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This is the World Bank's blog on governance and anti-corruption. It aims at providing a space for debate and knowledge sharing on this critical field of development. | Learn more...

economic stimulus

Capture and the Financial Crisis

Submitted by Kaufmann on Mon, 2009-03-09 17:41

There is no 'theory-independent' way of viewing reality.  We see and analyze world events through our own prism, shaped and tinted by upbringing, experiences, training and professional field of expertise. So it is not surprising that when it comes to the many explanations given for the current financial crisis, they differ greatly.

Global Integrity's Grand Corruption Watch List and economic stimulus packages

Submitted by Nathaniel Heller on Fri, 2009-02-27 17:31

As Dani Kaufmann and others on this blog have rightly pointed out, the issues of “grand corruption” and “state capture” are increasingly being viewed as central to promoting more accountable and transparent governments, whether in the developing world or in wealthier countries.  The West has little to show to the developing world by way of successful models, and all countries clearly have plenty of homework to do when it comes to curbing the influence of special interests on the policy process.

In the Global Integrity Report: 2008, we created our first ever Grand Corruption Watch List. This list identifies 13 countries with exceptionally weak anti-corruption safeguards in key areas that lead us to worry about the potential for large-scale theft of public resources.  As national bailout programs and stimulus packages are being rolled out worldwide, these are the countries to keep a close eye on for disappearing funds at the highest levels of government.

More on Lessons from Chile for the Americas during the Crisis

Submitted by Kaufmann on Thu, 2009-02-05 11:38

In my previous blog entry, I made the case that both the antecedents of the financial crisis faced by Chile in 1982, as well as the approach taken to resolve it, provide insights for countries such as the US today -suitably adapted by circumstances, size and complexity, of course.  Nonetheless, focusing on the fundamental pillars to approach the crisis comprehensively (including fiscal and monetary policies, institutional revamp, financial workouts, regulatory reforms) always ought to be a priority, rather than endless debates about whether one initiative such as a ‘bad bank’, will be the solution.  

From its more recent experience, there are further insights from Chile for the Americas. One is Chile’s consistently effective macro-economic management over the past two decades, where fiscal surpluses (a term that appears to have been excised from the US lexicon) have been the order of the day.  In fact, ‘best practice’ stabilization funds have permitted a sizeable accumulation of public funds during the ‘fat cow’ years, for judicious use during leaner times. 

 

Lessons from America for the US Financial Crisis?: the case of Chile

Submitted by Kaufmann on Mon, 2009-02-02 11:04

Forbes Magazine invited me to write an article on corruption.  Among others, I argue that the US financial crisis is a major and overdue wake-up call to the dormant anticorruption field, which for too long has focused on conventional second-order issues (here the article).   I also suggest that some humility could help: for a change, lessons from an emerging economy could be useful to the current situation in the US.  We know that the experience of Sweden in addressing their past financial crisis  offers some insights. 

But it is also important to draw on the lessons from other countries.  Let us focus on Chile, another country in the Americas (the era of equating the US with America should be over anyway).  I am getting questions about the parallels and insights from Chile for the US crisis.  Let me bring up a few points here, with some more detail than in Forbes.