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?

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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.

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 …

Trust (part 3)

Over the past two days I have blogged about the contrasting trust relationships we NGOs have with communities and donors, how important they are, and yet how frequently they fall short. Both, however, are wonders of mutual respect and cooperation compared to the relationship we have with government.

I think it is hard for anyone in my position to be openly and completely honest about their relationship with government. To be sure there are positive elements; there are genuinely good people in government – well-meaning and able – and we do reach out to each other. Some government policies, moreover, can be truly enlightened to the benefit of ordinary citizens, although regrettably implementation often falls somewhat short of ideal.

Sometimes government objections are reasonably founded, or based upon miscomprehensions which are readily appreciated and not unreasonably derived. However, it can be hard to spot those amongst the general tide of basic intransigence; the default attitude that they should impede your proposals unless given a reason not to, rather than the other way around. New ideas and new approaches are greeted with suspicion: this is not the way things are done around here!

Deciphering exactly what is meant when bureaucratic obstructions are raised can be difficult, and there is no doubt that subtle cultural and linguistic barriers can play a significant part; we need to remain watchful of when we may be the ones erring. However, if you are experienced (not just generally, but with the specific culture in which you are working) and working closely with local partners, then these problems should be minimised. Thereafter you are in a world of political shadow-boxing and doublespeak, in which few things are exactly what they mean, and your real task is to decipher the real issues, and what perverse incentives may lie behind the words chosen. Then you need to respond in kind, with a tip of the hat to the justification originally supplied by the official(s), but also addressing what you hope is the underlying cause. Liberal application of per diems can often work wonders!

But finally, many obstructions are raised because your project threatens a little off-the-books sinecure or maybe bigger vested interests. A few per diems will not solve this problem. So instead we have to resort to the same nonsense; allies are sought, reassurances are given, half promises made, attention is distracted with a big workshop which conveniently glosses over the proposed transfer of power from bureaucrats to ordinary people.

Little of this will be news to anyone who has spent much time in the aid industry, and it regrettably fits all kinds of derogatory stereotypes of life in the “third world”. But where is the trust in this relationship? Donors expect us to work in partnership with government, though, contradictorily, they also fund civil society groups to add dissenting voices to otherwise untrammelled government propaganda dressed up as participatory consultation exercises. I hate it when we find ourselves having to resort to sleight of hand and political trickery. Mostly we only use it on the littlest of things, for it is no way to handle strategically important issues; these need to be properly thrashed out.

The aid industry is founded upon noble ideals, but its practice can be anything but. Is the local MP the people’s popular representative or a venal kleptocrat? What do you do when the answer is both? We want the government to coordinate but may deliberately fail to give them all the information they need. We want the government to enforce its laws but get frustrated when they do so in perverse ways. Self-righteously proclaiming oneself the saviour of poor people and riding roughshod over officious objections in their name is no solution, but then neither is following the path of negligible impact which many government officials would prefer you take.

Having the trust of local government is a vital badge for most NGOs engaged in development work, and we wear it proudly. But sometimes I wonder if it stands for anything more than a few inane platitudes from the guest of honour at our last workshop. I cling to the belief that it does, and the good, comparatively trusting relationships we have with the genuinely concerned and committed government officials is the basis for something nobler. I just wish that belief were not swamped in a thicket of dissimulation, from which the precious virtue of trust seems to have been all but extinguished.

In praise of hand-wringing

Let’s not give Libya an anti-corruption commission, says Nathaniel Heller.* (Not, of course, that we’d be actually ‘giving’ it …)

I could give my own reasons to go alongside Nathaniel’s. (How do you stop the anti-corruption guys themselves being corrupted? Is the political will really there to eliminate graft wholesale, or only those bits which are politically convenient to attack?) Anti-corruption commissions are surely ideal candidates for falling into the trap of isomorphic mimicry.

But the bigger point here is that an anti-corruption commission strikes me as a classic donor response to the need to do something, or, more to the point, fund something. I’m no hand-wringing defeatist, but I do question donors’ pathological need to dish out money in response to every problem they see. It’s bad enough, but understandable, when amateur Aid DIYers feel the need to just “do something”, but professional aid agencies really ought to know better.

I suspect part of the problem is the need for donors to put aid donations into various different pots, one of which is probably labelled ‘governance’. Since poor governance is such a big problem throughout much of the developing world, any good donor worth their salt should surely be investing heavily in improving it, right? Except how does a bilateral donor improve governance standards in a developing country when most of their money is supposed to go to the host country government (rather than civil society)?

There are some genuine solutions out there, I’m sure – Twaweza sounds pretty promising – but in a choice between hand-wringing and window-dressing, I prefer the hand-wringing.

* H/T Swahili Street

Sleeping with the Enemy

What do you do if you know a friend of yours is a crook? You might not have any actual evidence, but you know it for sure, and you could easily gather the necessary evidence without putting yourself to much effort. You also know that the authorities are rather plodding and/or in league with them, and are unlikely to catch your friend. What to do?

Thankfully this is a dilemma which I suspect many readers (at least those safely ensconced in developed countries) have never faced, however, it will be far too familiar to anyone who has had a field posting in a developing country for any significant length of time. The friend will work for the government in one capacity or another, and after a while it will dawn on you that they must be quite corrupt in how they are carrying out the duties of their office.

The simple moral response is to turn your friend in, but that is not short of consequences. Outsiders meddling in this way is definitely not welcomed! You may not even be believed and nothing will come of your intervention – corrupt networks inside government are quite resilient to this kind of accusation. Regardless of the outcome you will almost certainly lose the trust of all the other officials you need to work with in order to do your work. And in governments where petty corruption is endemic, will the replacement be any more virtuous? Indeed your friend may well be your friend (as well as colleague) precisely because s/he is less grasping and obviously corrupt than other local officials. There may definitely be a case of better the devil you know!

