Rolf Alter @raltergov Director, Public Governance and Territorial Development Directorate
It’s hard to imagine government doing its job well without a commitment to basic levels of integrity. Imagine if every administrative process required a bribe to this official or that to accomplish it. Or imagine seeing your tax money wasted on lavish buildings or useless infrastructure because of collusion between public officials and private investors.
And what about the effects you can’t see but end up paying for: the very useful bridge that cost 50% more than it should have due to bribes, skimming and inefficiencies (not to mention potential quality issues); or a screwdriver with a 300% mark-up and other overpriced items buried in a defence contractor’s invoice? These are all examples of waste and abuse of hard-earned citizens’ wages made possible by breaches of integrity. Beyond monetary costs, there is also a steep price to be paid in lost trust and cohesion, both essential to reducing transaction costs and making our societies function.
Without a culture of integrity, democratic processes themselves become endangered. In every society there are individuals, families, organisations and even institutions that try to distort political processes and circumvent commercial rules and regulations. The role of a culture of integrity is, in part, to ensure the integrity of our democratic processes. It means having the controls in place to prevent narrow interests from “gaming” the essential fairness of political and business processes.
The OECD takes a holistic approach that considers all of the risk areas in which corruption takes place, as well as all of the actors, activities and transactions that need to be protected. Through our evidence-based approach, we are able to provide policy support that gives countries tools to help in the fight against corruption. In this role, the OECD partners with the G20, studying the relationship between corruption and economic growth, elaborating whistle blower protection frameworks, public sector integrity frameworks and more.
The risk of corruption is strongest in the case of government-led projects on infrastructure. In 2013, OECD countries spent close to $1.35 trillion in public investment, representing 3.1% of OECD GDP and 15.6% of total investment (public and private). The cost of corruption and mismanagement has been estimated to contribute to 10-30% of large infrastructure budgets. Indeed, the majority of cases brought under the OECD Anti-bribery Convention concern public procurement. The OECD Integrity Framework for Public Investment is a new tool (forthcoming) that can help governments to identify vulnerabilities and the potential points of entry of corruption in infrastructure projects.
There are concrete steps that can be taken in achieving a culture of integrity—and the OECD’s Directorate for Public Governance & Territorial Development (GOV) is accompanying many countries in this process. It requires coherent efforts to update standards and to provide guidance to public and private stakeholders. It also requires countries to anticipate risks and apply tailored countermeasures. These are all areas where governance and good policy make the difference by helping to bring about systemic change, rather than after-the-fact measures that risk overreaction and the undermining of credibility.
But good policies need to have teeth, in other words, monitoring and enforcement. A country may have campaign spending rules and even an oversight committee in place, but little or no enforcement. Underfunding enforcement is one of the ways that policies can be undermined by special interests. Policies must impose clear rules and meaningful penalties to ensure fair and democratic processes.
To achieve this, GOV works with countries to adopt a whole-of-society approach. That means all stakeholders, public, private and civil society, must work together to make it happen. If that sounds ambitious, it is. Fortunately, the OECD has processes that are helping countries take important strides in ensuring basic fairness in their political processes and public investment practices.