Corruption and fraud in agricultural and energy subsidies: identifying the key issues

Governments appear willing to provide publicly funded subsidy programs totaling billions of dollars, but they commit significantly fewer resources to monitor these programs effectively to prevent fraud and/or corruption.

The extent to which fraud and corruption affect subsidy policy is difficult to establish, since governments are often unwilling to publicize their occurrence due to a fear of bad publicity or public consternation at a perceived lack of oversight.

In this policy brief, the GSI identifies some of the main areas of subsidy policy affected by fraud and corruption, providing examples of some high profile cases. The brief outlines some of the challenges to developing a global estimate of the financial impact that fraud and corruption have on subsidy policies, pointing out some of the benefits of such an estimate. The brief concludes with a number of policy recommendations aimed at encouraging policy makers to take advantage of the relatively unique opportunity provided by public fraud and corruption cases to push the reform of ineffective and/or poorly designed subsidy programs.