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Empowering the poor by improving governance of social service delivery
World Bank

Delivery of essential social service delivery continues to be strengthened with the adoption of programmatic approaches in health and education, sustained emphasis to the sector in the budget, and continued non-government organisation (NGO)-government partnerships that have proved effective in the past. There is a common understanding that the next generation of reforms would need to focus on strengthening the institutional framework for service delivery along with increased social sector spending.
In the education sector, the Government has launched several reforms - that the development partners are actively supporting - to address the problems of poor quality and weak accountability. At the primary education level, a multi-donor group is supporting the Ministry of Primary and Mass Education's efforts to implement the Primary Education Development Program II (PEDP II) which aims to strengthen access, and improve quality and efficiency of primary education. At the secondary level, the Ministry of Education has finalised a medium-term framework that includes targets related to quality improvements, strengthening of governance, financing, and enhanced use of information communication technology (ICT), and policy measures and actions to achieve these. Similarly, in the area of vocational education and training and higher education the Government is developing options aimed at enhancing the relevance, quality and cost-effectiveness, as well as developing greater linkages with the private sector. Furthermore, collaboration between Government and NGOs in the education sector is increasing -- government has recently begun piloting a project which aims to help out of school children receive primary education, with NGOs being key facilitators. This collaboration will enhance Bangladesh's chances of achieving the MDGs in the education sector.
The government has undertaken a number of measures to improve the governance of the education system. Major steps include:
l At the secondary level, school subsidies have been linked to performance criteria and schools not meeting these have had their subsidies suspended. At the same time, a pilot program is setting up secondary schools in 60 of the most disadvantaged and underserved areas to ensure that these do not suffer because of the stricter criteria;
l Schools' registration process and their eligibility to receive public subsidies is being contracted to competitively selected private institutions who have the capacity to undertake this task;
l Community participation in school management is being enhanced with the inclusion of more community representatives in school management committees;
l Pilot surveys to track performance and expenditures have been completed and plans are being developed to mainstream these, in order to improve information and monitoring and evaluation (M&E) systems;
l Information on examination outcomes and school performance are being disseminated widely to stakeholders;
l The establishment of a National Teacher Registration and Certification Authority (NTRCA) has recently been approved. The NTRCA will screen and certify a pool of individuals eligible to be hired as teachers in secondary and higher secondary schools and all recognised schools will need to choose from this pool. This would help strengthen the transparency of the hiring process, and ensure that only qualified teachers get entry into the profession.
l The restructuring of the National Curriculum and Textbook Board, responsible for curriculum development and textbook production both at primary and secondary levels, has included a clear demarcation in the functions of the curriculum and textbook wings. Textbook production at the secondary level is also being privatised, leading to a significant reduction in scope for rent-seeking and improvements in the quality.
A means-tested stipend programme is being piloted to attract poor girls into secondary schools. Similar measures are also being taken at the primary level: For instance PEDP II aims to increase access in underserved areas through enhanced collaboration with NGOs and provide stipends to 40 per cent of students from the poorest families to attract them into primary education. At both the primary and secondary levels, greater attention is also being paid to teacher training.
Progress on reducing child labour needs acceleration through advocacy and incentive-based programmes. While school participation and the age at which girls marry have risen over the last decade, progress on reducing child labour has been much slower. There is consensus that the existing child labour situation requires attention from all levels of government and civil society to determine how to bring an end to this widespread practice. A National Plan of Action against Sexual Abuse and Exploitation of Children has been prepared and a National Policy on Child Labour is under formulation. The Government has also approved a project to prepare a Time Bound Programme for the elimination of child labour. Government and NGOs have had successes in advocacy programmes, which play an important role in influencing norms and practices related to children. These notwithstanding, there remains considerable room for a firmer advocacy position against child labour, on grounds of equity or universal rights to education and protection; highlighting the value of delaying children's involvement in work for longer term gains; focusing attention on the costs to society of harmful child labour; and tailoring advocacy messages to local experiences and idioms.
