NCPA - National Center for Policy Analysis


January 15, 2008

Corruption is an endemic problem in World Bank projects, swallowing unknown but significant chunks from its $30 billion-plus annual portfolio.  Yet nothing can compare to what has now been uncovered about five health projects in India, involving $569 million in loans, says the Wall Street Journal. 

According to the World Bank's Department of Institutional Integrity (INT):

  • In the $54 million Food and Drug Capacity Building Project, INT found questionable procurement practices, some of which indicate fraud and corruption, in nearly $9 of every $10 in aid funds.
  • For the $194 million Second National AIDS Control Project, the INT discovered that some of the test kits supplied performed poorly by producing erroneous or invalid results, potentially resulting in the further spread of disease.
  • In the $114 million Malaria Control Project, the review found numerous indicators of poor product quality in the bed nets supplied by the firms.


  • In the $125 million Tuberculosis Control Project, the INT discovered bidders sharing the same address and telephone numbers, unit prices showing a common formula, and indicators of intent to split contract awards among several bidders.
  • After visiting 55 hospitals connected to the bank's $82 million Orissa Health Systems Development Project, INT investigators found uninitiated and uncompleted work, severely leaking roofs, crumbling ceilings, molding walls,  non-functional water, sewage and/or electrical systems.
  • It also found neonatal equipment that lacked adequate electrical grounding, potentially exposing babies and their medical staff to electrical shocks.

The foreign aid lobby sometimes says that corruption is the inevitable price of "doing good" in the developing world, says the Journal.  But given the hazardous laboratories and sewage overflowing in hospitals outlined in the report, it is a wonder how anyone can make that case with a clear conscience.

Source: Editorial, "World Bank Disgrace," Wall Street Journal, January 15, 2008.

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