By J.F. Cerullo
The rule of law bakes no
bread, it is unable to distribute loaves or fishes (it has
none), and it cannot protect itself against external assault,
but it remains the most civilized and least burdensome
conception of a state yet to be devised.
Michael Oakeshott1
People could make it
against flood and pestilence, but not against the laws; they
went under.
Jorge Amad
OVERVIEW
Former World Bank President James Wolfensohn has repeatedly
called corruption “the single greatest obstacle” to long-term
development. More recently, corruption has emerged as a
first-order concern in many post-conflict transitions as well.
Whether corruption is indeed a priority will always be a
case-by-case determination. But, in several cases, the
determination has been that worrying about corruption “later” is
a luxury that countries emerging from conflict cannot afford.
Corruption is a broad term that covers a range of behaviors,
including “petty” or “administrative” corruption such as bribery
or asset-stripping as well as “grand” corruption such as illicit
influence over legislation or policy. When it becomes endemic,
corruption can derail political and economic transitions,
undermine state capacity and legitimacy, exacerbate poverty and
inflame grievances linked to conflict. Because the proximate
causes and patterns of corruption can vary widely across and
within countries, explicit efforts to analyze and “unpack”
corruption are critical and innovative methods exist to do so.
Tactics to address corruption have focused, at various points,
on law enforcement and investigation techniques to prosecute
corruption, administrative reforms to help “prevent” corruption,
and external advocacy and watchdog activities to spur reform and
raise awareness. More recent efforts have focused not only on
lower-level administrative corruption but also on less visible
forms of grand corruption, involving political and
economic elites and transnational actors. These various
approaches constitute a menu of options to address corruption
that must be tailored to differing needs and opportunities on
the ground. There is no “silver bullet” to address corruption,
the popularity of freestanding anti-corruption commissions
notwithstanding. Efforts to address corruption must be
coordinated with efforts to address other closely related
problems, such as weak rule of law, physical and economic
insecurity and weak political accountability.
Corruption is not just a long-term “drag” or “tax” on
development, but has real and immediate political salience often
poorly understood by outsiders. For this reason, it has quickly
become a first-order priority in some post-conflict transitions
despite the fact that national capacities are often stretched
thin by urgent demands on the ground and the avalanche of
international aid and conditionality. Interesting and varied
approaches are emerging in Afghanistan, Liberia, the Democratic
Republic of Congo and elsewhere to respond to growing problems
of corruption, as discussed below.
This essay will attempt to summarize the literature on
corruption, emphasizing the close links between corruption, the
rule of law, statebuilding and peacebuilding. It will then
review the evolution of international anti-corruption policy and
practice. Finally, it will examine the applicability of general
practice to post-conflict settings.
CORRUPTION, RULE OF LAW AND STATEBUILDING
Within the international community, there is a renewed
acknowledgement of the importance of building or rebuilding
states – not only to improve the well-being of citizens living
under them, but also to reduce the negative spillover effects of
state failure for global stability and security. States that can
govern well, it is now argued, are the key to long-term
development, to combating terrorism, and to preventing conflict
and the resurgence of conflict in post-conflict transitions.
Renewed emphasis on efforts to strengthen the rule of law is in
large part propelled by this new consensus on the importance of
statebuilding and governance.
But the degree of corruption within the state can fundamentally
alter whether laws lift people up or, as Amado describes, pull
them under. Although Montesquieu argued that “law should be like
death, which spares no one,” corruption is the system by which
those who pay are spared, enriching public officials in the
bargain. Therefore, efforts to control corruption are critical
to ensuring access to justice and equal treatment before the
law. Efforts to strengthen the rule of law, by challenging an
environment of impunity, are also critical to controlling
corruption.
While there is a new consensus on the importance of
statebuilding, there is no consensus yet on how to incorporate
corruption into it. This is in part because many international
actors have framed the problem as one of state fragility (i.e.,
lack of power) rather than state predation (i.e., abuse of
power). To outsiders, many states do appear weak, fragile,
overstretched, and under-resourced. To citizens living under
them, however, they appear often far more powerful than any
other actor in society. The UK’s Department for International
Development (DfID) tries to encompass both dimensions in its
study of
“difficult environments” in which the state is either unwilling
or unable to perform. While these two realities often co-exist,
they are distinct problems that have distinct policy
implications.
In countries at critical junctures, such as post-conflict
transitions, perceptions of corruption can help to shape
whether, in the eyes of much of society, the state is the
solution or the problem. Corruption undermines both state
effectiveness (the ability to govern) and state legitimacy (the
recognition of the right to govern). While effectiveness may
matter over time, legitimacy is essential for sustaining fragile
states that are not yet effective. While corruption hampers
development in the long run, it also has real and immediate
political salience as well. As one Brazilian activist put it,
“People have no idea how directly proportional the existence of
corruption is to the misery of our people. International actors
and national leaders ignore it at their peril.
In the international policy arena, after decades of efforts to
support development and achieve security despite corruption, a
growing number of actors are trying to understand and address
corruption itself. The single greatest challenge they face is
intense opposition from political and economic elites who
benefit tremendously from corruption. As Peter Evans points out,
“[f]or predatory states ‘low level equilibrium traps’ are not
something to be escaped; they are something to be cherished.”
The problem of corrupt elites is analogous to references in
peace implementation literature to the “spoilers problem.” If
the rule of law and statebuilding are going to move to the
center of post-conflict peacebuilding, as Lakhdar Brahimi and
others have argued, then “governance spoilers” must be
identified and strategies developed to confront them. An obvious
question is whether the peace spoilers and governance spoilers
are one and the same. If so, can they be brought into the peace
process without being brought into the state? In practical
terms, what can be done to address corruption by reformers
within society or within the state, and what is the role of
international actors?
The obstacles are tremendous, particularly in post-conflict
environments where institutional tools may be weak and the
objectives of short-term stabilization and long- term governance
may be at odds. However, the objective should not be viewed in
terms of eliminating corruption but, rather; in terms of
ensuring that the state is seen to be making a credible effort
to address it. Research and practice in the anti-corruption
field have evolved significantly over the past 10-15 years, but
relatively little of this learning has filtered into adjacent
but specialized fields of the rule of law and post-conflict
reconstruction. The next sections will summarize the
anti-corruption literature, identify key trends in international
practice, and highlight new approaches in post-conflict
reconstruction settings.
CORRUPTION: DEFINING THE PROBLEM
Corruption, in contrast to the rule of law, distributes “loaves
and fishes” valued at around $1 trillion per year or
approximately 3% of world income today. It exists in all
countries at all times, although this chapter will focus on how
corruption affects developing countries, including international
and national factors that drive it. It exists across all sectors
– public, private, civil society -- but public sector corruption
remains the more serious problem given the state’s role in
regulating the private sector and civil society.
The most common definition of corruption is the abuse of public
office for private gain.
It covers a range of actions including bribery, extortion,
asset-stripping, and illicit influence. This definition suggests
that gains may accrue to individuals or to groups, and that what
is considered “abuse” may vary according to situations and
settings regardless of whether it is legal or illegal. Several
issues which are closely linked to corruption but distinct from
it are clientelism and patrimonialism, rent-seeking, and
organized crime.
