anti corruption day
TRANSCRIPT
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 1/26
PRESENTATION ON
ANTI-CORRUPTION DAY
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 2/26
THE CHALLENGE
• Inefficient use of existing water sector finances
• Lack of investment
• Millions dying from lack of clean water and basic
sanitation: Reaching the MDGs is unlikely• Degradation of water resources and ecosystems
• Unjust distribution of water services and resources
• Lack of democratic influence for stakeholders
Corruption affects who gets what water when, whereand how. It determines how costs are distributed between different actors and the environment.
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 3/26
HOW BIG IS THE CORRUPTION PROBLEM?
• Varies across the sector and
national/sub-national governance
settings
• World Bank estimates of project
corruption in ‘highly corrupt’ countries
could be 30-40% prior to anti-corruption
initiative
• If 30% is correct –
US$20 billion could be lost in thenext decade to meet the MDGs
for WSS in Africa*
• Much need for diagnostics!
WSS in South Asia
• False readings: 41% of
customers had paid a bribe in last
6 months
• Illegal connections: 20% of households admitted paying a
bribe to utility staff
• Contractors: 15% excess cost
because of collusion
• Kickbacks: 6-11% of contracts
value
(Davis,WSP Study, 2003)
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 4/26
WHAT IS CORRUPTION?
Definitions
• ‘the use of public office for private gain’ (WB)
• ‘the abuse of entrusted power for private gain’ (TI)
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 5/26
CORRUPTION COMES IN MANY FORMS
• Bribes: payments to public officials to persuade themto do something (quicker, smoother or more favorably).
• Collusion: secret agreement between contractors to increase profit margin
• Fraud: falsification of records, invoices etc.
• Extortion: use of coercion or threats. E.g. a payment to secure / protect ongoing service – (cf.collusive corruption where both sides benefit)
• Favoritism/Nepotism in allocation of public office
• ‘Grand’ corruption: high level, political corruption
• ‘Petty’ corruption: corruption in public administration and/or during implementation or continuing operation and maintenance
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 6/26
EXAMPLES OF CORRUPTION IN THE WATERSECTOR
• Falsified meter readings
• Distorted site selection of boreholes or abstraction points
• Collusion and favouritism in public procurement
• Bribes to cover up wastewater and pollution discharge
• Kickbacks to accept inflated bills in production• Nepotism in allocation of public offices in water administration
• Bribes for diversion of water for irrigation
• Bribes for preferential treatment (spead, service level etc)
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 7/26
CAUSES OF CORRUPTION IN THE WATER SECTOR
Complementing perspectives
• Incentives: Cost/benefit ratio of engaging in corruption. Economic and non-economicrewards.
• Institutions: Dysfunctional institutions - stucture and capacity – creates opportunity andlowers risk of getting caught.
• Norms: Setting expectations and limitations for legitimate behaviour.
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 8/26
CAUSES OF CORRUPTION
Corruption = Monopoly + Discretion –
Accountability
HIGH HIGH LOW
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 9/26
It combines high riskcharacteristics:
• Monopolistic behavior
• Large flow of PUBLICmoney
• High cost of sector assets
• Assymmetry of power and
information• Sector/ technical complexity
It is similar to :
• Typical civil service behavior
• The construction industry (mostcorrupt sector?)
IS THE WATER SECTOR UNIQUE?
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 10/26
2. A FRAMEWORK FOR UNDERSTANDING
CORRUPTION IN THE WATER SECTOR
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 11/26
AN INTERACTION FRAMEWORK
• Public to public
• Diversion of resources
• Appointments and transfers
• Embezzlement and fraud in planning andbudgeting
• Public to private
• Procurement collusion, fraud, bribery
• Construction fraud and bribery
• Public to citizen / consumer
• Illegal connections
• Falsifying bills and meters
PublicOfficials
Public
Actors
Consumers Private
Corruption occurs
between public officials
and 3 different sets ofactors
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 12/26
Early warningindicators
•Same tender lists
•Bidders drop out
•Higher unit costs
•Variation orders
•Low worker
payments
•Single source
supply
•Change in quality
and coverage
Anti-corruptionMeasures
•Simplify tender
documents
•Bidding
transparency
•Independent tender
evaluation
•Integrity pacts
•Citizen oversight
and monitoring
•Technical auditing
•Citizen auditing,
public hearings
•Benchmarking
•SSIP support mechs
PUBLIC toPRIVATE
interactions
Procurement • Bribery, fraud, collusion
in tenders
Construction
• Fraud / bribes in
construction
Operations
• Fraud / bribes in
construction
•
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 13/26
PUBLIC toCONSUMER
interactions
Construction• Community based WSS –
theft of materials
• Fraudulent documents
Operations• Admin corruption
•(access, service, speed)
Payment systems
•
• meter, billing and
collection – fraud and
bribery
•
Early warningindicators
•Loss of materials
•Infrastructure
•failure
•Low rate of faults
•Lack of interest inconnection
campaigns
•Night time tanking
•Unexplained
variations inrevenues
Anti-corruptionMeasures
•Corruption
assessments
•Citizen
monitoring and
oversight
•Report cards•Transparency in
reporting
•Citizen oversight
and monitoring
•Complaintredressal
•Reform to
customer
interface (e.g.
