Of corruption, aid and respect

Update 02/12/14: news link fixed

Grand corruption is one of the stories of the year across East Africa, with several countries enduring major scandals. I am with many others who assert that corruption is not necessarily the most important development issue to address. (China seems to have got impressively rich incredibly quickly despite being also pretty corrupt.) And even were you to want to address corruption as an economic development rather than justice/rule-of-law issue I think that endemic petty corruption is probably a bigger barrier to development than political grand corruption. Finally, donor threats to punish especially egregious scandals by withholding funds always come with the inevitable downside that the poorest get punished twice whilst having only the slightest impact on the guilty politicians.

But then you have stories like this, and I am reminded of how useless many developing countries are at investigating their own elites when it really isn’t that difficult. Duh! Of course they are, I mean this is political science 101, right? But here’s the jarring juxtaposition; the same political elites want us to simultaneously accept the following:

1. Their countries are poor and need the help of a few $bn of Western taxpayers’ money.
2. That corruption in their countries is hardly as bad as others make it out to be*, and anyway their law enforcement agencies lack the capacity to finger and then prosecute such few officials who may be guilty of sticking their hands in the cookie jar.
3. Western donors are too bossy and guilty of neo-colonialism in their interference in supposedly internal affairs.

I don’t think Western donors do themselves any favours with their regular finger wagging, but honestly, do the corrupt local elites really expect the donors to show them the respect they so clearly feel they deserve when they carry on like that? It’s just cause and effect. Respect is earned.

* Ever heard the one about the smoke without a fire?

Advertisement

The joy and terror of total dysfunctionality

You have to marvel at the chutzpah of some government officials around here. Each day they commute into work only to spend most of their day seemingly reading the newspaper or out to lunch. Not such a bad gig if you can get it, even if the pay isn’t great! You can always top it up by demanding ‘express service fees’ to stamp the forms you’re supposed to stamp any way.

Except that presumably there must be a terrible nagging fear that, like a criminal trying to cover up his misdeeds, you will be eventually found out. Pity, then, the staff of the Ugandan National Seed Certification Service whom a World Bank evaluation adjudged to have a few shortcomings:

“The reality is that NSCS staff know that if the institution was granted autonomy, they would all be sacked.”

Ouch! But they need not worry too much, for, from my experience, should the donors ever prevail in persuading the Ugandan government to accept the prescription that the NSCS should be transformed into an independent body, the donors would feel morally obliged to support the newly autonomous parastatal by giving it a whole load a of (paid for) work even though they know its staff have not the necessary wherewithal.

Hat tip: to the marvellous new (and not the least bit boring!) Campaign for Boring Development. I just wish he would post a little less often, as I struggle to keep up.

Corruption myth flipped but still lands butter side down

“Many international development organisations hold that persistent poverty in the Global South is caused largely by corruption among local public officials. In 2003 these concerns led to the United Nations Convention against Corruption, which asserts that, while corruption exists in all countries, this ‘evil phenomenon’ is ‘most destructive’ in the global South, where it is a ‘key element in economic underperformance and a major obstacle to poverty alleviation and development’.

There’s only one problem with this theory: It’s just not true.”

So says Jason Hickel. He explains:

“According to the World Bank, corruption in the form of bribery and theft by government officials, the main target of the UN Convention, costs developing countries between $20bn and $40bn each year. That’s a lot of money. But it’s an extremely small proportion – only about 3 percent – of the total illicit flows that leak out of public coffers. On the other hand, multinational companies steal more than $900bn from developing countries each year through tax evasion and other illicit practices.”

It is a good point, but here’s the thing: it’s not necessarily the amount of money stolen that matters. Since most of this money is stolen from government coffers this only materially harms a citizen of that country if the government would otherwise have spent the money on services to them. Round here, however, most people are pretty cynical; the government mostly spends money on itself (legalised corruption if you like) and is often pretty useless at actually delivering useful services.

But, as anyone who has spent significant time in the least developed countries will tell you, the bigger problem is the all pervasive, endemic petty corruption. I would wager that economic underperformance happens not so much because some official stole some money from the government, but because someone could not register their business without paying a bribe that they cannot afford; others die or are maimed in road accidents because the police accept small bribes on a daily basis to look the other way; the list goes on … I have no figures to back up this assertion, so could be wrong, and obviously some thievery does have direct economic consequences if it means a new road or power plant is not completed. On the other hand how many business investment opportunities are foregone with investors are put off by their inability to enforce basic contracts due to a justice system that is always on sale to the highest bidder?