“Corruption” is a loaded term. For governments and outsiders, it
implies a degree of judgment or even crusading zeal they find
inflammatory or unhelpful. But anti-corruption advocates are
“loathe to separate the element of moral disapproval from the
word itself.” Euphemisms in international discourse, such as
lack of transparency or poor governance, may make people more
comfortable but cast a technical glaze over issues that, within
their respective societies, do have a normative dimension.
An important drawback of the term corruption is that it
encompasses many behaviors with distinct causes and solutions.
It is essential to unpack corruption and, in particular, to
distinguish between administrative corruption (i.e., corruption
among low- and mid-level bureaucrats) and grand corruption
(i.e., corruption among political and economic elites).
Administrative corruption may be addressed through institutional
reforms designed to improve accountability and transparency, in
conjunction with state and societal actors. Grand corruption,
however, requires a focus on the incentives of political elites
and key economic interests seeking to influence them or
“capture” the state.
Under very broad definitions, corruption and the rule of law may
be considered two sides of the same coin; the rule of law is a
set of formal rules partially regulating behavior while
corruption is a set of informal rules and practices partially
regulating behavior. The rule of law is founded on impersonal
trust in laws and institutions; corruption has been associated
with higher levels of “particularized trust” between
individuals. For that reason, rotating public officials among
offices can reduce some forms of corruption. The rule of law is
typically the goal; corruption is sometimes the prevailing
practice.
In broad terms, therefore, corruption and the rule of law are
closely linked and there is good reason to believe that efforts
to reduce corruption and strengthen the rule of law are mutually
reinforcing. Corruption and rule of law measures are highly
correlated and are often described as two dimensions within a
broader concept of governance. Both are dependent upon reformers
at the highest level and shaped by broader societal and market
dynamics.
Approaches to addressing corruption and building the rule of
law, however, do not overlap so neatly. Anti-corruption efforts
typically focus on corruption across all agencies and branches
of government while rule of law programs usually focus on a more
narrow set of public actors in the justice and security sectors,
though both deal with a number of societal actors outside the
state. Looking at various areas of law, rule of law specialists
typically focus on constitutional and criminal law in
post-conflict countries (and civil and commercial law in
developing countries), while anti-corruption specialists might
be more likely to focus on administrative law (or public law).
Administrative law governs all agencies typically operating
under the executive and charged with “the day–to–day minutiae of
governing”. Regulating the transparency and accountability of
these agencies is critical not only for corruption, but also for
building a rule of law culture in the Executive, the “public
face” of the state most visible to citizens.
ECONOMIC, POLITICAL AND SOCIAL CONSEQUENCES OF CORRUPTION
Corruption may have paradoxical effects. For example, one study
on Morocco found that corruption in land reform was functional
for the survival of the regime and dysfunctional for the
economy. But over time, the onus of scholarship has shifted
decisively away from arguments in the 1950-60s about the utility
of corruption, to mounting evidence in the 1980-90s of the costs
of corruption. Contributing factors included the spread of
democratic regimes (in which the costs of corruption were quite
significant) as well as new tools to measure corruption and
quantify some of its impact.
As Cartier-Bresson recently argued,
Theoretical and empirical analyses of the causes and
consequences of, as well as the means of fighting against,
corruption has reached a certain level of maturity. The
functionalist currents, which viewed corruption as a system that
lubricates the cogs of the bureaucratic machine, have
disappeared. Economists have reached a consensus on the very
negative effects of the phenomenon…Unfortunately, this maturity
has still not paved the way for a meaningful advance in the
improvement of governance, for the political barriers erected by
the losers of such reforms are formidable.
Corruption slows economic growth primarily by reducing
investment but also by reducing the quantity and effectiveness
of international aid and the quality of infrastructure, and is
associated with weak rule of law, insecure property rights and
declining government effectiveness, which are also detrimental
to investment and growth.
The political consequences of corruption are more difficult to
quantify. It is generally accepted that growing perceptions of
corruption diminish trust in public institutions. Only recently,
however, have scholars identified perceptions of corruption as
one of the key determinants of legitimacy and regime support in
multi-country analyses. State corruption has buttressed support
for military governments in Pakistan, Uganda, Nigeria and
elsewhere, undermining demilitarization. In many cases, citizens
are willing to tolerate some loss of freedoms in exchange for
less corruption. In Afghanistan, this was a large part of the
Taliban’s initial appeal. Democracy appears, therefore, to
undermine corruption and corruption appears to undermine aspects
of democracy. Bratton argues that “Africa’s prospects for
democracy depend critically on whether state elites can
establish a reputation for probity and honesty in the eyes of
ordinary people.”
Until recently, the social costs of corruption received little
attention in policy discussions. Studies now show that
corruption is associated with lower health and education
outcomes
and with lower levels of education spending. Corruption
exacerbates inequalities; women, the poor, and rural areas are
disproportionately affected. Studies of public expenditures at
the local level indicated that better-off communities
experienced less “leakage” in education funding, resulting in de
facto social spending that was even more regressive than de jure
allocations.
CORRUPTION AND CONFLICT
Sorting through the links between corruption and conflict is
very complex, with causality flowing in both directions. The
Report of the Secretary-General’s High Level Panel on Threats,
Challenges and Change notes that “corruption, illicit trade and
money-laundering contribute to State weakness, impede economic
growth and undermine democracy. These activities thus create a
permissive environment for civil conflict.” Clearly, corruption
undermines the state and its capacity to manage and prevent
conflict. It exacerbates grievances and inequalities. Massive
corruption at times of national emergency, described by Johnston
as “crisis corruption”, can be particularly explosive. For
example, after decades of repression under the Somoza regime in
Nicaragua, it was massive corruption in his handling of
emergency relief for earthquake victims that finally began to
seriously erode his national and international support,
eventually leading to the collapse of the regime. But the
conflict field, given its emphasis on stability, is one of the
few areas where some of the functionalist arguments for
corruption retain a foothold. When corruption networks
exacerbate existing societal or ethnic fault lines, it can be
explosive.
If corruption networks bridge these divisions among elites,
however, it might have some mitigating effects. Shared economic
interests of elites, it is argued, may lead them to temporarily
set aside differences to get rich together – albeit at the
expense of others. Some argued that this was the case, for a
certain time, in both Rwanda and Macedonia. LeBillon also argues
that anti-corruption reforms can be destabilizing. International
anti-corruption efforts and pressure to comply with
international standards in public finance and good governance
may, he argues, serve as an external shock, leading either to
new openings for reform or new possibilities of instability and
conflict.
Conflict feeds corruption as well. Even the risk of conflict and
perceptions of growing insecurity can undermine accountability
and create a permissive environment for state impunity – both
for human rights abuses and corruption. There is a large
literature on war-time economies and their association with
rising corruption. This allows the state to act as a protection
racket, demanding increasingly greater bribes in return for
security provision.
Finally, only recently has there been growing emphasis not only
on the costs of corruption for developing countries themselves,
but also for international security. The head of Interpol, four
weeks after 9/11, noted that the most sophisticated security
systems could be side-stepped by a simple bribe. The current US
National Security Strategy identifies corruption as creating an
enabling environment for terrorism, organized crime, and
trafficking in persons. The international security lens tends to
focus particularly on corruption in police and border agencies.
