The State of Governance Bangladesh 2016: regulation process performance

Abstract

BRAC Institute of Governance and Development (BIGD) has been publishing the State of Governance (SOG) Report since 2006. This year, the SOG has focused on four kinds of governance: Democratic Governance, Public Sector Governance, Economic Governance and Social (Health) Governance. An indicator-based approach, as was used in SOG 2015-16, is also adopted for this SOG. This approach allows for simplicity, tractability and comparability over large number of specific units of observations, for example, time, agency or district. Using this approach, the researchers identify factors that influence performance, thus providing valuable insights to policy makers on policy designs. A mix of both quantitative and qualitative analysis is applied with a varying degree depending on the availability of disaggregated data. SOG 2016 looks into three types of governance problems: i) Issues that are internal to the government (i.e. bureaucratic), ii) Issues that occur in the space where the government interacts with other non-government actors in the society and iii) Issues where the government plays the role of maintaining a healthy environment for private sector interaction. Given these outstanding issues, two types of indicators have been identified: the processes and the performances. The process indicators capture the government inputs and activities, whereas the performance indicators focus on the output of the internal to the government or external (between government and a private entity or between two private entities) interactions. With these two types of indicators in mind, the SOG 2016 examines a set of process and performance indicators, across space and time. Democratic Governance Focusing mostly on the local government elections in Bangladesh, this chapter follows a framework based on four globally accepted foundations - integrity, participation, representation and competition. Within this framework, the chapter looks into the role of competition in election, voter turnout, voter list, electoral expenditure and electoral violence. This chapter finds that voter turnout has been low in recent city corporation elections of Dhaka North, Dhaka South and Chittagong in comparison to other city corporation elections held in earlier years of the decade. The electoral competition in some elections, for example, the national election and city corporation elections in Dhaka and Chittagong, have been affected by boycotts by the main opposition party, which may have also resulted into lower voter turnout in those elections. In addition, there appears to be a striking positive pattern between the percentage of voter turnout and the winner's share of vote casts, which requires further attention from the authorities. Data also shows that election time violence has increased in Bangladesh in recent years. A further issue of concern is the increasing th gender gap in some regions observed in the final voter list prepared in 2014 before the 10 National Elections. Public Sector Governance This chapter discusses the efficacy of the public sector based on two activities, the allocation and utilisation of the Annual Development Program (ADP) expenditures and the execution of Mobile Courts. The discussion looks into the institutions that play important roles in public sector governance, the Right to Information and Information Commission and, Anti-Corruption Commission. Finally, the chapter examines the issues related to the municipalities and their implications for service delivery. The analysis suggests that approximately three-fourth of the annual ADP fund between 2011-12 and 2015-16 has been allocated to ten ministries or divisions, many of which regularly engage with heavy infrastructure projects and large social programs. Analysis of the legal framework and procedural apparatus of the Mobile Court operations shows that despite having less administrative units, majority of the divisions excel in having more Mobile Court operations than the set target. The section on Right to Information and Information Commission describes the institutional framework and highlights significant variations in Request For Information (RFI) across districts and ministries. The overall picture of implementation of RTI is marked by the diminishing trend of RFI in recent years. The section on Anti-Corruption analyses the activities of the Anti-Corruption Commission across the country. Among the corruption complaints, more than half are discontinued and filed for record. Additionally, it is found that, across the divisions, the pending rate of the inquiries is very high (more than half of all inquiries in most cases). There is a considerable variation across districts in the number of complaints submitted; something the agency should delve more into to find the cause of this variation. The chapter concludes with a case study on the current state of resources and service quality in all the municipalities in Bangladesh. The report highlights considerable number of unfilled positions in most departments across classes and divisions as well as in road networks, drainage system and bridges and culverts as well as water supply, street light and solid waste disposal in varied degrees. Economic Governance Economic governance focuses on three topics: labour, tax