Dealing with GAC Issues in Project Lending : The Special Case of Fragile and Conflict-Affected States

Abstract

The principal objective of the Bank's governance work should be to help develop capable and accountable states to deliver services to the poor, promote private-sector-led growth, and tackle corruption effectively. The agenda for action has been defined, new tools and approaches have been developed, and governance and anticorruption (GAC) issues and concerns are increasingly being mainstreamed in the Bank's operational work at the country, sector, and project levels. With the introduction of the operational risk assessment framework (ORAF), the Bank has undertaken a major effort to improve how it manages GAC risks in the development projects and programs it supports. This note provides principles-based advice and guidance to task teams working at the sector and project levels on fragile and conflict-affected states (FCS) countries in Africa. It aims to provide a common conceptual framework for understanding the challenges and opportunities they face in project design, implementation, and supervision; highlight key lessons learned and good practice examples from others working in this area; and suggest some topics where further work is needed to understand and mitigate key operational risks. A communications strategy that frames GAC issues in a constructive way, seeks to take into account the concerns and perspectives of all stakeholders involved, enhances the understanding of constraints and opportunities, and strengthens the project's incentives for improving governance and reducing corruption. In FCS countries, constraints are likely to include severe weaknesses in institutional capacity; thus the project design should include an explicit strategy and action plan for institutional strengthening, as well as explicit, measurable indicators of progress.