Panel 6: Building Public Sector Accountability: International-National

Linkages

Wednesday, April 19th (4:30-5:45pm)

13th Symposium on

Development and Social Transformation

Anti-Corruption In The Transportation Trade In China

Bingxian Chen

Panel 6: Building Public Sector Accountability: International-National Linkages

13th Symposium onDevelopment and Social Transformation

Complexity, Causes and Complexity, Causes and StrategiesStrategies

Anti-Corruption in China’s Highway Anti-Corruption in China’s Highway ConstructionConstruction

By Bingxian ChenBy Bingxian Chen

IntroductionIntroduction

Corruption Issues in ChinaCorruption Issues in China

A major social and political issues;A major social and political issues;

Second greatest public concern (behind Second greatest public concern (behind unemployment)unemployment)

Corruption Situation in Highway Construction Corruption Situation in Highway Construction

17 directors form nine provinces investigated17 directors form nine provinces investigated

Disaster area of corruptionDisaster area of corruption

Extremely fragileExtremely fragile

Uniqueness and Complexity Uniqueness and Complexity

Huge investmentHuge investment

1999-2004, 213Billion USD, Outspent 40 years1999-2004, 213Billion USD, Outspent 40 years

10,000-34,000 Kilometers within 6 years10,000-34,000 Kilometers within 6 years Lots of participants, complex contractual structureLots of participants, complex contractual structure

Owner—contractors—sub-contractorsOwner—contractors—sub-contractors

-- sub-sub-contractor-- sub-sub-contractor DiversitiesDiversities

Varied standards in Qualification, integrity, oversightVaried standards in Qualification, integrity, oversight Many phasesMany phases

Planning, design, pre-qualification, tendering, project Planning, design, pre-qualification, tendering, project execution, operation and maintenanceexecution, operation and maintenance

What Sparked Off the Corruption?What Sparked Off the Corruption? Firstly,Firstly, lack of independencelack of independence

Ministry of Supervision

Department of Supervision (Local)

Department of Transportation (Local)

Ministry of Transportation

Secondly, monopolySecondly, monopoly

Self-contained styleSelf-contained style Top-down structure, sub-system Top-down structure, sub-system Trinity: Financing, constructing and operating Trinity: Financing, constructing and operating

Thirdly, faults in bidding systemThirdly, faults in bidding system

Lags, immature, loopholesLags, immature, loopholes

Last, lack of skillful officialsLast, lack of skillful officials

Complex and sophisticated Complex and sophisticated Upgrade, tactics, networks Upgrade, tactics, networks

Political character vs. capability Political character vs. capability

Consequences of Consequences of

CorruptionCorruption

Poor quality Poor quality Competition in briberyCompetition in bribery Reputation and imageReputation and image Culture of illegalityCulture of illegality Market inefficienciesMarket inefficiencies

RecommendationsRecommendations

ReorganizationReorganization Revoke supervision delegation branch Revoke supervision delegation branch Enhance independence, clarify responsibilityEnhance independence, clarify responsibility Cut off connectionsCut off connections Eradicate monopoly practicesEradicate monopoly practices Opening up marketOpening up market Redistribute main functionsRedistribute main functions Introduce new mechanismsIntroduce new mechanisms Revise bidding systemRevise bidding system Identify corruption-prone pointsIdentify corruption-prone points Plug loopholesPlug loopholes Training Training

ConclusionConclusion

No one-time cure. No one-time cure. No one-fits-allNo one-fits-all Need fundamental reformNeed fundamental reform Need a enlightened governmentNeed a enlightened government Need a strong civil societyNeed a strong civil society

THANK YOUTHANK YOU

Bingxian ChenBingxian Chen

chenbingxian007@hotmail.comchenbingxian007@hotmail.com

Putting Pressure On The President: TANS And Their Impact On Anti-Corruption In

Nigeria

Jonathan Allen

Panel 6: Building Public Sector Accountability: International-National Linkages

13th Symposium onDevelopment and Social Transformation

Putting Pressure Putting Pressure on the Presidenton the President

TANs and the Corruption WarTANs and the Corruption WarIn NigeriaIn Nigeria

Jonathan AllenJonathan Allen

FACTSFACTS

March 22, 2005: 28 minute March 22, 2005: 28 minute address to the nationaddress to the nation

Denounces Corruption ActivitiesDenounces Corruption Activities Dares his people to publish any Dares his people to publish any

corruption activities against him corruption activities against him or his familyor his family

Promises: “Then, the world will Promises: “Then, the world will take us seriously.”take us seriously.”

IssuesIssues

What motivated the President to act What motivated the President to act in such a way?in such a way?

Was this simply rhetoric, or did he Was this simply rhetoric, or did he mean what he said?mean what he said?

Any underlying Intentions? New Any underlying Intentions? New elections? Tool against political elections? Tool against political enemies?enemies?

What impact did TANs have on the What impact did TANs have on the President’s behavior, and on the President’s behavior, and on the corruption war in general? corruption war in general?

Transnational Advocacy Transnational Advocacy Networks (TANs)Networks (TANs)

““Relevant actors working internationally on Relevant actors working internationally on an issue bound together by shared values, a an issue bound together by shared values, a common discourse, and dense exchanges of common discourse, and dense exchanges of information and services” (Keck & Sikkink).information and services” (Keck & Sikkink).

