From 12 to 13 April 2008, the financial and development committees of the World Bank and the International Monetary Fund convene to discuss progress on their poverty reduction work.

Transparency International takes a closer look at the relation between poverty and corruption and the Anti-corruption Strategy of the World Bank.

TI press release: TI welcomes the World Bank’s new strategy for increased transparency in the extractive industries

Ensuring the development effectiveness by fighting corruption was a central motivation of TI´s founding generation. TI has consistently pointed to the responsibility of the giving hand as much as the taking one in fighting corruption. The poor were the ones most affected when overpriced highways were built by foreign companies in favour of feeder road by local labour, when adjustment programmes cut into social services to make up for massive capital flight, when blue print trade policies in many countries destroyed far more jobs than they created.

Corruption is now universally recognised as denying individuals and communities their basic human rights and affecting the very root of development processes. Results from the TI Global Corruption Barometer show that poor respondents consistently pay more bribes than other income groups to receive medical services, attend schools or seek police assistance, Corruption drains international and domestic resources allocated to poverty reduction and reduces the quantity and quality of public services that the poor need most. Corruption can lead to resignation and apathy, undermining the engagement of citizens in their societies.

TI sees the poor as central stakeholders with a pivotal role in fighting corruption. They are the main victims of corruption and have the most to gain from a corruption-free society.

TI focuses on supporting the rights and opportunities of citizens to participate in their country’s political, economic and social development processes. The organisation draws on global and national frameworks – such as the United Nations Convention against Corruption (UNCAC) - that commit all states to actively promoting the participation of citizens and civil society in public decision-making, increasing the transparency and accountability of political systems and public finances.

Evaluations commissioned by the Organisation for Economic Cooperation and Development’s (OECD) have pointed to areas where development agencies reach their limits. This is particularly true for corruption at the political level. Political corruption undermines efforts of development cooperation that focus mainly on the administrative level of partner countries. In addition, the OECD identifies scope for improvement in fighting corruption in sector based cooperation and in the context of decentralisation. TI sees great potential in the cooperation between civil society engaged in service delivery and challenges organisations to address both political and administrative levels of corruption.

Such findings are a reflection of how civil society organisations and development agencies have typically promoted transparency and accountability without looking at the limitations that entrenched corruption poses. Complementary initiatives are needed to address the disabling environment that disenfranchises the poor in their own fight against corruption.

See the OECD’s ‘Setting an Agenda for Collective Action’.

Current efforts to increase development effectiveness are informed by the OECD 'Paris Declaration on Aid Effectiveness: Ownership, Harmonisation, Alignment, Results and Mutual Accountability', issued in 2005. Participating states, international and regional organisations commit to strengthening and not undermining country ownership and the accountability of development funding to parliaments and citizens.

The United Nations Convention against Corruption (UNCAC) entered into force in 2005 with 140 signatory countries as of today. It is the first global framework for fighting corruption and is unique in its extensiveness and detail of its provisions.

The UNCAC and the Paris Declaration commit the World Bank to ensure the full engagement of parliaments, civil society and citizens. The shift to development policy lending requires a much greater effort to ensure that political corruption does not impact on policy priorities. Actively ensuring spaces for the participation of citizens and civil society in all stages of decision-making is critical to preventing corruption.

Since 1996, the World Bank has supported more than 600 anti-corruption programmes and governance initiatives developed by its member countries. In recognition of the pervasive and significant impact of corruption on its overarching mission of poverty reduction, the World Bank has issued a comprehensive Governance and Anti-corruption Strategy (GAC Strategy) in 2007.

The World Bank Governance and Anti-corruption Strategy (GAC) is an opportunity for citizens and civil society to participate in increasing development effectiveness. The strategy acknowledges that anti-corruption measures must be embedded in domestic governance reforms. Citizens and civil society are central to ensuring public support, shaping political will and enforcing political accountability.

In a unique global process, multi-stakeholder consultations within countries were held and summaries posted on the WB website providing insights into challenges perceived by political representatives, civil society, media and other donors. TI national chapters attended consultations in some countries. In addition written submissions were made.

The World Bank categorizes corruption challenges in two contexts: One is in programme integrity, looking at how the World Bank protects entrusted public funds to make sure they reach the poor. The other is governance capacity building that seeks to support governance and anti-corruption reforms in partner countries. As a third aspect it emphasizes partnerships with multilateral and bilateral development institutions, civil society, the private sector and other actors in joint initiatives to address corruption.

The recent World Bank report on corruption in five of its health programmes in India demonstrates the negative impact of not ensuring citizen oversight and participation. Civil society’s exclusion and missing public accountability provide numerous opportunities for corruption. Insufficient internal incentives and controls are exacerbated and provide further opportunities for corruption.

More information:

See a summary of the World Bank GAC Strategy here.

The growth of democracies gives the poor an increasingly relevant political voice. The challenge of translating political voice into development benefits has been undermined by political corruption. TI seeks to strengthen the voice of the poor in the most important domestic accountability framework that can ensure ownership, accountability and development results. Fighting corruption in the political sphere allows the poor to benefit from existing rights frameworks, resources and participation opportunities in development processes.

TI national chapters have combined public awareness campaigns on integrity gaps in government with targeted advocacy efforts. TI’s work on ranking corruption in local governments, sectors and public service delivery has demonstrated the need for the authentic and politically-enforced participation of the poor in risk assessments, planning and implementation processes. Approaches and pilot tools developed by TI allow the political voice of the poor to translate into a fulfilment of development promises that are made to them. This approach has been successful in leading to political, policy and institutional reforms..

TI is in the process of strengthening the relevance of its anti-corruption work at political and administrative levels to marginalised communities. TI believes that the fight against poverty and corruption needs to be addressed jointly by civil society actors working in service delivery functions, on rights-based approaches and community development and those fulfilling a challenge function.

The positive experience of TI chapters and other civil society organisations in engaging political representatives is informing the development of new approaches. ‘Face the public meetings’, election pledges and development integrity pacts help to forge partnerships and enforce accountability between political representatives and citizens. Partnerships will seek to cover the entire decision-making chain that determine whether marginalized citizens have an equal voice and choice in determining sector policies, budgets and implementation. Working together with the media, civil society and other stakeholders at the national and international level is critical for TI in order to contribute to a concerted global effort that support the poor in exercising their right to corruption free development.

• World Bank, IMF warn of food price surge; metals prices could help
  The Earth Times, 12 April 2008