Going from Bad to Good: Combating Corporate Corruption on World Bank-Funded Infrastructure Projects

Abstract

Large-scale infrastructure projects are a vital part of the World Bank's development agenda, but the World Bank and host countries alike have placed little emphasis on combating corruption attached to these projects. Investigation of ongoing corruption and punishment of offenders is an important end goal in itself, and can be an important deterrent to future corruption. The World Bank and host countries face challenges in properly pursuing investigation and punishment, but the results certainly are worth the effort. This Note explores the importance of investigating and punishing corporate corruption on World Bank-funded large-scale infrastructure projects, and presents practical suggestions as to how investigation and punishment processes might be made more effective. Specifically, host countries and the World Bank should utilize a "trigger" mechanism, by which investigations by one party automatically trigger investigations by the other, in order to increase accountability. Other factors - including the willingness of third party states to assist in these efforts - also influence the outcome, but the triggering mechanism may be an important step forward. The outcome of the Lesotho Highlands Water Project corruption investigations provides a useful illustration of how such a cooperative triggering mechanism might work.