cpp anti-corruption final

8/2/2019 CPP Anti-Corruption FINAL

1/49

Comparative Public Policy

ANTI-CORRUPTION STRATEGIESAT THE NATIONAL AND LOCAL LEVEL

10th January 2012


2/49

I. Defining Corruption

II. Measuring CorruptionIII. Tackling Corruption: Case Studies


3/49

I. DEFINING CORRUPTION


4/49

HOW CAN CORRUPTIONBE DEFINED?

Transparency International: Corruption is the abuseof entrusted power for private gain.


World Bank: corruption is the abuse of public office

for private benefit.

Asian Development Bank: the abuse of public or

private office for personal gain. Corruption involves

behaviour on the part of officials in the public and

private sectors, in which they improperly andunlawfully enrich themselves and/or those close to

them, or induce others to do so, by misusing the

position in which they are placed.


5/49

LEVELSOF CORRUPTION

Petty corruption

Low level corruption

Junior officials

Grand corruption

High level corruption

Substantial amounts of money



6/49

TYPESOF CORRUPTION

Administrative corruption

Alters the implementation of policies

Political corruption

Influences the formulation of laws,

Public corruption Misuse of a public office for personal gain


Private corruption Between individuals in the private sector


7/49

FORMSOF CORRUPTION

Bribery

Extortion

Fraud Clientelism

Embezzlement

Favouritism Nepotism

Conflict of Interest as corruption



8/49

II. MEASURING CORRUPTION


9/49

II.1 CORRUPTION PERCEPTIONINDEX


10/49

The CPI measures the degree to which corruption(frequency and/or size of bribes) in public sector(corruption which involves public officials, civilservants or politicians)is perceived to exist in 183countries/territories around the world.

CORRUPTION PERCEPTION INDEX

II.1 CPI


11/49

STEP I Collect 17 data sources from 13 institutions

STEP II Rescale the data collected by the Matching Percentile

Method.Countries score are between 0 and 10

STEP III Increase the standardized deviation among all countries by the

Beta-Transformation Method

STEP IV Determine CPI score by averaging all standardized values of

every source for each country

BRIEF METHODOLOGIESTO CALCULATE CPI

II.1 CPI


12/49

STRENGTHS & SHORTCOMINGS

The Perception-based measure does not imply actual corruption.

CPI cannot be used for comparison of one country over an extended period.

The CPI look s at the aggregate picture only. There could still be big loopholes oncorruption in different forms, dimensions and sectors.

Aggregating and averaging several disparate ratings, which measure differentaspects of corruption, can exacerbate biases and inaccuracy.

Diversifies the risk of concentration on a few specific points of view.

CPI is favorable for cross-country comparison, due to its simplicity and overalloutlook.

II.1 CPI


13/49

RESULTS 2011 WORLDWIDE MAP

New Zealand (9.5), Denmark (9.4) and Finland (9.4) are perceived countries with lowest

corruption level.

In contrast Afghanistan (1.5), Myanmar, (1.5) North Korea (1.0) and Somalia (1.0) are

countries with highest corruption perception.

II.1 CPI


14/49

II.2 GLOBAL CORRUPTIONBAROMETER


15/49

OVERALL VIEW

Annual publication since 2003 Public opinion poll conducted for Transparency

International mostly by Gallup International

Intended to complement Corruption PerceptionIndex and the Bribe Payers Index

Assesses public perception and experience of

corruption and bribery in selected countries

worldwide

Gives a better idea of how corruption permeates

society and the extent to which support is

available for anti-corruption effortsII.2 GPB


16/49

WHATIS BEING MEASURED?

