Tackling corruption is vital for sustaining economic stability, promoting inclusive growth, and maintaining security in society and certainty in the market. The IMF plays a key role in shaping more effective and innovative policies to fight corruption, but there is more work to be done. Despite greater efforts to improve the quality of institutions and governance frameworks, corruption remains a challenge for many countries, from advanced economies to developing countries, even if its impact is most acutely felt in the latter. This seminar examines the diverse impacts of corruption and lessons learned from examples where it has been combatted effectively.
Despite greater efforts to improve the quality of institutions and governance frameworks, corruption remains a major contributing factor to poverty and inequality in many countries. The seminar examined the consequences of corruption and lessons learned from examples where it has been effectively combatted.
Key Points:
· Impact of corruption. The social contract is undermined, creating a circle of distrust that has far-reaching consequences for public finances (Lagarde) and kills the dreams of the young (Alonso). Rose-Ackerman highlighted that corruption distorts measures of economic activity. Okonjo-Iweala explained how a successful system of e-wallets was used in Nigeria to ensure that cash transfers reached the intended farmers, and that the use of new technologies can significantly improve the measurement of economic activity. In addition, estimates show that more than $50bn is leaving Africa in illicit financial flows each year, exacerbating the problem of mistrust in government officials and its institutions (Rose-Ackerman, Okonjo-Iweala).
· Sharing data. Lagarde noted that tackling corruption requires an of open flow of information. Ackerman suggested that the IMF should gather data on the cost of public utilities and create a database enabling cross-country comparisons of efficiency and costs. Okonjo-Iweala pointed out that there are NGOs that monitor public procurement and gather information on unit costs, and she urged the Fund to support these organizations.
· Mitigating corruption. Ackerman emphasized that changing the incentives structure is key to mitigating corruption. Both strengthening institutions and the increased use of e‑procurement are critically important to mitigate corruption (Okonjo-Iweala).
· Steps forward and international cooperation. Ackerman urged the Fund to continue with its analytical work on corruption and suggested that it takes a sector-by-sector approach on a country level to enable better targeting of measures. Lagarde highlighted that the IMF has a responsibility to its membership to deal with the economic impact of corruption and hoped that the Executive Board would support this.
Quotes:
“Corruption is not a crime of passion, it is a crime of calculation.” Sean Hagan
“Institutions matter. With weak institutions, the incentives for corruption are stronger” Ngozi Okonjo-Iweala
“If you write a plan on how to deal with corruption, you will have to change it completely when you get there” Laura Alonso
“Do you have a mission to trust, or a duty to suspect? That is the every-day challenge for our teams” Christine Lagarde
Contributor: Marushia Gislén
Sean Hagan
General Counsel and Director
Legal Department, IMF
General Counsel and Director of the Legal Department at the IMF. Advises on legal aspects of the IMF operations, regulatory, advisory and lending functions. Published extensively on the law of the Fund and a broad range of legal issues relating to prevent and resolve financial crises, with emphasis on insolvency and restructuring of debt.
Christine Lagarde
Managing Director
IMF
Christine Lagarde has been Managing Director of the International Monetary Fund since July 2011. She held various ministerial positions within the French government, including Finance and Economy Minister (2007–11), Minister for Foreign Trade, and Minister for Agriculture and Fisheries. She was also Chairman of the Global Exchange Committee and Global Strategic Committee of Baker & McKenzie.
Born in Paris in 1956, Christine Lagarde completed high school in Le Havre and attended Holton Arms School in Bethesda (Maryland, USA). She then graduated from law school at University Paris X, and obtained a Master’s degree from the Political Science Institute in Aix en Provence.
After being admitted as a lawyer to the Paris Bar, Christine Lagarde joined the international law firm of Baker & McKenzie as an associate, specializing in Labor, Anti-trust, and Mergers & Acquisitions. A member of the Executive Committee of the Firm in 1995, Christine Lagarde became the Chairman of the Global Executive Committee of Baker & McKenzie in 1999, and subsequently Chairman of the Global Strategic Committee in 2004.
