Fighting Corruption, Improving Transparency – who knows best?

Introduction

“just as it is impossible not to taste the honey or poison on the tip of your tongue, so it is impossible for someone dealing with government funds not to taste at least a little bit of the king's wealth.” Kautilya (nearly 2,500 years ago)

Action only since 1990 Only recently have the industrialised countries taken action on bribes paid in developing countries: December OECD convention against international corruption February UK made the bribing of foreign public officials illegal.

“Corruption is a problem that all countries have to confront. Solutions, however, can only be home-grown.” James Wolfensohn, President of the World Bank

Grand and petty corruption

Grand corruption: undertaken by political and business leaders aim is to win contracts or to stay in power is common across the world in developing countries the bribes are mainly paid by western companies.

Petty corruption: involves junior officials public pay for services they are entitled to anyway more common where:  pay of public officials is poor  governance and control processes are poor.

Kenya – success in progress?

TI 2003 survey shows fall in Kenyan bribes bribes fall from 65% to 40% of encounters cost of bribery falls from $50 to $15 January 2004 police pay doubled BUT only 4% of incidents are reported

Sources of Guidance

Non-Governmental Organisations Transparency International International Budgetary Project Unicorn Budget Transparency and Participation

Transparency International 90 national chapters Corruption Perception Index Bribe Payers Index Annual Corruption Report local surveys eg Kenya

Other NGOs International Budget Project Unicorn Budget Transparency and Participation

International Financial Institutions  UNDP  IMF  World Bank CFAAs HIPC assessments PEFA

UNDP – Contact Programme Website and CD Self assessment guidelines to evaluate financial accountability and transparency

International Monetary Fund Code of Good Practices on Fiscal Transparency from 1998 ROSC - Reports on the Observance of Standards and Codes

World Bank - 1 Country Financial Accountability Assessment (CFAA) in-depth assessment with a 50 page report with annexes at least every five years for active borrows where possible undertaken with other donors and the government.

World Bank - 2 HIPC assessment: undertaken with IMF for 24 HIPC countries this year 16 benchmarks – including one on expenditure tracking. May result in donor aid being withheld.

World Bank - 3 Public Financial Expenditure and Accountability (PEFA): financed by World Bank, EC and DfID review of main assessments draft high level diagnostic

“Any instrument for public expenditure management originating from another country must be carefully analysed in the light of the local context and rejected, adopted, or adapted as needed.” OECD 2001

Politics are important

Technical advice is not enough Is corruption the cause of poverty or a symptom of inequality?: We have to find the reasons for poor public financial management and accountability. The IFIs should not use their advice to introduce political measures

“Recent research is highlighting the importance of country specific solutions, which may not accord with best practice models or involve wholesale reform, but which target key local constraints while respecting social and political context.” DfID 2003

Conclusions Corruption is an international problem. We can all help to reduce its impact and there is lots of guidance to help us. All reform should improve: openness accountability integrity participation. YOU KNOW BEST!

Thank you

Andy Wynne - Head of Public Sector Technical Issues ACCA 29 Lincoln's Inn Fields London WC2A 3EE United Kingdom tel: fax: