Chapter 4. Promoting transparency and integrity through a targeted and effective Financial and Interest Disclosure System in Argentina

This chapter identifies ways to strengthen the financial and interest disclosure system in Argentina by improving the submission process, verification and sanctions. While the financial and interest disclosure system in Argentina is characterised by a high degree of maturity the system could better serve its objectives of conflict of interest prevention and illicit enrichment detection by demanding further information on sources for conflict of interest. In addition, the oversight function by the enforcement authorities is currently restricted because they have no access to key information. Similarly, an improved online search function would enable civil society to scrutinise the declarations.

    

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

4.1. Introduction

An effective financial and interest disclosure system can play a significant role in promoting integrity, transparency and accountability. Depending on their design, disclosure forms can serve to detect illicit enrichment or to determine whether a public official’s decision has been compromised by a private interest, such as former or outside employment, board membership or similar. The disclosure system is a building block of a country’s integrity system supporting the process of building a culture of integrity and reinforcing accountability (OECD, 2015[1]).

In addition, by making financial and interest disclosures public, the government shows its commitment to transparency and enables social control which adds a layer of scrutiny. Recent empirical cross-country evidence has shown the positive effect a disclosure system can have for a country’s capacity to control corruption (Vargas and Schlutz, 2016[2]).

In Argentina, the financial and interest disclosure regime was put in place by Law 25.188 on Ethics in the public sector (Ley 25.188 de Ética en el Ejercicio de la Función Pública) in 1999 and modified in 2013 by Law 26.857 which tied the asset declaration to the tax declaration process. Several decrees and resolutions were adopted to apply the Law in each of the three branches (Table ‎4.1).

Table ‎4.1. Overview of the legislative framework of the financial and interest declarations in Argentina

Legislation valid for all three branches

Branch

Regulatory framework

Content

Enforcement authority

Law 25.188 on Ethics in the Public Sector

Law 26.857 modifying the Ethics Law

Executive branch

Decree N.895/13

Establishes the Anti-Corruption Office (Oficina Anticorrupción, OA) as the enforcement authority which publishes the asset declarations (without the confidential information annex) on the internet and publishes a list of public officials what have not complied with their obligation to present an asset declaration.

Anti-Corruption Office

General Resolution N.3511/13

Public officials must present their asset declaration (form 1245) via the webportal of the Federal Administration of Public Revenue (Administración Federal de Ingresos Públicos, AFIP). For those officials that submit their Income and Personal Property Tax, the asset declaration fills in automatically the information of the tax forms. The forms are then automatically transmitted to the OA.

Resolution N. 1695/13

Confirms the provisions of the General Resolution and constitutes that those that want to consult an asset declaration must identify themselves and will be sanctioned according to Law 25.188 and 25.326 if the declarations is used illegally.

Judiciary branch

Resolution N. 237/14

Applies to the lower court judges and establishes the scope of the financial declaration which replicates the information requested in the executive branch. The Presidency of the Council of the Magistracy of the Nation is responsible for reception, safekeeping, registration and archiving of the financial declarations. The Presidency will also inform the Disciplinary Commission and the Council in cases of non-compliance, so sanctions can be administered

For lower court judges: Presidency of the Council of the Magistracy of the Nation

Agreement

N. 23/13

and N. 9/14

Applies to the Supreme Court of Justice and establishes the Secretariat General for the Administration (Secretaría General de Administración) as the entity responsible for reception, safekeeping, registration and archiving of the asset declarations. It sets out what information is included in the declaration which is similar to the ones in the executive branch.

For Supreme Court of Justice: Secretariat General for the Administration

Legislative branch

Provisions of the Administrative Secretary N. 46/14 and N.94/14

For the Chamber of Deputies, the provision N.46/14 establishes who is obligated to declare, when and how. In addition to the national representatives, all staff above director-level, and all staff who is part of a public procurement commission or participates in the decision-making in a public-procurement process. Parliamentarians have to present their declarations to the General Directorate of Administrative Co-ordination of the Administrative Secretary of the Chamber of Deputies, while all others have to submit their declarations to General Directorate Human Resources.

Congress of the Nation

Resolution of the Administrative Secretary N. 24/14

For the Senate, the Directorate of Human Resources is responsible for communicating the list of filers to the AFIP, to receive copies of the declarations (except for Senators for which the Administrative Secretary is responsible) and to transmit the documents to the OA. The General Directorate for Audit and Management Control of the Senate is responsible for safekeeping and archiving the declarations.

Honorable Senate of the Nation

4.2. Strengthening the submission process: Adapting the form and processes to better fit the system’s objectives

4.2.1. As most OECD countries, Argentina applies a risk based approach

The scope of the Argentinian financial and interest disclosure system applies to all three branches, including state-owned enterprises, armed services and police. It has a risk-based approach in so far as it does not require all public officials to declare their assets, but only obliges those that face a higher risk of corruption due to their position. Specifically, according to article 5 of Law 25.188 and modified by article 2 of Law 26.857, these are:

  • The president and vice-president;

  • The members of the Senate and Chamber of Deputies and personnel working in the Legislative Branch, with a rank not inferior to that of director;

  • The judges of the judiciary and Public Prosecutor’s Office and personnel serving in the National Judicial Branch and the National Public Prosecutor's Office, with a rank not inferior to that of a secretary or equivalent;

  • The Ombudsman and the deputies to the Ombudsman;

  • The Chief of the Ministerial Cabinet, Ministers, Secretaries and Deputy Secretaries in the National Executive Branch;

  • The Comptroller General and Assistant Comptroller General, the Auditor General and Assistant Auditor Generals, the higher authorities of regulatory bodies and other entities of the control system of the national public sector and members of the administrative bodies, the federal auditors and staff of federal auditors, with a rank or function not inferior to that of director or equivalent;

  • Ambassadors, consuls and public officials on permanent official duty abroad;

  • Staff with the position of colonel (or equivalent) or higher in the armed forces, federal police, airport police security, national gendarmerie, naval prefecture, federal penal correction service;

  • Rectors, deans and secretaries of national universities;

  • Officials or employees with a category or function not inferior to that of director or equivalent, who serve in the National Public Administration, centralised or decentralised, autonomous entities, banks and financial institutions of the official system, social works administered by the state, state-owned enterprises and personnel with similar category or function, appointed by the state in public-private partnerships, in public limited companies with state participation and in others;

  • Any public official or employee responsible for granting administrative authorisations for the exercise of any activity, as well as any public official or employee responsible for controlling the operation of such activities or for exercising any other control by virtue of police power;

  • Civil servants who make up the control bodies of privatised public services, with a rank no lower than that of director;

  • Any public official or employee who is a member of bidding, purchase or receipt of goods commission, or who participates in the decision making of bids or purchases and any public official whose function is to administer public or private assets, or to control or audit public revenues of whatever nature; and

  • Directors and administrators of entities subject to external control by the Congress of the Nation, in accordance with article 120 of Law 24156.

