1. Session 1. An introduction to
preventing corruption
John Butterworth
IRC International Water and Sanitation Centre
Mael Castellan
Water Integrity Network

2. Contents
1. Key definitions and the
importance of this topic:
what do statistics tell us?
2. Frameworks for
understanding corruption
3. Case studies
4. Designing pro-poor
strategies to prevent
corruption
5. Links and further
information

3. 1.1 Some key definitions
Transparency = sharing information and acting in
an open manner
Honesty/ Integrity = working and acting in ways
that reflect known best practices, and following
ethical principles
Accountability = objectively holding people and
agencies responsible for their performance
Corruption = the abuse of entrusted power for
private gain

4. 1.2 Governance, poverty and WASH
indicators in 10 selected countriesTransparency
International CPI
Index (Rank of 163
countries: 1=best,
163=worst)
Population below
national poverty
line, total,
percentage
(Most recent year
with data 1997-
2004)
Water supply
coverage %
(most recent
year e.g. 2004)
Sanitation
coverage %
(most recent
year e.g.
2004)
Children under
five mortality rate
(per 1,000 live
births, 2005)
Ghana 70 39.5 75 18 112
Burkina Faso 79 19.2 61 13 191
Uganda 105 37.7 60 43 136
Ethiopia 130 44.2 22 13 164
South Africa 51 Nd 88 65 68
Mozambique 99 69.4 43 32 145
India 70 24.7 86 33 74
Philippines 121 21.5 85 72 33
Honduras 121 29.5 87 69 40
Colombia 59 55.0 93 86 21
Sources: www.transparency.org; http://mdgs.un.org/; http://www.wssinfo.org/

5. Source: Stalgren, 2006
1.3 Correlation or cause?

6. 1.4 Key questions
Are there causal linkages, as well as correlations,
between corruption, WASH sector performance and
poverty?
Will increased WASH sector investment (to meet MDGS)
have the desired impact without better governance?
What are the most important forms of corruption and
levels at which it occurs?
Why might the WASH sector be prone to corruption?
How much leakage should we expect to find?
What could be achieved with existing investments if we
tackled leakage?
Should corruption ever be tolerated?

7. 2.1 Interaction framework
Public to public
Diversion of resources
Appointments and transfers
Embezzlement and fraud in
planning and budgeting
Public to private
Procurement collusion, fraud,
bribery
Construction fraud and bribery
Public to Citizen / consumer
Illegal connections
Falsifying bills and meters
Public
Officials
Public
Actors
ConsumersPrivate
Corruption occurs between
public officials
and 3 different sets of actors

8. 2.2 Interaction framework
PUBLIC
PRIVATE
interactions
PUBLIC
CONSUMER
interactions
PUBLIC
PUBLIC
interactions
Tendering and Procurement
Construction/Operations
Payment Systems
Policy-making and regulating
Planning/budgeting / transfers
Management

9. PUBLIC
PRIVATE
interactions
PUBLIC
CONSUMER
interactions
PUBLIC
PUBLIC
interactions
• Distortions and
diversion of
national
budgets
• Administrative
fraud
• Document
falsification
• State Capture
of policy and
regulatory
frameworks
• Bribery, fraud,
collusion in
tenders
• Fraud/bribes in
construction
• Bribery/fraud in
community
procurement
• Elite capture
• Illegal
connections
• Speed bribes
• Billing/payment
bribes

10. PUBLIC to PUBLIC
interactions
Planning and budgeting
• Corruption in planning
and management
• Bribery and kickbacks in
fiscal transfers
Management and
Program Design
• Appointments, transfers
• Preferred candidates
• Selection of projects
Policy-making/Regulating
•Diversion of funds
•Distortions in decision-
making, policy-making
Early warning
indicators
• Monopolies/tariff
abnormalities
• Lack of clarity of
regulator/provider
roles
• Embezzlement in
budgeting, planning,
fiscal transfers
• Speed/complexity of
budget processes
• No. of signatures
• % spending on capital
intensive spending
• Unqualified senior
staff
• Low salaries, high
perks, cf. HH assets
• Increase in price of
Anti-corruption
Measures
• Policy and tariff reform
• Separation
• Transparent minimum
standards
• Independent auditing
• Citizen oversight and
monitoring
• Technical auditing
• Participatory planning
and budgeting
• Performance based staff
reforms
• Transparent, competitive
appointments

