9th International 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 "roup Afroai#$raha%com TABLE OF CONTENTS S&nop!i! pa'e Intro#uction (appin' corruption in ai# The ai# in#u!tr&)! re!pon!e to the challen'e of corruption Some 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 Africa Appen#i- /+ Ai# an# #ebt in ,a!t Africa Appen#i- 0+ Some e-ample! of overfun#in' Appen#i- 1+ Di# 2'an#a #e!erve 3/ billion of ne4 ai#5 Appen#i- 5+ 6o4 to fool #onor!

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

Synopsis 7Corruption) i! inte'ral to the comple- patrona'e net4or*! foun# in African political !&!tem!% To var&in' #e'ree!, the!e net4or*! are !upporte# 4ith re!ource! provi#e# b& ai#, particularl& loan! from the International (onetar& 8un#, the 9orl# :an*, an# the African Development :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 a problem that ai# a'encie! can help !olve %%% 4ith more ai#% The 9orl# :an* ha! naile# it! fla' to the 'lobal anti-corruption ma!t b& a#optin' a 7zero tolerance) !trate'& to4ar#! corruption amon' borro4in' 'overnment!% :& no4, the lo'ical outcome of zero tolerance !houl# have been a #ramatic re#uction in len#in' to countrie! !ufferin' from 7en#emic) or 7!&!temic) corruption, inclu#in' mo!t of !ub-Saharan Africa% :ut apart from <en&a, it appear! to be more or le!! 7bu!ine!! a! u!ual) for the :an* an# the re!t of the ai# in#u!tr& in Africa% Donor!, it !eem!, are not about to un#ermine their #i!bur!ement imperative! becau!e of their =ver& real> concern! 4ith corruption% ?ormall&, the 9orl# :an*)! 4ell *no4n 7approval culture) overri#e! an& attempt! to ma*e ai# to Africa #epen#ent on the level of corruption% :oth e-ternal 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! to poor people are the e-ception, not the rule, e!peciall& in !ubSaharan Africa% Corruption, patrona'e, mi!mana'ement an# 4a!te e-plain 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 have been the ma@or victim!% The 4i#e!prea# failure of pro@ect-ba!e# len#in' an# !tructural a#@u!tment pro'ramme! to re#uce povert&, the central role of corruption in this failure, an# !ub-Saharan Africa)! re!ultant 3/00 billion of unpa&able e-ternal #ebt con!titute the blea* bac*#rop to m& !ub@ect% Current #onor-fun#e# anti-corruption initiative! ta*e three main form!+

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

a 4i#e ran'e of pro@ect! promotin' !tate an# private !ector 'overnance inclu#in' !pecific anti-corruption pro@ect!A impo!in' anti-corruption con#itionalitie! on recipient 'overnment!A 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# !tructural a#@u!tment loan!, an# a full-!cale, multi-#onor !ocial, economic, an# environmental impact a!!e!!ment pro'ramme to #etermine the benefit! #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' corruptionA the potential con!e;uence! of an ob@ective revie4 of corruption in ai# -- inclu#in' a #ra!tic re#uction in the number of countrie!, !ector! an# pro@ect! finance# -- 4oul# be unacceptable% 8or their o4n purpo!e!, both !i#e! prefer to !tic* to the m&th of ai# effectivene!!A 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 4hen the 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 the a'encie!, from the ? "O !ector, political pre!!ure 'roup! an# 'ra!!root! movement!, an# from #emocratic a!!emblie! in #onor countrie! un4illin' to further !ub!i#i!e a non-performin' in#u!tr&% The paper loo*! for 4a&! to operationali!e thi! conclu!ion%

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

In ro!"# ion C1D

There i! a !ub!tantial literature #emon!tratin' that forei'n 7ai#) ha! faile# to achieve it! !tate# ob@ective! of improve#, !u!tainable livelihoo#! for the poor in recipient nation!, 4hile contributin' to the ma!!ive accumulation of forei'n #ebt% C/D Corruption i! one of the ma@or factor! contributin' to the failure of ai# to promote African #evelopment% C0D 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>A 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>A .ro@ect! a! a mo#e of ai# #eliver& rarel& reach the poor or provi#e !u!tainable benefit! =Caufiel# 199F>A Technical a!!i!tance per!onnel are poorl& vie4e# b& ai# recipient!, an# their a#vice i! rarel& put to 'oo# u!e =:er' 1990A 199E>A Ai# ha! encoura'e# an# con#one# !&!tematic corruption in both #irect an# in#irect 4a&! =Coo*!e& 199E, 1999>% C1D

