to building collapse) should be part of any effort to ensure compliance and reduce the development impact of corruption.

For example, the UK already allows for conviction of senior company officials in cases where gross negligence leads to death. According to the Crown Prosecution Services, cases include work-related fatal accidents arising out of unsafe systems of work, and fatal accidents resulting from the provision of unsafe goods or services –events that are common in the construction industry.<sup>23</sup> A law to extend the culpability of senior company officers in cases where the way a company’s “activities are managed or organized” is causally related to a death and “amounts to a gross breach of duty of care” is working its way through the UK Parliament.<sup>24</sup>

# **The Government as a Customer –Planning, Budgeting and Institutions**

Looking at the government as a consumer of construction services, any approach to counter the negative effects of corruption again needs to look at outcomes rather than narrowly at procurement processes.<sup>25</sup> This suggests a focus that extends both upstream towards budgeting and project selection as well as downstream towards the final quality of deliverables.

If corruption is one factor that skews expenditure away from maintenance of existing infrastructure stocks and new construction with high economic returns, a key element of the anti-corruption agenda is to strengthen governance mechanisms linked with budgeting and project prioritization. The IMF’s Code of Good Practices on Fiscal Transparency – which promotes practices related to clarity of responsibilities, publication of information, open budget preparation and execution and assurances of integrity—provides guidance in the first area.<sup>26</sup> Evidence of the quality of budget management in 25 heavily indebted poor countries (HIPCs) suggests there is considerable need for progress, with the average country meeting just over five out of thirteen performance benchmarks in the areas of comprehensiveness, credibility, execution and external scrutiny.<sup>27</sup> A focus on the quality of existing infrastructure stocks will also involve institutions that help to ensure adequate funding and implementation of maintenance. One example might be hypothecated road funds with considerable board representation from user groups competitively contracting maintenance services through lump-sum contracts based on set performance standards. Such contracts would include performance bonds overseen through independent inspections as well as public involvement in monitoring

> 23 http://cps.gov.uk/legal/section5/chapter_b.html.

> 24 <u>http://www.publications.parliament.uk/pa/ld200607/ldbills/040/2007040.pdf. There is a similar law on</u> the books in Australia.

> 25 A recent survey of Norwegian firms involved in overseas contracting found that only six percent felt procurement rules were an efficient obstacle to corruption (Soreide, 2006).

> 26 And the result of an IMF Report on Observance of Standards and Codes provides an assessment of how well these good practices are implemented in a country: http://dsbb.imf.org/Applications/web/dqrs/dqrsroscs/.

> 27 Calculated from p. 36 of Levy, 2007.

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