor will it require the inception of major new institutions (and particularly no foreign-driven institution will be needed).</p>
<p>And while the reconstruction funding needs will be very large, in many billions of dollars, Chile’s resilient economy and stellar macroeconomic discipline gives it substantial headroom to fund this reconstruction without excessive reliance on debt (or inflationary) financing. Further, the dynamic private sector is expected to play a pivotal role.</p>
<p>In the reconstruction effort, it will be important to apply the lessons learned and mistakes made during this earthquake, such as in improving the tsunami warning system, ensuring sufficient backup power and establishing emergency communication systems, and designating strategic locations for crucial human resources and supply stocks around the country.</p>
<p>Applying lessons regarding standards for some types of construction, such as in the reinforcement of older structures and hospitals, may be required as well.  And Chile’s modern and transparent procurement system will now be put through a major test given the scope and urgency of the upcoming infrastructure investments that will be required.  Yet measures will need to be in place, including particular monitoring from civil society, so to mitigate the risk of capture by powerful private firms, a risk whenever there is a surge in large lucrative contracts.</p>
<p>There are also broader challenges that will need to be addressed. Among institutions, the police and the army may need to be reformed and modernized. A move toward some modicum of decentralization and devolution of central authority ought to be considered in light of this experience.</p>
<p>And more generally, the looting and arson is a potent reminder of the potentially explosive socio-economic tensions inherent in an unequal society. In fact, among pre-earthquake governance challenges in Chile, consistently common crime would top the list, which in part is due to an insufficiently professionalized police force, and in part the result of socio-economic inequalities and under-employment among the poor.  The massive investment and job creation effort that will be needed in Chile’s south may offer a unique opportunity to also tackle these pending challenges.</p>
<p>Indeed, a tragic natural disaster such as this can also become an opportunity for Chile to emerge even stronger and more equal. Leadership is, and will be, key.</p>
<p><img class="alignnone" src="http://www.brookings.edu/~/media/Files/rc/opinions/2010/0305_chile_earthquake_kaufmann/20100305_chile_earthquake_kaufmann_table_small.jpg" alt="" width="435" height="790" /></p>
<p><strong>                                              .</strong></p>
<p><strong>Note</strong>:  This entry originates from a <a href="http://www.brookings.edu/opinions/2010/0305_chile_earthquake_kaufmann.aspx" target="_blank"><em>Brookings Op Ed</em> Commentary article, written jointly with Jose Tessada</a>, also at Brookings.  </p>
<p><a href="http://thekaufmannpost.net/desastres-naturales-y-deberes-nacionales-el-terremoto-de-chile-en-una-perspectiva-internacional/" target="_blank">Este artículo esta en <em>castellano (aquí</em>).   This article is also in spanish (<em>here</em>). </a></p>
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		<title>National Disasters Today Provide Governance Lessons</title>
		<link>http://thekaufmannpost.net/national-disasters-today-provide-governance-lessons/</link>
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		<pubDate>Tue, 02 Mar 2010 04:34:55 +0000</pubDate>
		<dc:creator>Kaufmann</dc:creator>
				<category><![CDATA[Aid Effectiveness]]></category>
		<category><![CDATA[Corruption]]></category>
		<category><![CDATA[G-20]]></category>
		<category><![CDATA[Measurement Frontiers]]></category>
		<category><![CDATA[Public Financial Management]]></category>
		<category><![CDATA[Regulation & Security]]></category>
		<category><![CDATA[Rule of Law]]></category>
		<category><![CDATA[Transparency]]></category>
		<category><![CDATA[financial crisis]]></category>
		<category><![CDATA[Chile]]></category>
		<category><![CDATA[Chile earthquake]]></category>
		<category><![CDATA[Chile governance]]></category>
		<category><![CDATA[Chile risk rating]]></category>
		<category><![CDATA[Greece]]></category>
		<category><![CDATA[Greece bailout]]></category>
		<category><![CDATA[Greece crisis]]></category>
		<category><![CDATA[Greece governance]]></category>
		<category><![CDATA[Greece risk rating]]></category>
		<category><![CDATA[Richter scale]]></category>

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		<description><![CDATA[ Let us consider three countries:
Country 1: Its approach to industrialization has relied heavily on a very large public sector that accounts for well over 40 percent of GDP, and on aid financing from richer countries. The country has no fiscal discipline, running a deficit exceeding 13 percent of GDP. Rather, leaders have focused more [...]]]></description>
			<content:encoded><![CDATA[<p><img class="alignnone" src="http://rolfgross.dreamhosters.com/Box/Travel/1953-54Greece/1953AthensParthenonHymettos.jpg" alt="" width="219" height="145" /> Let us<strong> </strong>consider three countries:</p>
<p><strong>Country 1</strong>: Its approach to industrialization has relied heavily on a very large public sector that accounts for well over 40 percent of GDP, and on aid financing from richer countries. The country has no fiscal discipline, running a deficit exceeding 13 percent of GDP. Rather, leaders have focused more on ensuring adequate compensation for civil servants and providing a generous social safety net, including retirement at a young age. And transparency and integrity have not been a top priority, contributing to high corruption. This financial mis-governance has resulted recently in the downgrading of their sovereign risk ratings by commercial risk rating agencies.</p>
<p><strong>Country 2</strong>: Like Country 1, it also has had numerous governments from the left-of-center; but in contrast, it pays attention to good governance, anti-corruption, and integrity. The state owns some of the country’s large corporations and commercial banks. It has also focused on improvements in health, education and poverty alleviation. Further, fiscal discipline is prioritized more highly than in Country 1 (even if that is not saying much). Consistent with its strategy, the country instituted a very aggressive and generous fiscal stimulus plan during the global crisis, which amounted to over 2 percent of GDP&#8230;</p>
<p><strong><span id="more-1964"></span>Country 3</strong>: Like Country 2 (but unlike Country 1), it emphasizes governance and integrity. But unlike the other countries, it promotes free trade, openness, competition, FDI and global competitiveness, as well as private ownership (including pensions and schools). It pursues a very conservative macroeconomic policy—in fact fiscal responsibility is enshrined in law. Moody’s, the commercial risk-rating agency, upgraded its sovereign debt ratings last year in the midst of a global financial crisis&#8230;</p>
<p>There are two ways to classify these three countries. One option is to classify them by their ideology-in-government: the first two countries pursue left-of-center polices, while the third pursues policies that are right-of-center. The second option is to classify these three countries according to their institutional quality/governance: while the second and third countries have good governance, the first has weak governance.</p>
<p>So, which countries are we depicting here? The first is Greece, and both the second and the third are actually the same country—Chile—during the past two decades.</p>
