Restoring Trust by Curbing Corruption

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Restoring Trust by Curbing Corruption

Location: HQ1 Atrium, HQ1-1-700

Overview

The past few years have seen a growing distrust in governments and public institutions. A key factor fueling this distrust is corruption, which undermines revenue and reduces the efficiency of public spending. Recognizing that mitigating corruption requires a holistic and multifaceted approach, tailored to the specifics of each country, panelists will share their experiences with successful anticorruption initiatives. Another focal point of the discussion will be the international facilitation of corruption and tax evasion. Finally, panelists will discuss how the IMF can contribute to and help mend the trust divide.

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Seminar Report

Contributor: Marushia Gislén

Moderator: Greg Ip, Chief Economics Commentator, Wall Street Journal

Speakers:

Christine Lagarde, Managing Director, IMF

Abdoulaye Bio-Tchané, Senior Minister of Planning and Development, Republic of Benin

Lea Giménez Duarte, Minister of Finance, Paraguay

Penny Mordaunt, Secretary of State for International Development, United Kingdom

Patricia Moreira, Managing Director, International Secretariat of Transparency International

Over the last few years there has been a growing sense of distrust in public institutions. A key factor fueling this distrust is corruption, which, amongst other things, undermines revenue and reduces the efficiency of public spending. Panelists shared their experiences with successful anti-corruption initiatives and discussed how the IMF can contribute and help to mend the trust divide.

Key Points:

· Transparency. Speakers agreed that transparency of public information is critical to combat corruption. IMF research shows that more complicated and intricate rules are likelier to fuel corruption (Lagarde). Duarte emphasized that policy makers have to prove to the public that spending is efficient, and government data, including salaries, benefits, and expenditures, has to be publicly available.

· Technological innovation has the potential to enhance anti-corruption efforts. The digitalization of payments platforms for public salaries has proven an effective tool to cut cost (Bio-Tchané, Lagarde, Duarte), and speakers agreed that fiscal space can be created by improving procurement practices. However, Duarte emphasized that technology alone will not do it, and that it is important to educate the public and media about how to exploit the available information and technology.

· Ending impunity. Bio-Tchané, Duarte emphasized the importance of punishing corrupt officials, even at the highest level of the executive and judiciary to show the public that no one is above the law. Bio-Tchané noted that appropriate laws often exist, but that implementation is lacking. Duarte noted that the “cleaning process” of the public sector can be incredibly costly politically, and Lagarde noted that a change in government may sometimes impede the work on fighting corruption.

· Role of the Fund. Duarte, Bio-Tchané urged the Fund to be more involved in helping countries fight corruption. Lagarde highlighted the Fund’s TA work to strengthen AML-CFT regulations and standards. Going forward, the Fund will take on a more active role to assess country policies when corruption is deemed macrocritical or when countries request such analysis.

· Externally induced corruption? Lagarde emphasized that the IMF is working to build systems to curb corruption on the supply side and Mordaunt highlighted that DFID is working to help private enterprises deal with local corruption through its Business Integrity Hub. She also emphasized the importance of improving domestic regulation to prevent anonymous companies from buying properties or other assets in developing countries. Duarte said that corruption cannot be only externally induced but is usually domestically driven.

Quotes:

“Corruption and the lack of trust implies that the traditional social contract between citizen and state is broken.” Christine Lagarde

“Corruption can turn a country from being a star, to becoming a falling star.” Lea Giménez Duarte

Moderator

Greg Ip
Chief Economics Commentator, The Wall Street Journal

Greg Ip is the Chief Economics Commentator for The Wall Street Journal. He writes about U.S. and global economic developments and policy in the weekly Capital Account column and on Real Time Economics, the Wall Street Journal’s economics blog. Previously, he work ed as U.S. economics editor for The Economist and he was a reporter for The Wall Street Journal. Greg has won or shared in several prizes for journalism. He is the author of “The Little Book of Economics: How the Economy Works in the Real World” (Wiley, 2010) and “Foolproof: Why Safety Can Be Dangerous and How Danger Makes Us Safe,” (Little, Brown, 2015). He holds a B.Sc. in Economics and Journalism from Carleton University.

Panelists

Christine Lagarde
Managing Director, IMF

Christine Lagarde has been Managing Director of the International Monetary Fund since July 2011. She held various ministerial positions within the French government, including Finance and Economy Minister (2007–11), Minister for Foreign Trade, and Minister for Agriculture and Fisheries. She was also Chairman of the Global Executive Committee and Global Strategic Committee of Baker & McKenzie.

Abdoulaye Bio-Tchané
Minister of State for Planning and Development, Benin

Mr. Bio Tchane is currently Senior Minister of Planning and Development of the Republic of Benin since 2016 following the election of His Excellency Patrice TALON as President of Benin Republic.

Prior to that, Mr. Bio Tchane has held senior positions in the Central Bank of West African States and also served as Director of the African Department of the International Monetary Fund (IMF) and President of the West African Development Bank (BOAD). Mr. Bio Tchane is recognized for his leadership qualities and his reforms regarding transparency and the fight against corruption when he served as Minister of Economy and Finance of Benin.

Lea Giménez Duarte
Minister of Finance, Paraguay

Lea Giménez Duarte is the 121st Minister of Finance of Paraguay and the first woman to hold this position in the country's history. She was previously Vice-Minister of Economy. Prior to this appointment, she worked in the World Bank, where she led programs aimed at reducing poverty and promoting equitable economic growth in Asian, Latin American and Caribbean countries. Her work focused on institutional strengthening of public entities, the creation of institutional capacities, and the promotion of evidence-based policies. She holds a Ph.D. in Economics from the University of Lehigh (Pennsylvania, USA).

Penny Mordaunt
Secretary of State for International Development, United Kingdom

Penny Mordaunt is the Secretary of State for International Development, United Kingdom. Previously, she worked as Minister of State for the Armed Forces. She also served as Parliamentary Private Secretary to the Secretary of State for Defence; on the European Scrutiny Committee, Defence Select Committee; and as chairman of the APPGs for Life Science and for Ageing and Older People. In 2000 she served as Head of Foreign Press for George W. Bush’s presidential election campaign. She studied Philosophy at Reading University.

Patricia Moreira
Managing Director, Transparency International

Patricia Moreira has been appointed as Managing Director of the International Secretariat of Transparency International in October 2017. She is Spanish-Brazilian and has worked for more than a decade promoting social impact and innovation in a global environment. For the past 14 years, she worked at Ayuda en Acción, a Spanish aid organisation operating in 20 countries around the world. She became the organisation’s CEO in 2009 heading a team of around 100 people at headquarters and more than 300 in the field.

Prior to that, Ms Moreira worked as an international management consultant for ten years with a focus on technology, innovation and impact. She holds an MBA from INSEAD, France and a BA in Economics from the University of California, Los Angeles, and has done PhD research in Social Entrepreneurship at ICADE University in Madrid.

Spring Meetings

Restoring Trust by Curbing Corruption

Overview

Seminar Report

Moderator

Panelists

English