Finally, if this is a relatively junior official, which is likely to be the case in a field posting, do they really deserve to carry can for the whole corrupt system? Most likely they will just be part of a bigger network. In one case I have come across we have even speculated (probably naïvely, but friends are friends) that our friend was trapped in his corruption; that if he failed to continue to cooperate he would simply be hung out to dry. Indeed that is often the unfortunate outcome of anti-corruption drives around here in which one or two junior officials are made scapegoats for a much deeper-embedded corrupt network.

So inevitably you find yourself turning a blind eye. Without the subject ever being discussed between you and your friend you work out where the red lines are; at which point would you feel unable to continue to ignore the corruption? If they cross that line you may still feel unable to do anything, but by pushing the boundaries in this way they would cease to be your friend, becoming an adversary to be contained so far as is possible.

This moral equivocation then gets even worse when you yourself get involved in some kind of improved governance (i.e. anti-corruption) project. It is almost impossible not to co-opt government in many such projects – donors always require us to work in partnership with government – and so you find yourself sharing a stage with the same corrupt officials you are effectively targeting. (Of course, until charged and proven guilty they are presumed innocent, so you can hardly object to their involvement!)

The best that can be hoped for: either the authorities eventually get their (wo)man, but then you lose your friend, or you hope  to create the conditions under which your friend’s corruption becomes impossible to sustain, and they simply cease it because they have no alternative. But this is probably just pie in the sky dreaming. In the meantime we carry on in our extremely morally-grey ways, such are the contradictions of a life in tropical conservation and development, and another step on the way to SNAFUdom.

The psychology of giving and the corruption double whammy

An excellent post by William Savedoff and Nancy Birdsall over at GCD on Cash on Delivery aid got me thinking. Talking about proposed preconditions to successful COD aid they say:

“Similarly, conditioning a contract on adequate financial controls assumes that it is better to control the use of funds by tracking where they go than to control the use of funds by verifying what they yield. … Any further eligibility conditions are likely to undermine the restructuring of the accountability relationships or to simply delay implementation.”

They are absolutely right. Proposing such pre-conditions struck me as the classic aid mistake of focusing far too much on process, which able bureaucrats can spin out ad infinitum, as opposed to outcome, which is what we all want to see. Essentially donors are suggesting that they’d prefer to see none of their money stolen through local corruption than any particular outcome achieved, although given that money leaks even from the best aid projects, really all they are doing is prioritising the enforcement of controls – so that they cannot be accused of lax oversight – over effective implementation.

A good example of this which filters down even to small NGOs is procurement policies. A friend of mine experienced actual cost increases (never mind all the wasted staff time) when the NGO where he works was forced to implement a comprehensive procurement policy, and we have recently come under pressure to put one in place. Yet we all know the simple truth: trusting – and being able to trust! – your staff is easily the best, most cost-effective solution to dodgy procurement. I also have heard of big NGOs with dedicated procurement officers nonetheless paying suspiciously high prices for certain items.

What this highlights to me is one of the most pernicious effects of corruption: the layers of red tape that are imposed in an attempt to stamp it out; what I call the corruption double whammy. Unfortunately they rarely stop the leaks.

Donors ought to be capable of realising this and rising above it, but for their paranoia about best practices and being caught with their pants down. For most donors, I assume, this is basically a fear of the political process: tolerating a certain amount of corruption tends not to go down to well, and it is likely that the cacophony of condemnation will drown out more level-headed arguments. Indeed it is something we can all relate to: if you give some money to a good cause you’d prefer they suffered a glorious failure than that they’d achieved something with some of your cash, and then stolen the rest.

Is there a way forward? Perhaps some donors could set aside at least some of their funds for perceived riskier projects in which outcomes were prioritised over process? At least if the potential problems, but also potential gains, are acknowledged up front that might help draw some of the sting from the almost inevitable damning exposé when it comes.

About as bad as it gets

A $380 million yacht for a dictator’s son?

Equally eye-popping was Obiang’s justification of his and political elites’ wealth:

In a sworn affidavit to a South African court … He stated that public officials in his country are allowed to partner with foreign companies bidding for government contracts and said this means “a Cabinet minister ends up with a sizeable part of the contract price in his bank account.”

Presumably this blog post will be classified amongst the growing legion of “gossip, lies and miserable manoeuvres” about Equatorial Guinea. Miserable it certainly is!

Development Thought for the Day

New roads (or at least newly surfaced roads) are a staple of development, e.g. this, and with good reason since they reduce barriers to market access and catalyse economic growth. Unfortunately, round here, after a few years, many new roads start to crumple into corrugations, subside around bridges and develop potholes. Two causes are blamed:

1. Sloppy work by the contractor in the first place, and
2. Overloaded lorries causing unnecessary strains on the highway structure.

In order to solve the second problem there are weighbridges at various points along the way to stop overloaded lorries. Unfortunately this does not work since the police are easily bribed, and one regularly sees ridiculously overloaded vehicles careening along the deteriorating roads. Overloaded lorries also pose a public safety risk, so stopping them would definitely be worth doing. However, I suspect the social engineering required to institute honest policing of traffic regulations hereabouts is a far bigger job than the structural engineering involved in building a new road. Now I am no engineer, but I wonder whether, given the overloaded lorries seem to be a fact of life out here, why don’t they build roads to withstand those loads in the first place?

Ps. I should also like to say a big “Hello!” to all my new readers courtesy of the Guardian Development site. I’m flattered to have been selected as one of their featured blogs. It’s great to see this new portal for all things developmental, and which should hopefully bring the many issues of aid and development to a wider audience. So kudos to the Guardian.