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Assessing corruption risks in challenge funds

This Helpdesk Answer provides an analysis of potential risks of corruption in challenge fund cycles. It also draws on the anti-corruption literature to provide recommendations on how to integrate anti-corruption measures and best practices into the funding cycle. In addition, this brief also includes a number of cross-sectional anti-corruption measures. The results presented, however, have to be treated with caution as they provide only a theoretical insight into corruption risks rather than an evaluation of the likelihood of each risk occurring. As such, organisations concerned about corruption in the use of challenge funds should conduct a bespoke and in-depth risk assessment to account for the specific likelihood and probable impact of various forms of corruption.

28 November 2019
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Assessing corruption risks in challenge funds

Main points

  • Challenge Funds may entail high risks of corruption as they operate in specialised fields, have complex project structures with flexible results frameworks and can involve profit-driven actors.
  • Given their role as intermediaries between donors and grant holders, fund managers play a critical role in identifying and curbing corrupt practices.
  • The severity of different forms of corruption risk vary across the six typical phases of Challenge Fund project cycles.
  • The literature presents a range of mitigation measures suited to reducing corruption risk, ranging from clarity in project design to transparency in policies and procedures, third party oversight and grievance mechanisms.

Cite this publication

Costantino, F.; (2019) Assessing corruption risks in challenge funds. Bergen: U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (U4 Helpdesk Answer 2019:15)

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About the author

Fabrizio Costantino

Fabrizio Costantino is Research and Knowledge Coordinator at Transparency International. In 2014 he obtained a PhD in Law from the Pompeu Fabra University of Barcelona, Spain. He has been working as expert in various justice related studies on behalf of the European Commission. He is author of several publications and technical reports on corruption, law and criminology, both at national and international level. He is lecturer of eCriminology and Evaluation of criminal policies courses at the Department of Law, University of Trento (Italy). Before joining TI, Fabrizio worked at eCrime, the Research Group on eCriminology at the Faculty of Law of the University of Trento. He worked at the Policy Analysis and Research Branch of United Nations Office of Drugs and Crime (UNODC), Vienna.


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