October 30, 2002	Wednesday	Sha’aban 23,1423

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ISLAMABAD, Oct 29: Lack of accountability can be addressed by increased democratization, decentralisation and transparency, says the World Bank.

The World Bank’s draft report “Poverty in Pakistan: Vulnerabilities, social gaps and rural dynamics,” pleads for potential reforms to ensure sustained accountability.

Simultaneous improvement of the investment climate and the prospects for poverty reduction will emerge when broader needs, including those of women and other disadvantaged groups, are taken into account, the report states.

“Not all democratic governments - and certainly not all non-democratic governments - achieve this. However, growth, development and poverty alleviation demand it,” the report maintains.

The report emphasizes the importance of good macroeconomic policies and the need for continuing attention to the fiscal gap and that attention should be focussed on promoting growth through governance reforms.

Social sector reforms that ignore the difficulties that the poor face in holding government accountable and the important role that local elites play in this regard are unlikely to be successful, it says.

According to the report, incomplete understanding of the social and political context meant that the defunct Social Action Programme placed excessive emphasis on the creation of parent associations that could not exercise influence, and dedicated insufficient resources to circumventing institutional and social obstacles.

The report said continued attention must be paid to the governance environment and to the incentives for the actors whose support was necessary to make reform successful. The policies must be focussed on economic growth that was more sustainable than that experienced in the 1980s, it said.

A decline in the rule of law led not only to a redistribution of resources from citizens to state officials but persistent failure in this regard might also be associated with high costs of dispute resolution, which resulted in legitimization of informal mechanisms of enforcement and arbitration, it said.

Accordingly, “bad equilibria” could be formed in which the failure of law legitimized informal arbitration making it more difficult to establish the rule of law, it said.

Although some might welcome the existence of informal arbitration as evidence of a private response to state failure, it was likely to reinforce social and political inequalities and act as poverty trap, the report stated.0