UNINTENDED CONSEQUENCES OF ANTI-CORRUPTION
Pressure on the part of donors and the public to address
corruption can have unintended effects on the rule of law and
other objectives. Military officers may feel emboldened to step
in and “clean up” government.
The executive itself may respond with a “crack-down” on
corruption involving draconian law-and-order approaches and
violations of due process. International and popular pressure
may prompt cabinet reshufflings which may provide a cover for
eliminating rivals. Trumped up charges may be lodged against
anti-corruption reformers themselves. International agencies and
public opinion are usually not in a position to distinguish
scapegoating from well-intentioned efforts, undercutting their
ability to protest.
Exposing corruption can be economically destabilizing, as
evidenced by the explosion of unregulated pyramid schemes and
their subsequent collapse in Albania in 1997 and recent bank
failures in the Dominican Republic linked to revelations of
corruption. It can also be politically destabilizing, fed by
excessive expectations on the part of both voters and
international actors. In some cases, anti-corruption campaign
promises can become the “third rail” of politics – limiting
patronage, antagonizing key “clients” but failing to provide a
political pay-off at the polls. International actors often seek
strong, up-front commitments from political leaders to address
corruption and pursue comprehensive reforms. Meanwhile,
anti-corruption assistance programs ramp up slowly, well into
the middle of the leader’s term in office, undermining efforts
to deliver results before the next elections. Attention must be
paid to how international actors can work with committed
governments in a timely way to help them show results. A “throw
the bums out” mentality may be just what some countries need but
it often leads to a high rate of turn-over. As one voter said
after the Hamas landslide in the 2005 Gaza municipal elections:
"I voted for [Hamas] because we haven't tried them out before.
We've tried all the others, and they only brought us
corruption."
DETERMINANTS OF CORRUPTION
There is no clear answer to the “causes” of corruption.
Corruption and various dimensions of governance, such as the
rule of law, voice, accountability, stability, and regulatory
effectiveness, are so closely intertwined that separating cause
from effect is very difficult. Economic factors linked to lower
corruption included more developed economies, higher imports,
and more variable inflation. Political factors linked to lower
corruption include higher degree of female participation in
public life, larger electoral districts, and non-federal
systems. Democracy appears to influence corruption only over the
long-term. Social factors associated with lower corruption
include countries with Protestant traditions, histories of
British rule, and higher levels of trust. Johnston combines many
of these factors, arguing that the relative pace of political
and economic opening overlaid onto an institutional and social
context generates four discrete “corruption syndromes.” It is
very likely that all of these factors play a role, resulting in
patterns of corruption that vary both in degree and kind across
countries.
MEASURING CORRUPTION ACROSS AND WITHIN COUNTRIES
International surveys of firms as summarized by Kaufmann suggest
that, at the global level, aggregate levels of corruption have
not changed significantly in recent years. But this masks
important regional differences, including deterioration in South
Asia, Latin America, Africa, and the Former Soviet Union while
other regions have shown improvement or no measurable change.
Patterns vary within regions as well. Within Africa, a survey of
businesses detected improvements in Mauritius and Botswana in
sharp contrast to Zimbabwe and Nigeria. Other countries
perceived to have growing patterns of corruption include
Venezuela, Guatemala, Paraguay, Ukraine, Romania, Indonesia,
Bangladesh, and Germany.
Among post-conflict countries, levels of corruption are high
(meaning “control of corruption” is low) although the variation
across countries is significant. As shown in above, most
countries (9 out of 15) have notably higher levels of corruption
than countries with comparable income levels (although margins
of error, shown graphically below, are large).
PERCEPTIONS OF CORRUPTION IN SELECTED POST-CONFLICT COUNTRIES
While levels of corruption may be a rough but useful initial
indicator of the relative importance of corruption across
countries, they are of little assistance in developing specific
policy responses. Corruption may be organized and driven from
the top, as in Palestine, or more anarchic and chaotic, as in
Liberia. Institutional tools to address corruption will
therefore vary tremendously. Although Haiti and Iraq have
comparable levels of corruption, Haiti is a very weak state
while Iraq, until recently, was a “fully institutionalized
autocratic system” with low legitimacy but considerable
strength. The approaches will have to vary considerably,
reflecting historical, social, institutional, political and
economic factors on the ground.
Within countries, anti-corruption assessments and surveys can be
helpful in determining the importance of corruption relative to
other problems or aggregating perceptions of corruption across
institutions.
INTERNATIONAL STRATEGIES AND APPROACHES: THREE PHASES
As mentioned, the anti-corruption field is new but rapidly
evolving. Serious efforts to address corruption through
international diplomacy and technical assistance began only in
the 1980s. Since that time, international knowledge and practice
can be characterized as passing through three broad stages: law
enforcement, prevention, and a more recent focus on elite and
international corruption. These three approaches are not
mutually exclusive and all have been employed at different
times. But it is fair to say that an initial emphasis on law
enforcement has gradually been supplemented by an emphasis on
administrative reforms to prevent corruption. Even more recent
is the emphasis on grand corruption and prescriptions to address
it.
1. LAW ENFORCEMENT
Many of the pioneers of international anti-corruption efforts
were law enforcement officials and, beginning in 1983, they
began to organize international conferences to raise awareness
and exchange experiences across countries.
At the regional level, work began on a series of international
and regional conventions that continued through to the present.
The emphasis on criminalization of corruption in earlier
conventions gradually gave way to emphasis on prevention in
latter ones:
* The European Union adopted multiple legal instruments from
1995 to the present, aiming to protect the European Community’s
financial interests by criminalizing fraudulent conduct.
* The Inter-American Convention against Corruption of the
Organization for American States, which entered into force in
1997, was the first regional convention.
* The Organization for Economic Cooperation and Development
adopted the Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions in 1997, which
entered into force in 1999.
* The Council of Europe adopted the Criminal Law Convention on
Corruption and the Civil Law Convention on Corruption in 1999.
* The United Nations Convention against Transnational Organized
Crime included measures to criminalize corruption and was
adopted in 2000 and entered into force in 2003.
* The African Union approved a regional anti-corruption
convention in 2003.
* Most recently, in 2003, the UN Convention against Corruption
was adopted and will enter force on 14 December 2005.
Within developing countries, many governments faced growing
domestic pressure to address corruption. Expanding press
freedoms and civil society activism exposed an increasing number
of corruption scandals. Some governments turned to international
agencies for assistance in prosecutions and investigation.
International actors worked to improve legal frameworks,
including through the development of “model” anti-corruption
laws, conflict of interest provisions, asset declaration
requirements for public officials, clauses criminalizing various
forms of corruption, etc. The UN’s Global Programme against
Corruption, as well as justice and finance ministry officials
from donor countries, trained police and prosecutors in the new
laws and investigation techniques.
As it became clear, however, that many of the investigating
police, prosecutors and judges were themselves corrupt, efforts
were made to establish specialized anti-corruption units.
Anti-corruption commissions became de rigueur among donors and
governments alike. Many were inspired by the highly successful
Hong Kong commission established in 1974 but few ever replicated
its success. Conventional wisdom held that it was essential to
“fry a few big fish” but governments were often careful not to
vest commissions with sufficient resources or authority to do
so. More worrisome, local and international pressure for
prosecutions in these weak rule of law environments had led in
some cases to scapegoating and politically-targeted
investigations.
