Related items
Showing items related by title, author, creator and subject.
-
Is the Level of Financial Sector Development a Key Determinant of Private Investment in the Power Sector?This paper seeks to assess the extent to which a country's overall level of development and that of its financial sector, in particular, are factors that attract private capital into infrastructure projects. The authors investigate these effects in a 1990-2007 dataset on the power sector in 37 developing countries. The results suggest that economic growth is a key determinant of private investors' investment in infrastructure projects, and that investors tend to take countries governance quality into account in their decisions to invest. The empirical results highlight that the development of the financial sector also plays a significant role in private investors' decisions to enter infrastructure sectors. In particular, the degree of country risk and exchange rate volatility is found to be negatively related to the volume of private sector investment in power projects. Furthermore, when the banking sector and the capital market are separately treated in the analysis, the existence of a well functioning capital market is the main attracting factor. In addition, the existence of an independent energy regulatory authority significantly improves the level of private investors' implication in energy projects. When accounting for the interactions between the overall economic development and the financial sector development variables, the effects of these variables are still significant and the results also confirm the importance of an independent energy sector regulator.
-
Making Public Sector Reforms Work : Political and Economic Contexts, Incentives, and StrategiesSupporting effective public sector reform is a major challenge that the World Bank and other agencies and stakeholders have been grappling with. It is increasingly recognized that political economy factors play a crucial role. However, beyond this broad proposition, specific questions arise: What country contexts are more/less propitious for public sector reforms and what reforms are likely to succeed where? And can more explicitly taking political economy challenges into account help to pursue public sector reforms even in less propitious contexts? This paper addresses these issues in two ways: first, it draws on the existing literature to identify key propositions about factors that can trigger or facilitate public sector reforms, and those that tend to work against (successful) reforms. Second, it investigates the experience of World Bank public sector operations over the decade 2000-2010. It finds that governments in many developing countries face incentives to initiate public sector reforms, but that at the implementation stage, political costs frequently outweigh potential gains; and hence reforms are abandoned or left to wither. Real breakthroughs have been achieved in countries experiencing major structural shifts and those having political leadership committed to higher-level goals. The review of operations shows that successful projects are significantly more widespread than the literature would lead to assume. Furthermore, it provides tentative evidence that investing in understanding political economy drivers has been associated with better project performance. Key implications are the need to differentiate between country contexts more clearly ex ante, concentrate more on reform implementation during windows of opportunity that are typically of limited duration, and design reforms with a clear plan of engagement with stakeholder incentives.
-
Peru : Country Procurement Assessment Report (CPAR), UpdateSince the 2001 CPAR, Peru has made considerable progress in setting in motion the right conditions to improve public procurement. The primary regulator for procurement, the High Council for Government Procurement (CONSUCODE), has been strengthened; the development of the e-government procurement system has begun; significant training initiatives are underway; and important amendments have been made to the procurement law and its regulations. In addition, a very good Integrated Financial Management System has been implemented in all public sector entities. These initial achievements in procurement reform have complemented a deepening democratization process and Peru's impressive macroeconomic performance over the last few years. Several institutions play important roles, defined by law, in public sector procurement. However, there is no unifying vision of the system's objectives and priorities. Consequently, the initial reforms implemented by the Government were not framed within a comprehensive policy that includes a consistent strategy on how to move forward with the reform program and establishes clear leadership. Recommended short term actions include bringing all key institutions to an agreement for a detailed reform strategy with clearly defined leadership and objectives; emphasizing prevention over control and consolidating the supervisory role of the CONSUCODE; adopting a set of tools in the short-term to facilitate implementation of the reform; carrying out in-depth market studies, reviewing the Government supply processes, and implementing cost reduction strategies; and accelerating the development of e-government procurement. Mid-term actions include further streamlining the regulatory framework; and engaging civil society in a more constructive fashion. Suggested long-term actions include significantly strengthening human resource infrastructure and the procurement capacity of local governments.