World Bank President Dr. Jim Yong Kim called corruption “Public Enemy Number One“:
“In the developing world, corruption is public enemy number one,” said Kim, speaking at an event hosted by the World Bank’s anti-corruption investigative arm, the Integrity Vice Presidency. “We will never tolerate corruption, and I pledge to do all in our power to build upon our strong fight against it.”
“Every dollar that a corrupt official or a corrupt business person puts in their pocket is a dollar stolen from a pregnant woman who needs health care; or from a girl or a boy who deserves an education; or from communities that need water, roads, and schools. Every dollar is critical if we are to reach our goals to end extreme poverty by 2030 and to boost shared prosperity.”
An important step toward fighting corruption and helping more people lead better lives is to build institutions with greater integrity, Kim noted. He described three key elements in the World Bank Group’s approach:
“First, we need to improve the way we share and apply knowledge about building institutions with greater integrity; second, we need to empower citizens with information and tools to make their governments more effective and accountable; and third, we need to build a global movement to prevail over corruption.”
In addition to governmental action in anti-corruption, Kim called on other partners to join the fight, including the private sector.
“The private sector has to be part of the solution as well. Oil, gas, and mining firms are increasingly disclosing their contracts with governments. This gives everyone a chance to scrutinize the behavior of corporate and public officials.”
This transparency and accountability approach to development marks a stark contrast from the World Bank of 1990s. The IMF has recently also taken a more context-sensitive approach compared to “Washington Consensus” policies of the 1990s. This trend points to greater policy coherence between the World Bank, the IMF, and the U.N. as the Post-2015 development agenda is finalized.
These organizations have fully embraced the importance of the political economy of development. Without considering “good governance”, economic gains can be embezzled or misused. Corruption retards growth, increases inequalities, and causes grievances which can boil over civil if not regional conflicts. Economic growth and poverty reduction cannot be achieved on a large scale without considering political factors.
Ultimately, there are limits to even what global organizations can accomplish. To sustain social progress, people must be able to hold “duty bearers” (generally governments, but also private sector actors and social service providers) accountable for their human rights obligations. The role of international organizations and governments is mainly an empowering / enabling one–provide access to information, advocate for avenues / institutions to meaningfully voice grievances, and let people-power do the rest.
The anti-corruption push has recently taken hold in a number of countries. Below are a few notable examples:
“Today, the common man has won,” Kejriwal said in a triumphant speech at Delhi’s Ramlila grounds, the very place were huge protests over corruption erupted in 2011, opening the way for the birth of the AAP.
“This truly feels like a miracle. Two years ago, we couldn’t have imagined such a revolution would happen in this country.”
In a December 4 election to the legislative assembly of Delhi, a city of 16 million people, no party won the majority of seats required to rule on its own.
Wearing a simple blue sweater and with a boat-shaped Gandhi cap on his head, Kejriwal pledged to set up an anti-bribery helpline.
“If anyone in the government asks you for a bribe, don’t say ‘no’,” he said. “You report it on the phone number and we’ll catch every bribe-taker red-handed.”
Kejriwal, who has tapped into a vein of urban anger over the venality of the political class and the neglect of citizens’ rights in the world’s largest democracy, has promised to expand his movement across the country.
Along with a pledge to send Delhi’s corrupt lawmakers to jail, the AAP has also promised free water for every family in the capital and a sharp reduction in their electricity bills.
A business lobby group said on Saturday the unorthodox ideology was not important as long as results were delivered.
“We feel that though the promises made by it may look tall, they can still make a good economic sense if the objective … is achieved by bringing in operational efficiencies,” Rana Kapoor, president the Associated Chambers of Commerce and Industry of India, said in a statement.
The allegations of high-level corruption threaten to undo Mr. Erdogan’s accomplishment of wresting Turkish politics from the military and overseeing a long period of economic growth. Like a Moses in the wilderness, he has led his people from one sort of bondage but appears unable to deliver them to a promised land of transparent government where people are ruled through consensus rather than bullying and threats.
