Bloomberg News

World Bank Chief Says Corruption Hinders Developing World

January 30, 2013

World Bank President Jim Yong Kim said that corruption is hampering the bank’s efforts to help developing countries grow, and promised to fight against its “pernicious toll.”

“Corruption acts as a regressive tax, penalizing poorer citizens and smaller firms,” Kim said in remarks prepared for delivery today at the Center for Strategic and International Studies in Washington. “We need to be focused more upon solving real-world problems than the traditional ’best practice’ model of institutional development.”

Between $20 billion and $40 billion is stolen from developing countries each year by one estimate, said Kim, a former Dartmouth College president who took over as head of the Washington-based World Bank in July. He said the bank has closed 609 misconduct investigations in the past four and a half years.

The World Bank started an alliance between national level anti-corruption agencies, prosecutors and auditors in 2010, Kim said. It is now developing software to help spot corruption in public procurement. “Our willingness to work in difficult situations and an appetite for measured risk should never be confused with a willingness to tolerate corruption in Bank projects and activities.”

The World Bank has 188 member countries and committed $57 billion in 2011 to projects from building roads to taking stakes in companies in emerging economies.

To contact the reporter on this story: Jeanna Smialek in Washington at jsmialek1@bloomberg.net

To contact the editor responsible for this story: Kevin Costelloe at kcostelloe@bloomberg.net


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