Recommendations

 Design PSR projects and allocate Bank resources to them with recognition that PSR has especially complex political and sequencing issues. Be realistic about the time it takes to get significant results, understand the political context, identify prerequisites to achieve the objectives, and focus first on the basic reforms that a country needs in its initial situation. Reconsider the balance between development policy and investment lending; and institutional change usually needs the sustained support of investment projects, although development policy lending can help secure the enabling policy changes.

 In country PSR strategies, set priorities for anticorruption efforts based on assessments of which types of corruption are most harmful to poverty reduction and growth. Only when the country has both strong political will and an adequate judiciary system should the Bank put primary emphasis on support for anticorruption laws and commissions. Given that reducing corruption will be a long-term effort, the Bank should emphasize two things: building country systems that reduce the opportunities for corruption that is most costly to development and making information public in ways that stimulate popular demand for more efficient and less corrupt service delivery. The country team needs operational clarification about how the Bank's anticorruption efforts fit within the overall country strategy.

 Strengthen the civil service and administrative components of PSR, providing them with a better framework and indicator set, and give more attention to the budget execution phases of financial management. This will require PEFA-like actionable indicators for civil service and administrative performance and more linkage between the implementation of reforms for civil service and for financial management.