A World Bank report on Pakistan expresses some of the typical
frustrations associated with an emphasis on law enforcement and
anti-corruption agencies:
Corruption is a pervasive, deep-seated problem in Pakistan,
affecting the civil service as well as most other institutions.
There are twelve laws to deal with corruption, apart from the
disabling provisions in the Constitution. The number of agencies
to deal with corruption cases has expanded in recent years as
politicians have made public commitments to stem it and bring
corrupt employees to justice. Yet the record is bleak. Very few
corrupt officials are convicted. With little or no power to
investigate and prosecute, new institutions such as the Ehtesab
(accountability) Commission established to fight corruption have
in effect added other non-functioning layers to the bureaucracy…
Anti-corruption commissions, by themselves can accomplish little
in the absence of other fundamental accompanying actions (e.g.
regulatory procedures, strengthening judicial institutions) and
broader efforts to improve civil servants' accountability to the
public.
2. ADMINISTRATIVE REFORMS TO PREVENT CORRUPTION
Comprehensive efforts to prevent rather than prosecute
corruption gained momentum for several reasons. In 1996, then
World Bank President James Wolfensohn argued that corruption was
not a political issue but a development one, and many donors and
foundations, including the World Bank, UNDP, USAID, DfID, Open
Society Institute (OSI) and others became increasingly active in
this area. The emphasis on institutional reform, rather than
police investigations, played to their strengths, and many hoped
that a preventive approach would be not only more effective but
also less divisive and threatening to high-level government
officials.
Prevention, in essence, consisted of working with civil society,
media and the private sector to mobilize demand for reform and
working with governments to increase its supply. Getting the
public to care about corruption was often fairly
straightforward. But channeling this displeasure toward
constructive change and holding governments accountable is like
trying to grab a slippery bar of soap.
At the national and local level, public education efforts did
appear to have some impact on attitudes, generating more public
pressure and reducing tolerance for corruption through radio
segments and publicity campaigns. Training programs in
investigative journalism may have helped to expand coverage of
corruption issues. Despite assassinations, disappearances and
imprisonment, journalists around the world continue to report on
government corruption.
Civil society groups began to shift from general education to
watchdog activities targeting specific forms of corruption. For
example, several chapters of Transparency International (TI), a
major NGO dedicated to fighting corruption, focused on
procurement-related corruption. TI introduced the concept of
“integrity pacts.” – a process whereby bidders and government
officials pledge neither to offer nor accept kick-backs while
the national TI chapter in that country monitors the bidding
process closely. TI’s Argentina chapter monitored the award of a
tender for garbage collection for the city of Morón, resulting
in an award costing the city $13 million less than the previous
contract. Monitoring in Nepal led to a new practice of posting
information at construction sites listing the cost of the
project, its financing and where to report irregularities on
site.
Many research institutes in developing countries began focusing
on transparency in the budget process, providing independent
analysis of national budgets and helping, such as in the case of
Fundar in Mexico, to identify and expose presidential “slush
funds.” The Public Affairs Centre in Bangalore, India pioneered
the use of citizen report cards which track satisfaction with
municipal services and problems of bribes for services. The last
report card issued in 2003 showed a perceptible decline in
corruption levels since 1999 and improvements in services across
all agencies.
In general, progress on the “demand side” has been striking. At
the global level, TI, which began as a small Berlin-based NGO in
1993, has affiliated chapters in almost 100 countries today,
defining its mission as “prevention and reforming systems.” In
1995, Moíses Naím called attention to the “corruption eruption”
asking: “From India to Italy, from Japan to Brazil -- why have
societies which have traditionally tolerated corruption at the
highest levels in government and the private sector suddenly
lost their patience, their citizens willing to take to the
streets to topple high officials accused of wrongdoing?”
Corruption became a galvanizing issue for broad-based democracy
movements in Mexico, Georgia and Ukraine; it sparked efforts to
uphold constitutional term limits for Daniel Arap Moi in Kenya
and Frederick Chiluba in Zambia. David Ignatius observed in
early 2001 that “The most interesting political movement in the
world today doesn't have a name, and it doesn't even have a
clear ideology. It is the global rebellion against corruption.”
Despite the growing demand to address corruption, working with
states to increase the “supply” of such reforms has been more
difficult. One initial high-profile approach was to appoint a
commission to develop a national anti-corruption strategy or
action plan, an approach supported by the World Bank, USAID and
other donors in Eastern Europe, Central Asia, and Latin America.
These “omnibus” programs were often announced with great fanfare
at national public workshops following months of preparation.
Most strategies were comprehensive to a fault, containing over a
hundred measures to reform the civil service, public financial
management, tax and customs, public procurement, audit, court
administration, business regulation, whistleblower protection,
hotlines, etc. Where governments were committed to advancing
some reforms, as in the Slovak Republic and Latvia, these
processes were useful. But they were also supported in
environments of little or no political will and, after an
initial spurt of press, these efforts quickly stalled.
Anti-corruption strategies are very important but need to be
done well. In order to be useful, they must be adequately
resourced, locally-owned rather than donor-driven, and must
identify clear priorities for both near-term gains (to establish
credibility) and long-term strategic objectives (to ensure
durable impact).
In addition to omnibus programs, international donors worked
with governments to advance “good governance reforms.” These
were public management reforms that combined (or replaced) the
traditional objectives of downsizing and capacity-building with
a focus on accountability. Which administrative reforms matter
most to preventing corruption? The short answer is that “it
depends” –on where corruption is most pervasive, where
leadership exists to address it, whether priority should be
given to types of corruption that more directly impact security,
economic or political objectives at hand, etc. These will always
be context-specific decisions. Often, in monetary terms, the
biggest fraud lies in the area of public procurement. For the
investment climate, corruption in the courts and legal system,
undermining contract enforcement and property rights, is of
particular concern. From the perspective of political
legitimacy, the reputation and trustworthiness of the head of
state matters as well as corruption in the agency most visible
to the public – the police (especially traffic police).
Corruption in border agencies (border police, customs,
immigration) is often of concern to international security and
trade specialists but it also undercuts public revenues.
Citizens may not pay much attention to whether corruption is
predictable or arbitrary, but this is tremendously important to
firms. For example, Suharto’s Indonesia was a highly corrupt but
fairly predictable and stable environment. As the system then
began to break down, there was not necessarily more corruption
but it became more chaotic, rapacious, less stable and far more
damaging for investment and growth.
What should administrative reforms look like? The initial
instinct is almost always to turn to public salaries and working
conditions. Providing a basic dignified wage to public employees
is essential but there is little evidence that, once corruption
is pervasive, simply providing raises to everyone will solve the
problem. World Bank studies find that creating a climate of
“meritocracy” appears to have a larger effect on corruption than
wage levels. Di Tella and Schargrodsky have looked at
experiences in Argentina to support the “Becker-Stigler”
hypothesis that adequate wages combined with regular auditing
and monitoring is far more effective than either one on its own
(citing Perón’s observation that “People are good. But if you
monitor them, they are better”).80 Therefore, administrative
reforms ideally combine a carrot and stick approach – improving
basic conditions but also monitoring performance closely.
