By Lucien Chauvin
World Bank president Robert
Zoellick must now address concerns that bureaucracy and
inefficiency have allowed graft to take hold of the
Tackling graft was one of Paul Wolfowitzs top
priorities as World Bank president. Ironically, his downfall
was partly a function of the control and oversight mechanisms
that he implemented during his two-year tenure.
Wolfowitz commissioned a report on anti-corruption policies
within the Bank, which finally aired in early September,
months after his departure. Prepared by a panel headed by
Paul Volcker, former chairman of the US Federal Reserve, the
report stated that, while it was difficult to establish the
extent of losses from bribes, collusive bidding
practices and substandard project for goods and services ...
there is, a general sense that the losses are
It also stated that the Bank has been slow to implement
policies to weed out graft, and that a lack of common
purpose, distrust and uncertainty has enveloped the
anti-corruption work of the Bank.
A report published in April by US News and World Report
estimated that 20% of the World Banks loan or $4
billion annually was lost due to corrupt practices.
Another report, also released in early September by the
Government Accountability Project (Gap), a Washington-based
whistleblower group, found that the Banks
anti-corruption structure is designed in such a way that much
of the graft goes undetected.
Like the Volcker panel, the Gap report focused specifically
on the Banks Department of Institutional Integrity
(INT), listing a host of maladies during the Wolfowitz years
that made the unit inoperable. Gaps international
programmes director Beatrice Edwards says the problems with
the INT are structural, and that it cannot adequately perform
its job unless it is better integrated. She says that the INT
needs more explicit guidelines on how investigations are
carried out, and must be linked to operational units to
receive and provide information when there are indications of
The problem now is that the INT operates in an
alienated way from operations, so when it discovers patterns
of corruption, it has a hard time implementing lessons
learned. At the same time, INT is dependent on the operation
staff for information on corruption, so without a close
relationship to operation, the INT is unable to detect
wrongdoing, she says.
Edwards cites the INTs review of healthcare projects in
India as an example of this divorce. The unit is carrying out
a sweeping review of healthcare projects there, but is
basically doing survey research instead of focusing on areas
where other sectors of the Bank have detected problems.
Other organizations are not sure that the World Bank can
conduct business transparently under its current structure.
Mark Weisbrot, an economist and co-director of
Washington-based Center for Economic and Policy Research,
argues the Bank will never be fully transparent.
The World Bank is not accountable to anyone but the US
Treasury. The other 184 members dont really matter. It
is like a dictatorship. A dictatorship can be pressed for
change and something might be achieved, but the structure is
going to stay basically the same, he says.