By Nicholas Li
The weakness of conventional measures of cross-country corruption, such as the World Bank index (available here ), is that they rely on subjective perceptions of corruption (business leaders and country experts are asked to rate countries on a numerical scale in terms of corruption) and they cannot isolate the impact of cultural norms and attitudes towards corruption from the legal enforcement environment.
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By Nicholas Li
Under the leadership of President Paul Wolfowitz, the World Bank has increased its lending and research focus on the issues of corruption and governance. While this focus had already begun prior to Wolfowitz’s appointment as President in 2005, he has made corruption and governance the primary focus of the Bank’s agenda, representing $4.5 billion dollars or 19% of the Bank’s new lending in 2006. As the new President put it :
Corruption drains resources and discourages investment. It benefits the privileged and deprives the poor. It threatens their hope for a better quality of life and a more promising future. Accountable and sound governance, on the other hand, nurtures the soil in which a robust civil society and an energetic private sector can flourish.