World Bank Should Refocus Its Anti-Corruption Fight, Audit Says

The World Bank’s fight against corruption needs to focus more on helping borrower countries build the institutions and policies that make them accountable to their citizens, an internal audit said.

Since adopting a strategy of better governance and anti- corruption in 2007, the bank has mainly paid attention to improving its resources and reputation in dealing with those issues, according to the report. While it also has increased commitments to help countries strengthen their public sector, institutions and investment climate, that support has yet to show in concrete projects, the evaluation by the Independent Evaluation Group said.

“The bank has to focus on helping countries develop the capacities to govern. That’s what the bank should be focused on,” Navin Girishankar, the study’s main author, said in a telephone interview. “There is a gap between the plans and the follow-through that needs to be filled.”

Government distrust and exasperation with widespread corruption fueled the uprisings that toppled the presidents of Tunisia and Egypt this year. International financial institutions, which have been criticized for praising the economic policies of these countries, are now trying to support a growth model that’s more inclusive of the population.

“Well-governed countries are better able to formulate growth-enhancing policies, deliver essential services to the poor, and regulate financial and product markets,” the internal audit said.

Report Welcomed

The World Bank management welcomed the report, while noting that it didn’t cover the full extent of the institution’s efforts to fight corruption, such as a recent push to toughen its investigations and sanctions on projects it finances.

The audit centers on helping countries improve governance, an area where there are “obvious limits to what can be achieved in such a short time,” it said in its written response.

“We’re glad the report recognizes that the Bank is working to support good governance throughout our programs, and we can live with a criticism that we have spent too much time protecting our own money,” Joachim von Amsberg, vice president for the bank’s operations policy and country services, said in a telephone interview.

An example of how the World Bank can improve countries’ governance and fight corruption when lending them money is to include funds to strengthen road agencies in a project that finances infrastructure, Girishankar said.

The report also says the bank should be more consistent in the way it deals with countries where governance deteriorates.

“Many stakeholders inside and outside the Bank hold the view that lending goals conflict with pursuing” goals of the anti-corruption strategy, it said.

To contact the reporter on this story: Sandrine Rastello in Washington at srastello@bloomberg.net;

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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