Public Sector Governance

Country Reports

(more articles)

• Bulgaria's Progress Report
• 2007 Nigerian Corruption Index
• Regional Report on East and South East Asia
• 2006 Global Integrity Index: 43 Country Reports
• China: National Integrity System Report 2006
• Transparency & Accountability in Korea
• Tools for Measuring Corruption and Governance in Latin America
• Public Procurement in the Czech Republic
• 2005 India Corruption Study
• Corruption and Democracy in Nepal
• Corruption in Brazil
• China - Mounting Ethics Issues and OECD Proposals
  
  

Also see International Surveys

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Bulgaria’s Progress Report Based on Established Benchmarks

Bulgaria has been widely criticized recently by the EU and other international organizations for its lack of progress on curbing corruption.  In an effort to improve its status, Bulgaria established the Cooperation and Verification Mechanism, which laid out a number of benchmarks. The Sophia Echo posted an in-depth article on Bulgaria’s varying degrees of progress regarding these benchmarks. It is still clear the government has a long way to go in its fight against corruption and organized crime. The following is a short summary of the article. 

Benchmark 1: Adopt Constitutional amend­ments removing any ambiguity regarding the independence and accountability of the judicial system.  

Bulgaria has adopted a constitutional amendment providing for an independent judiciary, along with an independent inspectorate; however, it is too early at this time to measure the effectiveness of amendment until full implementation takes place.

Benchmark 2: Ensure a more transparent and efficient judicial process by adopting and implementing a new judicial system act and the new civil procedure code.

A new Judicial System Act was recently adopted. A monitoring system for the new penal procedure code and the new administrative procedure code has been set up to facilitate uniform application of law. However, there has been no systematic reporting on the findings of this monitoring mechanism.

Benchmark 3: Continue the reform of the judiciary in order to enhance professionalism, accountability and efficiency. Evaluate the impact of this reform and publish the results annually.

Only limited progress can be reported in this area. A judicial inspectorate has been established along with specific ethical codes and plans of disciplinary action against indicted prosecutors, but there are not yet measurements of success. Progress has been made by Bulgaria in terms of the recruitment procedure and performance evaluation of magistrates.

Benchmark 4: Conduct and report on professional, non-partisan investigations into allegations of high-level corruption. Report on internal inspections of public institutions and on the publication of assets of high-level officials. 

An implementation program to fight corruption has been established, but the guidelines for coordination and responsibility are not clearly defined.  This will make the program difficult to sustain.

Benchmark 5: Take further measures to prevent and fight corruption, in particular at the borders and within local government.

Bulgaria has successfully stepped up its efforts to curb corruption at some border stations with an increased number of preventive controls and sanctions. The establishment of electronic payment systems and a system of random shifts at some border stations have contributed to a decline of corruption opportunities and to increased revenue. This good practice should be extended to all border stations. In addition, training and awareness programs implemented at the local level are beginning to produce results.  Those high-level officials who have not yet submitted their property declarations are also being investigated.

Benchmark 6: Implement a strategy to fight organized crime, focusing on serious crime, money laundering as well as on the systematic confiscation of assets of criminals. Report on new and ongoing investigations, indictments and convictions in these areas.

Bulgaria is implementing an updated action plan on organized crime which focuses on prevention measures. Overall, progress in this area is still insufficient.

The article reports that the achievement of these benchmarks is a long-term process for Bulgaria.  None of the benchmarks are independent of the others, and the progress toward one will most likely positively affect progress in the others. The article emphasizes Bulgaria can only be successful if there is a strong commitment to the strict separation of executive, legislative and judicial power.

Posted 7/9/07

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2007 Nigerian Corruption Index

In the time leading up to the 2007 elections in Nigeria, the Independent Advocacy Project lead a comprehensive survey, released in June, to determine Nigerians’ perceptions on the Obasanjo regime and corruption that has racked the country for years.

The 2007 Nigerian Corruption Index (NCI) was conducted just before the Nigerian election, against a backdrop of rampant misuse of power and economic mismanagement.  As it happened, many observers – domestic and international – concluded that the 2007 election poll was severely flawed. There were widespread reports of violence, rigging, multiple voting, box snatching, illegal possession of ballot boxes, stuffing of ballot boxes; impersonation, ‘house voting’, unlawful possession of voting machines, vote buying, deliberate delay or refusal to supply election materials to certain areas, multiple thumb-printing of ballots, harassment or intimidation of candidates, agents, voters and monitors, and absence of valid voters register. In addition, despite large oil revenues, Nigeria entered the new millennium with real income per capita of around $260 (the same as it was during independence), and currently, it is believed that well over 70 per cent of Nigeria’s population survive on less than $1 a day. In the time running up to the 2007 elections, the report sought to elicit responses from prospective voters and others on bribery and corruption in addition to constructing a scorecard on the anti corruption programme of the Obasanjo regime and set an agenda for the new regime.

Objectives

In many ways, the 2007 survey is a comparative analysis on the 2005 survey. Here are the main objectives of the 2007 survey:

• To assess the general level of corruption in the daily interaction of members of the public with government institutions and identify further opportunities for advocacy work and consequently design appropriate advocacy responses.

• To provide hard data on corruption in the country thereby identifying possible linkages between levels of disposable incomes and incidence of bribery, such as percentages of incomes being paid as bribes.

• To make practical recommendations to government on reforms that are expected to strengthen the nation’s anti-corruption legal and administrative frameworks.

• To create awareness on the adverse effects of corruption on the enjoyment of economic rights in a democratic society and its effect on poverty levels.

Major Findings

The two most significant findings from the survey are the extent to which corruption affects Nigerians’ psychological state and their socioeconomic rights. In 2005, 70% of the sampled population reported that being forced to pay bribes to access basic services adversely affects their state of happiness. In 2007, this figure rose marginally to 71%. Encouragingly, the proportion of people who did not give bribes for a period of one year preceding the survey increased from 23% in 2005 to 35% in 2007, an indication that the anti-corruption crusade and all the value reorientation campaigns may well be yielding some positive results. However, since 2005, the likelihood of giving a bribe increased from 58% to 65%.

In addition to the likelihood of paying a bribe, the average amount of bribe paid in a year to various organizations increased by 50%.

Most corrupt institutions: The Nigerian Police Force was again like in 2005 identified as the most corrupt institution by Nigerians, followed by Power Holding Company of Nigeria (PHCN), Education Ministry (particularly higher institutions and examination bodies) and Customs and Excise Department.

Least corrupt institutions: The Health Ministry, Justice Ministry/Judiciary, Nigeria Airports Authority, Federal Road Safety Corps (FRSC), Nigerian Railway Corporation and Agricultural Development Authorities were identified to be institutions where one would be the least likely to have to pay a bribe.

Former President Obasanjo was largely at the forefront while these incidences of corruption were taking place.  Local opinion regarding the effectiveness of the Obasanjo regime is mixed. While 47% believe Obasanjo’s anti-corruption programme has been a success, 45% regard it as a failure. Most of the critics of Obasanjo’s anti-corruption programme reside in the Federal Capital Territory, ironically the federal seat of power. The implication of this is that many Nigerians are not satisfied with the style of President Obasanjo’s anti-corruption crusade.

Of the agencies involved in the fight against corruption, only the efforts of the EFCC (4.21 out of 5) and Transparency International (3.77 out of 5) were credited with an appreciable level of effectiveness. For enhanced performance, respondents advocate that the agencies should be:

• given more power to prosecute offenders
• independent of the Presidency
• better funded

To combat corruption effectively, most respondents advocated stringent legislation against corruption and severe punishment and sanctions against anyone involved in corrupt practices.

To read the public presentation of NCI 2007, given by IAP's non executive chairman Babatunde Olugboji, click here.

Posted on 6/26/07

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Anti-Corruption and Institutional Integrity in East and South East Asia:
A Regional Overview

On February 28, 2007, Transparency International (TI), a global corruption watchdog, released its Regional Overview Report on National Integrity Systems in East and Southeast Asia which assesses the health of institutions that most affect corruption levels in nine countries: Cambodia, China, Hong Kong, Japan, Korea, Philippines, Singapore, Thailand and Vietnam.

The report studies each country according to TI’s 'National Integrity System' (NIS) model - defined as the key institutions, laws and practices that contribute to integrity, transparency and accountability in a society – as well as identifies major trends and best practices in the region.

Below are highlights from the report:

Regional Trends

According to the country studies, reliance on multiple anti-corruption agencies leads to lack of coordination, competition for resources and dilution of anti-corruption efforts, whilst a single anti-corruption agency proves more effective in leading the fight against corruption in the region.

Key Country Findings

Singapore and Hong Kong

The NIS in Singapore and Hong Kong are the most effective out of the nine societies examined in this report. According to the World Bank’s six governance indicators, Hong Kong and Singapore have the highest average governance scores and they are the two least corrupt Asian societies according to Transparency International’s (TI) 2006 CPI.While in Hong Kong civil society groups like Civic Exchange can operate freely helping the territory to achieve a more inclusive type of governance, there is a lack an active civil society and weak media in Singapore. Singapore has contained corruption largely thanks to the political will of ruling elites and a sound anti-corruption framework.

Hong Kong and Singapore – both former British colonies – have also fought corruption by rejecting the British colonial model police dependence (instead relying on a single anti-corruption agency) and by maintaining the British meritocratic tradition in their civil service.

Vietnam

In Vietnam, the adoption of mixed-market reforms in 1986 led to an escalation of corruption – both petty and grand corruption are widespread. While the passage of the first Anti-Corruption Law in late 2005 shifted the focus to corruption prevention and emphasised the role of civil society and the media, these institutions are currently ill-equipped to act as watchdogs.

