Multilateral Development Banks’ integrity management systems
Query
What is considered best practice when it comes to the content and scope of the efforts against corruption in multilateral development banks? Are there any studies on anti-corruption in the multilateral development banks, and specifically in the African Development Bank?Purpose
To learn about best practices in regards to anti-corruption policies, guidelines and organisational structure in multilateral development banks.
Content
1. Evidence of corruption in Multilateral Development Banks (MDBs) activities
2. The integrity management systems of MDBs
3. References
Caveat
Although the anti-corruption efforts of multilateral development banks (MDBs) also include support provided to the anti-corruption initiatives of partner countries, this answer focuses exclusively on how, at the organisational level, MDBs deal with fraud and corruption in their own projects and operations.
Summary
Although there are very few studies specifically focussing on corruption risks in multilateral development banks, there is a broad consensus - confirmed by anecdotal evidence from the MDBs special investigative bodies’ annual reports - that corruption affects MDBs financed projects in all sectors. Corruption covers a wide range of behaviours that are of fraudulent, coercive or collusive nature, primarily occurring in the vulnerable areas of contracting and procurements.
Multilateral development banks have started addressing these issues in the last ten years by developing “zero tolerance” anti-corruption policies, reviewing internal procedures, setting up fraud and corruption investigative bodies, and supporting partner countries’ anti-corruption initiatives. In line with other MDBs’ initiatives, the African Development Bank (AFDB)’s efforts have focussed on strengthening its anti-corruption framework along four major dimensions, namely prevention, detection, investigation and sanctions.
MDBs – including the AFDB - have also made significant progress in recent years in harmonising their anti-corruption policies to promote a consistent approach to governance and corruption. These coordination efforts have culminated in April 2010 in the agreement between a number of MDBs to cross debar firms and individuals that have engaged in corruption in MDB financed projects.
Author(s): Marie Chêne, Transparency International, mchene@transparency.org
Reviewed by: Dieter Zinnbauer, Ph.D., Transparency International, dzinnbauer@transparency.org
Publication date: 21 December 2010
Number: 264