Yesterday the World Bank released its 2006 review of the effectiveness of its operations (Annual Review of Development Effectiveness 2006: Getting Results). Among other findings, "perceived governance quality has not yet responded to large-scale public sector reforms." As shown in a chart on p. 72 of the report (and reproduced here), perceived corruption got worse in 19 of 25 countries with World Bank-supported public sector reform programs. There are lots of reasons this might happen. One explanation given in the report: reform loans "have not always been aligned with political circumstances" (p. xvi).
The language is circumspect but the message is clear: the Bank (like other creditors and donors) doesn't know how to help countries help themselves. Humility should be the order of the day. Humility about public sector institution-building and humility about how much of what type of corruption matters for building state institutions and for sustainable development.
Kudos to the Bank's Independent Evaluation Group for airing the facts.
Meanwhile, the Bank management's controversial anticorruption "strategy," currently under discussion by Bank shareholders, starts with lessons from the past - in principle a good idea. But as my colleague Dennis de Tray (a World Bank veteran) suggested in his recent speech to Bank retirees on corruption and development, framing the problem as "reducing corruption" in the first place may miss the point. As Dennis says, if we don't start with reducing poverty and increasing development as the goals, we're not going to have the right conversation about corruption. After all, Indonesia's Suharto, who ranks at the top of the Transparency International corruption league, also takes the gold medal for reducing poverty during his 30 year regime.