9th iacc workshop do aid agencies have a comparative advantage in fighting corruption in africa

8/13/2019 9th Iacc Workshop Do Aid Agencies Have a Comparative Advantage in Fighting Corruption in Africa

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9thInternational Anti-Corruption Conference, 10-15 October 1999, Durban, South Africa

DO AID AGENCIES HAVE A COMPARATIVE ADVANTAGE

IN FIGHTING CORRUPTION IN AFRICA?

Brian Cooksey

Tanzania Development e!earch "roupAfroai#$raha%com

TABLE OF CONTENTS

S&nop!i! pa'eIntro#uction(appin' corruption in ai#The ai# in#u!tr&)! re!pon!e to the challen'e of corruptionSome option! for trac*in' corruption in ai#+

Option! for trac*in' corruption in the ai# a'encie!Option! for trac*in' ai#-relate# corruption in ai#e# countrie!

Conclu!ion

n#note!

eference!

Appen#ice!

Appen#i 1+ .lun#erin' the public pur!e in a!t AfricaAppen#i /+ Ai# an# #ebt in a!t AfricaAppen#i + Some eample! of overfun#in'Appen#i + Di# 2'an#a #e!erve 3/ billion of ne4 ai#Appen#i 5+ 6o4 to fool #onor!


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Synopsis

7Corruption) i! inte'ral to the comple patrona'e net4or*! foun# inAfrican political !&!tem!% To var&in' #e'ree!, the!e net4or*! are!upporte# 4ith re!ource! provi#e# b& ai#, particularl& loan! fromthe International (onetar& 8un#, the orl# :an*, an# the AfricanDevelopment :an*% :oth #irectl& an# in#irectl&, ai# i! heavil&implicate# in the corruption that it routinel& con#emn! amon'recipient 'overnment!% Con!e;uentl&, corruption in Africa i! not aproblem that ai# a'encie! can help !olve %%% 4ith more ai#%

The orl# :an* ha! naile# it! fla' to the 'lobal anti-corruptionma!t b& a#optin' a 7zero tolerance) !trate'& to4ar#! corruption

amon' borro4in' 'overnment!% :& no4, the lo'ical outcome ofzero tolerance !houl# have been a #ramatic re#uction in len#in' tocountrie! !ufferin' from 7en#emic) or 7!&!temic) corruption,inclu#in' mo!t of !ub-Saharan Africa% :ut apart from concern! 4ith corruption%

?ormall&, the orl# :an*)! 4ell *no4n 7approval culture)overri#e! an& attempt! to ma*e ai# to Africa #epen#ent on the level

of corruption% :oth eternal an# internal a!!e!!ment! of :an*len#in' !ho4 !carcel& believable level! of pro@ect failure over man&&ear!% .ro@ect! that #eliver !i'nificant an# !u!tainable benefit! topoor people are the eception, not the rule, e!peciall& in !ub-Saharan Africa% Corruption, patrona'e, mi!mana'ement an# 4a!teeplain thi! 4i#e!prea# pro@ect failure%

There i! a 'ro4in' con!en!u! that !tructural a#@u!tment len#in' ha!faile# to turn aroun# African economie!, an# that the poor havebeen the ma@or victim!%

The 4i#e!prea# failure of pro@ect-ba!e# len#in' an# !tructurala#@u!tment pro'ramme! to re#uce povert&, the central role ofcorruption in this failure, an# !ub-Saharan Africa)! re!ultant 3/00billion of unpa&able eternal #ebt con!titute the blea* bac*#rop tom& !ub@ect%

Current #onor-fun#e# anti-corruption initiative! ta*e three mainform!+


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a 4i#e ran'e of pro@ect! promotin' !tate an# private

!ector 'overnance inclu#in' !pecific anti-corruption

pro@ect! impo!in' anti-corruption con#itionalitie! on recipient

'overnment!

in-hou!e cleanin' inclu#in' enhance# !taff !upervi!ion

an# !tricter rule! an# penaltie! for contractin'con!ultant! an# procurement a'ent!%

The paper point! out the 4ea*ne!!e! of thi! approach% Initiative!that 4oul# complement tho!e li!te# above inclu#e a much 'reater#e'ree of tran!parenc& in ne'otiatin' !ectoral an# !tructurala#@u!tment loan!, an# a full-!cale, multi-#onor !ocial, economic,

an# environmental impact a!!e!!ment pro'ramme to #etermine thebenefit! #erive# from povert&-focu!e# ai# of all *in#!%

The entire ai# in#u!tr& -- the I8I! an# the 2? !&!tem, bilateral! an#the 2 -- nee#! to be !ub@ecte# to the *in# of tran!parenc& an#accountabilit& that it =theoreticall&> #eman#! of ai# recipient!%

Such propo!al! are unli*el& to appeal to the ai# in#u!tr& or ai#recipient! becau!e+

both have a lot to hi#e, inclu#in' corruption

the potential con!e;uence! of an ob@ective revie4 ofcorruption in ai# -- inclu#in' a #ra!tic re#uction in thenumber of countrie!, !ector! an# pro@ect! finance# -- 4oul#be unacceptable% 8or their o4n purpo!e!, both !i#e! preferto !tic* to the m&th of ai# effectivene!!

too fran* an a!!e!!ment of the impact of previou! len#in' --

fe4 !ucce!!e!, much failure, !ta''erin' #ebt! nee#le!!l&accumulate# B 4oul# be mo!t un4elcome at a time 4henthe I8I!) 'lobal cre#ibilit& i! un#er fierce attac* from all!i#e!%

.re!!ure! to increa!e tran!parenc& an# accountabilit& amon' ai##onor! an# recipient! 4ill therefore have to come from out!i#e thea'encie!, from the ?"O !ector, political pre!!ure 'roup! an# 'ra!!root! movement!,an# from #emocratic a!!emblie! in #onor countrie! un4illin' tofurther !ub!i#i!e a non-performin' in#u!tr&% The paper loo*! for4a&! to operationali!e thi! conclu!ion%


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Inro!"#ion 1

There i! a !ub!tantial literature #emon!tratin' that forei'n 7ai#) ha!faile# to achieve it! !tate# ob@ective! of improve#, !u!tainablelivelihoo#! for the poor in recipient nation!, 4hile contributin' tothe ma!!ive accumulation of forei'n #ebt% /

Corruption i! one of the ma@or factor! contributin' to the failure ofai# to promote African #evelopment%

There i! a 'ro4in' con!en!u! that+

Ai# i! ineffective 4here local political in!titution! re!pon# to

the imperative! of patrona'e rather than public accountabilit&=Chabal an# Daloz 1999>

8inancial ai# can #o more harm than 'oo# a! re'ar#! promotin'

economic 'ro4th an# !tructural a#@u!tment 4here local polic&-ma*in' an# implementin' capacitie! are 4ea* =Dollar an#.ritchett 199E>

.ro@ect! a! a mo#e of ai# #eliver& rarel& reach the poor or

provi#e !u!tainable benefit! =Caufiel# 199F>

Technical a!!i!tance per!onnel are poorl& vie4e# b& ai#recipient!, an# their a#vice i! rarel& put to 'oo# u!e =:er'199 199E>

Ai# ha! encoura'e# an# con#one# !&!tematic corruption in

both #irect an# in#irect 4a&! =Coo*!e& 199E, 1999>%

All the above critici!m! of ai#, an# other!, appl& particularl& acutel&to the Sub-Saharan African contet% Get one 4oul# be for'iven forconclu#in' that it i! more or le!! 7bu!ine!! a! u!ual) for #onora'encie! in Africa% It i! true that corruption ha! become central to#onor #i!cour!e in their overall concern 4ith improve#7'overnance)% Ai# flo4! have fallen overall, an# in !ome ca!e!,inclu#in'


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#onor! !tu#iou!l& avoi# the #eeper i!!ue! that un#ermine theeffectivene!! of 4hat the& #o% In the ab!ence of a more per!ua!ive#evelopment #i!cour!e, ai# a'encie! -- le#, of cour!e, b& the orl#

:an* -- continue to #efine the parameter! of the #ebate on ai#effectivene!!, inclu#in' corruption, in a narro4l& technocraticmanner%

Thi! paper con!i#er! the nature of corruption in the ai# in#u!tr&,criti;ue! current !tep! b& ai# a'encie! to #eal 4ith corruption, an#!pell! out the precon#ition! for a !&!tematic approach to a##re!!in'the ;ue!tion of corruption in ai#%

Ai# i! not homo'eneou!, an# 'enerali!ation! about 7corruption inai#) nee# careful ;ualification% (o!t ai# 4or*er! are not corrupt but!ome are, an# in !ome a'encie! corruption amount! to more than

in#ivi#ual initiative! b& ro'ue !taff member!% Similarl&, not allAfrican 'overnment official! mana'in' ai# are corrupt% "enerall&,ho4ever, the& are hi'hl& vulnerable to the imperative! ofpatrona'e, inclu#in' pre!!ure! from their political bo!!e! an#private actor!%

Ai# mone& -- a 4in#fall 'ain !imilar to a natural re!ource 7rent) --can be ;uite ea!il& turne# to 7uninten#e#) purpo!e!% o4 !alarie! --often cite# a! a ma@or cau!e of pett& corruption -- are a relevant,thou'h !econ#ar&, con!i#eration%

Mappin$ #orr"pion in ai!

