West Bank and Gaza - Improving Governance and Reducing Corruption

Abstract

In the past decade, the Palestinian Authority (PA) has worked to strengthen economic governance and combat corruption, both essential to sustained economic growth and improved delivery of public services. This report finds the PA has made significant progress in its public institutions, establishing a strong governance environment in many critical areas. But it also identifies areas where reforms are underway but incomplete or, in some areas, not yet under consideration. Major reforms have been put in place to strengthen the PA's public financial management (PFM) systems and better manage its equity holdings, two crucial components in the public finance sector. In other important areas, such as public procurement, public sector employment, regulation of the private sector, and the work of anti-corruption institutions, reforms are underway but have not been fully implemented. This analysis relies on an understanding of the relationship between good economic governance, public service delivery, and corruption. Studies show a direct correlation between weak governance systems and the quality of public service delivery. Weak governance systems, in turn, provide an opportunity for corruption. The report does not attempt to investigate specific corruption activities or quantify the economic costs of corruption in West Bank and Gaza. Its purpose is to provide a comprehensive look at the current state of economic governance in the PA. It is the first report to comprehensively assess governance reforms, ascertain citizens' and officials' actual experiences with corruption in the delivery of public services, identify institutional strengths, and highlight systematic governance weaknesses which could lead to corruption.