<p><a href="http://thekaufmannpost.net/wp-content/uploads/2010/03/Slide11.jpg"><img class="alignnone size-medium wp-image-1967" title="Slide1" src="http://thekaufmannpost.net/wp-content/uploads/2010/03/Slide11-300x225.jpg" alt="" width="300" height="225" /></a> Greece’s deteriorating performance on governance is depicted here, while Chile’s performance, compared with Greece, is depicted below. The results motivate us to challenge conventional wisdom about global development and governance. Let us focus briefly on six particular myths:</p>
<p><strong>Myth 1</strong>: <strong>Initial conditions and external factors determine governance outcomes</strong>. Wrong. The contrast between Greece and Chile demonstrates the importance of domestic factors and cautions against exaggerating external factors and initial conditions. Greece’s history, its location, EU membership and aid received all provide favorable initial and external conditions for the emergence of strong institutions. In contrast, Chile’s geographical location and geological faults (and not belonging to the EU), points to less auspicious initial and external conditions.</p>
<p><a href="http://thekaufmannpost.net/wp-content/uploads/2010/03/Slide2.jpg"><img class="alignnone size-medium wp-image-1965" title="Chile and Greece compared:  Governance Indicators (WGI)" src="http://thekaufmannpost.net/wp-content/uploads/2010/03/Slide2-300x225.jpg" alt="" width="300" height="225" /></a> Yet, Chile has stronger governance and thus pursues better policies. More generally there is growing evidence that concurrent domestic factors are highly significant determinants of country success, initial conditions, history, and external factors notwithstanding. Unfortunately, historical and cultural determinism, as well as external factors, are often used to excuse countries’ failures. Similarly, many continue to believe that large (and often indiscriminate) infusions of external financial assistance will make help countries achieve development outcomes and sustained growth.</p>
<p><strong>Myth 2</strong>: <strong>Economic ideology still matters</strong>. <a href="http://www.brookings.edu/opinions/2009/0409_g20_kaufmann.aspx"><em>Not very much</em></a>. The riddle about Chile at the outset may have suggested the existence of<a href="http://bx.businessweek.com/latin-american-economy/tables-turned-latin-americas-lesson-for-west/12749580885259392148-f0161707af8e74236697c13e39ea74a3/"> <em>two countries </em>(originally in the FT) </a>pursuing different economic policies. However, Chile is an example of one country simultaneously implementing market-led strategies, macro-economic discipline, and progressive social policies with a substantial state role. In Chile nowadays, basic principles of good governance dominate tired ideological divides.</p>
<p>For two decades, left-of-center governments in Chile have successfully implemented hard-nosed and conservative economic reforms, coupled with strong social programs and poverty alleviation, showing that we can transcend ideological divides. There is a consensus among the recent generation that macroeconomic stability, economic efficiency, poverty alleviation and good governance are not substitutes for each other but can be integrated together, and that they are key to achieving sustained growth and development. Disagreement about details on the role of the state vis-à-vis social programs and some regulations may persist across the main political coalitions, but they do so at the margin.</p>
<p><strong>Myth 3</strong>: <strong>In today’s globalized world, states no longer matter; the focus ought to be on regions and global institutions.</strong> At least not for a while. Both Greece and Chile<em> </em>illustrate the dangers of focusing excessively on global and regional governance at the expense of national-level governance. Also, they illustrate that regional generalizations are misleading. Denmark and Greece may both be members of the EU, but they are light-years apart in terms of governance, for instance. Likewise, generalizations about Latin America are not telling.</p>
<p><strong>Myth 4</strong>: <strong>The quality of a country’s governance is not as important as other factors in determining its long-term success</strong>. Wrong. The evidence to the contrary is substantial; including the research work that has been done showing that improved governance is a crucial and causal determinant of sustained growth and socio-economic development. We have found that on average there is about a 300 percent development dividend for good governance: a country that substantially improves, say, the effectiveness of its government, rule of law, and/or corruption control, can expect a <a href="http://www.brookings.edu/opinions/2009/0629_governance_indicators_kaufmann.aspx"><em>tripling of its per capita income in the long run</em></a>. In the case of Chile, for example, such tripling in per capita income, and enormous reduction in poverty, has taken place over a couple of decades.</p>
<p><strong>Myth 5</strong>: <strong>Good governance is a luxury good.</strong> Not at all. Higher incomes or financial resources cannot ”buy” good governance. The contrast between Greece and Chile also shows that a country’s membership to the ”rich” nations club is not an assurance of sustaining good governance, or of high integrity and strong leadership. Conversely, mis-governance and corruption are not synonymous with emerging and developing economies. There is enormous variation in the quality of governance across neighboring emerging economies and developing countries.</p>
<p><strong>Myth 6</strong>: <strong>One fights corruption by “fighting corruption:” creating more Anti-Corruption Commissions and redrafting laws and regulations</strong>. Not really. Many Anti-Corruption (A-C) strategies are ill advised, focusing on A-C campaigns, new A-C commission, and redrafted A-C laws (which lack enforcement). Instead, as in Chile, the focus ought to be on improving institutions and governance more generally, both on the supply side (e.g. procurement, civil service, financial management) and on the demand side (democratic accountability and integrity of elections, free press, civil society and private sector involvement). Notably, while Chile’s efforts have contributed to its low-level corruption (see chart comparison with Greece), it lacks an A-C Commission. Good governance is not embedded in particular anti-corruption commissions (there is none), rather it is embedded in the core institutions of the state.</p>
<p>Challenging these myths about governance and growth result in a few reflections.</p>
<p>The good news is that no country is a prisoner of its history—yes, history, culture and external factors do matter, but they are not the main determinants of country success. Having strong leadership, good governance, and adequate reforms makes a huge difference.</p>
<p>The challenging news is that while countries may not be prisoners of their past, they do have to be active stewards of their future, which implies hard and continuous efforts to improve institutions, governance, civil society activism, transparency, and leadership. These are not merely technocratic solutions but deeply political phenomena.</p>
<p>Lastly, let us conclude with a reminder of the ”Chilean Miracle,” a common description of Chile’s achievements. Over the past decade, Chile’s poverty rate has declined from 44 percent of the population living below the poverty line to 12 percent. The country just joined the ranks of the OECD. It routinely ranks in the top 20-30 countries in the world, not only in terms of governance and anticorruption but also in global competitiveness, contrasting Greece, for instance, whose <a href="%22http://www.weforum.org/en/initiati"><em>global competitiveness index</em></a> ranking has deteriorated from 47<sup>th</sup> in 2006, to 71<sup>st</sup> in 2009 among 134 countries ranked in 2009 by the World Economic Forum.</p>
