Financial Transparency Coalition

WASHINGTON, DC – Global Financial Integrity (GFI) applauded the World Bank for changing its policy and committing to publicly disclose the logic behind its decisions to sanction companies and individuals for alleged fraud and corruption, heralding the move as a major step forward in the Bank’s moves towards transparency. GFI believes the publication of these decisions will provide crucial information to foreign government officials, civil society organizations, and businesses as they monitor corruption risks around the world.

When we talk about economic growth and corruption, it is often in one direction: corruption hurts economic growth. One of the major reasons for this is that corruption increases risk and uncertainty for businesses and investors and provides a distinct disincentive for their investments. Lower investment levels lead to less economic growth. Less frequently, we say economic growth is an antidote to corruption. But this is also almost certainly true. The reasoning is somewhat complex and indirect, though. Economic growth does not directly ameliorate corruption. Rather, economic growth leads to better access to education, awareness of rights, empowerment of citizens,...

“If you don’t know how to fix it, please stop breaking it,” was the press headline when Severn Suzuki addressed heads of states in Rio de Janeiro in 1992. She was twelve years old, at what was then the world’s biggest-ever political gathering. In an impassioned critique of unfettered industrialism, Severn lamented the decline of the natural world, and the many injustices that man has wrought upon it. “I’m fighting for my future,” she said.

While the year-long allegations of misconduct against the Alstom Group (ALO) have led to some significant consequences for the company – US$9.5 million worth of them – a lot of questions about what happened remain. At the end of February, the World Bank decided to debar two Alstom subsidiaries for three years and agreed on a Negotiated Resolution Agreement worth US$9.5 million in restitution payments with respect to its conduct in Zambia. However, because of the nature of the settlement, the company has not had to publicly disclose the nature and scope of the alleged activities. There is currently a...