There are six fundamental problems in Vietnam’s NIS: the adoption of an incremental approach to tackling corruption; the protection of the politically powerful from prosecution; ‘institutional rivalry and jurisdictional disputes’ between anti-corruption agencies; widespread nepotism ; public consultation that is ‘formalistic and narrowly based’; and public reluctance to make complaints due to lack of whistleblower protection.

Philippines

Despite efforts by the government and civil society corruption remains a serious problem in the Philippines. According to a recent country report, the NIS in the Philippines faces two major problems. Firstly, legislation tends to under-legislate (as in the lack of protection for whistleblowers) or over-legislate (like, for instance, in government regulations). The second problem is ‘more disturbing’: the study found that all the integrity pillars are ‘tainted by internal corruption and are therefore heavily compromised’, ‘unable to perform their functions and operate effectively’. For example, the constitutional commissions are not independent and the public procurement system is plagued with misappropriation problems.

China

China has shown marked signs of improvement in addressing corruption in the past 10 years. Nevertheless, the recent analysis of China’s NIS China showed that corruption remains at a ‘comparatively severe level’ (for earlier coverage of China's NIS, see below)

Thailand

In 1997, Thailand adopted the ‘People’s Constitution’ along with a series of anti-corruption measures, including the formation of the NCCC in November 1999. However, the positive effects of these measures have been eroded in the past five years through the influence exerted by former Prime Minister Thaksin Shinawatra.

On September 19, 2006, Thaksin’s government was overthrown in a bloodless military coup and the Council for Democratic Reform took power, vowing to stamp out corruption. If the Council for Democratic Reform keeps its promise to hold elections after formulating a new constitution in one year’s time, there is hope that the corruption situation in Thailand will improve. Political leaders need to demonstrate their political will to curb corruption by strengthening anti-corruption measures.

South Korea

The South Korean government has demonstrated strong political will in curbing corruption. President Kim Dae Jung’s comprehensive anti-corruption strategy resulted in the enactment of the Anti-Corruption Act in July 2001 and the creation of the KICAC in January 2002. Civil society has also played an important role in fighting corruption in South Korea through the work of K-Pact.

However, corruption is still an issue, even though the KICAC has reported a gradual improvement of South Korea’s NIS architecture and significant improvements in governance and integrity , there are still important shortcomings in South Korea’s NIS.

Four measures outlined in the NIS study to improve South Korea’s NIS: (1) introducing effective monitoring mechanisms to ensure accountability and integrity; (2) strengthening law enforcement by increasing the commitment of the courts and prosecutors to be fair and independent in performing their duties; (3) empowering the KICAC by providing it with ‘more authoritative and/or investigative powers’ and protecting whistleblowers from ‘tangible and intangible retaliation’ and (4) establishing a special bureau of investigation of corruption by high-ranking public officials.

Japan

The situation in Japan is unique. There is little or no low-level corruption in the administration, but Japan suffers from a high degree of institutionalised corruption involving political leaders and business interests. Japan has not demonstrated strong political will in fighting institutionalised corruption and corruption within the private sector. Its government has not assigned this task to any specialised agency. The Japanese government appears to be satisfied with maintaining the status quo.

In its second review of Japan’s enforcement of the OECD Convention, the OECD Working Group on Bribery recommended that Japan be proactive in investigating and prosecuting foreign bribery cases . It also urged Japan to undertake an objective assessment of the legal and procedural obstacles to the effective investigation and prosecution of the offence of bribing foreign public officials.

Recommended Best Practice for the Region

1. Political will to curb corruption should be combined with a single independent anti-corruption agency;

2.  Civil society should mobilise other sectors to fight corruption through coalition building; and

3. As corruption cannot be solved overnight, a sectoral approach might be best suited to tackle critical sectors.

For the full report - including more detailed country analyses - click here.

Posted 3/2/07

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Global Integrity Index 2006

Report Measures the Level of Anti-Corruption Mechanisms in 43 Countries

In January 2007, Global Integrity (GI), a US-based, not-for-profit organization, released its Global Integrity Index 2006. GI’s flagship study, which includes 43 country reports, measures the existence, implementation of, and effectiveness of anti-corruption approaches and institutions designed to promote public integrity.

The 2006 Global Integrity Report includes several key findings:

1. Political financing is the number one anti-corruption challenge facing this year's group of countries.
   
   
2. Weak legislative accountability threatens to undermine other crucially needed long-term anti-corruption reforms.
   
   
3. Vietnam and the DRC are assessed as having the weakest overall anti-corruption framework of the entire group of countries; the strongest ratings go to Israel, Romania, South Africa and the United States.
   
   
4. Russia appears to have made little progress in establishing and enforcing effective anti-corruption mechanisms compared to several other former Soviet Union states.
   
   
5. Promoting effective anti-corruption and good governance programs in post-conflict Africa requires a long-term commitment.
   
   
6. New European Union (EU) members Romania and Bulgaria displayed a moderate gap in overall anti-corruption mechanisms, with Romania exceeding the performance of Bulgaria.
   
   
7. (Weak) Whistleblower protections and weak (or non-existent) access to information mechanisms threaten government accountability in almost every country.

GI specializes in assessing governance trends and each country report is based on up to 290 separate indicators that are organized into six categories (plus 23 sub-groups) –

1. Civil Society, Public Information and Media
2.  Elections
3. Government Accountability
4. Administration and Civil Service
5. Oversight and Regulation
6. Anti-Corruption and Rule of Law

In each country, the indicators are prepared by a lead researcher and then reviewed by in-country and external experts. Each country is then given an Integrity Indicators Scorecard, which is combined with journalistic reporting to produce a detailed country report.

Below is GI’s overall asessment of countries based on their accumulated indicator scores:

For individual country reports, breakdown by categories, methodology and a list of indicators see Global Integrity’s website.

Posted 2/23/07

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China: National Integrity System Country Study

Supported by Transparency International (TI) and using its "National Integrity System" methodology, a report was published in mid-December 2006 on governance in China. The author, who has worked with TI for some years, is Mr. Yong Guo, Assistant Professor, School of Public Policy and Management, Tsinghua University, Beijing, People’s Republic of China. Full Report & Press Release

Key Excerpts:

To download full report in .pdf

Currently, anti-corruption activity in China is at a crucial juncture, with certain progress already made but facing a long road ahead. In particular, there is still much room for improvement with respect to institution building. In this sense, the introduction of the analytical framework of the TI National Integrity System and its application in China for evaluation will promote China’s anti-corruption efforts.

China is in the process of unprecedented reform and transition in its economic, political and social systems and a proper legal anti-corruption framework is yet to develop, there are still huge opportunities for corruption.

Priorities and Recommendations

Strengthening of Roles and Positions of Departments

Strengthened NPC Oversight of the Government, Judicial and Law-enforcement Agencies

As legislator, the NPC plays an important part in China’s political system. The People’s Congress system is China’s basic political and democratic system and serves as the fundamental institutional basis for the national integrity system. The tasks of the NPC are to represent the People, to fully exploit the democratic mechanisms for supervising and monitoring the government, to realise good social governance and to struggle against serious corruption within the government. However, due to China’s current financial system, especially its imperfect budget system, NPC deputies’ limited channels for hearing from the people, and the absence of any integrity constraint mechanism on NPC deputies, the oversight role of the NPC, especially its oversight of financial expenditure, has not been brought into full play.

The Organisation Laws of the People’s court and the Organisation Law of People’s procuratorate provide that China’s local judiciary must accept the dual leadership of the People’s congresses at the same level and the judiciary at the next higher level. But in reality, as the personnel and financial management systems are mainly tiered, the courts, appointment and removal of judges and judicial personnel and expenses are under the control of government at the same levels. This has led to localisation of judicial power. With respect to procedure, the judiciary has a requesting and reporting system that requires major cases to be reported to the judicial committees within the courts. Although the purpose of establishing such a system is to reduce the number of wrongfully determined cases, it does affect judges’ independent exercise of judicial power, thus making the appeal procedures less meaningful. All these have affected the independence of the judiciary. In order to promote integrity, it is imperative to ensure the independence of the judiciary and guarantee that judges have adequate and independent budget support and a group of specialised personnel with a high degree of integrity.

Audit offices are important components of China’s national integrity system, as they are watchdogs of state assets and expenditures. They are also the institutional guarantee to minimise corruption and abuse of public funds by government departments. The audit offices officially came into being in September 1983, and their roles have not been brought into full play during a considerable period of time. Only at the end of the 1990s did Chinese audit offices begin to display their increasingly important roles. Audit reports began to be made public starting in 1998, exposing violations of financial rules and regulations by government agencies. Every year, the report stirs up a whirlwind, winning popular applause and exerting powerful social pressure on relevant government agencies. Over the past few years, the scope covered by auditing has been expanded and the degree of disclosure has been enhanced. But it is necessary to enhance its status further, giving it responsibility for the legislature, in order for its role to be fully realised.

More investment should be made in the auditing institutions, including adequate and independent budgets and highly specialised auditors.

Improvements in the Mechanisms of the National Integrity System

China is now living in the transition from centrally controlled planned economy to socialist market economy. Under the planned economy system, public departments possessed all resources in the society while the private sector and civil society were basically in a subordinate position. It was only after 1978, when the country started economic reform and the transition process, that the private sector developed rapidly and civil society also gained some ground. They are expected to play an increasingly important role in China’s public affairs management, as is occurring worldwide. The state should continue to retreat from over-regulating and over-intervening in the economy, giving more space to the private sector and civil society to play their roles. Meanwhile, China’s private sector and civil society have not given enough attention to corruption. If their roles are to be brought into full play, such attention would help promote public oversight but also enhance the restriction on power of the government. This will, in turn, facilitate internal integrity and self-discipline in the private sector and civil society and create a social culture with high probity and integrity.