To i#entif& the comparative a#vanta'e of ai# a'encie! in fi'htin'corruption in Africa, the main i!!ue! are the follo4in'+

ecipient 'overnment! in Africa routinel& u!e ai# for

purpo!e! of patrona'e

Doe! patrona'e al4a&! impl& corruption ?ot nece!!aril&% 8oreample, a!!ume a principal !ecretar& in 7Azania) u!e! hi! influenceto have hi! home #i!trict cho!en a! a pilot for a orl# :an* pro@ect

loan to co-finance a local e#ucation #evelopment fun#% Thi! ma& beu!e# to !tren'then relation! 4ith local Jlite!, inclu#in' politician!,bureaucrat! an# bu!ine!!men% There ma& or ma& not be a concerte#effort !ub!e;uentl& to mi!u!e pro@ect fun#! or opportunitie!% Theimportant point i! that ai#, particularl& in the form of pro@ect loan!,open! up man& opportunitie! for patrona'e, inclu#in'projectlocation, hiring project staff, training opportunities, procurementand purchases, consultancy, an# !o on% In the proce!!, covenant!


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an# con#ition! for loan! are 4i#el& i'nore# or flounte#% Ai#a'encie! are 'enerall& a4are of thi!, fre;uentl& turnin' a blin# e&e%F Corrupt a'encie! an# !taff are intimatel& involve# in the

proce!!e! of patrona'e them!elve!, of cour!e%

Corruption an# patrona'e !houl# al!o be #i!tin'ui!he# from 4a!te,4hich characteri!e! much pro@ect an# other ai#% a!te i! the u!e ofai# re!ource! for le'al but unnece!!ar& an#Kor non-pro#uctivepurpo!e!% 8or eample, pro@ect! are often heavil& front-loa#e# 4ithvehicle!, computer! an# other office e;uipment an# a ran'e oftrainin' activitie!, !tu#& tour!, an# 4or*!hop!K!eminar! of #ubiou!=ie non-pro#uctive> utilit&% Technical a!!i!tance an# con!ultanc&input!, lar'e component! of 7ai#), often come into the lattercate'or&%

Thou'h anal&ticall& #i!tinct, corruption, patrona'e an# 4a!te areu!uall& foun# to'ether, fee#in' off an# reinforcin' one other in a!&!temic fa!hion% The!e three, to'ether 4ith normal bureaucratic!lo4ne!! an# inefficienc&, 4hich !lo4 #o4n pro@ectimplementation, help eplain the incre#ibl& poor performance ofmo!t loan-finance# pro@ect! in Africa% L

The etent of official mi!u!e of ai# i! not ea!il& a!!e!!e#, !incemuch routine corruption i! not recor#e# or publici!e#% Thephenomenal amount of uneplaine# an# irre'ular 'overnmentepen#iture reporte# b& Au#itor! "eneral in both recurrent an#

capital bu#'et! 'ive! an impre!!ion of the etent of the problem=Coo*!e& 1999c>% =See Appen#i 1>% ven 4here ai# mone& i! not#irectl& mi!appropriate#, the conceptual 7fun'ibilit&) of ai# mean!that an& 7mi!u!e) of 'overnment revenue implicate! ai# inproportion to ai#)! overall contribution to 'overnment revenue!%Thu!, if Azania)! total bu#'et i! #onor fun#e# to the tune of /5M,the purcha!e of one thou!an# vehicle! for the Azanian arm& =4ithor 4ithout corruption> 4ill effectivel& be one ;uarter finance# b&ai# mone&, inclu#in' SA8 loan! from the I(8% An SA8 loan ha!helpe# finance Nimbab4e)! involvement in the Democratic epublicof Con'o)! on-'oin' civil 4ar% E

A le!! !ubtle 7fun'in') ta*e! place 4hen I8I loan! #i!appear throu'h#irect embezzlement b& 'overnment official!, a! in In#one!ia untilrecentl&, or the former Soviet 2nion% The latitu#e for thi! practicei! ;uite limite# in Africa, 4here lar'e chun*! of ne4 financial ai# 'o!trai'ht bac* to the I8I! to pa& intere!t on previou! loan!% 8or anumber of &ear!, man& African countrie! have been pa&in' the I8I!more than the& receive in ne4 cre#it!% (o!t corruption i! in


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!ectoral pro@ect! or 7SCAS)%

Other variable amount! of ai# mone& are #irectl& appropriate# for

uninten#e# purpo!e!, the mechani!m! of 4hich are #e!cribe#belo4%

(o!t vulnerable to corruption are loan! from the I8I!

an# re'ional #evelopment ban*! for pro@ect!implemente# b& national 'overnment! an# !ectoralmini!trie!

Thi! i! the mo!t crucial area for a!!e!!in' the impact of corruptionin ai#, !ince the I8I! account for a 'ro4in' proportion of total ai#flo4! to Africa, an# a 'ro4in' proportion of Africa)! forei'n #ebt%=See Appen#i />%

orl# :an*-fun#e# pro@ect! are fre;uentl& implemente# throu'hpro@ect implementation unit! ba!e# in central mini!trie!% The!e unit!are !taffe# b& official! 4ho hol# alle'iance to their hierarchical!uperior! an# their political bo!!e!% At the implementation pha!e, iti! relativel& ea!& for the imperative! of corruption, patrona'e an#4a!te to ta*e over from the formal pro@ect ob@ective!, #e!i'n an#mana'ement in #eterminin' pro@ect outcome!%

The :an* a#mit! that pro@ect bac*!toppin' an# !upervi!ion froma!hin'ton are u!uall& ina#e;uate, an# al!o a#mit! to contributin'

to the !lo4 implementation of pro@ect!% The :an*)! fre;uentl&critici!e# 7approval culture) mean! that effort! are concentrate# ini#entif&in' an# apprai!in' ne4 pro@ect!, not in a!!urin' the!ucce!!ful completion of tho!e alrea#& un#er4a&% Althou'h the:an*)! Operation! valuation Department routinel& a4ar#! poormar*! to both :an* !taff an# national pro@ect implementer!, theOD)! recommen#ation! for improvin' performance are routinel&i'nore# in the intere!t of maintainin' the :an*)! pro@ect approvalmomentum% Thi! proce!! ha! been much remar*e# upon an# nevereffectivel& a##re!!e#%

A recent eample+

In the cour!e of 4ritin' thi! report, orl# :an*emplo&ee! have complaine# that pro@ect! are in#ifferentl&au#ite#, or, even 4here au#it! reveal #iver!ion!, that thereare no !ub!tantial con!e;uence! for #iver!ion becau!e theinternal in!titutional incentive! of the :an* !pur len#in'%


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=Thoma! an# :ar*an 199E+/L, ba!e# on intervie4! inAfrica>

:eneficiarie! from corruption in loan-fun#e# pro@ect! inclu#e theprivate contractor! an# procurement a'ent!, both local an#epatriate, 4ho are a4ar#e# contract! throu'h ri''e# ten#erin'arran'ement!% In a!t Africa, non-in#i'enou! bu!ine!!e! areintimatel& involve# in the!e proce!!e!% In!i#e contact! in the7!&!tem) provi#e intelli'ence on opportunitie!% The be!t place#bu!ine!!e! are politicall& 4ell connecte#, an# ma& help fun# therulin' part&)! electoral coffer! from income from ai#-relate#contract!% In thi! 4a&, ai# mone& help! *eep rulin' Jlite! in po4er=Chabal an# Daloz 1999+ Chapter! L an# 9>%

Corruption ma& be foun# at an& point in the pro@ect c&cle% A

pro@ect ma& be i#entifie# 4ith corruption in min#% Corruption ma&be involve# in !electin' the con!ultant! 4ho apprai!e, implement,evaluate or revie4 a pro@ect% Corruption ma& allo4 pro@ect! to beu!e# for illicit activitie! #urin' implementation% .rocurementcontract! ma& be a4ar#e# to relative! an# cronie!% .ro@ect fun#!earmar*e# for particular purpo!e! ma& be turne# to other!% An# !oon%

orl# :an* pro@ect! have a hi'h failure rate, partl& a! a re!ult ofcorruption% :ilateral ='rant finance#> pro@ect! are !ome4hat#ifferent, in that t&picall& the #onor retain! !ub!tantial control! over

finance an# implementation% Thi! allo4! for a 'reater proportion offun#! to be u!e# for their inten#e# purpo!e, helpe# 4ith a variable#e'ree of mo#ern mana'ement an# technical competence%

Con!e;uentl&, !ome benefit! are #elivere# a! inten#e#% ample!4oul# be a roa# built un#er tie# ai#, or an immuni!ationpro'ramme run out!i#e the (ini!tr& of 6ealth, or a rural !hallo44ell! pro@ect un#erta*en b& a con!ultanc& compan&% 9

The critici!m that !uch arran'ement! 4ea*en 'overnment, areco!tl& an# un!u!tainable, ha! le# to a ne4 pro'ramme orientationamon' #onor!% ocal Jlite! are u!uall& a'ain!t !uch 7rin'-fence#)pro@ect!% De!pite the !ector pro'ramme approach, #onor! continueto be etremel& pro@ect-prone in their overall !upport !trate'ie!%The& are profoun#l& !ceptical about African 'overnment!) abilit& tou!e ai# for inten#e# purpo!e!, an# are nervou! about criticalcommentar& at home that coul# @eopar#i!e future fun#in'%ample! aboun# 4here bilateral! have #enie# or turne# a blin# e&eto evi#ence of corruption%


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After a #eva!tatin' report on it! len#in' performance in over 1,500pro@ect!, 4orth 3/E billion, the African Development :an* 4a!

