Not only has it scored at or near the bottom of Transparency International's corruption perception index, but Bangladesh also scores in the bottom quartile of many of the Worldwide Governance Indicators. Yet this same country has seen its per capita income rise by one percentage point every decade (it is now close to 5 percent). It has already achieved universal primary enrolment, and an equal number of girls and boys in secondary school. It is on track to reducing child mortality by two-thirds (relative to 1990 levels) by 2015. Finally, Bangladesh reduced poverty by eight percentage points in five years—a rate of poverty reduction that is twice as fast as India’s.
What can explain this apparent paradox? One response is that the data about Bangladesh’s development successes are inaccurate. This reminds me of a poster a colleague had in his office: “If the facts don’t fit the theory, change the facts”. But anyone who has studied or visited Bangladesh knows that the growth and dynamism of the place is real. Another response is that the governance indicators are mis-measured. True, alongside these indicators of high corruption is a vibrant free press, an active NGO community, and since 1991, democratic elections.
A third way of resolving the paradox is to recognize that the relationship between governance and development is complex. The same level of corruption could do a lot of damage in one country, and less in another. Even in the same country, corruption could be more or less harmful at different times. In the case of Bangladesh, the main sources of growth and human development arose by going around the government. The garment export industry grew thanks to duty-free textiles, which bypassed the customs department, where there was considerable corruption. The improvements in health have a lot to do with the work of NGOs in delivering contraceptive and other services that helped reduce Bangladesh’s fertility rate below 2. Girls’ enrolment in secondary education is helped by a scholarship scheme that also gives a stipend to the school—be it public, private, NGO-run or religious (madrassa)—depending on the number of girls enrolled. Finally, the reduction in poverty is associated with the widespread use of microfinance and remittances from Bangladeshi workers in the Middle East.
Of course these explanations beg the question: how did Bangladesh manage to introduce these programs that got around government? Why haven’t other countries been able to do so? These questions are hard to answer, but let me offer some conjectures (developed in conjunction with my colleague Binayak Sen). First, when Bangladesh was formed in the aftermath of the 1971 liberation war, there was hardly a government. The international and domestic NGOs filled the vacuum in delivering services. Second, Bangladesh is a densely populated, homogeneous society. In such a configuration, innovations spread like wildfire. So family planning, microfinance and other programs took off in Bangladesh more easily than they might have elsewhere. Finally, by the time the government got strong enough to control the NGOs and others, it was too late: microfinance, family planning and private schooling had already become commonplace. To its credit, the government recognized this and proceeded to support the providers of essential services with finance. The net result is a country with significant levels of corruption but where development has progressed at an impressive rate.
Can it last? Many observers felt that weak governance would constrain Bangladesh in the future, even if it hadn’t done so in a major way in the past. Evidence of this is the acute power shortage that the country faces. Until very recently, Bangladesh has not had an independent power producer investing in the country since 1999 or so. One of the obstacles was the high level of corruption. Furthermore, the current caretaker government is pursuing an active anti-corruption campaign, including arresting some high-profile individuals on charges of corruption. How these developments will play out in the future is unclear, but one thing is certain: Bangladesh’s unique development path has forced us to rethink any simple-minded notions of the relationship between governance and development.