and the financial sector governance. The section on labour governance analyses the role of ministerial and administrative bodies and discusses issues related to labour rights and collective bargaining, labour conflicts, and workers' safety. Historically, Bangladesh came a long way to enact a consolidated labour act. Nevertheless, the law is yet to recognise the issue of workers right to association and negotiation. Even though it is a key institution, the Ministry of Labour and Employment (MoLE) receives less priority in terms of budget allocation. With the rising numbers of industries and industrial disputes, insufficient number of courts cause serious case backlogs. The workers participation in trade union is dismal compared to the size of the workforce, although the registration shows some improvement after the Rana Plaza disaster. Implementation of minimum wage in RMG sector remains a major challenge for smaller factories and factories located at other cities. Industrial safety remains a major concern in the sector and the progress of the reform initiatives taken after the Rana Plaza disaster are yet to achieve the desired success. Analysis on tax governance looks at the governance of tax administration and collection in Bangladesh with a special emphasis on the indirect tax, particularly on VAT. The section reveals that the tax-GDP ratio for Bangladesh to be low in comparison to the target as set in the seventh Five-Year Plan as well as in comparison to other Asian countries. The government accordingly has made a number of tax related reforms and undertaken a few initiatives to improve tax collections. There has been an increasing trend in indirect tax revenue collection, particularly of VAT, since 2009. Despite this encouraging observation, an analysis of the projected and collected revenue reveals a considerable gap between the two and the NBR can put in greater effort towards revenue collection. There is also evidence of high unpaid income tax revenue and a considerable backlog of tax-related cases. Alternate Dispute Resolution, which is yet to be mainstreamed in Bangladesh, could be one way to address the issue of case backlogs in the country. Analysis of the financial sector governance looks into the financial reform measures and Basel related steps that have been undertaken over the years to enrich the financial system in terms of size and depth. The performance Indicators of the banking sector seems satisfactory. Following the global financial crisis of 2007, Bangladesh has formulated and implemented the Basel III recently for the banking sector. The financial sector has been doing well in terms of indicators like capital adequacy, leverage ratio and liquidity ratio. The banking sector in terms of absorbing shocks is reportedly in a moderate condition. Large non -performing loans have been a big concern for the last few years and no sign of significant improvement is observed. Health Governance Analysis of social (health) governance looks into an important component of the public health care system, the Upazila Health Complexes (UHCs). Using the MIS reports of Director General Health Services, the chapter sheds lights on a set of indicators measuring performance of the UHCs and the resources available at the UHCs as well as makes an attempt to find any connection between the resources and the performances. The performance indicators are OPD visits, emergency visits, hospital admission rate and total patient days whereas the four resources considered are the availability of the doctors, availability of the nurses, availability of functional equipment and the quality of the referral system from lower health care facilities measured by number of doctors available in Union Sub-Centres (USCs). Analysis of the contribution of resources in determining performance reveal that some of the resources are indeed closely associated with performance of UHCs. More specifically, the referral system seems to be an important factor for the OPD visits, whereas for emergency visits, it is the availability of the doctors and functional equipments that are closely related. For admission rate, all the four resource factors are important whereas all factors except nurses' availability are closely associated with the number of days patient stayed in the hospital. In conclusion, the findings of the report can be summarised by a few general observations. First, the regulatory provisions are often well founded and designed even though exception exists, as in the case of labour. There is still general room for improvements and current reform initiatives are bringing the gap closer. Second, the resource constraints, for example human resource, are quite stark despite provisions, especially in some areas and agencies and the government should try to reduce, if not eliminate, these gaps soon. This is particularly important since these resources eventually have significant implications for performance as in the case of UHCs. Third, extreme measures like boycotts, strikes and violence in a few occasions are observed (elections, labour right movements etc.) and the government should find the root causes and address these issues accordingly. Finally, the government should work on modernisation of the enforcement system through modern capacity building, provision of incentives and small 'nudges' type interventions.