!ub!tantiall& re!tructure# an# it! boar# of #irector! replace# =% The report !tate!+ 7The har#e!t ta!* 4ill be to in!til a ne4culture, 4hich 4ill inclu#e fun#amental chan'e! in per!onnelmana'ement an# in 'overnance%) =pa'e >% The AD:)! AfricanDevelopment 8un# 'ive! !oft loan! to Africa)! poore!t countrie!%Durin' 1990-9F the AD8 accounte# for ei'ht percent of allmultilateral loan! to Africa% 10

The mo!t perniciou! form of corruption in ai# concern! loan! fore!!entiall& bo'u! pro@ect! involvin' collu!ion bet4een !eniora'enc& an# 'overnment official!% A'riculture, live!toc* an#irri'ation are favourite tar'et! for thi! *in# of pro@ect, thou'h

multi!ectoral pro@ect! are al!o foun#% .ro@ect! are t&picall& locate#in remote re'ion!, 4here the o!ten!ible 7tar'et 'roup) of farmer!an# !o on i! unli*el& to complain that no benefit! are forthcomin'%Such pro@ect! are 7rin'fence#) in their o4n 4a& an# are befinition imperviou! to public !crutin&%

ac* of tran!parenc& an# accountabilit&, particularl& in themultilateral a'encie!, the uropean 2nion an# the 2? !&!tem,pre!ent! particular ob!tacle! to effort! at corruption control% Overthe &ear!, a number of 2? a'encie! have !uffere# from cron&i!man# corruption, inclu#in' 2?SCO an# 8AO% The recent

!pectacular event! in the uropean Commi!!ion climain' in there!i'nation of the entire Commi!!ion, #emon!trate ho4 a'encie!ma& fail to practice 4hat the& preach in their #evelopment i#eolo'&,namel& 'oo# 'overnance, tran!parenc& an# inte'rit&% 11

In 'eneral, bilateral a'encie! harbour the lea!t internal corruption%A! a rule of thumb, the #e'ree of corruption in national politic! an#the limit! on public accountabilit& in national life #etermine the#e'ree of corruption in bilateral ai#% Ai# from 8rance, :el'ium an#Ital& ha! been particularl& vulnerable to abu!e%

8rance ha! a uni;ue profile in thi! contet, 'iven it! clo!e tie! 4ithit! former African colonie!% Official financial an# political !upportha! helpe# promote 8rench bu!ine!! intere!t! throu'hout laFrancophonie, an# neither "aulli!t nor Sociali!t 'overnment! haveever con!i#ere# official corruption a particular problem that mi'ht#e!tabili!e ei!tin' arran'ement!% 1/

Overfun#in' =!ee Appen#i > encoura'e! corruption in part b&


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provi#in' more ai# than 'overnment! can effectivel& ab!orb%Sectoral overfun#in' reflect! a #onor ten#enc& to @ump into7flavour of the month) activitie!% ecent eample! inclu#e

#emocrati!ation an# 'overnance, !mall-!cale cre#it an# !upport for?"O!% Competin' for relativel& !mall mar*et! force! #onor! toi'nore 4arnin' !i'n! of lac* of capacit&, ;ualit& or inte'rit& amon'recipient!% Donor! have no incentive to loo* for proof of corruption4hen the& are them!elve! force-fee#in' the beneficiarie!, 4ho ma&receive lar'e 'rant! on the ba!i! of me#iocre or ne'ative trac*recor#!% De!pite 'ro4in' !upport for the private !ector an# civil!ociet& or'ani!ation!, central 'overnment i! !till the ma@or tar'etfor 7overfun#in') ho4ever% Ina#e;uate #onor co-or#ination ha!been blame# for overfun#in'% The orl# :an*)! OD blame!ina#e;uate 7ab!orptive capacit&) for much pro@ect failure%

o!eph arioba =199E>, chairman of Tanzania)! 199F .re!i#entialanti-corruption commi!!ion, ma#e a !tron' ca!e for tracin' the!ource of corruption in ai# to the ai# a'encie! them!elve!% arioba!ai# that ai# to countrie! li*e Tanzania Pfrom bilateral #onor! an#the International 8inancial In!titution! con!i!t! of ver& lar'eamount! of mone& an# the !um 4hich #i!appear! throu'hcorruption i! al!o ver& lar'e%P arioba !in'le# out ai# forinfra!tructural pro@ect! an# tie# ai#, 'ivin' the eample of a roa#pro@ect fun#e# b& a bilateral #onor in 4hich the contractor ha# the!upport of the local #evelopment mi!!ion #e!pite it! poorperformance%

The tentacular nature of ai# mean! that an& corruption relate# toimplementin' particular 'overnment policie! u!uall& involve! ai#mone&% arioba relate! eample! of corruption in the privati!ationproce!! an# in contractin' a #ubiou! forei'n firm to collect #ebt!from a #efunct 'overnment ban* =the fee! pai# 4ere more than the#ebt! collecte#>%

Ai# for emer'enc& relief an# humanitarian purpo!e! i!

particularl& vulnerable to abu!e, inclu#in' corruption

The recent eample of uropean 2nion 7recon!truction) ai# to:o!nia, 4here lo!!e! are bein' counte# in billion! of #ollar!, #oe!not =&et> have a parallel in Africa%

mer'enc& relief inclu#e! foo# ai#, 4hich i! al!o open to!&!tematic abu!e b& 'overnment official! an# the private !ector%"iven pre!ent tren#! in the inci#ence of civil #i!or#er in Africa,both internal an# international, an# 7natural) cata!trophe!, it i! li*el&


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that the!e form! of ai# 4ill increa!e in importance in &ear! to come%It i! !ai# that corrupt procurement officer! in relief or'ani!ation!!elf-recruit becau!e of the ea!& pic*in'!%

The brea*#o4n of civil or#er i! li*el& to have more impact on ai#flo4! than 4ea* or corrupt 'overnment% Hiolence #irecte# a'ain!tai# 4or*er! 4ill have a 'ro4in' impact on the in#u!tr&, inclu#in'non-emer'enc&Khumanitarian ai# in countrie! that are nominall&!table% 1


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T%e ai! in!"sry&s response o %e #orr"pion#%a''en$e

6avin' i#entifie# corruption a! a central 'overnance i!!ue an# acon!traint on economic 'ro4th an# !ocial #evelopment, the ai#in#u!tr& procee#e# to !et up pro'ramme! an# pro@ect! aime# atcurbin' corruption% hat the& faile# to #o 4a! to problemati!etheir o4n role in facilitatin', fuellin', con#onin' an# i'norin'evi#ence of 'ro4in' corruption re!ultin' from their ai#% 1

Thi! !ection criticall& revie4! #onor a'encie!) re!pon!e! to thechallen'e of corruption%

a 4i#e ran'e of pro@ect! promotin' !tate an# private!ector 'overnance inclu#in' !pecific anti-corruptionpro@ect!

(o!t African 'overnment! are implementin' #onor-fun#e#'overnance pro'ramme! coverin' a ran'e of activitie!, inclu#in'anti-corruption, #emocrati!ation, rule of la4, an# !upport for Pcivil!ociet&P, inclu#in' ?"O!% conomic reform! un#er !tructurala#@u!tment pro'ramme! are inten#e# to level the economic pla&in'fiel#, eliminate unnece!!ar& re'ulation an# encoura'e inve!tmentan# 'ro4th% Thi! i! not the place to revie4 the !ucce!! of the!epro@ect! in #etail% (an& are too recent to have &iel#e# an& concretere!ult! to #ate% A revie4 b& :er' =199E> of a 4i#e ran'e of public!ector reform! in Africa !ho4e# 'enerall& me#iocre re!ult!%

8ormall&, the ai# in#u!tr& treat! it! a!!i!tance a! lar'el& technical%Technical !olution! to polic& problem! mean%%% more pro@ect!% Arule of thumb+ if #onor-fun#e# anti-corruption initiative! be'in tothreaten ei!tin' Jlite! in an& 4a&, the& 4ill be ;ua!he#, i'nore#an#Kor b&pa!!e#%

impo!in' anti-corruption con#itionalitie! on recipient

'overnment! 15


13/3413


!till fifteen orl# :an* pro@ect! bein' implemente# in % Thir#, the I(8 ha! been #e!peratel& !ee*in'ecu!e! for 'ettin' a !u!pen#e# SA8 bac* on trac*, inclu#in'7con#itionalit&) that 4a&! if &ou 4antu! to help &ou #evelop%

African lea#er! !4allo4 their pri#e, ta*e the ai#, an# then procee#a! u!ual% .olitical !cienti!t! .atric* Chabal an# ean-.a!cal Daloz=1999+11F> put it li*e thi!+

