## Corruption and COVID-19

_IMF Blog, July 28, 2020_

## Source details

**Canonical URL:** [Corruption and COVID-19](https://www.imf.org/en/blogs/articles/2020/07/28/blog-corruption-and-covid-19)

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- [Markdown version](/en/blogs/articles/2020/07/28/blog-corruption-and-covid-19/index.md)
- [Structured JSON version](/en/blogs/articles/2020/07/28/blog-corruption-and-covid-19/index.json)
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## Bibliographic details
- Authors: Vitor Gaspar, Martin Mhleisen, Rhoda Weeks-Brown
- Published: July 28, 2020

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### Overview: why corruption matters more during the pandemic
- Corruption is defined as "the abuse of public office for private gain."
- The COVID-19 pandemic has heightened the importance of stronger governance for three reasons:
  - Governments around the world are playing a bigger role in the economy to combat the pandemic and provide economic lifelines to people and firms, which "increases opportunities for corruption."
  - As public finances worsen, countries need to prevent tax evasion and the waste and loss of funds caused by corruption in public spending.
  - Crises test people’s trust in government and institutions; ethical behavior becomes more salient when medical services are in high demand—evidence of corruption could undermine a country’s ability to respond, deepen the economic impact, and threaten political and social cohesion.
- IMF message to governments: "spend whatever you need but keep the receipts, because we don’t want accountability to be lost in the process."

### IMF operational response during the crisis
- Emergency financing and governance safeguards:
  - In lending work, the IMF provided quick disbursements to meet urgent needs while including enhanced governance measures to track COVID-19 related spending.
  - Borrowing countries committed to:
    - (i) undertake and publish independent ex-post audits of crisis-related spending; and
    - (ii) publish crisis-related procurement contracts on the government’s website, including identifying the companies awarded the contract and their beneficial owners.
  - The IMF ensured that emergency resources are subject to the IMF’s Safeguards Assessment policy.

### Longer-term governance and anti-corruption efforts
- The IMF’s enhanced framework (adopted in 2018) aimed to make IMF work with countries more candid, evenhanded, and effective; this laid the foundation for the COVID-19 policy and lending response.
- Key highlights from a recent staff analysis assessing progress:
  - The IMF "speak[s] more candidly and in-depth about governance issues with countries."
  - Text mining analysis findings:
    - Governance-related references more than doubled in staff reports in the 18 months after the IMF approved the framework, compared with 2017.
    - In 2019, the IMF discussed governance with countries four times more than the average over the prior ten years.
  - Surveillance examples cited:
    - Central bank governance and operations in Liberia.
    - Financial sector oversight in Moldova.
    - The anti-corruption framework in Mexico.
  - Fund staff are proposing more concrete governance and anti-corruption recommendations.
  - IMF-supported lending programs now include specific conditionality related to governance and anti-corruption reforms, with governance improvements being a core objective of many programs.
  - Technical assistance and training have been stepped up to help countries improve governance in areas such as:
    - tax administration,
    - expenditure oversight,
    - fiscal transparency,
    - financial sector oversight,
    - anti-corruption institutions,
    - asset declarations for senior officials.
  - Governance diagnostic missions to a dozen countries provide detailed analysis of governance weaknesses based on legal frameworks and propose prioritized solutions.

### Transnational corruption assessments and international cooperation
- Ten advanced economies have participated in voluntary assessments of their national frameworks to limit opportunities for transnational corruption:
  - Austria, Canada, the Czech Republic, France, Germany, Italy, Japan, Switzerland, the United Kingdom, and the United States.
- Purpose of these IMF-conducted assessments:
  - Determine the degree to which a country (1) criminalizes and prosecutes bribery of foreign public officials; and (2) prevents foreign officials from concealing corrupt proceeds in its own financial system or domestic economy.
- The IMF strongly encourages member countries to volunteer for such coverage in its annual economic health checks.

### Policy implications and recommendations
- Curbing corruption requires:
  - government ownership of reforms,
  - international cooperation,
  - a joint effort with civil society and the private sector,
  - political will and assiduous implementation of reforms over months and years.
- The crisis will sharpen the IMF’s focus on governance in the years ahead because of the pandemic’s devastating effects and costs for people and economies.
- Closing remark: "If ever there was a time for anti-corruption reforms, it is now."

*Vitor Gaspar, Martin Mühleisen, Rhoda Weeks-Brown — July 28, 2020*

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## Content in this bundle

- **Box 1. the Ebola Virus Disease Outbreak**
  - [Box 1. the Ebola Virus Disease Outbreak (Markdown version)](/-/media/files/publications/covid19-special-notes/enspecial-series-on-covid19budget-execution-controls-to-mitigate-corruption-risk-in-pandemic-spendin.pdf.md){rel="alternate" type="text/markdown"}
  - [Box 1. the Ebola Virus Disease Outbreak (PDF)](/-/media/files/publications/covid19-special-notes/enspecial-series-on-covid19budget-execution-controls-to-mitigate-corruption-risk-in-pandemic-spendin.pdf){rel="external" type="application/pdf"}

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## References

- [عربي](https://www.imf.org/ar/News/Articles/2020/07/27/blog-corruption-and-covid-19)
- [https://www.imf.org/zh/News/Articles/2020/07/20/blog-the-covid-19-gender-gap](https://www.imf.org/zh/News/Articles/2020/07/20/blog-the-covid-19-gender-gap)
- [日本語](https://www.imf.org/ja/News/Articles/2020/07/27/blog-corruption-and-covid-19)
- [Português](https://www.imf.org/pt/News/Articles/2020/07/27/blog-corruption-and-covid-19)
- [increases opportunities for corruption.](https://www.imf.org/en/About/Factsheets/Sheets/2020/04/30/how-imf-covid19-financial-help-is-used)
- [corruption in public spending](https://blogs.imf.org/2019/05/28/corruption-and-your-money/)
- [corruption](https://blogs.imf.org/2019/04/04/tackling-corruption-in-government/)
- [spend whatever you need but keep the receipts](https://blogs.imf.org/2020/04/15/fiscal-policies-to-contain-the-damage-from-covid-19/)
- [Safeguards Assessment](https://www.imf.org/en/Publications/SPROLLs/Safeguards-Assessments-Documents)
- [framework](https://www.imf.org/en/News/Articles/2018/04/21/pr18142-imf-board-approves-new-framework-for-enhanced-engagement-on-governance)
- [staff analysis](https://www.imf.org/en/Publications/Policy-Papers/Issues/2020/07/15/Progress-In-Implementing-The-Framework-For-Enhanced-Fund-Engagement-On-Governance-49576)

_Source: https://www.imf.org/en/blogs/articles/2020/07/28/blog-corruption-and-covid-19_