Dr Hickel’s moral outrage is well directed. The scale of tax evasion by multinationals is truly disgusting. But it does not detract from the importance of developing country governments putting their own houses in order, and it would be a shame if the crusade against international tax evasion served as a fig leaf for inaction domestically. Alas I doubt a UN Convention will help much with that; real reform will only come when the citizens of these countries demand accountability for themselves.

Tree grab or land grab?

A bunch of smallish NGOs has released a report criticising REDD as apparently incompatible with human rights. Some of these guys have previous form on just about any conservation programme that engages with markets. They have some nice principled arguments, but in the here and now they are so far away from a workable, affordable solution, that they’re just not helpful.

That said I have plenty of sympathy for the people subjected to rights violations mentioned here. I guess you could lay the blame on REDD for motivating at least some of these land grabs, but here’s my concern: are they not fundamentally illegal any way? (Yes, governments will deploy various quasi-legal arguments in their support, but in many cases these are weak, and courts with more than a modicum of independence may well find against them.) Stopping REDD will not stop other land grabs, e.g. for logging, agriculture or mining.

Blaming REDD is a bit like blaming world food markets for agricultural expansion, and betrays the fundamentally anti-markets stance of these critics. Better, I think, to tackle the underlying governance failings that lead to such abuses than to confuse the issue with an attack on REDD, which otherwise can deliver a lot of good to the world. I had the same thought a few years ago when biofuel production briefly menaced this part of Africa: no need for a dedicated biofuels policy if you implement your own land laws properly.

Aid as democracy enabler?

Whilst on the subject of disagreeing with Angus Deaton*, I re-read Chris Blattman’s commentary recently. Blattman made an interesting point about aid supporting the emergence of democracy in post-conflict situations such as Uganda and Liberia where Blattman has worked. The basic sense of his argument, that aid money helped those countries get back on their feet having chosen a proto-democratic path, seems clear enough. Clearly the link is not automatic: recent events in South Sudan show that just having lots of aid money around does not ensure a steady upward path, but I am more than happy to buy the basic idea, that, other things being equal, aid would help and potentially help quite a lot with the transition.

This line of reasoning can easily be extended. Just as the presence, even if largely wasted, of a big aid programme can provide cover for small local NGOs to do good things (I’ve seen cases of this), so maybe the promise of aid money can provide some cover to would be democratizers. I.e. at the margin, the presence of Western donors with deep pockets might plausibly increase the attractiveness of democracy to poor country elites (obviously the same cannot be said of the Chinese). Probably impossible to prove, but it is one of those enticing thoughts that you can see politicians grabbing on to.**

On the negative side of the ledger, the incentive value of lots of aid money would be paradoxically lower when accompanied by strong anti-corruption measures. But on the positive side such an incentive could be seen as the first step on a whole ladder of rising levels of cash support for good behaviour such as I’ve mused about before. It’s never going to happen, of course, and even in the case of democracy, I am sure all parties would deny the cash offer was anything as grubby as a bribe. But if Deaton is concerned with the theoretical undermining of the social contract caused by aid, then this is a nice theoretical riposte.

Next week, back to the messy real world in which bribes are paid all the time, even if they’re not called bribes …

* On the subject of international development aid. He can keep his intellectual authority status on other bits of development economics.

** I guess the Neo-Cons under Bush did exactly that!

Messy reality beats philosophy

Catching up on my listening as well as my reading included enjoying the Xmas time edition of Development Drums that was an interview with Angus Deaton in the wake of his recent book the Great Escape that, amongst other things, severely criticises international development aid. I would recommend a listen to the whole thing*, but here is a grossly simplified summary of the key exchanges (which start from about 40mins in):-

Deaton: Aid should be spent for the benefit of poor people, but not in poor countries, as, in the long run at least, aid spent there will always undermine the social contract (we elect you and pay our taxes, we expect half-decent leadership in return).

Barder: What about Anti-RetroViral drugs (ARVs) used to fight AIDS? Surely that is a massive improvement to millions of poor peoples’ wellbeing that was achieved through aid?

Deaton: Well, yes, so I would allow that kind of an exception, but I would announce that this programme of support will expire in ten years time,  allowing time for the people to force their government into funding it instead.

