Publication Date: July 2004
Publisher: Library of Congress. Congressional Research Service
Research Area: Banking and finance
The international financial institutions (IFIs) all have procedures to prevent, identify, and punish corruption within their organizations. The World Bank appears to have the most extensive and detailed process for addressing corruption issues, but the other multilateral development banks (MDBs) have or are establishing similar procedures. The International Monetary Fund (IMF) does not make loans for specific projects; all its loans go directly to the central bank or finance ministry of the borrower country. Nevertheless, it also has procedures for preventing, investigating, and punishing unethical or corrupt practices.
Organizations may achieve more effective anti-corruption programs by implementing complementary measures to counter corruption at many levels. These include scrutiny of the IFIs' lending procedures, their systems for the procurement of goods and services, staff conduct, oversight and management of their operations, and the education of staff on policies and procedures. Major procedures for controlling corruption include the establishment of an independent corruption unit, an oversight committee, mandatory staff financial disclosure procedures, and a corruption reporting hotline. The World Bank is the only IFI that has adopted procedures in all four areas. Most of the others, excepting the African Development Bank (AFDB) and the International Fund for Agricultural Development (IFAD), have procedures in three of these areas. The AFDB requires mandatory staff financial disclosure and is considering possible action in the other areas. IFAD's anticorruption unit is organized differently than the other IFIs in that anti-corruption responsibilities are carried out by its Office of Internal Audit, but it functions similarly to anti-corruption units at the other IFIs. Also, IFAD is still in the process of implementing mandatory staff financial disclosure.
This report provides, on a side-by-side basis, comparisons of the anti-corruption procedures in the MDBs and the IMF. It also provides a detailed description of the institutional arrangements each IFI has adopted to address corruption issues. This report will be updated if significant changes are made in the systems and procedures it describes.