The narrowed-down, focused approach of Argentina is in line with the majority of OECD countries (Figure ‎4.1 and Box ‎4.1). Given their decision-making powers, elected officials and senior civil servants are more influential and are at greater risk for capture or corruption. The focus on elected officials and senior public officials in all branches makes the best use of the capacities of the responsible bodies by not overburdening with the sheer quantity of declarations without appropriate human and financial resources.

Figure ‎4.1. Majority of OECD countries have stricter disclosure requirements for senior decision-makers
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Note: At the time the survey was conducted, Lithuania was not yet a member country of the OECD.

Source: OECD (2014), Survey on Managing Conflict of Interest in the Executive Branch and Whistleblower Protection, OECD, Paris.

Box ‎4.1. The financial and interest disclosure system in France

Since 1988, French public officials are obliged to declare their assets to prevent illegal enrichment. Until the end of 2013, the Commission for Financial Transparency in politics was responsible for controlling the declarations. As a consequence of various scandals, the Higher Authority for Transparency in Public Life (Haute Autorité pour la transparence de la viepublique, HATVP) was created with a broader legal authority to ensure effective auditing of the asset and interest declarations.

The HATVP receives and audits the asset and interest declarations of 14,000 high-ranking politicians and senior public officials:

  • Members of Government, Parliament and European Parliament;

  • Important local elected officials and their main advisors;

  • Advisors to the President, members of Government and presidents of the National Assembly and Senate;

  • Members of independent administrative authorities;

  • High-ranking public servants appointed by the Council of Ministers;

  • CEOs of publicly owned or partially publicly owned companies.

Asset declarations have to be filed online when taking up a position, when a substantial change in assets occurs and when leaving the position. The information submitted in the declaration concerns real property, movable property (e.g. financial assets, life insurance, bank accounts, vehicles), and any existing borrowing and financial debt. The HATVP verifies the declarations and investigates any potentially omissions or unexplained variations in wealth while in office. All declarations are systematically controlled for some specific populations such as members of the Government and members of the Parliament. For public officials holding other functions, a control plan is established with systematic controls for certain targeted functions and random controls for others. The HATVP has the right to refer cases to the prosecutor for criminal investigation. Furthermore, it oversees the fiscal verification procedure of members of Government.

Source: Based on information provided by the Higher Authority for Transparency in Public Life.

In the executive branch of Argentina, the Human Resource Management (HRM) offices oversee the filing of the asset declarations. This includes the creation and update of the list of filers in each entity which is transmitted by paper to the Anti-corruption Office (Oficina Anticorrupción, OA). The OA then transfers the information into the OA’s online database. This procedure is very time consuming and bears a high risk of human error. In the interviews for this review, it was reported that there has been some confusion over the criteria ‘public officials with a rank not inferior to director’ as there is no harmonisation over the denomination of position throughout the public sector. While the OA does provide advice to HRM offices over cases in which doubts arises, this does not seem to be systemised. However, as enforcement authority the OA has the final decision power whom it includes in the list of filers. In order to create a more harmonised filer list, the OA could elaborate written guiding material on the type of functions that are equivalent to the position of director which could act as a short reference guide in case of doubt in addition to the generic concept of functions of the law. This could build on Resolution 6/2000 which specifies the scope of the legal provisions.

To automate this process and avoid human error, the recently introduced Information Data Base on Public Employment and Wages (Estructura Base Integrada de Información de Empleo Público y Salarios, BIEP) could be leveraged (Box ‎4.2). The information also includes the type of position: senior authorities (minister, secretary, under-secretary, head of entity), Members of Cabinet, senior management, non-management position. Once established, the BIEP could include information on the obligation to present an asset declaration. This could be tied to the type of position already included. However, it would also need to include those that have to file a declaration due to their functions, such as public procurement officials. By including a separate section on the obligation to file, a centralised filing list for the executive branch would be created in the Ministry of Modernisation which should be obligated to transmit the list of filers to the OA on a regular basis. In this way the OA would be less reliant on individual HR offices. On a regular basis, the information could be cross-checked with other information, such as the overall number of people employed in an entity to ensure its correctness.

Box ‎4.2. Centralising Employment Data in Argentina

The integrated information data base on public employment and wages (Estructura Base Integrada de Información de Empleo Público y Salarios, or BIEP), created in 2017, centralises employment data for the entire Argentinian Public Sector at the federal level. The National Directorate of Information Management and Wage Policy (Dirección Nacional de Gestión de Información y Política Salaraial) in the Public Employment Secretariat of the Ministry of Modernisation manages the system and receives the information from the different entities and processes and standardises it. The BIEP collects data on:

  • Overall number of employees

  • Family relations of employees

  • Level of studies undertaken of employees

  • Contractual links of persons with the public sector

  • Results of performance evaluations

  • Attendance/Absence rate

  • Disciplinary regime

  • Settlement of claims or other remuneration

New type of information can be included in the data base as the needs for system evolve. The information is taken from several sources such as personnel administration and human resources management information systems, electronic records such as organisational structures and information provided directly by the entities. The quality of the data provided is reviewed by the Ministry of Modernisation and will notify entities in cases of missing information or inconsistencies to rectify them. The data is updated every month, except for the results of performance evaluations and disciplinary regime which are updated as soon as a change takes place.

Source: Ministerio de Modernización.

4.2.2. The prevention and identification of conflict of interest requires more information

In Argentina, the stated objective of the disclosure system is the promotion of transparency, the detection of illicit enrichment and the prevention of conflicts of interest. In order to serve this dual purpose, the system would be expected to collect information on financial assets (income, movable or immovable assets, shares etc.) and information on the sources of income, outside and previous employment and other financial interests. However, since the reform of the asset declaration system in 2013 (Article 4, Law 26.857), the information available to the public and the enforcement authorities, such as the OA, has been limited. This limitation specifically concerns the type of information necessary for the prevention of conflicts of interest. This severely undermines the system’s objective of promoting transparency.

