World Bank Presidential Fellows Lecture given on June 19th, 2006 in Washington D.C. by Anwar Ibrahim, Honorary President of AccountAbility and Distinguished Visiting Professor in the School of Foreign Service at Georgetown University.

INTRODUCTION

I must express my sincere appreciation to my friend Paul Wolfowitz for inviting me to offer this Presidential Lecture. I am not being presumptuous when I say Paul knows that I share his resolve in enhancing governance and accountability. This is in spite of my professed differences of opinion on certain policy issues.

My experience with the Bank was never a walk in the park. Back in 1987 we faced an uphill task in fulfilling the onerous conditions imposed upon us by the Bank as a prerequisite for borrowing, insisting on international standards for the creation of technical institutions. Fortunately, in 1994 after riding out the economic storm of the late 80s we registered a surplus budget, and with that we ceased our dependence on the Bank’s lending. Notwithstanding Malaysia has benefited immensely by the operations of the Bank throughout the initial period of our development.

I became the Chairman of the Development Committee just prior to the East Asian crisis and before I knew it my political foes seized the opportunity to accuse me of being in cahoots with the Bank and the IMF, and the rest of course is history.

I suppose Paul is trying to make amends for the frying pan that the Bank assisted in putting me in. But seriously, in all humility, I cherish the opportunity to benefit from the enormous experience and wisdom of my colleagues at the bank both past and present, in particular Jim Wolfensohn and now Paul Wolfowitz.

The 14th century Arab sociologist Abdul-Rahman ibn-Khaldun postulated that civilisations inevitably collapse from within as a result of corruption and moral decadence, and a disintegration of the institutions of accountability.1 And then four centuries later Thomas Jefferson also warned against the abuse of unlimited powers by elected despots and foretold that there would come a time “when corruption in this, as in the country from which we derive our origin, will have seized the heads of government, and be spread by them through the body of the people; when they will purchase the voices of the people, and make them pay the price.”2 In our time these same sentiments were expressed with greater vigour and tenacity by the great freedom fighters, from Simon Bolivar to Sun Yat Sen, and from Nehru to Mandela. Given the shared experience of these luminaries it is quite clear to me that the notion of a society that nurtures the self through civic engagement and guards against tyranny is a universal aspiration.

WHAT IS ACCOUNTABILITY?

Accountability is not merely a measure of compliance with the law. While enforcement of the law is to yield compliance, giving rise to what we regard as law-abiding citizens, accountability exists to secure integrity in the relationships that govern and delineate society. There are no islands of integrity from which blame can be righteously laid. The minister, the civil servant, the CEO, and the NGO activist are equally accountable to those over whom they yield power.

Accountability goes beyond compliance and carries a moral imperative: power is a trust and with it comes responsibility that must form the bedrock of governance.

Some may see it as a contradiction in terms to wave the flag of accountability and at the same time cheer for freedom. If I may summon the help of Isaiah Berlin in resolving this matter, freedom is essentially as the absence of constraints imposed by others. I am free to the degree to which no man interferes with my activity. Political liberty in this sense is the area within which a man can act unobstructed by others. In reading Berlin, however, we must not forget that his tradition of political liberalism has at its heart the need for a social contract that enables individual freedom. It follows that a meaningful social contract must be rooted in a deal that legitimises power and so sustains it by being held accountable for the manner in which power is exercised. There is no contradiction if we recognise that, in fact, it is not accountability, but rather the desire by those who yield power to crush and evade accountability that leads to unfreedom. In its widest sense, therefore, accountability is about civilising power for the preservation of freedom and justice.3

ACCOUNTABILITY AS FREEDOM

In the case of unfreedom, the constraints are imposed on us by the powers that be. In the case of freedom, the constraints are imposed by us on the powers that be. Without constraints, those who hold power will gravitate towards despotism, and as Dr. Chinua Achebe has said, an individual tyrant or a small clique of looters in power can destroy the lives and the future of whole countries and whole populations by their greed. “The consequences of these actions can be of genocidal proportions.”4

We hear that African economies lose over $150 billion every year to corruption. Politicians in power continue to harp on the importance of the integrity of public office to the process of accountability while they exhibit life styles beyond their means. The current malaise of abject poverty can no longer be blamed simply on a lack of donor funds, and I would argue that unless we devise strategies to prevent the leakages, stop corruption and quell the rampant exploitation of our natural resources, we will soon lose credibility in this mission.

Development’s intrinsic relationship with freedom, the brilliant thesis proposed by Nobel Laureate Amartya Sen5, might therefore be prefaced with an even more fundamental observation of “accountability as freedom.” In spite of the strongest political will in over fifty years and the vast sums of money pledged to support poverty reduction, preventative health care and education throughout the developing world, the situation in many places seems to grow worse by the day. As the Commission on Africa recently stated, “Without progress in governance, all other reforms will have limited impact.”6

DEMOCRACY AND ACCOUNTABILITY

This leads to our assertion that democracy is perhaps the world’s greatest accountability innovation. In a democracy, the Constitution is but the quintessence of the people’s compact with the state and the statement par excellence of accountability. In this compact, fundamental liberties are guaranteed and the separation of powers delineated to safeguard these guarantees through a system of checks and balances.

