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Fighting Corruption:Fighting Corruption:ParliamentParliament’’s Roles Role
Rick Rick StapenhurstStapenhurstWorld Bank InstituteWorld Bank Institute
September 17, Canberra 2008September 17, Canberra 2008
2
What is Corruption?What is Corruption?
Short DefinitionShort Definition
““The abuse of public office for private The abuse of public office for private gaingain””
2
3
Process of Fighting CorruptionProcess of Fighting Corruption
Successful antiSuccessful anti--corruption strategies need:corruption strategies need:
Political leadershipPolitical leadership
Coalition BuildingCoalition Building
Rigorous DataRigorous Data
4
3
5
0%
10%
20%
30%
40%
50%
60%Si
ngap
ore
Hon
g K
ong
Tai
wan
Mal
aysia
Chi
le
Phili
ppin
es
Tha
iland
Hun
gary
Chi
na
Bra
zil
Indo
nesia
Rus
sia
Kor
ea
% of respondents that report strong difficulty
Difficulty in Starting a Business
6
T.I. Corruption Index and Regulatory Discretion
ARG
AUS
AUT
BEL
BRA
CAN
CHE
CHL
CHN
COL
CRI
CZE
DEU
DNK
ESP
FIN
FRA
GBR
GRC
HKG
HUN
IDN IND
IRLISR
ITA
JPN
KOR
LUX
MEX
MYS
NGA
NLDNOR
NZL
PHL
POL
PRT
RUS
SGP
SWE
THATUR
TWN
USA
VENVNM
ZAF
r=0.76
Regulatory Discretion (GCS97)
T.I.
Cor
rupt
ion
Inde
x
High Corruption
Low Corruption
LOW HIGH
Even more important (than Regulatory Interventions) in understanding Bribery and Corruption is the degree of Regulatory Discretion.
4
7
S&P-DRI Corruption Index and Rule of Law
ZWEZMB
ZAR
ZAF
VNM
VEN
USA
URY
UGA
TZA
TWN
TUR
TUN
THA
SYR
SWE
SVK
SGP
SAU
RUS
RO M
Q AT
PRT
PO L
PHLPER
PAN
PAK
O MN
NZL
NORNLD
NGA
MYS
MMR
MEX
MAR
LKA
LBY
KWTKO R
KEN
JPN
JO R
ITAISR
IRQ
IRN
IRL
INDIDN
HUN
HKG
GRC
GHA
GBRFRA
FIN
ESP
EGY
ECUDZA
DNKDEU
CZE
CRI
COLCMR
CIV
CHN
CHL
CHECAN
BWA
BRA
BO L
BHR
BGR
BGD
BEL
AUTAUS
ARG
ARE
AGO
r=0.82
Rule of Law (ICRG, average 1990s)
S&P-
DR
I C
orru
ptio
n In
dex
LOW
HIGH
LOW HIGH
The absence of good Rule of Law institutions is a key factor associated with corruption.
8
Bribery and Civil Liberties
AGO
ARG
AUSAUT
BEL
BFABRA
CAN
CHECHL
CHN
CIV
CMR
COL
CRI
CZE
DEU
DNK
EGY
ESP
ETH
FIN
FRA
GBR
GHA
GRC
GTM HND
HUN
IDN
IND
IRL
ISL
ISR
ITA
JOR
JPN
KEN
KOR
LSO
LUX
MAR
MEX
MOZ
MUS
MWI MYS
NAM
NGA NIC
NLD
NOR
NZL
PER
PHL
POL
PRT
RUS
SGP
SVK
SWE
SWZ
THA
TUN
TUR
TWN
TZA UGA UKR
USA
VENVNM
ZAF
ZMB
ZWE
r=0.67
Civil Liberties (Freedom House)
Bri
bery
(GC
S97+
)
LOW BRIBERY
HIGH BRIBERY
LOW HIGH
Key message of the new empirircal research: even more important than political rights are civil liberties in understanding corruption.
5
9
AGOALB
AREARG
ARM
AUSAUT
AZE
!
