Development Blogs.com

Suspects stand trial at the No. 1 Intermediate People's Court in Chongqing, China. (Photo: CNS/Newscom) For a country of 1.3 billion, 30 million seems only marginal, yet with over 30 million inhabitants, the southwestern Chinese city of Chongqing has a population greater than most developed countries, including the Netherlands, Greece, Hungary, Portugal, and the Czech Republic—and that’s just legal residents. The recent city-wide crackdown on corruption and racketeering is therefore noteworthy. More than 3,300 have been arrested as part of a campaign led by the crusading local Communist Party boss Bo Xilai to root out corruption in the city. This comes as all police officials were asked to re-apply for their jobs less than a month after their chief was jailed following a mafia...

We often hear that corporate social responsibility, or corporate citizenship as it is often called in the business community, is more than philanthropy.  Its easy to agree with this statement.  But what does this “more than philanthropy” mean?  What is good corporate citizenship beyond financial contributions to a legitimate cause? A new paper by Transparency International argues that fighting corruption is good corporate citizenship.  One of the issues highlighted in the paper is that in move towards non-financial reporting on companies’ activities, reporting on anti-corruption strategies is often lacking. In 2007, TI commissioned a survey to probe company reporting on practices to combat bribery and corruption. The study, Transparency in Reporting on...

Residents look on as rioters clash with police last December in Algiers. (WSJ) In the weeks since Algerian President Abdelaziz Bouteflika launched a probe into Sonatrach, the country’s largest state gas company, a different, more compelling narrative has emerged which points to the powerful Department of Security Intelligence (DRS) as the origin of the probe. That is, the investigation and removal of Sonatrach’s top officials is seen as a direct affront to Bouteflika’s civilian control over Algeria’s lucrative oil and gas industry, which accounts for 98 percent of exports. Why on earth would Bouteflika launch an anti-corruption drive which weakens his own Minister of Energy, Chakib Khelil, who is one of his closest allies? If civilian-military power struggles are a central...

Good corporate governance undeniably brings resilience in companies, improves values, and attracts cheap capital. A recent study by the Philippine Institute of Corporate Directors (ICD) suggests that corporate governance practices in the country have improved over the last five years, and that new scores have led to significant change in the valuation of firms. The study determined the co-relationship between share prices and corporate governance in China, Hong Kong, Indonesia, the Philippines and Thailand. Jesus P. Estanislao, Chairman of the ICD, said that: “The question as to whether in fact corporate governance makes a difference in the valuation of the firms in the stock exchanges, and in all five economies, the answer is very clearly so, and the result is that relationship is...

http://news.bbc.co.uk/2/hi/7936004.stm With a majority of its population under the age of 30, the Middle East is the youngest region in the world. Understanding the pressures that this “youth bulge” exerts on the labor market can help us gain a better understanding of a viable economic approach that responds to the needs of a growing young population in search for work.One pillar of any viable economic approach must be how to weed out corruption. A recent article in the Daily Star, the pan-Middle East English language newspaper edited in Beirut, noted that corruption denies job opportunities in labor-exporting MENA countries such as Lebanon, Egypt, Yemen, Syria and Iraq, who, unsurprisingly are also the top corruption offenders according to Transparency International’s 2009...

A common frame of analysis for examining political reform in the Arab world is to group the region’s political actors into three groups: secular democrats, Islamists, and loyal regime supporters. This approach makes it easier to talk about the challenges secular parties face in crafting a space between the regime and popular Islamist groups; it buttresses the profile of leftist activists making great sacrifices to fight for reforms in their own countries; and it offers a convenient lens for explaining the fears more established political actors have of conservative Islamists coming to power in the advent of electoral democracy. While many of these arguments are well-founded and carry a good share of analytical gravitas, they can also perpetuate rigid political categorization that...

