Improving governance and fighting corruption helps countries to better deliver basic services and to create growth and employment opportunities for the benefit of the poor. This work is therefore fundamental to the Bank’s mission. In March 2007, the Board unanimously endorsed a new strategy on Bank engagement on governance and anticorruption. Under this strategy, the Bank will expand and strengthen its support for improving governance and curbing corruption in order to fight poverty; | |  © Jonathan Ernst
| improve the delivery of services; strengthen the environment for private investment; and foster economic growth at the project, country, and global levels. |
Activities at the Project Level Governance and anticorruption are being addressed at the project level across the Bank’s portfolio, including in public sector reform, infrastructure, health, extractive industries, and the financial sector. In fiscal 2007, World Bank support to governance was $3.8 billion—$3.4 billion to public sector governance and $424 million to support the rule of law. This comprised 15 percent of Bank lending. Assistance for governance includes support for increasing transparency in public financial management, strengthening tax and customs administration, enhancing civil service performance, supporting legal and judicial reforms, and enabling local and central governments to deliver services more effectively and with greater accountability to local communities. A project in Afghanistan is funding improvements in procurement and financial management. In Cambodia, the Bank is supporting more transparent civil service pay structures. In the difficult postconflict environment of Liberia, the Bank, under the multidonor Governance and Economic Management Action Plan, helped streamline budget execution processes and fiduciary controls while building capacity. By providing Institutional Development Fund (IDF) grants, the Bank has helped strengthen the capacity of Mexico’s Federal Institute for Access to Information. IDF grants have also allowed the Slovak Republic to redesign and streamline the judicial system and increase access to justice. The Department of Institutional Integrity (INT) investigates allegations of corruption involving Bank operations and possible staff misconduct. The Bank offers multiple outlets for reporting allegations of fraud, corruption, and other misconduct in Bank-financed projects, including an international hotline (+1-800-831-0463). In fiscal 2007, INT released the Integrity Report of the World Bank Group, Fiscal Years 2005–2006, which details actions the Bank has taken in investigating fraud, corruption, and other misconduct over that period. The programmatic elements of a new Voluntary Disclosure Program were approved by the Board in August 2006 to elicit voluntary cooperation in the fight against corruption from firms that have previously engaged in wrongdoing. Information on the companies and individuals the Bank has sanctioned is publicly available on the Bank’s Web site. An independent panel was established to review INT’s roles, responsibilities, and working relationships as part of the Bank’s governance and anticorruption strategy. Activities at the Country Level Improving governance has become a component of the Bank’s country assistance strategies (CASs) in most countries, and it is a central element in some, including those of Albania, Bangladesh, Indonesia, and several countries in Africa. Bank support for governance is channeled through a mix of lending, grant, analytical, and advisory instruments. Consistent with its heightened focus on governance, IDA makes its allocations based in large part on country performance ratings, and two-thirds of the value of this rating is based on a country’s governance. Research over the past two decades has shown that governance has a strong impact on both development performance and aid effectiveness. The global commitment to reducing poverty by increasing aid—supported by IDA—is based on the principle of mutual accountability: more aid is provided the greater the effectiveness of how aid is used. Aid is best increased using recipient country systems for public policy making, budgeting, and service provision. The World Bank Institute, the knowledge-sharing and learning arm of the World Bank, promotes the Bank’s governance and anticorruption agenda through its Global Governance Program. The program delivers courses and seminars, provides governance advisory services, and carries out operational research on various aspects of governance. These activities and diagnostic tools help support action planning for in-country reform. In fiscal 2007, the program published an updated set of governance indicators for 213 countries and territories. In partnership with bilateral agencies, local authorities, and civil society, the program is supporting in-depth governance and anticorruption diagnostic studies in Benin, Burundi, El Salvador, and Haiti; it is planning to complete studies in Kenya and Nigeria; and it has received preliminary requests for diagnostic-related assistance from 11 other client countries. IEG finds that the bulk of the Bank’s assistance in governance and anticorruption has taken the form of reform programs in public administration and public financial management.
This assistance has often improved the quality of public sector management processes without translating into improvements in the perceived quality of governance. Yet recent progress in Eastern and Central Europe shows that it is possible to raise perceived quality in a limited time when there is strong country commitment to doing so. The IEG eval-
uation suggests that public sector reform initiatives have not always been aligned with political circumstances, focusing on new legislation and institutions while overlooking the enforcement dimension. Reform initiatives have also tended to overlook the interface between the public and the private sectors even though regulatory reforms have often been effective against corruption. Activities at the Global Level The Bank is expanding partnerships in a number of joint initiatives to strengthen governance. It is an active participant in promoting the OECD Convention on Combating Bribery of Foreign Public Officials (1997), the Forest Law Enforcement and Governance Ministerial Processes (from 2001), the Extractive Industries Transparency Initiative (2002), and the United Nations Convention against Corruption (2003). It works closely with several international anticorruption organizations and networks, including the Financial Action Task Force, the Partnership for Transparency Fund, the OECD Development Assistance Committee (DAC), and Transparency International. In fiscal 2007, the Bank collaborated with OECD-DAC Govnet to prepare an issues paper that sets out an agenda for engaging in global collective action to improve poor governance, for conducting joint corruption assessments, and for leveraging comparative strengths for a coordinated response to addressing corruption. (See www.worldbank.org/governance and www.worldbank.org/integrity.) |
RSS