<p>And in terms of corruption control, for instance, Greece rank position in last year&#8217;s WGI was 82, while Chile&#8217;s was 28 (out of 208 countries we measure).  Surely there are challenges ahead in Chile, but these enormous accomplishments are real. Yet describing them as a “miracle” is misleading; they are after all not acts of God, but of the people and their leaders.</p>
<p>And on a somber note, the <a href="http://thekaufmannpost.net/natural-disasters-national-diligence-the-chilean-earthquake-in-perspective/" target="_blank"><em>tragic earthquake in Chile</em></a> over this weekend brings these issues to the forefront. The catastrophic mega-earthquake, of a magnitude of 8.8 on the Richter scale (or hundreds of times more powerful than other major earthquakes over the past 20 years, and the fifth most powerful since records have been kept) may have taken the lives of about a 1,000 people. Every single death is painful; yet, if this figure roughly stands it would constitute a very tiny fraction of the numbers that perished in recent and less powerful earthquakes elsewhere. This is not a “miracle” either.  Chile’s good governance has made a difference.</p>
<p>While imperfect, this institutional environment is homegrown resulting from hard work. And Chile will not require a massive international aid rescue effort. Greece will.</p>
<p>Note: this entry is an abridged version of the opening keynote presentation that I gave at the <a href="http://www.keghart.com/PFA_Armenia_Diaspora"><em></em></a><a href="www.pf-armenia.org" target="_blank">&#8220;Policy Forum Armenia&#8217;s <em>Conference</em> on Armenia-Diaspora relations&#8221;</a>, held at the Cosmos Club in Washington, D.C., last night, Sunday February 28th, 2010.</p>
<div><span style="font-family: Arial, 'Times New Roman', 'Bitstream Charter', Times, serif; font-size: x-small;">[For an interview in Spanish following this entry in <a href="http://www.df.cl/portal2/content/df/ediciones/20100303/cont_134986.html" target="_blank">Chile's Diario Financiero,  h<em>ere</em></a>.  For a subsequent article focused on an analysis of the earthquake in Chile, <a href="http://thekaufmannpost.net/natural-disasters-national-diligence-the-chilean-earthquake-in-perspective/?utm_source=feedburner&amp;utm_medium=feed&amp;utm_campaign=Feed%3A+thekaufmannpost+%28The+Kaufmann+Governance+Post%29" target="_blank"><em>here in English</em></a>, and <a href="http://thekaufmannpost.net/desastres-naturales-y-deberes-nacionales-el-terremoto-de-chile-en-una-perspectiva-internacional/" target="_blank"><em>here in Spanish</em> - Castellano</a>].<br />
</span></div>
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		<title>Haiti: Rescue, Recovery, and Effective Development Aid</title>
		<link>http://thekaufmannpost.net/haiti-rescue-recovery-and-effective-development-aid/</link>
		<comments>http://thekaufmannpost.net/haiti-rescue-recovery-and-effective-development-aid/#comments</comments>
		<pubDate>Tue, 19 Jan 2010 03:14:54 +0000</pubDate>
		<dc:creator>Kaufmann</dc:creator>
				<category><![CDATA[Aid Effectiveness]]></category>
		<category><![CDATA[Corruption]]></category>
		<category><![CDATA[Measurement Frontiers]]></category>
		<category><![CDATA[Public Financial Management]]></category>
		<category><![CDATA[Rule of Law]]></category>
		<category><![CDATA[Transparency]]></category>
		<category><![CDATA[Voice and Human Rights]]></category>
		<category><![CDATA[Central America]]></category>
		<category><![CDATA[Dominican Republic]]></category>
		<category><![CDATA[failed state]]></category>
		<category><![CDATA[Haití]]></category>
		<category><![CDATA[Haiti earthquake]]></category>
		<category><![CDATA[Indonesia]]></category>
		<category><![CDATA[Somalia]]></category>
		<category><![CDATA[texting 90999]]></category>
		<category><![CDATA[UN]]></category>
		<category><![CDATA[US]]></category>
		<category><![CDATA[WGI]]></category>

		<guid isPermaLink="false">http://thekaufmannpost.net/?p=1691</guid>
		<description><![CDATA[ We are pained about the death toll and human suffering in Haiti and we share their sorrow.  With the exception of the tsunami in Asia, this tragedy is unprecedented in recent memory in a country not at war.  Current technology makes the devastation and death instantly clear around the globe.  Such technology also enables [...]]]></description>
			<content:encoded><![CDATA[<p><img class="alignnone" title="Devastating earthquake in Haiti" src="http://media.ft.com/cms/e70f8044-0027-11df-8626-00144feabdc0.jpg" alt="" width="264" height="232" /> We are pained about the death toll and human suffering in Haiti and we share their sorrow.  With the exception of the tsunami in Asia, this tragedy is unprecedented in recent memory in a country not at war.  Current technology makes the devastation and death instantly clear around the globe.  Such technology also enables the outpouring of private financial contributions to charity (like the ease by which one can contribute by <a href="http://www.google.com/search?hl=en&amp;rlz=1G1ACGWCENUS335&amp;num=50&amp;q=texting+haiti&amp;btnG=Search&amp;aq=f&amp;oq=&amp;aqi=" target="_blank">texting the <em>number</em> <em>90999</em></a> and typing &#8220;Haiti&#8221; to contribute to the Red Cross efforts in that country).</p>
<p>It is also clear what the immediate emergency rescue and relief needs are, such as water, food and medical treatment, and then some shelter and emergency power.  While precious few days may have been lost at first, the international community is now rushing assistance to Haiti, and improved coordination efforts on the ground are beginning to show results.  And we know that in recent times international donors have generally had a decent track record recently in emergency relief efforts when disaster strikes&#8230;</p>
<p><span id="more-1691"></span>What is much less clear is what needs to happen after the first emergency stage in Haiti, and what the response from the international community ought to be in the short-to-medium term.  Some pundits are providing recommendations brimming with certitude.  But it just may turn out to be more efficient to start from a position of humility and doubt, acknowledging a measure of collective ignorance as to what will work in Haiti in the medium term.  This is not based in the abstract: for many years, until the earthquake last week, the international community approach to development aid in Haiti was far from a success.   The blame is not merely due to insufficient aid funds <em><a href="http://www.brookings.edu/opinions/2010/0119_haiti_kaufmann.aspx" target="_blank">(here for details)</a></em>, or the erratic and often military-driven foreign policy of the US in Haiti.  It is much more complicated than that, it relates to domestic factors as well, including leadership and governance.  Such simplistic views on funding and finger pointing at one foreign power betray a misunderstanding of the development process.</p>
<p>In a meaningful sense, Haiti had not yet become a developing country prior to the earthquake.  Granted, two weeks ago Haiti may not have been an extreme case of a &#8216;failed state&#8217;, in the way that Somalia has been for instance.  While very weak, Haiti did have a government of sorts, which had made some tentative inroads in some areas over the past decade (such as on <em>&#8216;</em><a href="http://www.govindicators.org" target="_blank"><em>voice&#8217;</em></a>).</p>
<p>But political correctness aside, Haiti had not yet joined the developing country set.  Public Sector as well as Rule of Law institutions were fledgling at best, and often dysfunctional at worst.   The two comparative charts below illustrate the enormous challenge that Haiti was facing prior to the devastating earthquake, for two governance dimensions, namely Rule of Law, and Government Effectiveness.   Not shown here is the chart for <a href="http://info.worldbank.org/governance/wgi/mc_countries.asp" target="_blank">Control of <em>Corruption</em></a>, which features a <a href="http://thekaufmannpost.net/corruption-index-today-development-aid-reform-tomorrow/" target="_blank">very similar <em>pattern</em></a>.</p>
