Two weeks ago I wrote about the growing disparity between transnational prosecutions for paying bribes and those for receiving bribes. The number of cases where OECD countries have prosecuted their nationals or firms subject to their jurisdiction for bribing developing country officials has been growing steadily, but there are disappointingly few cases where a developing state has gone after its nationals for accepting bribes. Last week I suggested one way to increase the number of cases against bribe-taking officials is to publicize whenever a firm or individual has been convicted of paying a bribe in a developing state. For every payer, there is a taker, and if the details of the case are widely publicized, my contention was that civil society, the media, and the political opposition would then press the authorities to prosecute the taker.
The World Bank has tried something similar when an investigation reveals corruption in one of its projects, and the experience suggests that, though not a silver bullet, the effort is worthwhile.
The Bank makes loans to developing states to finance projects, and if the Bank finds fraud or corruption has tainted one of these projects, it can sanction the staff members involved and bar any contractor implicated from bidding on future Bank contracts. But this is all it can do. As an international organization it has no power to bring criminal charges, nor does it have any authority to penalize the borrowing country officials who took bribes or otherwise participated in the wrongdoing.
To bolster its limited sanctioning power, the Bank has since the early 2000s referred its investigative findings to those countries with jurisdiction over the wrongdoers — nations where the contractors were located or where bribe takers resided. At first these referrals were confidential. Reading between the lines of the early reports of the Integrity Vice Presidency (the unit in the World Bank responsible for the investigations and referrals), one gets the distinct impression that the referrals went into a black hole.
Things began to change in 2008 when in the annual report for that year the Integrity Vice Presidency publicized the referral program. At first it simply stated how many referrals it had made the previous year and noted when a country had opened investigations. The 2009 report thus states that nine referrals had been made in 2008 and that the Philippines and the Indian state of Orissa were following up on referrals. In its 2011 report the Integrity VP, while noting follow up actions taken by a handful of states, acknowledged that “the hoped-for vigorous, global response [to its referrals] from national authorities has not been consistent.”
To prompt action the unit began publishing a chart showing, for each referral, the country to which it had been made, the date, and its status — investigation opened, entity or individual sanctioned, or more commonly, “no action taken.” The 2012 and 2013 reports continue to publicize what steps, if any, countries are taking in response to a referral, and the publicity seems to have had some salutary effects. The 2013 report states that in the previous year ten referrals had led to investigations by domestic authorities, the most yet.
One should not overstate the positive effects of this program. But one should not understate them either. The simple act of publicizing referrals seems to be having a modest but meaningful effect on developing countries’ investigations of their own officials. This suggests that greater publicity (even without a lot of detail that could be used in an investigation) may help pressure some governments to take action.