BEN
BFABGDBGR
BHR
BHS
BIHBLR
BOL
BRABRN
BWA
CANCHE
CHL
CHNCIV
CMR
COGCOL
CRICUB
CYP
CZE
DEU
DNK
DOMDZA ECU
EGY
ESP
EST
ETH
FIN
FJI
FRA
GAB
GBR
GEO
GHA
GIN
GMBGNB
GRC
GTM
GUY
HKG
HND
HRVHTI
HUN
IDN
IND
IRL
IRN
IRG
ISL
ISR
ITA
JAMJOR
JPN
KAZKENKGZ
KOR
KWT
LBN
LBRLBY
LKALSO
LTU
LUX
LVA
MAR
MDA MDGMEX
MKD MLI
MLT
MMR
MNG
MOZ
MUS
MWI
MYSNAM
NER
NGA NIC
NLDNOR
NZL
OMN
PAKPAN
PER PHL
PNG
POL
PRK
PRT
PRY
QAT
ROMRUSSAU
SDN
SEN
SGP
SLESLV
SOM
SURSVK
SVN
SWE
SWZ
SYRTCD
TGO THA
TJK TKM
TTO
TUN
TUR
TWN
TZA
UGA
UKR
URY
USA
UZBVEN
VNM
YEMYUG
ZAF
ZAR
ZMBZWE
r = 0.68-2.5
-2
-1.5-1
-0.50
0.51
1.5
22.5
0 0.2 0.4 0.6 0.8 1
Corruption and Freedom of the Press
High
Low
Low High
r = .68
Freedom of the Press (Freedom House)
Con
trol o
f Gra
ft
10
The The ““Bribe Fee ListBribe Fee List””: Unofficial Payments by Enterprises : Unofficial Payments by Enterprises for Licenses and Servicesfor Licenses and Services
UkraineRussia
"Unofficial fee": type of license/"favor"Average "unofficial" fee
required for “favor”
$ 176$ 288Enterprise registrationEach visit by fire/health inspector $ 42$ 67Tax inspector (each regular visit) $ 87$ 250Each phone line installation $ 894$ 1,071Lease in state space (sq. meter per month) $ 7$ 26Each export registration/consignment $ 123$ 643
Each import registration/consignment $ 278$ 133
Domestic currency loan from bank (preferential terms)
4%8%
Hard currency loan (preferential terms) 4%23%
6
1158
Corruption
Policy Reforms:•Privatization•Deregulation•Tax simplification
Individual Departments:•Focus on Key Revenue,
Expenditure and RegulatoryAgencies
AA MultiMulti--pronged Strategy forpronged Strategy forCombating CorruptionCombating Corruption
Core Systems:•Accountability Institutions•Civil Service Reform•Public Expenditure
Management and Procurement
•Legal and Judicial Reform
ECA and Associates
Political System:•Campaign finance•Public Service Boards•Roles and Responsibilities
Public Oversight:•Public Involvement
•“Power of data”/Surveys•Civil society/Media
•Parliamentary Oversight•Parliamentary Safeguards
12
Combat Corruption Combat Corruption by Changingby Changing
Policies and InstitutionsPolicies and Institutions
PoliciesPolicies InstitutionsInstitutions
CorruptionCorruption
7
13
Think of the Problem onThink of the Problem onFour LevelsFour Levels
Corruption and theCorruption and thePolitical ProcessPolitical Process
Core Core SystemsSystems AgencyAgencyof Governmentof Government SpecificSpecific
CorruptionCorruptionLink with ParliamentLink with Parliament
and Civil Societyand Civil Society
14
Think of the Problem onThink of the Problem onFour LevelsFour Levels
Corruption and theCorruption and thePolitical ProcessPolitical Process
Core Core SystemsSystems AgencyAgencyof Governmentof Government SpecificSpecific
CorruptionCorruptionLink with ParliamentLink with Parliament
and Civil Societyand Civil Society
8
15
Corruption and the PhilippineCorruption and the PhilippinePolitical SystemPolitical System
Vibrant democracy with approximately Vibrant democracy with approximately 353,000 government positions up for 353,000 government positions up for electionelectionElections are often expensive:Elections are often expensive:–– P3 billion for presidencyP3 billion for presidency–– P100 million for congressP100 million for congress–– P5 to 10 billion to support a slate of national P5 to 10 billion to support a slate of national
and local candidatesand local candidates
16
Corruption and the PhilippineCorruption and the PhilippinePolitical SystemPolitical System
Elections are often expensive:Elections are often expensive:It doesnIt doesn’’t stop there...t stop there...–– Weddings, funerals, natural disasters, etc.Weddings, funerals, natural disasters, etc.–– Strong cultural norms of kinship and Strong cultural norms of kinship and
reciprocityreciprocity
9
17
As a Result...As a Result...
