Smart priorities for the new government’s first budget

Since 2015, Copenhagen Consensus and BRAC have collaborated on Bangladesh Priorities to create a bridge between policy and research. This is driven by the belief that, with limited resources and time, it is crucial that decisions are informed by what will do the most good for each taka spent.

More than 1,100 pages of new research were written for Bangladesh Priorities by economists from Bangladesh, the region and the world, identifying the costs and benefits of 76 policy interventions under the 7th Plan. This research shows exactly how much each option costs all of society, and exactly what we get in return.

The benefit-cost analysis was widely acclaimed by economists, highly appreciated by the government, and is contributing directly to new plans and policies.

In the Bangladesh Priorities 2.0 (2018-2019) research exercise, we have gone much further and deeper in analysing four interventions from those 76 policy options: e-Government Procurement (e-GP), e-Mutation or land records digitisation, services through Union Digital Centres (UDCs), and village courts.

All four were among the priorities identified among the 76 policy options for Bangladesh by an eminent panel including a Nobel laureate, for having the potential to achieve vast benefits for Bangladesh.

The deeper analysis includes a political economy study to reveal the constraints inhibiting scale-up of the four key interventions, which are all priorities of the 7th Plan.

Scaling up e-GP would mean better spending of the Tk 72,000 crore that the government spends each year on everything from Padma Bridge to pencils in government offices.

At present, the e-GP system has reached 50 percent of its intended usage level and it is generating Tk 400 of benefit for each taka that has been spent so far. The new evidence reveals that if scaled up, e-GP can generate Tk 755 for each taka spent. Such returns are anticipated as a result of increased competition and transparency.

Based on these findings, we encourage the government to allocate resources to motivate e-GP use under a whole-of-government approach in the Budget FY2019-20. Prioritising implementation of the Electronic Contract Management System (e-CMS) would ensure bidders are using quality inputs and delivering tendered outputs on time.

The Eminent Panel ranked land records digitisation as a high priority because electronic records can make transfers simpler and reduce corruption. Moreover, it increases the security of property rights, which increases investments and will make the economy grow even faster in Bangladesh.

The government has made commendable progress towards digitising the mutation or khatiyan records system. It appears there has been an increase in transparency and accountability under e-Mutation as a result of SMS notification and the tracking number, but loopholes still exist.

The new evidence shows that at present there is still no positive return from e-Mutation investment. This is because of low utilisation. It is encouraging that the government has committed to implement the e-Mutation system across all upazila offices by June.

If e-Mutation is scaled up across all upazila offices, our research suggests a return of Tk 6 for each taka spent. Adding the spill-over effects toward economic growth suggests a phenomenal return of Tk 619 of benefits for every taka spent.

Therefore, we also urge scaling up e-Mutation across all upazilas as part of Budget FY2019-20. This would include development and implementation of the Land Information Service Framework being designed by the Cabinet Division.

UDCs are seen as a hallmark achievement of the government's Digital Bangladesh vision. These one-stop shops are making service delivery processes easier for rural citizens.

Our new research evidence reveals that for each taka spent, UDCs are generating two takas of social benefits from delivering three services: online birth registration, exam registration and social safety net programme (SSNP). Scaling up the last of these using the  civil registration and vital statistics (CRVS) system could increase the social benefits to Tk 3 for every taka spent.

Based on this research, we urge the government to consider spending money on behavioural change communication programmes to keep UDC entrepreneurs socially motivated and bureaucrats administratively focused on serving rural citizens.

An important point for future analysis is UDC data availability. A Digital Centre Management System (DCMS) needs to be made publicly accessible and used for identifying demand-driven services. And a census of UDCs is required before the government drafts the eighth five-year plan.

Finally, we have studied the empowerment of village courts. At present, the village court system generates Tk 2 of social benefit for each taka spent, and manages to partly reduce the backlog of cases in district courts.

Empowering village courts as a quasi-formal justice system to deal with many more complicated and higher value cases could benefit Bangladesh tremendously. This would generate nearly Tk 19 of benefit for each taka spent because of the far more significant backlog reduction, and because it would make it more convenient for a village-level petitioner to access justice, without having to travel to district courts.

UP chairpersons need to carry out electoral duties, hindering performance of village courts. Based on this analysis, we suggest that Budget FY2019-20 prioritises training all UP personnel responsible for village courts and introducing measures that boost performance, such as the transfer of authority to other representatives when the UP chairperson is not available.

We hope that, as with past Bangladesh Priorities findings, the new research on these four key priorities will receive attention from the newly elected government as it studies its first budget. Each is critical to promoting good governance, economic growth and public welfare, and we commend the Planning Minister for his commitment to scaling up these priorities.

In the belief that all of Bangladesh is helped when the policymaking and decision process is more evidence-driven, we will continue to develop the policy-research bridge.

Bjorn Lomborg is President of the Copenhagen Consensus Center and Visiting Professor at Copenhagen Business School.