EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf

7 Challenge: How do we Lift Performance
Some Pacific and small comparator countries demonstrate better performance than
others, despite facing similar challenges. So what goes wrong, and how do we change
this
To answer this question we must first try to determine what causes the infrastructure
policy failures described in section 6.3. Then we can discuss possible ways to
improve it.
7.1 What Causes Poor Infrastructure Policies
7.1.1 An Analytic Framework
The East Asia and Pacific Flagship Study 13 articulated a new framework for analyzing
and responding to infrastructure challenges in this region. The study considers the
key issues affecting infrastructure development under three headings: Coordination,
Accountability and Risk Management.
Infrastructure is complex, capital intensive and lasts a long time. Coordination is
necessary for good infrastructure performance. Coordination, in essence, is each
country’s ability to generate a strategic vision for infrastructure development and
ensure the vision becomes a reality.
Good coordination prioritizes infrastructure development, balancing multiple
objectives to ensure that the right infrastructure is provided to the right sectors of
the community, at the right time. For example, the Government of Kiribati’s
National Development Strategies (2004 – 2007) outlined a number of strategies for
economic growth, including tourism. The strategy notes growing the tourism sector
will require both private investment and supporting infrastructure. To do this, the
government needs to decide what levels of infrastructure must be developed to
encourage tourists, and what can wait until the tourists, and hence the demand, is
there. The ability to coordinate the priorities of different stakeholders and various
government agencies with relevant responsibilities is critical to successful
infrastructure development.
As a reaction to failed experience with central planning in the 1970s and 1980s, the
1990s saw a move from centralized approaches to greater reliance on market
incentives and decentralized decisions. However, the key lesson from the 1990s is
that decentralized provision of infrastructure requires as much, if not more, central
coordination than the old model. The renewed emphasis on coordination is based
on the recognition that the difficulties experienced by many countries in meeting the
challenge of infrastructure development comes from an inability to put together a
comprehensive set of policies which pull in the same direction. A critical example of
this is the inability to create the fiscal space for the necessary public support for
infrastructure. For example, many countries in the Pacific have struggled to allocate
sufficient resources for the maintenance of the infrastructure built under aid projects.
13 “Connecting East Asia: A New Framework for Infrastructure” was launched by the Asian Development Bank, the
Japan Bank for International Cooperation and the World Bank in Tokyo in March 2005
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