In a speech on Tuesday, Wolfowitz said graft was a major impediment to development and the bank would step up transparency and anti-corruption efforts on three fronts.


In countries with serious problems, he said, the bank would take such steps as investing in anti-corruption expertise and governance specialists, and would increase its investments in such key areas as judicial reform, civil service reform, the media and freedom of information.


The bank will also introduce a new system to reduce the risks of corruption in its projects, including steps to "address the incentives and opportunities to fight corruption right from the start."


Wolfowitz said that had already been done in Indonesia's Aceh province, working to recover from the Indian Ocean tsunami of December 2004.


The bank believes that more community involvement will mean money less wasted.


Survivors in Aceh are "managing their own reconstruction projects" and widows are "using micro-finance to improve their family's lives," he said.


Expanding partnerships


"It's (corruption) not a problem that has a single, simple solution...It's a problem where you've got to work at making progress over time..."

Paul Wolfowitz, president of the World Bank

Wolfowitz said the third front was to expand partnerships with groups interested in improving fiscal transparency, such as civil organisations and the private sector.


While some companies "take advantage of weak governance to alter the competitive playing field, the private sector as a whole stands to lose the most when corruption is pervasive and the rule of law is undermined," he said.


Later in a conference call with reporters, Wolfowitz said there were no simple answers to fighting corruption.


He said: "It's not a problem that has a single, simple solution.


"It's a problem where you've got to work at making progress over time; but to some extent you have to chase the corrupters because they are going to figure out ways to deal with whatever mechanisms people develop to control them."