Do we then need two World Banks?

Krishna Guha and Eoin Callan in the Financial Times of September 13 and in reference to a report on the role played by the World Banks internal anti-corruption unit the Department of Institutional Integrity (INT) were told by Paul Volcker, the main responsible for that report, that “his inquiry had ‘reconfirmed’ there was ‘ambivalence’ in the bank as to whether they really want an effective anti-corruption program or not”. 

Wrong! Having been an Executive Director at the bank (2002-2004) I sincerely believe that an overwhelming majority of the bank staff clearly comes out in favor of more and better anti-corruption efforts but that these do not come into fruition only because part of the management, rightly or not, believe that these could hinder the bank from operating efficiently… at least as they wish for it to operate for whatever reason efficiently. 

If we discuss “ambivalence” then perhaps we should also discuss what Volcker’s report does not touch upon and that is perhaps the single most outstandingly ugly blemish on the World Bank’s reputation. To see what I refer to please search out INT on the external website of the World Bank and then click on the list of Debarred Firms and Individuals. On that list you will find, duly named and shamed, the names of many individuals that one way or another after a due process have been considered involved in corruption, but that list does not include one single name of those officers of the World Bank that presumably must also have been involved in these acts of corruption one way or another. Susanne Folsom the Director of INT, on a Q&A session on that same site mentions, “We’re often asked why we don’t publicly name Bank staff who are terminated for fraud and corruption as well. The Bank’s rules don’t allow such disclosures….” 

What credibility can you get naming others while not being willing to name your own? It might very well be that the “ambivalence” on anti-corruption in the World Bank is insurmountable but if so perhaps what we need is to have two world banks since the world definitely needs one that comes out completely and unabridged against corruption. And mind you I am far from being a zealot on this issue, since life has taught me well that zealousness frequently carries within its own even more dangerous breed of corruption.

Let us not waste this opportunity to make a very significant reform at the World Bank

On the web of World Bank (WB) we can read an interview with Suzanne Rich Folsom, the Director of the World Bank's Department of Institutional Integrity (INT), on the theme of fraud and corruption. When questioned “What sanctions are imposed on those misusing WB’s funds?, she answers “when we find that a supplier has engaged in corruption in a project, we take actions to debar them – which means to make sure they can’t get any more contracts for a while. We also publicly debar – we list their names on our website. ‘Naming and shaming’ is a huge deterrent.” This sounds of course reasonable, especially considering that INT is not a court that could send anyone to jail.

Unfortunately, immediately thereafter, Folsom also has to say the following: “We’re often asked why we don’t publicly name WB staffs that are terminated for fraud and corruption as well. The WB’s rules don’t allow such disclosures…”, and this, no matter how you look at it, is of course something completely unacceptable and represents a truly ugly wart on the public face of what in so many respects is the best managed of all our international organizations.

Perhaps these days, when the World Bank’s President’s and a former staff names are publicly mentioned everywhere as having done something not correct, this could be the best opportunity ever for getting rid of whatever crazy disclosure rule stops the World Bank from living as it preaches,