11. Early warning
indicators
• Same tender lists
• Bidders drop out
• Higher unit costs
• Variation orders
• Low worker
payments
• Single source
supply
• Change in quality
and coverage
Anti-corruption
Measures
• Simplify tender
documents
• Bidding
transparency
• Independent tender
evaluation
• Integrity pacts
• Citizen oversight
and monitoring
• Technical auditing
• Citizen auditing,
public hearings
• Benchmarking
• SSIP support
mechanisms
PUBLIC to
PRIVATE
interactions
Procurement
• Bribery, fraud,
collusion in tenders
Construction
• Fraud/bribes in
construction
Operations
• Fraud/bribes in
construction

12. PUBLIC to
CONSUMER
interactions
Construction
• Community based WSS –
theft of materials
• Fraudulent documents
Operations
• Admin corruption
(access, service, speed)
Payment systems
• meter, billing and
collection – fraud and
bribery
Early warning
indicators
• Loss of materials
• Infrastructure
• failure
• Low rate of faults
• Lack of interest in
connection
campaigns
• Night time tanking
• Unexplained
variations in
revenues
Anti-corruption
Measures
• Corruption
assessments
• Citizen monitoring
and oversight
• Report cards
• Transparency in
reporting
• Citizen oversight and
monitoring
• Complaints
redressed
• Reform to customer
interface (e.g. women
cashiers)

13. 2.3 Chain of impacts

14. 2.4 Local governance
Specific governance challenges at local level require
different approaches
Decentralisation brings new challenges and
opportunities
Corruption has more immediate and corrosive impact
Improvements may also be more rapid and wide
reaching
In WASH, community management as a key
paradigm
Tackling poverty is a key issue

15. 3.1 Decentralization versus
centralization in India
Davies (2004) identified
high levels of corruption
Petty corruption (falsify meter
reading, speed repairs etc)
Kickbacks from contractors
Transfers within administration
Decentralisation linked to higher
levels of corruption. Why?
Opportunity to plan activities
linked to decentralisation
programmes

16. 3.2 Report cards in India
Public Affairs Centre (PAC) in Bangalore developed report
cards for citizens to rank performance of public service
agencies (including water)
Monitored public satisfaction with staff behaviour, quality
of service, information, and corruption (speed money)
Initially showed lows levels of public satisfaction, agencies
not citizen friendly, lacked customer orientation, corruption
a serious problem
Second survey 5 years later revealed limited
improvements
Third survey 4 years later showed noticeable progress by
all agencies

17. 3.2 Report cards in India
Report cards influenced key
officials in understanding
perceptions of ordinary citizens
Public agencies launched
reforms to improve the
infrastructure and services
Government agencies showed
greater transparency and more
responsiveness
CRCs acted as a catalyst in the
transformation of services in
Bangalore

18. 3.3 Using freedom of
information laws
India adopted a Right to
Information Act in 2001
The citizens group
Parivartan in Delhi has been
active in supporting its use
There have been examples
where an application under
the act has brought
immediate results on a water
issue
Source: Earle & Turton

19. 3.4 Lesotho Highlands Water
Project
Largest international water
transfer was from Lesotho-
South Africa
Construction contracts
awarded fraudulently
Foreign companies paid
bribes
Successful prosecutions
set precedents
Source: Earle & Turton

20. 3.4 Lesotho Highlands Water
Project
Precedents from prosecution
Bribes are still illegal
even if not acted on
after corrupt agreement
Jurisdiction can be taken
where the impact is felt
Crucially, courts can
gain access to
Swiss bank accounts
Source: Earle & Turton

21. 3.5 Pipe manufacturers in
Colombia
Procurement is vulnerable to
price fixing and collusion
Private sector pipe
manufacturers in Colombia
introduced self-regulation
Adopted an integrity pact
not to pay or accept bribes
Support given by professional
association, Transparency
International and government
Half of 167 manufacturers have
signed up
Prices have reduced by 30%

