The World Bank and Anti-Corruption…a final word?

I was recently asked by someone helping to conduct a Congressional review if I had done any more work on the World Bank’s anti-corruption programme since my Brown Journal article came out in 2007. I answered truthfully…I haven’t actually been working on this topic since then. Partly this is because soon afterwards I went on maternity leave for several months, but also because it doesn’t seem like there’s very much to report.

I don’t mean this facetiously, and I mean this, of course, as a researcher and not a policy-maker. There are likely to be aspects of their work, on a day to day basis, that would be worth someone looking at  – cases that have been successful or cases where fraud has been uncovered, but my interest has always been in looking at the Bank’s anti-corruption work at the level of policy or conceptualisation. As far as I can tell, they’ve been approaching anti-corruption work in much the same way for a number of years now.

I’ll explain what I mean by this along two lines: 1) the work that the Bank does in terms of its support for anti-corruption work in countries, and 2) its work in terms of rooting out corruption in its own ranks.

1) The Bank approaches support for anti-corruption work in its recipient countries primarily along institutional strengthening lines, with particular attention paid to financial management and the rule of law. Critics have claimed that this is because the Bank prioritises support for the private sector over other developmental objectives, and that these are the institutions that best support the private sector’s interests as well, but I’m not quite that cynical. I just think that it reflects the the interest and expertise of a majority of the Bank’s staff (which are economists in the majority and so are bound to be interested in markets, growth, etc). The World Bank Institute has always had a particular expertise in support for parliaments, for example, but this is driven by individual staff members’ interests and expertise, much as you’d expect. The UK’s aid agency, the Department for International Development, also supports financial management and the rule of law but does so from an increasingly from an overall rubric of ‘state-building’, which reflects its own perceived ‘comparative advantage’ and its reputation for good work in support for political development and civil society, areas in which the Bank is much more limited because of its non-political mandate and its status as a multilateral donor.

The problem here for the Bank, as I see it, is that research on corruption in the past 10 years has been exploding, and there is a tremendous amount of good work being done. However, much of the most exciting and innovative work is outside economics/economic development and focuses on the social and political aspects of corruption (I’ll be the first to admit that this demonstrates significant bias on my part…I’m a political scientist and so I obviously think it’s much more interesting. I’m sure there’s plenty of exciting, relevant research being done by economists on corruption, but what I’ve read in the past couple of years has definitely not done it for me). What much new research is suggesting is that improvements to institutions themselves aren’t sufficient and that much more attention needs to be paid to areas such as political culture, the role of elites, the role of political violence in supporting corruption/corrupt networks, ideas of citizenship and what constitutes ‘moral politics’, social capital (for better and for worse), and so on. There is also a great deal of research being done on the impact of donors on corruption, again, for better and for worse.

I recently led on a piece of political analysis in Kenya, funded by the Dutch government. The Dutch have developed an innovative approach to political analysis focused on governance and corruption known as SGACA – Strategic Governance and Anti-Corruption Analysis. Using qualitative methodologies, SGACA helps donors get to what are known as the ‘informal rules of the game’, or how things really work. One of the findings of our analysis relevant here relates to the rule of law. In Kenya, donors have spent a great deal of money supporting legal reform and institution building, however the legal/judicial system in Kenya continues to be plagued with widespread corruption and inefficiency. SGACA helped us to show that there is a great deal of capacity in the Kenya legal system, but the informal rules of the game – that the rich can buy justice and that there is a culture of impunity – suit those in power who undermine efforts for real reform. Interestingly, this only applies to the criminal justice system; there is a separate justice system for private sector/corporate law and this seems to work efficiently and without significant problems with corruption. The lesson here is that until the informal rules change, and the culture of impunity for the rich and powerful diminishes, putting more funding into institution building isn’t likely to be effective. Trying to change the political culture in Kenya, however, is not within the Bank’s remit or its scope.

I would also argue that it shouldn’t be, and that the Bank should continue to try to make institutional improvements, particular in financial management and procurement systems, say, because these are clearly useful. What I don’t think the Bank, or other donors for that matter, should claim is that they can significantly reduce corruption in countries. I think there is too much pressure on the Bank – from Congress, for example – to make broad claims that it can’t possibly be expected to achieve. Research on corruption should still be considered to be in its infancy, and methodologies for researching it are continuing to be developed and tested, but it – like any covert behaviour – is difficult to research with any certainty. This means that claims about the effectiveness of anti-corruption activities can’t be made with any certainty without the benefit of hindsight. The only things that we can say work, with any degree of certainty, are reducing inequality, reducing poverty, restraining power, trying to ensure accountability, and having a culture that frowns upon corrupt behaviour. External agencies can try to contribute to this process, but they can’t claim to be able to change these single-handedly in any given country – and nor should they be judged on this basis, in my opinion. These are massive issues and history has shown that they only change over time.

2) In terms of reducing corruption in their own ranks, I’ve said something on this in the Brown article, so I won’t say much more here. I just want to reiterate that the Bank is a massive organisation, bigger than many multinational corporations, and it works – by necessity – in some of the most challenging environments in the world. It disburses a tremendous amount of money each year. If it is truly to work on reducing poverty, then it will have to work in poor countries, and many of these are very corrupt. I would be very surprised if there were zero claims of corruption in Bank funded work, and I don’t think that this should be expected. What should be expected is that the Bank takes this very seriously, no matter which country they’re working in, and that they tighten up their own procedures and oversight up to make it very difficult for funds to be diverted. If they find corruption in their work, then the expectation should be that they suspend funds and seek to prosecute the corrupt. The latter is not always easy, both politically and in terms of evidence, but I think the Bank should continue to strengthen its procedures and policies here.

What I think the Bank has not done well is the same thing that happens in countries themselves (and this includes developed countries as well): tackling the ‘big fish’. When it comes to small-scale corruption, the Bank has acted swiftly, blacklisting small companies or consultants or dismissing staff members. When it comes to large-scale corruption, that involving senior political figures or big multinational corporations, it has been notoriously quiet. The Bank needs to be willing, and empowered by its Board, to make some very difficult decisions if need be.

I remember reading on my friend Graham Harrison’s webpage once that he had said all he wanted to say on the question of governance (or the World Bank…I can’t remember now!), and I have to say that I echo this. I have said all I want to say on the World Bank’s anti-corruption programme, unless there is something dramatic, a really interesting innovation that I feel is worth researching. Of course, I’ve been doing other things and who knows…there could be all kinds of exciting work going on that I don’t know about, to be fair. All I know is that I’m bored and enjoying doing other work, and this is the main reason why this is the final word from me.

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