Asian Development Outlook 2013 Update: Asia's Governance Gap

ASIAN DEVELOPMENT OUTLOOK (ADO) 2013 UPDATE: ASIA'S GOVERNANCE GAP The Asia and Pacific region must make headway toward catching up with the advanced economies and matching their quality of governance. Focusing on strengthening public service delivery can provide immediate benefits to make growth more inclusive and create momentum for wider governance reforms. ASIA & PACIFIC RESIDENTS' EARNINGS VS. DEVELOPED WORLD COUNTERPARTS 700 MILLION PEOPLE HAVE RISEN OUT OF EXTREME POVERTY TODAY 1980 LESS THAN NEAR UNIVERSAL PRIMARY EDUCATION ACHIEVED FOR BOTH BOYS AND GIRLS OVER 6% 18% -o 86% OF HOUSEHOLDS NOW HAVE ACCESS TO SAFE DRINKING WATER | GOVERNANCE IN THE REGION HAS LAGGED ITS ECONOMIC ACHIEVEMENTS THE REGION HAS SEEN LESS PROGRESS I IN CLOSING THE GOVERNANCE GAP WITH ADVANCED ECONOMIES THAN IN CLOSING THE INCOME GAP GOVERNANCE PERFORMANCE 2 WITHIN THE REGION IS QUITE DIVERSE 3 GOVERNANCE MATTERS • Since 1993, Asia has made only modest advances in rule of law and the quality of bureaucracies • East Asia shows strong government effectiveness, regulatory quality, and rule of law, but lags in controlling corruption • Good governance and growth are positively associated; Asia is no exception • In 2011, Asia ranked below Latin America in control of corruption, government effectiveness, political stability, regulatory quality, and rule of law • Southeast Asia struggles with controlling corruption and giving a voice to all its citizens • Governance matters for attaining high levels of income and better social outcomes • Corruption ratings for Asia which declined sharply during the Asian financial crisis of 1997-1998 have yet to fully recover • Political stability and regulatory quality are the key issues in South Asia | PUBLIC SERVICES AS THE FRONTLINE OF GOVERNANCE I MECHANISMS TO IMPROVE PUBLIC SERVICE DELIVERY PEOPLE JUDGE THE QUALITY OF GOVERNANCE BY THEIR EXPERIENCE WITH PUBLIC SERVICES The quality of public services is a popular yardstick for governance, which affects daily lives of people, particularly the poor: Effective service delivery is an entry point for wider governance reforms and inclúsive growth A MULTIPRONGED STRATEGY: 3 Es is needed for better public services EMPOWERING CITIZENS: Directly involving communities in delivering services generates dynamism for greater accountability PUBLIC SERVICE SHORTFALLS MIRROR LAGGING GOVERNANCE Large infrastructure deficits plague the region and essential services in many countries lag in quantity and quality - for example, high absenteeism of doctors in health clinics and teachers in public schools ENGAGING LOCAL GOVERNMENTS AND PRIVATE SECTOR: Devolving power and funding to local authorities and leveraging the private sector expands the scope and scale of public services WEAK GOVERNANCE IN TURN UNDERMINES PUBLIC SERVICE QUALITY Corruption and the lack of transparency in service delivery are among the more obvious elements of weak governance. Fighting corruption is high on Asian leaders' agenda EXPANDING USE OF ICT: It catalyzes the impact of empowerment and partnerships by increasing transparency, redućing opportunities for corruption and improving service quality STOP CORRUPTION MOVING FORWARD ON GOVERNANCE REFORM As development goals in themselves, all dimensions of governance should be pursued. Policymakers need to focus their efforts on the particular governance deficiencies that hold their country back from its next stage of development. CHANGE AHEAD LOW-INCOME COUNTRIES SHOULD IMPROVE GOVERNMENT EFFECTIVENESS, QUALITY OF REGULATIONS, THE RULE OF LAW, AND CORRUPTION CONTROLS TO SUPPORT GROWTH MIDDLE-INCOME COUNTRIES NEED TO RESPOND TO THE ASPIRATIONS OF THE JOURNEY FOR GOVERNANCE REFORM IS LONG & CHALLENGING, BUT PAYOFFS WILL BE LARGE INCREASINGLY AFFLUENT CITIZENS WHO WANT TO HAVE A GREATER SAY IN THE DEVELOPMENT PROCESS SOURCE ADB Asian Development Bank • Asian Development Bank (2013). Asian Development Outlook 2013 Update FIGHTING POVERTY IN ASIA AND THE PACIFIC wwW.ADB.ORG