Crime and Corruption | Page 7

has pernicious effects on inward investment as
well. The World Bank has appointed last year a Director of Institutional
Integrity - a new department that combines the Anti-Corruption and
Fraud Investigations Unit and the Office of Business Ethics and
Integrity. The Bank helps countries to fight corruption by providing
them with technical assistance, educational programs, and lending.
Anti-corruption projects are an integral part of every Country
Assistance Strategy (CAS). The Bank also supports international
efforts to reduce corruption by sponsoring conferences and the
exchange of information. It collaborates closely with Transparency
International, for instance. At the request of member-governments
(such as Bosnia-Herzegovina and Romania) it has prepared detailed
country corruption surveys covering both the public and the private
sectors. Together with the EBRD, it publishes a corruption survey of
3000 firms in 22 transition countries (BEEPS - Business Environment
and Enterprise Performance Survey). It has even set up a multilingual
hotline for whistleblowers. The IMF made corruption an integral part
of its country evaluation process. It suspended arrangements with
endemically corrupt recipients of IMF financing. Since 1997, it has
introduced policies regarding misreporting, abuse of IMF funds,
monitoring the use of debt relief for poverty reduction, data
dissemination, legal and judicial reform, fiscal and monetary
transparency, and even internal governance (e.g., financial disclosure
by staff members). Yet, no one seems to agree on a universal definition
of corruption. What amounts to venality in one culture (Sweden) is
considered no more than hospitality, or an expression of gratitude, in
another (France, or Italy). Corruption is discussed freely and
forgivingly in one place - but concealed shamefully in another.
Corruption, like other crimes, is probably seriously under-reported and
under- penalized. Moreover, bribing officials is often the unstated
policy of multinationals, foreign investors, and expatriates. Many of

them believe that it is inevitable if one is to expedite matters or secure a
beneficial outcome. Rich world governments turn a blind eye, even
where laws against such practices are extant and strict. In his address to
the Inter-American Development Bank on March 14, President Bush
promised to "reward nations that root out corruption" within the
framework of the Millennium Challenge Account initiative. The USA
has pioneered global anti-corruption campaigns and is a signatory to
the 1996 IAS Inter-American Convention against Corruption, the
Council of Europe's Criminal Law Convention on Corruption, and the
OECD's 1997 anti-bribery convention. The USA has had a
comprehensive "Foreign Corrupt Practices Act" since 1977. The Act
applies to all American firms, to all firms - including foreign ones -
traded in an American stock exchange, and to bribery on American
territory by foreign and American firms alike. It outlaws the payment
of bribes to foreign officials, political parties, party officials, and
political candidates in foreign countries. A similar law has now been
adopted by Britain. Yet, "The Economist" reports that the American
SEC has brought only three cases against listed companies until 1997.
The US Department of Justice brought another 30 cases. Britain has
persecuted successfully only one of its officials for overseas bribery
since 1889. In the Netherlands bribery is tax deductible. Transparency
International now publishes a name and shame Bribery Payers Index to
complement its 91-country strong Corruption Perceptions Index. Many
rich world corporations and wealthy individuals make use of off-shore
havens or "special purpose entities" to launder money, make illicit
payments, avoid or evade taxes, and conceal assets or liabilities.
According to Swiss authorities, more than $40 billion are held by
Russians in its banking system alone. The figure may be 5 to 10 times
higher in the tax havens of the United Kingdom. In a survey it
conducted last month of 82 companies in which it invests, "Friends,
Ivory, and Sime" found that only a quarter had clear anti-corruption
management and accountability systems in place. Tellingly only 35
countries signed the 1997 OECD "Convention on Combating Bribery
of Foreign Public Officials in International Business Transactions" -
including four non-OECD members: Chile, Argentina, Bulgaria, and
Brazil. The convention has been in force since February 1999 and is
only one of many OECD anti-corruption drives, among which are

SIGMA (Support for Improvement in Governance and Management in
Central and Eastern European countries), ACN (Anti-Corruption
Network for Transition Economies in Europe), and FATF (the
Financial Action Task Force on Money Laundering). Moreover, The
moral authority of those who preach against corruption in poor
countries - the officials of the IMF, the World Bank, the EU, the OECD
- is strained by their ostentatious lifestyle, conspicuous consumption,
and "pragmatic" morality.

II. What to do? What is Being Done? Two years ago, I proposed a
taxonomy of corruption, venality, and graft. I suggested this cumulative
definition: (a) The withholding of a service, information, or goods that,
by law, and by right, should have been provided or divulged. (b) The
provision of a