Improved financial management and treasury systems, clear and
enforceable procurement rules, internal audit capacity, and
external audit bodies were all important. Tax and customs
administrations were usually an early target for reform since,
if effective, these reforms yielded additional revenues to fund
government operations.
Several approaches have been used to detect and prevent
corruption. Public expenditure tracking surveys in Uganda
determined that in 1995 only 88% of non-wage funds for schools
were “leaking” and only 22% reached schools. Due to improved
oversight by the central government, local newspapers and
parents, up to 78% of these funds were reaching schools in 2001.
A recent DfID-funded public employment study in Kenya identified
1,000 potential “ghost workers” that, once removed, would allow
the Ministry of Health to hire more doctors and nurses. The
World Bank helped the Kenyan government to establish a
procurement appeals board that dismissed over $10 million in
tenders over eight months. In Bosnia, automated government
treasury systems at the national and subnational levels reject
payment orders inconsistent with parliamentary-approved budgets
and, in one jurisdiction alone, $17 million in payment orders
were rejected as “unauthorized” over an eight-month period.
Many of these efforts focused on strengthening not only the
executive but also the judiciary, parliament and independent
audit agencies – applying many of the same techniques described
above. For example, comprehensive, incentive-based reforms were
incorporated into several rule of law assistance programs.81
Court and case management reforms were emphasized. This included
introducing clearer laws and sentencing guidelines, publication
of reasoned decisions and random assignment of cases, guaranteed
minimal appropriations from the executive, separate courtroom
entrances for judges, tamper-proof software for entering
evidence in courts and prosecutors’ offices, and improved
processes for investigating complaints against judges, including
the use of judicial inspection panels. All of these measures
were useful for improving the administration of justice
generally and for reducing opportunities for corruption.
In general, efforts to improve judiciaries need to be far less
tentative. As some have argued, reforms should be “focused on
competition and incentives for disrupting current legal
practices…because existing legal institutions remain artifacts
of the very system that is the object of reform.” It is
extremely difficult to politely dislodge an ingrained culture of
corruption at the highest levels of the judiciary. Early efforts
that emphasized elite training seminars for judges, better
working conditions and better pay have now been combined with
tentative efforts to press not only for more independence but
also for greater accountability and performance. Judges
(particularly chief justices) resisted reforms such as changes
in appointment, promotion and dismissal procedures which they
correctly saw as undercutting their authority and discretion.
The executive often joined the public and media in condemning
corruption in the judiciary, feeding calls to “clean house.”
In these environments, international advisors were uncertain how
to press for change in the judiciary without undermining
judicial independence. In Georgia and Albania, however, one-time
competency tests of all sitting judges resulted in substantial
turnover without politicizing the courts. Some Latin American
countries have turned to judicial councils, composed of a mix of
judges, justice ministry officials and civil society
representatives, to improve judicial accountability within the
bounds of judicial independence. One study concluded that
judicial councils in Latin America had not made a clear
contribution to judicial governance, often falling prey to
corruption and cronyism themselves. But combining judicial
councils with vigorous civil society oversight did seem to
improve the appointment process for judges in Argentina. The TI
chapter, Poder Ciudadano, closely monitored the council’s work,
analyzing and publishing the qualifications of all proposed
nominees. This effort has been replicated in Peru and Bolivia.
Parliaments would appear to be the last refuge of scoundrels.
They are a potentially important source of oversight but
perceived in many country surveys as among the most corrupt
institutions. More than elections are needed to hold them
accountable; financial and legal accountability is also critical
but rarely examined. Recorded votes and open hearings are
valuable but also more attention should be focused on the
sweeping immunities that parliaments grant themselves,
including, in some cases, immunity for crimes committed before
taking office. Transparency in operating budgets for parliaments
is almost never discussed. A recent exception is the Ad Hoc
Committee set up to investigate administrative and financial
malpractices within the Liberian parliament which, in 2005, led
to the suspension of its speaker on corruption grounds.
There is now a rich array of innovative tools to prevent
corruption. But the single greatest obstacle has been the lack
of political will to allow these efforts to take root. Efforts
to address corruption have tremendous distributional impacts.
What makes them valuable makes them extremely difficult to
enact. In Kenya, for example, President Mwai Kibaki launched one
of the most high-profile corruption crusades. Expectations were
high and donors responded with many of the programs cited above.
But in February 2005 these efforts appeared to hit a wall. The
highly respected anti-corruption advisor, John Githongo,
resigned due to obstruction to his work at the highest levels.
The US suspended its anti-corruption assistance.
The British announced a new policy of refusing visas for Kenyan
officials or businessmen suspected of corruption. Administrative
reforms were now being coupled with diplomatic instruments
targeting elites. Efforts to prevent corruption initially
focused on reshaping and reforming institutional environments
that were “corrupting” individuals but, as in Kenya, attention
has finally begun to shift to how powerful individuals were
“corrupting” institutions.
3. TARGETING GRAND CORRUPTION
Administrative corruption and grand corruption are overlapping
problems, but require very different solutions. In 2000, the
World Bank issued a report distinguishing between
“administrative corruption” and “state capture,” rated all
transition countries as high, medium and low in each category,
and recommended differentiated approaches for addressing each
one. This helped to open discussions on low-level vs. high-level
corruption. Political and corporate governance scandals in the
US and Europe also revived interest in high-level political
corruption and corporate fraud in developed countries.
Efforts to curb grand corruption are still relatively recent and
not yet well defined. They require a focus on the incentives
driving political and economic elites, including international
and transnational elites operating in the country. Initially, it
was argued that political and economic liberalization would
expose politicians and firms to competition, squeezing out
corruption and creating incentives to improve the performance of
each. However, many economies and regimes that have liberalized
have not become less corrupt, for a few reasons. First, many of
the reforms were hijacked by elites and became instruments of
corruption, as was the case of “crony privatizations.” Second,
entrenched but uncompetitive firms have more incentive than ever
to purchase state influence. Third, politicians that have to
face elections have more incentive than ever to collect rents to
finance their campaigns and distribute resources to supporters.
Grand corruption, rather than being squeezed out, has adapted
well. Regulating economic competition is particularly difficult
when the rule of law is weak and many firms are international.
Some studies indicate that foreign firms are not any less likely
than local firms to bribe public officials and provide by far
the largest payments.
EFFORTS TO ADDRESS GRAND CORRUPTION TAKE SEVERAL DIFFERENT
FORMS:
Aid conditionality -- Influential research by Burnside and
Dollar in the late 1990s argued that aid was less effective in
environments of high corruption (as well as bad policies and
weak institutions). This left policymakers struggling with the
dilemma of how to design aid programs to address corruption if
corruption itself undermined the effectiveness of aid. The
result was a heavy emphasis on conditionality and “selectivity”
that would create incentives for states to reduce corruption and
improve governance. The Monterrey Consensus was a “grand
bargain” in which donors promised more aid in exchange for
better governance. The US Millennium Challenge Corporation will
soon offer supplemental aid for “good performers,” and it is not
a coincidence that the program singles out corruption as the
initial performance indicator. The World Bank has beefed up
governance criteria in its country allocation formulas. The
primary objective is to make their own aid more effective, but
the hope is that these financial “carrots” will also make good
governance a more attractive and financially viable option for
leaders. In post-conflict environments, however, conditionality
is very problematic. Where international actors often have large
forces deployed on the ground, “walking away” is not an option
and could destabilize the transition.