All the above critici!m! of ai#, an# other!, appl& particularl& acutel& to the Sub-Saharan African conte-t% Get one 4oul# be for'iven for conclu#in' that it i! more or le!! 7bu!ine!! a! u!ual) for #onor a'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' <en&a, corruption ha! been cite# a! one rea!on for the !u!pen!ion of ai#% C5D Hariou! #onor initiative!, #i!cu!!e# belo4, are un#er4a& to help confront corruption in Africa an# el!e4here% Get the!e initiative! have ha# little !i'nificant impact on the 4a& #onor! con#uct their affair!% 9hile tin*erin' at the peripher&,

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

#onor! !tu#iou!l& avoi# the #eeper i!!ue! that un#ermine the effectivene!! 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 9orl# :an* -- continue to #efine the parameter! of the #ebate on ai# effectivene!!, inclu#in' corruption, in a narro4l& technocratic manner% 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 in ai#) 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 all African 'overnment official! mana'in' ai# are corrupt% "enerall&, ho4ever, the& are hi'hl& vulnerable to the imperative! of patrona'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!% Io4 !alarie! -often cite# a! a ma@or cau!e of pett& corruption -- are a relevant, thou'h !econ#ar&, con!i#eration%

Mappin$ #orr"p ion 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& corruption5 ?ot nece!!aril&% 8or e-ample, a!!ume a principal !ecretar& in 7Azania) u!e! hi! influence to have hi! home #i!trict cho!en a! a pilot for a 9orl# :an* pro@ect loan to co-finance a local e#ucation #evelopment fun#% Thi! ma& be u!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!% The important point i! that ai#, particularl& in the form of pro@ect loan!, open! up man& opportunitie! for patrona'e, inclu#in' project location, hiring project staff, training opportunities, procurement and purchases, consultancy, an# !o on% In the proce!!, covenant!

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

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% CFD 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#% 9a!te i! the u!e of ai# re!ource! for le'al but unnece!!ar& an#Kor non-pro#uctive purpo!e!% 8or e-ample, pro@ect! are often heavil& front-loa#e# 4ith vehicle!, computer! an# other office e;uipment an# a ran'e of trainin' 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 latter cate'or&% Thou'h anal&ticall& #i!tinct, corruption, patrona'e an# 4a!te are u!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@ect implementation, help e-plain the incre#ibl& poor performance of mo!t loan-finance# pro@ect! in Africa% CLD The e-tent of official mi!u!e of ai# i! not ea!il& a!!e!!e#, !ince much routine corruption i! not recor#e# or publici!e#% The phenomenal amount of une-plaine# an# irre'ular 'overnment e-pen#iture reporte# b& Au#itor! "eneral in both recurrent an# capital bu#'et! 'ive! an impre!!ion of the e-tent 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# in proportion 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& =4ith or 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 epublic of Con'o)! on-'oin' civil 4ar% CED 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 until recentl&, or the former Soviet 2nion% The latitu#e for thi! practice i! ;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 a number of &ear!, man& African countrie! have been pa&in' the I8I! more than the& receive in ne4 cre#it!% (o!t corruption i! in

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

!ectoral pro@ect! or 7S,CAIS)% 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# !ectoral mini!trie!

Thi! i! the mo!t crucial area for a!!e!!in' the impact of corruption in 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- />% 9orl# :an*-fun#e# pro@ect! are fre;uentl& implemente# throu'h pro@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, it i! 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 from 9a!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# in i#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#! poor mar*! to both :an* !taff an# national pro@ect implementer!, the O,D)! recommen#ation! for improvin' performance are routinel& i'nore# in the intere!t of maintainin' the :an*)! pro@ect approval momentum% Thi! proce!! ha! been much remar*e# upon an# never effectivel& a##re!!e#% A recent e-ample+ In the cour!e of 4ritin' thi! report, C9orl#D :an* emplo&ee! have complaine# that pro@ect! are in#ifferentl& au#ite#, or, even 4here au#it! reveal #iver!ion!, that there are no !ub!tantial con!e;uence! for #iver!ion becau!e the internal in!titutional incentive! of the :an* !pur len#in'%