Donor! %%% !eem on the 4hole to have accepte# a #e'ree ofnon-compliance 4ith the !tate# aim! of ai# an# a level offailure of tar'ete# ai# pro@ect! 4hich be''ar belief% %%%African rulin' Jlite! 4ere able to u!e forei'n ai# primaril& a!an a##itional !ource of clienteli!tic revenue%

Althou'h the bilateral! are potentiall& vulnerable to public#i!enchantment 4ith 7ai#), the orl# :an* !uffer! from no !uch


14/3414


con!traint!% "eor'e an# Sabelli =199+/9> ;uote the 8inancialTime! =(arch 199> commentin' on the orl# :an*)!+

relation!hip! 4ith !ome of it! African client! 4hich areprofoun#l& unhealth&+ protective, !ecretive or #efen!ive,!ometime! all three%%% all too often, information that !houl#be in the public #omain remain! !ecret% hen informationabout 'rave mi!mana'ement i! 4ithhel#, confi#entialit&overlap! 4ith complicit&%

The real, effective 7partner!hip) bet4een #onor an# recipient i!ba!e# on the tacit a'reement 7you pretend to implement ourconditionalities and we'll pretend to believe you. ) The ai# in#u!tr&)!abilit& to maintain the m&th of =at lea!t partial> !ucce!! in the faceof overpo4erin' evi#ence to the contrar& =albeit fre;uentl&

repre!!e#> bear! elo;uent te!timon& to the in#u!tr&)! re!iliance an#a#aptabilit&%

An&one familiar 4ith the orl# :an* 4ill tell &ou that tho!ere!pon!ible for !upervi!in', monitorin' an# evaluatin' pro@ect! arefull& a4are of much of the corruption that 'oe! on, to 4hich the&turn a blin# e&e% One pro@ect mana'er tol# me that an&thin' un#erfift& percent of mi!u!e# pro@ect mone& 4oul# be acceptable to him%

In Azania, the orl# :an* recentl& con!i#ere# clo!in' #o4n it!entire pro'ramme becau!e of the level of corruption% In!tea#, it

#eci#e# 7to cut bac* on financin' #urin' the current len#in' c&cle4hile increa!in' over!i'ht of ei!tin' pro@ect!%) Accor#in' to thi!unpubli!he# !ource, 7hile each orl# :an* pro@ect ha! aneternal au#it on a re'ular ba!i!, thi! ha! proven to be in!ufficient intrac*in' an# accountin' for fun#!% %%% public procurement i! a hi'hpriorit& tar'et for re#ucin' corruption%)

ample! aboun# 4here eternal au#it! have faile# to pic* up orfollo4 up evi#ence of corruption% (o!t !uch eerci!e! limitthem!elve! to chec*in' 4hether the account! tell a plau!ible !tor&,not 4hether the& tell the truth% =See Appen#i 5>% Callin' in one ofthe bi' five accountin' companie! to #o an in#epen#ent pro@ectau#it ma& or ma& not be a 'oo# 4a& of 'ettin' at the truth% Thu!the nee# for 7value for mone&) au#it! at the ver& lea!t%

in-hou!e cleanin' inclu#in' enhance# !taff !upervi!ion

an# !tricter rule! an# penaltie! for contractin'con!ultant! an# procurement a'ent!


15/3415


The min#!et of the po4erful rea!on! thu!+ if the me#icine #oe!n)t4or*, increa!e the #o!eQ "enerall&, a#optin' a punitive approachon matter! of public polic& - for eample, concernin' crime an#

puni!hment, or international #ru' traffic*in' - ha! the oppo!iteeffect of that inten#e#% In man& ca!e!, anti-corruption eerci!e!have le# to mi!tru!t, lo4 morale amon' !taff, the po!!ibilit& ofother form! of corruption #evelopin', the #eterioration of 4or*performance an# !pee#, an# avoi#ance mechani!m!% Anechiarico#e!cribe! ho4 anti-corruption initiative! have faile# in 2S publica#mini!tration% 1F

The 7zero tolerance) option ha! ha# all the!e pre#ictable effect!%Competitive bi##in' ha! been intro#uce# for contract! 4orth @u!t afe4 thou!an# #ollar!% Donor! intro#uce proce#ure! to 4ee# out thelea!t !u!picion of malpractice, !uccee#in' in !lo4in' #o4n pro@ect

implementation an# fru!tratin' the hone!t actor! alon' 4ith there!t% Onerou! bureaucratic proce#ure! become even more onerou!%The co!t! involve# in appearin' 7!;ea*& clean) are not counte#,!ince ai# i! not or'ani!e# aroun# principle! of efficienc& orcompetition% :oth ai# 4or*er! an# recipient! re!ent the a!!umptionof 'uilt until proven innocent%

The orl# :an* recentl& be'an to publi!h the name! ofprocurement companie! an# contractor! involve# in malpractice,bannin' them from further bi##in' on :an*-finance# pro@ect!%nhance# internal control! have al!o unearthe# maveric* !taff,

inclu#in' one hi'hl& !ucce!!ful po4er !ector !peciali!t 4ho left theban* to !erve a! an a#vi!or to the 'overnment of .a*i!tan%Smac*in' of to*eni!m, the!e initiative! are not 'oin' to ma*e an&!ub!tantial inroa#! on the real i!!ue!%

The 7i!lan#! of inte'rit&) initiative champione# b& the "lobalAlliance for Africa an# Tran!parenc& International, that aim! toclean up on procurement an# ten#erin' in ma@or pro@ect!, a##re!!e!a ver& real an# ur'ent i!!ue% Thi! 4orth4hile initiative mu!t belin*e# to a more 'eneral vie4 of ai#-relate# corruption alon' theline! #e!cribe# in thi! paper% Thi! 4oul# allo4 the inclu!ion ofpro@ect! an# non-pro@ect loan! 4here international procurement i!not a central feature%

So(e opions )or ra#kin$ #orr"pion in ai!

The formi#able capacit& of the ai# in#u!tr& to 4ith!tan# 4ell-foun#e# internal an# eternal critici!m! in the intere!t of 7bu!ine!!


16/34


17/3417


little real pro're!! i! ma#e on the 'roun# in comin' &ear!%

.o!!ible preventive mea!ure! inclu#e+

8in#in' champion! an# con!tituencie!

To for4ar# the 7main!treamin') of the i!!ue! of corruption an# ai#,moral lea#er!hip !houl# be !ou'ht from 4ithin the #onorcommunit&, the ma@or #evelopment ?"O! an# foun#ation!, there!earch an# con!ultanc& in#u!trie!, the private !ector, a!!ociation!of ai# 4or*er!, an# political partie!% .artner or'ani!ation! arere;uire# in Africa% The role of Tran!parenc& International i!mentione# belo4%

Compilin' an annual #onor corruption in#e to

complement TI)! C.I an# !oon-to-be-relea!e# :.I

The C.I ha! ha# a #ramatic impact on public #i!cu!!ion! ofcorruption% The critici!m that the C.I i! unfair in concentratin' onthe bribe-ta*er! 4ill be a##re!!e# b& ran*in' bribe-'iver!% In the!ame 4a&, an ai# corruption in#e 4oul# ran* both recipientcountrie! an# a'encie! on their propen!it& to corruption% :ut 4ho4oul# compile !uch an in#e an# #efen# it! fin#in'!

6ubert! =199F> a!*e# a panel of /5L epert! about the level ofcorruption an# frau# in !iteen multilateral or'ani!ation!% The

avera'e !core 4a! on a !cale of 1 =ver& hi'h> to 5 =little or none>4ith a ran'e from /%E =8AO> to %0 =?ATO>% 6ubert!) !amplecon!i!te# of #ele'ate! to anti-corruption conference!%%%

in*in' #ebt relief to improvement! in ai# tran!parenc&

an# mana'ement, not @u!t to enhancin' povert&-focu!e#policie! amon' countrie! !ee*in' relief

There i! no ;ue!tion that #ebt relief i! an over4helmin' priorit& for!ub-Saharan Africa% Get it remain! to be !een 4hether the correctle!!on! are bein' learne# concernin' the ori'in! of the!e #ebt! an#

the role of the I8I! in their creation% 2nle!! the irre!pon!iblelen#in' perpetrate# b& the I8I! an# other len#in' in!titution! can bebrou'ht un#er control, the net 'eneration of forei'n #ebt 4ill notbe lon' in comin'% The onl& po!!ible !olution to thi! problem i!enhance# tran!parenc& an# accountabilit& for both borro4er! an#len#er!% Thi! me!!a'e 4ill emer'e from the political proce!! in'eneral, from ?"O a#vocac& 'roup!, an# from polic& re!earchor'ani!ation! an# thin* tan*!%


18/3418


(an& ?orthern ?"O! are !till ar'uin' for more rather le!! bilateralai# on the a!!umption that ai# ha! an overall po!itive impact

=uro!tep et%al% 199L>% The fact that mo!t ??"O! are heavil&!ub!i#i!e# b& their o4n 'overnment!) ai# bu#'et! ma*e! it #ifficultfor them to a#opt an openl& critical !tance on corruption i!!ue!%