Peoples opinion on most corrupted public

sectors

Governments anti-corruption efforts

Peoples experiences with bribery

Personal willingness to engage in the fightagainst corruption

II.2 GPB


17/49

Measures citizens

perception of andexperience with briberyin different publicinstitutions

Measures experiencewith corruption

Bribery is only form of

corruption assessed Assesses perceptions of

corruption, which may notbe indicative of the actuallevel of corruption

Does not assess institutionalframework/quality

20II.2 GPB

STRENGTHSAND WEAKNESSES


18/49

2010 REPORT: 91,781 PEOPLEIN 86 COUNTRIES

II.2 GPB


19/49

II.3 WORLDWIDE GOVERNANCEINDICATORS (WGI)


20/49

WORLDWIDE GOVERNANCE INDICATORS (WGI)*

Survey 200 countries since 1996

Voice and Accountability

Political Stability & Absence of Violence and Terrorism

Government Effectiveness Regulatory Quality

Rule of Law

Control of Corruption

The WGI is a valuable tool for assessing cross-country differences & changes in

country performance over time on key dimensions of governance.

If you cannot measure it, you cannot improve it. Lord Kelvin

II.3 WGI


21/49

The WGI draw on four different types of source data:

Surveys of households and firms (9 data sources)

Commercial business information providers (4 data sources)

Non-governmental organizations (9 data sources)

Public sector organizations (8 data sources)

Perceptions matter

Agents base actions on perceptions, impressions & views.

Citizens unlikely to avail themselves of public services if they are ineffecient.

(voting, courts, police)

Enterprises base investment decisions on perceived view of the investment

climate & the government's performance.

Few alternatives to relying on perceptions data

Particularly for corruption, which almost by definition leaves no paper trail

that can be captured by purely objective measures.

II.3 WGI


22/49

WGI

Process

Voice andaccountability

Political stabilityand absence of

violence

Capacity

Governmenteffectiveness

Regulatoryquality

Respect

Rule of law

Control ofcorruption

II.3 WGI


23/49II.3 WGI

Measurement

Type

Conceptual

Dimension of

(Anti-)

Corruption

Input (Rule-

based) vs.

Output

(Outcomes-

based)

Composite vs.

Original Data

Internal vs.

External

Corruption

Perception

Index

Perception on

extent of petty

corruption-bribes

Outcome based Composite Both. Uses 3rd

party sources in

aggregation of

index

Global

Corruption

Barometer

Perceptions;

Experience with

corruption;

Bribery

Outcome based Original Internal.

Designed by TI,

carried out by

polling

organizations

World

Governance

Indicators

Assesses voice &

accountability,

government

effectiveness,

regulatory quality, rule

of law, control of

corruption

Hybrid Composite External


24/49

II.4 CORRUPTION AND SOVEREIGN

CREDIT RATING

The big picture where does

corruption bite economically?


25/49

QUANTIFYING CORRUPTION

Different corruption measurement indices have apseudo effect on fighting corruption

Credit ratings on possibility of sovereign defaultshave an immediate or stronger effect

Credit ratings are based on prevalence ofcorruption in different countries

Strong correlation between CPI and Standards & Poor

ratings Credit ratings by all three major agencies take political

and economic stability into account

II.4 CORRUPTION AND SOVEREIGN CREDIT RATING


26/49

CORRUPTIONAND ITS EFFECTSON

SOVEREIGN CREDIT RATINGS

Corruption shifts economic activity from the

formal to informal (non-taxable) sector

So, basically corruption is resource misallocation

Credit ratings are dependent on how a

government can pay back its debt through taxes

or on other economic indicators (GDP, fiscal

balance, oil supply) Direct, significant and negative correlation found

between corruption and credit ratings



27/49

FINDINGS

Relation holds amongst all four types of

bonds/debts (short/long or local/foreign

currency)

One standard deviation decrease in corruption

translates into improved rating by a full

category

Simply put, for every US$ 1 Million, annualsavings of US$ 10,100


Source: http://belkcollegeofbusiness.uncc.edu/cdepken/P/intl_corruption9.pdf
http://belkcollegeofbusiness.uncc.edu/cdepken/P/intl_corruption9.pdfhttp://belkcollegeofbusiness.uncc.edu/cdepken/P/intl_corruption9.pdfhttp://belkcollegeofbusiness.uncc.edu/cdepken/P/intl_corruption9.pdfhttp://belkcollegeofbusiness.uncc.edu/cdepken/P/intl_corruption9.pdf


28/49

PECUNIARY BENEFITS FROM ANTI-CORRUPTION

Eg. 1 - Argentina in 2003 had an outstandingdebt of $127,687 M. Reducing corruption by

one standard deviation would have saved

Argentina $1,289 M annually, equivalent to1% of its 2003 GDP of $129,596 M.

