The World Bank recently announced that it has suspended funding for the Reproductive and Child Health Program in India due to corruption charges in the procurement of pharmaceuticals. (An op-ed by Michael Carter, the WB Country Director for India, is quoted at length here.)There have been several recent studies tackling the issues of corruption in health, including work by Maureen Lewis at CGD, and it was the subject of this year's Transparency International Global Corruption Report. Taken as a whole, these efforts strongly refute the outdated notion that health programs are immune to weak governance and corruption. The suspension of India's health funding, however, shifts the debate away from defining the problem to focus squarely on the implementation of practical solutions. Or at least it should. But given the highly political nature of the 'corruption in aid' discourse, there is a justified concern within the development community that this specific case is being treated less as a substantive issue in its own right and is instead being made an example of by Wolfowitz in his efforts to ferret out and deter corruption in World Bank projects as a whole. This situation raises several thorny questions, and it is not clear to what extent they are being considered. Will more people eventually die in the absence of funding, and will they be outweighed by long term gains in effectiveness? Will the leakage problems be adequately addressed as a result of the Bank's actions? And what levers will the Bank and other donors use to ensure that goal? Whether or not these levers have been the focus in the decision-making to date, the Bank should welcome such suggestions from the broader development community. While this case may be the basis for prosecution of corrupt officials around World Bank projects more generally, we hope that this is not the only purpose it serves.