Christine Lagarde joined the French government in June 2005 as Minister for Foreign Trade. After a brief stint as Minister for Agriculture and Fisheries, in June 2007 she became the first woman to hold the post of Finance and Economy Minister of a G-7 country. From July to December 2008, she also chaired the ECOFIN Council, which brings together Economics and Finance Ministers of the European Union, and helped foster international policies related to financial supervision, regulation, and strengthening global economic governance. As Chairman of the G-20 when France took over its presidency for the year 2011, she set in motion a wide-ranging work agenda on the reform of the international monetary system.
On July 5, 2011, Christine Lagarde became the eleventh Managing Director of the IMF, and the first woman to hold that position. On February 19, 2016, the IMF Executive Board selected her to serve as IMF Managing Director for a second five-year term starting on July 5, 2016.
Christine Lagarde was named Officier in the Légion d'honneur in April 2012.
Ngozi Okonjo-Iweala
Chair of GAVI and Former Finance Minister, Nigeria
Ngozi Okonjo-Iweala has been Finance Minister of Nigeria since July 2011. She was Managing Director of the World Bank from 2007 to 2011. Between 2003 and 2006 she served as Finance Minister and Foreign Minister of Nigeria. Previously, she served in a number of positions at the World Bank including Vice President and Corporate Secretary, Director of Operations in the Middle East and North Africa region, and Country Director for the South East Asia and Mongolia Country unit. She holds a Ph.D. from M.I.T.
Laura Alonso
Secretary of Public Ethics, Transparency, and Fight Against Corruption
Argentina
Laura Alonso is the Secretary of Public Ethics, Transparency and Fight against Corruption of Argentina, in charge of the Anticorruption Office, since December 2015.
She has served as Member of Congress for the City of Buenos Aires, from 2009 to 2015, being member of the Committees of Constitutional Affairs; Foreign Relations and Freedom of Speech. Previously, she was the Executive Director of “Poder Ciudadano”, the Argentine chapter of the organization Transparency International.
Her work has just been selected globally by the organization “Vital Voices” to be part of an extensive study on her efforts strengthening democracy and integrity in Argentina.
She has also been selected as Young Global Leader by the World Economic Forum in 2012, Chevening Fellow (2000), Eisenhower Fellow (2008), and Draper Hills Fellow from the University of Standford (2012).
In 2008, she received a Global recognition from the Vital Voices organization for her work strengthening liberties, and in 2014, the magazine Poder of Florida, distinguished her work in Argentina.
The Council of the Americas developed a portrait of her work in 2012 as an “Innovator”, at the publication “Americas Quarterly” http://bit.ly/2oZgomf
She has recently been a key speaker at the Global Conference “Woman in the world” at the Aspen Ideas Festival, and at the OECD 2017 Integrity Forum.
She has a degree in Political Science from the University of Buenos Aires and holds a Master in Public Administration and Public Policy from the London School of Economics and Political Science.
Susan Rose-Ackerman
Henry R. Luce Professor of Law and Political Science
Yale University School of Law
Susan Rose-Ackerman is the Henry R. Luce Professor of Jurisprudence (Law and Political Science), Yale University. Her current research and teaching interests are the political economy of corruption and comparative administrative law and public policymaking. Her recent books are Corruption and Government: Causes, Consequences and Reform, 2d edition with Bonnie Palifka, 2016 (forthcoming translations into Chinese, Spanish and Portugese); Due Process of Lawmaking: The United States, South Africa, Germany and the European Union (with Stefanie Egidy and James Fowkes, 2015); Greed, Corruption, and the Modern State (editor with Paul Lagunes, 2015); Comparative Administrative Law, 2d edition (editor with Peter Lindseth and Blake Emerson, 2017), and International Handbook on the Economics of Corruption (vol. I, editor, 2006; vol. II, editor with Tina Søreide, 2011). She has held Fulbright and Guggenheim Fellowships and has been a research fellow at the World Bank, the Wissenschaftskolleg in Berlin, Sciences Po, and Stanford Center for Advanced Study in the Behavioral Sciences. She holds a B.A. from Wellesley College and a Ph.D. in economics from Yale University.
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