Eg. 2 - Chile had an outstanding debt of

$35,727 M. Reducing corruption could havesaved it $361 M annually in interest.



29/49

BUT DOES IT REALLY HELP US? CREDIT RATING

AGENCIES THEMSELVESARE CORRUPT

Dominated by three giants - S&Ps, Moodys and Fitch

Ratings are issuer-requested

Banks, investors require all bonds to be rated by theseprivate, independent rating agencies to assess the

quality of debt being sold

Agencies and issuers conspire and fix the rating of adebt

Any country looking to raise capital in internationalmarket will have to get their debt rated

Corruption from a supra-national to a national level

Ties with corruption from local and national level

II.4 CORRUPTION AND SOVEREIGN CREDIT RATINGSource: http://rru.worldbank.org/documents/CrisisResponse/Note8.pdf
http://rru.worldbank.org/documents/CrisisResponse/Note8.pdfhttp://rru.worldbank.org/documents/CrisisResponse/Note8.pdfhttp://rru.worldbank.org/documents/CrisisResponse/Note8.pdfhttp://rru.worldbank.org/documents/CrisisResponse/Note8.pdf


30/49

III. TACKLING CORRUPTION


31/49

CORRUPTION: CHIMERA CHARACTERISTICS

multifaceted

multi-functional

multi-spatial phenomenon

chimeric:

composed ofparts that are ofdifferentoriginand

are seeminglyincompatible (and operating

differently in different contexts or spheres ofsociety)

http://www.biology-online.org/dictionary/Chimeric

http://www.biology-online.org/dictionary/Partshttp://www.biology-online.org/dictionary/Originhttp://www.biology-online.org/dictionary/Originhttp://www.biology-online.org/dictionary/Seeminglyhttp://www.biology-online.org/dictionary/Incompatiblehttp://www.biology-online.org/dictionary/Incompatiblehttp://www.biology-online.org/dictionary/Incompatiblehttp://www.biology-online.org/dictionary/Seeminglyhttp://www.biology-online.org/dictionary/Originhttp://www.biology-online.org/dictionary/Originhttp://www.biology-online.org/dictionary/Parts


32/49

SPHERESOF SOCIETY

Public to public Diversion of resources

Appointments and transfers

Embezzlement and fraud inplanning and budgeting

Public to private Procurement collusion, fraud,

bribery

Construction fraud and bribery

Public to Citizen

Illegal connections Falsifying bills and meters

Source: Janelle Plummer

Public

Officials

Public

Actors

ConsumersPrivate

Corruption occurs between

Plummer, J. 2007. Making Anti-Corruption Approaches Work for the Poor: Issues for consideration in the development of pro-

poor anti-corruption strategies in water services and irrigation. Swedish Water House, SIWI and WIN. [online] Available atwww.swedishwaterhouse.se

http://www.swedishwaterhouse.se/http://www.swedishwaterhouse.se/


33/49

CAUTION

No one-size-fits-all strategyjust ideas and adaptations from WB and TI

Workable strategy is context dependent

Begin with WB schematic followed by TITemple



34/49

WORLD BANK STRATEGY



35/49

Jeremy Pope (ed), TI Sourcebook2000, p.35

TI NATIONAL INTEGRITY SYSTEMGREEK TEMPLE



36/49

Institutional pillar Corresponding core rules/practicesExecutive Separation of Powers

Conflict of interest rules

Legislature Separation of Powers

Independence

Fair electionsOversight: Parliamentary Integrity

Commissioner

Judiciary Independence

Good facilities to ensure effectiveperformance

Proper remuneration



37/49

Institutional pillar Corresponding core

rules/practicesPublic Accounts Committee (of

legislature)

