21 October 2006
The World Bank's controversial Governance and Anti-Corruption Framework was the subject of intense debate prior to the Annual Meetings, raising important questions about the appropriate role for the Bank in fighting corruption, and the need for the institution to clean up its own act before dictating strategies to others.
Under the direction of Paul Wolfowitz, World Bank management presented the Governance and Anti-Corruption Framework to the Development Committee (the senior decision-making body at the institution) at the September 2006 Annual Meetings in Singapore.
Our sources say that the Development Committee discussion of the framework lasted an amazing 6 hours - suggesting how heated the conversation must have been.
An important modification to the proposed strategy was that the effort be overseen by the Bank's Board, thus checking the influence of Wolfowitz's camp. "Given the importance of this issue, we stressed the importance of Board oversight of the strategy as it is further developed and then implemented, and we look forward to a report from the Board at our next meeting," the Committee noted.
Although the amended framework was approved by the Committee, several aspects of the strategy and the implementation plan still need to be defined.
What next?
Management is apparently drafting the first steps of an action plan, and will present a progress report to the Development Committee next spring. Public consultation on the implementation of the framework are scheduled to begin in a few weeks. Watch this website for updates on the consultation process.
Development Committee member statements on the framework
Below are summaries of Development Committee member statements in reaction to the plan. Read transcripts on the World Bank Development Committee website.
On the Bank’s role
Most DC members commented on the Bank’s need to stay true to its poverty-reduction mission. The fight again corruption can’t obscure the poverty-reduction agenda. “It is extremely important to avoid a sequential approach of rooting out corruption and improving governance before getting down to the development agenda,” P. Chidambaram (India) added.
Several members also commented on the importance of the Bank’s exploiting its comparative advantages: reforming the civil service, strengthening public financial management, accounting and auditing, codes and standards, and delivery of basic services. “In our view, the Bretton Woods institutions are best positioned to assist their member countries in designing and implementing adequate macroeconomic, structural and social policies aimed at development and poverty alleviation,” Aleksei Kudrin (Russia) commented.
On disengagement
There were a number of strong statements against the Bank’s disengagement from borrowing countries. “None of us should walk away from assisting the poor people, even where the situations are difficult,” Hilary Benn (UK) noted. Many also noted the need for clear criteria for engagement.
On the Bank cleaning up its own house
Several members noted the importance of the Bank practicing what it preaches. The Bank can foster an enabling environment for borrowing countries to tackle corruption by addressing problems with staff incentives (the pressure to lend), proper sanctions and benefits, and the Department of Institutional Integrity.
On borrowing countries
Many commented on the importance of country ownership of the strategy. Efforts to fight corruption should be participatory, and specific to country needs. Some members also noted the importance of sensitivity to capacity constraints and risks faced by countries.
On projects
One member commented that project-level concerns should be addressed prior to implementation. Another recommended that the Bank broaden its approach, employing tools such as community-based monitoring and government audits.
On international coordination
Several members highlighted the benefits of increased coordination with international bodies, organizations and conventions, including the UN, bilaterals, regional development banks, parliaments and the Paris Declaration.
On the role of NGOs
Not surprisingly, this seems to be an area of great concern to some members. The division seems to be between borrowing and donor countries.
Some noted the need to be sensitive to a perceived politicization of the Bank’s work. One cautioned against the potential “deepening instability” that might result from creating what might be perceived as parallel governance processes. Another questioned whether the NGOs the Bank involves will always be truly representative of the “genuine public interest”. And some applauded the heightened emphasis on the role of civil society.
On the relationship between governance and corruption
Several members noted that the fight against corruption is only one facet of good governance. Other dimensions might include: reforming delivery of basic services, civil service, public investment systems, and in general improving the quality of public expenditure.
On the need for clear and impartial standards
Many members commented on the need for clear criteria, impartial decision making, and transparency in the creation of indicators. Many noted the importance of developing criteria in collaboration with governments. Some members supported working through the CPIA, while others were keen on developing a separate standard. Although there will be challenges with ranking countries, several recognized the need to identify some broad patterns while staying sensitive to the need for a differentiated strategy. Board oversight can help ensure consistent treatment.
On the role of the Board
Many noted specific roles for the Board in the continued development and implementation of the framework. Some also called for a Board-supervised review within the next year.
On stolen assets
Several members commented in the need for restitution of stolen assets
On the supply side of corruption
Several members noted the need to address supply-side issues. “Developed countries must lead by example by trying to ensure that the operations of their governments and corporations are models of transparency and accountability,” James Flaherty (Canada) stated.
Next steps
Some noted the need for more debate and consultations. “The governance framework is a good start, but should be regarded as a work in progress. In this sense, we encourage the Bank to continue learning from its own and others’ experiences,” the Swiss Councillor noted.
Find out more
- World Bank Governance and Anti-Corruption Framework,(BIC website)
- Development Committee webpage, (World Bank website)
- The World Bank's strategy on governance and anticorruption: a civil society perspective, by CIDSE, August 2006 (CIDSE website)
- Civil society letter to Paul Wolfowitz, Eurodad, Latindad, Afrodad and CIDSE, July 31, 2006 (CIDSE website)
- Wolfowitz on French charm offensive as bank seeks cash, by Anna Willard, Reuters, October 18, 2006 (Yahoo News)
- Corruption debate rages on, by Lucy Conger, Emerging Markets, September 20, 2006 (Emerging Markets website)
- Benn beats World Bank chief over corruption policy, by Philip Thorton, The Independent, September 19, 2006 (The Independent website)
- Wolfowitz reined in by ministers, by Gary Duncan, The Times, September 19, 2006 (Times Online website)
- The Trouble with the Bank, by Anthony Rowley and Simon Pirani, Emerging Markets, September 18, 2006 (Emerging Markets website)
- Wolfowitz Corruption Drive Rattles World Bank, by Steven R. Weisman, The New York Times, September 14, 2006 (New York Times website)
- World Bank in corruption amnesty, BBC News,August 7, 2006 (BBC News website)