Sanctions – As is well known by the human rights community,
smart sanctions can send an important signal to high-level
officials that are not held accountable by their own courts. In
2002, the US State Department announced a new policy of denying
visas to Latin American public officials involved in corruption
or money laundering “just as we deny entry to war criminals or
narcotics traffickers.” The first denial was to a Nicaraguan
official that had been implicated but never charged in any
corruption case.
Abuse of Immunities -- Limited immunities for parliamentarians,
heads of state and judges and magistrates are appropriate to
prevent harassment and intimidation. But many enjoy sweeping
immunities. In Italy, legislation passed in 2003 granted
immunity to the prime minister and other high-level officials
even for those crimes committed before their terms of office
began. Legislation passed in Guatemala in 2002 gave Congress
unlimited time to decide whether to lift the immunities of
political officials but set a two-month deadline for judges.
Electoral Reforms and Party Finance – Political party finance
“has arrived,” as evidenced by the publication of several
handbooks and toolkits by international donors and NGOs in 2004.
The next step is to test out new approaches on the ground,
taking care to tailor approaches carefully. Other dimensions of
electoral reform, such as open vs. closed list systems, also
have implications for transparency and political corruption. At
the local level, the ability to field independent candidates
against nationally-registered parties may improve the quality of
candidates and governance overall.
Tracking Stolen Assets – The 2002 UN Global Convention against
Corruption was considered weaker than some earlier regional
conventions with one exception: the inclusion of provisions to
assist in tracking and recovery of stolen assets moved overseas.
Some progress has been made in identification and reporting on
bank accounts held by “politically-exposed persons” as well as
officials but more emphasis on preventing initial transfers
overseas is important.
Industry-specific Approaches -- Some of the most interesting
initiatives, propelled by joint international human rights,
environmental and anti-corruption advocacy groups, have taken an
industry-by-industry approach. Industry-wide approaches help to
address private sector concerns regarding a level playing field.
The last few years have seen an explosion of vigorous advocacy,
research and eventually diplomacy on extractive industry
management and revenues and their implications for corruption,
conflict, growth, poverty, and the environment. Transparency in
revenues is essential in order to track downstream expenditures.
Focusing just on bribes generated by various sectors (rather
than total revenues diverted), Transparency International’s
Bribe Payer Index identifies the arms and construction
industries as generating more bribes in developing countries
than oil, gas and mining yet relatively few industry-wide
initiatives have emerged within the construction and arms
industries.
OECD Anti-Bribery Convention – International conventions matter
little if the rule of law is extremely weak. It is often
presumed that they matter quite a lot in OECD countries, but
effective enforcement is still not automatic by any means. If
enforced, such conventions can be vital to addressing the
international “supply-side” of grand corruption. One of the most
remarkable examples of leadership in international
anti-corruption efforts was the passage and approval of the 1977
Foreign Corrupt Practices Act (FCPA). This law prohibited
bribery to “foreign officials”, including government, political
party officials and candidates by US firms, and arguably placed
US firms at a disadvantage in highly-corrupt environments. Even
with the United States government and business community
lobbying strongly, it took 20 years for the other OECD countries
to follow suit. The OECD Anti-Bribery Convention took effect in
1999 and included a well-defined peer monitoring process.
Unfortunately, monitoring of the convention is perennially
under-funded.
EVALUATING INTERNATIONAL ANTI-CORRUPTION ASSISTANCE
These three categories of approaches described above – law
enforcement, prevention, and efforts to address grand corruption
– all have a role to play in curbing corruption. Many good
resources now exist that summarize some of the lessons that have
been learned over the past 10-15 years. There is a tendency to
favor new ideas over old ones but, in reality, the lack of
systematic, long-term evaluation makes it difficult to
prioritize investments to address corruption. Surveys of
development practitioners conducted by OECD-DAC, DfID and the
Utstein Group, USAID, OSI and the World Bank help to analyze
trends, practice and emerging lessons.
Targeted and short-term studies, several of which have been
referenced above, suggest that anti-corruption commissions,
omnibus programs and international conventions have not
demonstrated their effectiveness and that, within institutional
reform, a focus on creating a meritocracy, rather than building
capacity, may have more impact on fighting corruption.
Furthermore, combining decent pay with regular monitoring may be
far more effective than either measure on its own. European Bank
for Reconstruction and Development (EBRD) researchers analyzed
three types of anti-corruption activities – omnibus
anti-corruption programs, legal reforms, and adherence to
international anti-corruption conventions -- in 24 transition
countries implemented in 1999-2002. They found no discernible
effect of omnibus programs or membership in international
conventions on corruption but it did find that new or amended
laws were associated with lower levels of petty or
administrative corruption -- a reminder that administrative and
grand corruption are closely related but distinct problems
requiring different solutions.
Perhaps the most persistent weakness in international efforts to
address corruption is that international actors are particularly
ill-suited to identify politically feasible strategies and, as
Ivan Krastev has argued, rarely even try. The difficulty for any
government is that efforts to address grand corruption will
quickly alienate powerful elites and efforts to address
administrative corruption will take time. Anti-corruption
commissions are popular with reluctant governments because they
send an immediate signal that someone is “on the job,” but they
rarely have the financial or institutional independence to
escape their political masters.
CORRUPTION IN POST-CONFLICT TRANSITIONS
Measures designed to address corruption have rarely, if ever,
been incorporated into peace agreements. Yet abuse and
corruption by the state is often a root cause of conflict.
Failure to build in controls against corruption can also
undermine implementation of political, economic and security
objectives, such as restoring state authority and delivering
services to such key beneficiary groups as demobilized
combatants, returning refugees, and war-ravaged communities.
But how applicable are broader anti-corruption approaches
reviewed above to post-conflict settings? Countries emerging
from conflict frequently have very high or endemic corruption,
low state legitimacy, low state capacity, weak rule of law, and
high levels of physical insecurity and residual violence.
Economic legacies of civil wars involve concentrations of wealth
flowing from illegal or unregulated trade and unofficial “taxes”
collected by soldiers, rebel factions, etc. Where post-conflict
countries vary considerably is in the quality of emerging
leadership. In other words, some post-conflict countries are
unable to control corruption while others are unwilling to do
so. Afghanistan and East Timor are examples of countries where
credible leadership does exist. In other countries such as Iraq,
and Sudan, leaders may be associated with corrupt patterns of
governance, and fear of opposing factions often prevents
followers from throwing off “strong” leaders in search of more
accountable and transparent ones.
It is typically more difficult, therefore, to address corruption
in post-conflict settings than in other developing countries.
Poor legal conditions mean that prosecutions in local courts are
rarely advisable. Security conditions rarely exist to enforce
compliance with laws. The tremendous uncertainty in these
environments may lead to hand-over-fist corruption as soldiers
and rebels grasp for rents before they are disarmed and economic
elites search for friends in emerging power structures.
Second-tier controls, such as free-standing anti-corruption
commissions, may be premature before first-tier legal,
administrative and financial controls are designed, established
and staffed.
