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Does decentralizing the allocation of public resources reduce rent-seeking and improve equity? This paper studies a governance reform in Pakistan's vast Indus Basin irrigation system. Using canal discharge measurements across all of Punjab province, the analysis finds that water theft increased on channels taken over by local farmer organizations compared with channels that remained bureaucratically managed, leading to substantial wealth redistribution. The increase in water theft was greater along channels with larger landowners situated upstream. These findings are consistent with a model in which decentralization accentuates the political power of local elites by shifting the arena in which water rights are contested.

Bureaucracy --- Elite Capture --- Governance --- Inequality --- Landownership Inequality --- Poverty Reduction --- Rent-Seeking

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Despite their explicit focus on reaching the poor, many community driven development (CDD) projects have been found to be only mildly pro-poor in their funding allocations. This paper presents evidence of an explanation that has been overlooked in the CDD literature to date: the requirement that beneficiaries must apply for projects in order to receive support. The authors first examine data on the universe of project applications and funding under Tanzania's flagship CDD program, Tanzania's Social Action Fund, and then use a census of 100 program villages to examine the determinants of both program awareness and program participation at the household level. The data paint a consistent picture at both levels: wealth, access to information, and political capital are important correlates of the ability to navigate the application process successfully. The centrally dictated features of this decentralized program appear to be the most effective mechanisms in directing funds to the poor. The results suggest that unless demand-driven projects can develop ways of soliciting engagement from a broader cross-section of the population, they are unlikely to achieve truly progressive targeting.

Community Driven Development --- Elite Capture --- Housing & Human Habitats --- Poverty --- Poverty Monitoring & Analysis --- Poverty Reduction --- Regional Economic Development --- Rural Poverty Reduction --- Services & Transfers to Poor --- Social Development --- Targeting

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Corruption continues to have a disproportionate impact on the poor and most vulnerable, increasing the cost of, and reducing access to, health, education, justice, electricity and other basic services, thereby exacerbating inequality. It reduces private investment as it increases risks for investors, with consequent effects on growth and jobs. It distorts public spending decisions and weakens the quality of public investments as substandard infrastructure gets built and the regulatory systems for quality control and safety are bypassed. It erodes public trust in governments, undermining their legitimacy and posing a threat to peace and stability. This paper draws on these lessons and proposes a new approach, both in terms of what we work on and how we work, focusing on initiatives to be led by the Bank's EFI vice presidency to reaffirm the Bank's commitment to anticorruption. The initiatives refresh approaches that are showing results, scale up those that are emerging and show promise, or experiment and innovate where fresh thinking is needed in our support to client countries to help them control corruption. In this note, corruption is seen as both a symptom of underlying governance challenges and a problem in and of itself. For practical purposes, and to keep the focus on corruption, the initiatives do not expound on the many aspects of governance that influence corruption. The paper also does not focus on efforts to control corruption risk in World Bank operations, but rather focus on the support that the EFI Vice Presidency will provide to countries in their efforts to control corruption.

Accountability --- Anticorruption --- Bribery --- Corporate Governance and Corruption --- Corruption --- Elite Capture --- Fragile States --- Governance --- Labor Market --- Local Government --- National Governance --- Private Sector Development --- Public Policy --- Public Sector Development --- Transparency

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This Systematic Country Diagnostic seeks to identify the most important constraints to and opportunities for inclusive and sustainable growth in Haiti, a country that is one of the poorest and least equal countries in the world. For this purpose, an extensive review of the literature (from both within and outside the World Bank) was carried out, as well as broad consultations across the country. The results point out five broad themes around which activities need to be organized in order to ignite a process whereby Haiti could set itself on a new development path: (i) balancing macroeconomic stability with developmental needs; (ii) improving statistics and analytics; (iii) creating greater economic opportunities and better jobs, including through infrastructure and human capital; (iv) (re)building the social contract; and (v) reducing vulnerabilities and building resilience. Progress on all these themes is needed simultaneously. In light of the tighter budget constraints facing the government, maintaining the stability of the macroeconomic environment, and improving knowledge and statistics to increase the effectiveness of public policy (including more transparent fiscal reporting) call more particularly for immediate attention.

Conflict and Development --- Development Patterns and Poverty --- Disaster Management --- Elite Capture --- Governance --- Inequality --- Infrastructure --- Macroeconomic Management --- Macroeconomics and Economic Growth --- Migration --- National Governance --- Natural Disasters --- Poverty Reduction --- Remittances --- Social Contract --- Violence