Political system generates tremendous Political system generates tremendous demands for demands for moneymoney and and patronagepatronage
18
The Supply of Money:The Supply of Money:Where Does It Come From?Where Does It Come From?EmbezzlementEmbezzlement (estimated $150 million to (estimated $150 million to support Marcos reelection in 1986)support Marcos reelection in 1986)Access to offAccess to off--budget revenue sourcesbudget revenue sourcessuch as Philippine Amusement and such as Philippine Amusement and Gaming CorporationGaming CorporationAllowancesAllowancesSpecial legislative projectsSpecial legislative projects
(analogous to (analogous to ““Peoples ProgramPeoples Program””))
10
19
Corruption and the Corruption and the Political SystemPolitical System
These problems are fundamental, and These problems are fundamental, and their resolution will require: their resolution will require: –– Campaign finance reform Campaign finance reform –– Strengthen Public Service BoardsStrengthen Public Service Boards–– Redefine roles for politicians and civil Redefine roles for politicians and civil
servantsservants–– Changes in political cultureChanges in political culture
20
Think of the Problem onThink of the Problem onFour LevelsFour Levels
Corruption and theCorruption and thePolitical ProcessPolitical Process
Core Core SystemsSystems AgencyAgencyof Governmentof Government SpecificSpecific
CorruptionCorruptionLink with ParliamentLink with Parliament
and Civil Societyand Civil Society
11
21
Need for Strong, Independent Need for Strong, Independent Accountability InstitutionsAccountability Institutions
Parliament, Auditor General, Parliament, Auditor General, Anticorruption Agency, Ombudsman, Anticorruption Agency, Ombudsman, Civil Service CommissionCivil Service CommissionIndependent in their:Independent in their:–– BudgetBudget–– StaffingStaffing–– Work programWork program–– Reporting relationshipsReporting relationships
22
Hong Kong Independent Hong Kong Independent Commission Against Commission Against Corruption (ICAC)Corruption (ICAC)
Established in 1974Established in 1974Currently has 1,336 staff, 72% in Currently has 1,336 staff, 72% in OperationsOperationsThree main functions:Three main functions:–– OperationsOperations–– Corruption PreventionCorruption Prevention–– Community RelationsCommunity Relations
12
23
ICACICAC
Full powers of arrest, supplemented with Full powers of arrest, supplemented with search and seizuresearch and seizureProsecution under Department of JusticeProsecution under Department of JusticeWork scrutinized by four independent Work scrutinized by four independent committees comprised of leading citizens committees comprised of leading citizens
24
Philippine OmbudsmanPhilippine Ombudsman
Established in 1987Established in 1987Constitutionally independent, with power Constitutionally independent, with power to investigate and prosecuteto investigate and prosecuteStaff of around 200Staff of around 200
13
25
0123456789
Hong Kong Philippines
Number of Corruption Cases Successfully Prosecuted
(per 10,000 civil servants)
8.24
0.25
26
Why the Difference?Why the Difference?
ICAC practices more robust triage up ICAC practices more robust triage up front, moves forward selectively and winsfront, moves forward selectively and wins–– ICAC investigates only about 50% of the ICAC investigates only about 50% of the
allegations it receivesallegations it receives–– Moves forward with sanctions in about 10% Moves forward with sanctions in about 10%
of the casesof the cases–– Wins 4 out of 5 cases it prosecutesWins 4 out of 5 cases it prosecutes
14
27
Why the Difference?Why the Difference?