Oh dear! Two very obvious problems with this solution:

1. It won’t work. Aid dependency is far too entrenched. The donors would be blamed not the local political leaders. That might fit with Deaton’s philosophical argument, but isn’t much use in the real world.
2. Why 10 years? Why not add on another 10 and make it 20 years? I’ve got a few more exceptions I can think of … Where, in other words, do you draw the line when back on the slippery slope? You will always find someone with a well marshalled argument to draw the line that little bit lower.

Surprisingly Barder never explicitly tests Deaton on those two points, but he does tie him in a few knots with other thoughtful probing, before Deaton remembers that a big part of the ARVs success story was achieved by lobbying (especially by the Clinton Foundation and their army of bright, young things) in rich countries to get Big Pharma to reduce their prices, i.e. it satisfies his requirement about where aid money should be spent. That wouldn’t, however, entirely get him off the hook, as I suspect many of those reduced cost ARVs are still being paid for with donor money.

All of which is a bit of a shame, because apart from that Deaton makes a number of very good points, and much of his criticism of international aid is valid and insightful. But, as many academics are wont to do, by keeping his argument (in this case) strongly rooted in philosophical (some might say ideological) foundations, he fails to grapple with the messy politics and complexity of the real world. Also ironic, as, according to Owen Barder, Deaton is known for careful treatment of data.

* And British listeners can enjoy a nice little audio pun at the end!

Anti-corruption efforts: perfecting the art of isomorphic mimicry

UNDP has launched a portal on Anti-Corruption for Development. (To distinguish it from anti-corruption efforts that are anti-developmental??) It includes an anti-corruption poster for REDD programmes that, I am sure, is guaranteed to reduce rent-seeking and improper uses of funds.

Anti-corruption commissions and their ilk seem to me to be one of the worst uses of aid money out there. Because they almost never deal with the politics they only ever address a few low level symptoms (disposable scapegoats) and abysmally fail to tackle causes. And yet they are legion, and probably persist now quite happily without donor money, both for the sinecures they provide, and because, from time to time, they may be politically useful to chastise the opposition. Are anti-corruption commissions therefore the pinnacle of isomorphic mimicry? I think it could be so.

How about a Cash on Delivery solution? $10,000 for every successful prosecution (where the accused have had a fair chance to defend themselves), rising to $100,000 and $1million for more senior officials. Make the bounties high enough and in themselves they may even start to provide an incentive against corruption, because even if the current government are not inclined to follow through, the next one might be …

Big man culture and the art of non-delegation

Big man culture is often used specifically to refer to the preponderance of men with strong dictatorial tendencies ruling many African countries*. However, like any proper cultural trait, its manifestation is not restricted to a single walk of life but is broadly preponderant, especially in many developing country government institutions.

Morten Jerven’s travails conducting his research into the failings of GDP calculation in African statistics departments (remarked upon in my previous post) struck a definite chord with me in that respect. Critics of his research have alleged that he did not seek the views of the statisticians themselves, including – critically from their perspective – the views of the department directors. Professor Jerven’s response will be familiar to too many people around here:

I had an invitation and introduction to all the offices I visited. … I wrote letters, emails and phoned all statistical offices in Sub-Saharan Africa repeatedly in order to verify information, request access and set up interviews. As anyone who has tried something similar can attest, the response rate is extremely low. For all the places I did go to I had a response, a contact and an invitation.

Upon arrival at all these places I went through the dissemination office to clarify my purpose and research. At all those offices I also requested an interview with Directors and senior management and in every case these requests were ignored.

Yes openness about one’s data and methods are hardly common amongst government staff around here, but we knew that already. What Professor Jerven alludes to, but does not elaborate, is how the institutional architecture in such organisations itself is set up to frustrate the inquirer.

In particular, the concentration of official power and responsibility in a single big man or woman at the top. This tends to be reflected in all official correspondence and notices, which are always issued in the name of the head honcho. Inquirers are instructed to address all correspondence to the same. Often the whole institution will have only a single official email address, with staff having to use personal addresses at the likes of Gmail or Yahoo just in order to work effectively. (Sending emails to the official address is often as about as useful as trying to signal to them in semaphore.)

Some of these problems can be mitigated where the Executive Director is a genuinely committed and energetic leader, but still it hardly makes for great dynamism. Where he or she is more concerned simply with protecting their own interests or personal fiefdom it can lead to almost complete paralysis. It can be so frustrating to have go right to the top to get the smallest thing addressed wherever it does not very clearly fall within an underling’s typically narrow job description.