<p><img class="alignnone size-full wp-image-1706" title="Rule of Law in Haiti in 2008, comparative" src="http://thekaufmannpost.net/wp-content/uploads/2010/01/Slide1.jpg" alt="Rule of Law in Haiti in 2008, comparative" width="441" height="386" /></p>
<p>The evidence suggests that Haiti was placing barely a notch above the failed state of Somalia.  It was not far above it, or from Sudan, for instance.  Haiti&#8217;s &#8216;performance&#8217; was well below developing countries in Central America, for instance, which have had to cope with their share of natural disasters.  The contrast between Haiti and the Dominican Republic, which share the same <a href="http://en.wikipedia.org/wiki/Hispaniola" target="_blank"><em>island of Hispaniola</em></a>, was also stark by the end of 2008.  Likewise, Haiti&#8217;s institutional performance was far below that one of Indonesia, which took the brunt of the tsunami.  Indonesian institutions, even if less than stellar (yet improving), played a key role in the relief and recovery effort post-tsunami.  That is unlikely to be the case in Haiti.  While Haitians should take the initiative as much as possible in leading their own recovery and reconstruction effort, it is counterproductive to claim that very soon the international community ought to play a &#8217;supportive role&#8217;, providing as much funds as possible to the government, and expecting it to deliver in taking the lead now.</p>
<p><img class="alignnone size-full wp-image-1707" title="Haiti Government Effectiveness, 2008, comparative" src="http://thekaufmannpost.net/wp-content/uploads/2010/01/Slide2.jpg" alt="Haiti Government Effectiveness, 2008, comparative" width="442" height="388" /></p>
<p>Instead, the international community will need to be much more involved than usual, for a longer period, and in a more &#8216;hands-on&#8217; fashion than warranted in developing countries &#8212; akin to a ravaged post-conflict situation.  This does not mean that one country (whether the US or France) or one institution (whether the UN or one multilateral development bank) should take full control of the effort, either.  This would be a bad idea.  First, because the enormous challenges ahead are vast and in different areas (ranging from security, emergency relief and infrastructure, to development), and there is not a single country or institution that could do it well across the spectrum.  Each country and institution has a comparative advantage, and the needs are dire.  Second, the track record by many international donors in Haiti is spotty, and thus there is uncertainty as to which country or institution will perform.  Some division of labor , as well as a modicum of competition may work out better than a foreign monopoly in the aid effort.  Third, given history and culture in Haiti, it may backfire for a country like the US to take over.</p>
<p>And the last (but not least) reason: while I argue that we need to be realistic regarding how much can be expected from the Haitian central government in the near future, the same is not the case at the community level in Haiti.  Even in terms of ensuring an orderly and efficient distribution of emergency relief right now, it would be well advised to collaborate much more closely at the community level (and its leaders) within Haiti.</p>
<p>In fact, after the urgent relief effort and coping with the challenges of exodus, migration and maintaining order, as a medium term aim there an opportunity to help build Haitian institutions so that the country jumps aboard a sustained development path.   Currently we see that the media is concerned about the looting and violence that is taking place in the capital.  Less known is the fact that there was frequent looting and violence well before the earthquake, a symptom of dysfunctional institutions.</p>
<p>Consequently, complementing the massive needs for food and infrastructure, the medium term approach to aid in Haiti needs to invest significantly in governance institutions, in some cases essentially starting from scratch.  There is not a one and only &#8216;right way&#8217; of doing this, and by one anointed international or government agency.  This massive effort will take an number of key players &#8212; governmental and non-governmental&#8211; from the outside and from within the country.  New technologies (including satellite) ought to play a major role in helping coordinate efforts, mitigating the traditional rationale that there should be one single coordinating agency in control.</p>
<p>Further, we should be realistic about the void in Haiti&#8217;s central government in the short term, but entrust its people and communities with major responsibility in the process that will ensue for years to come.  Finally, we should be draw the lessons from the mistakes in past development aid programs, ensure that donors ensure that projects and funds are carried out with decent governance standards, and that uncertainty is factored into the design and implementation of development strategies and projects.</p>
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		<title>Chile ingresando a la OCDE: como ir al Mundial de Futbol?</title>
		<link>http://thekaufmannpost.net/chile-ingresando-a-la-ocde-como-ir-al-mundial-de-futbol/</link>
		<comments>http://thekaufmannpost.net/chile-ingresando-a-la-ocde-como-ir-al-mundial-de-futbol/#comments</comments>
		<pubDate>Tue, 15 Dec 2009 23:41:58 +0000</pubDate>
		<dc:creator>Kaufmann</dc:creator>
				<category><![CDATA[Corruption]]></category>
		<category><![CDATA[G-20]]></category>
		<category><![CDATA[Public Financial Management]]></category>
		<category><![CDATA[Bachelet]]></category>
		<category><![CDATA[Chile]]></category>
		<category><![CDATA[ingreso a OECD]]></category>
		<category><![CDATA[Michelle Bachelet]]></category>
		<category><![CDATA[Mundial Futbol]]></category>
		<category><![CDATA[OCDE]]></category>
		<category><![CDATA[OECD]]></category>

		<guid isPermaLink="false">http://thekaufmannpost.net/?p=1551</guid>
		<description><![CDATA[  Es ya oficial ahora: Chile entrará a la OCDE, y pronto.   Un gran reconocimiento y logro.   Según la BBC, Chile festeja como un Mundial, ya que Andrés Velasco dice en París:  &#8220;Es como clasificar para el Mundial, donde están los 32 mejores equipos. Aquí en la OCDE son 30 y con Chile vamos a ser [...]]]></description>
			<content:encoded><![CDATA[<p><span><img class="alignnone" title="Presidente Bachelet y Ministro Hacienda Velasco" src="http://3.bp.blogspot.com/_inC3ipGToQk/SlL7MqKEs-I/AAAAAAAACe0/R01vUxQTVyo/s400/velasco_bachelet-1b05e.jpg" alt="" width="145" height="139" />  </span><span>Es ya oficial ahora: <em><a href="http://thekaufmannpost.net/gobernabilidad-e-ingreso-de-chile-a-la-ocde/?utm_source=feedburner&amp;utm_medium=feed&amp;utm_campaign=Feed%3A+thekaufmannpost+%28The+Kaufmann+Governance+Post%29" target="_blank">Chile entrará a la OCDE</a></em>, y pronto.   Un gran reconocimiento y logro.   </span><span>Según la BBC, Chile festeja como un Mundial, ya que <a href="http://www.bbc.co.uk/mundo/economia/2009/12/091215_chile_ocde_jp.shtml" target="_blank">Andrés Velasco <em>dice en París</em></a>:  &#8220;Es como clasificar para el Mundial, donde están los 32 mejores equipos. Aquí en la OCDE son 30 y con Chile vamos a ser 31, con la diferencia de que no clasificamos para el Mundial por una vez sino para siempre, porque esta es una membresía permanente&#8221;. </span></p>