Since 2005, CIPE has worked with the Corporate Governance Association of Turkey (COGAT; Türkiye Kurumsal Yönetim Derneği (TKYD)) on increasing awareness of good governance practices among Turkish directors; increasing the skills of current and prospective board members on how to construct a better governance structure within their organizations and in the Turkish private sector; and engendering a voluntary and broadly accepted culture of good governance amongst companies. Most recently, the work has also focused on preparing smaller and medium-sized businesses – particularly family-owned businesses – for compliance with new governance requirements in Turkey’s pending commercial code and encouraging Turkish firms to demonstrate their commitment to adopting best practices...

Long-term CIPE partner the Lebanese Transparency Association (LTA) just released their 2009-2010 documentary on YouTube. The piece highlights LTA’s anti-corruption, anti-bribery, and corporate governance programs and activities in both Arabic and English....

As UNDOC notes, Attitudes on corruption are changing. As recently as ten years ago, corruption was only whispered about. Today there are signs of growing intolerance toward corruption and more and more politicians and chief executives are being tried and convicted. Countries all over the world demonstrated their intolerance for corruption last week in a spectrum of manifestations. Thousands took to the streets in Indonesia as students, NGOs, farmers, fishermen, and workers rallied on December 9 marking International Anti-corruption Day. Representing a wide cross section of Indonesian society, protesters demanded that the government take immediate action to end long-time political corruption problems in Indonesia. Bangladesh observed this year’s International Anti-corruption Day with a...

Facilitation payments – small payments to government officials to facilitate action on their part – are the grey area of corruption.  In the eys of some they are a bribe, in the eyes of others they are not. Foreign Corrupt Practices Act has long made an exception on facilitation payments, allowing companies to make small payments to government officials as long as such payments are properly recorded and reported. I remember working on TI Business Principles for Countering Bribery, which took a tough stance on facilitation payments, and the fascinating discussions that would take place in working group meetings over the issue.  Eventually, the working group drafting the principles took a tough stance of recommending not accepting facilitation payments (only in extreme cases...

Despite the H1N1 fears, the majority of those that registered for the conference were in Kyiv today. We were very glad to welcome about 70 people from 20 countries this morning. Today was quite exciting with three panels engaged in very lively discussions on lessons from successful and unsuccessful transition, anti-corruption strategies, and corporate governance. John Sullivan, CIPE Executive Director, set the tone for the two days with the remark that each country travels its own path; it is important that the reform process is built up from the grassroots to identify issues that are important locally and turn them into an agenda for reform. While talking about the success factors of the Polish reforms, Mieczyslaw Bak, from the Institute for Private Enterprise and Democracy from Poland,...

“Are you the victim of corruption? Then call 080 100 76 76.” This is how a new advertisement for the Center for Anti-Corruption Assistance (Cajac) begins – exhorting Moroccans to say no to corruption! Cajac was set up by Morocco’s local Transparency International chapter (Transparency Maroc) and is funded by the British Department for International Development. Since its launch last January, Cajac has treated some 250 cases; most of them dealing with property rights, complaints about the justice system and stories of abuse of power by local police. The Center is run by a voluntary staff of lawyers and unemployed students with doctorates in law who take turns working one day a week. Although Cajac’s mandate limits it from formally representing clients in court or filing suit...

When it comes to Nigeria’s vast informal sector, Nigerian public officials can be astonishingly candid. The executive director of the Nigerian Export Promotion Council (NEPC), David Adelugba, said at a recent press conference that most of the Nigerian products sold outside the country are not officially exported out of the country. “Most of the trade done in the export sector are done through the informal means and this affects the level of development in the sector because the government does not have a record to know how the sector is thriving and how much it can contribute to the nation’s development,” Mr. Adelugba said. (“The numbers don’t add up,” 234Next.com, October 21, 2009) With so much unregistered commerce taking place, policymakers cannot...

To much of the world, success in Afghanistan hinges on defeating the Taliban and removing any potential for an al Qaeda safe haven.  In a word, success stems from security.  Yet, as Thomas Friedman notes in his latest column, this ignores the endemic corruption in Afghanistan. Where a “normal” government raises revenues from the people — in the form of taxes — and then disperses them to its local and regional institutions in the form of budgetary allocations or patronage, this Afghan government operates in the reverse. The money flows upward from the countryside in the form of payments for offices purchased or “gifts” from cronies. Fighting the war on terrorism involves more than security.  To Thomas Friedman, it means opening another front to challenge against the demand...