Transparency is crucial to increase accountability and deter corruption. In the course of reform and opening up, the Chinese government has introduced a series of measures to open administrative affairs to good effect. But generally, transparency still remains relatively low, constituting a major barrier to oversight of power. Sunshine is the best steriliser. Disclosure and transparency is most important to ensure rational participation in policy decision making by citizens and to realise effective oversight.

At the beginning of the economic reform, China relaxed control of the financial system, allowing local governments and government departments to create incomes so as to encourage local governments to develop their own economies and ease fund shortages. Although the policy played its due role in a given historical period, it has also caused distortions in the financial system and resulted in the existence of extra-budgetary funds, which provide more opportunities for corruption. At present, the Chinese government is establishing a public finance and public budget system. But due to the problems left over from the past, the reform has encountered great difficulty. This has, perhaps, become the institutional reason why many corrupt activities cannot be curtailed from their roots. Therefore, China should strengthen budget management and reduce off-budget financing.

A large number of laws, rules, regulations and legal documents have been produced since 1978 by the NPC, the CCP, the government, the Supreme People’s Procuratorate and the Supreme People’s Court. These legal instruments have detailed provisions concerning the integrity of public service personnel. If viewed from this perspective, China is one of the countries in the world that has the greatest constraints on the behaviour of public service personnel. However, due to the fact that some regulations are too strict or have not been renewed in a timely way to respond to the changes in the corruption situation, or that different departments have issued documents with the same contents, some systems cannot, in reality, be implemented strictly. This has affected the authority of the whole integrity system. It is, therefore, necessary for China to sort out existing integrity instruments and make unified laws and regulations, such as an anti-corruption law, to specify the requirements and provisions for building a clean government.

(See the full report at Transparency International's Asia/Pacific regional "National Integrity System" page.)

Direct Contact: Dr. Guo Yong, Tsinghua University
School of Public Policy and Management
Tsinghua University, Beijing 100084
Phone/Fax: +86-10-6277 2999 Email: guo@mail.tsinghua.edu.cn

Posted 12/22/06

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South Korea: Transparency and Accountability Update
TI National Integrity System Report
To view as .pdf

Executive Summary

Over a period of 10 years, the Republic of Korea (hereinafter called Korea) has made considerable progress in creating and establishing a sound National Integrity System (NIS). This has taken place through the implementation of a regulatory framework of policies and practices designed specifically to curb corruption in both the public and private sectors. Korea has introduced rules and regulations prompted by international trends and public demand, and the general public is increasingly becoming aware of the importance of good governance, integrity and anti-corruption measures. However, while expectations of rapid development are high, at present Korea still ranks low in terms of integrity and anti-corruption activities, failing to do justice to its relative international economic standing and trailing well behind other Organisation for Economic Co- operation and Development (OECD) countries.

Legal provisions in Korea concerning the governance and integrity of public institutions are meant to ensure an integrated architecture from both inside and outside. Internally, of particular importance is the Anti-Corruption Act, which requires all public institutions to set up codes of conduct for maintaining the integrity of public officials, allows any public official to report acts of corruption conducted by other public officials and enables the public to request audits and inspections of public institutions. The Korea Independent Commission Against Corruption (KICAC), established under the Anti-Corruption Act, handles whistleblowing reports, recommends policies and legislation for combating corruption and also examines the integrity of public institutions.

The Public Service Ethics Act is designed to prevent high-ranking public officials from enjoying financial gains related to their duties during and after their time of employment. This Act requires high-ranking officials to register their assets, report gifts they receive from foreign entities, and obtain prior approval for employment after they leave office.

Externally, four key laws prevail and act as check-and-balance mechanisms. The Budget and Accounts Act regulates the procedures of the budget and final accounts of public institutions.The Board of Audit and Inspection Act allows the Board of Audit and Inspection (BAI) to inspect the final accounts of public agencies and job performance of public institutions, while the Act on the Inspection and Investigation of State Administration allows the National Assembly to carry out inspections and examinations of state administration. Lastly, the Act on the Disclosure of Information by Public Agencies requests public institutions to provide information on their job performance. In addition, there are several acts that provide for civil society to participate in public
administrative affairs.

Generally speaking, central public institutions have improved their governance and integrity systems. As a top priority in the current reform agenda, the president has shown eagerness to address corruption during his term of office on the one hand and promote the governance and integrity of public officials on the other. Central government agencies have largely complied both with the president’s request for action and with provisions for increasing public consciousness. However, constitutionally independent institutions such as the legislative and the judicial branches have not shown the same level of enthusiasm in addressing corruption, although they too have a mandate to establish plans and programs to guarantee the integrity of their organisations. Meanwhile, on the regional level, local autonomous institutions reveal serious problems in their governance and integrity, with significant increases in corruption.

While the introduction of the Anti-Corruption Act was long regarded as a cornerstone in the anti- corruption movement in Korea, increasing concern remains over the lack of investigative authority of the KICAC, its limited authority and the ineffective nature of whistleblowing mechanisms, raising doubt over the applicability and efficacy of the Act. As for the Public Service Ethics Act, the provisions regarding assets registration and post-employment fail to provide clear guidelines, rules and standards that would discourage and ultimately prohibit officials from enjoying unfair financial gains. In addition, high-ranking public officials continue to be reluctant to comply fully with asset registration and post-employment restrictions. Public-official ethics committees, in charge of overseeing and examining the various provisions of the Public Service Ethics Act, also remain too lenient in fulfilling their duties.

Corruption in Korea has long sparked intense debates in both political and social spheres. For the political leadership, proclaiming engagement in the fight against corruption, especially in the public sector, has become a norm rather than an exception. Current legislation regarding anti-corruption mechanisms remains focused on the public sector, while legislative and voluntary efforts are increasingly concentrating on the non-public sector as well.

Korea’s NIS continues to undergo rapid transition. Over a relatively short period of time, it has achieved significant improvement in governance and integrity through political leadership and public demand. What remains at this juncture is the need to address apparent shortcomings.

Recommendations:

The government must carry out the following:

· Enhance monitoring mechanisms to proactively prevent wrongdoing and reactively follow up to sanction the same. This will ensuring the highest degree of accountability and integrity from a holistic point of view, resulting in an active interplay between all stakeholders of society.

· Strengthen enforcement and obedience of the regulatory framework that surrounds the country’s NIS.

· Empower anti-corruption institutions with more investigative powers, enabling the government to oversee and act on corrupt practices within the system as a whole.· Introduce a special bureau of investigation of high-ranking public officials.

Priorities and Recommendations

The NIS of Korea continues to undergo rapid transition. Over a relatively short period of time, Korea has achieved significant improvements in governance and integrity through political leadership and public demand. However, Korea at this time needs to address its apparent shortcomings to attain national integrity in congruence with its economic and social status. Rather than addressing priority areas within each pillar, it is important that, in the case of Korea, emphasis be placed on the fundamental effectiveness of its regulatory environment. Thus, efforts should first of all be channelled into three areas: enhancing monitoring mechanisms, strengthening law enforcement and empowering anti-corruption institutions.

Enhancing Monitoring Mechanisms

The current status of Korea’s governance and integrity reveals that, so far, it has failed to institute effective monitoring mechanisms. The narrow emphasis on externalities such as social status and job performance has obscured the basic functioning of the monitoring of governance and integrity. Korean public institutions now have to focus their efforts on strengthening their monitoring systems. At the core of this construct are well-functioning checks-and-balances systems that proactively prevent wrongdoing and reactively follow up to sanction the same. Both horizontal and vertical organisational structures and entities need to be subject to monitoring and checks and balances, including constitutionally independent institutions and non-public organisations. Only then will it be possible to ensure the highest degree of accountability and integrity from a holistic point of view, resulting in an active interplay among all stakeholders of society.

Strengthening Law Enforcement

In Korea, stringent rules and regulations are well in place that are meant to strengthen the country’s NIS. Yet, in many sectors, the country continues to tread the borderline between corruption and integrity. Korea’s courts and prosecutors have been criticised for their inability and shortcomings in enforcing legislation. Thus, for Korea, the key to success will primarily lie in the strict enforcement and obedience of the regulatory framework that surrounds the country’s NIS. Given the prosecutors’ and the courts’ constitutional independence, law enforcement cannot be strengthened without their commitment. Rigorous internal rules and regulations in addition to professional ethical behaviour will also help prosecutors and the courts to attain fairness and independence in fulfilling their jobs.

Empowering Anti-Corruption Institutions

While the establishment of the KICAC was hailed as another cornerstone in the fight against corruption, the firm positioning and true value of the KICAC to the NIS of Korea has yet to be fully realised. Concern has mounted over the introduction of independent investigative authority, the ineffective nature of whistleblowing mechanisms and the limited authority of the KICAC.

The mere existence of such an anti-corruption body is not enough. To carry out substantive duties for the benefit of the Korean NIS, the KICAC should be equipped with more authoritative and/or investigative powers. The introduction of an investigative authority for the Act constituted one of the major items that civil society requested when the Act was finally passed in 2001; yet, the current Act does not include such a provision. To effectuate the whistleblowing system, the KICAC needs to come up with practical plans to protect whistleblowers from tangible and intangible retaliation. In addition, the Act should be expanded to cover constitutionally independent institutions and non-public sectors as well. Only then will it be possible to oversee and act on corrupt practices within the overall national integrity system.

