Combating Corruption 3/8/18, 1:08 PM

Understanding Poverty (/en/understanding-poverty) / Topics (/en/topic) / Governance (/en/topic/governance)

Working for a World Free of Poverty

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BRIEF

Combating Corruption
September 26, 2017

RELATED LINKS

Blog posts on anti-corruption

(http://blogs.worldbank.org/category/tags/corruption)

Stolen Asset Recovery Initiative

(http://www.worldbank.org/star)

World Bank Integrity Vice Presidency

(http://www.worldbank.org/en/about/unit/integrity-vice-
presidency/report-an-allegation)

10 WAYS TO FIGHT CORRUPTION

Here Are 10 Ways to Fight Corruption

photo credit: futureatlas.com

The World Bank Group considers corruption a major challenge to its twin goals of ending extreme
poverty by 2030 and boosting shared prosperity for the poorest 40 percent of people in developing
countries. In addition, reducing corruption is at the heart of the Sustainable Development Goals
(https://sustainabledevelopment.un.org/sdgs) and achieving the ambitious targets set for Financing for
Development (http://www.worldbank.org/en/news/press-release/2017/04/22/world-bankimf-spring-
meetings-2017-development-committee-communique). It is a priority for the World Bank Group and Governance (/en/topic/governance)

many of its partners.

Businesses and individuals pay an estimated $1.5 trillion in bribes each year. This is about 2% of global
SENIOR MANAGEMENT SPEECHES
GDP—and 10 times the value of overseas development assistance. The harm that corruption causes to
development is, in fact, a multiple of the estimated volume, given the negative impact of corruption on Remarks by World Bank Group President Jim Yong Kim at
the poor and on economic growth. Anti-Corruption Summit 2016
(http://www.worldbank.org/en/news/speech/2016/05/12/re
marks-by-world-bank-group-president-jim-yong-kim-at-anti-
Empirical studies have consistently demonstrated that the poor pay the highest percentage of their
corruption-summit-2016)
income in bribes. For example, in Paraguay, the poor pay 12.6 percent of their income to bribes while
Remarks by President Jim Yong Kim at "Speak Up Against
high-income households pay 6.4 percent. The comparable numbers in Sierra Leona are 13 percent and Corruption" Event
3.8 percent. Every stolen dollar, euro, peso, yuan, rupee, or ruble robs the poor of an equal opportunity (http://www.worldbank.org/en/news/speech/2013/12/19/wo
rld-bank-group-president-jim-yong-kim-corruption-event)
in life.
President Jim Yong Kim's Remarks at the International
In addition, corruption discourages poor people from accessing health services and negatively impacts Corruption Hunters Alliance
(http://www.worldbank.org/en/news/speech/2014/12/08/wo
health outcomes, such as infant mortality. It contributes to higher-order crimes: when money is lost
rld-bank-group-president-jim-yong-kims-remarks-
through illicit financial flows (IFFs), it often finds its way across borders to fund drug and human international-corruption-hunters-alliance)
trafficking. Its presence works to erode the social contract between citizens and the state.

Economic activity is similarly harmed by corruption – with corruption operating as a strong disincentive
to foreign investment. Countries capable of controlling corruption are able to use their human and
financial resources more efficiently, attract more foreign and domestic investment, and grow more

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Combating Corruption 3/8/18, 1:08 PM

rapidly. Recent research suggests that there is a 300 percent dividend for improving governance from
weak to strong.

The Bank Group recognizes that corruption comes in different forms. It might impact service delivery,
such as when police officers ask for bribes to perform routine services. Corruption might unfairly
determine the winners of government contracts, with awards favoring friends or relatives of government
officials. Or it might affect more fundamental issues of how the institutions work, a form of corruption
that is often the costliest in terms of overall economic impact. Each of these forms is important, and
tackling them all is fundamental to achieving progress and sustainable change.

Successful anti-corruption efforts are often led by a 'coalition of concerned' – by politicians and senior
government officials, the private sector, and by citizens, communities, and civil society organizations.
Increasingly, addressing corruption will require the concerted attention of governments and businesses
and use of advanced technology to capture, analyze, and share information in order to prevent, detect,
and sanction corrupt behavior. Much of the world's highest-value corruption could not happen without
institutions in wealthy nations: the private sector firms that give large bribes, the financial institutions
that accept laundered money, and the lawyers and accountants who facilitate corrupt transactions. Data
on international financial flows shows that money is moving from poor to wealthy countries in ways that
fundamentally undermine development. Corruption is a global problem that requires global solutions.

The World Bank Group is committed to fighting corruption in Bank-financed projects, in an effort that
involves the work of its Integrity Vice-Presidency (http://www.worldbank.org/en/about/unit/integrity-vice-
presidency). Last year, the Bank’s Integrity department (INT) substantiated investigations that involved 68
projects and the review of 166 contracts and agreements worth about $818 million, resulting in 60
sanctioned entities.

STRATEGY

The World Bank Group works at the country, regional and global level to build capable, transparent, and
accountable institutions and design and implement anticorruption programs. Our work revolves around
changing outcomes by helping both state and non-state actors establish the competencies needed to
implement policies and practices that improve results and build public integrity.

