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

Box 7.1: The Impact of Good Coordination on Infrastructure
The East Asia Pacific Flagship Study highlights examples of where coordination
has helped to achieve improved infrastructure performance in six East Asian
economies: Hong Kong, Korea, Japan, Taiwan, Malaysia and Singapore.
Key features of coordination in these countries include:
Political leaders and senior policy makers created a long term development
vision, and sector strategies that flowed from this vision. There was a broad
consensus between policy makers
These economies emphasized infrastructure strategies that focused on
achieving export-led growth, high savings and investment levels, and balanced
social development
In general infrastructure reacted to development constraints when they
emerged, rather than anticipating demand. These reactions were rapid and
strategic, and sector strategies adapted as production strategies changed
Strong planning agencies drove infrastructure development at a central or
sector level. These agencies had significant political influence
Infrastructure service delivery was mainly carried out by a monopoly
corporation, often publicly owned. A strong planning agency provided clear
incentives for improved performance. Cost recovery policies were encouraged
and operational subsidies were limited.
In each of these countries infrastructure performance improved substantially
between 1950 and 1990, until financial crisis and economic slowdown began to
impede development.
Source: Connecting East Asia: A New Framework for Infrastructure, ADB, JBIC, World
Bank, March 2005
Successful infrastructure development also requires institutions and systems that
reward good performance and punish poor performance. This will ensure all
stakeholders remain focused on the ‘big picture’, and contribute to development, rather
than seek to maximize their own short term gains. This comes under the general
heading of Accountability.
There are various institutions that provide accountability, by encouraging oversight of
infrastructure development, service provision and maintenance. These include
competition, regulation or other oversight functions, such as monitoring service
contracts. In most Pacific countries, community leaders also play an important oversight
role. For example, in Samoa, the village chief or the church leader is consulted before a
telecommunications company can decide to expand service into their village. In Kiribati
and other Micronesian countries, village chiefs on small remote islands exercise a form of
regulation by overseeing the operation of electricity generators.
Risk Management is closely related to accountability. In essence, this element of the
framework focuses our attention on the need to ensure that the risks and rewards in
the provision of infrastructure services are aligned.
The key conclusion of the Flagship Study is that improvements in coordination and
accountability are the key elements in ensuring that infrastructure projects and policies
contribute to the overarching goal of development. We have applied this framework to
analyze the reasons for underperformance in infrastructure in the Pacific.
We suggest that there are two principle causes of poor infrastructure outcomes in the
Pacific:
Poor policy design and coordination, and
Lack of good governance and accountability.
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