Performance Accountability and Combating Corruption

By Anwar Shah | Go to book overview

7
Tailoring the Fight against
Corruption to Country
Circumstances

ANWAR SHAH

Although statistics on corruption are often questionable, the data suggest that corruption accounts for a significant proportion of economic activity. In Kenya “questionable” public expenditures noted by the controller and auditor general in 1997 amounted to 7.6 percent of GDP. In Latvia a recent World Bank survey found that more than 40 percent of households and enterprises agreed that “corruption is a natural part of our lives and helps solve many problems” (Shah and Schacter 2004: 40). In Tanzania service delivery survey data suggest that bribes paid to officials in the police, courts, tax services, and land offices amounted to 62 percent of official public expenditures in these areas. In the Philippines the Commission on Audit estimates that $4 billion is diverted annually because of public sector corruption (Tapales 2001).

A 2004 World Bank study of the ramifications of corruption for service delivery concludes that an improvement of one standard deviation in the International Country Risk Guide corruption index leads to a 29 percent decrease in infant mortality rates, a 52 percent increase in satisfaction among recipients of public health care, and a 30–60 percent increase in public satisfaction stemming from improved road conditions. Studies also show that corruption slows growth, impairs capital accumulation, reduces the effectiveness of

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