Anti-Corruption Conference in Astana Two weeks ago I attended an international conference on fighting corruption and promoting good governance in Eastern Europe and Central Asia that took place in Astana, Kazakhstan and was co-organized by the OECD and the Financial Police of Kazakhstan. This was a particularly significant event because it was the first conference of this kind in the post-Soviet space since the fall of the Berlin Wall. Over 150 delegates from over 40 countries from as far away as Latin America to as nearby as Kyrgyzstan included high-level dignitaries and anti-corruption specialists who descended onto a seemingly empty, but posh capital city of Astana for several days. It is difficult not to think of fighting corruption and improving good governance as two of the most...

It’s funny when a survey is released how everyone becomes an amateur statistician.  I’m guilty of it, too - the first thing I do when I get a survey is flip with a skeptical eye to the methodology page. Of course, methodology is an important element of understanding a survey’s data.  But often, methodology is attacked to distract attention from the elephant in the room - the uncomfortable truth that a survey can reveal. CIPE Egypt, in cooperation with the Ahram Center for Political and Strategic Studies (ACPSS), recently released a survey of nearly 800 Egyptian small- and medium-sized enterprises (SMEs) about their experiences with corruption (results here).  Corruption is endemic in all aspects of Egyptian life.  Transparency International’s 2008...

CIPE/CSD 2007 roundtable with Boyko BorisovThe latest from Bulgaria: Boyko Borisov, Sofia’s mayor, won Sunday parliamentary elections on an anti-corruption platform. Yesterday’s New York Times said that Borisov’s opposition party Citizens for the European Development of Bulgaria (GERB), scored “a larger-than-expected election victory” at 42 percent of the vote, while the incumbent Socialist party had 18 percent, much less than had been anticipated. Borisov will probably be the next prime minister, if negotiations to form a coalition government are successful. Borisov’s party has become the leading political force in the country at a time when Bulgaria is weakened by a severely deteriorating economy and voter fatigue with chronic corruption. CIPE long-term partner in Bulgaria,...

Breaking news from Nepal, courtesy of the BBC: In an effort to fight corruption at the international airport, the Nepalese government is now issuing pants without pockets to airport employees. While I applaud the practicality and simplicity of the proposed solution, I have to question whether the mere loss of pockets will stop airport employees from hassling travelers for bribes. CIPE has seen worldwide that the largest cause of reduced corruption is a change in citizen mindset. Without local desire to stand up for a new set of principles, anti-corruption efforts often go unnoticed. Tribhuvan Airport corruption is unique in one factor - bribery may be rampant, but only among Nepalese travelers. Foreigners are, surprisingly, left largely alone in recognition of (a) the tips many...

That we are all equally human, we should all have equal rights of some sort, the argument goes; equal opportunity, equal outcomes, equal by some measure. Michaela Wrong’s It’s Our Turn to Eat provides a living, detailed, vibrant story of human beings conspiring to deny equal rights for all - embodied by Kenya’s corrupt politicians and the inherited system of political patronage at the heart of Kenya’s recent electoral violence. This story was the subject of Monday’s event hosted by the Cato Institute, featuring Wrong, with comments by the former Vice Chairman and Co-Founder of Transparency International, Frank Vogl. The story provided harrowing testimony to human equality, by reminding us that people of all races are equally capable of extraordinary crime,...

“Having my own company, I no longer work for profit but as a hobby, with no money to me, only paid to everyone else’s pocket who has an official hand.” This was the view–commonly held– of one businesman who finally moved his business out of Russia’s “pocket-oriented democracy” to Germany. Corruption in Russia is endemic, widespread and well-known. Elena Panfilova of Transparency International’s Russia Chapter began by painting a bleak picture for CIPE’s and TI’s guests from NED, State Dept, Dept of Justice, and others at today’s roundtable on Evolving Approaches to Combatting Corruption in Russia. And yet some progress is being made. President Medvedev has championed new anti-corruption laws, including declaration...

