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  • August 2005 This publication was produced for review by the United States Agency for International Development. It was prepared by the IRIS Center, at the University of Maryland.

    TOOLS FOR ASSESSINGCORRUPTION & INTEGRITYIN INSTITUTIONSA HANDBOOK

  • TOOLS FOR ASSESSINGCORRUPTION & INTEGRITYIN INSTITUTIONSA HANDBOOK

    DisclaimerThis document was prepared by the IRIS Center for the United States Agency for International Development.The authors viewsexpressed in this publication do not necessarily reflect the views of the United States Agency for International Development or theUnited States Government.

  • SUBMITTED BYThe IRIS Center, University Research Corporation International

    SUBMITTED TODavid Meyer, Cognizant Technical Officer

    CONTRACT NUMBERPCE-I-00-97-00042-00,Task Order 8

    ABOUT THE AUTHORSThis handbook was written by Dr. Anthony Lanyi and Dr. Omar Azfar, both economists at the IRIS Center.

    Dr. Lanyi is an expert in macroeconomic policy in developing countries and international finance. He currently specializes inthe analysis and measurement of corruption, the economic impact of poor governance, and training. Prior to joining IRIS in1996, Dr. Lanyi served for 26 years at the International Monetary Fund.

    Dr. Azfar is an expert on the causes, consequences, and remedies for corruption, as well as on the determinants of effective localgovernment. He has examined the effect of womens empowerment on corruption, as well as the effect of corruption on health,education, and trade reform. Dr. Azfar is currently working with the World Bank to develop objective governance indicators.

    ACKNOWLEDGMENTSA number of people made important contributions to the handbook. Dr. Peter Murrell co-wrote the first draft and signifi-cantly contributed to the development of the methodology. Ann Mestrovich, Dr. Peter Murrell, Malcolm Russell-Einhorn, andDr. Melissa Thomas wrote annexes. Patrick Meagher permitted the authors to use portions of his Analytical Tools for USAIDAnticorruption Programming in the Europe and Eurasia Region paper. Christine Prefontaine edited the handbook and managedits design and production.

    Finally, it is gratefully acknowledged that this work was supported under USAIDs Enhancing Anticorruption Programming in theEurope and Eurasia Bureau (EECOR) project.The advice and ideas of David Meyer, the Cognitive Technical Officer, played amajor role in determining the final shape and thrust of this document.

    ABSTRACTDeveloped for practical field use, this handbook outlines a methodology that provides reliable quantitative, qualitative, andcomparative information that can be used to design, implement, and evaluate sector- or government agency-specific anti-corruption programs. Steps in the methodology include reviewing available information, conducting an expert assessment,conducting quantitative surveys of both users and government officials, and using the assessment findings to inform programdesign. A series of annexes provide technical depth, as well as a model scope of work to implement the assessment.

    KEY WORDSCorruption, anticorruption, institutions, principal-agent theory, Europe, Eurasia, USAID, government integrity, governance, survey,assessment, institutional reform, transition economies.

    DOWNLOADwww.irisprojects.umd.edu/anticorruption

    CONTACT INFORMATIONIRIS CenterUniversity of MarylandDepartment of Economics2105 Morrill HallCollege Park, MD 20742, USAE-mail: info@iris.econ.umd.eduPhone: +1.301.405.3110Fax: +1.301.405.3020Web: www.iris.econ.edu

  • TOOLS FOR ASSESSING CORRUPTION & INTEGRITY IN INSTITUTIONS

    CONTENTS

    INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1How to Use this Handbook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Testing the Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Complementary Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

    CHAPTER 1UNDERSTANDING CORRUPTION & INTEGRITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

    Understanding Corruption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Understanding Integrity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

    CHAPTER 2REVIEW OF EXISTING MATERIALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

    Sources of Background Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Data & Information on Corruption & Integrity . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Institutional Integrity of Specific Sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Existing Documentation on Sector-Specific Institutional Integrity . . . . . . . . . . . . . 24

    CHAPTER 3EXPERT EVALUATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

    Initial Inquiry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Structured Interviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29The Substance of Structured Interviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Other Methods of Obtaining Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32The Next Step: Quantitative Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Second-Stage Expert Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

    CHAPTER 4SURVEYS OF CORRUPTION & INSTITUTIONAL INTEGRITY . . . . . . . . . . . . . . . . . 37

    Organizing a Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38Measuring Corruption with Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39Measuring Integrity with Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42Lessons Learned from Pilot Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

    CHAPTER 5DESIGNING A PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

    Determine Corruption Vulnerabilities & Integrity Strengths & Weaknesses . . . . . . 45Make a Judgment as to the Degree of Systemic Corruption . . . . . . . . . . . . . . . . . 46Use Prior Experience to Create a Menu of Reform Measure Options . . . . . . . . . 46Choose Appropriate & Feasible Reform Measures . . . . . . . . . . . . . . . . . . . . . . . . . 46Take into Account Strategic Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47Establish Benchmarks for Monitoring & Evaluation . . . . . . . . . . . . . . . . . . . . . . . . 50

  • TOOLS FOR ASSESSING CORRUPTION & INTEGRITY IN INSTITUTIONS

    ANNEX 1 DEFINING CORRUPTION: INTER-COUNTRY DIFFERENCES . . . . . . . . . . . . . . . . . . . .

    Linguistic Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Survey of Business Registration & Licensing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

    ANNEX 2 CORRUPT PRACTICES & CORRUPTION VULNERABILITIES CHECKLISTS . . . . . . . . .

    Corruption in the Health Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Corruption in the Judicial System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

    ANNEX 3INTEGRITY CHECKLIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

    Purpose & Underpinnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Structure & Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Illustrative Checklist for Assessing Integrity & Accountability . . . . . . . . . . . . . . . . . . .

    ANNEX 4 SOURCES OF DATA & INFORMATION ON CORRUPTION & INTEGRITY . . . . . . . . .

    ANNEX 5ASSESSING CORRUPTION & INTEGRITY IN SELECTED SECTORS . . . . . . . . . . . . . . .

    Business Licensing & RegulationThe Health Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The Judicial Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Tax Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The Energy Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

    ANNEX 6 USING INTERVIEWS TO ASSESS INTEGRITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

    Human Resource Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Financial Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Assets Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .External Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Services & Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

    ANNEX 7RETICENT