Anti-corruption and transparency – a prerequisite for development

Published 8/8/2024

Updated 8/8/2024

Norad’s efforts to combat corruption and promote good governance promote transparency, participation and accountability to ensure social protection, end inequality and poverty and strengthen the social contract and democracy. Corruption undermines funding for development and damages trust and development in society.

What

Corruption and unlawful flight of capital drain government resources and lead to fewer and worse investments in all sectors, including health, education, climate adaptation and infrastructure. The efforts to end corruption are based on the UN Convention Against Corruption (UNCAC), which is currently endorsed by 191 parties (of which 186 are countries). The convention is the only legally binding universal anti-corruption instrument and covers five areas: prevention, criminalisation and law enforcement, international cooperation, the return of stolen funds and professional cooperation.

Why

Corruption weakens development and state-building and undermines trust. Norad’s anti-corruption efforts support SDG 10 on reduced inequalities, as well as SDG 16 and 17, which include targets to combat corruption, bribery and unlawful capital flight and strengthen the return of unlawfully acquired funds.

The distinctions between public and private roles in enabling corruption are often unclear. The private sector’s ability to influence politicians and government officials often contributes directly to an increased risk of corruption.

Transparency regarding ownership of companies and the wealth and income of individuals and companies has been found to be effective when it comes to prevention and necessary for the investigation of corruption and financial crime. This requires investments in civil society and authority systems in order to develop and implement system changes for greater transparency and accountability.

Money that is evaded tends not to end up in the local economy, instead being moved out of the country to tax havens. Capital flight is enabled by facilitators who benefit from the confidentiality of lawyers, real estate agents and auditors who, through complicated company structures and the establishment of shell companies, conceal ownership and dividends from corruption and other criminal activities.

Large investments in climate adaptations and demand for natural resources increase the risk of corruption and allow for greater environmental and climate crime. In order to protect the environment, climate and natural resources that will finance the green transition, the fight against corruption and financial crime needs to be strengthened and coordinated.

How

The primary aim of Norwegian aid for anti-corruption is to strengthen the state and public administration through system changes and increased expertise and capacity. Given the significant risk of corruption and how much of the national budget is set aside for procurements, licenses and contracts, transparency in public procurement and knowledge of company owners are natural focus areas. At the same time, such efforts should reflect the fact that corruption is a complex social phenomenon. Reforms require interaction between public and private stakeholders for the design and implementation of policy.

Anti-corruption efforts require work across institutions. Norad contributes to strengthening cooperation across institutions both nationally and internationally. The return of funds, for example, requires more effective laws, international cooperation between police and prosecuting authorities, better knowledge of the investigation of financial crime and adequate processes for the confiscation and return of assets.

The integration of anti-corruption in sector efforts could yield results that go well beyond what is possible in a restricted and, in financial terms, limited anti-corruption effort. Health has so far been a leading area and Norad has taken the initiative to launch a global alliance, the Global Network for Anti-Corruption and Transparency for Health (GNACTA) in collaboration with the WHO, in order to help major players in international health, civil society, and bilateral donation move in the same direction.

Norad emphasises interaction between global processes and what takes place at national and regional level. One priority is to contribute to ensuring that experiences and knowledge of needs and approaches from different countries are incorporated into processes relating to international resolutions and knowledge development and to help further develop the international framework.

Who/Where

Anti-corruption efforts largely take place through international organisations and global programmes. UNODC is the largest partner and includes cooperation with Open Contracting Partnership and Open Ownership.

Norad helps ensure that Norway assumes a leading role in international work to promote financial transparency and combat the unlawful flight of capital and anti-corruption efforts are a key part of this. By supporting U4, the UNCAC coalition, UNDP, UNODC and ICAR, Norad ensures that new knowledge is acquired and applied. Together with the Norwegian Ministry of Finance, Norad contributes to OECD, G20 and the work towards the Financing for Development conference in 2025.

Contact

For further information, please contact the Section for Governance.