Mr. Erdogan does not know how to play defense. Last weekend, he addressed rally after rally and cursed the “international groups” and “dark alliances” trying to undermine Turkey’s prestige.
The government is treating the crisis as nothing short of a coup by those jealous of its success. This is nonsense.
The opposition it faces has emerged because of the A.K.P’s own lack of respect for the rule of law and a cynical disregard for public accountability. It can no longer hide behind conspiracy theories and bluster.
Since its establishment in 2002, the KPK (Corruption Eradication Commission) has become, contrary to all expectations, a fiercely independent, resilient, popular and successful institution that is a constant thorn in the side of Indonesia’s establishment.
[In 2009] police arrested two KPK commissioners for extortion and bribery. The charges were dropped after nationwide street protests and a Facebook campaign that gathered one million supporters.
“The KPK’s only friend is the public,” says Dadang Trisasongko, secretary general of the Indonesian chapter of global corruption watchdog Transparency International.
The international business community is watching this tussle closely. Executives surveyed in the World Economic Forum’s Global Competitiveness Report 2011-12 said corruption remained “the most problematic factor for doing business” in Indonesia.
The World Bank has said corruption across the world costs $1 trillion. No one has done a thorough study of the costs in Indonesia, the world’s fourth-most populous country and one of the hottest emerging markets with an economic growth rate of 6 percent. The Anti-Corruption Studies Center at Gadjah Mada University in Yogyakarta put the losses to the state at $1 billion over the past five years alone.
Thailand protests are different in the sense that the opposition is arguing for less democracy and less populist economic policies. Opponents of Prime Minister Yingluck’s Pheu Thai party cite corruption as their main grievance.
Populist economic policies, while generally beneficial in the long run, do have a common pitfall of corruption. Populist policies rely on the government signing many contracts for social goods and services. Without proper oversight, these contracts themselves present many opportunities for corruption / embezzlement of tax-payer money.
I do not know if this is what has happened in Thailand, or whether these claims are unfounded (it is worth noting that Thailand does not score well on Transparency International’s “Corruption Perception Index“. Regardless, the Pheu Thai party should consider setting up social accountability mechanisms to allay the fear of corruption.
Anti-corruption measures are themselves populist policies. Enabling people to hold corrupt government officials accountable realizes a key political right. Moving money from corrupt politicians pockets to social services helps fulfill economic and social rights. Therefore, the anti-corruption movement is an indispensable aspect of the human rights based approach to development.
The near universal embrace of anti-corruption measure–from the highest level of global governance to local politicians and their constituents on the ground–bodes well for the Post-2015 development agenda. While much work remains to be done, every anti-corruption / accountability / civilian empowerment policy is a step in the right direction.
December 28, 2013 at 8:14 pm
If people around the world weren’t expressing dissatisfaction in a large way, the World Bank president would be saying nothing about corruption. When he states the goal of eliminating extreme poverty by 2030, he shows himself as one who talks the talk, but does not walk the walk. Talk is cheap. This man will never make an effort to do anything about corruption he is fully aware of. The tax haven industry, has been going strong for decades. and only when major leaks about it went viral did any top dogs at the IMF or World Bank disclose what they KNEW was occurring for over 20 years.
December 29, 2013 at 1:13 pm
Isn’t that one of the beautiful aspects of the internet, the way it empowers ordinary people to hold those in positions of power responsible. It’s in my blogs tagline after-all!
I do not think that it was necessarily bad intentions by IEOs in the 80s and 90s which led to bad policies. I think it was more of a “white mans burden” sort of thing–we’re developed, we know better, economic problems require economic solutions. Only after “lost decades of development”, and tens of billions in misused development aid have these organizations realize that without addressing governance issues, even good “context sensitive” macroeconomic policies won’t lead to sustainable human development. The World Bank is launching a governance division, that’s a good start no?