Issues:Issues: Clear ideas about right and wrong Clear ideas about right and wrong Bodily harmBodily harm Legal Equality of OpportunityLegal Equality of Opportunity

Networks:Networks: strong, many actors, and reliable strong, many actors, and reliable information flowsinformation flows

State Actors:State Actors: Vulnerable to pressure; Vulnerable to pressure; discrepancies between policy commitments discrepancies between policy commitments and practicesand practices

Anti-Corruption NetworkAnti-Corruption Network

Regional/LocalRegional/Local Anti-Corruption Internet Database Anti-Corruption Internet Database

(ACID)(ACID) Anatomy of Corruption Advocacy Anatomy of Corruption Advocacy

CampaignCampaignInternationalInternational Transparency InternationalTransparency International Utstein Anti-Corruption Resource CenterUtstein Anti-Corruption Resource Center UNCAC, UNDP, World Bank, US, and EUUNCAC, UNDP, World Bank, US, and EU

Corruption in NigeriaCorruption in Nigeria

Long history of CorruptionLong history of Corruption New democracyNew democracy Amenable to incentives/sanctions Amenable to incentives/sanctions

from international communityfrom international community Discrepancies between promises and Discrepancies between promises and

practicespractices However, the culture of corruption is However, the culture of corruption is

not susceptible to changenot susceptible to change

Pressuring the PresidentPressuring the President 1999 Elections: President promises 1999 Elections: President promises

to stamp out corruptionto stamp out corruption TI and the Network: From watchdog TI and the Network: From watchdog

to bulldogto bulldog President Obasanjo Starts to CarePresident Obasanjo Starts to Care March 2005 Address and aftermathMarch 2005 Address and aftermath

Anti-Corruption Network: Not enoughAnti-Corruption Network: Not enough What’s next? Local governments?What’s next? Local governments?

ImplicationsImplications

TANs and their strategic approach:TANs and their strategic approach:

1)1) Frame issue within the democracy; Frame issue within the democracy;

2)2) Bring the issue to the forefront of Bring the issue to the forefront of election debateselection debates

3)3) Secure promises from elected Secure promises from elected leadersleaders

4)4) Place external pressure on Place external pressure on governments to fulfill their governments to fulfill their promisespromises

ImplicationsImplications

DrawbacksDrawbacks Differing Conceptions of CorruptionDiffering Conceptions of Corruption Structural Issues: Incentives may Structural Issues: Incentives may

still be too strong and officials will still be too strong and officials will continue corrupted practicescontinue corrupted practices

What about non-democratic What about non-democratic governments?governments?

Witch Hunt ProblemsWitch Hunt Problems

THANK YOUTHANK YOU

Any Questions?Any Questions?

Oil Development In Chad: The World Bank’s Intention And Reality

Kenichi Yamada

Panel 6: Building Public Sector Accountability: International-National Linkages

13th Symposium onDevelopment and Social Transformation

The Resource Curse Not Overcome: Intention and

Reality in Chad

Kenichi Yamada

Outline

• Introduction of the project• What is exceptional in the project?• Negative outcomes• Problem 1: Loopholes and weaknesses • Problem 2: Absence of preconditions • The latest resource curse• Recommendations

Chad-Cameroon Pipeline Development Project

• Oil for poverty reduction with remedies

• $2 billion oil revenue over 25 years $130 million per year

• $3.5 billion project Oil consortium (ExxonMobil, Petronas, Chevron): 60 to 70%

World Bank Group: $260 million loan Commercial Banks: remaining

Law 001

• All direct oil revenue to CitiBank account in London

• 10% for Future Generation Fund• 72% for priority sectors• 4.5% for oil producing regions• 13.5% for treasury balance• Establishment of the Petroleum Oversight and Control Committee

Negative Outcomes

• Delay of first transfer of oil revenue

• Signs of nepotism• President Déby’s attempt to break Law 001

• WB’s suspension of loan, and frozen bank account

• Chad threatening the halt of oil flow• Chad demanding $100 million

Loopholes and Weaknesses of the Project (1)

• Secrete in the agreement between the government and the oil consortium

• Unrestricted indirect revenue• Ignorance of other fields• Government’s incapability to monitor the oil production

• Dispute over calculation of the revenue

Loopholes and Weaknesses of the Project (2)

• Two speed nature of the project Oil consortium wants to finish the job as quickly as possible

Chadian government not prepared to manage the oil revenue

Long delayed capacity building despite warnings

• Monitoring problem Recommendations not taken into account

Absence of Precondition in Chad

• Fragile political ground Poor and corrupt Political instability

• Weak judicial system Oversight does not function Sign of nepotism Difficult to reform

• Chad was and is far from ready

The Latest Resource Curse

Project failure +

Fragile political ground

=Potential resource curse

Resource Curse in Chad

• Natural resource dependence Slower economic growth Corruption Dismal social indicators

• Newest cases in Sun-Saharan Africa

• Success story not applicable

Legitimacy of the Project in Question

• Suggested remedies Transparency of money flow Future generation fund Modification in contract

• Remedies not worked Watchdogs not functioning Lack of democratic institutions Expectations of Law 001 not worked

Recommendations in Chad

• Slowing the production of oil• Strengthening civil society• More accountable World Bank

No compromise with the government Engage in non-oil sector development

Regular examination of the project

• Donors No compromise with the government

Recommendations for Future Projects

• World Bank should: Do more research prior to the project approval

Set minimum governance standards Mandate capacity building before the revenue flow

Examine the project regularly Contribute to non-oil sector development

Assist strengthening civil society

International Organizations Competency Index

Amir Farmanesh

Panel 6: Building Public Sector Accountability: International-National Linkages

13th Symposium onDevelopment and Social Transformation

Panel 6: Building Public Sector Accountability: International-National Linkages

Wednesday, April 19th (4:30-5:45pm)

Bingxian Chen Anti-Corruption In The Transportation Trade In China

Jonathan Allen Putting Pressure On The President: TANS And Their Impact On Anti-Corruption In Nigeria

Kenichi Yamada

Amir Farmanesh

Oil Development In Chad: The World Bank’s Intention And Reality

International Organizations Competency Index

13th Symposium onDevelopment and Social Transformation