Bangladesh has made impressive progress toward most of the health related millennium development goals (MDGs), but the sector remains beset with weak governance. Much of the credit goes to NGOs; providers outside of the public sector deliver 60-70 per cent of health care services in Bangladesh, and a higher proportion of curative care. Public sector service providers are generally not accountable to clients, especially the poor and, with some exceptions, service quality has deteriorated significantly while the share of public sector spending going to delivery of primary health care has actually declined over the last few years. There are a number of reasons why public health services have tended to be non-responsive to service users. They include: (a) service providers are not accountable to the service users but rather to a distant centralised bureaucracy; (b) normal supervision system within the bureaucracy which could have helped to enforce accountability has broken down over time; (c) facility managers have little training and independence in decision making; (d) support services such as drug supply etc. are managed by a part of the Ministry bureaucracy which has little to do with consumer inter-face and thus may not respond to the needs; (e) in common with many bureaucracies the world over - the health bureaucracy suffers turf battles and other forms of in-fighting; and (f) the situation is made even more complicated by having two health service delivery organisations within the Ministry - the Directorate-General of Health and the Directorate-General of Family Welfare. There is little coordination between these two service delivery wings and the result has been duplication of facilities and employees while the services provided have continued to deteriorate.
The recent Health Nutrition Population (HNP) Strategic Investment Plan 2003-2010 confirms government commitment to pro-poor health service provision and addresses the need to reappraise the essential core functions of the public sector. The plan identified some key long term challenges for the sector which include: First, restructuring the way services are provided including ensuring greater efficiency and responsiveness to HNP challenges as they emerge; guaranteeing free provision of emergency services to those in need; and expanding HNP services in urban areas for provision of coordinated primary, secondary and tertiary care. Second, improving equity: ways are being explored for shifting resources towards areas with the greatest needs, through a revision of norms for per capita allocations to districts, weighted by a poverty-related index of health needs, for incentives for practitioners to attend to the needs of the poor, and for systems of demand-side financing. Third, improving service efficiencies by enhancing workforce motivation and productivity and by the use of service providers according to their comparative advantage.
The Government and Development Partners are addressing these issues under the Health, Nutrition and Population Sector Programme (HNPSP) umbrella. The HNPSP includes accountability instruments and seeks to improve targeting. It will seek a better partnership with non-public providers via a Management Support Agency and Performance Monitoring Agency, while simultaneously aiming to strengthen its stewardship role to ensure quality services under HNPSP at all levels of the system. A Management Information System for producing credible statistical, personnel and procurement reporting is a priority issue for the HNPSP.
Finding cost-effective ways of improving demand for/ consumption of essential Health Nutrition Population (HNP) services by the poor is critical. Attention should be focused on targeting consumption subsidies and restructuring allocation mechanisms based on population and poverty indexes. Service improvements in health will use a variety of instruments such as vouchers and the contracting out of health services to the NGO and private sector. In the latter approach, accountability will be enforced through a greater reliance on union parishads (lowest level of elected government), which will have an enhanced monitoring role, in place of service users relying solely upon a central government hierarchy over which they have little influence.
Micro-credit now reaches as many as 37 per cent of all Bangladeshi households and around 60 per cent of poor households. Growing financial sustainability has meant declining dependence on donor funding, and the bulk of revolving loan funds are now from client savings and micro-credit surpluses. The Government's role in financing the expansion of micro-finance through Palli Karma Sahayak Foundation (PKSF), and ensuring that PKSF retains its autonomy to make professional resource allocation decisions, is a highly successful example of Government-NGO partnership. The recent initiative to modernise the regulatory framework for micro-finance needs to ensure that any new legislation protects the interests of depositors while preserving the space given to NGOs to innovate and scale up. Moreover, it is essential that both Government and NGO micro-finance programmes are covered by the new regulatory framework in order to create a level playing field in the industry.