The 78ift& Gear! i! nou'h ?et4or*) ta*e! the !trate'ic po!itionthat the onl& 'oo# I8I i! a #ea# one% hile thi! po!ition mi'ht beintellectuall& attractive, it i! hi'hl& ;uiotic in it! ambition! to ri#the 4orl# of the I8I!% 1L A carefull& or'ani!e# an# evi#ence-ba!e# buil# up of pre!!ure from multiple an# cre#ible !ource!!houl# have 'reater impact in the lon'-run%

ubilee /000 i! the la!t an# ar'uabl& the mo!t intere!tin' in a !trin'

of popular ai# lobb& 'roup! ori'inatin' in the ?orth% It ha! ta*enthe po!ition that #ebt relief !houl# be lin*e# to povert& re#uctionpro'ramme! to be finance# from #ebt !avin'!% Thi! approach i!har#l& li*el& to en#ear ubilee /000 to relief-!ee*in' 'overnment!%ecentl&, ubilee /000 ha! ta*en up the corruption i!!ue%

Tran!parenc& International ha! achieve# a 'reat #eal in it! fir!t five&ear! in brin'in' the corruption i!!ue onto the front burner an#'ettin' ?orthern 'overnment! to a'ree to outla4 an# puni!hcompanie! pa&in' bribe! for contract!% TI ha! al!o influence# the4a& #onor! thin* an# act on corruption% :ut TI #oe! not have the

re!ource! to ta*e on the hu'e i!!ue of corruption in ai#% Al!o, !incethe orl# :an* ha! ta*en up the anti-corruption initiative, it mi'htappear churli!h for TI to be'in !nipin' at the :an*)! o4n recor#, orthat of other #onor!, in thi! re!pect%

7Donor #epen#enc&) characteri!e! the ma@orit& of con!ultant! an#aca#emic! involve# in ai#% The pre!!ure! on aca#emic an# re!earchor'ani!ation! to earn their *eep from contractual 4or* allo4!#onor! to #efine re!earchKcon!ultanc& prioritie! in 4a&! thatprimaril& !erve their o4n intere!t!% African aca#emic! !uffer fromthe !ame con!traint!% 1E

The creepin' 7privati!ation) of the ai# in#u!tr& throu'h the activitie!of !uch luminarie! a! "eor'e Sorro!, Te# Turner an# :ill "ate!rai!e! the intere!tin' ;ue!tion of 4hether the private !ector canbreath ne4 life into an otio!e an# !clerotic in#u!tr&%

.unitive mea!ure!+


19/3419


!tabli!hment of a !tan#in' committee in the DAC to

monitor corruption in ai#

eferral of 'rievou! ca!e! of corruption in ai# a'encie!to international le'al proce!! an# a#@u#ication, 4ithappropriate !anction!

Option! for trac*in' ai#-relate# corruption in ai#e#countrie!

African 'overnment! naturall& re!ent an# re!i!t anti-corruptioninitiative! b& #onor!% In Tanzania, for eample, #onorrepre!entative! 4ho !pea* out a'ain!t corruption have beenpublicl& critici!e# for ecee#in' their man#ate% The e!i#ent

epre!entative of a 2? a'enc& 4a! 4ith#ra4n from hi! po!t 4henhe trie# to publici!e evi#ence of corruption lin*in' hi! re'ionaloffice 4ith hi'h-ran*in' 'overnment official!%

In Tanzania, a hi'h-level initiative to #eepen the 7partner!hip)concept le# to the public critici!m of Tran!parenc& International for7unfairl&) ran*in' Tanzania a! one of the mo!t corrupt countrie! inthe 199E Corruption .erception In#e% (uch pro're!! 4a! claime#in improvin' recipient-#onor relation! from a lo4 point in the earl&ninetie! 4hen a lar'e amount of import !upport fun#! #i!appeare#%One !i'nificant area in 4hich no pro're!! ha# been ma#e 4a! inmonitorin' an# a!!e!!in' the impact of ai# pro@ect! on the poor%

19

There 4ill be !tiff oppo!ition from African 'overnment! to attempt!to rai!e the i!!ue of corruption in ai#, inclu#in' ai#-fun#e# pro@ect!%Out!i#e South Africa, the number of African ?"O! an# 'ra!!-root!C:O! 4ith the capacit& to ta*e up the i!!ue of ai# tran!parenc& i!ver& limite#% TI)! national chapter! in Africa coul# ta*e up the i!!ueof corruption in ai#, !houl# the& be convince# that the i!!ue merit!their attention% The problem i!, TI chapter! rel& on #onor! for theircore fun#in' an# other activitie!, an# are therefore unli*el& to 4antto bite the han# that fee#! them%

.reventive mea!ure!+

All ai# pro@ect! above a certain value, an# all

pro'ramme! !houl# be the !ub@ect of public #i!cu!!ion,inclu#in' 4i#e revie4 b& parliament, the bu!ine!!communit& an# civil !ociet& or'ani!ation! of all *in#!


20/3420


.ublic Sector evie4! to inclu#e 'reater #i!clo!ure of

ai# input! an# the rationale for public inve!tmentchoice!

e'ular publication of #etail! of #onor-fun#e# pro@ect!

an# public acce!! to #ata on ai# an# #ebt

Inte'rit& an# !ervice #eliver& !urve&!

e!earch on corruption in ai# can be inclu#e# in 7inte'rit& !&!tem)an# !ervice #eliver& !urve&!% The!e !urve&! #ocument publicopinion an# eperience of corruption, inclu#in' it! impact on theavailabilit&, co!t an# ;ualit& of public !ervice!% Such !urve&! arealrea#& part of the batter& of public !ervice reform tool! aime# at

improvin' the performance of central an# local 'overnment!%.lanne# national inte'rit& !&!tem re!earch inclu#e! the i!!ue ofcorruption in ai#, a po!!ible !ource of the DCI =Donor CorruptionIn#e>%

There i! a ten!ion, ho4ever, bet4een the TI an# the orl# :an*approach to !ervice #eliver& !urve&!% 8or TI, civil !ociet& an# theprivate !ector nee#! to be involve# in carr&in' out the !urve&!,4herea! the :an* !ee! them a! part of civil !ervice reform, an#therefore un#er 'overnment control% It i! unli*el& that !urve&!controlle# b& the central an#Kor local 'overnment inve!ti'atin'!ervice ;ualit& an# the role of ai# 4oul# be carrie# out ob@ectivel&,!ince the real picture 4oul# pre#ictabl& !ho4 up the poorperformance of both 'overnment an# #onor!%

It i! al!o unli*el& that #onor! 4oul# 'et a4a& 4ith fun#in'in#epen#ent an# potentiall& !hoc*in' re!earch for ver& lon'%8in#in' cre#ible local re!earcher! prepare# to ri!* the con!e;uence!of bein' involve# in !uch activitie! i! problematic% The involvementof out!i#e re!earcher! an# con!ultant! coul# lea# to the re!earchbein' bran#e# a! a 7forei'n plot #e!i'ne# to #i!cre#it u!%)

8or !ome time the orl# :an* ha! been !pon!orin' inve!ti'ative

@ournali!m 4or*!hop!, national inte'rit& 4or*!hop!, an# other anti-corruption activitie!% A roun# of inve!ti'ative @ournali!m4or*!hop! coul# be run on the theme of corruption in ai#%Corruption in ai# !houl# fi'ure in inte'rit& 4or*!hop!% It i! 4orthrememberin' that the t4in ri!*! to inve!ti'ative @ournali!t!, e#itor!an# ne4!paper e#itor! - bein' bribe# or bein' *ille# - 4ill be ofma@or proportion!, !ince !o man& 7bi' people) have !o much tohi#e% hi!tle-blo4er! al!o ri!* their live! if the& !tart tellin' the


21/3421


truth about certain t&pe! of 7ai#)%

.unitive mea!ure!+

.arliamentar& committee! empo4ere# to revie4 ai#

performance 4ith po4er! to ;ue!tion !enior official! onai#-fun#e# pro@ect! an# pro'ramme!% Se!!ion! to bepublic

2nannounce# value for mone& au#it! of an& loan-

fun#e# pro@ect b& official au#itor or con!ultant!

S&!tematic a!!e!!ment! of environmental, povert&

an# economic impact of ai# pro'ramme! an#

pro@ect! in all !ector!

