JURIST - Dateline: WASHINGTON DC: The World Bank's Fight Against Corruption

Kindra Mohr, Boston College Law '11, was a consultant at the headquarters of the World Bank* in Washington, DC...

One of the fastest growing areas in international law, and within the international development field in general, is the expansion and enforcement of anti-corruption standards. The United Nations Convention Against Corruption, along with domestic laws such as the Foreign Corrupt Practices Act, have existed for a number of years. Now, however, multilateral development banks (MDBs) are playing a larger role in combating corruption in their member countries. For instance, in 2008 alone, the Inter-American Development Bank applied sanctions for corrupt practices against 33 firms and individuals. In addition, the Asian Development Bank recently sanctioned one firm and one individual for bribing public officials. The World Bank has also been active in the fight against corruption. Since January 2009, the World Bank has already debarred 20 firms and individuals for corrupt and fraudulent practices. The World Bank also posts its 24-hour Fraud and Corruption Hotline phone number on its home page, which includes interpretive services, and displays a link to its guidelines for reporting suspected misconduct.

During my consultancy with the World Bank this summer, I recognized how critical the work of MDBs is in promoting anti-corruption standards on a global scale and in holding firms and individuals accountable for their actions. The World Bank achieves this through a multi-phase investigatory and adjudicatory process that evaluates whether a firm or individual has engaged in “sanctionable” practices—corruption, fraud, collusion, coercion, and/or obstruction. These practices may involve forgery, bid manipulation, labor mischarges, and bribery, among others. In brief, this process begins with an investigation by the Integrity Vice Presidency (INT), which forwards the case to the Office of Evaluation and Suspension if there is sufficient evidence of these practices. After reviewing the evidence, the Evaluation and Suspension Officer determines whether to apply sanctions, which can be contested by the firm or individual through the Sanctions Board — the final level of the World Bank’s sanctions system. After this process, it is possible that the firm or individual will be permanently barred from bidding on all future World Bank projects.

Although the sanctions system within the World Bank is limited in that it applies to private entities rather than public officials, it often provides member governments with the support they need to deter corruption. In many cases, developing countries have weak and unaccountable judicial institutions, and thus these governments are unwilling or unable to prosecute firms or individuals engaging in corruption. However, if a business recognizes that the World Bank will take action for misconduct, it will naturally be less inclined to submit a fraudulent bid or to bribe a public official in connection with a World Bank-financed project. In turn, as more businesses refrain from “giving in” to demands for bribery by public officials, these officials will soon find that the supply of bribes or illicit payments has run dry.

Corruption still infiltrates the private and public sectors in both developed and developing countries. Nevertheless, the work of the World Bank and other MDBs is a necessary and important element in establishing and enforcing anti-corruption standards and reducing the supply of and demand for misconduct. Following my experiences this summer, it is my hope that these efforts will continue to play a prominent role in the global fight against corruption.

* The views expressed herein are the personal views of the author and are not intended to reflect the views of the World Bank.

Referred to in this article:

Inter-American Development Bank Office of Institutional Integrity, Annual Report 2008

World Bank Home Page

World Bank Sanctions System

Photo Credits: Jennifer Long