Cambodia is one of the world’s most open economies, sustaining high levels of growth in an
environment of relatively weak governance. Emerging from a legacy of genocide and civil
conflict, the country has sought to address human and social capital deficits across sectors,
weaknesses in public finance, and corruption. Despite improvements in access to basic
services, governance constraints persist and may threaten gains from economic integration.
Over the 2004-10 period, the Bank’s engagement on Governance and Anticorruption (GAC)
issues in Cambodia was not defined by a single, overarching priority or entry point (such as
core public sector management, natural resource management, or service delivery). Rather,
the Bank was opportunistic, opting to support the government’s GAC efforts across multiple
sectors and institutions. The relevance of this opportunistic approach is judged to be
moderately relevant. The Bank’s objectives on public financial management (PFM) were
highly relevant given Cambodia’s nontransparent and weak public expenditure management
and limited capacity. The Bank’s response to sectoral governance weaknesses such as red
tape, inefficiencies, and other forms of rent-seeking in customs is rated modest given the
need for the government to implement its World Trade Organization commitments. The
Bank’s project level engagement is rated as moderately relevant. As a basis for reinstating
suspended projects, portfolio-wide measures included the use of an Independent Procurement
Agency (IPA) for the International Development Association (IDA) procurements, and the
implementation of Good Governance Frameworks (GGF) for all IDA projects.