MANILA, PHILIPPINES – Weak governance underlies Asia’s most pressing challenges of income inequality and environmental degradation that threaten the continuation of the region’s strong economic performance, finds a study by Independent Evaluation at the Asian Development Bank (ADB).

The just-released evaluation, ADB Support for Enhancing Governance in its Public Sector Operations, says the region’s rapid economic growth is not matched by improved governance—a contradiction that can no longer continue as countries increasingly find that the pace and the quality of growth depends on better governance.

Successive ADB surveys taken in client countries rank corruption and poor governance as Asia’s top threats to development progress, ahead of poor infrastructure and environmental degradation. “The region’s governance performance is not in line with its economic performance,” says the study.

Asia leads the world in economic growth and poverty reduction, but ranks low among the regions of the world in global measures of governance. Among Asia’s sub regions, Southeast Asia fares particularly poorly in control of corruption and South Asia ranks low in political stability. East Asia, the region’s driver of economic growth, is weak on voice and accountability, which measures the extent to which citizens can participate in policy making processes.

“For most people, governance is identified with the quality of public services, which has a weak record in many countries where paying bribes for processing business applications or getting an electricity connection is common,” says Vinod Thomas, Director General of Independent Evaluation at ADB. “With the support of development institutions, country reforms—through interventions to improve transparency, increase civic participation, and harness information technology to improve public services—can make a difference.”

The study encourages ADB to help improve results in the management of public services and finances, noting Asia’s relatively poor performance in key measures of governance. Support for governance reforms is a significant part of ADB’s operations, with loans for public sector management accounting for 14% ($16.6 billion) of total lending from 1999 to 2013. Demand for ADB support in this area has increased following recent economic crises.

“Improving governance is a complex undertaking for the long-haul,” says the study’s principal author Benjamin Graham. “Compared to other areas of development, governance interventions are more difficult to design and deliver, and their results harder to assess. But despite the tough terrain, successful governance projects and programs can often have transformative countrywide impacts that affect all sectors of an economy.”

Successful governance reforms involving ADB include helping increase transparency in procurement regulations in the Philippines, strengthening fiscal management in Sri Lanka and reforming state-owned enterprises in Indonesia and the Pacific islands. Evaluations show governance efforts often fail because of insufficient capabilities and resources in governments to undertake reforms, unrealistic programs, and weak commitment in the first place.

The electronic delivery of public services—such as processing applications on line and cash transfers to the poor—shows promise for improving government efficiency and transparency, and reducing bribery by cutting out intermediaries. ADB operations to improve public sector management are increasingly using information and communication technology components.

Success stories highlight the critical importance of political interest and commitment in confronting long-standing problems and their essential link to technical and financial support in effecting change. Encouragingly, the role that good governance plays in promoting broaderbased and sustainable growth is increasingly recognized by governments in the region, among them, the People’s Republic of China and the Philippines.

Says Thomas: “Governments can no longer look to economic growth alone for delivering lasting development. Asia faces urgent challenges in bringing about greater inclusion and environmental care in its growth process. Better governance is a common denominator in addressing them.”

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To download the evaluation report, visit http://www.adb.org/documents/thematic-evaluation-study-adb-support-enhancing-governance-its-public-sector-operations

About Independent Evaluation at the Asian Development Bank

Asian Development Bank's Independent Evaluation, reporting to the Board of Directors through the Development Effectiveness Committee, contributes to development effectiveness by providing feedback on ADB's policies, strategies, operations, and special concerns in Asia and the Pacific.

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