Since the reform of the declaration system, which mandated that the asset declarations are the same as the tax declarations, the declaration captures the following non-exhaustive type of information:

  • Real estate, and the improvements that have been made on said properties;

  • Movable property;

  • Other movable property, determining its value as a whole;

  • Capital invested in securities, shares and other securities quoted or not in stock exchange, or in personal or corporate holdings;

  • Amount of deposits in banks or other financial institutions, savings and provisional, national or foreign, holdings of cash in national or foreign currency;

  • Mortgage loans and mortgages;

  • Annual income and expenses arising from work in relation to the exercise of independent and / or professional activities;

  • Annual income and expenses derived from income or pension systems.

This information is included in the public part of the declaration, accessible to the public and the enforcement agencies such as the OA. The confidential annex, which is only accessible if judicial proceedings are opened, gives greater details on the requested information, such as the individualisation of each asset, its location, size, acquisition value and tax value, ownership, percentage over ownership or, in the case of profits, origin of the funds. The confidential annex also includes information on external activities and basic information on spouses and children of the public official.

The type of information requested from public officials in Argentina varies significantly from the information request in other OECD countries, in particular regarding non-financial information (Figure ‎4.2).

Figure ‎4.2. Type of information disclosed in the Executive Branch in OECD countries
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Source: OECD (2013), Government at a Glance.

Box ‎4.3. Content of the Income and Asset Disclosure form in the USA

The primary objective of the Income and Asset Disclosure Form in the USA is at the detection and prevention of conflicts of interest. High-ranking public officials, such as the president, vice-president and senior executive branch officers above a certain pay scale and their spouse and minor children need to file the publically available form 278. It includes the following information:

Assets

  • Interests in property held in a trade or business or for investment or the production of income (real estate, stocks, bonds, securities, futures contracts, beneficial interest in trusts or estates, pensions and annuities, mutual funds, farms, and so forth) that meet reporting thresholds; reported by categories of values)

Sources and amounts of income

  • Sources, type, and amount by category of value of investment income meeting a threshold amount

  • Sources and exact amounts of earned income (other than from U.S. government employment), including honorariums

Transactions

  • Purchases, sales, and exchanges of real property and securities that meet reporting thresholds

Liabilities

  • Creditor, amount by category, and terms of liabilities meeting a threshold amount reached at any point during the reporting period (major exceptions include mortgage on personal residence, certain family loans, and some revolving credit obligations)

Gifts and reimbursements

  • Gifts and reimbursements that meet reporting thresholds

Positions held outside of government

  • Positions as an officer, director, trustee, partner, proprietor, representative, employee, or consultant

Agreements and arrangements with respect to past or future employment

  • Parties to and terms of any agreement or arrangement with respect to future employment, leaves of absence, payments from and/or continuing participation in a benefit plan of a previous employer

Major clients (first-time filers only)

  • Identity of each source of income over a threshold amount generated by the performance of personal services for that source

Source: World Bank. 2013. Income and Asset Disclosure: Case Study Illustrations. Directions in Development. Washington, DC: World Bank. doi:10.1596/978-0-8213-9796-1.

In comparison to the declaration form prior to 2013, the current form (Form 1245) is a step back. Comparing the form to the USA income and asset declarations with the specific objective of preventing conflict of interest, it can be seen that the Argentinian form is not including the majority of the information necessary to assess conflict-of-interest situation (Box ‎4.3). It does not include information on unremunerated outside positions, such as board functions in political parties, foundations, charities or volunteer work. Similarly, the declaration does not include any information on previous employment which undermines the declarations purpose of preventing conflict of interest. Previous posts the public officials has held could for example influence policy decisions or create the appearance decisions have not been taken according to the public interest, but in the interest of selected stakeholders (Chapter 3 and 7). Information on positions held previous to public service should be collected in the interest of transparency and to prevent conflicts of interest. In addition, by opting to not include information on previous posts, the new public declaration form also infringes on Article 12 of the Public Ethics Law which was not modified by Law 26.857 and is still valid. Article 12 stipulates that all non-elected public officials must include their employment history to facilitate a better control over possible conflicts of interest that might arise because of it.

By only including the information already presented in the tax declaration in the publically accessible part of the asset declaration, additional information has been moved to the confidential annex or is omitted completely, as stated above. Limiting access to this information severely impacts the verification and audit functions (see section ‎4.3). Therefore, Argentina could consider decoupling the tax and asset declaration and broadening the type of information requested to facilitate an effective audit process. Besides information on previous and outside employment, a threshold for immovable and movable assets should be specified. Assets above the threshold would be specified individually while below the threshold the accumulated value could be indicated. In fact, article 17 of the draft law to reform the public ethics law proposes to introduce a threshold of 15 times the minimum wage. In addition, demanding a registration number, where applicable (e.g. cars), would improve the verification process by enabling automatic data comparison. In particular for immovable assets, information on other shareholders and the tax value, in addition to the acquisition value, should be captured. For debts the date when the liability was incurred and the deadline for repayment should be included. In addition, for asset declarations, filed when leaving office, future employers should be specified if already known. Furthermore, the disclosure form should include information on partners and dependent children. If amended in such a way, the asset declaration would fulfil the system’s dual objective of detecting illicit enrichment and preventing conflict of interest.

4.2.3. Beneficial ownership could be explicitly defined and included as one of the form of possession of assets for politically exposed persons

The current disclosure form only asks public officials to declare those assets they or their family members own directly. Limiting assets to direct ownership bares the risk that relevant information is omitted. For example, it would exclude shares owned by a trust the public official has set up. By not including information on assets of which the public official is not the direct owner, but has effective control over creates a gap allowing corrupt public officials to hide their assets from scrutiny. Therefore, Argentina could mandate public officials to not only declare what they legally own, but also those that they effectively use and control, despite being in the name of a third party (Rossi, Laura Pop and Tammar Berger, 2017[3]). Due to the fact that the risk of beneficial ownership is more relevant to higher public officials, beneficial ownership could be a complementary declaration category only for those public officials fitting the politically exposed person definition by Article 1 of Resolution 52/2012.

