An Anticorruption Strategy for Countries in Transition¹

1. In addition to countries in transition, this strategy might prove effective in developing nations where corruption is endemic.

Abstract

The failure of grass-roots anticorruption initiatives in countries where corruption is endemic provides both opportunity and motivation for private-sector leadership. MNC country managers, many of them compromised and at risk, as international law enforcement increases, can join local companies in organized resistance to extortion and bribery demands by government officials. Targeting individual Ministries, business leaders can use Collective Action and media disclosure to negotiate Integrity Pacts, as part of a larger Anticorruption Campaign. Launching the Campaign prior to national elections affords leverage at the highest levels, where political promises of WTO and EU accession and increased foreign direct investment can no longer be effective, without reform.

Notes

1. In addition to countries in transition, this strategy might prove effective in developing nations where corruption is endemic.

2. USAID Anticorruption Strategy, Washington, DC, 2005. http://www.usaid.gov/our_work/democracy_and_governance/ publications/pdfs/ac_strategy_final

3. Collective Action is a concept whose usage and meaning varies among the social sciences. As used at the World Bank Executive Development Conference, Fighting Corruption through Collective Action in Today's Competitive Marketplaces, June 9–11, 2009, at which I was an invited speaker, Collective Action referred to the cooperation among companies within an industry, or across industries, which agree to resist attempts, usually by a particular government ministry or agency, to extort money or other personal favors, as a requirement for participation in bidding, or winning, a government procurement contract.

4. From the UN-HABITAT's website: “The Integrity Pact (IP) was designed and launched by Transparency International in the 1990s with the primary objective of safeguarding public procurement from corruption. It has been formulated as a tool that can be used by a government agency, indeed, any procurement body, in its procurement practice. The Integrity Pact has already been implemented in several countries and in large-scale infrastructure projects ranging from telecommunications to public transport.

The goal of the Integrity pact is to reduce any (and almost ensure no) chances of corrupt practices during procurement through a binding agreement between the agency and bidders for specific contracts.

The Integrity Pact is intended to accomplish two primary objectives:

•	To enable companies to abstain from bribing by providing assurances to them that their competitors will also refrain from bribing, and (that) government procurement, privatisation or licensing agencies will undertake to prevent corruption, including extortion, by their officials and to follow transparent procedures; and
•	To enable governments to reduce the high cost and the distortionary impact of corruption on public procurement, privatisation or licensing.”

http://ww2.unhabitat.org/cdrom/transparency/html/2c_5.html. (See also http://www.transparency.org/global_priorities/public_contracting/integrity_pacts; and, at same URL, links to “The integrity pact: The Concept, the Model and the Present Applications: A Status Report (2002),” and “The integrity pact: A Powerful Tool for Clean Bidding.”)