Tackling corruption: 6 takeaways from the World Bank Spring Meetings

WASHINGTON — Representatives from the World Bank, business, technology companies, media, and law enforcement discussed ways in which they can work together to combat corruption during the Spring Meetings.

The bank’s Chief Executive Officer Kristalina Georgieva put out a positive message, promising to be both a “much stronger and proactive voice for countries to be effective in protecting their own money” as well as watching its own money closely, during a side event held on Wednesday.

But some civil society groups accused the bank of freezing them out of the discussion and called for greater funding for NGO-led efforts.

“Corruption is unfortunately alive and kicking in many places and it causes tremendous losses,” Georgieva said, before going on to say, “we want things to be clean and clear … because every penny that is going away from the purpose for which donors and taxpayers put it … erodes trust in institutions and when institutions are not trusted they are not strong enough to do their job for citizens.”

Africa alone loses $50 billion in illicit financial flows every year, according to the Organisation for Economic Co-Operation and Development and the International Monetary Fund has estimated public sector corruption costs between $1.5 trillion to $2 trillion annually from the global economy, approximately 10 times the value of overseas development assistance.

The bank has stepped up its efforts to tackle corruption through both preventive measures as well as sanctioning corrupt partners, the bank CEO said. In 2016, the bank’s Integrity department, or INT, initiated substantiated investigations into 68 projects, reviewed 166 contracts and agreements worth about $818 million, and sanctioned 60 entities.

The bank is also working to empower citizens to “make sure that ordinary people can have their voices heard in the high corridors of power,” Georgieva said. The bank does this by working with technology companies — for example through using biometrics to ensure payments go to the intended recipient, and in Brazil, the bank is supporting a project which enables people to report bribes via smartphones.

Wednesday’s session brought together a diverse range of actors from government, the private sector, media, and academia to discuss new ways and challenges to ending corruption. Here are six key takeaways from the discussion.

1. Empower companies to report corruption

Peter Solmssen, former general counsel of Siemens AG, said that contrary to perceptions, corruption is bad for business and that his company actually performed better once it “cleaned up.”

“Corruption is dangerous and expensive, and it soaks up all the margins you make,” he said, adding, “so we are not interested in participating and we are so happy the World Bank is taking a leadership position [on corruption].”

Solmssen encouraged the bank to work with companies like Siemens to create a safe space for them to report corruption. “I’m asking you to embrace us, to bring us in as a partner, we are the eyes and ears … the people in the room when the palm comes out,” he said.

He added that the bank needs to work with companies to make reporting corruption “safe” and free from penalties. He also said in countries where the government is part of the corruption problem, then companies need to “engage in collective action” and “collude” with their competitors to “keep the bad guys out.”

2. Technology can help but it is not the solution

Former public prosecutor in South Africa, Thuli Madonsela, who authored the controversial “State of Capture” report on corruption in her own country, underlined the important role technology can play in fighting corruption. She said that that cell phone data was regularly used as part of her office’s corruption investigations.

Christopher White, principal researcher and partner at Microsoft, said that with financial institutions, communication networks, and infrastructure now operating through technology channels, the ability to understand and analyze these “data trails” has become a “requirement to counter corruption.” Avoiding technology “amounts to professional malpractice,” he added.  

However, harnessing technology for anticorruption still poses challenges, White said, partly because of the sheer volume and complexity of data information being captured and which requires data analytics and artificial intelligence to analyze it, he said.  

In response, he called on the World Bank to “incubate” technology and “be a place that addresses the global data challenge to make that data available to its partners,” and also said the bank should use its platform to “affect policy for adoption and for implementation.”

3. Empowering actors to use the tools

Academic and journalist Alina Mungiu-Pippidi, from the Hertie School of Governance in Berlin, agreed that technology, including platforms like Facebook, can help drive the kind of social action needed to create noncorrupt governments.  

However, these “tools will only work where there is constituency,” such as journalists operating within a free media space, she said. “You can’t rely on digital tools if there is no one there to report,” she said, and so anticorruption technologies must “adjust to the actors who are there.”

4. A role for civil society?

The World Bank and businesses need to put “real money” into supporting civil society groups fighting corruption according to Frank Vogl, the co-founder of Transparency International and the Partnership for Transparency Fund, both NGOs dedicated to fighting corruption.

“There is no money going into civil society organizations around the world that are on the frontier and they are being starved of money and of civic space … and it is time that business and the [World Bank] actually stop the rhetoric and put money behind it,” Vogl said during a question and answer session with the panel.

However, Mungiu-Pippidi disagreed, saying civil society can actually be “part of the problem” and that “imagining [the] world is going to be changed by professional NGOs applying for grants … is sheer nonsense,” she said. Instead, she wants the World Bank to create a “favorable environment” and to “give a voice” and make “serious actors” out of civil society groups fighting corruption rather than funding them.

Madonsela emphasized the important role played by civil society in “making integrity sexy again,” but also its role as part of social accountability, she said. During her time as public prosecutor, “civil society became critical,” she said, adding that many investigations would not have taken place without civil society groups backing and supporting whistleblowers, for example.

5. Leveraging citizen engagement to combat corruption

Citizens need to be empowered and educated as part of drives to stamp out corruption, Madonsela said. As part of this, “we need to deepen and strengthen democracy,” since “democracy-literate citizens are more likely to be involved in social accountability,” she explained.

Mungiu-Pippidi agreed, saying “citizens should cooperate, associate, create good parties, and win elections that will govern differently,” in order to drive down corruption. Good journalists who are able to access and analyze “good data” can help with this, she said.

However, technology and data can only do so much since corruption “problems are so complicated [that] to assume technology will solve them is deluded,” according to Microsoft’s White.  

6.  New models for spending seized assets

“Citizens will not get serious about working on corruption unless they see a better result coming from the capture of corrupt assets than they are seeing now,” according to Lester Salamon, director of the Center for Civil Society Studies at Johns Hopkins university. Currently, these assets are put back into government agencies and flow back into corruption, he said during the question and answer session.

The PtP Program is calling for seized assets to be put into new institutions dedicated to “the improvement of people’s lives and for the fight against corruption itself,” Salamon said, adding the approach has been piloted in Kazakhstan.