Given that the concept of beneficial ownership has not been included so far, it can be expected that both the staff of the OA and staff in the HR offices of the entities have limited familiarity with the concept. In order to being able to effectively monitor the implementation and provide guidance on the new requirement, the financial intelligence unit and anti-money laundering experts could raise awareness and sensitise the staff to recognise suspicious information. As a second step, guidance should be drafted providing examples of how a public official might beneficially own assets or certain rights (Rossi, Laura Pop and Tammar Berger, 2017[3]).

4.2.4. The electronic filing system could be by using the digital signature for the authentication of disclosures.

In comparison to the majority of countries, Argentina’s submission process is almost completely electronic. However, currently filers still need to print out the declarations and validate them with their signature on paper. This adds a step in the submission process. The hard copies are sent to the HR offices which in turn transmit them to the OA, except for the most senior five percent of public officials who send their declarations directly to the OA. By creating a legal basis for the use of a digital signature as authentication of the declaration, the submission process could further advance to being completely electronic and cutting out the additional administrative step. The electronic file could be transmitted both to the OA and the HR office, responsible for archiving.

4.2.5. Using behavioural science to incentivise public officials to comply with their duty to declare their assets

In Argentina, the OA regularly incentivises public officials to fulfil their obligation to declare their assets. The OA has published detailed information and frequently asked questions about the system’s objective, who, what and how public officials need to declare their assets, public availability, applicable sanctions and how to proceed if the official notices a mistake in the declaration. In addition, the OA publishes general reminders for public officials to declare their assets on twitter and their website. It also encourages the HR offices to remind filers in their respective entities of their obligation to file.

The compliance rate for submitting the asset declaration has significantly increased over the last two years reaching almost 90% (Figure ‎4.3). However, considering the individual compliance rate of each entity strong differences can be noted. For example in the case of the 2016 disclosures, in October 2017 the Ministry of Energy had a compliance rate of 45.28% and the Executive Office of the Cabinet of Ministers one of 67.24%. Even lower, the Nuclear Regulation Authority had a compliance rate of 0% (Infobae, 2017[4]).

Figure ‎4.3. Rising compliance with the obligation to present an asset declaration
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Source: Oficina Anticorrupción (2017), Informe.

Drawing insights from behavioural science, Argentina could send reminder messages prior to the filing deadline. Evidence, for example, shows that reminders significantly increase tax compliance (Hallsworth et al., 2017[5]). A timely reminder can break through the sometimes combination of reason for not complying, such as inertia, procrastination, competing obligations and simply forgetfulness (Sunstein, 2014[6]). In order to make the reminder salient, the message should be tailored to the recipient and ideally enable the recipient to act directly upon receiving it by including a link to the online declaration (World Bank, 2015[7]). Ideally, the message would directly address the recipient by name.

In a pilot project, the OA, in collaboration with the HRM offices, could test differently framed reminder message via email in one of the entities with a lower compliance rate. Once a reminder is proven effective, it could be rolled out to other entities. Examples of differently framed messages could be:

  • Entity norm: Nine out of ten public officials submit their asset declaration on time.

  • Minority norm: Nine out of ten public officials submit their asset declaration on time. You are currently in the small minority of people who have not done so.

  • Minority status: You are currently in the small minority of people who have not submitted their asset declaration.

  • Fraction injunctive norm: Nine out of ten people agree that everyone is obligated to declare their assets should do soon time.

  • Ethical norm: Contribute to public integrity in Argentina; submit your asset declaration on time.

  • Collective action: Integrity depends on each and every one of us! Submit your asset declaration on time.

  • Sanction: Don’t get punished! Submit your asset declaration on time (adapted from (Hallsworth et al., 2017[5]).

Going beyond communication efforts to increase compliance with the filing obligation, communication tools can also be used to support declarants. Online chat services, detailed guidelines or designated support staff can facilitate the filing process, make it less time-consuming for users and as a result increase the quality of information collected (Rossi, Laura Pop and Tammar Berger, 2017[3]). As a first step, Argentina could embed information which answers common questions and avoids common errors in the electronic filing form. To give more personal guidance, the integrity contact points, which are recommended to be created in the entities (see Chapter 1), could encourage public officials to contact them in case of doubts. This could be done by distributing flyers with the main details and objectives of the declaration system or by publishing a short message on the internal platform. By highlighting the importance of declaring their asset situation and raising awareness, a stronger culture of integrity can be created.

Given that the asset declaration system’s objective is to prevent conflict of interest in addition to detection illicit enrichment, the OA and possibly the integrity contact points should clearly underline the purpose of prevention in regards to conflict of interest by highlighting support tools and processes to resolve a conflict of interest. It needs to be clearly communicated that submitting the declaration does not free the public official from resolving the conflict of interest. In addition, trainings and awareness-raising measures on conflict of interest should emphasise that the annual declaration does not relieve the public official of managing ad hoc emerging conflict-of-interest situations.

4.3. Ensuring effective verification of the submitted information

An effective system for verifying the submitted information allows for achieving the objective of detecting illicit enrichment and preventing conflict of interest. It is through the verification that the data reveals the full picture about the declaration’s accuracy. Only through this process, sanctions can be administered deterring illicit enrichment and conflict-of-interest situations (OECD, 2011[8]).

Similarly, verification can strengthen a culture of integrity among public officials. Potential conflict-of-interest situations can be detected through verification and public officials subsequently advised on how to manage their private interests to avoid an actual conflict-of-interest situation.

In the case of the executive branch in Argentina, a specific dedicated Asset Declaration Unit (Dirección Nacional del Sistema de Declaraciones Juradas) in the OA is mandated to verify the content of the asset declarations of the Executive Branch. The verification process includes the comparison with the declaration of previous years, the analysis of internal consistency and general reasonableness of the data, corroboration of the data declared through the crossing of information with public records and other available sources of information. Yet, more could be done to reap all the benefits of the system.

4.3.1. To ensure effective verification, the Anti-Corruption Office needs to be granted access to confidential information

The purpose of the verification process is to ensure the accuracy of the asset declarations. This means on the one hand no omitted information and on the other hand accurate information. A well-designed verification process detects inconsistencies, misrepresented information and other red flags, such as a big difference between income and spending. Ultimately, verification can draw a picture to detect false declarations, unjustified variations of wealth, illicit enrichment, potential or actual conflicts of interest, incompatibilities and information relevant to corruption, tax crime or money-laundering investigations (Rossi, Laura Pop and Tammar Berger, 2017[3]).

