Transparency International's 2008 Corruption Perceptions Index (CPI) highlights the fatal link between poverty, failed institutions and graft. But other notable backsliders in the 2008 CPI indicate that the strength of oversight mechanisms is also at risk among the wealthiest. In low-income countries, rampant corruption jeopardizes the global fight against poverty, threatening to derail the UN Millennium Development Goals (MDGs). According to TI's 2008 Global Corruption Report, unchecked levels of corruption would add US $50 billion (€35 billion) - or nearly half of annual global aid outlays – to the cost of achieving the MDG on water and sanitation.

A new approach in development aid could be fuelling corruption. Western countries are testing the "budget support model", whereby funds are given directly to the government in order to reduce poverty. A report claims that up to June 2002, government expenditure was not supported by the correct documentation.