22. 3.6 Phnom Penh, Cambodia
Transformation of a
public utility under
difficult post- conflict
(civil war) conditions
High levels of illegal
connections and
unaccounted for water,
including bribery of
utility officials
Indicators 1993 2006
Staff per 1,000/connections 22 4
Production Capacity 65,000 m3
/day 235,000 m3
/day
Non Revenue Water 72% 8%
Coverage area 25% 90%
Total connections 26,881 147,000
Metered coverage 13% 100%
Supply Duration 10 hours/day 24 hours/day
Collection Ratio 48% 99.9%
Total revenue 0.7 billion riels
(US$180,000)1
34 billion riels
(US$8.7 million)
Financial situation Heavy subsidy Full cost recovery

23. 3.6 Phnom Penh, Cambodia
Corruption was
tackled effectively, due
to
• Leadership
• Culture of change
• External support
Led to reform and new
investment

24. 3.6 Phnom Penh, Cambodia
Human resources
management improved
Revenue collection
improved
Rehabilitation of services
achieved harnessing
local resources
Illegal connections were
tackled, reducing
unaccounted for water
Tariffs were increased

25. 3.7 Sanitation in Kerala
The NGO SEUF targeted
diversion of funds to reduce costs
(by ½ to ⅔) in latrine construction
Mix of strategies to tackle
corruption:
• more information
• extra checks & spot checks
• public postings
• double signatures
• action on complaints at
lowest level
• referral of problems

26. 3.8 Money diverted from
education in Uganda
 Public expenditure tracking
(PET) survey in Uganda
 Tracked central funds allocated
for school construction
 Only 13% of funds arrived at
schools
 Transparency campaign
published, information about the
grants
 Led to capture being reduced
from 87% to 18%
 Schools near newspaper and
communication points did better in
receiving their funds
Source: Reinikka, R. and Smith, N. Undated

27. 3.9 Kecamatan Development
Project (KDP)
 Tackling grassroots
corruption in a large rural
development project
 KDP – a central
government project focused
on poor villages and highly
dispersed
 Very high risk environment
 Weak institutions for
control
 Mapping is a key step in
tackling this
Source: Guggenheim (2007)

28. 3.9 Kecamatan Development
Project (KDP)
Mapping identified
sources of corruption
• Bribing officials to get
projects
• Cuts taken at high levels
• Illicit fees
• Under-delivery of
materials/ work
• Embezzlement by staff

29. 3.9 Kecamatan Development
Project (KDP)
Solutions identified
• Reducing discretion
• Reducing transactions
• Promoting competition
• Lowering costs of
acquiring information
• Promoting social controls
• Strengthening formal
oversight
• Applying sanctions
Effect of Audits on Percent Missing
Wages
Wages
Materials
Materials
0%
5%
10%
15%
20%
25%
30%
35%
Control Audits
PercentMissing

30. 4.1 Pro-poor anti-corruption
strategies
Are all information,
transparency and
accountability initiatives
likely to benefit the poor?
Could they even be
harmful?
Evidence shows that anti-
corruption actions can
harden and shift its forms
Source: Janelle Plummer (2007)

31. 4.2 Diagnose
 A key starting point is to
understand what types and level
of corruption exist
 Frameworks can be used to
map different types of corruption
and help to identify appropriate
solutions
 Severe lack of diagnosis of
corruption and its impacts on the
poor in the WASH sector
 Poorly informed anti-corruption
activities risk merely hardening or
shifting it to other forms
 Look before you leap
Diagnose
Monitor Target
Mitigate
Connect
solutions

32. 4.3 Target
 Focus on water and sanitation
services that reach the poor
 May include small-scale
providers and community
managed systems
 Local government a key level in
WASH - an opportunity to prevent
corruption before it takes root
 Decentralisation to service
providers and agencies that are
closer to communities can
encourage more accountability
 Weak local agencies may be
more susceptible to being
corrupted than stronger State
agencies

Diagnose
Target
Connect
solutionsMitigate
Monitor

33. 4.4 Example: Indonesia
15% get water directly from utility networks
20% get water indirectly or illegally
65% rely on community-managed systems,
self-supply and small-scale providers

34. 4.5 Connect solutions
Effective anti-
corruption programmes
combine a mix of
strategies.
Supply side measures
include high level
institutional reforms to
tackle corruption
Demand side
measures strengthen
the ability of poor
people to seek
improvements
Diagnose
Target
Connect
solutionsMitigate
Monitor

