Public Management and Governance

ADB is committed to improving governance, strengthening institutions, and reducing vulnerability to corruption—key ingredients for equitable and sustainable development

Developing capable institutions and reducing corruption will improve development outcomes. Despite operational constraints, countries in Asia and the Pacific have made concerted efforts to address these challenges. However, the region continues to face significant risks associated with weak institutions and vulnerability to corruption.

Within this regional context, a review of the implementation of ADB's governance and anticorruption policies conducted in 2005 highlighted the need for a more systematic approach to mainstreaming ADB's governance and anticorruption efforts in ADB operations, particularly at the sector level.

Supporting country-led efforts to strengthen governance systems

ADB's long-term strategic framework 2008–2020 (Strategy 2020) identifies good governance and capacity development as drivers of change. And so we are strengthening and increasing efforts to improve the quality and capacities of the Asia and Pacific region's public sector. ADB operations and activities focus on four elements of good governance: accountability, participation, predictability, and transparency.

A symptom of weak governance is vulnerability to corruption. ADB will attempt to reduce the profound harm corruption inflicts on development, particularly on the poor. We will continue to focus on strengthening initiatives and systems that emphasize prevention, and using the international framework embodied in the United Nations Convention Against Corruption.

Use of risk assessments to ensure development outcomes achieved

ADB has adopted a risk-based approach to assess public financial management, procurement, and corruption risks at the country, sector, and project levels. The purpose is to determine whether the country's development objectives could be adversely affected by poor governance, weakly performing institutions, or vulnerability to corruption. If major risks exist, ADB will work with countries to identify and implement measures for effectively managing and mitigating these risks over time.

ADB has already completed several country-level risk assessments of our developing member countries, as well as sector-level risk assessments in education, energy, finance, infrastructure, maritime transport, power, railways, regional/atolls, roads, rural development, wastewater management, water and sanitation, and urban infrastructure sectors.

Working in partnership to strengthen governance capacity (with emphasis on public financial management, procurement, and anticorruption)

Effective management of government financial resources and ensuring operational efficiency are key challenges for many countries in the region. Revenues must be properly assessed, collected, and administered; budgets must be judiciously prepared and executed; fiscal discipline must be maintained; and procurement, accounting, internal control, and intergovernmental fiscal relations must be well managed.

ADB has collaborated with governments and development partners to conduct Public Expenditure and Financial Accountability (PEFA) assessments in eight countries. The PEFA Public Financial Management (PFM) Performance Measurement Framework has been developed as a contribution to the collective efforts of many stakeholders to assess and develop essential PFM systems to provide a common pool of information for measuring and monitoring PFM performance progress, and a common platform for dialogue. Assessments support country-led public finance management reform, donor harmonization, and alignment with the country's own national policies and development strategies.

ADB also supports developing member countries that conduct self-assessments of national procurement systems, and has already participated in assessments of country procurement systems for seven countries. Here the standard Organisation for Economic Co-operation and Development (OECD) Benchmarking and Assessment Methodology for Public Procurement Systems is used to assess where a country is based on its own procurement procedures. Legislative, regulatory, and institutional frameworks; management capacity; procurement operations; market practices; and public procurement system integrity are examined. Baseline indicators offer snapshot comparisons of actual systems against international standards. Compliance/performance indicators assess how the system actually operates in practice.

ADB has partnered with OECD, with support from German Technical Cooperation Agency (GTZ), AusAid, the World Bank, Transparency International, and the United Nations Development Programme to sponsor the ADB/OECD Anti-Corruption Initiative for Asia and the Pacific. The initiative brings together 28 member countries and jurisdictions around the Anti-Corruption Action Plan for Asia–Pacific, which focuses on reducing corruption through strengthening public sector management and engaging more proactively with the private sector and civil society. Thanks to its biannual conference, publications, regular regional forums, extensive research, technical advice, and information-sharing activities, the initiative enjoys increasing recognition among governments, international and donor organizations, civil society, and the private sector.

A sample of programs and projects ADB supports across the region

• Improving public financial management by strengthening reforms in ministries supporting rural development, and through capacity development in the National Audit Authority in Cambodia.
• Increasing the quality and transparency of public financial management processes, and supporting reforms for restructuring public sector enterprises, debt management, revenue management, and rationalization of public expenditures in India.
• Building public auditing capacity in Pacific island countries, and strengthening the governance and anticorruption orientation of ADB's country strategies in the Pacific region.
• Identifying governance risks in urban development projects, and providing risk mitigation measures through capacity development in the People's Republic of China.
• Strengthening judicial fiscal autonomy and justice sector accountability by building the capacity of the courts in the Philippines.
• Empowering communities to make local governments accountable for providing effective and inclusive services in Nepal.
• Creating fiscal space for increasing social sector spending by strengthening public expenditure management in Pakistan.

ADB's commitment is real

Governance issues are critical to virtually all areas of development, and ADB's is stepping up its commitment. Moving forward, we will continue to increase our efforts to strengthen institutions and policies that maximize opportunities for poverty reduction and inclusive, sustainable growth.