World Bank Report Finds Governance Gains in Unfinished Agenda

May 18, 2011

Perception of corruption high but reported experience low

Jerusalem, May 18, 2011 - The Palestinian Authority has taken significant steps over the past decade to strengthen economic governance and combat corruption, but the government still needs to complete some unfinished reforms and begin to implement others, according to the report “West Bank and Gaza: Improving Governance and Reducing Corruption,” released by the World Bank today.
“Major reforms have been carried out, particularly in public finance, and the PA is now able to better manage its public financial systems and equity holdings,” said Mariam Sherman, World Bank Country Director. “However, there are still important reforms that remain incomplete and other areas where work has not yet begun.”
Public procurement, public sector employment, and regulation of the private sector are some of the areas where reforms are underway. In a few areas, notably management of state land assets, transparency in licensing, and public access to information, the World Bank found little or no progress made to improve governance or institute reform.
“These are areas of vital importance to any government, its people and its businesses,” said Mark Ahern, Senior Public Sector Specialist and the team leader for the report. “The PA should jump-start reform efforts to improve them.”
The report also features surveys which show a high perception of corruption in public services, but very low reported experience. The surveys measure how Palestinian households and public officials view government integrity in the public service sector, and compares perception with actual experience.
The report acknowledges that the PA has faced many challenges, including the difficulties new governments often have when developing public institutions as well as unique, varying political situations over the last decade.
The report includes five case studies to illustrate some of the challenges. For example, telecommunications, a sector which in the past constituted a monopoly, and would greatly benefit from an independent regulator. Although the 2009 Telecommunications Law created an independent regulatory body, the law has yet to take effect. In another case study, the report finds extremely weak governance of physical assets such as land.
The report also focuses on legal and institutional frameworks developed to fight corruption. While the creation of an Anti-Corruption Commission is a major milestone, the PA must ensure that the commission is able to investigate and prosecute allegations of corruption.
“The PA needs to take a more proactive approach to investigating and prosecuting corruption, as well as communicating these efforts in order to build public confidence in government accountability,” said Ahern. 

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