The way out of poverty and corruption is paved with good governance


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Woman speaks to World Bank MD and COO Sri Mulyani Indrawati in the Nyabithu District of Rwanda. © Simone D. McCourtie/World Bank

For the first time in history, the number of people living in extreme poverty has fallen below 10%. The world has never been as ambitious about development as it is today. After adopting the Sustainable Development Goals and signing the Paris climate deal at the end of 2015, the global community is now looking into the best and most effective ways of reaching these milestones. In this five-part series I will discuss what the World Bank Group is doing and what we are planning to do in key areas that are critical for ending poverty by 2030: good governance, gender equality, conflict and fragility, creating jobs, and, finally, preventing and adapting to climate change.

Twenty years ago, the World Bank took up the fight against corruption as an integral part of reducing poverty, hunger, and disease. The decision was groundbreaking then and remains valid today. Corruption diverts resources from the poor to the rich, leads to a culture of bribes, and distorts public expenditures, deterring foreign investors and hampering economic growth.

But, in some ways, corruption is only a symptom. Anti-corruption must be paired with efforts to enable governments to govern openly and fairly, to provide services and security to their citizens, and create an environment that fosters jobs and economic growth.

These are the attributes of good governance and effective institutions, and helping countries achieve them is a major focus of our work in low-income countries around the world.

Here are three ways we are going about it.

  1. We focus on institution-building.

    Prosperity and the quality of a country’s institutions typically go hand in hand. Governments with well-run, accountable institutions are better able to deliver public goods and support an environment that can generate jobs and growth. 

    Public sector performance is particularly important to the world’s poorest people, who rely disproportionately on government services, and improving service delivery is essential to leaving poverty behind.

    World Bank specialists in nearly 100 countries provide expertise and training to governments to strengthen public administration and public financial management -- systems that are the key to ensuring fiscal resources are spent efficiently, effectively, and accountably.

    We’ve seen significant results. Between 2011 and 2015, 50 million people in the poorest countries gained access to better water services, 413 million people received essential health services, and 102,000 kilometers of roads were constructed or improved.

    In Comoros, we’ve helped the government strengthen economic management, so that more information on national finances is available to the public than ever before.

    In Côte d'Ivoire, our support has helped the government bring in the private sector and prepare energy, transport and port infrastructure projects.

    Impending reforms of the financial sector promise to promote investment in agriculture, agribusiness and manufacturing.

    Data is crucial, and one of our priorities is building the statistical capacity of our client countries. Last year, we helped 32 countries (including 11 fragile states) do this; 18 countries now use statistics to design and monitor policies and promote accountability and transparency.  For example, Bolivia has completed agricultural and housing censuses and three rounds of household surveys to strengthen the planning and evaluation of public programs and policies.
  2. We help countries mobilize the resources necessary for delivering services.

    Fifty percent of low-income countries raise less than 15% of their gross domestic product in taxes. By contrast, the OECD average is about 34%.

    The reason for this discrepancy? The poorest countries grapple with a wide range of problems: businesses — both foreign and domestic — that avoid paying taxes, large numbers of informal businesses that aren’t on the books, weak revenue administrations, poor governance, lack of international tax cooperation and the public’s mistrust.

    This is not just a question of raising taxes, but of designing tax systems that are fair and accountable and don’t hinder economic growth. We’ve supported tax reforms and improved tax administration for years, both within countries and in international fora such as the G20. And we just launched a Global Tax Team to expand this work.  

    From 2012 to 2014, Mauritania increased the amount it collects in taxes by nearly 50 percent through reforms to improve public resources management.

    In Pakistan, tax collection in the Sindh province increased by 24 percent in a single year.

    While development assistance will remain critical in the fight against poverty, it won’t be enough to achieve the ambitious goals we have set. We must help countries mobilize domestic resources – the largest untapped resource for development - to become self-sufficient and to provide quality services to citizens.
  3. We promote transparency and accountability.

    Openness about the use of public resources builds trust between citizens and their governments. It can make public spending more targeted and effective. This is why we work with governments to make their budgets and the way resources are used more transparent, This also reduces fraud and corruption, and makes citizen voices heard.

    Tunisia is among 40 countries using our public expenditure database tool to make detailed public spending data more open and accessible.

    Also in Tunisia, our research quantifying the value of illicit trade and identifying the scope and cost of state capture has helped increase transparency and improved the ability of Tunisians to hold their government accountable.

    In Moldova, more than 2,200 public servants and other employees received e-government training. People can now access more than 880 government datasets and 131 electronic public services.

    In Nigeria, the number of public contracts awarded through open competition grew by 85 percent in 2015, up from 20 percent growth in 2009.

    The three-pronged approach of improving institutions, raising more domestic resources, and engaging citizens is the closest thing to a development silver bullet. Chronic mismanagement and corruption demoralizes citizens and undermines their trust in the state; corruption deepens poverty, leaving the poor vulnerable to exploitation and bribery in return for services such as health care and education; denying citizens participation in their governments stunts their full potential. For all of these reasons, the World Bank considers strong governance and effective institutions essential to putting the poorest countries on the path to self-sufficiency.
This blog post was originally published in the Huffington Post.

