Global Issues Seminar Series November 14, 2006 Governance and Corruption Vinay Bhargava, Director...
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Transcript of Global Issues Seminar Series November 14, 2006 Governance and Corruption Vinay Bhargava, Director...
Global Issues Seminar Series
November 14, 2006
Governance and Corruption
Vinay Bhargava, Director International Affairs, The World Bank
Slide# 1: Governance & Corruption – Not the Same
The manner in which the statestateacquires and exercises its authority to provide public goods & services
Use of publicpublic office for privateprivate gain
GovernanceGovernance
CorruptionCorruption
Corruption is an outcome – a consequence of the failure of accountability relationships in the governance system
Corruption is an outcome – a consequence of the failure of accountability relationships in the governance system
Sldie#2: Key Dimensions of Governance
Core GovernancePublic financial management
Multi-donor PEFA initiative (including Switzerland)
Administrative & civil service reform
Governance in SectorsTransparency
Participation
Competition in service provision
Sector-level corruption issues
Demand for Governance
State oversight institutions (parliament, judiciary, SAI)
Transparency & participation (FOI, asset declaration)
Civil Society advocacy
Competitive private sector
Local GovernanceCommunity-driven development
Local government transparency
Downward accountability
Private Sector Development
Competitive investment climate
Two faces of the private sector
Coalition building
Slide 3: Corruption is present in all countries in the world—
pervasiveness varies
TI 2005 Corruption Perceptions Index
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Slide 4: Consequences—corruption lowers incentives for
investment
Slide 5: Consequences—corruption affects the personal lives of citizens and hurts the
poor the most
Slide 6: Consequences—corruption undermines trust in institutions
Coalitions with civil society, private
sector, parliamentarians,
and others to combat entrenched corruption networks
MDB collaboration in high-risk
settings to avoid ‘mixed-signals’;
coordinated donor action to support
demand-side initiatives
Slide 7: Global Collective Action Against Corruption
Global Conventions (OECD, UNCAC) need to
be enforced to curb transnational corruption &
facilitate asset recovery
Slide 8: Globalization of the Fight Against Corruption UN Oil-for-Food Scandal
•More than 2,200 companies involved
•Humanitarian kickbacks from 66 countries
•Oil surcharges paid by companies form around 40 countries.
Slide 9: Forces Shaping Evolution of Corruption as a Global Issue
Demand: Policies to increase transparency in public, corporate, and international finance arenas; research supplying credible information
Supply: Anticorruption measures —national and international
Institutions: Speed at which national and international governance institutions mature
Integrated financial systems—harder to monitor; increases risks of corrupt behavior
Slide 10: International Actions to Combat Corruption
Ensuring that loans and grants to developing countries are used effectively
Bolstering donor support for reform Reducing the incentives for multinational
businesses to pay bribes Promoting international programs to control
organized crime and the flow of illicit funds Improving the institutional framework for
resolving international disputes
Slide 11: International Actions to Combat Corruption
UNCAC: 133 signed; 30 ratifications to enter into force reached on Sept. 15, 2005—preventive measures, criminalization and law enforcement, international cooperation, asset recovery
OECD Convention Against Bribery: all 30 OECD members and 6 non-members have complied with making it a punishable offense to bribe an official in a host country; as of 2005, only 4 have prosecuted more than 1 case; uses a 2-step peer review system
FATF: national and international policies vs money laundering and terrorist financing; 30 countries + HK, EC, and Gulf states are members
Slide 12: Civil Society Initiatives Transparency International
EITI: 8 countries implementing; 14 more have endorsed; IFIs, donors, mining and oil companies, NGOs included
Global Witness: investigative org to break link between natural resource exploitation and the funding of conflict and corruption—led to demise of Khmer Rouge, now active in Asia and Africa
Global Organisation of Parliamentarians Against Corruption (GOPAC): 400 parliamentarians from 70 countries fighting corruption
Slide 13: Business Sector Initiatives
International Accounting Standards: 10 countries in 1974 to over 70 countries to date
International Chamber of Commerce: published Rules of Conduct to Combat Extortion and Bribery in 1977 (revised in 1999)
Publish What You Pay (George Soros, 2002): now a coalition of over 280 NGOs worldwide
Partnership Against Corruption Initiative: WEF in 2004 Global Compact: 10th principle against corruption added in
2004—hundreds of companies have committed to the compact which urges them to lobby for ratification and implementation of the UNCAC and collaborate with other anticorruption efforts
Slide 14: Key Elements of World Bank Strategy
Project Level
Combating corruption in Bank
operations
Country Level
CAS-centered Approach,
deepening support to countries to
strengthen governance
Global Level
Working with development
partners, sharing experience & addressing
transnational issues
THANKS
AND NOW YOUR QUESTIONS