What is corruption and anti-corruption?
Global perspectives on costs of corruption and anti-corruption approaches
Jesper Johnsøn, U4
Costs of corruption
• What type of corruption, what type of cost?– Bribery reducing foreign direct investment,
rent-seeking limiting competition, leakage/waste reduces state revenue
– Grand corruption impact on social contract and state-formation, electoral corruption, broken accountability
– Unfair social dynamics created by petty corruption + self-serving elites – corruption hurts the poor disproportionately
Economic costs
Political costs
Social, individual
costs
A few global cost quotes…
• Globally estimated US$ 1 trillion paid in bribes• Tackling corruption, improving governance and rule of law
could increase per capita income 400% • Increase in corruption index by one point acts as 7.5% tax
increase, reducing FDI inflows• US$ 197 billion illicit financial flows from 48 poorest
developing countries into developed countries 1990-2008• Corruption is associated with reduced trust in political
institutions• 16/20 countries in the bottom CPI are in conflict - citizens of
conflict-affected states often view corruption as an important source of insecurity and conflict
Illustrative examples of local costs and anti-corruption benefits • Indonesia – village roads – audits reduced missing expenditures by 8%
- CBA = $245/village• Argentina – hospital procurement – prices decrease 10% after
crackdown (audits) • Uganda – education – access to information and budget tracking
reduces leakage from 80% in 1995 to 20% in 2001• India – education – formal monitoring reduces absenteeism from 42%
to 21%. Test scores improve.• Uganda – health – community monitoring reduces child deaths by 33%• Brazil – elections – access to information + auditing lowers re-election
rates for corrupt local officials
Control, monitoring
and sanctionsAccess to
information, media, whistle-
blowing
Basics of anti-corruption continued – the policy levelFour general characteristics have traditionally been identified as facilitating corruption:• Monopoly of power• Wide discretion • Lack of transparency in decision-making • Weak checks-and-balances for decision-making
Anti-corruption approaches designed to
counter such facilitating factors
National Integrity System
Multi-Pronged Approach – Accountability linkages
United Nations Convention Against Corruption
Does anti-corruption work?