underestimated. Lack of clarity in the budget process or ambiguity in delineating responsibilities and boundaries provide ripe opportunities for corruption.<sup>20</sup> How governments manage the budget will clearly have a considerable bearing on the incidence of corruption, as the budget represents the single largest pocket of resources in a country’s economy, sometimes equivalent to almost half of a country’s annual GDP. The more open and transparent the process, the less opportunity it will provide for malfeasance and abuse. Collier (2007, pp. 66, 150) provides a distressing example of the impact of ineffective systems of budget control: in Chad a 2004 survey tracking the funds released by the Ministry of Finance for rural health clinics established that less than one percent actually arrived at its intended destination—more than 99 percent was “lost” along the way. In Uganda, a similar survey showed that only 20 percent of budget allocations for primary schools (other than teachers’ salaries) were getting through to the schools. However, once the Ministry of Finance started providing information on monies released to the media and informing individual schools directly about the allocations made, compliance rose to 90 percent.

Improving the interrelated processes and mechanisms underpinning the preparation and execution of the budget may well be one of the potentially most fruitful areas in which multilateral organizations could assist in the fight against corruption. Again, given their reluctance to wade into “political” waters, there is no need to frame such reforms from a corruption-reducing vantage point per se. It is quite enough to see the benefits in terms of gains in efficiency and better resource allocation. The IMF, in particular, with its vast expertise on fiscal issues, could be a particularly important player, given the ample leverage it has due to its ability to quickly disburse resources. And yet, it is not unfair to say that these organizations— having abandoned their state of denial about the relevance of corruption for resource allocation and its centrality on any debate about economic development—are still reluctant to use their leverage more energetically to tackle corruption in the countries where they have lending programs.

# **_Other reforms_**

Rose-Ackerman (1998), and others provide a useful overview of other measures or reforms which will help to better control corruption. Among them: “a viable legal framework that enforces the law without political favoritism or arbitrariness” and that is buttressed by a credible system of penalties for offenders; improving the pay for judges and giving them greater independence from the executive; efforts to improve the clarity of laws, to reduce the scope for disputes and abuse; the creation of “a tough, independent anticorruption agency can be a potent tool—as long as it represents a credible long-term commitment and includes checks on its ability to be misused for political ends;” ensuring that civil service pay is competitive with respect to

> 20 For a detailed discussion of the Russian budget process in the 1990s and the ways in which the system afforded countless opportunities for corruption see Lopez-Claros and Alexashenko (1998, pp. 29-34). Jack Diamond (2006) has an extensive discussion of budget system reform issues, providing an extremely helpful international perspective.

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