Draft for discussion and comments Transparency, Incentives and Prevention (TIP) for Corruption Control and Good Governance Empirical Findings, Practical Lessons, and Strategies for Action based on International Experience

The graduation from the ‘awareness-raising stage’ in anti-corruption to a concrete action-oriented phase too often has led to a plethora of legal drafting initiatives, changes in internal accountability mechanisms or administrative rules, or focus on enforcement issues on their own. This has been at the expense of prevention within a systemic or incentives-driven approach to institutional change. Based on empirical analysis of experiences of industrialized, transition and emerging economies, we argue on the importance of transparency, incentives and prevention (TIP) in improving governance and addressing corruption. In moving towards an integrated TIP-driven corruption control approach, the importance of broadening the approach to focus on Governance is emphasized. Within it, control of corruption is one important component, closely linked to others, such as rule of law, external accountability, voice, and transparency. Worldwide indicators on such multi-pronged measures of governance are now available, as well as approaches to generate detailed in-country governance diagnostics and monitoring. They in turn are key inputs to a strategy of transparency and incentive-based anti-corruption reforms. Salient findings are presented, suggesting the value of prevention strategies in controlling corruption for increasing welfare of the poor and for enterprise development. These empirical diagnostics tools also assist in the identification of country-specific priorities for institutional change. Yet these advances in protransparency approaches can only provide major concrete benefits where complemented by leadership, proper enforcement, and collective involvement of key stakeholders in society for implementing institutional change. 1 Draft for comments, which are very welcomed. The text in this paper is to be complemented by the powerpoint presentation with graphical evidence supporting the arguments here. The work in various sections in this paper draws on a number of collaborative projects at the World Bank and outside, notably with A. Kraay, J. Hellman, M. Gonzalez de Asis, S. Pradhan, R. Ryterman, F. Recanatini and L. M. Ocampo, as well as with the Governance Group at the World Bank Institute, institutes and experts in the emerging countries we are working on, and partner donor agencies. Some sections in this paper also draw from the author’s chapter in “The Quality of Growth” book. The data discussed here originate from various surveys as well as outside expert rating agencies and are subject to a margin of error. The purpose is not to present fully precise comparative rankings for countries, but instead to empirically illustrate characteristics of governance performance in order to assist in drawing implications for action. Views, errors and omissions are the responsibility of the author, and may not necessarily reflect those of the institution or their Executive Directors. For further details on the materials presented here, contact author at [email protected] or visit http://www.worldbank.org/wbi/governance.