Can corruption risks be mitigated without hindering governments’ COVID-19 response?

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As governments respond to the coronavirus (COVID-19) crisis, the need for speed can lead to short-circuiting the normal procedures designed to control corruption risks. The circumstances of the pandemic can make traditional oversight even more challenging. Moreover, the nature of an emergency response itself can open new avenues for corruption. At its worst, corruption could lead to unnecessary suffering and even loss of lives by diverting scarce resources from the people and places who need them most.  It could also entrench elite privilege, widen inequality, and undermine trust in the institutions of accountability.

To help guide policy makers, the World Bank’s Governance team has prepared a policy brief on Ensuring Integrity in Government’s Response to COVID-19

The response to the COVID-19 pandemic is likely to increase corruption risks and practices that contribute to illicit financial flows, and may also introduce new risks.

As governments grapple with the pandemic, the first response involves efforts to blunt the health impact.  Rapidly procuring medical supplies, moving them to intended points of service delivery, ensuring rapid customs clearance of imported medicines, and mobilizing additional health care workers all present opportunities for corruption.  

In poorer developing countries and in fragile contexts, economic shutdowns can cause some people to lose their sources of income; they also have a direct impact on food supplies and availability. Government actions that provide vital lifelines—cash transfers to individuals, food purchase and distribution to the poor, and support to struggling formal and informal private sector entities—are vulnerable to corruption. 

The adoption of emergency powers to address the health crisis and maintain public safety also presents a concern. Strict rules mandating quarantine, isolation and curfews, and prohibition of economic activity in many countries entail mobilizing police and other authorities for enforcement. There are opportunities for the enforcers to seek and receive rents in this process. Moreover, the adoption of unfettered emergency powers and surveillance technologies risk undermining institutional checks and balances, weakening the authority and independence of accountability institutions, and shrinking civic space.

Recognizing risks is the first, easier, step. Coming up with approaches to deal with those risks without hindering a government’s response is tougher but possible.  

Given the unprecedented nature of the crisis and the need for cooperation across agencies and levels of government, oversight mechanisms could be compromised. This can be resolved by specifying in every piece of legislation or executive order which agencies will be responsible for oversight. Similarly, some measure of ex-post accountability can be ensured by activating explicit processes and protocols for documenting emergency spending, including procurement transactions, receipt of goods and supplies, and tracking of the delivery of supplies involving central and decentralized authorities.

There is no excuse for weak transparency – in fact, more transparency is needed. Governments can build trust by establishing rules regarding how and where information on emergency spending is published, and by following those rules without fail. Governments should publicly disclose all grants, procurements or provision of emergency funds over a set amount within a specified number of days after funds are released and/or used. Clear rules on eligibility are needed to mitigate the risk of corruption skewing the distribution of financial support that is meant to help struggling firms and individuals.

With speed leading to fewer protections upfront to prevent corruption, monitoring and feedback need to be even faster. Shortening feedback loops by increasing the frequency of audits and spending reviews can help.

Grievance redress mechanisms are needed to ensure that communities and intended program beneficiaries know what to do when they do not receive their expected payments.

To address the abuse and overreach of extraordinary powers, it is important to specify upfront the scope and duration of those powers.

With all these measures, diligent follow-through and communication are needed to ensure accountability and maintain trust. Temporary provisions, adopted in the name of speed, also need to be reversed as the emergency subsides.  

It is also important to maintain focus on the broader anticorruption agenda. The response to the COVID-19 pandemic is likely to increase corruption risks and practices that contribute to illicit financial flows, and may also introduce new risks , driven by theft and diverted funds, such as the use of shell companies and other anonymous structures registered in tax havens to secure public contracts and loans or subsidies, among others. Policy responses to address these risks, such as beneficial ownership transparency and the enforcement of anti-money laundering standards in the financial sector, acquire even greater relevance in the context of COVID-19.

Corruption is but one of the challenges facing overstretched public sectors. The risks are formidable but not insurmountable if there is a will to mitigate them.

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The World Bank Group and COVID-19

Ensuring Integrity in Governments' Response to COVID-19

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Join the Conversation

Anuradha Srinivasan Palanichamy
May 14, 2020

Corruption and Transparency at. Strategic & Operational levels

ngangbam roben
May 14, 2020

Very true but will a corrupted government be interested in keeping such checks when the pandemic is providing a golden opportunity for practising a relatively risk-free corruption.

Gabriel Negatu
May 15, 2020

This is particularly concerning in countries with weak institutions and accountability mechanisms. We need to pay attention to dangers ranging from weak capacity, weak political will and an even weaker culture of integrity. Please keep this convo going.

Ed Olowo-Okere
May 19, 2020

That's so true, Negatu.

Mohammad Abdur Rahman Asif
May 15, 2020

Hello Ed Olowo-Okere,

I have gone through your insights which you have presented in your article "Can corruption risks be mitigated without hindering governments’ COVID-19 response?".

But i am seeing this from another perspective which you have not presented here. I am seconding the stance from Anuradha Srinivasan Palanichamy.

And sees crisis management is all about the management and preparedness. On the other side i see that the current situation where COVID-19 pandemic has shaken the world community & questions public health governance systems; we should overcome the gaps/failures of our disaster program management strategy.

The Public Policy Specialists should respond to the alarms you have buzzes; where societies un-directed and powers misuses are ruining the situations.

Patrick Abulu
May 19, 2020

As a media practitioner, I want my TV station to do a broadcast of this publication. Thank you Ed olowo-okere and world bank group. I believe it's for wider reach

Awinja Wameyo
May 23, 2020

This is interesting discourse that is missing as we fight against the pandemic. Thank you Ed for bringing this to the fore. That said - if the new york ventilator example is to do by - even the most advanced economies with "stronger systems" are not any more less prone to rent seeking by unscrupulous individuals. In this case, an executive order was signed to allow for a payment of USD 69.1m for ventilators without the usual due dilligence & prior to receipt of goods. Needless to say, the ventilators were not received.

IKRAM UL HAQ
June 04, 2020

IDA grants are conversely impervious to Value for money auditing disregarding rampant mal-governance, redundancies, wastages, instances of blatant abuse of authority and pilferages which on the contrary are allowed to employ the subterfuge of compliance auditing, fudging of figures in the financial reporting followed by conveniently attested unqualified certification generated to avoid aborted funding by donor agencies. It is imperative for the donor agencies to condition funding with meaningful evaluation by SAIs.

Ian Heptinstall
July 15, 2020

Corruption is a risk that needs managing.

But at least it is one we are aware of and addressing.

What about the invisible risk, that also leads to much needed funds being wasted and used inefficiently? This is poor procurement practices.

I have seen bureaucratic practices used to procure development projects and which lead to less competition and higher cost.

The covid examples also highlight the problem of buying only for projects, and not managing some categories more long term and strategically. Pandemic planning is a regular practice - surely they addressed supply as part of the analysis? PPE is an ongoing need that should span individual projects. You should not have to select suppliers and do deals in the short term for something like that that.

Chris Njobvu
August 07, 2020

The response to covid 19 it requires the gorvement to put in place the system that can make it easier for people to have access to testing e,g trading places which are always congested.