There is a limited role these organizations can play. They have to be invited into countries, and they have to respect national sovereignty / self-determination (except in the most severe R2P cases). These organizations therefore must work with countries, developing context-sensitive poverty reduction plans and tying development aid to good governance. One thing IEOs can (and do) advocate for is a rights based approach to development, because generally the majority of people on the ground want what people in the “western world” want–responsive governments, security, dignity, and social mobility.
I am not saying this is ideal, perhaps a move powerful international government which could directly determine policies that would more quickly and peacefully lead to sustainable human development. But it is the world we live in, and I for one at least am optimistic when these IEOs and people on the ground are of one mind. This certainly wasn’t the case when the MDGs were being developed, so I am therefore more optimistic about the Post-2015 development agenda in terms of [extreme] poverty reduction and sustainable human development.
December 29, 2013 at 5:30 pm
Funny coincidence while channel surfing this morning C-Span had a panel at the World Bank discussing corruption. There was president of WB Kim, Paul Volcker, Former WB president Wolfensohn, Ms. Huguette Kabelle of Transparency International, and Cesar Purisimi – Finance director of the Philippines. Then the young gal is from Al Jazeera, who I watched yesterday interviewing John Pilger on The Stream. Purismi had a great idea to give every business in the world a sort of passport-unique identifying number – the same as telephone numbers – to track world business transactions. Wolfensohn tried to tear the idea down by asking him about Chinese secrecy and foot dragging. You could tell Purisimi was a little intimidated, but he stood his ground. So, here is a great idea that should have been thought of and implemented decades ago. Kim, Volcker, and Wolfensohn never gave an analysis of Purisimi’s idea, except for Kim saying, “ideas like our colleague…” Ms. Labelle was surprised to hear the idea come up, and she showed an intrigue about it.
My view is that the IMF, World Bank, Federal Reserve are privately owned so have profits as a primary motive. John Perkins’ book Confessions of an Economic Hit-man lays out the corruption as well as any book out there. He dealt directly with presidents who later were assassinated for not “playing the game”. He speaks inconvenient truth f corruption and lethal illegality that none of the C-Span panel members even came remotely near.
December 29, 2013 at 7:58 pm
Yeah idk, I mean counties have to pay into these funds in order for them to remain relevant, it would be incredibly short-sighted to intentionally give bad advice to make certain stakeholders happy IMO–I could be wrong.
Recent changes at these institutions would make it appear they are willing to change their models in the face of overwhelming evidence (WB–political economy approach, IMF–FCLs and changes from benchmark based conditionality to before-the-fact macro stability based conditionality) and own up to past mistakes (debt forgiveness). I generally do not buy into global conspiracy theories, maybe I am naive.
The BRICs are planing their own development institutions to challenge the WB and IMF. Competition is probably a good think for more “country friendly” deals, but given the human rights records of China and Russia, one has to be skeptical of these alternative institutions as well.
I’m actually about to read Confessions on vacation next week. First time I’ll have had time to read a book for pleasure in a few years as I am finally done with grad school. I’ll let you know what I think about it.
December 30, 2013 at 4:17 pm
Hope you have a good vacation. Don’t know if Perkins’ book will provide any pleasure, but his experience as an Economic Hitman will blow away anyone who reads it.
December 30, 2013 at 5:20 pm
Happy holidays and New Years! All the best too you and yours
January 14, 2014 at 11:12 am
So I read Confessions of an EHM. I guess my education kind-of prepared me for what I was about to read, but it was very interesting to hear the personal account of someone who was doing the manipulating. I do still hold onto my beliefs that IEOs such as the IMF / WB are not inherently evil (they would challenge these inflated forecasts), but rather they were having “experts” feed them the information they wanted to hear (people tend to be more accepting of information they want to hear) do not challenge . And I still think recent developments point to stronger pro-poor policies by these organizations; I guess we’ll have to wait and see if it is just rhetoric or not.
I particularly enjoyed the part where he contrasts American values as outlined by our founding fathers, and the desires of the global corporatocracy–it is a distinction I think more people should be aware of.
January 14, 2014 at 11:09 pm
Perkins went to Central America to apologize. “Apology of an Economic Hitman” on YT.