Introduction of a Special Bureau of Investigation of Corruption by High-Ranking Public Officials

Since 2000 there have been talks of introducing and establishing a special bureau of investigation of high-ranking public officials as there was a continuous stream of scandals involving high-ranking officials that came to an end without clear investigations and judgments. This issue constituted one of the major promises that both the ruling party and the main opposition party presented during their 2002 presidential election campaigns. However, by the end of 2005, the initial plan to introduce an Act establishing such a bureau was stymied in the National Assembly, and the talks shifted to establishing a standing special investigation system under an anti-corruption–related public institution.

In addition, promoting professional ethics and raising public awareness are further areas that need to be actively tended to as the foundation of a solid NIS. More fundamentally, the NIS is based on the rationale that people serving both public and non-public organisations must abide by professional codes of ethics, recognizing that authority must be accompanied by conduct accountable to the public and society’s stakeholders.

For now, however, the main challenge for Korea’s anti-corruption efforts and reforms will be the dependence on and sustainability of political commitment towards a coherent and sound anti- corruption framework. Addressing the aforementioned issues would significantly enhance and contribute to a strengthened NIS, which, in turn, would add credibility to and confidence in the country’s social, political and economic standing and future prospects.

Posted 10/30/06

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Tools for Measuring Corruption and Governance in Latin American Countries

A new report, Corruption and Governance Measurement Tools in Latin American Countries, produced by Transparency International (TI) and commissioned by the United Nations Development Programme (UNDP), presents the international, national and local tools used to measure corruption and good governance in Latin American countries. The report includes nearly 100 different corruption measurement tools in 17 countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, México, Nicaragua, Panamá, Paraguay, Perú, Uruguay and Venezuela.

These tools include public opinion surveys, public sector diagnostics, private sector surveys, combined surveys, and multi-country tools such as the World Bank’s World Business Environment Survey/Investment Climate Assessment.  In the “Key Findings" section, the report analyses the uses, value, and impact of each type of tool (public opinion surveys, institutional diagnostics, and multi-country tools). It also comes to several conclusions about the impact of corruption on the poor and across gender, which are reproduced below:

Findings on Poverty and Gender
Concerning the Poverty Dimension, Similarities in the Findings Include:

- Many surveys show that corruption in absolute terms seems to affect the poor less than the non- poor: People with higher income have more often had experience with corruption and also spend higher sums on bribes. Nevertheless, when seen in relative terms, the burden of corruption weighs heavier on the poor: Low-income households bear a larger burden of corruption when burden is measured as the bribes/income ratio.

- A similar pattern can be found for micro-enterprises: They spend a larger share of their revenue
on bribes.

- Poor households are not meeting essential requirements such as food, health, and education partly because of the direct cost of corruption. Thus for the poor, the marginal utility of a currency unit paid as a bribe is greater than for the non-poor.

- The kinds of services in which bribes are common are more important to the poor

- In the provision of many services, public officials are more likely to disadvantage low-resource users and ask them for bribes. It is exactly small businesses and the poor who don’t posses alternatives in their demand of public services. Agencies ridden by corruption are more likely to discriminate against the poor by limiting access to basic services.

- Some studies give additional information on income-specific aspects for example, bribery is directly and positively associated with income: the wealthier the respondent, the more likely s/he will have heard of any act of bribery.

- Concerning the impact of corruption on gender, the studies show that men are more likely to be victims of corruption than women. A possible explanation could be that it is males, especially in Latin America, who are more often involved in official transactions than females. One should underline that similar conclusions have been drawn in other regions.

- Results are inconsistent when it comes to the perception of corruption across gender. While some studies indicate that women perceive their country to be less corrupt than their male counterparts, other studies suggest that males and females have very similar perceptions of the prevalence of corruption; or even that women are more preoccupied by the phenomenon of corruption than men.

- These findings are important but one should still draw attention to the fact that only a limited number of tools and initiatives (about 20%) are addressing gender and poverty dimensions. There may be an explanation, which can be related to the type of tools. In order to disaggregate per gender and per income, you need a large sample size, which is not the case for most of the tools.

- There may nevertheless be a need to encourage the development of more specific tools addressing those issues with the ultimate aim to better equip policy makers. This could be done by the inclusion of more specific questions targeting the poor or women for instance. If some surveys with very large sample size like the survey on living conditions of Peruvian households (3.1.19) carried out among 18598 households offer the possibility to cross the information collected on corruption to other socioeconomic dimensions and highlight the connection between poverty and incidence of corruption, others, such as the corruption survey conducted by TI Mexico among 16000 household, had still very limited sub-analysis on income or gender.

Conclusion

The report concludes that “tools to measure corruption and governance are very useful tools and are able to create change, but can only do so if all stakeholders are invited to discuss the findings and if sustained education-sensitization efforts are carried out by the media, civil society organisations and also the public sector. Strong civil society organizations and political will are pre-conditions for enhanced use of the findings of empirical research in these areas”

For the full report and mapping of tools visit Transparency International’s website, www.transparency.org or click here.

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Posted 8/16/2006

* * *

Fighting Corruption: What Approaches Work?

Experiences with Anti-corruption Action Plans at the National Level.

Case studies from:

Poland

Ghana

Slovakia

Latvia

Nepal

Mongolia

Paraguay

Case studies highlighting best practices and lessons learned relating to diverse issues concerned with corruption, including developing a pragmatic toolkit, raising public awareness, the media, public procurement, privatization, election monitoring.

Over the past four years the Partnership for Transparency Fund (PTF) has provided small grants (maximum amount $25,000) to NGOs across the developing world to assist in the development of specific anti-corruption initiatives. Full details of the projects and PTF’s work can be found on its website. Below are a series of cases, highlighted in summary form, which provide insights into what works. The experiences gained by the NGOs that have pursued these initiatives can assist other organizations around the world as they prepare their own specific anti-corruption projects.

UNDP Evaluation Praises PTF                                 

"PTF is an extremely effective instrument for support of small but important anti-corruption projects" says Alex Shakow, a former World Bank senior executive in an evaluation report to UNDP. "PTF’s  track record is very impressive.  The vast majority of its projects have been designed and implemented well and achieved valuable results. Given the difficulties of working in this highly sensitive area, the PTF success rate is a great tribute to the many courageous people implementing these programs across the globe, and to the PTF leadership for its commitment, professionalism and good sense.  There are lessons to be learned but, by and large, this volunteer operation sets very high standards and meets them.”

POLAND
Citizen’s Anti-Corruption Legal Toolkit

A project by TI Poland (TIP) assisted by PTF (www.transparency.pl)

The project established a Citizens’ Anti-Corruption Toolkit as a means of strengthening the implementation of TIP’s citizens’ legal aid Intervention Program.

The program arose in reaction to requests for legal support submitted to TIP from all around the country. Individuals, citizen groups, associations and councilors’ groups were asking for support in solving cases involving corruption or suspicion of corrupt practices. Most of the requests came from small towns where counteracting corruption is particularly difficult.

TIP reports that the people who applied for help frequently stressed that they go to TIP because they have trust. This trust is founded on a recognition that TIP is a reliable, politically unbiased, and independent organization, which does not avail itself of government funds. The Intervention Program has been carried on since January 2000. Although it is not advertised in any way, its growing good reputation, coupled with the inefficiency of state institutions, is resulting in a rapid increase of the number of cases taken on. Through its legal education and assistance program TIP has been creating public awareness of the people’s rights. In this way, dishonest public officers are being discouraged from taking advantage of people’s ignorance.

The proposed toolkit was to serve three purposes: (i) to support TI Poland’s legal Intervention Program; (ii) to be used by individuals and groups in their own cases; (iii) to enable groups and organizations to start their own legal intervention programs. The toolkit was to have six different components:

• Software in the form of program management applications, internet discussion groups for program collaborators, frequently asked questions and application forms for people looking for help)
• Software to provide legal help by internet (web page, discussion group, help on-line)
• Practical anti-corruption guides accessible for citizens (published on paper, CD and website),
• Intervention program working procedures and instructions providing legal help – based on TIP’s experience,
• internet center for practical anti-corruption help,
• anti-corruption toolkit on CD

The project has been successfully completed. At the start, the project team prepared instructions and forms for the collection of data on the ‘tricks’ used by authorities, then collected the data and reviewed a number of court cases. This has lead to the creation of database of the tricks used. Their subsequent analysis allowed the preparation of a compendium of the most frequently used tricks in public administration institutions. The project team has constantly updated the database. Three of the most interesting court proceedings were selected for further observation, recording court proceedings, collecting information and evidence, and providing legal help. A practical toolkit for a citizen in court was then prepared. The project team consulted local citizens’ groups and individuals in the preparation of the toolkit.

The project team reviewed the existing anti-corruption legal guide-books. This revealed an absence of such guidebooks and therefore this particular subject became the focal point for subsequent work. In addition, the team noted a lack of awareness of access to public information. A set of manuals was prepared, and a new dedicated website established. This included printing and distributing 1000 copies of a practical toolkit for a citizen in court, with tips for a citizen on how to perform in a court, mostly based on observations from the Legal Aid Program cases and court proceedings.  Also, counseling by phone was successfully tested. The “first contact” instruction has been prepared for volunteers’ contacts of with people looking for legal help.

TIP’s review revealed an absence of guidebooks on access to public information. Moreover, their other work indicated a general lack of awareness on access to  public information. In result a manual on access to public information was prepared and 2000 copies printed and distributed.

Copies of all manuals can be found on TIP’s website; the demand for these products has been considerable. In addition, some 100 CD copies of TIP’s Anti-Corruption Toolkit have been ‘burned’ and distributed.

