To get the pulse of an institution’s financial management and its room for growth, we must first look at its financial statements. The information in these statements is, of course, essential but often provides only a partial picture focusing on short-term returns.
To understand the true value created by an organization, we need to look more broadly. This necessitates going beyond traditional financial reports and spending time understanding how the institution manages its non-financial resources.
In a sector that is scarce and expensive to begin with, corruption can mean the difference between life and death.
I recently attended the World Bank Group’s second annual Youth Summit, developed in partnership with the Office of the United Nations Secretary-General's Envoy on Youth. The event, hosted thanks to the leadership and initiative of young World Bank Group employees, focused on increasing youth engagement to end corruption and promote open and responsive governments. In the wake of the Ebola crisis, and amidst some very eager, idealist, and passionate conversations, I couldn’t help but think about the price of corruption in health.
Many have argued that decades of corruption and distrust of government left African nations prey to Ebola. Whether in Africa or any other continent, it should come as no surprise that complex, variable, and dangerously fragmented health systems can breed dishonest practices. The mysterious dance between regulators, insurers, health care providers, suppliers, and consumers obscures transparency and accountability-based imperatives. As the recent allegations about Ebola-stricken families paying bribes for falsified death certificates illustrate, when it comes to health, local corruption can have serious consequences internationally.
I’ve always been intrigued by the challenge of coming up with new solutions for everyday problems – kind of like 3D-puzzles for adults. Problems that seem simple from the outside but that are really difficult to crack once one focuses on them, like the development challenges countries face. Whether it’s access to basic services such as education or health, or building the infrastructure needed to connect producers to markets, or providing drinkable water to all, a broad range of sound and proven technical solutions already exists. But millions of kids continue to suffer from poor quality education, mothers continue to die while giving birth, and poor families spend a good chunk of their day walking just to get drinkable water.
Why is it so difficult to get solutions to reach those who need them the most? Many times, the almost automatic answer is that while the knowledge is there, countries lack the necessary resources to address these problems. But too quickly, more money is thrown at these problems without changing the fundamental issues, resulting in limited success at best. In other cases, we spend millions of dollars to build capacity and share knowledge, but it is hard to see results because the institutional support for a solution is lacking.
Imagine you are a leader of an African country and your entire government budget for the year is $1.2 billion.
That same year, an investor sells 51 percent of their stake in a huge iron ore mine in your country for $2.5 billion — more than double your annual government budget.
And imagine having ordered a review into mining licenses granted by previous regimes and knowing that the investor who made the $2.5 billion sale had been granted a mining license in your country for free.
It's what happened in Guinea. It's a story I heard Guinea's president, Alpha Condé tell the G8's trade, transparency and taxation conference in London. And it's a story I thought well worth sharing at the UN Security Council's meeting on fragile states and natural resources last week.
LONDON -- I'm just back from the G8 meeting in Northern Ireland, and under the leadership of Prime Minister David Cameron, we focused on some critical but often overlooked elements on how the world can end extreme poverty in a generation: taxes, trade, and transparency. Watch the video to see why I feel so strongly about this.
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What’s a cash-tight government to do when it wants to modernize a hospital, build a railway, or expand the power grid to reach underserved areas? It might explore outside, private sources of financing—that’s where public-private partnerships (PPPs) come in. The acronym has a promising ring to it, yet going back to the 1970s, its impact has been mixed. At their best, PPPs can provide rapid injections of cash from private financiers, delivery of quality services, and overall cost-effectiveness the public sector can’t achieve on its own.
But at their worst, PPPs can also drive up costs, under-deliver services, harm the public interest, and introduce new opportunities for fraud, collusion, and corruption. Our experience at the World Bank Integrity Vice Presidency is that because PPPs most often are geared toward providing essential public services in infrastructure, health and education, the integrity risks inherent in these sectors also transfer to PPPs.
On April 17, the Integrity Vice Presidency convened a public discussion on corruption in PPPs (pdf) bringing together finance, energy, and fairness-monitoring perspectives. Looking at the landscape, in the last eight years, 134 developing countries have implemented PPPs in infrastructure, and in the last decade the World Bank has approved some $23 billion lending and risk guarantee operations in support of PPPs.
As many of those gathered here in Busan, I feel very excited about the chance we have to collectively shape the way in which development is practiced.
I have some good and some not so good news about aid. First, the good news. The aid landscape has seen three important changes during the last decade that have had a transformative, positive effect on the very nature of aid.
One of these changes has been the increased focus on the quality of aid—especially on the results being achieved on the ground. The World Bank and IDA, the Bank’s fund for the poorest, have placed a premium on having a real impact in the work we support, and the results show.