In Argentina, the OA’s ability to effectively verify the asset declarations was seriously curtailed by the reform of the system in 2013, merging the asset and tax declaration. The OA only has access to the public form of the asset declaration. The confidential annex is accessible by judicial authorities and by the OA with the permission of the minister. In practice this means that the Office has information on cumulative amounts, but without details on sources. For example in the case of income, this would be vital to detect a possible conflict of interest. Size and location of immovable assets is also not accessible to the OA. This makes it difficult, if not impossible, to verify whether the monetary value given for example for a property is in relation to the usual price for the size and area of the property. Outside activities and business partners and contracts, a potential source of conflict of interest, are also not captured in the form accessible to the OA. In addition, the scarce information can seriously undermine the Office’s ability to cross-check information with other database.

The asset declaration of household members can be an important piece in the verification process. In Argentina, spouses, cohabitants and minor children must submit the same information as the public servant, except the information on employment history.. As information of household members is included in the confidential annex, it is not accessible to the OA. As a result, public officials could use family members to hide illicit wealth and sidestep oversight. As such the limitation to access confidential information, restrict the OA to use the common verification methods to their full potential.

Therefore, the reform of the Ethics Law could grant the OA access to confidential information. This would ensure that the OA can effectively execute its mandate to verify declarations for indicators of illicit enrichment and for potential conflicts of interest and advising filers on how to avoid conflicts of interest. An additional confidential annex with confidential information, such as bank account details and precise addresses, could be created. Consulting this information would only be possible for the OA with the permission of the Minister of Justice and Human Rights or the Public Prosecutor’s Office in a judicial case. This has been suggested in the draft law to reform the public ethics law.

4.3.2. The disclosure system has a well-developed system for verification

The verification process of the Argentinian disclosure system is characterised by a high level of maturity in comparison to systems in other countries. This is in particular because of the systematic and standardised steps taken to verify the asset declarations. The number of public officials required to file a declaration (currently around 50 000) is too great to permit the verification of every single one. However, the system is designed to enable the systematic verification of all of the declarations submitted by the most senior 5 percent of public officials. This includes the highest members of the central administration, armed forces, security forces, federal penitentiary system, decentralised bodies depending on the National Executive Branch, ambassadors, national universities and learning institutes, and foundations depending on the National Public Administration. Most notably, it also includes advisors to the President, Vice-president, Head of the Ministerial Cabinet, Ministers, Secretaries and Deputy Secretaries of the National Executive Branch.

The remaining declarations of lower level officials are verified according to different criteria:

  • Officials from an entity or hierarchy at risk for corruption

  • Officials whose declaration present red flags based on the exploitation of different databases

  • Officials with a file in the Investigations Directorate

  • Officials analysed in previous analyses.

While these criteria cover a wide array of public officials, the selection poses the risk of permanently excluding certain categories of public officials from verification that would not fall under the formal risk criteria established that warrants verification. All public officials, demanded by law to file their asset declarations, have been selected to do so based on some level of exposure to corruption risks. Therefore, their declarations should be subject to verification at least every few years. Furthermore, the selection according to the stated criteria can be misled by incorrect perceptions about corruption. To mitigate this risk, Argentina could select a sample based on a random lottery each year which ensures that each year a different sample is chosen. In this way, all declarations would be covered over the course of time. In addition, media reports and whistleblower reports could be taken into account in the selection for verification (Hoppe and Kalnin, 2014[9]). This would need to be aligned with the personnel capacities of the OA to ensure the broadened verification. In France, for example, an in-depth audit process of the financial and interest declarations is triggered according to risk exposure, missing or wrong information or late filing, abnormalities in previous years, reports from civil society and a random computer generated selection (Box ‎4.4).

Box ‎4.4. Verification process of financial and interest declarations in France

In France, the Board of the HATVP defines and adopts a yearly control plan. It is based on risk exposure, occupied functions and seniority of the different categories of public officials. The verification process of the financial and interest declarations consists of three different levels

Basic verification: Upon reception of a declaration, a first formal check of the disclosed data is conducted. This check verifies that public officials submitting a declaration fall within the scope of the High Authority (eligibility check) and on the other hand that declarations are complete (completeness check).

Simple verification: The completeness, accuracy and consistency of the content is checked to ensure there are no omissions, misevaluations or shortcomings. In this way the coherence of the declaration is verified, any important omissions or inexplicable variation of assets and subsequently illicit enrichment can be detected. In addition, potential conflict-of-interest situations can be identified.

Audit verification: A selection of declarations is subject to a more in-depth audit verification process. This audit process is triggered by:

  • Specific exposure to risk factors;

  • The fact that, upon formal verification, the declarations are visibly incomplete, sent after the delays or erroneous (35% of in-depth controls in 2016);

  • Red flags (civil society organizations, citizens, other administrations, etc.);

  • A random check, selected across all categories of filers by random computer generated draws (25% of in-depth controls in 2016);

  • Abnormalities revealed in controlling assets variation during the mandate or time in office (40% of in-depth controls in 2016).

Source: Based on information provided by the High Authority for Transparency in Public Life.

The verification process is conducted according to a standardised process which clearly sets out the procedures, such as verification with external databases and scanning of alert signals and inconsistencies which warrants the transfer of file to investigative authorities. In order to strengthen the verification process, the OA should aim for an integration of a higher quantity of relevant databases which would allow for an automatic cross-check. For example in France the High Authority for Transparency in Public Life (Haute Autorité pour la transparence de la vie publique, HATVP) can demand information from any institutions and individuals considered to be useful to the audit process (Box ‎4.5).

Box ‎4.5. The financial and interest disclosure system in France: Extensive powers to verify declarations and cross-check data

In order to fulfil its mandate, the HATVP has the right to ask fiscal authorities to analyse the declarations and access documents abroad or any fiscal information deemed of interest. Likewise, the HATVP can demand information from institutions and individuals who detain information useful to the audit process. The asset declarations of Government ministers and members of Parliament are transferred to the Public Finances General Directorate and in return the tax administration provides the High Authority with “all information to enable the latter to assess the exhaustiveness, accuracy and sincerity of the asset declaration, in particular the income tax notices for the person concerned, and, as applicable, the wealth tax notices”. Tax administration officers are released from their requirement of professional secrecy with regard to the High Authority’s members and rapporteurs. Citizens can also report to the High Authority any irregularities they notice about the online declarations.