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		<title>Power shifting back from Washington to New York:  Recapture of the State in the offing?</title>
		<link>http://thekaufmannpost.net/power-shifting-back-from-washington-to-new-york-recapture-of-the-state-in-the-offing/</link>
		<comments>http://thekaufmannpost.net/power-shifting-back-from-washington-to-new-york-recapture-of-the-state-in-the-offing/#comments</comments>
		<pubDate>Tue, 15 Dec 2009 06:02:20 +0000</pubDate>
		<dc:creator>Kaufmann</dc:creator>
				<category><![CDATA[Corruption]]></category>
		<category><![CDATA[Measurement Frontiers]]></category>
		<category><![CDATA[Public Financial Management]]></category>
		<category><![CDATA[Public-Private Linkages]]></category>
		<category><![CDATA[Transparency]]></category>
		<category><![CDATA[capture]]></category>
		<category><![CDATA[financial crisis]]></category>
		<category><![CDATA[Citibank]]></category>
		<category><![CDATA[financial regulations]]></category>
		<category><![CDATA[Goldman Sachs]]></category>
		<category><![CDATA[JP Morgan]]></category>
		<category><![CDATA[legal corruption]]></category>
		<category><![CDATA[Morgan Stanley]]></category>
		<category><![CDATA[New York Times]]></category>
		<category><![CDATA[Obama]]></category>
		<category><![CDATA[regulatory reforms]]></category>
		<category><![CDATA[state capture]]></category>
		<category><![CDATA[Wall Street]]></category>
		<category><![CDATA[Washington]]></category>

		<guid isPermaLink="false">http://thekaufmannpost.net/?p=1530</guid>
		<description><![CDATA[ Imagine you hold a very high position in the US Government, in Washington, DC.  And you believe it is important to talk to the top Wall Street bankers, to nudge them to be more modest about their bonuses, and more generous about their lending.  You call a meeting with these top bankers in Washington. [...]]]></description>
			<content:encoded><![CDATA[<p><img class="alignnone" title="Worth a trip from here to the White House?" src="http://letustalk.files.wordpress.com/2008/11/wall-street-sign.jpg" alt="" width="275" height="240" /> <span>Imagine you hold a very high position in the US Government, in Washington, DC.  And y</span><span>ou believe it is important to talk to the top Wall Street bankers, to nudge them to be more modest about their bonuses, and more generous about their lending.  You call a meeting with these top bankers in Washington.  The chief executive of JP Morgan shows up from New York for the high level meeting.  But those from Goldman Sachs, Morgan Stanley and Citigroup do not make the 200 mile trip.  Their excuse:  the weather (which was not too bad). </span></p>
<p><span>Who were these bankers supposed to meet with in person but did not show up?:  President Obama.  When?: &#8230; </span></p>
<p><span><span id="more-1530"></span>&#8230;earlier today &#8212; a few months after the banks had already been rescued, and with the process of repaying the Government well underway already.  Their incentives to show up had dramatically changed over the past year or so.  <a href="http://www.nytimes.com/2009/12/15/business/15sorkin.html?hp=&amp;adxnnl=1&amp;adxnnlx=1260849643-44FJ4hQGnpUY168JYoMyJw" target="_blank"><em>This article in the New York Times </em>is telling</a>.  The no-show incident is perhaps a metaphor about who is actually in charge; how the power is shifting again from Washington to New York City.  As if the global financial crisis did not happen, or if it did, as if Wall Street excessive influence over policy and regulations had nothing to do with it.</span></p>
<p><img class="alignnone" title="Capture and Legal Corruption in 2004: US in comparative perspective" src="http://thekaufmannpost.net/wp-content/uploads/2008/11/corp-corrptn-blog-slide2-300x225.jpg" alt="" width="315" height="278" /><span> We were writing about <a href="../capture-and-the-financial-crisis-an-elephant-forcing-a-rethink-of-corruption/" target="_blank">capture of the <em>state</em> and its <em>regulatory</em> regime years ago (with <em>data</em> dating back to 2004)</a>.  Given the euphoric economic and financial times in the past, it was almost excusable that no attention was paid to the problem then.  But now?  It is as if we may be on the way back to square one.  Admittedly, we are still far form being back where we were in terms of the extent of legal corruption and capture of the past, and the concomitant excessive risks taken, but signs are worrisome.</span></p>
<p><span>And one wonders whether the White House actually believed that exhortations and admonitions would really make a dent on the bankers (even if they had showed up in person today).  Unless incentives and regulations are revamped, and the power of the Wall Street elite (and the very large financial institutions) to shape financial regulations and practices is drastically curtailed, exhortations will go nowhere (other than nice PR headlines for both sides for a few days). </span></p>
<p><span>Lobbyists are already working furiously to mitigate the likelihood of any meaningful reform.  Yet I believe that at some level <a href="http://thekaufmannpost.net/obama-capture-and-the-financial-crisis/" target="_blank"><em>President Obama</em>, together with a few of his key advisers (and, as we know, some politicians in Congress, but not others), still <em>think that serious reforms needs to take place</em></a>.  But merely stating or thinking that it is important will not do.  Leadership and mettle from the very top will be required to push for such reforms, soon after resolution of the health care reform conundrum. </span></p>
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		<title>International Anti-Corruption Day 2009:  An Hour of Silence to Reflect and Reboot</title>
		<link>http://thekaufmannpost.net/international-anti-corruption-day-2009-an-hour-of-silence-to-reflect-and-reboot/</link>
		<comments>http://thekaufmannpost.net/international-anti-corruption-day-2009-an-hour-of-silence-to-reflect-and-reboot/#comments</comments>
		<pubDate>Wed, 09 Dec 2009 05:30:24 +0000</pubDate>
		<dc:creator>Kaufmann</dc:creator>
				<category><![CDATA[Aid Effectiveness]]></category>
		<category><![CDATA[Corruption]]></category>
		<category><![CDATA[Measurement Frontiers]]></category>
		<category><![CDATA[Public Financial Management]]></category>
		<category><![CDATA[Public-Private Linkages]]></category>
		<category><![CDATA[Rule of Law]]></category>
		<category><![CDATA[Transparency]]></category>
		<category><![CDATA[Voice and Human Rights]]></category>
		<category><![CDATA[capture]]></category>
		<category><![CDATA[financial crisis]]></category>
		<category><![CDATA[Anticorruption Day]]></category>
		<category><![CDATA[Brookings Institution]]></category>
		<category><![CDATA[China]]></category>
		<category><![CDATA[Doha]]></category>
		<category><![CDATA[Egypt]]></category>
		<category><![CDATA[farewell presentation]]></category>
		<category><![CDATA[International Anticorruption Day]]></category>
		<category><![CDATA[legal corruption]]></category>
		<category><![CDATA[Pakistan]]></category>
		<category><![CDATA[regulatory capture]]></category>
		<category><![CDATA[Russia]]></category>
		<category><![CDATA[state capture]]></category>
		<category><![CDATA[UN Convention Against Corruption]]></category>
		<category><![CDATA[UNCAC]]></category>
		<category><![CDATA[World Bank]]></category>
		<category><![CDATA[Zimbabwe]]></category>

		<guid isPermaLink="false">http://thekaufmannpost.net/?p=1512</guid>
		<description><![CDATA[ As Wednesday, December 9th dawns, there is a dim reminder that one is supposed to &#8216;celebrate&#8217; International Anti-Corruption.   &#8216;Dim reminder&#8217; to &#8216;celebrate&#8217; in quotation marks indeed, because unfortunately anti-corruption continues to be largely in the back-burner for most world powers, for most international institutions, and for many of their leaders.
