Aftermath baking

In short, the depth and breadth of the accountability weaknesses exposed at IDA are alarming.

Yet, the Bank's management claimed that the accountability flaws the report about IDA flagged are now being addressed on three fronts. First, the recommendations of the Volcker , which reviewed the performance of the Bank's investigative unit in 2007, have been implemented. Second, the Bank's Board approved a whistle blower protection policy in June, 2008. Finally, implementation of the Governance and Anti-Corruption Strategy (G A C) began in January 2008 and has been progressively integrated into lending and projects.

None of these claims, however, withstands scrutiny. The Volcker Panel, for example, insisted that corruption be effectively addressed through a "fully coordinated approach across the entire World Bank Group, ending past ambivalence about the importance of combating corruption." Yet the I E G report itself shows that this is precisely what management has not done:

• Basic project and lending documents don't include a requirement to assess the risks of fraud and corruption;
• Safeguards against corruption don't exist for budget support loans, perhaps the most vulnerable of IDA funds;
• Staff members haven't been adequately trained to recognize signs of corruption in projects; performance appraisals include incentives to report corruption;
• Management routinely fails to take timely actions to follow up on audit, investigatory, and evaluation findings of impropriety.

Nor is the whistle blower protection policy effective. Would-be whistle blowers informed IEG that they fear they are risking their careers at the Bank if they report fraud. Further, staff members in the Department of Institutional Integrity (INT), the unit specifically responsible for investigating corruption, reported more than the staff of any other unit that: "[S]seeking out [fraud and corruption] issues in projects and reporting on observed improprieties may lead to reprisals from their managers, and managerial signals and behavior are not always consistent with these messages. Overall, mixed messages and ambivalence are still considered prevalent."

Further, a close reading of the whistle blower policy shows that it incorporates coverage loopholes, unrealistic caps on compensation for vindicated whistle blowers, and unjustifiable reporting restrictions. As a result, nearly one year after the Board approved the protection policy, there are virtually no whistle blower cases under investigation at the Bank, despite reports of both widespread corruption and retaliation.

The third World Bank effort mentioned prominently in the I E G report as providing future protection for IDA funds is the Governance and Anti-Corruption Strategy (G A C). But the , released in December 2008, revealed that management lacked an institutional commitment to the strategy: "Senior Bank leadership should overcome current problems within the Bank of ad choc responses and ambivalence about the G A C mission…with clear statements about institutional and individual responsibility and accountability." The implementation report concluded that the G A C strategy was not integrated effectively into Bank operations