Financial disclosure systems are attracting increasing attention. Can these systems credibly help to prevent corruption in public office? Can they play a useful role in detecting officials who engage in corrupt behaviors? Could they even assist in the complex global work of tracking and investigating illicit flows?
The recently released Public Office, Private Interests  from the Stolen Asset Recovery (StAR) Initiative  with data by the Public Accountability Mechanisms Initiative  of the World Bank provides a practical approach to addressing the challenges and requirements of effective disclosure administration. The overarching message is that effective disclosure is a balancing act. Yes, a disclosure system can make a meaningful contribution to corruption prevention and enforcement. But cannot do so if expected to tackle and apply sanctions for all forms of graft and corruption in public administration.
Requiring that public officials submit a signed declaration of their income, assets and business interests is on the face of it an intuitively simple way of ensuring that they think twice about seeking to profit illicitly from their public duties, or of allowing private interests to influence, appear to influence, or otherwise conflict with their official responsibilities. Fear of detection is the motivating force; a reminder of ethical obligations, and assistance in fulfilling them, the encouragement. In practice, however, this deceptively straightforward idea is very challenging to implement.
The skeptics out there will rightly affirm that a determined official will find ways of concealing illicit gains. That the disclosure agency may be hard pressed to verify the accuracy of declarations, whether because of banking or tax secrecy laws, the lack of property, business and other registries, limited public access, or their own limited resources. They might add that the enforcement of sanctions is bedeviled by delays in the courts or other factors borne of the local environment. Finally, they would caution that the agency charged with this task must also steer a course through the inhibiting political straits of anti-corruption enforcement.
Are we perhaps expecting too much of an administrative mechanism that must at a minimum contend with the bureaucratic challenge of collecting, reviewing and auditing large quantities of information from an officialdom whose members and duties are continually evolving, and whose identities – in many countries – are not accurately reflected in public rolls? Under such conditions, how can a disclosure system meaningfully contribute to corruption prevention, anti-corruption enforcement, and public accountability?
The issue is partly a matter of scale; and largely a matter of context. As the StAR publication shows, a disclosure regime needs to be designed to suit the constraints and conditions of the local context. That means a mandate based on achievable objectives and backed up with commensurate resources. In practice this could result in a dispensation from disclosure for the state employees whose job presents little risk or opportunity for graft. It could also mean that the disclosure agency chooses not to treat all declarations as equally worthy of scrutiny. It could also mean that a new system, in a fragile environment, might require that only the most senior 100 officials submit a declaration, as a first step in an incremental roll-out of a disclosure law. These approaches – namely, risk-based disclosure requirements and targeted verification – make it easier to focus resources where they really count.
But that alone is rarely sufficient. Public access to disclosure information can exponentially enhance an agency’s ability to provide credible scrutiny. Despite the squeamishness and debate that public access can generate, there are examples from around the world of workable approaches to providing public access to certain categories of information so as to address the perceived safety risks and privacy concerns of officials and yet leverage the benefits of public access. Moreover, providing access to compliance statistics and other related data sends a strong signal that an agency is serious about fulfilling its mandate, without typically engendering too much squeamishness.
Delivering on the potential for disclosure systems to contribute to broader, international anti-corruption efforts requires that the basic ingredients of domestic implementation are in place. It also requires that policymakers and practitioners begin to view financial disclosure systems as part of an interconnected architecture of agencies and actors engaged in international financial investigations, asset tracing and anti-money laundering. Initial research undertaken by StAR and the World Bank’s Financial Market Integrity  group provides recommendations on how to leverage these connections.
A drawback of any safeguard mechanism is that it shines a spotlight on the behaviors it seeks to deter. The implication of a disclosure requirement is that, given the chance, public officials will be corrupt or prone to corruption. This pessimistic view is not a new one. In the Republic, Plato put forward the notion that all ‘guardians’ should be prohibited from owning private property beyond the basic needs of their family, and should touch no income except a soldier’s wage. While no-one would think to propose such a disincentive to public service today, growing disenchantment with the perceived venality of governing classes around the world is intensifying calls for effective measures to curb such behaviors. That is a heavy expectation to place on a disclosure regime.
A disclosure regime should at most aspire to make life difficult for officials seeking to engage in corrupt practices, and to make life easier for the vast majority who wish neither to defraud the public trust nor to fall foul of disclosure requirements or codes of conduct that may be complex or difficult to navigate. Part of the balancing act for a disclosure regime then is to enforce compliance while reassuring the public that compliance is but a formality. Educating filers and the public about the government’s commitment to public ethics is an important step in communicating that message. Following through with the enforcement of sanctions for those caught breaking the rules is the other vital part of the equation.