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Corruption in foreign aid takes many forms and can be an obstacle to social and economic progress in developing countries. Less clear is how donor agencies and governments should address it—if at all. Effective anti-corruption efforts are obscured by misperceptions of the problem, weaknesses in measuring corruption, and limited evidence linking corruption, institutions, and development outcomes. CGD’s experts bring clarity to these issues by examining the implications of existing anti-corruption efforts and highlighting how data on development results can help guide more effective strategies to increase transparency and strengthen accountability.
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Taxation, which has been a Cinderella subject in development, has finally been invited to the ball, but the arguments that have helped to push taxation up the finance-for-development agenda may also be in need of clarification.
A bipartisan group of eight Senators led by Senate Foreign Relations Ranking Member Ben Cardin (D-MD) has just reintroduced a new version of a bill designed to identify and combat corruption overseas. The Combating Global Corruption Act of 2017 ties some potentially useful anti-corruption measures to a less-than-useful exercise in corruption ranking that will blunt their impact. That’s a shame, but it also suggests an easy fix: junk the ranking.
Even while policy solutions to address de-risking are being implemented, new technologies have emerged to address de-risking by increasing the efficiency and effectiveness of AML/CFT compliance by financial institutions.