Verification and audit process

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Source: Based on information provided by the High Authority for Transparency in Public Life.

If an irregularity or inconsistency is detected in the previous steps, a formal “request for clarification” is sent to the official via the HR offices. If no satisfactory clarification or correction is provided, then the case is passed on to the Sub-Secretariat for Anti-corruption Investigations. In cases of potential conflicts of interest, the Sub-Secretariat for Integrity and Transparency of the OA advises the public official of the appropriate steps to manage the conflict.

4.3.3. Argentina could increase the availability of information to the public

Disclosure systems can serve to build greater trust in government by citizens, since the act of public disclosure is a signal to citizens that public sector officials are committed to protecting the public interest, and are open to public scrutiny and oversight. Making disclosures publically available adds to the level of scrutiny by adding a countless number of external stakeholders, namely media, civil society organisations and citizens, that can double-check the information declared and report inconsistencies to the authorities. In this way, public availability can strengthen the deterrent effect and build social pressure to adhere to the integrity standards. However, the information in the disclosure form refers to assets and interests pertaining to the public official’s private capacity. As such, privacy and security concerns need to be considered.

In Argentina, according to Law 26.857 and Resolution 1695/2013 (applicable to the Executive and Legislative)/ Resolution 237/2014 (applicable to the Judiciary) the asset declarations are freely accessible and can be consulted via the internet at no cost. The OA is responsible for publishing the declarations from the executive and legislative branch. In the case of the judiciary, the Supreme Court and Council of the Magistracy of the Nation ratified the Agreement 9/2014 in 2016 which stipulates that the asset declarations are published on the webpage of the Supreme Court. However, at the time of writing no asset declaration have been published.

There are strong arguments in favour of making asset disclosures public. In addition to the added layer of public scrutiny, studies have found a correlation between public availability and a decreased perception of corruption. Citizens who can access asset disclosures can revisit their perception of excessive wealth of public officials gained through corrupt practices. However, this only holds if the information available is comprehensive. In countries where these conditions are not given, the relationship between asset disclosure systems and perceived corruption is inconsistent (Djankov et al., 2010[10]).

However, in Argentina the public’s ability to hold public officials accountable is limited. While Argentina makes disclosures public, the public form severely restricts the access to information as was discussed concerning the OA access above (see ‎4.3.1). For example no information on the sources of income which could be tied to outside employment is presented. Similarly, by not publishing information on the spouse, no real control of unjustified wealth is possible. As such, the public cannot determine incompatibilities or conflicts of interest. This is not in line with the system’s objective of promoting transparency.

While privacy and security concerns may have to be weighed against the public’s right to access information, in the interest of public accountability Argentina should make more information available to leverage the asset disclosure system’s positive effect on corruption perception. Three different levels of access could exist: confidential information (only accessible by a judicial authority or the Public Prosecutor’s Office in a legal case), information accessible by the OA and the Supreme Court and Magistrates Council of the Nation and public information. The scope of information available for each level could look as detailed in Table ‎4.2:

Table ‎4.2. Suggested information available for the three levels of access

Access level

Information included

Judicial authority in case of legal proceedings

Precise location of the declared properties (declarant and household members)

Numbers of bank accounts safety deposit boxes and credit cards (declarant and household members)

Precise amount of debt owed

Information on debt owned for household members

Entity responsible for verification (e.g. OA)

Exact amount of income from other sources, not related to the public official’s primary employment

Name, immovable and moveable assets of household members

Type of liability, date when liability was incurred and repayment deadline

Identification of those who are partners, co-owners or parts of companies, assets or contracts declared by the official (trusts, usufructs, powers of attorney, guarantees, etc.)

Information on beneficial ownership

Access to the declaration of spouses, cohabitants and minor children

Public

All information, except the information detailed for the other two access levels

Moreover, while the asset declarations are available online and it is commendable that the OA makes one file with all declarations for every year since 2012 accessible. However for the asset declarations of a particular public servant, both in the executive and the legislative, first and last name, number of a valid identification document and the reason for wanting access (journalist, investigator, academic or other) needs to be stated. Thereby a hurdle is introduced that can dissuade individuals from accessing declarations. For the judiciary branch, prior authorisation from the enforcement authority is needed which introduces an even bigger hurdle.

While security and confidentiality might be a reason for this on-demand access, Argentina could nevertheless better satisfy the public’s right to information. For example, some countries have opted to make only the declaration of high-ranking public officials freely accessible. Given the nature of their position, public scrutiny is a reasonable component of higher-ranking positions (StAR (Stolen Asset Recovery Initiative), 2012[11]). In France, which has a separate declaration for assets and interests, both asset and interest declarations of members of the government are available online. For deputies of Congress and senators only the interest declarations are available online, while the asset declarations are available in the prefecture. Indeed, Argentina could consider a tiered system for granting access (Figure ‎4.4). Declarations of key government officials would be freely accessible online, while access to the declarations of lower level officials would only be accessible upon identification.

Figure ‎4.4. Tiered system for access
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4.3.4. The user friendliness of the on-line interface could be improved

The user-friendliness of the online interface for accessing the asset declarations could be improved to facilitate public access to the declaration. Currently the search function for requesting access to an asset declaration does not autocomplete or suggests the public official’s name. Names have to be typed in exactly to render results. Similarly, the search for a group of public officials according to their function is not straightforward, because no categories are prefixed. As such the system might not give any results if functions have not been typed in correctly.

For example, in France financial and interest declarations are freely accessible without identifying oneself and the search function autocompletes names or suggest names depending on the function, region or department typed in. In addition, all declarations available according to a specific function, region or department are listed. Similarly, in Chile the search interface presents in addition to the search function an overview of all declarations available according to functions (Figure ‎4.5). Those that want to consult the financial and interest declaration obtain a quick overview and information on the breadth of the system. The files can then be exported as an open file format. While the OA already makes a csv file of all asset declarations available, individual declarations are only available as a pdf file. The OA, the Supreme Court and Council of the Magistracy of the Nation could consider a search mechanism similar to Chile and consider to make the declarations available in open file format and pdf to facilitate the public’s access to the declarations.