Join the Conversation

Rajkumar Prasad
May 15, 2016

Great. Innovation is directly linked with Governance and Good Governance always make sustainable development at social and environmental level. The Good Governance always linked with eGovenance with Sustainable Administration to make SDGs success and fulfill citizen expectation at all level.
It is also important to bring Responsible Governance system within Government to eliminate corruption, inequality ,Genders Divide and bring Trust in Government and Governance for Better Socio Economy Sustainable Growth and Development

Rahul Yadav
May 17, 2016

Many scholars are giving there theories on poverty, good governance, corruption etc.. But there is nothing happens to maintain blogs and creative theories... We should have to work on ground level.. I think if we visit on ground level.. Then we realise that exactly what z going on.. There z lot of difference...

Amin Mahmood
May 17, 2016

Charity starts at home.
2. While renowned for introducing systemic reforms as a fundamental step towards development, the Bank has failed in stringent implementation of such 'systemic' checks within, as well as in partner organizations.
3. Anti-corruption measures are rather an eye-wash.
4. A page for reporting non-transparent doings in sponsored projects hardly qualifies as an effective systemic check.
5. The private sector sponsoring-arm IFC engages in inviting competition in specific areas while it already has equity participation in related prospective private bidders.Why was such a systemic check missed?
6. What happened to P4R programme? Why was it not carried forward with full force and partially abandoned in mid-way? Had it to do with such programmes being an inherent check on the Bank mis-spending on several wild pursuits yielding little or no results but offering glamorous association for the Bank and similar cheap popularity seeking third world governments?
7. Is it organizationally required (for all Group agencies) prior to seeking through approval of concerned Board, that the organization certifies within the approval summary that the respective World Bank Agency itself (and not individuals working for it) does not have a conflict of interest. Unfortunately it does not seem so.
8. Why is such a systemic check missing?
9. It is unfortunate. Why does it wait for "whistle-blowers" help? If good governance brings about positive change for corrupt governments, introduction of adequate systemic guards/ checks equally prevents such "mis-transactions" within the World Bank Group organizations.
10. The results of the public perception survey on the World Bank's programmes and concerned achievements/ results of the major survey vis-a-vis spending needed to be properly spread to take due ownership of all acts of omission and commission. Any circulation through curtailed 'information-highlights' may not be in any stakeholders interest, not even that of the Bank. People for whom the Bank is working need to be reassured that the Bank may have committed mistakes in the past but that like any other good growing organization the admission of such acts would actually lead to launching of due corrective processes.
11. When was the last time a thorough 'soul' searching undertaken NOT through inherently weak 'internal assessments' and reviews but through requisite THIRD PARTY EVALUATIONS/ EXPERTS - appointed through EXTERNAL CONTROLS in line with international 'accounting' practice?
12. Definitely a big step in the World Bank's image-building would result only if peoples of developing countries are assured that the organization propagating highest governance standards is itself exposed to systemic checks and balances.
13. Checks/ Guards determined by truly independent Third Party, Evaluators / Consultants appointed through independent external controls (and such experts not be involved directly or indirectly in receipt of any payments from the World Bank) to favorably view the Bank/ Group's internal systems (and when they are assured that such recommendations are not only for third world governments NOT DEIGNED for implementation within).
14. Such identification of weaknesses in the Group organizations approvals and systems would help in removing the general developing nations perceptions about mis-spending in programmes, which obviously may also be part of the World Bank's fundamental motto.

Tirumal Hyderabad India
May 26, 2016

Poverty comes from not controlling expance of govts VIPs president prime minister governor cm minister mp mla govt decoration control save poverty beyond expance going

Wejuli Ronald
May 23, 2019

With all due respect allow me say thank you your Excellence Sri Mulyani Indrawati for such a powerful inspiring message but neverthe less allow me point out that poverty traces its way from Leaders especially of heads of state who over stay in power creating many loop holes in acountry like corruption, political instability among others, there for i would be happy if you help Uganda and Africa at large and say no to prolonged stay in power. Thank you

Sri Mulyani Indrawati
May 26, 2016

Thank you very much for taking the time to read this post and expressing a strong interest in the important topic of good governance and the fight against corruption. Please help us spread the word and raise the demand for better, more effective, and accountable institutions.
The World Bank Group is working on governance issues through many channels. The independent integrity unit pursues sanctions related to allegations of fraud and corruption in World Bank Group-financed projects. This unit focuses on investigating and preventing wrongdoing and houses the International Corruption Hunters Alliance.
We also have a governance unit that brings together global expertise and supports countries directly in building good institutions for inclusive development. Among other areas, they help countries strengthen their tax systems and improve their anti-corruption efforts, and they encourage citizens to hold governments accountable.
As I said in my blog, good governance is the fuel that keeps development on track. Without it we cannot end poverty. It is integral for our work with countries that are determined to achieve more prosperity and a key focus for the Fund for the Poorest.

Aliyu Musa
June 27, 2016

Thank you Sri Mulyanu for the wonderful piece on good governance, corruption and accountability. Clearly this is stuborn menace in the way of sustainable development in the developing economies and governments. Open competition or tendering really promotes corrupt tendency in public procurement in government spend activities. However, the bank has good procurement guidelines in place and operational in all bank financed projects and the modified new procurement framework for implementation in July, 2016, better regime of accountability in projects procurement fuctions to address your contribution on the subject is in sight, Hopefully too.