Mariam Claeson
Sat, 07/19/2008 - 19:24 A tale of governance Oli Md. Abdullah Chowdhury Quality of governance has not improved much though non-partisan caretaker government initiated anti-corruption and targeted institutional reforms designed to ensure that the next elections will be free and fair. Human rights organisations have expressed their concerns, as there is a sharp increase in rights violation during the time of emergency. Not only there are reported incidents of torture and violations of jail code, children and women from marginalised community are often becoming victim of abuse and maltreatment. Corruption continues to spread although an anti-corruption drive began to bring members of political, business and public administration elites to accountability for their corrupt practices. Bangladesh nearly reached to a state of pandemonium when confrontations intensified in October 2006 during the transition of power from the incumbent government to a non-party caretaker government (CTG). Development partners of Bangladesh have monitored the situation intensively and Swiss Development Corporation (SDC) in the country assistance paper reflected on the situation. Cooperation Strategy Bangladesh 2008-2012 delineates the situation “The sitting President assumed the duty of Chief Advisor of the CTG under controversial circumstances. Street agitations intensified with the AL-coalition announcing boycott of the elections. Ultimately, the armed forces intervened; resulting in the President's appointing a new Chief Advisor and Council of Advisors and postponing elections. Under a state of emergency, the new CTG assumed power in January 2007. Since then, it has been pushing for reforms in public institutions, in the judiciary, and in the election process to improve governance”. A massive crackdown on corruption although went on, targeting allegedly corrupt politicians, officials and businessmen; there is hardly any significant improvement in the state of overall governance. Again, UK is one of the four biggest donors along with World Bank, Asian Development Bank and Japan. Department For International Development (DFID), UK in the white paper “Working Governance work for the Poor” identifies good governance requires three things: * State Capability * Responsiveness * Accountability Good governance is not only about government, it is also about political parties, parliament, the judiciary, the media and civil society. Elections and democracy though are an important part of the equation, but equally important is the way government goes about the business of governing. However, Accountability is at the heart of how change happens. Where accountability is good, audit institutions and parliamentary committees scrutinise the way government bodies spend their money and what they achieve. Courts help prevent abuse of office. And beyond the formal structures of the state, civil society organisations give citizens power, help poor people get their voices heard, and demand more from politicians and government. Ironically, the process of strengthening the executive branch of the government at the expense of the legislature and the judiciary occurred incrementally throughout the history of Bangladesh. Moreover, Perception-based governance indicators prepared by staff at the World Bank Institute, which aggregate data from a number of survey-based indexes, revealed low ratings for Bangladesh on six key indicators, with particularly poor ratings on control of corruption, regulatory quality, and rule of law. As revealed in Bangladesh Country Assistance Strategy 2006-2009 by World Bank, Bangladesh scored poorly on all six indicators for 2004. Let alone other indicators, control of corruption is still a far cry. Though interim government imposed a state of emergency and attempted to take actions against corruption, TIB has reported rise in corruption in the year 2007. Furthermore, it has been reported in The Daily Star (June 19, 2008) referring to TIB that Bribery claimed 3.84 percent of per capita income of the country during the period. Corruption in education, health, land administration, local government and in different utility services sectors increased in the first half of 2007 despite the caretaker government's anti-corruption effort during state of emergency. In terms of magnitude, law enforcing agencies including the joint forces, police and Rapid Action Battalion (RAB) were found to be the most corrupt while land administration was found the most corrupt in terms of the amount of bribe that went into any sector, according to the National Household Survey on Corruption 2007. If we look at other reports on the state of governance in Bangladesh, there are similar findings as well. Institute of Governance Studies, BRAC University publishes report on the state of governance in Bangladesh annually. The findings of 2007 point to a set of paradoxes for governance: in the interim, governance suffered a setback as the political, albeit non-partisan, power was further concentrated by the executive and the accountability mechanisms further weakened. Moreover, parts of the business sector that operated under the assumption of bad governance and through pervasive corruption, are suffering from instability and uncertainty-adding pressure to the declining state of economy in Bangladesh. However, there are rays of hope also. Researchers from Institute of Development Studies (IDS) at the University of Sussex have found strong linkage between tax and governance and the National Board of Revenue (NBR) has recorded a 193 percent rise in income tax collection totalling Tk 739.11 crore in the tax year 2007-08 from Tk 252.11 a year ago, reported in The Daily Star on December 4, 2007. Their research suggests that states relying on revenue from natural resource exports or aid have little need to negotiate with, or to be accountable to citizens, or to build capacity to raise and administer tax. On the other hand, states that rely on broad taxation have much greater incentives to practice better governance. Historical experience, contemporary evidence and case studies comparing experiences between countries also support the linkage. States having substantial track record of good governance rely principally for revenue on broad taxation of citizens and enterprises and the number of income tax payers has increased by 20 percent as 6,45,617 individuals submitted income tax returns in the 2007-08 tax year compared to 5,35,994 tax payers a year ago. Highest tax was collected in Sylhet where submission of tax returns saw a 49 percent rise with 1,403 percent growth in collection of income tax, according to NBR. With the rising number of tax payers, citizens of the country are anticipating quality improvement in governance. As reflected in the white paper, “Making Governance Work for the Poor”, governance is influenced by what happens in the region, by international organisations and standards, and by the views of other countries and international partners. This is about politics and politics determines how resources are used and policies are made. In short, good governance is about good politics. To recapitulate, “The State of Governance in Bangladesh 2007”, published by Institute of Government Studies, BRAC University has commented also that without any political will to change by the ruling party or a demand for reforms by the opposition and with the booming economy in the background, the prospect for a shift in the paradigm of governance remained grim. The hope for improved governance, therefore, lies with the elected government and the opposition for the people of Bangladesh in 2009.