Geo-Economics and Politics

Serious about sustainability? Get serious about corruption

Corruption can undermine successful implementation of all 17 Sustainable Development Goals (SDGs). Image: Lucas Favre/Unsplash

Delia Ferreira Rubio
Chair, Transparency International
Elisabeth Andvig
Project Specialist, Partnering Against Corruption Initiative, World Economic Forum
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This article is part of: Sustainable Development Impact Summit

Imagine your son is sick with a chronic disease for which he needs to take pills daily. The local hospital is supposed to provide medication for free, but when you arrive, the staff tell you they’ve run out of your son’s medication. A family friend knows someone who can sell you the medication, but the cost is the equivalent of what you earn in a week.

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Without the medication your son’s condition will deteriorate, forcing you to spend money normally used to provide your family with other basic needs. This might seem like an exceptional case, but for thousands of families around the world, this is the daily reality.

In some countries, the re-selling of pharmaceuticals is an important source of income for healthcare workers. Prescription drugs meant for free distribution are often lost to theft or just unaccounted for before ending up on the black market. Corruption in the healthcare sector takes many forms – and corruption within healthcare services and industry can inflate prices of medicine and equipment, lower the quality of care and products and impede the necessary response to injuries and disease.

Each year, $7.35 trillion is spent on healthcare worldwide, but $455 billion is lost to fraud and corruption, leading to the deaths of more than 140,000 children. Transparency International’s recent report Global Corruption Barometer (GCB) — Africa 2019 highlighted some of these issues. In the 12 months prior to the survey, some 14% of people who accessed healthcare services paid bribes to healthcare workers – and bribery affects women and children more than the rest of the population.

The top scorers and bottom scorers in Transparency International's Corruption Perceptions Index 2018 Image: Transparency International

We now understand the role of corruption in undermining human development, and we need to fully address its corrosive effects to have any hope of achieving the Sustainable Development Goals (SDGs). In particular, SDG 3 on health and wellbeing is at risk if corruption in public health institutions is not urgently addressed. Pharmaceutical products, based on their share of total health spending (about 50%) and high market value, are magnets for corruption and unethical practices.

The SDGs aim to achieve economic, social and environmental sustainability by 2030. Corruption has the potential to undermine the successful implementation of all 17 goals. Without meaningful action against corruption, progress towards the other goals is likely to be extremely limited, hampering economic growth, increasing inequality and inhibiting prosperity.


What is the World Economic Forum’s Sustainable Development Impact summit?

Corruption thrives in conditions where accountability and institutions are weak, and where there is a shared expectation of corrupt behaviour. The collective and systemic character of corruption also makes it difficult to address. Corruption deeply undermines legitimacy and trust in public institutions and shapes people’s perceptions of government performance and state effectiveness. It skews the distribution of public services and has a disproportionate impact on marginalized and vulnerable groups, leading to increased inequality. While many forms of corruption affect both men and women, it disproportionately affects women, who also represent a higher share of the world’s poor.

This makes achieving the anti-corruption targets in SDG 16 more urgent than ever – not only because they are important for promoting transparency, accountability and integrity for their own sake, but also because they can serve as a baseline to achieve the successful implementation of all the remaining SDGs. Corruption is intrinsically linked to all 17 SDGs, going way beyond institutions and financial flows to affect services and sectors we deal with every day. Sometimes these issues hit closer to home than we might ever expect.

Operation Varsity Blues” recently revealed how Hollywood actors and high-level CEOs in the US paid bribes and engaged in academic fraud to get their children into elite colleges and universities. Bribes for access to education and paying for degrees and certificates outright are widespread around the world, but this case showed it also happens in countries where systems and the rule of law should prevent it.

Another scandal erupted in Puerto Rico over the summer where the former secretary of education was arrested on charges of steering $15.5 million to contractors with political connections. Education is a sector characterized by large amounts of public money, with 20-30% of a country’s budget used for education, and corruption can occur at the political, administrative and classroom levels. Corruption in education threatens the well-being of society, erodes social trust and worsens inequality. It undermines development by taking away the education of the future workforce – the leadership and hope for the future.

Education budgets are also affected by corrupt public procurement practices and false maintenance costs of school buildings. Corruption in public procurement is a major issue in many contexts, as the recent Odebrecht scandal highlighted. It has far-reaching consequences for the quality and availability of basic services, not only a negative impact on people’s daily life but also on the economy and the environment. It diminishes the potential for economic growth and distorts competition, affecting businesses, workers, cities and communities.

How to stop corruption Image: Transparency International

The SDGs offer an ambitious and compelling framework for transformation recognizing the importance of institutions to foster more resilient states and societies. However, if anti-corruption efforts are to be effective, we need to recognize the full complexity of corruption – its causes and effects – to fully address the underlying structures and dynamics. For states, it’s important to align action plans for implementation of the SDGs with anti-corruption strategies.

The private sector also stands to gain enormously from effective action on corruption, reducing the cost of doing business. Businesses have made commitments to the SDGs, and now need to demonstrate leadership on them. Companies committing to the implementation of anti-corruption policies and practices will find themselves in a better position to contribute to the SDGs.

Successfully addressing corruption will require the concerted action of both governments and businesses through multi-stakeholder processes, as well as the use of the latest technologies of the Fourth Industrial Revolution to capture, analyse and share data to prevent, detect, and deter corrupt behaviour. The World Economic Forum Sustainable Development Impact Summit will be an opportunity for business and other stakeholders to discuss effective action and implementation of the SDGs, including anti-corruption strategies.


What's the World Economic Forum doing about corruption?

The Partnering Against Corruption Initiative (PACI) will be conducting a session with the Centre for the Fourth Industrial Revolution looking at how technologies, from blockchain-based procurement systems to anti-corruption crowdsourcing platforms, hold the promise of transforming the fight against corruption. PACI is also working with stakeholders, such as the UN Global Compact, through their Action Platform on SDG 16, to ensure meaningful dialogue and implementation of SDG 16 and beyond.

At the end of the day, corruption affects all five pillars of sustainable development – people, planet, prosperity, peace, and partnerships. If we’re serious about 2030, and delivering a sustainable future for all, we have to be serious about ending corruption.

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