Corruption has modernized, so should anticorruption initiatives

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The World Bank’s commitment to helping countries control corruption dates to 1996 when then President James Wolfensohn made his “cancer of corruption” speech. It was the first time the issue was given such prominence by a World Bank President and put squarely on the agenda of the institution.

A lot has happened since then. In 1996 only 22 countries had right to information laws, compared to 123 today. The Open Data revolution had not yet begun; neither technology nor attitude supported such openness in most countries. Global standard-setting instruments such as the OECD Anti-Bribery Convention and the UN Convention Against Corruption, were envisioned at that time but not enacted. Others, such as the Extractive Industries Transparency Initiative (EITI) got launched and matured since.  Behavioral economics had not yet been recognized by the Nobel Prize committee. No one had heard of GovTech, and the Open Government Partnership had not yet been established. Terms like illicit financial flows and e-procurement were not common, and the Panama Papers and Luanda Leaks were well in the future. And no one had heard of COVID-19.

Addressing corruption not only saves money and stops bad behavior, it helps achieve a wide range of development goals.  Think, for a moment, about the many ways corruption can undermine human capital development.  Ghost workers in the education system, kickbacks for school meals contracts and false degrees, weaken the efficacy of learning-related spending. Bribery and fraud in procuring  pharmaceuticals or medical equipment can weaken survival rates and constrain the ability of children to thrive. Corruption in infrastructure and among traffic police can lead to unsafe roads, weakening human capital and undermining access to opportunities.

“Corruption has evolved over the last two decades, and in the course of the COVID-19 response. Our approach is evolving as well.”

The World Bank’s approach to controlling corruption needs to keep up with the times. What should we be doing differently? Anticorruption Initiatives—Reaffirming Commitment to a Development Priority outlines an approach, organized around five initiatives.

  • Global norms and standards are essential in shaping policy and ensuring governments take action. The World Bank’s global perspective can help. Progress in the criminalization of corrupt acts and in strengthening transparency have shown the value of standards. Can greater consistency in approaches to beneficial ownership transparency, management of conflicts of interest, and other areas do the same? How can we better track progress? The initiative on Global Standards and Monitoring proposes some areas of focus.
  • Corruption is often transactional but it can also be embedded in networks, tilting the playing field to the advantage of political elites and connected firms . Given what we’ve learned about power, politics, business and corruption, can we do more to address state capture? The initiative on Power and Money takes on this challenge.
  • Transparency has value in its own right. Access to information is a basic human right.  How can we take advantage of new technologies to analyze the torrents of data for patterns we wouldn’t otherwise notice, and better engage stakeholders for oversight, and accountability, and to make services more responsive and equitable? The High Definition Transparency initiative supports efforts to respond to these challenges.
  • Corruption comes in all forms, and these can vary systematically. Controlling patronage networks in customs, for example, calls for approaches different from those needed for embezzlement in state-owned enterprises or bribery in the courts. It’s been 13 years since The Many Faces of Corruption outlined sector-specific approaches. A Sector-Based Approach will update our work to reflect the changes in technology and thinking.
  • The common definition “abuse of public office for private gain”, projects an image of a lone person doing wrong. In many cases, though, they get help from bankers and lawyers and accountants, sometimes in off-shore jurisdictions and financial centers in advanced economies. And what about the behavior of the firms and individuals? Addressing the Facilitators initiative highlights what can be done in the professions and locations that facilitate corruption and take on the stubborn social norms that surround both bribe payers and bribe takers.

We will be expanding on each of these initiatives in a series of blog posts. Corruption has evolved over the last two decades, and in the course of the COVID-19 response. Our approach is evolving as well, to reflect the global and local challenges countries face today as well as the new opportunities presented by technology, behavioral and political science insights, a growing global community focused on norms and standards, and partnerships. Our paper reflects these new realities and sets out a road map to work closely with governments, international partners and civil society to take anticorruption in new directions and reaffirm that controlling corruption is a development priority. 

This blog is part of a series on  Anticorruption Initiatives­­­­ – Reaffirming Commitment to a Development Priority.

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Join the Conversation

Fabiano Angélico
July 15, 2020

Great blogpost.

How can I follow the initiatives mentioned?

This is all very much alligned with the Outcome Statemet we produced in Oslo a year ago: https://www.unodc.org/unodc/en/corruption/meetings/oslo-egm-2019.html

July 15, 2020

Thanks for the interest. This is an evolving work program and we will be posting on discrete activities from time to time. Thanks also for the link. Jim

Toby McIntosh
July 15, 2020

What is the High Definition Transparency initiative please?

July 15, 2020

Thanks for the interest. The HD Transparency initiative involves expanding transparency to newer areas, such as beneficial ownership, making better use of technology, and strengthening data literacy. Another post on this topic will be coming soon, and you can also read more in the paper: http://wrld.bg/ziQZ50AzqDF

Angel R Ojastro III
July 21, 2020

Good morning. This is a most timely discourse, specially in the Philippines. I was a policymaker and I still contribute policy recomms to some national and local officials. I also teach constitutional law in law school, and operationalizing legal principles on accountability of public officers is one area where training of law students lacks. Please keep me in the loop of all your tools on this. Thank you and keep safe and healthy. God bless.

Tlotlo Monyere
July 21, 2020

Very enlightening article as the issue of corruption has become more heightened during the Covid- 19 pandemic. The public has also become more aware of government expenditure and spending through media coverage which facilitates for more transparency. However where no such freedoms are prominent, corruption continues to reign uninterrupted. It is for this reason that i think this subject should be brought to attention more and openly discussed to encourage stronger mitigation and penalties as well all to protect citizens and economies.

Richard E Messick
July 21, 2020

Thanks Jim. Great summary of what my former colleagues and (still) friends up to. Thanks.

Great to see the Bank appreciates the importance of curbing facilitation activities and facilitators. It is key to arresting the outflow of IFFs and stolen assets as the Oslo statement Fabiano cites below emphasized.

When we talk about facilitators, we are talking principally of lawyers, notaries, and other legal professionals. Unlike other facilitators, they can conceal their illegal activities beyond claims of legal professional privilege. A great selling point when hustling facilitation business from corrupt politicians and their cronies.

The good news is FATF has issued a sensible, reasonable standard for addressing the problem. Recommendation 22 provides that when buying real estate or other assets or otherwise acting as an investment advisor for a PEP, the privilege should not apply. When acting as a business advisor, legal professionals should be subject to the same enhanced due diligence and suspicious transaction reports as financial institutions.

The bad news is the fierce opposition to this recommendation by legal professionals across the globe. While EU Member States have agreed to implement it, lawyer and notary associations are busy watering down the implementing legislation in member states. Even worse, opposition by Australian lawyers, with support from Canadian, and American bar associations, now threatens the entire FATF review process. Australia has refused to comply with Recommendation 22 for 17 years and a showdown review was set for last November. It was cancelled at the last moment with FATF announcing the entire mutual legal review process is undergoing a review. No word yet on the review.

Would hope the Bank and others concerned about illicit flows and stolen asset recovery could stiffen FATF's spine on Recommendation 22.

Emmanuel Alfred Zingwa
July 21, 2020

Nice insight, how can I access more of such information?

July 30, 2020

Dear Emmanuel, thank you for your interest. You can read more in the paper: http://wrld.bg/ziQZ50AzqDF