women cashiers)
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 14/26
7 sets of anti-corruption measures
► Measuring and diagnosing
► Transparency and access to information
► Improving accountability
► Institutional and policy reform
► Enforcement and regulation
► Education and advocacy
► Integrity
IDENTIFYING ANTI-CORRUPTION MEASURES
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 15/26
AREAS TO EXPLORE
• What is the viability of specific sector interventions?
• How can decentralization be harnessed as an
anti-corruption strategy?
• How are these measures different from current reform efforts?
• How do we make anti-corruption work for the poor?
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 16/26
3. MAKING ANTI-CORRUPTION
APPROACHES WORK FOR THE POOR
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 17/26
MAKING ANTI-CORRUPTION WORK FOR THE POOR
• Why pro-poor anti-corruption approaches?
• Understanding the poor’s interaction with corruption
• Identifying hotspots in the water sector
• Developing responses to bring benefit to the poor
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 18/26
WHY PRO-POOR ANTI-CORRUPTION APPROACHES?
Why pro-poor?
• disproportionate impact – regressive
• differentiated impact – the affect on the poor varies
• unpredictable impact – not much is known
• Loss of water assets and services – diversion
• User pays and cost recovery principles – double cost
• Risk of fallback – tightening and shifting – effects?
• Growth, efficiency of services, better governance…all these things supportpoverty reduction …
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 19/26
UNDERSTANDING THE POOR’S INTERACTION WITH
CORRUPTIONWhat are the impacts of corruption on the poor?
• Short term issues – access to water
• Differentiated – Marginalisation or empowering
• Coping strategies
• Bribery decreases financial assets but increases short term water assets, healthassets
• Long term issues – efficiency and effectiveness
• Marginalisation
• Decrease in physical assets
• Loss of options
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 20/26
UNDERSTANDING THE POOR’S INTERACTION WITH
CORRUPTION
1. Indirect… (does not involve the poor in interaction)
• Political corruption, state capture
• Diversion and distortion in the allocation of funds
• Embezzlement from state, sector, local government budgets
• Procurement fraud, fraud in construction
• Elite capture
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 21/26
UNDERSTANDING THE POOR’S INTERACTION WITH
CORRUPTION
2. Direct… (the poor are involved in the interaction)
• Poor users offer bribes or bribes are extorted
• to access water (for irrigation, drinking water etc)
• for quality, maintenance
• to get a fair price
• Poor officials use their public office for private gain
• To provide access, quality and price
• To enable elite capture
• To defraud program / project funds
• Act in organizational chain of fraud/ bribery
or as an individual or middleman
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 22/26
IDENTIFYING HOTSPOTS
A flow of corruptinteractions…
…in which the poor arepaying bribes to stay inthe system
…and receiving bribes (asofficials or de-facto officials)
…which ones matter most?
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 24/26
IDENTIFYING HOTSPOTS IN THE WATER SECTOR
… In the poor’s water context … what matters most?
• Paying bribes at the point of service delivery
• To access assets – for WSS/irrigation/drainage control (one-off)• To access ongoing services – for repair / operation (recurrent cost)
• To get the right price – for legal or illegal aupply
• Taking and extorting bribes and defrauding projects either individually or as a part of a group
• Assets captured, controlled by officials
• Services and Payment systems controlled by officials
• Procurement and execution controlled by officials
7/29/2019 anti corruption day
http://slidepdf.com/reader/full/anti-corruption-day 25/26
IDENTIFYING HOTSPOTS IN THE WATER SECTOR
… In the poor’s water context … what matters most?
• The sub-sector – WRM, water supply, sanitation
• What characteristics make for more corruption?
• The ‘public good’ finding
• The system
• Where do the poor get their water? The spectrum of water providers
• The location
• Opportunities for corruption at low access points
• The actors
• Relationships between poor and leaders / social elite