Or worse&#8230;
To place this special [...]]]></description>
			<content:encoded><![CDATA[<p><img class="alignnone" title="Be Accountable, Inclusive and Public:  All 3 UNCAC review tenets rejected by Governments" src="http://farm3.static.flickr.com/2569/4089745702_465e4829e4_m.jpg" alt="" width="240" height="180" /> As Wednesday, December 9th dawns, there is a dim reminder that one is supposed to &#8216;celebrate&#8217; International Anti-Corruption.   &#8216;Dim reminder&#8217; to &#8216;celebrate&#8217; in quotation marks indeed, because unfortunately anti-corruption continues to be largely in the back-burner for most world powers, for most international institutions, and for many of their leaders.</p>
<p>Or worse&#8230;</p>
<p><span id="more-1512"></span>To place this special Anti-Corruption Day in poignant perspective today, as the decade draws to a close, consider that over six years ago, in late 2003, the UN General Assembly designated December 9th as International Anti-Corruption Day.  It was intended to further the UN Convention against Corruption (UNCAC) and encourage countries to sign and ratify it, so to ensure its swift entry into force.   The UNCAC was touted by the UN as<a href="http://www.timeanddate.com/holidays/un/international-anti-corruption-day" target="_blank"> &#8216;the first legally binding, international<em> anti-corruption instrument</em> that provides a chance to mount a global response to corruption.&#8217;</a></p>
<p>What happened since then?   Countries signed.  Countries ratified.  Plenty of process work by secretariats.  And a very large contingent of government officials and others just gathered in Doha in mid-November, in order to reach closure on six years of work regarding implementing the review mechanism for country progress on anti-corruption.   But an important group of governments present in Doha, including China, Russia, Egypt, Pakistan and Zimbabwe, were against agreement of serious commitment to such implementation.</p>
<p>The resulting <a href="http://www.google.com/hostednews/afp/article/ALeqM5iJ5xvMTOa6J7lz9xCXXpqwj38tNg" target="_blank"><em>review mechanism for UNCAC is toothless</em></a>.   It gives governments discretion in denying inclusion of civil society in reviewing progress, it introduces voluntarism into monitoring progress (rather than mandating it), and it allows governments to be non-transparent and withhold full publication of country reports.  Further, they somehow managed to create what is already by design a very ineffective and bloated implementation review group, which incidentally will not even be allowed to review country reports.  And they failed to advance on key pending challenges on asset recovery.</p>
<p><img class="alignnone" title="UNCAC toothless, from Global Witness" src="http://farm3.static.flickr.com/2638/4094037924_67fde09a79_m.jpg" alt="" width="184" height="145" /> All this conspires against the objective of governments fulfilling their obligations under the UNCAC.</p>
<p>Thus, in the immediate aftermath of such UNCAC setback, today, as we face the (UNCAC-inspired) International Anti-Corruption Day, it may be appropriate to have an hour of silence instead, in order to pause and reflect where we are today, and where we need to go instead.  Let us reflect, and try to reboot.</p>
<p>Any such reflection needs to take a broader view, beyond the UNCAC (and the UN), and would need to consider the world&#8217;s changed geopolitics today, the <a href="http://www.forbes.com/2009/01/27/corruption-financial-crisis-business-corruption09_0127corruption.html" target="_blank">lessons and</a><em><a href="http://www.forbes.com/2009/01/27/corruption-financial-crisis-business-corruption09_0127corruption.html" target="_blank"> aftermath of the financial crisis</a></em>, and would also have to consider that one does not fight corruption by merely fighting corruption.   Leadership, institutions and governance need to be brought to the fore.</p>
<p>In fact, taking the broader path, it was exactly a year ago that on International Anti-Corruption Day 2008 I was asked to give a farewell address at the World Bank, as I was leaving after decades there, to join the Brookings Institution.  I was reviewing some slides from that <a href="http://info.worldbank.org/etools/bspan/PresentationView.asp?PID=2363&amp;EID=1056" target="_blank"><em>presentation</em></a> and find that its essence still applies today <a href="http://info.worldbank.org/etools/bspan/PresentationView.asp?PID=2363&amp;EID=1056" target="_blank"><em>(it is here</em>)</a>.</p>
<p>At the time, after recounting some of my earlier experiences working on development, I spent some time on unorthodox notions such as <a href="http://thekaufmannpost.net/capture-and-the-financial-crisis-an-elephant-forcing-a-rethink-of-corruption/" target="_blank">&#8216;<em>Legal Corruption&#8217;</em> as well as the State and Regulatory Capture</a> of the US financial system and the havoc that it was causing around the world.  I also addressed the problematic approach that the <a href="http://thekaufmannpost.net/on-“aid-effectiveness-and-governance-the-good-the-bad-and-the-ugly”/" target="_blank">aid donor community has had <em>to furthering good governance</em> and corruption control</a> when working with developing countries.   If anything, some of those problems have become even more serious over the past year, as I have written in this space and elsewhere in recent months.</p>
<p>Fortunately, there are a some far sighted leaders and reformists in some countries who recognize that the global financial crisis was not only a challenge, but also an opportunity for implementing reforms that otherwise may have been politically difficult to carry out.  Those countries will emerge stronger from the crisis, with better prospects in the medium term than the many that used the crisis as an excuse to postpone reforms.  <a href="http://uk.reuters.com/article/idUKTRE57926D20090810" target="_blank"><em>Further divergence</em> among countries, not convergence, will take place, driven by starkly different quality of leadership and governance</a>.</p>
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		<title>Corruption Index today, Development Aid Reform tomorrow?</title>
		<link>http://thekaufmannpost.net/corruption-index-today-development-aid-reform-tomorrow/</link>
		<comments>http://thekaufmannpost.net/corruption-index-today-development-aid-reform-tomorrow/#comments</comments>
		<pubDate>Wed, 18 Nov 2009 06:43:45 +0000</pubDate>
		<dc:creator>Kaufmann</dc:creator>
				<category><![CDATA[Aid Effectiveness]]></category>
		<category><![CDATA[Corruption]]></category>
		<category><![CDATA[Measurement Frontiers]]></category>
		<category><![CDATA[Public Financial Management]]></category>
		<category><![CDATA[Rule of Law]]></category>
		<category><![CDATA[Transparency]]></category>
		<category><![CDATA[Voice and Human Rights]]></category>
		<category><![CDATA[Afghanistan]]></category>
		<category><![CDATA[Aid Reform]]></category>
		<category><![CDATA[authoritarianism]]></category>
		<category><![CDATA[Chad]]></category>
		<category><![CDATA[CPI]]></category>
		<category><![CDATA[Denmark]]></category>
		<category><![CDATA[Development Aid]]></category>
		<category><![CDATA[Equatorial Guinea]]></category>
		<category><![CDATA[extractive industries]]></category>
		<category><![CDATA[Finland]]></category>
		<category><![CDATA[Haití]]></category>
