Corruption risk assessment tools for use
in development projects
Would it be possible to provide an overview of diagnostic
tools that can be used to determine corruption risks in programmes
and projects? I'm especially interested in tools that can
be used to determine corruption risk during the programme
development phase in order to develop appropriate mitigating
measures (if necessary).
Purpose We need this overview to determine
whether existing tools cover our need in determining fiduciary
risks (especially corruption). Most of the tools available
focus too much on perceptions and or on social / institutional
causes of corruption.
Definition of Query:
The query requests an overview of risk assessment tools to
determine corruption in development programmes and projects, including
general budget support. The questioner is preparing a guideline to
assist agency workers in carrying out a corruption risk analysis to
determine the accountability and fiduciary risks related to development
aid.
To clarify the content of this query and the response, it may help
to distinguish between risk assessments and tools to measure corruption.
With risk assessment tools we are seeking to be careful and to take
precautionary measures in the design of projects: it may be that there
is no corruption, but we seek to assess the weak points in a system
and the risks of corruption occurring. With tools to measure corruption
we are seeking to find corruption, to know the extent of corruption
that exists within a system. Incidentally, on this last point it has
been shown that perceptions of corruption is a valuable tool for measuring
corruption. See D. Kaufman "Myths
and Realities of Governance and Corruption".
Our response starts by giving details of a (non-exhaustive) overview
of corruption risk assessment tools, and then gives fuller details of
particular risk assessment tools.
A (non-exhaustive) Overview
Our research indicates that there is not a comprehensive overview of
corruption risk assessment tools. However, we did locate a report that
goes some distance towards providing an overview:
The Management Systems International (MSI) report for USAID,
"Development of a Corruption assessment Framework and Methodology:
Review of the Literature, Development Experience and Existing Methodologies
for Corruption Assessments; Preliminary Report" (January
10 2005) is the first report under a series of studies contracted
to MSI by USAID. It presents a review and analysis of the literature,
development experience and existing methodologies for corruption assessments.
It summarizes and draws insights from the basic approaches that have
been implemented, what they measure, how they collect information
and what they do with the results to assist in the development of
a corruption assessment framework and methodology. The report identifies
four types of corruption assessment approaches ("Self-Assessment
Approaches"; "External and Peer Assessment Approaches";
"Aggregate Data Approaches" and "Large N Survey Approaches").
Under each of these approaches it lists and describes types of corruption
assessment tools and comments on their strengths and weaknesses.
In brief, the tools mentioned in each corruption assessment approach
are:
Self-Assessment Approaches
ADB/OECD Stocktaking Reports
UNDP Country Assessment in Accountability and Transparency (CONTACT)
(includes many factors related to fiduciary risks)
OECD Survey of Prevention Measures for Public Sector Corruption
(1999)
OECD Trust in Government - Ethics Measures in OECD Countries (2000)
Integrity Development Review, developed by the Development Academy
of the Philippines (DAP)
OAS Follow-Up Questionnaire Concerning Implementation of the Inter-American
Convention Against Corruption
External and Peer Assessment Approaches
Transparency International National Integrity System (NIS) Country
Studies
GRECO Peer Evaluations
OSI's EU Monitoring and Advocacy Program (EUMAP) - Corruption
Methodology
Public Integrity Index (Center for Public Integrity)
World Bank and European Bank for Reconstruction and Development's
World Business Environment Survey (WBES) and Business Environment
and
Enterprise Performance Survey (BEEPS)
Other Sources (and a fuller description) of
Risk Assessment Tools The World Bank
1. The World Bank's decision to extend development policy lending
is based on a Country Assistance Strategy (CAS) which is an
assessment of the country's policy and institutional framework - including
the country's economic situation, governance, environmental/natural
resource management, and poverty and social aspects. The CAS itself
draws on Poverty Reduction Strategy Papers (PRSPs) which are country-owned
strategies for reducing poverty. Each CAS contains a diagnosis of
a country's governance conditions.
2. The World Bank Institute's Governance and Anti-Corruption (GAC)
Program has developed GAC diagnostics that gather information about
vulnerabilities within a country's institutions. The diagnostic
tools consist of:
A Public Officials Survey to understand institution specific determinants
of corruption (including bribery, nepotism, political interference,
embezzlement etc), discretionality/informality, performance and
governance. The purpose of this questionnaire is to identify the
practices that have developed within the public institutions related
to the distribution of public services.
An Enterprise Survey to study the business environment. The objective
of this survey is to have a better understanding of the reasons
that prevent or limit the development of businesses in a particular
country. It specifically looks at the impact of the diverse modalities
of corruption in the development of the private sector. This study
is undertaken in order to make recommendations that allow the elimination
of - or at least the decrease of - the sources of corruption that
limit competition and increase costs, and that therefore weaken
the possibilities for business growth. Attention is also devoted
to the judicial system.
A Household Survey to learn what citizens think about public services
and the level of service they receive when going through required
procedures.
A Specialised Survey to study (1) a special sector or group where
corruption is perceived as prevalent, such as forestry or customs
or (2) a special sector or group that is known to lay an important
role in anti-corruption, such as the judiciary or mass media.