Figure ‎4.5. The search interface for financial and interest declarations in Chile
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Source: Contraloría General de la República and Consejo para la Transparencia, Infoprobidad, http://www.infoprobidad.cl/, accessed on 26-01-2018.

4.4. Administrating appropriate and effective sanctions that create a deterrent effect

Building on a strong verification process, sanctions are essential to guarantee compliance with the requirements of the financial and interest declaration system. Sanctions can act as deterrent for public officials to on the one hand comply with their obligation to present a declaration and on the other hand to not engage in dishonest conduct because the risk for detection and penalty is heightened. Sanctions can vary between criminal sanctions, administrative sanctions, disciplinary sanctions, civil liability, and other softer measures such as warnings, public announcements or apologies and similar (OECD, 2017[12]).

In the majority of OECD countries, the failure to fulfil the duties related to the declaration system results in administrative or disciplinary sanctions. These are related to either the submission process or to the information provided (OECD, 2011[8]).

In addition to the actual enforcement of sanctions, publishing sanction statistics will strengthen the credibility of the system and signal to the public the commitment of the government to integrity and anti-corruption (see Chapter 6). Similarly, the public visibilities of a public official’s noncompliance can have a strong social effect on behaviour, because the official might not want to be seen and perceived as someone breaking an existing norm (Rossi, Laura Pop and Tammar Berger, 2017[3]). Considering this, the OA’s publication of both non-compliant public officials and compliance rate of each entity is an effective measure to build social pressure. The judiciary branch publishes both the list of those who have to present an asset declaration and a list of those who complied. The legislative branch does not publish this type of information.

4.4.1. Given the high burden of proof for declaring false information, Argentina could introduce civil sanctions for false and missing information

In Argentina, public officials who fail to submit their declaration on time are warned to comply with their obligation within the following fifteen days. Not complying with this warning results in of a 20% monthly salary retention until the declaration is submitted. Once the declaration has been submitted, the sum is returned. Furthermore, failure to submit the declaration is considered serious misconduct and disciplinary sanctioned according to Article 8 of the Public Ethics Law. This disciplinary sanction consists of warning, suspension, dismissal or exemption. This is similar to the majority of G20 countries where this type of non-compliance involves administrative penalties and fines (Figure ‎4.6). In the case of the declaration when leaving office, the former public official is banned from re-entering the public sector for non-compliance.

The retention of salary is administered by the HR offices in each entity and relies heavily on them taking the appropriate action on time. In the last year, the OA sent and published all entities a communication to apply the salary retentionsigned by the President which showed the high-level commitment. However, to ensure that the salary retentions are applied fairly and consistently throughout the executive, Argentina could consider making more frequent and effective use of the possibility of administratively sanctioning those heads of HR offices who do not comply with their duty to retain the salary of non-complying public officials. In this way the salary deductions would play an important role in protecting the overall functioning of the financial and interest disclosure system.

In case of wilfully omitting or falsifying data in the asset declarations, criminal sanctions can be applied, consisting of a prison term of 15 days to two years and permanent disqualification for the exercise of public duty. In practice, proving the intent to omit or falsify information during criminal proceedings is a challenging hindrance to apply criminal sanctions. Indeed, practitioners in other countries point to the fact that it is difficult to prove intent (Rossi, Laura Pop and Tammar Berger, 2017[3]). This is the more so in Argentina, where a lack of resources to expedite and pursue the investigations are additional factors hindering the application of criminal sanctions in general (OECD, 2017[13]; World Bank, 2016[14]).

Some countries adopt a mix of civil, disciplinary and criminal sanctions for false or missing information. For example, in the USA, a civil monetary penalty of up to USD 50 000 can be enforced for not filing a declaration or wilfully submit false information. In addition, public officials may be subject to criminal sanctions, including imprisonment for wilfully providing false information or failing to submit their declaration. Disciplinary sanctions can also be applied for those that do not submit required information (United States Office of Government Ethics, n.d.[15]).

Similarly, Argentina could consider introducing civil sanctions in addition to criminal sanctions for wilfully not submitting information or declaring false information. The burden of proof is lower in administrative and disciplinary sanctions which should make it more likely that sanctions are applied. These sanctions should proportional, enforceable and visible (for further information see Chapter 6). In addition, it should be stressed that before applying this sanction, the public official does have the opportunity to rectify information throughout the verification process where the OA seeks communication with the public official to clarify information.

Figure ‎4.6. Sanctions for public officials in case of violations of the disclosure requirements in 10 G20 countries
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Note: Data refers to sanctions in place in Australia, Canada, France, Italy, Japan, Korea, Mexico, Turkey, the United Kingdom and the United States.

Source: (OECD and World Bank, 2014[16]).

Proposals for action

Strengthening the submission process: Adapting the form and processes to better fit the system’s objectives

  • The Anti-Corruption Office elaborates guiding material on the type of functions that are equivalent to the position of director required to file an asset declaration.

  • The Integrated Information Database On Public Employment and Wages could include data on the obligation to file an asset declaration to create a harmonised and centralised list of filers throughout the executive branch.

  • The Ministry of Modernisation would transmit the list of filers to the OA on a regular basis.

  • On a regular basis, the Anti-Corruption Office cross-checks the filer list with other information, such as the overall number of people employed in an entity to ensure its correctness.

  • The asset declarations could be decoupled from the tax declarations to strengthen the system’s purpose of preventing conflict of interests.

  • The asset declarations could capture information on:

    • Employment history;

    • Registration number of assets, where applicable;

    • Information on other shareholders of assets;

    • Acquisition value of assets;

    • Date of when liabilities were incurred;

    • Deadline for repayment of liabilities.

  • A threshold could be specified for immovable and movable assets under which the accumulated value of assets would be indicated

  • Beneficial ownership could be introduced as a complementary declaration category for public officials fulfilling the politically exposed person definition by Article 1 of Resolution 52/2012.

  • The financial intelligence unit and anti-money laundering experts could raise awareness and sensitise the staff to recognise suspicious information.

  • The Anti-Corruption Office elaborates written guidance providing examples of how a public official might beneficially own assets or certain rights.

  • Congress creates a legal basis for the use of a digital signature as the authentication of the declaration.