35. 4.6 Mitigate
In some places petty
corruption may be a
necessary evil to get access
to services
Anti-corruption measures
take away this coping
strategy
Programmes should do no
harm
put back what is lost
identify alternatives so that
the poor do not need to
engage in petty corruption
Diagnose
Target
Connect
solutionsMitigate
Monitor

36. 4.7 Monitor
WASH sector has little
experience in reducing
levels of corruption
Vital to observe which
strategies are effective
and which aren’t
Implementation
programmes should be
flexible and build on
what works best
Diagnose
Target
Connect
solutionsMitigate
Monitor

37. 4.8 Key messages
Be informed and anticipate
Be inspired by examples
and success stories
Use multiple strategies to
improve access to
information, transparency
and accountability…and
prevent corruption
Act in partnerships
Learn what works

38. 5.1 Links and further information
 www.waterintegritynetwork.net is the website of the
Water Integrity Network based at Transparency
International in Berlin
 www.irc.nl/transparency includes materials from the IRC
International Water and Sanitation Centre and links to other
useful sources
 www.transparency.org is the website of Transparency
International, a global civil society organisation in anti-
corruption

39. 5.2 Links and further information
Astana, A.N. (2004). ´Corruption and decentralization: evidence from India’s water sector´. In proceedings of the 30th WEDC
International Conference, held at Laos, 2004.Loughborough, London, WEDC.
Balcazar, A.R. 2006. The establishment of an anti-corruption agreement with pipe manufacturing companies: a Colombian
experience [online] Available at www.waterintegritynetwork.net/page/238 (A 5 minute video about the Colombian integrity pact
between pipe manufactures can be viewed at www.waterintegritynetwork.net/page/254)
Davis, J. (2004). ´Corruption in Public Service Delivery: Experience from South Asia’s Water and Sanitation Sector´. In: World
Development, vol. 32, no. 1, pp. 53–71, UK, Elsevier Ltd. www.elsevier.com/locate/worlddev
González de Asís, M., O’Leary, D., Butterworth, J. & Ljung, P. (forthcoming) Training modules for the Programa para mejorar la
transparencia, la rendición de cuentas y el acceso a la información en el sector del agua en Honduras y Nicaragua. World Bank
Institute. Available in English and Spanish (forthcoming)
Gonzalez de Asis, M. (forthcoming) Reducing Corruption at the Local Level. World Bank.
Plummer, J., & Cross, P., 2006 A framework for tackling corruption in the water and sanitation sector in Africa. In proceedings of
the 32nd WEDC International Conference held in Sri Lanka, 2006. Loughborough, London, WEDC.
Plummer, J. 2007. Making Anti-Corruption Approaches Work for the Poor: Issues for consideration in the development of pro-
poor anti-corruption strategies in water services and irrigation. Swedish Water House, SIWI and WIN. [online] Available at
www.swedishwaterhouse.se
Satyanand, P.M. and Malick, B. 2007. Engaging with citizens to improve services: overview and key findings. Water and
Sanitation Program-South Asia, New Delhi, India [online] Available at www.wsp.org
Shordt, K., Stravato, L., & Dietvorst, C. 2007. About Corruption and Transparency in the Water and Sanitation Sector. Thematic
Overview Paper 16. IRC International Water and Sanitation Centre, the Netherlands [online] Available at www.irc.nl
Sijbesma, C., Mathew, S., and Balachandra Kurup, K. (forthcoming) Preventing corruption in sanitation: A case from Kerala,
India. World Bank Institute, Washington.
Sohail, M & Cavill, S. 2007. Accountability arrangements to combat corruption – case study synthesis report and case study
survey reports. Partnering to combat corruption series. [online] Available at www.lboro.ac.uk/wedc/publications/
Stålgren, P. 2006. Corruption in the Water Sector: Causes, Consequences and Potential Reform. Swedish Water House Policy
Brief No. 4, SIWI, Stockholm, Sweden [online] Available at www.swedishwaterhouse.se
TI & UN-Habitat. 2004. Tools to support transparency in local governance. Urban governance toolkit series [online] Available at
www.transparency.org/tools/e_toolkit/
TI. The 2008 Global Corruption Report is focused on the water sector. Forthcoming at www.transparency.org
Woodhouse, A. 2002. Village corruption in Indonesia: Fighting corruption in the World Bank’s Kecamatan Development Program.
World Bank, Washington.