But in other ways, these environments provide unusual
opportunities to address corruption. Because political and
economic environments are largely fluid, shifting alliances may
create opportunities to sideline elites that would be highly
entrenched in more stable countries. International actors tend
to have a larger influence in these settings due to high troop
deployments or massive infusions of aid. Finally, in their own
large assistance programs, aid agencies have the opportunity to
set an example of transparent and accountable practices.
Unfortunately, these agencies answer first and foremost to their
bosses back home; as a result, in-country transparency and
accountability is often quite weak.
Is it realistic to address corruption in post-conflict
countries? After all, many of these states cannot even provide
minimal public order, so how can they be expected to control
corruption? An important critique of international post-conflict
efforts is that international actors are already trying to do
too many things at once, overwhelming absorptive capacity and
failing to set priorities with national counterparts. Is
corruption one of those second-order priorities that can wait?
Shouldn’t the basic institutions be created before they are
cleaned up? Shouldn’t the emphasis be on disbursing state and
international funds quickly rather than carefully?
The challenge in post-conflict environments is to target the
types of corruption which, if not addressed, can derail the
entire transition, but to do so in ways that do not create large
additional demands on already overwhelmed reformers within and
outside fragile state structures. Some recent examples from
post-conflict situations today might help to illustrate how
practitioners are trying to thread this needle.
LIBERIA
As of this writing, Liberia has the largest concentration of UN
peacekeepers in the world. The security situation has improved
over the past year, leading one news report to conclude,
“corruption has now replaced the AK-47 rifle as the preferred
method of illicit enrichment.” Massive corruption was
undermining state legitimacy and citizens’ hopes for the future.
It was also undermining the effectiveness of large aid flows
into Liberia. Massive looting continued unabated under the nose
of international forces in the freeport of Monrovia. Per the
initial peace terms, the port was still under the control of
rebel factions in 2004, denying the new government a key source
of revenue and choking economic recovery.
In 2005, national reformers and international actors took
several steps. An Ad Hoc Committee in parliament opened an
investigation of corruption by its speaker and former rebel
leader, George Dweh. In March 2005, UN forces stepped up
security at the parliament and called for calm among Dweh’s
supporters as parliamentarians called a Special Session and
suspended him. In April 2005, UN forces seized control of the
port while the World Bank began preparations to award a contract
for external management of the port. In May 2005, corruption
topped the list of international priorities emphasized at an
international donor conference with Liberian government
officials. The Security Council may consider taking more direct
measures in the areas of revenue collection and management of
public resources in the coming months in order to try to rein in
corruption, but at the cost of limiting Liberian sovereignty.
These measures may or may not have a critical impact on
Liberia’s transition. Some have argued that nothing short of
sustained international engagement for 15-25 years will create
the conditions for new, less corrupt political forces to
develop. But they do indicate an acknowledgement that something
more than procurement and financial management reformers were
called for, and some action was taken to marginalize potential
“spoilers” in parliament and the port even at the risk of
antagonizing LURD supporters and other factions. Liberia’s
experience illustrates the links between security and
anti-corruption in post-conflict settings. Without a strong
security presence, there would have been very little space to
move against flagrant corruption within the capital city itself.
AFGHANISTAN
Afghanistan is an example of how initial efforts to bring
potential spoilers into the peace processes and into the state
may have long-term costs for the country. In the case of
Afghanistan, the three closely linked problems of warlords, drug
trafficking and corruption threaten to overwhelm nationally-led
and internationally-supported statebuilding and development
efforts. International troop deployments were never sufficient
to secure the entire country and, as a result, warlords
controlling local militias were invited into the transitional
government in a power-sharing arrangement. Continuing US
military cooperation with warlords on efforts to root out
Al-Qaeda and Taliban fighters further strengthened their hand.
Finally, when opium production exploded in the post-Taliban
period, warlords quickly moved to control lucrative drug
trafficking networks, reasserting control at the local level.
For many Afghans, these steps signaled that their hopes for a
clean and honest public administration would again not be met.
As one Afghan put it, “We were so anxious to escape the warlords
that many even supported the harsh measures of the Taliban and
now, after hiding up in the hills, these warlords are invited
back to Kabul and put in charge of ministries.”
Gradually, however, a recognition began to emerge that things
were moving in the wrong direction. The US Ambassador admitted
that, ''[r]ather than getting better, it's gotten worse. There
is a potential for drugs overwhelming the institutions – a sort
of a narco-state.” Observers noted that corruption had actually
increased since the end of the conflict and appeared to be
driven from the top. President Karzai’s last-minute change of
running mate for the 2004 presidential elections and the cabinet
he complied afterwards suggest important steps in this
direction. It remains unclear, however, given the uncertain
security environment and the slow pace of disarmament, how much
space there is for maneuver. Massive rents from drug trafficking
now ensure that warlords have an independent financial power
base which they can use to buy state influence even after they
no longer directly control state ministries. The drug trade
represents more than half of Afghanistan’s formal GDP,
constituting a tremendous risk of state capture unless
additional steps are taken quickly.
DEMOCRATIC REPUBLIC OF CONGO
The Democratic Republic of Congo is a massive country with
endemic levels of grand and administrative corruption. The DRC’s
transition from war toward the 2005 elections began in 2003. But
fighting continues in the east and signatories to the Sun City
agreement continue their scramble for resources at the center,
exerting weak control over their respective political and
military forces at the periphery. An independent analysis in
March 2005 concluded that neither:
[the UN Mission in the DRC] nor the wider international
community has shown the ability or the will to address the
Congo's crises. While donors finance over half the country’s
budget, they have been unable or unwilling to take serious
action against the spoilers in the transitional government, who
work against unification of the army and administration. Some
members of the government have been suspended for corruption but
none has faced criminal charges.
In the midst of this environment, one interesting initiative
focused on local-level efforts to mobilize against corruption
along the Congo River.110 An international NGO, Innovative
Resources Management (IRM), began a program financed by USAID to
address the tracassaries or illegal taxation of river traders in
Western Congo, where 80% of commercial produce travels by water.
The massive illegal taxation by unsalaried civil servants
stationed at ports throughout the interior had effectively dried
up river-based commerce, devastating the rural economy which had
served as a bread basket for the capital, contributing to food
scarcities in Kinshasa. The project began with a recognition
that these bribery points were an “epi-phenomenon” of patterns
of corruption and natural resource exploitation dating back to
the 1970s and 1980s and driven from Kinshasa. It produced a
report that, for the first time, measured and documented the
problem along the Congo. They found that 92% of traders’
operating costs are accounted for by illegal taxes and fees
imposed by unauthorized civil servants for trumped-up or
fictional services (‘loading rights’, ‘docking permission’,
etc.). Only 8% of fees are authorized; even less actually
accrued to the state. During one trip to Kinshasa, a river
transporter had to pay off an average of 24 government services
at 9 different ports of call for a total of 216 payments and a
delay of 24 hours at each port.