  • Based on behavioural insights, the Anti-Corruption Office could send reminder messages to public officials prior to the filing deadline. The message should be tailored to the recipient, ideally directly addressing the recipient by name, and enable the recipient to act directly upon receiving it by including a link or similar.

  • The electronic filing form could embed information which answers common questions and avoids common errors when submitting information.

  • The integrity contact points, which are recommended to be created in the entities, could encourage public officials to contact them in case of doubts.

  • Flyers with the details and objectives of the declaration system could be distributed and a short message on the internal platform published.

  • The Anti-Corruption Office should clearly underline the declaration system’s purpose of prevention in regards to conflict of interest by highlighting support tools and processes to resolve conflict-of-interest situations. This would mean clearly communicating that submitting the declaration does not free the public official from resolving the conflict of interest.

Ensuring effective verification of the submitted information

  • The Anti-Corruption Office could be granted access to confidential information.

  • Argentina could select a sample based on a random lottery each year for verification which ensures that each year a different sample is chosen. In addition, media reports and whistleblower reports could be taken into account in the selection for verification.

  • The OA could aim for an integration of a higher quantity of relevant databases which would allow for an automatic cross-check.

  • An additional confidential annex with confidential information, such as bank account details and precise addresses, could be created which can only be consulted by the judicial authority or the Public Prosecutor’s Office in a judicial case.

  • More detailed information of the declarations could be made accessible to the public.

  • A tiered system for public availability of asset declarations could be introduced. Declarations of key government officials would be freely accessible online, while access to the declarations of lower level officials would only be accessible upon identification.

  • The online interface should be designed more user friendly and include a search function which at a minimum autocompletes the name of public officials.

Administrating appropriate and effective sanctions that create a deterrent effect

  • Heads of Human Resources offices who do not comply with their duty to sanction non-complying public officials could be administratively sanctioned.

  • Argentina could consider introducing civil sanctions in addition to criminal sanctions for wilfully not submitting information or declaring false information.

References

[10] Djankov, S. et al. (2010), “Disclosure by Politicians”, American Economic Journal: Applied Economics, Vol. 2, pp. 179-209, http://dx.doi.org/10.1257/app.2.2.179.

[17] Dolan, P. et al. (2012), “Influencing behaviour: The mindspace way”, Journal of Economic Psychology, Vol. 33/1, pp. 264-277, http://dx.doi.org/10.1016/J.JOEP.2011.10.009.

[5] Hallsworth, M. et al. (2017), “The behavioralist as tax collector: Using natural field experiments to enhance tax compliance”, Journal of Public Economics, Vol. 148, pp. 14-31, http://dx.doi.org/10.1016/J.JPUBECO.2017.02.003.

[9] Hoppe, T. and V. Kalnin (2014), Practioner manual on processing and analysing income and asset declarations of public officials, Eastern Partnership-Council of Europe Facility Project on “Good Governance and Fight against Corruption”, https://rm.coe.int/16806db62d (accessed on 9 February 2018).

[4] Infobae (2017), “Los ministerios de Salud y Energía, al tope del ranking de incumplimiento en la presentación de DDJJ”, Infobae, https://www.infobae.com/politica/2017/11/30/los-ministerios-de-salud-y-energia-al-tope-del-ranking-de-incumplimiento-en-la-presentacion-de-ddjj/ (accessed on 11 July 2018).

[12] OECD (2017), OECD Integrity Review of Colombia: Investing in Integrity for Peace and Prosperity, OECD Public Governance Reviews, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264278325-en.

[13] OECD (2017), Phase 3bis Report on Implementing the OECD Anti-Bribery Convention in Argentina, OECD, Paris, http://www.oecd.org/corruption/anti-bribery/Argentina-Phase-3bis-Report-ENG.pdf (accessed on 29 January 2018).

[1] OECD (2015), Government at a Glance 2015, OECD Publishing, Paris, http://dx.doi.org/10.1787/gov_glance-2015-en.

[8] OECD (2011), Asset Declarations for Public Officials: A Tool to Prevent Corruption, Fighting Corruption in Eastern Europe and Central Asia, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264095281-en.

[16] OECD and World Bank (2014), Good practices in asset disclosure systems in G20 countries, http://www.bmjv.de/SharedDocs/Downloads/EN/G20/Good%20practices%20in%20asset%20disclosure%20systems%20in%20G20%20countries,%20prepared%20by%20the%20OECD%20and%20the%20World%20Bank.pdf?__blob=publicationFile&v=1 (accessed on 29 January 2018).

[3] Rossi, I., Laura Pop and Tammar Berger (2017), “Getting the Full Picture on Public Officials: A How-toGuide for Effective Financial Disclosure”, http://dx.doi.org/10.1596/978-1-4648-0953-8.

[11] StAR (Stolen Asset Recovery Initiative) (2012), Public Office, Private Interests Accountability through Income and Asset Disclosure, World Bank, Washington D.C., https://star.worldbank.org/star/sites/star/files/Public%20Office%20Private%20Interests.pdf (accessed on 28 January 2018).

[6] Sunstein, C. (2014), “Nudging: A Very Short Guide”, J. CONSUMER POL’Y, Vol. 583, https://dash.harvard.edu/bitstream/handle/1/16205305/shortguide9_22.pdf?sequence=4 (accessed on 16 January 2018).

[15] United States Office of Government Ethics (n.d.), Public Financial Disclosure Guide: 1.06: Failure to File and Falsification Penalties, https://www.oge.gov/Web/278eGuide.nsf/2cf9ac792bc0654a85257ea1005f838a/9ce577dec23161bc85257f4500736b90?OpenDocument (accessed on 10 February 2018).

[2] Vargas, G. and D. Schlutz (2016), “Opening Public Officials’ Coffers: A Quantitative Analysis of the Impact of Financial Disclosure Regulation on National Corruption Levels”, European Journal on Criminal Policy and Research, http://dx.doi.org/10.1007/s10610-016-9320-3.

[14] World Bank (2016), World Governance Indicators, http://info.worldbank.org/governance/wgi/#reports (accessed on 30 January 2018).

[7] World Bank (2015), World Development Report 2015: Mind, Society, and Behavior, World Bank, Washington D.C., http://dx.doi.org/10.1596/978-1-4648-0342-0.

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