What is corruption and anti- corruption ?

1. What is corruption and anti-corruption? Global perspectivesoncostsofcorruption and anti-corruptionapproaches Jesper Johnsøn, U4

2. Costsofcorruption Economiccosts • What type ofcorruption, what type ofcost? • Briberyreducingforeigndirectinvestment, rent-seekinglimitingcompetition, leakage/wastereducesstaterevenue • Grand corruptionimpactonsocialcontract and state-formation, electoralcorruption, broken accountability • Unfair socialdynamicscreated by pettycorruption + self-serving elites – corruptionhurtsthepoordisproportionately Politicalcosts Social, individualcosts

3. A few global costquotes… • Globallyestimated US$ 1 trillion paid in bribes • Tacklingcorruption, improvinggovernance and ruleoflawcouldincrease per capitaincome 400% • Increase in corruptionindex by onepointacts as 7.5% taxincrease, reducing FDI inflows • US$ 197 billion illicitfinancialflows from 48 poorestdevelopingcountriesintodevelopedcountries 1990-2008 • Corruption is associatedwithreduced trust in politicalinstitutions • 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

4. Control, monitoring and sanctions Access to information, media, whistle-blowing Illustrative examplesoflocalcostsand anti-corruptionbenefits • Indonesia – villageroads – auditsreducedmissingexpenditures 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 – communitymonitoringreduceschilddeaths by 33% • Brazil – elections – access to information + auditinglowers re-election rates for corruptlocalofficials

5. Basics of anti-corruptioncontinued – the policy level Four 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

6. National Integrity System

7. Multi-ProngedApproach – Accountability linkages

8. United Nations Convention AgainstCorruption

9. Does anti-corruptionwork?