* * *

GHANA

 Raising Public Awareness of Corruption

A project of the Ghana Integrity Initiative (GII) assisted by PTF

The project involved a survey of corruption in four major cities as a tool for raising public awareness and to provide a robust basis for civil society to engage with the government on ways to reduce corruption. The key objectives were:

• To measure the perceived degree of bribery and corruption in the country
• To find out the most corrupt institution(s) in the country.
• Find out why people involve themselves in bribery and corruption.
• To find out the categories of perpetrators of bribery and corruption in the country.
• To measure the perceived level of corruption in the government, metropolitan, municipal and district assemblies in the country.
• To assess government commitment to fighting bribery and corruption.
• To find out whether respondents are aware of the institutions fighting bribery and corruption in the country.
• To solicit proposals from the public on ways to minimize bribery and corruption.
  
  

A “voice of the people” survey – an urban household corruption perception survey was conducted in Kumasi, Sekondi-Takoradi and Accra-Tema areas (Southern Ghana) from 10th to 26th March 2005. The survey, using face-to-face interviews and a structured questionnaire, captured the views of 900 residents of households on their perceptions of corruption, personal involvement as well as other people’s involvement in bribery and corruption, underlying reasons for corruption, institutions and officials perceived to be affected by corruption and suggestions on how to deal with the problem of corruption. GII prepared and disseminated a report summarizing the findings of the survey with a view to strengthening civil society’s advocacy of specific measures to fight corruption.

GII believes that the findings of the survey, with all its limitations, provide the public and policy makers with useful information on the perceived state of corruption in the country, and the expectations of the public in terms of dealing with the canker. Key findings include:

• The perception of a pervasive of corruption in Ghanaian society.

• There is a perception of greater administrative or bureaucratic corruption compared to political corruption. Respondents cited ‘delaying tactics’ as a way by which the people are ‘forced’ to pay bribes for public services or indulge in other forms of bribery. This is a disincentive for investors and undermines public trust in the efficient management of public resources.

• A high tolerance for corruption among Ghanaians. Most of the respondents interviewed said they looked on unconcerned when witnessing acts of bribery and corruption. Moreover, where reports are made to the police and offenders are sometimes arrested, the offenders still get off and nothing comes of the investigations. For most people, therefore, reporting corruption is an exercise in futility. This is a particularly disturbing finding as it implies the existence of a culture of impunity. Nepotism, cronyism and ethnic bias, which are often inimical to development, appear to have eaten very deeply into Ghana’s social fabric such that, nobody seems to see anything wrong with them.
• Some of the institutions perceived to be highly corrupt, such as the Police Service and the Judicial Service, are paradoxically also the ones expected to help control corruption.
  
  

The report made a number of recommendations, most importantly:

• A strong code of conduct for civil/public servants as well as political appointees, especially those in positions to hire, fire, and influence resource allocation, is needed as a matter of urgency.  Such a code of conduct should be systematically and rigorously enforced.
  
  

• The Commission on Human Rights and Administrative Justice (CHRAJ) and the Serious Fraud Office (SFO) should be granted independent powers of prosecution. This will help check the creeping culture of impunity among those entrusted with elective and administrative power.
  
  

• Government should strengthen existing laws to include the imposition of stiffer punishment, such as longer prison terms for perpetrators of corruption. At the same time, the Public Service should institute a reward system for those who exhibit high standards of performance and commitment to duty in public office.
  
  

• Parliament should, as a matter of priority, enact the Whistleblowers Bill and the Freedom of Information Bill to encourage exposure of wrongdoing in the workplace as well as foster transparency in governance and public administration.
  
  

• Civic education should be increased to educate and sensitize Ghanaians on the deleterious effects of corruption. Ghanaians must learn to be loyal to the state rather than to friends, relatives and members of their ethnic groups. This calls for a change of attitude and a system of democratic practice where all citizens are equal before the law and where meritocracy rules over and above all other considerations.
  
  

• Government, Employers, Trade Unions and other Stakeholders should take steps to organize a national debate on income policy as a matter of urgency since research findings suggest that low income and poverty-related issues are among the root causes of bribery and corruption.
  
  

• Finally, recognition should be given to people who risk their lives and/or livelihoods in order to champion the anti-corruption cause.

A stakeholders’ event was organized on July 19, 2005 in Accra to disseminate the survey findings. The event attracted the media, government officials, donor agencies, representatives of political parties, civil society organizations, etc. A number of public institutions/agencies have since requested copies of the survey’s findings. Notable among them are the Ministry of Finance and Economic Planning, international NGOs, donor agencies, etc. Radio talk shows were also organized to further disseminate, critique, and elicit listeners’ views on the survey findings. GII was invited by a German institute (INWENT) to share the findings of the survey at a forum on the Millennium Development Goals in Bonn in October 2005. The impact of the survey report on the media has been remarkable. A number of articles on the report have been published. It has also been the source of reference for radio and television discussions, the general public and academia.  

The ongoing critique of the survey findings by the government, civil society, media and other stakeholders serves to increase public awareness of the negative effects of corruption and the need to fight it. This will increase public demand on government to pass the Whistleblower Bill and the Freedom of Information Bill into laws.

GII intends to follow up with some of the public institutions that topped the list of institutions perceived by respondents as highly affected by corruption in order to discuss possible ways of dealing with the possible sources of corruption. Also, GII intends to work closely with the newly established Ministry of Public Sector Reform, which is promising to undertake far-reaching public sector reforms. GII is planning further stakeholders’ events and radio talk shows with phone-in segments to further disseminate survey findings. GII has posted the report and the financial statement on its website (www.tighana.org) to facilitate easy access to the survey report.  Lastly, the project has also enhanced the organization’s capacity to conduct surveys. GII proposes to undertake a similar survey in Northern Ghana. This will enable GII obtain urban corruption data covering the whole country.

* * *

SLOVAKIA
Enhancing Public Procurement

A project of TI Slovakia assisted by PTF.

The project aimed to help improve the transparency and effectiveness of public procurement at the national, regional and local levels of government.  Public procurement has been identified as one of the areas most prone to corruption in Slovakia. The proposed project was to test methodologies for monitoring procurement activities, organize workshops to refine the methodologies, recommend measures to enhance the integrity of public procurement and undertake a public awareness campaign to publicize the results of the project.

TIS conducted three rounds of public procurement monitoring covering all levels of the public sector in Slovakia – state, regional and local, as well as public companies. Slovakia within its administrative setting has eight regional governments. Public procurement monitoring of regional governments focused on all of them. In addition – selected secondary schools under their control have been monitored. TIS also monitored public procurement undertaken by all 14 of the government’s central ministries.

A monitoring methodology was developed ending with a workshop for the local partners who were to conduct the field work. Monitoring in the regions was undertaken, the data evaluated and a report issued (available on the TIS website in Slovak). Some of the regional governments at the first did not want to have their public procurement monitored and refused to support the activity. After several meetings and explanations the situation improved. In the case of the central ministries, a workshop for the partners who were to conduct the field work was held, monitoring was undertaken and a report developed.  

Based on the survey work, TIS was able to obtain quite a precise picture on the situation in the area of public procurement in Slovakia in various public sector organizations. TIS, among others, is using this information for the following follow-up activities:

• The Public Procurement Office of the Slovak Republic, the regulatory body for public procurement in Slovakia, has invited TIS to utilize the knowledge gained from its survey work by participating in a working group formed to draft new public procurement act. In April 2005 experts from TIS submitted the comments on the newly prepared draft of the Public Procurement Act and in May 2005 Jiří Vlach, representing TIS, took part in a discussion held by the Public Procurement Office regarding the its comments.
  
  

• TIS met with the representatives of the regional governments, which were monitored during the first round in June, 2005.  A meeting with the representatives of the ministries was held in August, 2005 to discuss the monitoring report. In same month, TIS also met with the Public Procurement Office to discuss the challenges TIS faces when approaching public companies, and with the vice-chairman of the Supreme Audit Office to discuss the monitoring of public procurement.
  
  

• Also in August 2005, the Ministry of Finance asked TIS to provide its professional feedback on the newly developed Public Procurement Act. 
  
  

There has been a range of other follow-up activities. TIS’ report on its monitoring work has been widely distributed and TIS presented the results at several events -- for example on November 22, 2005 at the conference on Public Procurement held in Bratislava and on November 24, 2005 in Brno at the conference on EU and Corruption.  In addition, TIS has presented the final results to Supreme Audit Office and Office of Public Procurement and encouraged them to continue in those activities.

TIS that the monitoring methodology, slightly adapted to local legislative framework, can be used in other countries as well. To this end, TIS has discussed piloting monitoring activity in Serbia with the Serbian chapter of TI . Several other chapters have expressed interest in TIS’ monitoring methodology.

* * *

LATVIA
Monitoring Government’s Initiatives to Address “State capture” Issues and Its Implementation

A project by DELNA( TI-Latvia) assisted by PTF

The monitoring of the government’s initiatives to address “state capture” was the main objective of a project initiated by DELNA (the Latvian national chapter of Transparency International) and supported by a PTF grant. Civil society participation achieved through this project ensured:

• Monitoring of the quality of the actual work of the government’s working groups;
• Effective use of the experience of DELNA of other NGOs in the country dealing with anti-corruption issues and of the global TI network, directly in the working process, which can be more productive than the criticism of a finished product;
• Ensuring of public trust by reporting on the positive work done;
• Broadening of the discussion on more controversial topics, such as party finance from the state budget, etc.;
• Monitoring of the results of the working groups in further procedures within the government and the Parliament.

 
Results

• As the result of the project all 3 laws were adopted in the Parliament and have entered into force giving a new ground for anti-corruption work in Latvia. Especially one can say that about the new anti-corruption body, which started its functions in July 2002 and the new legislation on political party finance, which was finally voted in June 2002 providing substantial transparency for the voters on the incomes and expenditures of the political parties. Further steps to improve the law on the conflict of interest are also taken.
  
