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Bribery costs $1 trillion a year

July 2007: Bribery is costing the world $1 trillion a year with the burden falling disproportionately on the billion or so people living in extreme poverty, the World Bank said yesterday.

In a report on the quality of governance in the world's countries over the past decade, the Bank added that many poor countries had significantly improved governance and clamped down on corruption in recent years.

"Such improvements are critical for aid effectiveness and for sustained long-run growth," said Daniel Kaufmann, co-author of the report and director of global programmes at the World Bank Institute, the Bank's research arm.

"The hopeful news is that a considerable number of countries, including in Africa, are showing that it is possible to make significant governance progress in a relatively short period of time."

The world's rich countries have over the past decade written off many of the debts of the world's poorest countries under the Bank's Heavily Indebted Poor Countries (HIPC) initiative and increased aid flows to them on condition that they stamp out corruption so that the poor see the benefit.

The report emphasised that good governance matters for other aspects of development such as infant mortality, illiteracy and inequality. It has also been found to significantly enhance the effectiveness of development assistance in general, and of World Bank funded projects in particular.

The Bank says the report contains the most complete set of data on governance yet published.

Some African countries are making significant strides on the path to good governance, it says, in particular Kenya, Niger, Sierra Leone, on accountability of their leaders, Algeria and Liberia on the rule of law, Algeria, Angola, Libya, Rwanda and Sierra Leone on political stability and Tanzania on corruption.

Emerging economies such as Chile, Botswana and Costa Rica as well as Estonia and the Czech republic, are matching rich countries on governance. More than a dozen score higher on good governance than Greece or Italy.

Despite improvements in individual countries, the average quality of governance around the world has not improved much over the past decade, the report adds.

For the countries that have done well, there have been a similar number that have deteriorated, including Zimbabwe, Cote D'Ivoire, Belarus and Venezuela.

Source: The Guardian

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