Fundamental liberties must be entrenched in a foundational charter so that the holders of power are held to account for their policies and actions. By no means do we confine our prescriptions to the fledgling democracies and failed states of the world. Democracy is a work in progress in counties that claim to have invented it as much as it is in those nations struggling to break the enduring chains of authoritarianism; whether there is complete media control or the presence of a media bias, whether we face blatant violations of human rights or the suspension of civil liberties, or whether corruption runs rampant and unchecked or is institutionalised. It is at these dark moments when the ossified and stale practice of democracy must be renewed and invigorated by the spirit of accountability.

The world is awash with accountability. And yet some of our greatest achievements in civilising power are now characterised by bureaucratic excess and decay, if not outright greed and corruption. The crisis of legitimacy facing governments and multilateral institutions places us in a unique but not unfamiliar historical moment. Just as yesterday’s innovations were once a sign of great hope, we must reinvent accountability for the 21st century.

THE CHALLENGE TO THE WORLD BANK

The disillusionment and distrust one encounters of the World Bank and the IMF and by those wary of US global influence is rooted both in the legacy of flawed policies, but more fundamentally in the weak stance that we have taken on governance and accountability. In East Asia, for example, the World Bank contributed to the euphoria surrounding the economic miracle, praising the strong performance of these economies whilst ignoring fundamental weaknesses of fiscal policy, corruption, and governance.

In the light of these experiences we must not be so easily persuaded by the rhetoric of those who subscribe to the prescriptions of multilateral institutions but continue to act with impunity. They function as credible interlocutors with these organisations, adopting the mantra of privatisation, deregulation, and liberalisation. But with no transparency and with no free media to report on the excesses of their rule, and with a compliant judiciary, the proceeds of these deals are funnelled into the pockets of friends and cronies — a classic example of Mancur Olson’s “stationary bandit”7. The nation’s wealth is squandered while the people are made to suffer for the excesses of their political masters. I do not underestimate the vast contributions that multilateral institutions such as the Bank have made. But I am equally cognisant of the loopholes and leakages that we have seen which have dealt a harrowing blow to our credibility around the world. It is imperative that we deal with these criticisms with clear and definitive measures.

Development as accountability can be a rallying cry for the World Bank. By broadening the rigid technocratic and economic framework from which Bank policy has traditionally issued, it becomes easier for the Bank to engage with countries on issues of how governance is tied to development objectives. Operational innovations and a reorientation of staff incentives in order to promote good governance and accountability through the development of civil society will become integral components of Country Assistance Strategies and will, in the process, transform many of our detractors into potential allies.

In my conversations with the President and with staff during my most recent association with the Bank I was encouraged by a refreshing resolve to tackle these issues. It is remarkable to hear that disclosure, public participation, and civic engagement are becoming the buzzwords around which policies are formulated. Initiatives that were proposed earlier have crystallised into formal institutions to ensure greater accountability and governance.

It would be rather patronising on my part to reiterate the need to formulate greater cohesion within the Bank in its treatment of this issue. But we would be remiss if we did not take full advantage of the success of recent initiatives promoting the accountability and governance agenda. These advances ought not lull us into complacency, for Kafka advised one to take a fresh breath after outbursts of vanity. At this critical juncture, therefore I believe it is an opportune moment to also reflect on the internal oversight functions of the World Bank and chart a path for the future which will inspire greater confidence from within and abroad.

The World Bank has over the years devised a variety of institutional safeguards to guard against corruption. In my mind we will not be satisfied until these oversight committees are granted full independence. It is in this context that I propose the Bank establish a formal body, an “Office of Accountability” if you will, that is autonomous from the political and financial interests that grease the daily operations of the Bank. Members of this body should have long-term appointments independent of the tenure of political appointees. They should report to the President and Executive Directors but they will be accountable to an independent panel of administrators who are not beholden to perpetuation of the status quo, nor subject to the short-term whims of politicians and bureaucrats. An independent “Office of Accountability” should be granted a broad mandate not only to function as project assessment, but also as a central body that can bring cohesion and coordination to the accountability and governance projects already underway.

This is both a dramatic shift in but also a logical next step in the Bank’s mandate: to champion the cause of development as accountability, building on its well-established expertise and through the leadership of the new President. It is a vision that will resonate equally with the borrowers and donors disillusioned with each other’s complicity in the current malaise of corruption and poor governance. The World Bank can convey that self-reflection and evaluation is a noble trait and not just something we prescribe upon others. For when we talk about civilising power we must never lose sight of that power which we yield ourselves.

There is no doubt that we are on a precipice whereby the collective efforts of the international community to wage war on poverty, strengthen the institutions of governance, and protect the environment stand to suffer a crippling blow in the absence of measures which re-establish our credibility and capability. As Lord Acton has said, authority is legitimate only by virtue of its checks in as much as the sovereign is dependent on the subject. The Bank remains a critical multilateral institution for development particularly for poverty alleviation and for promoting accountability.

Thank you.