Managing Conflict of Interest - Organisation for Economic Co ...

Defining Conflict of Interest 25to corruption and abuse of power in the public domain on a largescale. In the 20th century there was a gradual cleansing of publiclife, thanks to the rise of progressive politicians (such as the twoRoosevelts), a more vigilant press, and the recognition that for theUS to be a successful world power it needed an efficient and uncorruptadministration.The American approach, much more than Britain’s, was to relyon the law to enforce rectitude, rather than self-regulation. Thisapproach is reflected in a vast array of “ethics legislation,” whichgoes into great detail on the duties and obligations of elected andappointed officials.Today, political patronage remains more widespread—andaccepted—than in most Western democracies. For example,ambassadors are routinely chosen on the basis of a connectionwith the President—friendship or financial support for his election.And thousands of other senior officials in the federal governmentare appointed on the basis of their political affiliation.Furthermore, conflicts of interest are not adequately controlled,especially in the area of public procurement, and public spendingmore generally.It is rare for the formal rules to be broken, but private businessesoften have a major influence on how the rules are formedand implemented. Recent examples include the extensive useof sole-source contracting in Iraq, the pricing of pharmaceuticalproducts under Medicare, and the exorbitant margins paid tothe banks for funding guaranteed student loans. In return, politiciansreceive funding for their election campaigns. Even more sothan in Britain, a major concern is the whole question of electionfunding. Effective restrictions on donations do not exist, and thelength and huge expense of electioneering encourages politicalcorruption of the type just mentioned. All that said, the US doeshave a very tough legal framework and a vigilant press, and itsWGI ranking is only just below the top decile—though, as theworld’s wealthiest nation, it might be expected to have a higherranking. 1616See Table 1 for more information on the World Bank Institute’s WGIrankings.ADB/OECD Anti-Corruption Initiative for Asia and the Pacific