Developed countries lead the effort to combat error, fraud or corruption (EFC) in Social Protection (SP) programs. The two factors which triggered this development were the sheer size of the SP spending in these countries, and the emphasis on accountability and management-for-results in public policy. On average, developed countries spend 15.7% of GDP for SP programs, making it one of the largest public spending item, if not the largest. National audit institutions and other public bodies are increasingly scrutinizing whether public transfers reach the right beneficiaries, in the right amount and at the right time. In few countries, the level of benefits affected by fraud and error is one of the performance indicators of the program, subject to a continuous process of measurement and sometimes linked to incentives or penalties that determine the size of the administrative budget of the program. Efforts to reduce EFC are quite recent and vary across developed countries. With few exceptions, comprehensive strategies to reduce EFC across the SP sector or for selected programs have been launched only in the last decade. UK, for instance, adopted its first strategies to combat EFC in 1997; Australia started in 2006. The reduction of EFC is a policy priority especially in the Anglo-Saxon countries which transfer a larger share of SP benefits based on a means-test, and thus are more prone to EFC. The developed countries’ experience with controlling and reducing EFC varies, ranging from across-the- sector strategies and action plans, to program-focused approaches, and to doing nothing. How successful are the efforts to combat EFC in developed countries, and where to look for good examples and best-practice? A 2006 Study by Rand Europe (1.3mb pdf) commissioned by the UK National Audit Office, has benchmarked the efforts of 9 OECD countries with respect to their effort to minimize the funds affected by EFC. The study describes the SP systems, assesses the scale and prominence of the problem in a national context, outlines the measures taken to reduce fraud and error and describes the steps taken to measure the level of fraud and error. - The study finds that fraud and error rate is positive even in well-run programs operating in high-capacity countries. Rates of fraud and error in social security systems range between 2 and 5%. By type of program, SSN programs have the highest fraud and error rates (5-10%), followed by unemployment benefit or disability pension programs (1-2%); old-age pensions have the lowest rates (0.1-1%). These figures should be interpreted with caution, as they come from a small sample of countries or programs who measure the level of FEC with reasonable accuracy, biased toward good programs.
- Efforts to reduce the level of EFC can be quite successful. The UK halved the level of fraud in the decade following the adoption of a strategy. The study lists many tools or instruments used to minimize the level of EFC with positive, quite high benefit-to-cost ratios.
- Although a clear country ranking is difficult due to institutional differences and lack of availability of comparable data across countries, the UK emerges as of the best country examples as of 2006.
Despite the growing attention devoted to the reduction of EFC in developed countries, only three countries implemented as of 2006 across-the sector strategies: Australia, Ireland and the United Kingdom. Other countries have adopted program-centered approaches. For instance, the United States Department of Agriculture developed a Food Stamp Program Quality Control System which measures the accuracy of the states’ eligibility decisions and benefit amounts. The following links will guide you to the key policy documents from selected countries.
 Reducing Error, Fraud & Corruption in Social Protection Programs
Controlling Error, Fraud & Corruption in Developing Countries
International Benchmarking
The United Kingdom’s Experience in Reducing Error & Fraud
Efforts to Combat Error, Fraud & Corruption in SP Systems: Country Examples
Measuring Error & Fraud
International Cooperation to Reduce Error, Fraud & Corruption
Control & Accountability Mechanisms in Conditional Cash Transfer Programs: Review of Programs in Latin America & the Caribbean 
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