The establishment of the Government's Small Enterprise Fund (SEF), has helped improve access to finance by small enterprise -- the 'missing middle' traditionally beyond the reach from Banks or micro-finance institutions. The SEF is a refinancing window set up at the Bangladesh Bank, which allows banks and non-banking financial institutions (NBFIs) to increase their lending to small enterprises. Disbursement figures indicate that the SEF has already enabled many financial institutions such as BRAC Bank, NCC bank, MIDAS Financing, and some other private commercial banks (PCBs) to rapidly expand their small enterprise portfolio by aggressively entering this market. In the past year, these financial institutions have disbursed loans to over 2,600 small enterprises across the country. A Bangladesh Bank survey has shown that funds to date have been used properly, generating additional rural and semi-urban employment, with satisfactory loan repayments. The SEF is, however, far from meeting the demand for funds. Further growth of this sector can be facilitated by deeper reforms in rural finance to increase the supply of funds to meet this huge latent demand. Moreover, since the clients in this sector do not have immovable assets they cannot offer any collateral for accessing bank finance. Regulatory reforms would therefore be needed to create a secured transaction regime which would allow the banks to register their claim on the moveable assets of these clients, whilst institutional reforms would be required to increase competition and outreach of banks to serve this sector on a sustainable basis.
Social safety nets, especially for the poor, are accorded high priority in the Poverty Reduction Strategy Paper (PRSP), although an integrated approach to administering safety net programmes is still not in place. Evaluation studies indicate that non-cash-based social safety programmes in Bangladesh are plagued by large leakages. The cash-based programmes (such as the secondary schools stipend programme) are much less vulnerable. The Government is now magnetising some of its larger programmes in the hope of curbing corruption and containing transaction costs. The Food for Education program that had been plagued by high leakages was replaced by an expanded Primary Education Stipend Program. An estimated 7.0 million children benefit from the program. Other in-kind programmes such as the Food-for-Work programme and Food Aid are also being monetized. But cash-transfer programmes are not in themselves a panacea. It is important that monitoring systems be strengthened and adequate checks and safeguards be put in place.
Bangladesh's constitution provides for gender and social equality in all public spheres, and reducing gender gaps and promoting women's advancement is also one of the goals of PRSP. The policy prioritization of gender equality in Bangladesh is manifest in the attainment of the MDG on gender equality in primary and secondary enrollment. Further, Bangladesh has ratified the Convention on the Elimination of All Forms of Discrimination against Women, with a few reservations (pertaining to marriage, divorce, and inheritance). Special clauses have been included in family laws to give women the right to divorce and the power to stop practice of polygamy by husbands. Tougher laws for preventing violence against women (VAW), e.g., throwing acid on women and trafficking of women and children, were enacted in 2003 and special arrangements - such as inter-ministerial task force and VAW cells in the Ministry of Home and in police stations - to enforce these were established in 2004. Quick trial courts under these acts were established in 2004 for punishing the perpetrators. The strong focus in the PRSP for women's issues provides the basis for further advancing gender equality.
Overall status of policy reforms. Bangladesh's basic economic policies are and have been sound for decades, and have helped Bangladesh establish a record that is in many ways enviable among low-income countries. Conservative fiscal management has kept inflation low and limited the public sector's capacity to misdirect resources. The currency is stable and government is small. The NGO movement has been not only tolerated but encouraged to grow to a size and importance in people's lives that would be considered threatening by many governments; NGOs now deliver major portions of health, education and microcredit services.
Much remains to be done, however. Perception based governance indicators may fail to capture positive economic and social outcomes, but perceptions can still significantly affect outcomes. Pervasive corruption and unreliable law and order are major deterrents to economic enterprise in general and investment in particular. If governance improved in Bangladesh, economic growth would be about two per cent per year faster. This is coincidently the acceleration that the PRSP shows is needed if Bangladesh is to meet its poverty reduction and MDG goals.
The road ahead is hard to predict. It is possible for government to make real progress on governance. And development partners have also helped, especially at critical junctures. Such a progress would, however, have been difficult to map out in advance. Progress in Bangladesh was, and perhaps is, best made by pursuing a broad reform agenda and pressing forward on those items and at those times where progress was/is possible. Looking forward such a flexible and opportunistic strategy can be expected to have more success than a strategy based on staking out specific goals in advance and focussing entirely on attaining those goals.
This is the seventh instalment of a report -- Bangladesh Poverty Reduction Strategy Paper Forum Economic Update: Recent Developments and Future Perspectives -- prepared by the World Bank that the FE is publishing in a serialised form. The sixth instalment of the report was published on January 24