The World Bank has a new president, Jim Yong Kim of the United States, and it is hoped he will embrace the consistent anti-corruption stance of his predecessor Robert Zoellick. When he takes over the reins on 1 July, one of Kim’s first tasks should be to take a long hard look at current World Bank anti-corruption reforms and what work remains to be done.
Under Zoellick, the World Bank waged a commendable fight against corruption within the bank. It is very much a different institution than when he started there five years ago. But much more needs to be done to hone the institution’s focus on eradicating bribery and graft from its development work around the world.
A bank others look up to
The sheer size of the World Bank means its view on corruption in many ways sets the tone for how the rest of the financial world sees the problem. With funding that tops $43 billion annually, 9000 staff across the world and 100 offices, it commands attention as a multilateral organisation that matters.
This institutional strength has been used for the last five years to try to re-shape the global discourse on corruption. From the start under Robert Zoellick, the governance and anti-corruption agenda was prominent among the World Bank’s strategies to reduce poverty and support development. To mark his 100th day in the job, Robert Zoellick pointed to poor governance and corruption for preventing the benefits of globalisation from reaching everyone.
But where exactly are we in terms of anti-corruption progress at the World Bank? Did President Zoellick achieve what he committed to in words? What will incoming President Kim have to do to finish off the work that has been started?
To answer these questions, let’s look at some of the promises that President Zoellick has made in the name of promoting greater transparency, accountability and integrity at the World Bank.
Promise 1: Building integrity at the World Bank
Zoellick's day 100 speech said that for the World Bank to be effective in its external operations, it would need to “squarely face its own internal challenges”. This meant doing two things:
- Taking measures to build integrity in the World Bank’s operations both at headquarters and in the country offices.
- Providing leadership to integrate good governance and rule of law policies into the development agenda.
Where do we stand?
Internally, the bank launched a number of initiatives to become more open, and many of the policies regulating information disclosure, investigations and sanctions were reviewed. For example in 2011 the World Bank issued a new Access to Information Policy which presumed all information would be disclosed unless it was included in its list of exemptions. The World Bank also decided to open up all its development data (2010) and aid flows (2008).
Yet the World Bank’s Governance and Anti-Corruption strategy, announced shortly before President Zoellick’s arrival, has not been fully taken up across the institution – particularly in the country offices.
Promise 2: Preventing corruption in development
Among the World Bank’s value-added areas, President Zoellick saw the institution helping to reassure both borrowing and lending member countries that governance issues would be addressed wherever the World Bank was involved in development projects. President Zoellick’s line throughout his public speeches was that the World Bank needed to create the “right incentives” and make it clear that its development financing would be free of corruption.
Where do we stand?
In the coming years, the existing network of safeguards governing World Bank projects will apply to a declining number of initiatives, as other lending instruments, such as the recently approved Programme for Results, emerge. The World Bank argues that these new instruments respond to a demand from countries for less burdensome forms of lending.
However, efforts to make World Bank lending more flexible will likely result in weakened safeguards, critics say. The tendency to delegate more responsibilities to countries is in line with the commitments made by the international community in Accra and Paris. Still, it raises troubling questions, particularly regarding how the World Bank will continue to uphold the good development lending standards that have made it different from private investment banks. Also, it is unclear whether the World Bank will take on its good governance and “value-added” role when it comes to the issue of climate financing. More than US$ 1.6 billion in funding has been pledged by donors to the four largest climate funds although their fiduciary management is still being sorted out.
How fighting corruption helps development
Transparency International research shows that citizens are more likely to have access to clean drinking water – one of the eight Millennium Goals – if their government is accountable. Corruption raises the price of connecting a household to a water network by as much as 45 per cent.
Although more than 2 billion people gained access to clean water between 1990 and 2010, 97 out of every 100 people do not have piped water and 14 per cent of the population drinks surface water – for example, from rivers, ponds, or lakes.
Promise 3: Creating a new social contract
Looking at the revolutions across Arab countries in 2011, President Zoellick pointed out that good politics in countries means good economics for them. President Zoellick argued that institutions matter as much as citizens. To these ends, a new fund was recently launched to help civil society groups that want to make public services more accountable to the people who use them.
Where do we stand?
The Global Partnership for Social Accountability, under which the bank will be providing funding directly to civil society without the filter of governments, is one of the most ambitious and innovative tools the bank has designed to strengthen civil society’s role in governance. However, under the current formulation the partnership has failed to meet the expectations it had initially raised because of the scope, amount of limited funding, and the option that borrowing countries can “opt out” of the programme.
Where to go?
The good governance agenda set out by President Zoellick needs to become a permanent fixture of the World Bank, regardless of who sits at its helm.
Transparency International calls on the incoming president to take charge of this task by:
- Expanding resources and budgets available for good governance initiatives, particularly those aimed at supporting civil society participation and oversight.
- Making the Governance and Anti-Corruption strategy the lynchpin for all governance initiatives both within the bank and in its country operations.
- Ensuring that the World Bank’s safeguards and risk strategies are modernised to meet related social and anti-corruption responsibilities and changes in the lending market place.
- Bringing the World Bank’s new lending instruments and voting structures in line with the commitments and plans set out in the governance strategy.
- Protecting whistleblowers – internal and external to the organisation – that come forward with allegations of misconduct involving projects and initiatives backed by the World Bank.
The last five years have seen many positive changes at the World Bank in the fight against corruption. Let’s hope the next five years under President Kim result in concrete actions that make corruption a concern of the past.
Transparency International, Making aid effective: an anti-corruption agenda (2011)
Transparency International, The Anti-Corruption Catalyst: Realising the MDGs by 2015 (2010)
Transparency International, Africa Education Watch (2010)
Transparency International, Mapping Transparency and Integrity Deficits in Primary Education in Cameroon (2011)
Transparency International, Mapping Transparency and Integrity Deficits in Primary Education in South Africa (2011)
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