The la!t t4o are not 7punitive) !o much a! information-empo4erment mea!ure!, 'ivin' all !ta*ehol#er! the mean! to ta*ean intelli'ent po!ition on the impact of ai#%

Con#'"sions

The i!!ue of the corrupt u!e of ai# !houl# be a central concern inthe international anti-corruption !tru''le%

Corruption i! a ri!* factor for all ai# venture!, ho4ever 4ellinten#e#% (ulti-billion #ollar !tructural a#@u!tment loan! from theI8I! =In#one!ia, u!!ia>, an# uropean 2nion po!t-conflictrecon!truction 'rant! =:o!nia>, have been !ub@ecte# to !&!tematicembezzlement an# international rec&clin'% /0 Tho!e involve#inclu#e hea#! of !tate an# their cronie! in the private !ector,inclu#in' the (afia%

In !uch compan& Africa mi'ht !eem a bit pla&er% Get the 3/00billion o4e# b& !ub-Saharan countrie! to ai# a'encie! an# other

international cre#itor! i! har#l& incon!e;uential% :& contra!t, the3/ billion !o far earmar*e# for #ebt relief amon' the nineteenpoore!t countrie! loo*! li*e a #rop in the ocean, even if it ha! beentoute# a! a 7victor& for ubilee /000)%

The mechani!m! for i#entif&in' an# #ealin' 4ith corruption in ai#-recipient relation! are not #ifficult to i#entif&% The ma@orprecon#ition for a##re!!in' corruption in ai# i! to #efine the i!!ue


22/3422


correctl&% hat i! currentl& lac*in' i! the 4ill to a!!imilate thele!!on! of the pa!t in or#er to clean up the #onor!) o4n act% Thi!po!e! particular challen'e! for the I8I!% "iven the uni;ue po!ition

of the orl# :an* in #efinin' the term! of the #evelopment #ebate,inclu#in' corruption, I !peculate on 4hether a more fun#amentalcriti;ue of corruption in Africa can be invo*e# in the intere!t of'oo# !en!e an# in the !earch for practical !olution!% /1

The ai# in#u!tr&, le# b& the orl# :an*, ten#! to #efine corruptionin Africa a! a local i!!ue that can be a##re!!e# b& !upportin'#iver!e initiative! of a lar'el& technical nature =@u#icial reform,inve!ti'ative @ournali!m, 7i!lan#! of inte'rit&), !upport for an anti-corruption a'enc&>% In all the!e an# more, it i! a!!ume# thatcorruption i! an in#i'enou! problem, to 4hich ai# offer! ana!!ortment of !olution!% It i! al!o a!!ume# that corruption i! a

lar'el& in#ivi#ual proce!! of 7rent-!ee*in') that can be a##re!!e# b&chan'in' incentive !tructure!, inclu#in' 4a'e!, accountabilit&, an#competition%

If corruption 4ere to be vie4e# a! a !&!temic politicalphenomenon, ai# a'encie! 4oul# have to a!* 4ho their local 7anti-corruption) allie! mi'ht be in an& 'iven contet% It i! not enou'h fora hea# of !tate to a#opt a formall& anti-corruption !tance+ he mao thi! @u!t to placate #onor!% If ai# a'encie! an# their local7partner!) have #iametricall& #ifferent #efinition! of the !ituation iti! #ifficult to !ee ho4 the #emon!tration of lar'el& technical

!olution! to corruption 4ill have an& impact%

Ai# i! the main vehicle throu'h 4hich eternal pre!!ure! arebrou'ht to bear to force the pace of #emocrati!ation, 'overnancean# anti-corruption initiative!% Get a 'ro4in' number of ob!erver!no4 !ee ai# a! a ma@or cau!e of the corruption an# 'overnanceproblem! 4hich it i! concerne# to a##re!!% At be!t, #onor! haveten#e# to turn a blin# e&e to the mi!u!e of their ai# at 4or!t,certain ai# a'encie! an# a'enc& official! have them!elve! beenactivel& involve# in corrupt practice!%

Africa)! current cru!hin' forei'n #ebt 4ill eventuall& be cancelle#%:et4een no4 an# then 4e mu!t prepare the 4a& for a!!urin' thatfuture ai# #oe! not lea# to the !ame #i!a!trou! re!ult! a'ain%


23/3423


?D?OTS

1 ac* of !pace prevent! a full @u!tification of man& of the point!ma#e, 4ith appropriate reference! an# ;ualification!% The!&mpathetic rea#er ma& be prepare# to 7ta*e m& 4or# for it) 4herefull @u!tification for !tatement! ma#e i! lac*in'% (uch of 4hatfollo4! i! ba!e# on per!onal eperience of over t4ent& &ear!4or*in' in an# aroun# the ai# in#u!tr&, mo!tl& in a!t Africa%

/ See for eample A#am! =1991>, Caufiel# =199F> "eor'e an#Sabelli =199>, 6ancoc* =19E9>, .a&er =19E/, 1991>, Samp!on=19E1>% The orl# :an* provi#e! it! o4n rich literature on ai#effectivene!!, comin' to often !imilar conclu!ion! to the above!ource!, minu! the moral in#i'nation% Dollar an# .ritchett =199E>,

for eample, recommen# that in 4ea* an# corrupt polic&environment!, #onor! !houl# not 'ive financial a!!i!tance butmerel& polic& a#vice, a recommen#ation 4ith profoun# implication!for the future of ai# to Africa%

See Chabal an# Deloz =1999> an# Coo*!e& =199E, 1999>%

The bi''er picture for !ituatin' ai# =in>effectivene!! nee#! toinclu#e the 'lobali!ation of tra#e, inve!tment an# finance =2?D.1999> an# impen#in' environmental cata!trophie! of all *in#!re!ultin' from economic an# population 'ro4th, #efore!tation, lo!!

of bio-#iver!it&, pollution an# 'lobal 4armin'%

5 It i! !ai# that !ome #onor! u!e the TI in#e a! one criterion for@u#'in' a countr&)! ai#-4orthine!!%

F The apenhan! eport =199/> foun# that 7borro4er! re!pecte#their a'reement! in onl& t4ent&-t4o percent of the loan! eamine#%)A! a re!ult, Pthe hi'h inci#ence of non-compliance un#ermine! the:an*)! cre#ibilit&%P "eor'e an# Sabelli =199+//>%

L The :an*)! OD evaluation! of :an* len#in' performancema*e #epre!!in' rea#in', thou'h the& 'enerall& avoi# the 7C) 4or#%OD i! mar'inal to :an* len#in' activitie!, an# !taff ne'otiatin'ne4 loan! are often una4are of the hi!tor& of loan! to thecountr&K!ector in ;ue!tion% The :an* i! fre;uentl& 7tr&in' a ne4approach), ma*in' hi!torical concern! irrelevant%

E The I(8 complain! that the 'overnment of Nimbab4e provi#e#it 4ith fal!e fi'ure! of the co!t of it! involvement in Con'o =actual


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co!t+ over 31F0 million !ince anuar&>% e mi'ht a!* 4h&Nimbab4e i! involve# in thi! =relativel& #i!tant 4ar>% Other !imilareample! 4oul# inclu#e 2'an#a =Su#an, DC>, u!!ia

=Chechn&a>, an# In#one!ia =a!t Timor>% On the criminali!ation ofthe African !tate, !ee :a&art et% al% =199E>%

9 .oor pro@ect performance ha! le# #onor! to tr& an alternative#eliver& mechani!m of ba!*et-fun#e# !ectoral pro'ramme!% Thecon!traint! on !ector-4i#e pro'ramme! are even more #auntin'than tho!e on pro@ect!+ !ee Coo*!e& =1999a>% The orl# :an*claim! a fall in the proportion of un!ucce!!ful pro@ect! in recent&ear! =Dollar an# .ritchett 199E>% h& pro@ect! fail i! #i!cu!!e# in:er' =199, 199E>, Ther*il#!en =1999>, Coo*!e& =199E, 1999>, an#8er'u!on =1991>% ?ot all ob!erver! a'ree that 7pro@ect! #on)t 4or*%)8or eample, in #e!cribin' the impact of ai# to Africa, van #e alle

an# ohn!ton =199F> a!!ert that+ 7Countle!! eample! of hi'hl&!ucce!!ful ai# pro@ect! ei!t%%% the impact of ai# i! clear, an# there!ult! of man& in#ivi#ual ai# pro@ect! are tan'ible%%%) The author!#o i#entif& !ome problem! 4ith ai#+ the 7Dutch #i!ea!e) =too muchai# lea#! to currenc& overvaluation an# #i!coura'e! a'riculturaleport!>, 7enclave) pro@ect! that are un!u!tainable =mentione#above>, lac* of #onor co-or#ination%%%

10 The :an*)! culture 4a! characteri!e# b& 7aniet& to meetannual len#in' tar'et!), 7reluctance to #ele'ate authorit& an# anun4illin'ne!! to accept re!pon!ibilit&,) 7lac* of tran!parenc& in

#eci!ion-ma*in'), an# 7!u!picion an# #i!tru!t%) =p/F>% Other;uotable ;uote! from the report+ 7.ro@ect i#entification i! e!!entiall&left to the borro4er, even thou'h man& African countrie! arein!ufficientl& e;uippe# to i#entif& the ri'ht *in# of pro@ect! for theirnee#!%%% %%% there are !ome in#ication! that political pre!!ure! ma&have le# to the inclu!ion of inappropriate pro@ect!%%%) =pp1-1>%7:orro4er o4ner!hip i! not an i!!ue beneficiar& an# communit&participation i!%) =p1>% .ro@ect monitorin' 7i! not !&!tematic an# !o#oe! not allo4 mana'ement control an# boar# over!i'ht%) =pE>%Supervi!ion 4a! totall& ina#e;uate% A ;uarter of active pro@ect!4ere con!i#ere# 7problem!), concentrate# in a'riculture an# rural#evelopment, public utilitie! an# the !ocial !ector!% :ut 7there i! noa!!e!!ment of the !eriou!ne!! of the problem! nor their impact onpro@ect implementation or !u!tainabilit&%) =pE>%