Ombudsman practices limited triage up Ombudsman practices limited triage up front, moves forward broadly and losesfront, moves forward broadly and loses–– Recently implemented initial screening procedures Recently implemented initial screening procedures –– Moves forward with sanctions in about 28% of the Moves forward with sanctions in about 28% of the
casescases–– At best wins about 12% of cases it prosecutes, At best wins about 12% of cases it prosecutes, –– Sanctions often arbitrary; significant numbers Sanctions often arbitrary; significant numbers
overturned on appealoverturned on appeal
28
Anticorruption Effort is Anticorruption Effort is Fragmented AdministrativelyFragmented AdministrativelyOmbudsman Ombudsman Commission on Audit (COA)Commission on Audit (COA)Department of JusticeDepartment of JusticeNational Bureau of Investigation (NBI)National Bureau of Investigation (NBI)Civil Service CommissionCivil Service CommissionPresidential Commission Against Graft and Presidential Commission Against Graft and Corruption (PCAGC)Corruption (PCAGC)Presidential Commission for Good Governance Presidential Commission for Good Governance (PCGG)(PCGG)
15
29
Think of the Problem onThink of the Problem onFour LevelsFour Levels
Corruption and theCorruption and thePolitical ProcessPolitical Process
Core Core AgencyAgencyAccountabilityAccountability SpecificSpecificInstitutionsInstitutions CorruptionCorruption
Link with ParliamentLink with Parliamentand Civil Societyand Civil Society
30
Much Corruption is Much Corruption is Agency SpecificAgency Specific
Perversion of the unique tasks and Perversion of the unique tasks and missions of a given organization missions of a given organization Concentrated in Key Departments (Top Concentrated in Key Departments (Top 10 account for 95% of complaints)10 account for 95% of complaints)Typically involves agencies with signifiTypically involves agencies with signifi--cant revenue and/or expenditure assigncant revenue and/or expenditure assign--ments, or enforcing rules in key areas ments, or enforcing rules in key areas ((““wetwet”” versus versus ““drydry””))
16
31
Top 10 AgenciesTop 10 Agencies
Dept Public Works Dept Public Works and Highwaysand HighwaysDept of Env. and Dept of Env. and Natural ResourcesNatural ResourcesDept of EducationDept of EducationBureau of CustomsBureau of CustomsNational Irrigation National Irrigation Admin.Admin.
Bureau of Internal Bureau of Internal RevenueRevenueDept of HealthDept of HealthDept of Interior and Dept of Interior and Local GovernmentLocal GovernmentNational Power CorpNational Power CorpBureau of Bureau of ImmigrationImmigration
32
Think of the Problem onThink of the Problem onFour LevelsFour Levels
Corruption and theCorruption and thePolitical ProcessPolitical Process
Core Core AgencyAgencyAccountabilityAccountability SpecificSpecificInstitutionsInstitutions CorruptionCorruption
Link with ParliamentLink with Parliamentand Civil Societyand Civil Society
17
33
3%
4%
4%
4%
7%
8%
18%
4%
48%
0% 10% 20% 30% 40% 50%
Not Worth It
NGOs Alone
Int'l Experts
Legislative
Enforcement Agencies
Executive Alone
Civil Society Alone
A-C Agency
Broad Coalition
Percentage of Respondents
Who Should take the lead in a National Governance/Anticorruption Program?
A-C: Anti-Corruption
34
Public InvolvementPublic Involvement
SurveysSurveys–– Technical, but publicTechnical, but public
Civil Society, NGOsCivil Society, NGOsMediaMedia–– Investigative reportingInvestigative reporting–– Press freedom, access to informationPress freedom, access to information–– Media accountabilityMedia accountability
18
35
Parliamentary OversightParliamentary Oversight
Office of the Auditor GeneralOffice of the Auditor GeneralOmbudsmanOmbudsmanPublic Accounts Committee (Uganda)Public Accounts Committee (Uganda)–– Chaired by member of oppositionChaired by member of opposition–– Public hearingsPublic hearings–– Focus on strategic not administrative issuesFocus on strategic not administrative issues
36
Conclusion : Political WillConclusion : Political Will
ThailandThailandUganda (now)Uganda (now)
PhilippinesPhilippinesKenyaKenya
WeakWeakPolitical WillPolitical Will
Hong KongHong KongSingaporeSingaporeUganda (formerly)Uganda (formerly)
South KoreaSouth KoreaRwanda (?)Rwanda (?)
Strong Strong Political WillPolitical Will
CordinatedCordinatedAA--C StrategyC Strategy
UncordinatedUncordinatedAA--C Strategy C Strategy
19
37
30/3042/4235/35
39/5019/23
29/3616/2114/2031/436/35
6/326/22
20/2747/50
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Georg
ia (19
98)
Cambodia (2
000)
Sierra
Leo
ne (20
03)
Honduras (
2001
)
Romania
(2000)
Paragu
ay (1
999)
Latvia (
1999)
Bolivia
(1999)
Guinea (2
004)
Slova
kia (200
1)
Ecuado
r (199
9)
Peru (
2001
)
Guatemala
(200
4)
Colombia (2
001)
Rank of Parliament within country, by Public Servants
Source: WBI diagnostics and survey data; various countries; 1998-2004. Paraguay figure comes from the first governance diagnostic 1999. http://www.worldbank.org/wbi/governance/Note: The chart shows percentage of respondents reporting that Parliament is dishonest institution. The number at the topof each bar reflects the ranking of Parliament relative to other government institutions.
Parliaments: Misgoverned or Honest Institutions?
Relatively good Relatively bad
% w
ho believe that Parliament is corrupt