In the last twenty years countries of Latin America and the Caribbean, in line with the OECD and many middle-income countries around the world, have sought to adopt modern techniques of public management that can deliver better, more relevant, and simply more public services despite tight fiscal constraints.
The World Bank has been assisting governments at all levels, as well as other public bodies, to improve performance through its advisory and lending services. Public officials leading reform efforts or seeking advice or technical cooperation on specific technical issues can access global experiences and world-class experts through the World Bank, quickly and flexibly.
The World Bank's vast research, analytical and technical capabilities are a vital part of the Bank's contribution to development. Use of these services can support member governments in adopting better policies, programs and reforms that accelerate economic growth and poverty reduction. Products range from reports on key economic and social issues, to Policy Notes, knowledge-sharing workshops and conferences.
An increasing number of governments and state institutions are obtaining expert, global assistance from the World Bank through Fee-Based Services — which may be provided following agreement between all parties concerning the terms of reference and cost. There are no preset limits on the contract size or time period allowed for Fee-based Services support. The Bank’s comparative advantage in the provision of Advisory Services is that — unlike private sector consulting firms — services are priced at full cost recovery, with no profit for the Bank. In addition, as funds are executed through the Bank, the procurement process is carried out in a more rapid and flexible manner.
To meet the modest cost of Fee-based Services, governments generally use their own budgetary resources. But in some cases governments have obtained funding for these services through trust funds. In certain circumstances, the Bank may also be able contribute, via its own budget, to funding a portion of the cost.
Recent partners that have requested Fee-based Services include governments (federal and state) and government institutions; but there is also growing interest from non-governmental organizations (NGOs) and other not-for-profit associations (such as chambers of commerce) who are also eligible to work with the World Bank in this way, subject to approval by the government of the member country concerned.
The Bank's program of analytic work provides a foundation for policy dialogue with governments and supports strengthening countries' analytic capacity, formulating and implementing effective lending programs, and the knowledge base of the development community. The Bank’s program typically comprises Economic and Sector Work Reports, prepared by the World Bank with the agreement of the government, and Non-Lending Technical Assistance with more flexible outputs such as Policy Notes and direct assistance to key institutions.
World Bank loans
The World Bank also funds two basic types of lending:
§ Investment operations provide funding to governments to cover specific expenditures related to economic and social development projects in a broad range of sectors.
§ Development Policy operations provide untied, direct budget support to governments for policy and institutional reforms aimed at achieving a set of specific development results.
Advisory Services from the Latin America and the Caribbean Public Sector and Governance Unit
The Latin America Public and the Caribbean Sector and Governance Unit within the World Bank provides world-class analytic and research services, as well as financial instruments to assist governments to satisfy citizens’ demands for more efficiency, accountability and honesty. The Unit draws on global experience, including from the OECD and fast-growing middle-income countries in the Latin American region and beyond. The Fee-based Services instrument plays an increasingly important role in supporting the delivery of focused advice
Services from the World Bank assist governments to improve public sector performance through:
- reforming public expenditure management and financial accountability, developing performance regimes across the public sector;
- reforming human resource management in the public sector;
- restructuring the public sector for better regulation, service delivery and inter-governmental relations;
- sharing risks and approaches with private actors, employing alternative service delivery mechanisms;
- empowering citizens through demand-side reforms;
- strengthening justice sector institutions performance, transparency and accountability as well as their capacity to deliver quality and accessible justice services. Supporting alternative dispute resolution mechanisms for vulnerable and rural isolated groups and crime/violence prevention activities to improve citizen security;
- strengthening Customs and tax collection agencies; and
- facilitating the preparation of municipal and territorial development strategies.
The services provided by the Bank through the Fee-based Services are not normally available commercially. The Bank has a clear comparative advantage in these areas derived from its global knowledge and institutional expertise in areas such as: performance management; public finance; treasury and accounting; institutional building capacity; public budget monitoring and evaluation; and quality control. Furthermore, the Bank is in a unique position to evaluate M&E systems with impartiality and objectivity.
The Bank also is well positioned and has extensive experience in supporting governments to define long-term development strategies. This type of work builds on existing experience in middle-income countries and highly indebted poor countries (HIPC) in LAC and other regions of the world. In addition, over the last decade, the Bank has developed a strong capacity in promoting and providing technical assistance for territorial and regional development.
Recent Examples of Fee-Based Services
§ In 2006, Chile’s Ministry of Finance engaged the Bank under a Fee-based Service agreement to carry out an impact evaluation of its Management Improvement Program, implemented through the Budget Office of the Ministry of Finance of Chile (DIPRES). The Extensive Evaluation Study of the Management Improvement Program (MIP) focused on two types of evaluations: evaluations of government programs (EPG); and impact evaluations (EI). The Bank’s printed and electronic publications have been widely disseminated in Chile and elsewhere.
§ Through the Management of Financial Assets Program the Latin America and the Caribbean Public Sector and Governance Unit also provided advisory services to support Chile’s Ministry of Finance in designing a Strategic Plan to strengthen its investment and debt management operations in line with international best practices.
§ Mexico’s Ministry of Finance and Public Credit (SHCP) contracted a Report on Mexico’s Integrated Financial Management Systems to assist the government in unifying current accounting processes and systems to generate opportune, accurate, detailed and synchronized information demanded by the decision-making process.
§ At the subnational level, the Latin America and the Caribbean Public Sector and Governance Unit provided technical assistance to support the Government of the State of Guerrero in (i) defining a long- term development vision for the State, including the identification of a series of investment projects to be implemented over the next 20 years; and (ii) designing an integrated system of regional development agencies. The objective of this Fee-based Service was to support de State of Guerrero in fighting poverty in a more efficient way by providing tools to make public expenditures more efficient and by strengthening the capacity of local actors to better coordinate the efforts of the federal, state, and local governments.
§ Another good example of Fee-based Services at the subnational level is the Technical Assistance Program for the design of a Strategic Plan for Corrientes – Argentina. The Bank is supporting the Ministry of Finance of the Province of Corrientes (Ministerio de Hacienda y Finanzas) in the design of a strategic plan, with a special focus on the productive development of the province. The Bank will carry an assessment and will support the design of a strategic plan for the productive sectors, the investment climate and selected public sector areas, as well as the development of M&E and change management mechanisms for their effective implementation.