		<category><![CDATA[Iraq]]></category>
		<category><![CDATA[Myanmar (Burma)]]></category>
		<category><![CDATA[New Zealand]]></category>
		<category><![CDATA[Pakistan]]></category>
		<category><![CDATA[Singapore]]></category>
		<category><![CDATA[Somalia]]></category>
		<category><![CDATA[Sudan]]></category>
		<category><![CDATA[Sweden]]></category>
		<category><![CDATA[Switzerland]]></category>
		<category><![CDATA[TI]]></category>
		<category><![CDATA[Transparency International]]></category>
		<category><![CDATA[Turkmenistan]]></category>
		<category><![CDATA[Uzbekistan]]></category>
		<category><![CDATA[Venezuela]]></category>

		<guid isPermaLink="false">http://thekaufmannpost.net/?p=1476</guid>
		<description><![CDATA[
Transparency International (TI), the international anti-corruption NGO, just released its annual corruption perceptions index (CPI).  No big surprises. This is no surprise.  Corruption does not tend to change dramatically from one year to the next.  Yet it is certainly worth reviewing the new data&#8230;
Before so doing, a warning:  governance indices (including those we are associated [...]]]></description>
			<content:encoded><![CDATA[<p><img class="alignnone" title="Corruption undermining Aid?" src="http://www.u4.no/images/photos/Banknotes2.jpg" alt="" width="139" height="161" /></p>
<p>Transparency International <em><a href="http://www.transparency.org/" target="_blank">(TI)</a></em>, the international anti-corruption NGO, just released its annual <em><a href="http://www.transparency.org/policy_research/surveys_indices/cpi/2009" target="_blank">corruption<span style="font-style: normal;"> perceptions index</span></a></em> (CPI).  No big surprises. This is no surprise.  Corruption does not tend to change dramatically from one year to the next.  Yet it is certainly worth reviewing the new data&#8230;</p>
<p><span id="more-1476"></span>Before so doing, a warning:  governance indices (including those we are associated with) are not highly accurate.  Therefore, precise rankings are misleading. There is a need to be transparent and precise about the extent of imprecision in each index, as well as the implications of such imprecision for comparisons across countries and over time&#8230;</p>
<p>When differences between two countries are large (or the change for the same country over an 8-year period is substantial), and such change is informed by many independent sources, one can have confidence that those differences are meaningful.  Small differences in ranks or ratings imply that the two countries being compared are in a &#8217;statistical tie&#8217;.  Yet there is such large variation in anti-corruption performance across countries, that there are many comparisons that can be made with high confidence &#8212; without pretending precision in rankings.</p>
<p>New Zealand, Denmark, Singapore, Sweden, Switzerland and Finland are at the top.  Comparisons among themselves, or trying to &#8216;anoint a &#8216;No. 1&#8242; would be silly hair-splitting.  Yet one can suggest that any country in that top group does perform better than the US or France, for instance, both of which cannot be meaningfully distinguished from each other (or from Chile, for that matter&#8230;).</p>
<p>On the other end of the spectrum one finds well over a dozen countries regarded by the TI index as rife with corruption, including Afghanistan, Iraq, Sudan, Chad, Somalia, Myanmar (Burma), Equatorial Guinea, Venezuela, Haiti, Turkmenistan and Uzbekistan.  Conflict is rife in some, authoritarianism and extractive industries in others.</p>
<div id="_mcePaste" style="overflow: hidden; position: absolute; left: -10000px; top: 119px; width: 1px; height: 1px;">Iraq, Afghanistan, Sudan and Pakistan are among the top US development aid recipients and fare very poorly on corruption.  Nigeria, the DRof Congo (Kinshasa), Egypt, Uganda and Kenya are also large recipients of US aid and fare badly on corruption.</div>
<div id="_mcePaste" style="overflow: hidden; position: absolute; left: -10000px; top: 119px; width: 1px; height: 1px;">This ought to be a concern, particularly now that the US government and Congress are embarking in a full fledged review of its foreign aid program.    But it is important to probe beyond the surface.  First, even if there are high levels of corruption in the country when the US provides massive aid, are there at least signs that improvements are taking place, so that there is movement in the right direction?</div>
<div id="_mcePaste" style="overflow: hidden; position: absolute; left: -10000px; top: 119px; width: 1px; height: 1px;">Second, are the US funds helping promote improved governance and anticorruption, and thus supporting this movement in the right direction for the whole country, or is it mostly wasted?  And third, let us also look at other countries which are large recipients of US development aid, such as Colombia (where over the past decade there has been a notable improvement in anticorruption), or Ethiopia (where there is some corruption, but the real challenge is voice and democratic accountability).</div>
<div id="_mcePaste" style="overflow: hidden; position: absolute; left: -10000px; top: 119px; width: 1px; height: 1px;">In sum, there is a need for further selectivity in development aid, not only by the US but by donors in general, but one has to look at this issue beyond Iraq and Afghanistan alone, and more broadly than anticorruption efforts alone.One healthy debate that ought to deepenIraq, Afghanistan, Sudan and Pakistan are among the top US development aid recipients and fare very poorly on corruption.  Nigeria, the DRof Congo (Kinshasa), Egypt, Uganda and Kenya are also large recipients of US aid and fare badly on corruption.</div>
<p>Focusing on the group of countries that are performing very poorly on corruption, which include other dozens in addition to those listed above as well, may spur further debate about aid effectiveness.  This could be healthy.  In fact, right now in the US there are now at least three major efforts underway to review that country&#8217;s official foreign aid strategy and programs, one from the White House, another from the State Department, and yet another in the US Congress.  Indicators are key to evidence-driven policy making.</p>
<p>Looking at the indices on corruption, it is simple to see that countries where the US has channeled large amounts of development aid, such as Iraq, Afghanistan, Sudan and Pakistan, and to a large extent Nigeria, Egypt and Kenya, are not faring well on corruption.</p>
<p>It would be equally simple to rationalize pulling back from development aid.  That would be simplistic and misguided, for the US, or for other bilateral or multilateral donor agency.   Yet business as usual in development aid is not an option.  [Actually, I stand corrected; continuing old practices of funneling funds seems to be the only 'option' being on the table in some aid agencies nowadays...]</p>
<p>It is critical to probe below the surface and ask tough questions, like these ones for starters:</p>
<p>1.  Even if there are high levels of corruption in the country when the US (or other donors) provide massive aid, is there evidence that improvements are taking place, and that there is a reformist leadership (not just in central government) committed to future changes &#8212; so that there is a likelihood of sustained movement in the right direction?   In other words, let us not focus on mere levels of corruption, even if dire.</p>