Power to question senior

officials

Auditor General Independence/Autonomy

Adequate resources

Public Reporting

Public service Public service ethics

Codes of Ethics

Media Freedom of information

Freedom of speech

Competition vis vis



38/49

Institutional pillar Corresponding core

rules/practicesCivil society Freedom of speech

Ombudsman Records management

Public reporting

Raising public awarenessAnti-corruption/watchdog

agencies

Enforceable and enforced

laws (Justiciability)

Private sector Competition policy, including

public procurement rules

International community Effective mutual

legal/judicial assistance



39/49

UN Convention Against Corruption (2003)

Council of Europe Criminal Law Convention on Corruption (2002)

Asian Development Bank/OECD Anti-Corruption Initiative for Asia-

Pacific (2001)

OECD Convention Against Bribery of Foreign Public Officials in

International Business Transactions (1999)

Organisation of American States Inter-American Convention

Against Corruption (1997) US Foreign Corrupt Practices Act (1977)

African Union Convention on Preventing and Combating

Corruption (not yet in force)

INTERNATIONAL CONVENTIONS



40/49

WHAT DOES IT TAKE?

1. Generate political will and localownership

2. Resource and capacity-based

3. Measurable

4. Transparent, non-partisan and mindful

of relevant conflict of interest issues



41/49

POSSIBLE SOURCESOF CONFLICTOF INTEREST

www.issafrica.org

Conflicts ofinterest

Friendship/kinship ties

Private

FundingPoliticalParties

Transformatoryeconomic

policies (VAT)

Overlapbetween

party, state

and business



42/49

SAMPLE INVENTORYOF

ANTI-CORRUPTION MEASURES

1. Institutional Reforms:

Limiting Authority

Privatization

Liberalization

Competitive Procurement

Competition in Public

Service


Improving Accountability

Freedom of Information

Legislation

Financial Disclosure laws

Open Budget Process

Financial Management

Systems and Audit

offices

Inventory of Anti-

Corruption Measures



43/49

SAMPLE INVENTORYOF

ANTI-CORRUPTION MEASURES2. Institutional Reforms:

Improving Accountability

(cont.)

Inspector

General/Ombudsmen/Anti-Corruption Agency

Hot Lines and Whistle-

Blower Protection

Sanctions

Judicial Reform

Elections


Realigning Incentives

4. Societal Reforms: Changing

Attitudes and Mobilizing

Political Will

Public Relations

Campaigns

Investigative Journalism

Civic Advocacy

Organizations

Workshops

International Pressure



44/49

CASE STUDIES:

SUCCESSES & FAILURES INTACKLING CORRUPTION


45/49

Hong Kong MexicoPolitical will for fighting

corruption: creation of the ICAC

and the succeeding support to it

Lack of political will: only limited

efforts and initiatives against

corruption since the year 2000

Multilevel strategy against

corruption

Localized efforts directed only to

some sectors of society

Adequate system of Checks and

Balances

The system of Checks and

Balances confronts a crisis

Proper and clear legislation on

corruption

Strong legal framework, lack of

enforcement, complex procedures

Active civil society and freedom of

speech

Weak but quickly growing civil

society

Specialized Anti-Corruption Body:Independent Commission Against

Corruption ICAC

Ministry of Public Administration

Federal Superior Auditor

IV. CASE STUDIES


46/49

Source: 2009 ICAC Annual Report

IV. CASE STUDIES


47/49


48/49

Evaluation Hong Kong MexicoTI Corruption PerceptionIndex 2011

12 100

Worldwide Governance

Indicators 2011 / World

Bank Control of

corruption (-2.5 the

lowest, 2.5 the highest)

1.94 -0.37

TI Global Corruption

Barometer 2010 / Table

1: In the past three

years, how has the levelof corruption in this

country changed?

Decreased: 32%

Stayed the same: 35%

Increased: 33%

Decreased: 7%

Stayed the same: 18%

Increased: 75%

IV. CASE STUDIES


49/49

THANKYOUFORYOURATTENTION

cpp anti-corruption final

Documents