11 On the 2? !&!tem "eor'e an# Sabelli =199+1//> comment+7Corruption in the 2? i! con!i#ere# 4i#e!prea# an# man& of it!a'encie! are, if an&thin', le!! open to !crutin& an# amen#ment thanthe :an* it!elf% Some are run a! per!onal baronie!, li*e the 8oo#


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an# A'riculture Or'ani!ation in ome 4here #ouar# Saouma hel#!4a& until late 199, un#er purel& nominal boar# control, for nearl&ei'hteen &ear!%) Saouma 4a! accu!e# of hol#in' up emer'enc& foo#

for thiopia for t4ent& #a&! becau!e of a per!onal #i!li*e for thelocal 8AO repre!entative% =6ancoc* 19E9+E5>% I have hear# it !ai#that relief effort! 4ere #ela&e# to allo4 cronie! to 'et in on the act%

1/ It i! claime# that .re!i#ent (itteran# !ac*e# hi! (ini!ter ofCo-operation ean-.ierre Cot on the in!i!tence of !ome Africanpre!i#ent! 4ho 4ere not happ& 4ith hi! 7moral intran!i'ence%)Durin' an earlier perio#, .re!i#ent "i!car# #)!tai'n)! famil& 4a!involve# in bu!ine!! in Naire, "abon, (orocco, Cha#, the CentralAfrican epublic, the Cameroon!, Ivor& Coa!t, (auritania, ?i'eran# 2pper Holta% Accor#in' to the all Street ournal+ PIn man&of the!e countrie!, the ei!tin' re'ime! are heavil& obli'ate# to

.re!i#ent Haler& "i!car# #)!tain')! 'overnment for the 8renchmilitar& !upport that *eep! them in po4er%P =;uote# b& A#am!1991+1/->%

1 In Tanzania, one bilateral a'enc& recentl& pulle# out pro@ect4or*er! from a certain re'ion becau!e the 'overnment coul# not'uarantee their !afet&% Ai# vehicle! 4ere tar'ete# for theft an# !alein nei'hbourin' countrie!%

1 Thi! 7blame the victim) attitu#e i! fre;uentl& note# in relationto the orl# :an*)! criti;ue of the pre-a#@u!tment perio#, 4hen the

:an* 4holehearte#l& !upporte# interventioni!t an# non-mar*etoriente# 'overnment! in Africa% The heav& inve!tment in !tate-o4ne# enterpri!e! #urin' the (c?amara epoch =19FE-E1> helpe#buil# up the ma!!ive #ebt! that are the centre of attention to#a&%

15 olfen!ohn 1999% The author 74arn! 'overnment! in#evelopin' countrie! that the& 4ill @eopar#i!e their forei'na!!i!tance an# inve!tment b& con#onin' corruption%) An earlier=199L> :an* !ource =;uote# b& ile& =199E+1L> !tate! that 7theevi#ence of !&!temic corruption in it!elf i! not a rea!on to 4ith#ra4the :an*)! !upport%)

1F A 'oo# eample i! the American 'overnment)! approach to theColombian #ru' tra#e, 4here an e!calatin' inve!tment of mone&an# manpo4er bor#erin' on militar& intervention coinci#e! 4ith a!i'nificant improvement in the ;ualit& an# fall in the price of ?e4Gor* cocaine%

1L 50 Gear! i! nou'h ?et4or*, 1/L Street, S, a!hin'ton


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DC /000 - 2SA%

1E 8ailure to confront the corruption i!!ue 4ea*en! other4i!e

authoritative 4ritin' on ai# to Africa% 8or eample, in 7Improvin'Ai# to Africa) van #e alle an# ohn!ton =199F> #evote one!entence to corruption =pLF> 4herea! ile& =199E>, 4ritin' on the7.olitical conom& of Anti-Corruption Strate'ie! in Africa),inclu#in' the :)!, fail! to con!i#er ai# a! a potential incentive tocorruption%

19 The author of the report, .rofe!!or "err& 6elleiner, claime#the C.I 4a! !u!pect, an# that Tanzania)! lo4 ran*in' 4oul##i!coura'e Tanzanian! involve# in anti-corruption effort!% =SeeCoo*!e& 1999e>% 8or the moment, there i! a !i'nificant orl#:an*-'overnment alliance that i! unli*el& to re!pon# po!itivel& to

an& propo!al! for enhance# tran!parenc& of the t&pe ma#e here%

/0 The I8I! claim there i! a! &et 7no evi#ence) that their loan! tou!!ia 4ere part of the laun#erin' of 3L billion throu'h the :an* of?e4 Gor*% The 7fun'ibilit&) of ai# ma*e! the !earch for #irectevi#ence of embezzle# ai# fun#! a re# herrin'%

/1 The omen! are not 'oo#% 8or eample, the apenhan! report=199/> le# the :an* to a!!ert that+ 7Onl& !oun#, on-the-'roun#re!ult! - the #evelopment impact of pro@ect! - are true mea!ure! ofthe :an*)! contribution to !u!tainable #evelopment%) Ruote# b&

"eor'e an# Sabelli =199+//5-F>% Con!e;uentl&, the :an* initiate#a proce!! for a!!e!!in' the impact of !ocial !ector loan!, coverin'onl& thirteen percent of :an* len#in'% =ibi#>%


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eference!

A#am!, .atricia =1991> Odious Debts: loose lending, corruption

and the third world's environmental legacy,arth!can, on#on

Anechiarico, 8ran* =1999>Alternatives to the aw !nforcement"odel of #orruption #ontrol, .aper propo!e# for the 9th IACC,Durban, October 1999%

:a&art, -8%, S lli! an# : 6ibou =199E>% $he #riminali%ation ofthe &tate in Africa, Ofor#, ame! Curre& for the InternationalAfrican In!titute

:er', lliott =199>ethin(ing $echnical #ooperation: eformsfor #apacity )uilding in Africa% 2nite# ?ation! Development

.ro'ramme, ?e4 Gor*

----- =199E> PAi# an# .ublic Sector eformP, Conference on Ai#,2niver!it& of Copenha'en, October 9-10 =#raft>

Caufiel#, Catherine =199F>"asters of *llusion: $he +orld )an(and the overty of -ations, .an :oo*!, on#on

Chabal, .atric* an# ean-.a!cal Daloz =1999>Africa +or(s:Disorder as political instrument, Ofor#, ame! Curre&

Coo*!e&, :rian =199La> #orruption in Aid: ow much isacceptable/"overnance, Hol%1, ?o% 1, conomic DevelopmentIn!titute, orl# :an*, a!hin'ton, pp 1-1E, anuar& 199L%eprinte# in Africa Anal&!i! ?o% /FL =(arch 199L>

----- =199Lb> +ho is responsible for corruption in aid/Tran!parenc& International ?e4!letter, :erlin, une 199L

----- =1999a>Does Aid #ause #orruption/a!t AfricanAlternative!, Hol% 1, ?o% /, ?airobi, anuar&-8ebruar& 1999

----- =1999b> &hould Aid &urvive/a!t African Alternative!, Hol%1, ?o% , ?airobi, (arch-April 1999

----- =1999c> #orruption and overty: +hat are the lin(ages/Technical evie4 or*!hop on the Socio-economic Con!e;uence!of .overt& an# Corruption, International Centre for conomic"ro4th, ?airobi, =/Fth (a&>


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----- =1999#> #orruption *nde0: Don't &hoot the "essenger1, a!tAfrican ?airobi, ul& 5-11

----- =1999e>Dar( deals that cast a long shadow, ODAID)99Director&, $he eality of Aid 233456: An*ndependent eview of Development #ooperation, uro!tep,ICHA, Actionai#, arth!can .ublication!, on#on

8er'u!on, =1991> $he Anti7olitics "achine, :er*ele&, 2niver!it&of California .re!!

"eor'e, Su!an an# 8abrizio Sabelli =199>Faith and #redit: $he+orld )an('s secular empire,on#on, .en'uin

6ancoc*, "raham =19E9>ords of overty, on#on, (acmillan

In!titute of conomic Affair! =199E> Our problems, Our solutions:an economic and public policy agenda for 8enya, ?airobi

6ubert!, =199F>!0pert views on public corruption around theglobe, Department of .olitical Science an# .ublic A#mini!tration,8ree 2niver!it&, Am!ter#am

$he 9uest for 9uality: eport of the $as(

Force on roject uality for the African Development )an(,Ofor#, ?uffiel# Colle'e

.a&er, Cherl& =19E/> $he +orld )an(% ?e4 Gor*, (onthl& evie4

.re!!

----- =1991>ent and ost, on#on, Ne# :oo*!

ile&, Stephen =199E> PThe .olitical conom& of Anti-CorruptionStrate'ie! in AfricaP, in (ar* obin!on =#%> #orruption andDevelopment, 8ran* Ca!! .ubli!her!, on#on

obin!on, (ar* =199E> =#%> #orruption and Development, 8ran*Ca!! .ubli!her!, on#on

Samp!on, Anthon& =19E1> $he "oney enders% ?e4 Gor*, Hi*in'.re!!

