Barely a slap on the wrist for the World Bank but better than nothing

The anticorruption drive led by Paul D. Wolfowitz as president of the World Bank, which shook the institution and contributed to his downfall, remains hampered by weak management, internal distrust and employee resistance to combating fraud, a panel of outside experts concluded Wednesday. [...]

The long-awaited report said it was impossible to quantify the losses from bid-rigging, bribes, poor quality of goods and services and other problems of graft in the operations of more than $20 billion a year in lending to poor countries.

“There is, however, a general sense that the losses are substantial,” it said. Current and former officials at the bank say that some form of fraud affects as much as 40 percent of the bank’s programs. [...]

In general, the report said the bank had done a poor job in following up findings of corruption with remedial action in many countries, and it recommended that [World Bank President Robert] Zoellick select a top manager to oversee efforts to work with countries and regional bank officials to root out graft once it is uncovered. It also called for an outside panel of advisers to evaluate antigraft activities. [...]

Mr. Zoellick welcomed the report for its “excellent and I hope most useful” recommendations, and he indicated that he would probably put most of them into effect. Aides close to the new president say that whether anticorruption efforts succeed will depend as much on his personal efforts to heal rifts at the bank as on managerial changes.

In an interview, Mr. Zoellick said many of the Volcker proposals were in line with plans he and his staff had already generated. “The most important recommendation is that anticorruption efforts are a vital function of the bank and need to be incorporated into everything we do,” he said. [...](1)

A reasonable person would ask why the personal efforts of the Bank's president to smooth ruffled feathers should affect how the Bank goes about fighting corruption. The answer is that with enough will to do so, it's perfectly possible to convince yourself of anything.

Throughout the course of its existence, the World Bank has helped create and sustain a climate of acceptance about corruption that has been devastating to the poorest countries. The climate is supported by the fiendish lie that tolerating vast levels of corruption tied to World Bank loans is simply part of the cost of writing development loans.

1) Panel Urges World Bank to Change Antigraft Plan, The New York Times, September 13