All of this is tied up to a degree with the shallowness of the talent pool in the labour force (though where rent seeking is common, talent often fails to rise to the top any way), and sometimes one can feel a certain sympathy for senior officials. But too often I also just want to scream: “Lighten up a little!” (Pomposity in execution of their duties is regrettably common.) “Give a few of your many reins to some of your junior staff. If you never show any trust in them then you’ll never find out if you can trust them.”

Sadly, but unsurprisingly in what has coalesced into a social norm, is that such management structures and approaches are also often found in businesses and NGOs, although less rigidly in the best performers. Of course such social constructs are not immutable, and in time one would expect the big man culture to wane (just as it is slowly in the political sphere), but for the time being the art of non-delegation will continue to frustrate the Professor Jervens of this world, as well as those big men and women who wonder why they can get so little done.

* The term is a literal translation from various Bantu languages, hence the African association, although I think the practice itself is not particularly African.

Party connotations

What do you think of when you read or hear the phrase “ruling party”? Would you describe the Conservatives in Britain as the “ruling party”? Or the Socialists in France? What about Congress in India? (The situation in the USA is obviously complicated by the division of powers.)

The “ruling party” is one of those disarming phrases that is apparently neutral but comes loaded with additional implications. And yet, in my experience use of the term is not restricted to Western ‘cultural imperialists’, but is frequently used by local political observers.

I venture a conclusion: if contemporary commentary on a country regularly involves mention of the term “ruling party” then its democracy lacks a certain vigour.

Decentralisation Blues

The World Bank’s Shanta Devarajan reckons that there needs to be real political demand for capacity building to truly transform dysfunctional developing country institutions, and avoid the trap of isomorphic mimicry. He is surely correct in this assertion, but I fear the rose-tinted spectacles return when he advocates the benefits of decentralisation:

“One reason [for doubting local authorities capacity to manage financial resources] may be that no one has given local authorities the chance to deal with funds.  There may have been no demand for financial management at the local level because the central government has told you what to spend.  If you give them the chance to make the decisions, then they might actually build the capacity or hire that capacity because it’s something they can decide for themselves.

Moreover, if the local governments are accountable to the local population, they will have to build capacity really fast. They can no longer put the blame on central government if things don’t work well.”

To be fair to Devarajan he does qualify his enthusiasm with the requirement that local governments should be accountable to the local population. The trouble is that in the decentralisation that I have witnessed in least developed countries I have never seen much sign of that condition coming true, and certainly not any evidence of it leading to substantially increased capacity. Instead, where local official venality and low capacity are the rule rather than the exception, as is the case around here, such pushes as there are to improve service delivery come from above, although even here there’s a lot more political rhetoric than practical action. Decentralisation thus leads to temporary petty fiefdoms that can go largely unmolested so long as performance is not notably worse than elsewhere in the country (and sometimes even when it is).

This rose-tinted view of decentralisation is not restricted to ill-informed denizens of the embassy district and big donor agencies. I think we field operatives can sometimes be equally guilty in assuming that just because community leaders are that much closer to their constituents they will therefore be that much more responsive to their needs, or that bad leaders will get voted out of office. For even at the community level base party politics and local rivalries so often trump technocratic concerns of executive competence.

I would suggest that demand for good services is predicated on at least some idea of what they should look like and sense that they are properly due. By this I mean not just that a community should want the service, and be prepared to air their grievance to anyone who cares to come by and ask (very common around here), but that their sense of justice should be inflamed at the breach to the perceived social contract, and, as an aggrieved party, they are prepared to act seriously to obtain redress. Consuming many government services, e.g. sending one’s children to the local school, might be a largely passive undertaking, but service quality depends upon a community’s aptitude to pursue their due proactively, and in turn for the rest of society not to regard such direct action as disproportionate.

Some would translate all of that as the need for a large middle class, and trot out that old canard about democracy not being workable without one. I am prepared to be a bit more optimistic than that, but I think we should be cautious about expecting demand for service provision to drive improvements in local capacity. There will always be counter-examples, usually championed by exceptional local leaders, but countrywide I wouldn’t pin your hopes on anything other than slow progress, with plenty of steps back interspersed with the forward ones. Social change is slow and messy.

Hat Tip: Lee Crawfurd