Ther*il#!en, Ole =1999> P.ublic !ector reform! in a poor, ai#


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#epen#ent countr&P, .ublic A#mini!tration an# Developmentubilee Conference, St% Anne)! Colle'e, Ofor# 2niver!it&, April1/-15

Thoma!, (eli!!a an# oel :ar*an =199E> #orruption and politicalfinance in Africa, orl# :an*, .( Seminar Serie!, December1

2nite# ?ation! Development .ro'ram =1999>umanDevelopment eport, ?e4 Gor*

2nite# epublic of Tanzania =199E>%eport of the #ontroller andAuditor7;eneral for the Financial th ?une 2334, Dare! Salaam

To&e, ohn =1991> PI! There a ?e4 .olitical conom& ofDevelopmentP in Colclou'h, Chri!topher =e#> &tates or "ar(ets/-eo7liberalism and the Development olicy Debate,Claren#on.re!!, Ofor# pp /1-E

van #e alle, ?icola! an# Timoth& ohn!ton =199F>% *mprovingAid to Africa,Over!ea! Development Centre, .olic& !!a& ?o% /1,a!hin'ton D%C%

arioba, o!eph =199E> #orruption in Aid 7 $he #ase of $an%ania,Conference on Stren'thenin' Inte'rit&+ The Challen'e! for A!ia - A

"lobal A'en#a, A bac(7to7basics anti7corruptionstrategy, conomic .er!pective!, 2%S% Information A'enc&, :ureauof Information, a!hin'ton

orl# :an* =199F>$an%ania: $he #hallenge of eforms: ;rowth,*ncome and +elfare =Three Holume!>, Countr& Operation!Divi!ion, a!t Africa Department, Africa e'ion, a!hin'ton D%C%

----- =199Ea>8enya: #ountry Assistance &trategy, a!hin'tonD%C%

----- =199Eb> @ganda: ecommendations for &trengthening the;overnment of @ganda's Anti7#orruption rogram, .overt&e#uction an# Social Development, Africa e'ion

----- =199Ec> $an%ania, Agriculture and the +orld )an(, ODevie4, eport ?o% 1E111, a!hin'ton DC


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1


Appen!i* +, P'"n!erin$ %e p"-'i# p"rse in Eas A)ri#a

In Tanzania, 2'an#a an#

In Tanzania, t4o-thir#! of the account! eamine# b& the CA" in 199FK9Lreceive# a#ver!e opinion!, reflectin' ma@or error! in the account! an# acommon failure to prepare ban* reconciliation !tatement!% 2nvouche# an#improperl& vouche# epen#iture amounte# to nearl& T!h!% / billion, of4hich F billion 4a! totall& unvouche#%

Althou'h the& have the man#ate, Au#itor! "eneral 'enerall& lac* there!ource! to au#it ai#-finance# pro@ect!% 8or mo!t mini!trie!, the!e pro@ect!are the main !ource of inve!tment fun#!% In Tanzania, about !event& percentof #onor finance i! not reflecte# in 'overnment bu#'et!% A! a re!ult, ai#pro@ect! are effectivel& out!i#e the purvie4 of the relevant parliamentar&committee!%

Source!+

In!titute of conomic Affair! =199E> orl# :an* =199Ea> an# =199Eb>2T =199E>


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2


Appen!i* ., Ai! an! De- in Eas A)ri#a

TanzaniaAbout of thir# of Tanzania)! total bu#'et for 199LK9E con!i!te# of ai#% Debt

!ervicin' =intere!t on pa!t loan!> accounte# for 1M of recurrent epen#iturean# /1M of total =ie inclu#in' #evelopment> epen#iture%

ternal #ebt 4a! 2S3/%F billion in 19E0 an# 2S3L% billion in 199,e;uivalent to 50M of "D. in the fir!t &ear an# over /00M in the !econ#%Currentl& it !tan#! at aroun# 3E billion%

Debt !ervicin' accounte# for /EM of revenue in 8GEFKEL an# avera'e# 5Min the earl& ninetie!% It 4a! 1M in 199, promptin' the orl# :an* to notethat PTanzania re;uire! eceptional #ebt relief mea!ure! to overcome it!eternal #ebt !ervice problem%P

In 19E0, //M of eternal #ebt 4a! o4e# to the orl# :an*KIDA, ri!in' toM in 199% A number of bilateral #onor! have 4ritten off Tanzania)! #ebt!in recent &ear!%

Some ob!erver! ;ue!tion 4h& Tanzania !houl# repa& loan! for faile# pro@ect!4hich reveal !eriou! 4ea*ne!!e! on both the borro4er!) an# the len#er!)!i#e% Accor#in' to the :an*)! internal a!!e!!ment, LEM of a'ricultural loan!to Tanzania 4orth 3E00 million 4ere rate# un!ati!factor&%


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3


Appen!i* /, So(e e*a(p'es o) o0er)"n!in$

A bilateral #onor provi#e! core fun#in' to e!tabli!h a ?"O 4ith a lar'e'rant% The foun#er of the ?"O ha! clo!e #iplomatic tie! 4ith the countr&provi#in' the 'rant%

A bilateral #onor commi!!ion! a re!earch in!titution to un#erta*e a !ocial!urve& for 30%/5 million% The re!ult! of the !urve& are never publi!he#%The #onor hire! a con!ultant to evaluate the in!titution! performance%The latter i! ecu!e# for the non-pro#uction of the report an# i! a4ar#e#a further re!earch contract for 31 million%

A la4 i! pa!!e# to ta the private !ector to fun# a vocational e#ucation bo#&%In !pite of thi! private fun#in', a bilateral #onor lon' a!!ociate# 4ith thevocational !ector allocate! the a'enc& a 'rant of 3F million, effectivel&un#erminin' the !pirit of the ne4 la4%

:ilateral #onor! provi#e capital 'rant! to a non-'overnment !econ#ar&e#ucation tru!t% Other #onor countrie! fun# ?"O! that !upport the !ametru!t% A! a re!ult, the fe4 !chool! 4hich the tru!t run! receive multiplefun#in' 4hich i! al!o a multiple of 4hat !tate !chool! receive%

A bilateral #onor initiate! a !ector 4i#e e#ucation pro'ramme% :efore thepro'ramme i! in place, the #onor #i!bur!e! nearl& 3/0 million on theprovi!ion of tetboo*! an# cla!!room buil#in' an# rehabilitation to be!pent 4ithin one financial &ear% :oth !ector! are *no4n to be vulnerableto 7!&!tem lea*a'e)%

In all the above ca!e!, public alle'ation! of corruption have been ma#e a'ain!tthe recipient! of the 'rant! in the variou! !ector!% ?o abu!e ha! been prove# to#ate, ho4ever%


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4


Appen!i* 1, Di! U$an!a !eser0e 2. -i''ion o) ne3 ai!?

Donor! !earch #e!peratel& for eample! of !ucce!!ful reformer! un#er orl# :an*KI(8-in!pire# !tructural a#@u!tment pro'ramme!% 2'an#a i! the late!t of a 'ro4in' li!t of !uchcountrie!%Assessing Aid=Dollar an# .ritchett 199E> li!t! 2'an#a 4ith In#ia, thiopia,:olivia an# Hietnam a! countrie! 4ith P'oo# policie!P 4hich coul# u!e a##itional financialai# to promote economic 'ro4th an# help more people out of povert& than the pre!entinefficient #i!tribution of ai# mana'e! to #o%

Out of E5 countrie! li!te# in Tran!parenc& International)! late!t corruption in#e, In#iaran*e# FFth, :olivia F9th, 2'an#a Lr#, an# Hietnam LFth, =thiopia 4a! not !urve&e#>%

In December, 2'an#a)! main cre#itor! met in


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Appen!i* 4, Ho3 o )oo' !onors

A con!ortium of #onor! 'rante# nearl& 3/0 million to an electoral commi!!ionan# ?"O! to con#uct an# monitor national election!%

An eternal au#it b& a repute# accountin' compan& foun# that the mone& ha#been properl& !pent, 4ith onl& ver& minor #i!crepancie!% Get man& felt that theperformance of both the commi!!ion an# a number of ?"O! ha# been poor,!u''e!tin' that at lea!t !ome fun#! ha# been mi!u!e#%

One eample that came to li'ht 4a! the u!e of nearl& 31%/ million to purcha!e

in#elible in* for the election!% Thi! 4or*e# out at aroun# one #ollar per fivevoter!% Inve!ti'ation !ho4e# that the in* coul# have been procure# for afraction of the actual co!t%

hen the!e fact! 4ere ma#e public the lea# #onor a'enc& #efen#e# theprocurement on the 'roun#! that the ten#er ha# been allocate# to the lo4e!tbi##er an# the eternal au#it ha# !ho4n that the mone& ha# been !pent a!planne#%

Thi! !tor& #emon!trate! ho4 ea!& it i! to hoo#4in* #onor! an# ho4 4ea*eternal au#it i! a! a mechani!m for #etectin' abu!e%

A rou'h calculation reveal! a 7rent) of up to 2S31 million on thi! !in'letran!action%

Althou'h the #onor! involve# 4ere a4are of the i!!ue, there 4a! no follo4 up%

9th iacc workshop do aid agencies have a comparative advantage in fighting corruption in africa

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