Good Governance

No less than was the case with respect to UN development efforts, the success of OECD and World Bank development efforts depends on good governance at the national level.

The work of the OECD’s Development Assistance Committee (DAC) is carried out primarily through its Network on Governance (GOVNET), an international forum that brings together practitioners of development co-operation agencies, both bilateral and multilateral, as well as experts from partner countries. The GOVNET aims at improving the effectiveness of donor assistance in support of democratic governance.

It provides members with a policy forum for exchanging experiences and lessons, as well as identifying and disseminating good practice, and developing pro-poor policy and analytical tools, relating to the reform of institutions, the dynamics of change and the interplay of checks and balances, and issues surrounding domestic accountability and respect for human rights.

The membership of the GOVNET is composed of representatives from responsible Ministries of DAC members and observers, experts from developing countries, international NGOs and policy research institutes.

On November 21, 1997, the members of the OECD adopted the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

In November 2006, the OECD DAC Network on Governance published a Policy Paper on Anti-Corruption: Setting an Agenda for Collective Action.

Until recently, World Bank anti-corruption efforts in the development aid area have lagged behind those of the OECD. Under the direction of the then President of the World Bank, Paul Wolfowitz, on March 21, 2007, the World Bank published “Strengthening Bank Group Engagement on Governance and Anticorruption.”

On August 17, 2007, the World Bank published a Draft Discussion “Implementation Plan for Strengthening World Bank Group Engagement on Governance and Anticorruption.”

The World Bank has also published “Governance Matters 2007: Worldwide Governance Indicators- 1996-2006.”

Since his arrival at the World Bank, Paul Wolfowitz, who was terminated as President in mid-2007, had been promoting an emphasis on good governance, anti-corruption measures, and accountability. Yet, this agenda faces strong opposition at the Bank. Opponents argue that anti-corruption efforts, while worthwhile, should not detract the Bank from the short-term pursuit of its poverty-reduction mission.

The Department of Institutional Integrity leads the anti-corruption efforts at the World Bank. The Department of Institutional Integrity is mandated by the World Bank Group to investigate allegations of fraud and corruption in Bank Group operations as well as allegations of staff misconduct. The Integrity Department reports its findings to senior management, who in turn decide what measures should be taken. In addition, the Integrity Department assists in preventative efforts to protect Bank Group funds, and those funds entrusted to it, from misuse and to deter fraud and corruption in its operations. The work of an investigative unit aids the World Bank in ensuring that funds are used for their intended purposes, thereby contributing to the organization's core mission of promoting development and reducing poverty.

On September 4, 2007, the work of the Department of Institutional Integrity was the subject of a Wall Street Journal commentary and a Wall Street Journal editorial.

On September 13, 2007, an Independent Panel, chaired by Paul A. Volker, published its Review of the World Bank Group Department of Institutional Integrity.

The Independent Review Panel was constituted to review the work of the Department of Institutional Integrity and to place that work in the context of the World Bank Group’s Governance and Anticorruption (GAC) strategy. The Independent Panel’s objective was to find ways to improve the INT, a relatively new and small unit within the Bank tasked with investigating everything from complaints about sexual harassment to evidence of bid-rigging, bribery, mismanagement and fraud in the Bank's $23 billion annual lending portfolio.

In 2007, the World Bank published a Detailed Implementation Review of the India Health Sector, a forensic examination undertaken by the World Bank’s Department of Institutional Integrity that identified corruption in the administration of loans relating to five health projects in India.  As a result of the findings of the Detailed Implementation Review (DIR), on March 11, 2008, the World Bank released its response to the DIR.  The response includes an eight point Action Plan that seeks to address the problems of corruption that are highlighted in the DIR’s report.  These points include:

• Highlighting the actions that the World Bank has already taken to address the types of problems mentioned by the DIR;
• Following up on the DIR’s findings with more thorough investigations;
• Initiating a Joint Health Action Plan between the World Bank and the government of India that specifically addresses issues raised in the DIR;
• Developing a wider Governance and Anti Corruption Agenda that looks at issues of corruption in the region of South Asia as a whole;
• Establishing an India Program-Wide Response that considers the internal World Bank problems highlighted by the DIR;
• Implementing a South Asia Program-Wide Response that uses the lessons learned in India to put in place “immediate risk mitigation measures” in other operations in the region;
• Addressing “business model issues” by establishing a World Bank Operations Policy and Country Services and a Human Development Network action plan; and
• Conducting an Internal Accountability Review to “determine whether any disciplinary actions are warranted as a result of the findings of the DIR."

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