  
• Experts of DELNA were admitted to all the working groups of the government and accepted as working partners. However, the experts noticed the lack of motivation and goals in preparing the draft legislation.
  
  
• The Parliament adopted the concerned pieces of legislation in big haste and thus gave DELNA little room for intervention. DELNA was possible to follow the legislative changes in the Parliament due to transparent on-line internet system, but there was too little time to lobby for additional changes or protest against some specific changes. The exception, however, was the law on political party finance where DELNA experts were consulted on regular basis.
  
  
• As a result of the PTF assisted project DELNA was able to establish a long-term relationship with the government bodies dealing with anti-corruption issues and was invited to join the working groups on anti-corruption and related legislation also after the project finished.
  
  
• DELNA has gained very important knowledge and practical skills about the legislative process within the government and has been able to comment on these issues to the national media.
  
  
• The anti-corruption topics are of a general interest of the Latvian media, and so there was a broad coverage of the process and the results of the draft legislation.

* * *

NEPAL

 Radio Program on Anticorruption and Good Governance
A project by Forum Against Corruption and Turmoil Nepal project by  (FACT Nepal) assisted by PTF

Background

The majority people in Nepal are far from an access of information about corruption and good governance. Moreover, they are still unknown about the term governance that is widely used by the NGOs and GOs in recent days.  In fact, the people are still deprived from a fast and quality service from government authorities, also yet unknown about the corrupt activities in government and private sectors. They even don’t know much about the inherent right that has been guaranteed by the constitution. 

FACT Nepal, assisted by a small grant of less than $4,000 from PTF, launched and completed a one year radio program from FM station. The Program was completely issue-based and the contents were related to the current issues of corruption and governance. The program aimed to bring mass awareness and became quite successful to achieve its targeted goals.

Objectives

Public awareness on current corruption issues, empowerment to the civil society to fight against corruption, assistance and co-operation to the government agencies to combat corruption in Nepal were the general objectives of Radio Program of FACT. This project also aimed the government authorities to boost up in their administrative works. Specific objectives were:

• To collect many literatures concerned to corruption and good governance in order to broadcast them widely.
• To draw attention of government authorities regarding transparency, accountability and various aspects of responsibilities.
• To bring attention of civil society and private sector to promote good governance and uproot corruption.
• To develop and establish a moral society by promoting ethical and social norms and values.
• To make an effort to establish a corrupt free society by promoting whistles blowing act and other programs focused to anticorruption activities.

The major goal of the program was to create and promote effective mass awareness about the corruption and governance issues by education, information and empowerment via media program.

Operational Approach

FACT Nepal constituted a team of media professionals and its executive members to run the radio program on anticorruption and good governance. The radio program is informative radio magazine and makes exclusive coverage of anticorruption, good governance issues and efforts of the government and non-government institutions to curb corruption in Nepal. The program also highlighted and made exposure of the corrupt activities taking place in the administration, politics and social sector.

There were different steps in the preparation to broadcast program. Firstly, the production unit collected the materials and news related to issues of anticorruption and good governance from various sources such as newspapers, bulletins, internet, seminars and workshops. In addition, the production unit also made the program by directly contacting the general public and the concerned government authorities.  The collected materials used to be sincerely observed, analyzed and finalized for the broadcast by the production team. The team of FACT executives used to help in order to find the right materials for broadcasting purpose.  Furthermore, contemporary burning topic was selected for an interview in the third track of the radio program in each episode. FACT managed to present some prize to the winners participated in the listener's forum in order to maximize participation.

The radio program was divided into 3 tracks. The first track included the news headlines concerning the corruption cases, governance issues, efforts from governmental and non governmental sector to curb corruption, cases of public concern, existing administrative political and social problems etc.

The second track included the fundamental presentation of FACT Nepal on sub heading “Our Steps” in which the subject of social issues, reports of commission formed by the government, individual efforts to curb corruption, editorials on current social issues and other distinct analytical matters from different walks of life were broadcasted.  This track also included different coverage of corruption cases, news report, articles, suggestion, comments, information and notices, public announcements issued for the public interest by FACT Nepal. Listeners’ Forum where we asked a question to our listeners and collected the correct entries from our listeners also included in this track. On every fortnight we provided some attractive prizes to the lucky winner selected from the lucky draw among the correct entries. We also collected the feedbacks and comments of our listeners regarding our weakness and impact for the improvement of program and broadcasted the appropriate suggestions and comments. We also included VOX POP (Public Voice) in some of episodes where the common citizens expressed their opinions.

The Final track of the program was allocated for an interview on the topic of anticorruption and good governance. The prominent personalities from different walks of life were invited for interview. Bureaucrats, social activists, politicians, leaders of different social movement, top level/ retired professional and other high ranking people of policy making level were the participants. This section of the program was the major attraction to listeners. The interview and ideas shared in this section were all very sensitive, authentic and of great values.

* * *

MONGOLIA

Promoting Democracy: A Competition for Journalists

A project by the Zorig Foundation in Mongolia assisted by PTF

Under the heading of “TODAY OR … IT MAY BE TOO LATE” the Zorig Foundation in Mongolia, assisted by PTF, launched a competition on anti-corruption theme among journalists, artists and media people.

1. Preparation for the contest

• As a first step we developed an action plan and started implementation of the project.
  
  

• Met with administrators and journalists from newspapers, radio and TV, as well as, artists of the Mongolian Artists Union. We exchanged views and heard their opinion.
  
  

• This helped us to draft the contest rules.
  
  

• At the every organization mentioned above we conducted seminars on the issue of corruption. Also in course of one month we held briefing seminars at the Zorig Foundation for freelance writers and anyone else who wanted to participate in the contest.
  
  

• According to the project plan, from February 21 through March 21, 2002 we published contest guidelines and rules in daily newspapers and aired information on radio and TV. We negotiated with media people and put free advertising on FM radio stations and in non-daily newspapers. We used all possible ways to reach people with the contest announcement. In addition, we utilized the Zorig Foundations information board and its web page.
  
  

• To attract people’s attention to the contest, in co-operation with the daily newspaper “Onoodor” (Today) and Central Mongolian Radio we organized roundtable discussions about corruption. We held a letter writing contest “Youth Rejects Corruption” among school children. More than 100 children from cities and the countryside participated in the contest. About 80% of the participants gave particular examples of abuse and admitted that corruption exists in their environment and that it affects their lives both directly and indirectly. Some children described corruption as a “weed” or “deadly epidemic” or “dark cloud”.
  
  
• In the preparation phase we selected contest judges (which included people from  public life, the arts, academia and the media).
  
  

Contest evaluation

We received 411 entries from about 450 people. The majority of participants were freelance writers, students, youth, and children. Entrees included:

• 166 posters
• 170 essays
• 20 TV programs and advertisements
• 55 Radio programs and advertisements
  

• Every entry was given a code number and this way judges couldn’t know who was the author of a given work. We sought the most fair and blind test for contest evaluation. As a result, the participants perceived the evaluation as fair, just, and open; or in other words, not corrupt.

• The Award ceremony was organized as an open event.  It took place at the Exhibition Hall of the Mongolian Artists Union on April 10, 2002. A total of 166 contest posters were exhibited   for the public. The winning TV programs and advertisements were shown to more than 500 viewers who visited the exhibition during the week exposure.

• The Awards giving ceremony was attended by the Board Members of the Zorig Foundation, all contest judges, various heads of the diplomatic missions, representatives of the international organizations (UNDP, USAID, IRI), members of political parties, the  contest participants and the  media.

• Mongolian Artists Union strongly supported our project and kindly gave us space the exhibit their Exhibition Hall free of charge.

• The Awards ceremony was widely publicized in the media.

Publicizing of works submitted for the contest

• Award winning TV and Radio programs and advertisements  were  broadcast free of charge for a one week period on Mongolian National Television, Channel 25 TV, Central Mongolian Radio and various FM radio stations. Programs and advertisements will be shown again on Channel 25 TV in July 2002.
• Mongolian radio has also agreed to announce and read out the best three essays.

• Award winning essays were published in the daily newspaper “Onoodor” (Today).  Award winning essays and posters were published in the weekly newspaper “Mongol Times.” In total this was done twenty times.

• The best five posters were printed and 1600 copies and given to NGOs and sent to the provinces. A large number of posters were given to the State Minister O.Enkhtuvshin, Head of the Government Administration and Head of the Government “Good Governance” program. We requested Mr. Enkhtuvshin to distribute and place posters in the Government ministries, agencies and offices.

• The best essays and poster are currently publicized on the Zorig Foundation information board located on the main street and on the Foundation’s web page.
• The competition has provided material for a book and has also provided a data base on anti-corruption.

Comments and Conclusion

• When evaluating the competition, the Zorig Foundation introduced special prizes in some categories and funded them through the Foundation itself. This was done   separate from the project. Special prize winner’s works were of high professionalism and presented a new vision.

• The anti-corruption works contest “Today or … it may be too late” was timely, because it took place right before the opening of the Spring session of the Mongolian Parliament which has delaying  for two years a passage of the National Anti-Corruption Program. We can assume that as a result of our action above legislation is on the agenda of the Parliament Spring session.

• The contest was widely publicized in the media and reached a wide range of people. We are glad that many citizens including contest participants – journalists and artists, freelance writers, youth and children learned about the issue of corruption and its damage to society.

* * *

PARAGUAY
Monitoring Privatization
A project by Transparencia Paraguay (TP), (www.transparencia.org.py) the national chapter of Transparency International, assisted by PTF.