<p>2.  Aren&#8217;t there some cases of significant aid flowing to countries where there is no endemic corruption, and what can one learn from these?   The focus on the Iraqs, Afghanistans and Pakistans can blindside one to the fact that there different country cases as well.  Colombia has been a large recipient of development aid, and over the past decade there have been notable improvements in controlling corruption.  Then in Ethiopia corruption is not endemic, another relatively large aid recipient.  Of course both countries feature other challenges (to different degrees), such as in the democratic accountability and human rights front.  Liberia, through resolute leadership, provides another potentially interesting case study in improvement in the short term.</p>
<p>3.  Are the programs  funds being provided by the aid program actually helping promote improved governance and anti-corruption in meaningful way, with full country leadership and partnership?  Or are they perpetuating corrupt governments, leaders and institutions?  Or are they simply being wasted and not making a difference (while they could be making a big difference somewhere else)?</p>
<p>4.  Where the public leadership and central government is entrenched and highly corrupt, what alternatives to working with central governments can be deepened?  What has worked, and what has not?</p>
<p>5.  What is the exposure to corruption in the very projects and funds provided by development aid?   [This is a well known concern, and a relevant one, although often concentrating solely on this fiduciary issue has meant ignoring the all-important development effectiveness concern in the previous four sets of questions].</p>
<p>Needless to say, corruption cannot be the only lens by which aid effectiveness needs to assessed.  It is often a symptom of broader governance failures. Nonetheless, a likely conclusion from a serious review of development effectiveness if governance and corruption are taken head on would be that <a href="http://thekaufmannpost.net/on-%E2%80%9Caid-effectiveness-and-governance-the-good-the-bad-and-the-ugly%E2%80%9D/" target="_blank">further selectivity <em>in aid programs</em></a><em> </em>may be needed.  Yet the devil will be in the details.  And in the polity.</p>
<p>Further consistency in applying criteria for helping countries is also sorely needed, even if imperfectly.  The treatment of similarly corrupt governments by official donor agencies tends to be very different depending on geo-oil-politics, undermining credibility and impact.  This is just for starters, and was also part of an interesting exchange today with a journalist of <em><a href="http://www.sphere.com/2009/11/17/big-u-s-aid-recipients-rank-among-worlds-most-corrupt-governme/" target="_blank">Sphere/AOL News, here</a></em>.   And this <em><a href="http://www.nytimes.com/2009/11/17/us/17visa.html?_r=2&amp;pagewanted=1&amp;partner=rss&amp;emc=rss&amp;src=ig" target="_blank">story in today&#8217;s NYT</a></em> on the politics of corruption between the US and Equatorial Guinea is very telling.</p>
<p>Plenty of work ahead.</p>
<p style="margin-bottom: 12pt;">
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		<title>Indicadores Mundiales de Gobernabilidad 2009</title>
		<link>http://thekaufmannpost.net/indicadores-mundiales-de-gobernabilidad-2009/</link>
		<comments>http://thekaufmannpost.net/indicadores-mundiales-de-gobernabilidad-2009/#comments</comments>
		<pubDate>Fri, 03 Jul 2009 04:26:00 +0000</pubDate>
		<dc:creator>Kaufmann</dc:creator>
				<category><![CDATA[Aid Effectiveness]]></category>
		<category><![CDATA[Corruption]]></category>
		<category><![CDATA[Measurement Frontiers]]></category>
		<category><![CDATA[Public Financial Management]]></category>
		<category><![CDATA[Public-Private Linkages]]></category>
		<category><![CDATA[Regulation & Security]]></category>
		<category><![CDATA[Rule of Law]]></category>
		<category><![CDATA[Transparency]]></category>
		<category><![CDATA[Voice and Human Rights]]></category>
		<category><![CDATA[Arabic]]></category>
		<category><![CDATA[español]]></category>
		<category><![CDATA[Français]]></category>
		<category><![CDATA[French]]></category>
		<category><![CDATA[Governance Matters]]></category>
		<category><![CDATA[Indicadores Gobernabilidad]]></category>
		<category><![CDATA[Indicadores Mundiales de Gobrenabilidad]]></category>
		<category><![CDATA[indicateurs mondiaux de la gouvernance]]></category>
		<category><![CDATA[Japanese]]></category>
		<category><![CDATA[WGI]]></category>

		<guid isPermaLink="false">http://thekaufmannpost.net/?p=1223</guid>
		<description><![CDATA[Acabamos de salir a la luz con los Indicadores Mundiales de Gobernabilidad 2009, y con el nuevo reporte &#8216;Governance Matters&#8217;.  El resumen en español, el reporte, y los datos estan aqui.
In French, here.
In Arabic, here.
In Japanese, here.
In Chinese (last year), here. 
In Russian (last year), here.
In Português (last year), here.
For access to the most current Worldwide Governance [...]]]></description>
			<content:encoded><![CDATA[<p>Acabamos de salir a la luz con los <a href="http://web.worldbank.org/WBSITE/EXTERNAL/BANCOMUNDIAL/NEWSSPANISH/0,,contentMDK:22232376~pagePK:64257043~piPK:437376~theSitePK:1074568,00.html" target="_blank"><em>Indicadores Mundiales de Gobernabilidad</em></a> 2009, y con el nuevo reporte &#8216;Governance Matters&#8217;.  El resumen en español, el reporte, y los datos <a href="http://web.worldbank.org/WBSITE/EXTERNAL/BANCOMUNDIAL/NEWSSPANISH/0,,contentMDK:22232376~pagePK:64257043~piPK:437376~theSitePK:1074568,00.html" target="_blank"><em>estan aqui</em></a>.</p>
<p>In <em><a href="http://web.worldbank.org/WBSITE/EXTERNAL/ACCUEILEXTN/NEWSFRENCH/0,,contentMDK:22241392~pagePK:64257043~piPK:437376~theSitePK:1074931,00.html" target="_blank">French, here</a></em>.</p>
<p>In <em><a href="http://web.worldbank.org/WBSITE/EXTERNAL/EXTARABICHOME/NEWSARABIC/0,,contentMDK:22249201~pagePK:64257043~piPK:437376~theSitePK:1052299,00.html" target="_blank">Arabic, here</a></em>.</p>
<p>In <em><a href="http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22229248~pagePK:34370~piPK:34424~theSitePK:4607,00.html" target="_blank">Japanese, here.</a></em></p>
<p>In <em><a href="http://siteresources.worldbank.org/EXTWBIGOVANTCOR/Resources/NewsreleaseChinese.pdf" target="_blank">Chinese (last year), here</a>. </em></p>
<p>In <em><a href="http://siteresources.worldbank.org/EXTWBIGOVANTCOR/Resources/NewsreleaseRussian.pdf" target="_blank">Russian (last year), here.</a></em></p>
<p>In <em><a href="http://siteresources.worldbank.org/EXTWBIGOVANTCOR/Resources/Comunicadodeimprensa.pdf" target="_blank">Português</a></em><em><a href="http://siteresources.worldbank.org/EXTWBIGOVANTCOR/Resources/Comunicadodeimprensa.pdf" target="_blank"> (last year), here</a></em>.</p>
<p>For access to the most current Worldwide Governance Indicators <a href="http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22229554~pagePK:64257043~piPK:437376~theSitePK:4607,00.html" target="_blank">(WGI) materials in <em>English, here</em></a>.</p>
<p>And for recent <a href="http://www.brookings.edu/~/media/Files/experts/kaufmannd/20090626_kaufmann.pdf" target="_blank"><em>presentation on Governance Matters in Hanoi</em> </a>(in English and Vietnamese), here.</p>
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