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Leveraging Corruption: How World Bank Support to Private Sector Undermines Emerging Democracies

Abstract

The International Finance Corporation, the branch of the World Bank that lends to the private sector, is closely associated with the biggest corruption cases in history, including the infamous Odebrecht scandal that resulted in the removal, imprisonment and even suicide of several Latin American presidents. Yet diplomatic immunity has kept the Bank and its Private–Public Partnerships model away from scrutiny.

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Notes

  1. https://www.justice.gov/criminal-fraud/file/920101/download.

  2. https://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/gender+at+ifc/priorities/employment/sheworks_enhancing_womens_employment.

  3. Citynews, ‘World Bank unit implicated in Latin America graft scandal’, July 2019. https://www.citynews1130.com/2019/07/01/world-bank-unit-implicated-in-latin-america-graft-scandal/ and BluRadio ‘Superindustria impone sanciones por $295.000 millones contra Odebrecht por Ruta del Sol’, 28 December 2020. https://www.bluradio.com/nacion/superintendencia-impone-sanciones-por-295-mil-millones-contra-odebrecht-por-ruta-del-sol.

  4. US District Court, S.D. New York, ‘Estado v. International Finance Corporation’, September 2007, https://www.casemine.com/judgement/us/5914b3b5add7b04934767e9b.

  5. http://ifcext.ifc.org/IFCExt/pressroom/IFCPressRoom.nsf/0/0F649A1A15FC4B0885257936005218E0.

  6. World Bank Group (2012): Public–Private Partnerships Briefs: Brazil: Belo Horizonte Schools (http://documents.worldbank.org/curated/en/180971468188941367/pdf/96871-P3Briefs-BrazilBeloHorizonteSchools-Box391454B-PULBIC-Colltitle-PPP-BRIEF.pdf).

  7. World Bank ‘Creating Markets in Ghana. Country Private Sector Diagnostic’, https://www.ifc.org/wps/wcm/connect/publications_ext_content/ifc_external_publication_site/publications_listing_page/cpsd-ghana-2017.

  8. http://ppi.worldbank.org/snapshots/sponsor/odebrecht-sa-1503.

  9. World Bank, 'World Bank Group Announces Settlement with Brazilian Subsidiary of Odebrecht', press release of January 29, 2019, Available at: https://www.worldbank.org/en/news/press-release/2019/01/29/world-bank-group-announces-settlement-with-brazilian-subsidiary-of-odebrecht.

  10. ‘The Odebrecht scandal brings hope of reform, The Economist, 2 February 2017 www.economist.com/news/americas/21716105-revelations-wholesale-bribery-may-mark-turning-point-latin-americas-battle-against.

  11. Christian Science Monitor, 10 April 2017, www.csmonitor.com/World/Americas/2017/0410/As-Brazil-s-Car-Wash-case-surfaces-more-corruption-will-scandal-fatigue-slow-progress.

  12. Vijaya Ramachandranmm, ‘In a 7-1 Decision, the United States Supreme Court Rules that the IFC Is Not Above the Law’, Center for Global Development, Washington, February 2019. https://www.cgdev.org/blog/7-1-decision-united-states-supreme-court-rules-ifc-not-above-law.

  13. DOJ, Acting Assistant Attorney General Kenneth A. Blanco Speaks at the Atlantic Council Inter-American Dialogue Event on Lessons From Brazil: Crisis, Corruption and Global Cooperation, Washington, DC, July 19, 2017. https://www.justice.gov/opa/speech/acting-assistant-attorney-general-kenneth-blanco-speaks-atlantic-council-inter-american-1.

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Correspondence to Roberto Bissio.

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Bissio, R. Leveraging Corruption: How World Bank Support to Private Sector Undermines Emerging Democracies. Development 64, 93–96 (2021). https://doi.org/10.1057/s41301-021-00289-x

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  • DOI: https://doi.org/10.1057/s41301-021-00289-x

Keywords

  • Private–Public-Partnerships
  • IFC
  • Leveraging
  • Democracy