World Bank set to examine its role in confronting corruption

World Bank set to examine its role in confronting corruption

The World Bank’s internal evaluation arm is finalizing a report on the institution’s strategy for confronting corruption in countries to which it lends. The report will be debated by the Bank’s executive board in late July and will be published shortly thereafter. It should generate some waves.

The World Bank is a relative newcomer to the anti-corruption fight. For decades, the Bank  all but ignored corruption–deeming it to be a political issue. Since the mid-1990s, however, the global lender has changed tack. Indeed, all Bank presidents since James Wolfensohn have made corruption a central theme. The Bank now has a vice president for integrity and regularly convenes meetings on how to most effectively combat corruption. More of its funding goes to strengthening public accountability than in the past. This year’s annual meetings featured a panel discussion with corruption fighters from different national and international institutions. The Bank’s rhetorical committment to clean governance is clear.

But challenging official corruption means challenging Bank members, and that’s uncomfortable. Scrutinizing the private-sector has been easier. The Bank has recently investigated a handful of companies implementing Bank projects. Several, including a subsidiary of the electronics giant Siemens, have been debarred from working on Bank-funded projects (as part of  a settlement, Siemens pledged $100 million over 15 years for good governance projects) . In other cases, including a major roads initiative in Kenya, the Bank has backed out of projects altogether because of concern about exactly what private-sector actors are involved.

These policies generate complications of their own. In some cases, big lenders less concerned about corruption simply step into the space the Bank vacates.  There are also questions about how consistently anti-corruption standards are enforced. Certain influential voices in the Bank are less than enthusiastic about the anti-corruption fight, at least as it’s being conducted. Emerging powers like Russia, India, and Brazil generally score poorly on corruption indices. None of the BRICS cracked the top 50 in Transparency International’s 2010 ranking, and Russia stumbled in at 154th of 178 countries surveyed. In the past, these countries have expressed anger about Bank publications–notably the annual Doing Business survey–that rank countries in part on the basis of their perceived levels of corruption. Expect the forthcoming report to stir up that debate.