It compares, on a side-by-side basis, the international financial institutions'(IFIs') procedures and policies for preventing and punishing corruption in their operations. (1)
The anti-corruption measures at the MDBs are new, and in some cases (notably in the African Development Bank) are still being implemented. Congress specified thatthey shall use the voice and vote of the United States in each MDB to ensure that by June 30, 2005,each institution (1) posts an annual report on its website containing statistical summaries and casestudies of the fraud and corruption cases pursued by its investigations unit; (2) establishes a plan forconducting regular independent audits of internal management controls including fraud preventionand making reports publicly available; and (3) establishes an effective procedure for the receipt,retention, and treatment of complaints received by the bank regarding fraud and other matters ofinternal control. Experts say measures for countering corruption at the MDBs must be implemented on many levels to be effective. These include bank lending and operations; procurement of goods andservices; staff conduct; independent internal reporting mechanisms to address allegations ofmisconduct; oversight and management of bank operations; and educating staff on policies andprocedures. Each of the IFIs consider similarsanctions for misbehavior, such as demotions and dismissals of staff members, blacklisting firms,and the cancellation of loans for borrowers. In the most airtight organization, it may still be possiblefor corruption to occur. Anti-Corruption Measures in the MDBs

		The World Bank

The World Bank's Internal Audit Department (IAD) began working in anti-corruption issues in 1997. The bank also as an independent Inspection Panel, which also reports directly to the executive board. The International Monetary Fund

The IMF is different from the MDBs in that it does not fund projects. IFAD is different than the other IFIs in that it is a specializedagency of the U.N., and it conducts investigations in a manner consistent with the rules of the UnitedNations. Asian Development Bank

At the Asian Development Bank (ADB), an Anti-corruption Unit (OAGA) within the Office of the Auditor General (OAG) is responsible for implementing the ADB's anti-corruption policies,with oversight from the Oversight Committee on Corruption. Comparison of the IFIs' Anti-Corruption Mechanisms
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 anddetailed process for addressing corruption issues, but the other multilateral development banks(MDBs) have or are establishing similar procedures. The International Monetary Fund (IMF) doesnot make loans for specific projects; all its loans go directly to the central bank or finance ministryof the borrower country. Nevertheless, it also has procedures for preventing, investigating, andpunishing 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, oversightand management of their operations, and the education of staff on policies and procedures. Majorprocedures for controlling corruption include the establishment of an independent corruption unit,an oversight committee, mandatory staff financial disclosure procedures, and a corruption reportinghotline. The World Bank is the only IFI that has adopted procedures in all four areas. Most of theothers, excepting the African Development Bank (AFDB) and the International Fund for AgriculturalDevelopment (IFAD), have procedures in three of these areas. The AFDB requires mandatory stafffinancial disclosure and is considering possible action in the other areas. IFAD's anti-corruption unitis organized differently than the other IFIs in that anti-corruption responsibilities are carried out byits 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 eachIFI has adopted to address corruption issues. This report will be updated if significant changes aremade in the systems and procedures it describes.