International Handbook on the Economics of Corruption, Volume Two
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International Handbook on the Economics of Corruption, Volume Two

Edited by Susan Rose-Ackerman and Tina Søreide

A companion volume to the International Handbook on the Economics of Corruption published in 2006, the specially commissioned papers in Volume Two present some of the best policy-oriented research in the field. They stress the institutional roots of corruption and include new research on topics ranging from corruption in regulation and procurement to vote buying and private firm payoffs.
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Chapter 17: Why Multi-Stakeholder Groups Succeed and Fail

Rory Truex and Tina Søreide


Rory Truex and Tina Søreide1 1. Introduction Theories of corruption incidence hold that sectors with a high degree of complexity are particularly prone to corruption because it is difficult for outsiders to effectively monitor service delivery (Klitgaard, 1988; RoseAckerman, 1999). The construction sector, characterized by hundreds of technical contracts, significant cash transfers, and extensive approval and bidding processes, is considered extremely vulnerable to corruption at all phases in the value chain (Stansbury, 2005; Kenny, 2006; Kenny and Søreide, 2008).2 Estimates suggest that of the $2–3 trillion spent globally on construction projects, direct and indirect ‘losses’ from corruption amount to 15 to 30 percent per year. International development institutions have recently turned towards a multi-stakeholder approach to address this endemic problem. The Construction Sector Transparency Initiative (CoST), a new pilot initiative (2008–10) conducted under the auspices of the UK’s Department for International Development (DFID) with support from the World Bank, requires representatives from government, the private sector, and civil society organizations to work together in a multi-stakeholder group (MSG) to promote accountability in the construction process. The core goal of CoST is to encourage the disclosure of material project information on a selection of public construction projects, and to independently assess whether those projects delivered ‘value for money’.3 The program operates on the principle that transparency can foster accountability and ultimately reduce corruption, and the MSG serves as a force for clean governance in environments where other accountability mechanisms may be compromised. CoST is currently being...

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