Interesting piece of news from China - there is a growing public pressure on Chinese public officials to disclose their assets, as part of a broader push to expose corruption.  But not all officials are taking the pressure lightly - one even responded by linking the relationship between government representatives and citizens to the one of employers and employees (and No, citizens are not employers in his mind). And he is not alone, as according to one survey of public officials in China… …concerning the proposed asset declaration requirement for public officials, 97 percent of respondents said they opposed such a law. In fact, the idea has been repeatedly discussed for the past 20 years, but has never been implemented. But even though the officials are scoffing at the idea,...

CIPE partner the Lebanese Transparency Association (LTA) was featured in an April 23, 2009 New York Times article “Money From Abroad Floods Into Lebanon to Buy Votes” on the upcoming parliamentary elections in Lebanon in June. LTA is in charge of monitoring election campaign spending limits – the first such monitoring system in the Arab world. CIPE and LTA are working together to tackle corruption from the supply side, within the broader context of developing a national anti-corruption strategy for Lebanon. Working in a participatory and multi-stakeholder manner—unprecedented in Lebanon on this subject and a model for the broader Middle East-North Africa region—LTA is conducting awareness-raising workshops and developing resources and practical implementation tools on corporate...

The World Bank Institute and partners have launched two essay competitions on fighting corruption through collective action. One of them is intended for students and young professionals and the other for practitioners. Students and young professionals may participate by submitting an essay or business model on the topic and practitioners may participate by submitting their experiences on fighting corruption. You can learn more here: http://info.worldbank.org/etools/antic/anticorruption_competition.asp Main prizes cover participation and travel expenses to the World Bank Institute’s Executive Development Program: “Fighting Corruption through Collective Action in Today’s Competitive Marketplaces” that will be held in Washington D.C., June 8 to 11. Winners will also be...

To what degree does corruption affect economic growth in emerging markets? To answer this question, development institutions must find ways to measure corruption and the efforts to fight it. According to the World Bank Institute, “This recognition has renewed interest in the World Bank, and among aid donors, aid recipients, investors, and civil society, in developing measures of corruption, both in aid-financed projects as well as more broadly in developing countries. This in turn has also sparked debate on how best to measure corruption and monitor progress in reducing it.” One way to address this problem is to measure the rates charged for debt issued in specific emerging markets. By understanding how corruption affects lending, we can see the direct cost to businesses,...

Over the next few weeks, the staff of Global Integrity will be guest bloggers here at the CIPE Development Blog. I came across Global Integrity a few years ago, and I was immediately captivated by their approach to addressing the challenges of measuring and fighting corruption. (check out our recent work on local governance in Liberia) Instead of measuring corruption - a concept that is quite difficult to observe and estimate - they look at the flip side of it and measure integrity mechanisms.  For example, we may know that freedom of the press is an effective anti-corruption tool and, as such, Global Integrity will look at the freedom of the press laws and their implementation, trying to determine to which extent that institution is effective in preventing corruption. Their...

Building the institutional framework for better companies and better societies is a learning process, where the public, private, and civil society sectors share mutual responsibility to strengthen good governance, particularly in the context of developing countries. All stakeholders must ensure that the rules of the game are written and applied for the benefit of all of society and not for the private gain of the few. If that is not the case, corruption can take its most extreme form: state capture, where a country is run for the benefit of political elites colluding with narrow private interests at the expense of the society at large. This Feature Service article is based on the report of the International Consultation on the “Role of the Private Sector in Ethics and Corporate...

According to a new Ernst & Young survey, illegal business practices including bribery are still used by many organizations to secure or retain business, despite the rise in international anti-corruption legislation and law enforcement… Key findings of this global, private sector survey include: Although companies are doing more to establish anti-corruption programs, their efforts are being undermined by a lack of knowledge about relevant legislation. Two-thirds of respondents claimed to know nothing about the Foreign Corrupt Practices Act (FCPA). Over two-thirds of respondents believed their internal audit teams were capable of detecting bribery and corruption. The full survey is available here. Other notable findings are: Regulatory enforcement is significantly stronger than...