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Governance Policies and Strategies

ADB’s Second Governance and Anti-Corruption Action Plan, implemented since 2006, outlines specific actions toward improving governance and fighting corruption in ADB operations. The plan derives from ADB’s Governance Policy (1995) and Anticorruption Policy (1998), which inform ADB's governance and anti-corruption work.

Governance and Anti-Corruption Plan

ADB’s Second Governance and Anti-Corruption Action Plan is about improving the effectiveness of development assistance and contributing to poverty reduction in the Asia-Pacific region. It provides focus and proposes actions to strengthen the oversight of ADB projects, and to improve internal checks and balances.

Achievements

In 2013, a review of the plan’s implementation found notable progress. ADB approved $3.1 billion in operations in public sector management and governance, an increase of 27% from 2012. However, implementation still needs to be strengthened. Other notable achievements in the plan’s key results areas are:

  • Completion of country and sector level risk assessments and risk management plans in 7 countries to inform their respective country development plans—Armenia, Azerbaijan, Bhutan, Georgia, India, Kyrgyz Republic, and Nepal
  • Preparation of project-level risk assessments and risk management plans for 30 projects in Southeast Asia, 25 projects in South Asia, and 12 projects in the Pacific. Plans were also prepared for projects in Azerbaijan, Pakistan, the People’s Republic of China (PRC), and Uzbekistan.
  • Organization of capacity development activities for project agencies, their officials and administrators, including training on ADB’s procurement, financial management, and safeguards procedures in Fiji, Kiribati, Papua New Guinea, Samoa, Solomon Islands, and Tonga.
  • Effective oversight of the plan’s implementation by the Governance Thematic Group, including the conduct of peer reviews of 11 public sector management loans/grants and 13 projects.

Read the 2013 Accomplishment Report

Results areas and priority themes

The Governance and Anti-Corruption Action Plan targets four key result areas:

  • Improve identification and management of governance, institutional, and corruption risks in country development plans
  • Strengthen governance and anticorruption components in project and project design
  • Strengthen program and project administration and portfolio management
  • Improve organizational structure, human resources, and access to expertise

The plan outlines a comprehensive risk-based approach focused on three governance themes that cut across development sectors and government levels:

  • improving public financial management
  • strengthening procurement systems
  • combating corruption

These three priority themes are critical to development assistance effectiveness and poverty reduction, and relevant to a significant proportion of ADB’s lending and projects.

Managing risks

Sound public financial management, transparent procurement, and effective corruption prevention measures provide a solid foundation for strong state institutions. ADB adopts a risk-based approach in managing governance and corruption risks, which are also considered opportunities for capacity development, in these three priority themes.

The Governance and Anti-Corruption Action Plan requires ADB and its members to assess risks the priority themes and the measures needed to manage such risks, prior to formulation of country development plans. Sector risk assessments should cover corruption risks for the private sector. It also requires mid-term reviews and updates of risk assessments and risk management plans.

The plan emphasizes the involvement of civil society organizations to provide oversight and promote links between ADB member governments and citizens to strengthen participation and improve accountability. It also encourages working with other development institutions in developing innovative interventions to meet the unique needs of ADB members and specific sectors.

The risk-based approach allows ADB to channel resources and expertise to countries or sectors where ensuring the effectiveness of development assistance can be challenging.

Implementation and review

Implementation of Governance and Anti-Corruption Action Plan requires concerted efforts among many departments and units within ADB. Changes in institutional processes and internal capacity development activities have added value to ADB’s governance and anti-corruption work.

A 2013 review of the plan’s implementation noted accomplishments in the four key results areas and provided an outlook and future focus.

Implementing the recommendations put forward by the 2013 review is a corporate priority. Revised staff guidance on implementing the plan was completed in 2014 to assist regional departments strengthen the quality of risk assessment and risk management plans. The Governance Thematic Group continues to take the lead in promoting governance issues in ADB’s development work operations and coming up with initiatives that strengthen the plan’s implementation.

Read the Governance and Anticorruption Plan

Policy Foundation

ADB has learned through decades of experience that sustainable development depends on good governance. In 1995, ADB became the first multilateral development bank to adopt a Governance Policy to help enhance governance quality in its member countries. An Anticorruption Policy was approved in 1998 to ensure that development is not derailed by corrupt practices. Together, these two policies serve as the bedrock of ADB’s work on governance and development in the region.

Governance policy

ADB's Governance Policy guides the organization's work in enhancing governance quality in developing member countries. It defines four elements of good governance.

Accountability. Public officials should be answerable for government behavior and responsive to the needs of the public. Accountability entails establishing criteria to measure the performance of public officials, as well as oversight mechanisms to ensure that the standards are met. The accountability of public sector institutions is facilitated by evaluation of their economic and financial performance.

Participation. Involving the public in the development process is necessary as they are both beneficiaries and agents of development. Participation implies that government structures are flexible enough to offer beneficiaries the opportunity to improve the design and implementation of development programs and projects.

Predictability. An environment governed by the rule of law is conducive to economic growth and development. Predictability refers to the existence of laws, regulations, and policies to regulate society and their fair and consistent application. Consistent and sound public economic and fiscal policy is also important, and allows for the growth of private sector initiatives.

Transparency. Transparency refers to the availability of information to the general public and clarity about government rules, regulations, and decisions. It can be strengthened through the citizens' right to information with a degree of legal enforceability. Transparency in government decision making and public policy implementation reduces uncertainty and can help inhibit corruption among public officials.

Read the Governance Policy

Anticorruption policy

Complementing the Governance Policy, ADB's Anticorruption Policy aims to reduce the burden corruption exacts from the governments and economies of the region. The policy has three objectives:

  • support competitive markets and effective public administration,
  • support explicit anticorruption efforts, and
  • ensure ADB-financed projects and its staff adhere to the highest ethical standards.

ADB's integrity is one of its strongest assets. ADB affirms a zero tolerance policy when credible evidence of fraud and corruption exists among ADB-financed projects or its staff. ADB's Anticorruption Policy covers all firms and individuals associated with ADB-financed projects, including all ADB staff. It covers proposed, ongoing, and completed projects in all ADB public and private sector operations.

Read the Anticorruption Policy