TP was engaged in monitoring government reforms of various state companies (such as the telephone company ANTELCO, later named COPACO, the water works, ESSAP, and the CARLOS ANTONIO LOPEZ national railroad).  The Government wanted to privatize the first two and thee was considerable skepticism about the genuine political willingness of the authorities to relinquish control.

Impact

1.TP monitored the transparency of the various stages of the process (compliance with the legal requirements) in observance of the current international practices and without interfering with the administrative work of the Secretaría de la Reforma (reform secretariat), or on the quality of the decisions of the Government, since they were the owner of the process.

2. Thanks to the first report from the Chilean consulting firm, Chadwick & Associates, retained with the financial help of PTF, we were able to advise The Reform Secretariat (SNRE) of the need to avoid providing possible privileged information to bidders in the investment bank selection stage. This warning caused the annoyance of the technical staff of the SNRE who firmly defended the communications policy adopted as from the start with the bidders. However, they promised to regulate the information in order to avoid privileging certain bidders in the coming stages to be carried out in the privatization process of the telephone company, ANTELCO, and the water works, CORPOSANA.

3. In this stage we sustained a transitory interruption in the delivery of technical documentation by order of the Secretary of the Reform, alleging that first they must have the no objection clause approval from the World Bank technicians. Our institution appealed the measure stating that it posed an obstacle in our independent monitoring work requested by the President of the Republic, who had declared the participation of Transparencia Paraguay (TP) in the process, by letter to the World Bank representative. Consequently, the Secretary revised his resolution and we received the relevant documentation for the duration of the privatization process until its termination in the month of June 2003.

4. TP maintained direct contact with the director of the World Bank for the reform process, Mr. Ventura Bengoechea, on his frequent visits to Paraguay, in order to exchange information referring to the development of the ANTELCO (COPACO) privatization process. That direct contact continued after the suspension of the suspended process, in his capacity as official responsible for privatization of the water works, ESSAP.

5.  In the different stages, priority was given to providing information to the public and the media, using Transparencia Paraguay web site. Additionally, we urged the Secretary of the Reform to do likewise through the government web site for publication of the terms and conditions documents referring to the process and, in certain circumstances, they did so.

6.  TP timely received 100% of the documents referring to the different stages leading to the privatization of ANTELCO, in hard and soft copies, allowing our national and foreign experts to study them. The comments of TP were forwarded to the authorities of the National Secretariat for Government Reform.

7.  No claims of corruption, regarding the privatization process, were made by the companies selected for the bidding process. One hundred percent of the information relating to the monitored process was available to the public on our web site.

8.  Additionally we have made direct inquiries with the participating companies in order to determine the degree of conformity with the various stages of the process and haven’t received any objection to the stages that were developed prior to the final suspension of the  privatization.

9.   During the months of growing deterioration of the privatization process, TP maintained a professional neutrality attitude. We have stated to the media, as well as in reply to sector questions that our role was centered on the correct development of the steps concerning privatization and not on the administrative operation of the Secretariat of the Reform. That event allowed us to maintain excellent professional relations with the new Secretary of the Reform who replaced the previous one who had resigned in March of 2002 as stated in this report.

10.   The Secretariat of the Reform held an exclusive meeting form TP at the Convention Center on February 15 2002 with attendance of the Secretary of the Reform and the auditors of the two institutions to be privatized (Antelco and Corposana) who submitted reports on the development of the relevant processes. The international consultants retained by the national Government also expressed their experiences wherein the inquiries of TP, that were given prominent cover in the media with direct participation of the television channels, referring to the public procedure to be utilized on the date of the opening of bids for the telephone company now known as COPACO, with the direct acceptance of the best bid by the previously selected institutions.

11. Permanent relationship with the media (newspaper, radio, television) that have resorted to TP in the more serious moments of the negotiations for the sale of COPACO. Furthermore, they normally looked to our web site www.transparencia.org.py for information on the privatization of the telephone company and other matters of interest relating  corruption.

Additional Impacts

12.   Thanks to the experience in the field obtained through work on the privatization process, TP became a co-sponsor with the Consejo Nacional de Integridad (CISNI) (national integrity board) of the first public hearing held on June 11 2002, in the Senate, on the Public Contracts Law project, an unprecedented occurrence in the history of politics of our country. The technical team retained by TP participated actively and made approximately 80 observations on the form and substance of the proposed law.
The majority of our observations were incorporated, particularly those referring to limiting the scope of the exceptions, confidential information, and selection criteria as well as the unilateral declaration of integrity of the proceedings. The importance of the objective of this law project constitutes the cornerstone of the fight against corruption related to public affairs (contracts and purchases).

13.   TP participated actively in monitoring of the specifications of the terms and conditions of seven (7) contracts for good and services for the waterworks ESSAP (ex CORPOSANA), six of them corresponding to supplies normally used for the provision of water to the population and the other on the insurance service for the institution.

Some key lessons learned

1)    Regulating Institution, CONATEL, could have established at the beginning of the year 2002, the Regulation opening the market of the company being privatized, since there is substantial international experience on the matter and it would have been very easy to establish adequate number of operators for the size of Paraguay.

2)    The weak position of the Regulating Institution, CONATEL, in the face of companies offering cellular telephone service that substantially exceeds in number of telephones the number of telephone lines installed by ANTELCO (COPACO).

3)      The Secretariat of the Reform and the Regulating Institution failed to coordinate their activities and there was a feeling of antagonism between them.

4)      In the first stage of the Investment Bank selection process, TP acted more in the capacity of citizen comptroller than as the active monitor of the process.

5)      TP detected the need for adequate handling of information that could be deemed reserved or confidential.

• Transparencia Paraguay maintained direct contact with the Secretary of the Reform and the technical staff assigned to the project from December 2000 through June 2003, time when the privatization was cancelled due to various situations that escaped from the direct monitoring work of Transparencia Paraguay, such as:
  
  

a)     Resignation Secretary of the Reform in March of 2002 due to internal pressure from the Executive Branch because of administrative problems that are of public knowledge.

b)     The delay in issuing the regulation project for opening the market by the Regulating Institution, CONATEL, until a few weeks before the bidding process programmed for the month of June 2002. This situation originated strong questioning in the public sessions to the Secretariat of the Reform and the Regulating Institution CONATEL  by the members of Congress, members of the consulting Board constituted by enterprise representatives and members of the civil society.

c)     Stealing of an important sum by a high administrative official of the Secretariat of the Reform who escaped and later judicially involved the previous Secretary of the Reform and other technical officials who took part in authorization operations for payment of project expenses. The suit continues to date.

d)     Intervention by politicians of the House of Representatives who held that the process was plagued with corruption, alleging that an auditor firm for the process had not been selected as set forth in Law 1615.

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Corruption & Democracy in Nepal

by Dr. Devendra Raj Panday

Nepalese anti-corruption leader Dr. Devendra Raj Panday sent EthicsWorld a detailed article on the state of corruption in his country, which is published in full at the website of TI-Nepal.

He starts his article by noting, “ In order to have clean, impartial, and effective governance, one needs to go beyond the domain of the state for initiating reform. Much work needs to be done at the societal level on the issues of values and norms. Such work should be the responsibility of social leaders trusted by the people. Only social leaders can talk about higher motives and goals beyond what a personal utility maximizing political and economic man or woman (including the king) does, and inspire the society. Unfortunately, in the age of politics and power and consultants and experts, social leadership is a vanishing vocation.”

Dr. Panday introduces his analysis by stating, “ One cannot be sure of the real extent of corruption in any country. In Nepal, this is even more true due to a lack of appropriate surveys and data. Even Transparency International’s Corruption Perception Index (CPI) was able, for only the first time last year, to include Nepal. When the incidence or degree of corruption cannot be measured and debated with some certainty, opinion about it becomes subjective, even when the problem is real."

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“Public Procurement in the Czech Republic: Corruption or Transparency”

Report Published by Transparency International - Czech Republic

The aim of the study is to quantify the losses caused by the inefficiency and lack of transparency in public contracts awarding procedures. The results are not encouraging for Czech taxpayers; In 2004, of the total volume of public funds, CZK 15 billion was used inefficiently at the municipal level and CZK 17.4 billion at the central level. The total estimate of losses caused by the inefficiency and lack of transparency in public contract awarding procedures in 2004 thus amounts to CZK 32.4 billion 

TIC asserts that the main problem is the influencing of public contract awarding procedures by political representatives. Politicians at the local, regional and central levels apply their influence when tender terms are set, interfere in the activities of evaluation committees and can reverse their decisions. Furthermore, TIC notes that there is a lack of efficient controls in public administration.

The study on the shortcomings of the current public procurement system, the materials for the assessment of the financial losses, the recommendations and other related information are available on the TIC websites.

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2005 India Corruption Study Released

Undertaken by the Centre for Media Studies (CMS) Delhi in alliance with Transparency International - India

The study is the largest corruption study ever undertaken in the country, covering 151 cities and 306 villages. The findings reveal that as many as 62% of all citizens think that corruption is real, and they have in fact had first hand experience paying a bribe or “using a contact” to get a job done in a public office. Kerala was deemed the least corrupt State in India, while Bihar was cited as the most, followed by Kashmir and Jammu. The study indicates that a third to a half of the factors causing corruption in India can be addressed and removed using simple initiatives, including the use of technology—for example, it illustrates the benefits of implementing computerized railway reservations. For the full 2005 India Corruption Study, search for Recent Publications at the Centre for Media Studies website.