Following the Anti-Corruption Summit (https://www.gov.uk/government/topical-events/anti-corruption-

summit-london-2016), May 2016, the Bank Group reaffirmed its commitment
(http://www.worldbank.org/en/topic/governance/brief/update-on-world-bank-group-commitments-
following-the-uk-anti-corruption-summit-may-2016) to confront corruption as a core development issue
wherever it exists and to support integrity in public sector institutions. The Bank Group also agreed to:

1. build the capacity of country clients to deliver on their commitments to enhance transparency and
reduce corruption;

2. enhance its support for implementation of anti-money laundering requirements and for the
recovery of stolen assets, and

3. extend its work on tax reform, illicit financial flows (IFFs), procurement reform, and preventing
corrupt companies from winning state contracts.

The World Bank Group has included Governance and Institutions as a theme in IDA-18
(http://ida.worldbank.org/theme/governance-and-institutions) – its Fund for the Poorest Countries – in
order to focus global attention on the issue. Read more about the status update on the Bank Group’s
commitment (http://www.worldbank.org/en/topic/governance/brief/update-on-world-bank-group-
commitments-following-the-uk-anti-corruption-summit-may-2016) at the UK Anti-Corruption Summit.

Regional and Global initiatives:

Leadership in creating international transparency standards (Global Initiative on Financial Transparency

(http://www.fiscaltransparency.net/), Open Contracting Standard (http://standard.open-
contracting.org/latest/en/), Asset Disclosure Standards) and support for the implementation of open
government (through support for the Open Government Partnership
(https://www.opengovpartnership.org/)).

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Combating Corruption 3/8/18, 1:08 PM

Active assistance in the implementation of transparency and accountability efforts such as Extractive
Industries Transparency Initiative (https://eiti.org/who-we-are) (EITI (https://eiti.org/)), Publish What You
Pay (http://www.publishwhatyoupay.org/), Fisheries Transparency (http://fisheriestransparency.org/),
Anti-Money Laundering rules.

Engagement and active support for international alliances and regional anti-corruption forums, such as
the International Corruption Hunters Alliance and LAC Regional Parliamentary Network.

Engagement in international forums on anti-corruption including the G20 Anti-Corruption Working

Group, the Financial Accountability Task Force, the OECD Anti-Corruption Task Team.

Fighting corruption within World Bank-financed projects:

The Bank Group's approach to fighting corruption combines a proactive policy of anticipating and
avoiding risks in its own projects with a commitment to helping clients and stakeholders identify and
combat corruption at national and international levels. The Bank Group subjects all potential projects to
rigorous scrutiny and works with clients to reduce possible corruption risks that have been identified.
Public complaint mechanisms built into projects encourage and empower oversight, and projects are
actively supervised during implementation.

The World Bank has a zero-tolerance policy toward corruption in its projects. When allegations of fraud
and corruption are substantiated, companies involved in misconduct are debarred from engaging in any
new Bank-Group-financed activity. Concerned governments receive the findings of Bank Group
investigations. In the past 7 years, the World Bank Group has debarred 368 firms and individuals.

Selected country examples include:

Nigeria — The country was the first African government to implement the Extractive Industries
Transparency Initiative (EITI), and one of the first steps it took was a comprehensive audit of the oil
sector value chain to verify that all payments were correct and settled. The audit revealed $9.8 billion in
outstanding recoverable revenues from 1999 to 2008, including an estimated $4.7 billion owed by the
state-owned Nigerian National Petroleum Corporation (NNPC). As a result of the audit, at least $2.4
billion of the lost revenue was recovered.

India — Some of the country's largest social welfare programs suffered because of ineligible
beneficiaries receiving payments and officials taking a cut of or delaying payments meant for the poor.
Now the government has distributed smartcards based on the country's biometric identification system
to 19 million villagers in connection with the $5.5 billion National Rural Employment Guarantee Scheme.
This reduces the chances for misconduct and gets money faster to the people who need it most.

Dominican Republic — Public officials, civil society, private sector leaders, and other committed citizens
formed the Participatory Anti-Corruption Initiative, a forum that gives thought-leaders a unique
opportunity to tackle corruption and take on powerful interest groups in many areas, including medicine
and procurement. By 2014, reforms in this area had lowered drug prices, improved medication quality
and reduced public spending by 64%.

Last Updated: Sep 26, 2017

SELECTED BLOG POSTS

Here are 10 ways to fight corruption (http://blogs.worldbank.org/governance/here-are-10-ways-fight-

corruption)

Is Technology Good or Bad in the Fight Against Corruption?

(http://blogs.worldbank.org/governance/technology-good-or-bad-fight-against-corruption)

Quest for Green, Clean, and True Sport for All (http://blogs.worldbank.org/publicsphere/quest-green-
clean-and-true-sport-all)

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Combating Corruption 3/8/18, 1:08 PM

Here are Some Ways to #TakeOn Corruption (http://blogs.worldbank.org/governance/here-are-some-

ways-takeon-corruption)

Corruption Fight Aided by Technology (http://blogs.worldbank.org/voices/corruption-fight-aided-

technology)

Building trust in the government one text at a time (http://blogs.worldbank.org/category/tags/anti-

! (mailto:?body=http%3A%2F%2Fwww.worldbank.org%2Fen%2Ftopic%2Fgovernance%2Fbrief%2Fanti-corruption.print%3Fcid%3DEXT_WBEmailShare_EXT&subject=Combating%20C
corruption)

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