For further information is available on the World
Bank diagnostics webpage.
3. The World Bank also has produced a document titled "Additional
governance tools". Here you will find brief information about/mention
of the following diagnostic tools:
PRMPS Public Officials Surveys
Quantitative Service Delivery Surveys (QSDS)
Public Expenditure Tracking Surveys (PETS)
Worldwide Governance Research Indicators, 2000/01 and 1997/98
World Business Environment Survey (WBES)
Transition Economies Enterprise Survey (BEEPS)
Investment Climate Surveys
FIAS Surveys
Score Cards
Institutional Governance Review
Public Expenditure Reviews
TI Sources a) Risk assessments
TI has developed a series of risk
assessment discussion documents for the construction industry.
In "Risk assessment and proposed actions for project owners"
you will find examples of different types of corrupt practices which
can take place during the various phases of a construction project;
find discussion of how the cumulative cost effect of corrupt practices
can make the project uneconomical, with resultant damage to all those
affected, and find assessments of the risk to project owners as a
result of corruption. Finally, the document proposes actions which
could be taken by project owners to reduce the risk of corruption
on construction projects. In "Risk assessment and proposed
actions for banks, export credit agencies, guarantors and insurers"
you will find examples of different types of corrupt practices
which can take place during the various phases of a construction project;
an assessment of the risk to banks, export credit agencies, guarantors
and insurers ("funders") as a result of corruption as well
as proposals for actions which could be taken by funders to reduce
the risk of corruption on construction projects. In "Risk
assessment and proposed actions for construction and engineering companies
and consulting engineering firms" you will find an examination
of how the corrupt actions of employees, subsidiary and associated
companies, agents, joint venture and consortium partners, sub-contractors,
consultants, suppliers, competitors, project owners and government
officials can adversely impact on the company during a construction
project; an assessment of the losses and civil and criminal liability
which a company can incur as a result of corrupt actions by these
parties and finally, proposals for actions which could be taken by
construction and engineering companies and consulting engineering
firms to reduce the risk of corruption on construction projects.
The site also documents how "Construction integrity pacts"
can be used to reduce these risks and offers models of construction
integrity pacts. For example, you will find models of construction
integrity pacts for use by companies working in the same sector ("Model
construction integrity pact - sector"); model agreements between
the project owner, designer and all bidding contractors ("Model
construction integrity pact - project - prequalification and tender");
model agreements between the project owner, certifier and the selected
contractor ("model construction integrity pact - project - execution")
and a model code of conduct which can be incorporated into construction
contracts ("Model claims management code").
b) Risk Maps
TILAC (Transparency International Latinoamerica y Caribe: the TI Latin
American and Caribbean Countries network) has done work in assessing
corruption risks in public procurement systems in different countries
of the region, using the risk map methodology. TI is further developing
this tool. You can find the methodology, the findings by country and
the regional outcomes on the regional
TI website (n.b. this is in Spanish)
The risk mapping methodology has become popular in Latin America,
for use in different sectors. Transparency in local government is
one of those. See the work of the TI
Peru national chapter (Proetica) for more details.
TI has produced a database of procurement tools. This includes many
projects that have used corruption risk mapping methodology. You can
find details on the public
contracting pages of the TI website.
TI Toolkits document corruption risk mapping exercises carried out
by national chapters. For example, see TI Lithuania's mapping exercise
in the Toolkit
2002 edition.
c) PCMS
The Public Contracting Monitoring System (PCMS) is a tool aimed
at enabling TI national chapters and other interested stakeholders
to observe and monitor (measure) public contracting systems and its
changes towards or away from an "ideal" contracting system
in terms of transparency, corruption prevention, and control. This
distance between the ideal system and the actual situation is defined
as corruption risk. This is therefore a tool that measures and identifies
corruption risks and is not meant to provide a ranking of countries.
The attached PCMS document describes the methodology in more detail.
For more information you can also contact the LAC department of TI-S
at tilac@transparency.org
This paper focuses on the question of corruption control in the discussion
of aid policies. Conclusions made are that the main tools available
- diagnostic surveys, studies of institutional integrity - still need
more conceptual groundwork and empirical testing in the field; Conditionality
is complementary and cannot substitute aid to the poorest and most
corrupt countries and that aid projects need more protection against
corruption. With reference to this last conclusion, Speck states that
project planning has to take into account the specific perils of private
interests channelling resources to specific local clients. He also
states that the training of experts should include a module on corruption
control and that direct budget support increases the responsibility
of donors to the integrity of resource allocation.
See, for example, "Preventing corruption in public finance management.
A practical guide"
This paper examines closely the dimensions of the public finance system
and details the points at which anti-corruption measures should be
taken. Lists are given of the points in a public finance system where
corruption can occur.
See, for example, "Preventing corruption in public administration
at the national and local level. A practical guide"
This paper provides suggestions and practical advice to support those
individuals in integrating corruption prevention components into such
projects in an appropriate manner. Like the above mentioned paper
it lists weak points within a system where corruption might occur.