IRM obtained copies of legislation specifying that only four
agencies are authorized to collect fees in ports and determined
that the 90% of the unofficial payments were by agents linked to
the Ministry of Interior. They had a series of meetings with
officials in Kinshasa and secured the backing of the Interior
Minister to bring these payments in line with the law, arguing
that fewer payments would increase river traffic and legal
government revenues. Associations of transporters and
communities were formed along the river to share information on
tracassaries and high-frequency radios were distributed to
communities allowing them to report illegal payment points
directly to the Interior Ministry. After several months, a
“critical mass” of community oversight and state monitoring
began to change practices in the first province and efforts also
began to build momentum in two additional provinces as well. IRM
argues that opening dialogue with territorial administrators was
central. An organized “convoy” containing representatives of the
provincial and national government, private sector and donors
“offered a forum to civil society…for the first time to
publicly, in a transparent manner, express itself concerning
abuses and corrupt government agency practices.” The effort
built new patterns of cooperation among communities,
transporters and the state and helped to begin, however slowly,
to revive commerce along the Western Congo. These types of
approaches are sometimes called “islands of integrity” and,
while they cannot substitute for political will at the highest
levels of government, they can achieve real gains in discrete
areas, such as revival of regional commerce and livelihoods – an
example of “quick wins” so vigorously sought in post-conflict
transitions.
POST-CONFLICT LESSONS
There are many examples of bad ideas that the international
community should not support in many post-conflict environments.
The Afghan constitution, for example, calls for the creation of
an anti-corruption commission to investigate acts of corruption.
Last year the presidency requested international assistance to
train and equip this office. Meanwhile, several line ministries
did not even have Chief Financial Officers in place. Primary
systems should be in place before secondary bodies, like
anti-corruption commissions, look to see whether those systems
are working.
The continued pattern of early elections leads political parties
to scramble for supporters, offering whatever inducements they
can, accumulating whatever resources they can. In order to
reduce pressures on parties to turn to these tactics, donors in
Mozambique took the unusual step of creating a trust fund for
political parties. Today Mozambique remains one of the few
countries that permits international financing of political
parties through this special trust fund.
Another temptation is for international actors to step in and
take over. Steps toward “shared sovereignty” are receiving
increased attention. Sometimes this may be necessary, as many
feel is the case in Liberia today. Unfortunately, failures would
appear to outnumber successes in this area. One frequent example
is international administration of customs agencies. In
Pakistan, a Swiss firm, Société Générale de Surveillance (and
its subsidiary Cotecna Inspection SA) were hired by the
government to conduct pre-inspection customs clearances but
admitted that in December 1997 they themselves had paid a
"substantial commission" in 1992 to obtain the original
contract. Mozambique, in contrast, appears to offer a relative
success; Crown Agents took over customs operations in 1997,
financed by DfID, and transferred responsibility to the
government in 2003 but continued to provide technical assistance
and to work closely with state officials throughout. Lessons are
that increasing revenues was far easier than reducing corruption
and reforms required substantial purges of the entire customs
workforce and selective rehiring.
One of the best approaches may be for international actors to
finance vigorous and professional monitoring efforts. An
emphasis on monitoring does not sideline the state but instead
provides an incentive for it to improve its performance while
diagnosing key problems. Publication of all monitoring efforts
can increase democratic accountability. These same monitoring
efforts could also be directed toward international aid agencies
as well, increasing accountability of both national and
international actors. Ideally, these concurrent and random
audits would be undertaken by National Audit Offices of donor
countries on a rotating basis. But it is precisely because
executives of donor countries do not control their own audit
bodies that they may resist efforts to bring them in.
The incentives operating on donor agencies are clearly to be far
more concerned about insulating their own programs from
corruption rather than focusing on how corruption in the use of
public resources undermines nascent state structures. The
tendency, in highly corrupt environments, is to go around the
state in order to deliver services, build highways and construct
schools rather than building state capacity to do so. That leads
to a focus on avoiding, rather than reducing, public sector
corruption. An emphasis on closely monitoring state performance
rather than substituting for it would help to better align these
objectives. Afghanistan’s Trust Fund operated by the World Bank
channels international resources toward government-identified
priorities.
This also addresses international fiduciary concerns without
undercutting states that are making credible efforts to improve
their effectiveness over time.
In post-conflict settings, it is even more important than usual
for international agencies to make extraordinary efforts to
operate in a transparent manner with high public accountability,
constantly providing information on their programs,
procurements, and impacts. Donors are quick to call a press
conference to announce massive “pledges” and citizens are slow
to see the direct impact on their well-being, opening them up to
believe all accusations of corruption and mismanagement that
they read and hear about.
CONCLUSION
A survey of the anti-corruption literature and practice yields
some general lessons. The academic literature has evolved from
viewing corruption as functional to benign to one of the
greatest obstacles to development. It has shed light on the
links between corruption and the rule of law, conflict,
inequality, democratization and economic development.
International anti-corruption practice has, at various times,
emphasized law enforcement and administrative reforms, and a
more recent focus on grand corruption; all three have a role to
play. Experience and research both emphasize the importance of
distinguishing between administrative and grand corruption. As
discussed above, a variety of tools exist to monitor and address
specific forms of corruption (procurement fraud, budget
leakages, bribes, etc.) in specific types of organizations
(judiciary, police, health, education, customs, etc.).
Experience suggests that there are risks to addressing
corruption, such as scapegoating and character assassination
that must be managed carefully. In addition, international
actors need to work with national reformers to identify
strategies that are politically feasible for leaders operating
in democratic or partially democratic environments.
All of these lessons need to be carefully tailored to
post-conflict environments where security may not exist,
political authority may be contested, and institutional capacity
may be constrained. Aid bonanzas in these environments create
opportunities to assist in development of legal, financial and
political accountability structures that are essential to
controlling corruption, but they also create risks of corruption
bonanzas as well.
“Most wars,” Wesley Clark argued, “are much more about money
than they are about ideology…We should have been looking at bank
accounts instead of military targets before we went into some of
these countries.”
International actors need better information and analysis to
understand the links between corruption, conflict, and the
viability of new states. In broader efforts to address
corruption in developing countries as a whole, international
actors are simultaneously criticized both for overemphasizing
and underemphasizing corruption. In fact, international efforts
too often combine strong public rhetoric with very limited
resources, diplomatic leverage or staying power and ask the
equivalent of political suicide for leaders and parties standing
for internationally-mandated elections. Efforts to address
corruption need to draw from law enforcement approaches as well
as efforts to address both administrative and grand corruption
–depending on prevailing patterns in the country. Up against
serious and entrenched corruption, half-hearted efforts to “do
something” are rarely commensurate with the size of the problem
itself, make it more difficult for governments to take
international rhetoric seriously, and may therefore be worse
than no efforts at all.
Increasingly, however, international actors are recognizing that
addressing corruption requires not only rhetoric but a
willingness to walk away, to apply muscle, and to understand
local dynamics. It requires a comprehensive focus not only on
narrow financial accountability but also legal and political
accountability as well. Recent lessons from Liberia, Afghanistan
and the DRC suggest that, even in post-conflict settings,
addressing corruption is emerging as a fundamental and early
priority that is strongly supported by local populations.
Despite tremendous challenges, openings may exist in these
settings given political and economic fluidity. The window to
address corruption in some transitions may be short-lived and,
where feasible, action is necessary to prevent a slide toward
entrenched, “low-level equilibrium traps” where the state is
everyday more the problem and less the solution.
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