The IMF will review the role advanced countries play in bribery and other forms of corruption as part of a revised framework on governance around the world.
Under the new system, the International Monetary Fund will assess areas such as budget management, financial-sector oversight, central bank controls, market regulation, and the rule of law. Officials will estimate the economic impact of governance weaknesses and provide policy recommendations, the fund said Sunday.
The IMF will also step up its monitoring of corruption in the countries to which it lends. The IMF’s loan program for Ukraine, for example, has been bogged down by concerns about corruption in the former Soviet republic.
To address the “supply side,” the fund will study the legal and institutional systems of nations that volunteer to be scrutinized. It’ll check whether countries criminalize and prosecute bribery abroad, and whether they have rules to stop money laundering.
Group of Seven countries, as well as Austria and the Czech Republic, have volunteered so far.
“The flip side of every bribe taken is a bribe given,” IMF Managing Director Christine Lagarde said in a blog post on Sunday. “Funds received through corruption are often funds concealed outside the country -- often in the financial sectors of major capitals. It is quite possible for countries to have ‘clean hands’ at home but ‘dirty hands’ abroad.”
Philip Hammond, Britain’s Chancellor of the Exchequer, said his priority was to secure an international agreement on how to tackle “dirty money.”
“We must tighten the financial screws on rogue regimes and corruption,” he said in a statement. “We must shine a light into the darkest corners of global finance, crack down on corrupt cash, and ensure that as terrorists and criminals become ever more sophisticated, the international community stays one step ahead.”
On the day its citizens go to the polls to elect a new Congress and president, Paraguay’s Finance Minister Lea Gimenez said the South American country’s government has built credibility by being more transparent about its budget.
“We’ve seen a huge change. This was a country known for corruption, known for darkness. But we opened those dark books. We didn’t know what we would find. We started to find very interesting things,” Gimenez, a former World Bank economist, said at a panel Sunday on the closing day of the IMF spring meetings.