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Please see Views and Analysis for an analysis of corruption in Brazil by Cláudio Weber Abramo, Executive Secretary of Transparencia Brasil

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China - Critical Ethics/Governance Issues Gain Increasingly High Domestic and International Profile

Business is increasingly under pressure to learn how to best confront acute ethical and corruption issues in China. Below we provide a series of examples of diverse ethical challenges in China today - these examples are taken from the media. Then, below these stories we highlight two new reports from the Organization for Economic Cooperation and Development (OECD).

• A chilling tale of a U.S. businessman's imprisonment in China because of a dispute with a Chinese supplier. Joseph Kahn of The New York Times reported on November 1, 2005 that, "China has attracted hundreds of billions of dollars in foreign investment and has become the world's third largest trading power. But its legal system, even when handling nonpolitical business cases, has progressed far more haltingly and still rarely backs investors or ordinary citizens against the state."
  
  Writing from Beijing, Kahn starts his major page one article by telling the story of David Ji, a Chinese-American electronics entrepreneur who spent two months in custody enduring all-night interrogation sessions. Then, in late December last year, according to a person who compiled a record of the encounter, guards emptied his pockets, removed his shoes and socks, and ripped the buttons off his oxford shirt. He was ushered disheveled and barefoot into the office of Zhao Yong, the chief executive of Sichuan Changhong Electric, Mr. Ji's onetime business partner and, more recently, his warden."Your only way out is to do what Changhong tells you to do," Mr. Zhao told him. "If I decide today I want you to die, you will be dead tomorrow."
  
  
• U.S. Businesses in China Face Dilemma: Corruption in China: Views differ among corporate executives over the degree of bribery in which foreign firms engage in China. Numerous corporations assert that they do not pay bribes and they have found ways to avoid extortion. If you have insights on this critical issue, please send us your views. To understand the scale of this issue, read a recent front page article in The Washington Post, August 22, 2005, which noted, " For multinational companies grappling with stagnant sales, China has become a magnet for investment and a huge potential market beckoning with growth. Yet the lure of China profits combined with pervasive local corruption is tempting foreign companies and managers and bringing them into conflict with U.S. anti-bribery laws. In interviews, China-based executives, sales agents and distributors for nine U.S. multinational companies acknowledged that their firms routinely win sales by paying . . . kickbacks -- often in the form of extravagant entertainment and travel expenses -- to purchasing agents at government offices and state-owned businesses."
  
  
• Rampant Corruption - states official report. BEIJING Reuters - An investigation by China's state auditors released on October 7, 2005, has found rampant financial irregularities throughout government and said corruption in public administration is widespread. The report found budget mismanagement in no less than 32 government ministries and departments, and was equally critical of the Finance Ministry and the National Development and Reform Commission, the two main bodies that disseminate cash. Chinese leaders have said the government faces self-destruction is it fails to crack down on corruption but it remains a problem both for government and private business despite periodic clean-up campaigns."If the problems found by the auditors can't be solved, people will be disappointed and the audit administration will lose its authority," Qin Rongsheng, deputy director of China's Audit Research Association, was quoted as saying in the report carried in domestic media.
  
  
• Yahoo! Inc. Collaboration with Chinese Police Raises Ethics Questions:
  A report written by Reporters without Borders shows that the 10 year jail sentence given to a Chinese reporter, Shi Tao, relied on evidence provided by the Hong Kong subsidiary of Yahoo! Inc. They report that Yahoo gave the Chinese police the information that was necessary to track Shi Tao down. Shi Tao was arrested because he e-mailed foreign websites saying that he and his colleagues had been warned against commemorating the 15 th anniversary of the 1989 Tiananmen Square pro-democracy protests. See the full report and additional stories on the Reporters without Borders website.
  
  
• China Fights Corruption in Preparation for Beijing Olympics: September 30, 2005.  International Herald Tribune.  The Chinese government, in cooperation with international advisers, has introduced measures to fight corruption in preparing for the Beijing Olympics in 2008.  The government has instituted a range of new measures to prevent corruption in contracts for the Games, which it estimates will be worth up to $16 billion.  Experts say the new measures could become a blueprint for a wider campaign against graft.  The measures include more frequent audits of spending, last-minute selection of experts to decide on contract bids to reduce the possibility of bribery, threats of blacklisting for corrupt contractors, the opening of tenders to public scrutiny on the Internet and the start of public hot lines for public complaints.
  
  
• VP of Asian Development Bank Says 1/3 of Public Investment in Asia is Lost to Corruption:  September 28, 2005, Xinhua News Agency.  At the fifth Asian-Pacific Regional Anti-Corruption Conference held in Beijing on Wednesday, Geert van der Linden, the vice president of the Asian Development Bank, said that 1/3 of public investment in some Asian countries is squandered on corruption.  Van der Linden also said that corruption has raised businesses costs and makes public services inadequate and exhausts citizen's assets and incomes.  To support his statement, van der Linden cited a recent World Bank survey, which shows that 36% of companies with businesses in the Asia-Pacific region regard corruption as a major hurdle to business growth.
  
  
• Business Ethics in China: Murdoch Criticizes China Media Policy:  September 19, 2005.  Financial Times.  At a conference in New York on Friday, Mr. Rupert Murdoch admitted that News Corp had “hit a brick wall” in China – and accused Chinese authorities of being paranoid about foreign media.  The comments were the most public and direct expression of dissatisfaction yet by an international media mogul at China. Murdoch's statement of frustration highlights the difficult ethical position of media companies operating in China who must decide to what degree they are willing to play by the Chinese government's rules. The statement comes on the heels of the Yahoo! case involving Yahoo's cooperation with the Chinese police in the case of the jailing of the journalist, Shi Tao.
  
  
• Wal-Mart Faces Sweatshop Lawsuit:
  September 14, 2005. Wal-Mart is facing a lawsuit in California that seeks to make the corporation legally liable for violating its own code of conduct at supplier's factories around the world. The lawsuit is brought on behalf of workers in China, Bandgladesh, Nicaragua, and Swaziland. See the Financial Times for the full story.
  
  
• Former Bank of China-Hong Kong Chief Given Suspended Death Sentence for Embezzlement: August 15, 2005 The New York Times. Liu Jinbao, former chief executive of Bank of China's Hong Kong subsidiary, was given a suspended death sentence after being convicted of embezzling $2.7 million and accepting $173,000 in bribes. Liu's death sentence will most likely be commuted to life in prison.
  
  KEY ANALYSIS:
  
  

• OECD Highlights Need for Corporate Governance Reforms in China
  China needs far-reaching reforms in public and corporate governance, stated the Organization for Economic Cooperation and Development (OECD) in a new report on September 7, 2005. China needs to make wide-ranging changes in the way it runs its public and private sectors if it is to continue on a stable growth path leading to full integration into the world economy, according to a new report from the OECD.
  
  The following is the statement issued by the OECD: Governance in China reviewed the state of governance in China’s public and private sectors. It concludes that the country’s governance arrangements as they stand at present suffer from a number of serious fault lines, particularly in relation to China’s public finances and social stability.
  
  The report is the latest in a series of studies conducted by the OECD in co-operation with the Chinese government under a co-operation program launched in 1995. China is not a member of the OECD, but it participates in the work of some OECD committees. OECD countries and China have a shared interest in helping China to develop its economy in a stable manner.
  
  To date, China has already taken some steps to improve its public and private governance, the OECD report acknowledges. However, it observes, laws and regulations are often applied in an unsystematic manner and can be skewed by special interests.
  
  China has made progress in strengthening the budget management and civil service systems – the two main pillars of public administration – but many weaknesses remain, leading to inefficiencies.  Public resources that could be used to finance social services are absorbed by efforts to shore up loss-making state-owned companies and prevent default on loans they have received from state-owned banks. Local government structures are burdened by heavy spending obligations without appropriate matching revenues or an effective system of transfers. 
  
  Decisions on public capital expenditure are taken by the National Development and Reform Commission, while the budget is managed by the Ministry of Finance. Staffing decisions with regard to public employees down to a certain level are made by yet another body, without compulsory co-ordination. In addition, the OECD noted, organizational and co-ordination problems result from the co-existence of structures inherited from the past with new institutions.
  The OECD observed that economic growth alone will not solve all these problems, and recommends that China should:
  
  
  • redefine the role of public authorities: who does what needs to be decided before addressing issues relating to the sustainability and efficiency of public spending.
    
    
  • reform relations across levels of government, so as to ensure that local authorities act in accordance with national objectives in relation to issues such as the rural/urban balance, redistribution of wealth, the environment and central control versus local autonomy.
    
    
  • develop more effective tools for monitoring progress and evaluating the outcomes of government policies.
    
    
  • ensure greater consistency among laws affecting a particular area and see that laws mandating broad principles are accompanied by more specific regulations for implementation.
    
    
  • step up enforcement through a system of incentives accompanied by sanctions matching the potential benefits to miscreants from violations.
    
    
  • consolidate the framework for the market economy by giving market participants a level playing-field in terms of laws and regulations.
    
    
  • regulate businesses and individuals on a basis of economic performance rather than according to bureaucratic categories such as ownership classifications that are no longer valid.
    
    
  • establish a sound competition policy approach as a means to reduce market segmentation and local protectionism, consolidate the intellectual property rights regime and further restructure state banks and industries. 
  
  
  

  In another report on China, the OECD’s first economic survey of the country,  the OECD stated that, “China could overtake the US and Germany to become the largest exporter in the world in the next five years. By then, Chinese goods and services could represent as much as 10% of global trade compared with 6% at present.”

  OECD said the current pace of economic growth – averaging more than 9% annually over the past two decades – shows no sign of slowing. But although economic dynamism has helped reduce the number of Chinese living in absolute poverty, income levels are still low and inequality is on the rise, not only between the cities and rural regions – average incomes in the countryside are only one third of those in the cities – but also within the more prosperous coastal provinces.

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