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

=Thoma! an# :ar*an 199E+/L, ba!e# on intervie4! in Africa> :eneficiarie! from corruption in loan-fun#e# pro@ect! inclu#e the private contractor! an# procurement a'ent!, both local an# e-patriate, 4ho are a4ar#e# contract! throu'h ri''e# ten#erin' arran'ement!% In ,a!t Africa, non-in#i'enou! bu!ine!!e! are intimatel& involve# in the!e proce!!e!% In!i#e contact! in the 7!&!tem) provi#e intelli'ence on opportunitie!% The be!t place# bu!ine!!e! are politicall& 4ell connecte#, an# ma& help fun# the rulin' 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 be u!e# for illicit activitie! #urin' implementation% .rocurement contract! ma& be a4ar#e# to relative! an# cronie!% .ro@ect fun#! earmar*e# for particular purpo!e! ma& be turne# to other!% An# !o on% 9orl# :an* pro@ect! have a hi'h failure rate, partl& a! a re!ult of corruption% :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 of fun#! 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!ation pro'ramme run out!i#e the (ini!tr& of 6ealth, or a rural !hallo4 4ell! pro@ect un#erta*en b& a con!ultanc& compan&% C9D The critici!m that !uch arran'ement! 4ea*en 'overnment, are co!tl& an# un!u!tainable, ha! le# to a ne4 pro'ramme orientation amon' #onor!% Iocal Jlite! are u!uall& a'ain!t !uch 7rin'-fence#) pro@ect!% De!pite the !ector pro'ramme approach, #onor! continue to be e-tremel& pro@ect-prone in their overall !upport !trate'ie!% The& are profoun#l& !ceptical about African 'overnment!) abilit& to u!e ai# for inten#e# purpo!e!, an# are nervou! about critical commentar& at home that coul# @eopar#i!e future fun#in'% ,-ample! aboun# 4here bilateral! have #enie# or turne# a blin# e&e to evi#ence of corruption%

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

After a #eva!tatin' report on it! len#in' performance in over 1,500 pro@ect!, 4orth 3/E billion, the African Development :an* 4a! !ub!tantiall& re!tructure# an# it! boar# of #irector! replace# =<no1991>% The report !tate!+ 7The har#e!t ta!* 4ill be to in!til a ne4 culture, 4hich 4ill inclu#e fun#amental chan'e! in per!onnel mana'ement an# in 'overnance%) =pa'e 01>% The AD:)! African Development 8un# 'ive! !oft loan! to Africa)! poore!t countrie!% Durin' 1990-9F the AD8 accounte# for ei'ht percent of all multilateral loan! to Africa% C10D The mo!t perniciou! form of corruption in ai# concern! loan! for e!!entiall& bo'u! pro@ect! involvin' collu!ion bet4een !enior a'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 b& #efinition imperviou! to public !crutin&% Iac* of tran!parenc& an# accountabilit&, particularl& in the multilateral a'encie!, the ,uropean 2nion an# the 2? !&!tem, pre!ent! particular ob!tacle! to effort! at corruption control% Over the &ear!, a number of 2? a'encie! have !uffere# from cron&i!m an# corruption, inclu#in' 2?,SCO an# 8AO% The recent !pectacular event! in the ,uropean Commi!!ion clima-in' in the re!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&% C11D 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! conte-t, 'iven it! clo!e tie! 4ith it! former African colonie!% Official financial an# political !upport ha! helpe# promote 8rench bu!ine!! intere!t! throu'hout la Francophonie, an# neither "aulli!t nor Sociali!t 'overnment! have ever con!i#ere# official corruption a particular problem that mi'ht #e!tabili!e e-i!tin' arran'ement!% C1/D Overfun#in' =!ee Appen#i- 0> encoura'e! corruption in part b&

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

provi#in' more ai# than 'overnment! can effectivel& ab!orb% Sectoral overfun#in' reflect! a #onor ten#enc& to @ump into 7flavour of the month) activitie!% ecent e-ample! inclu#e #emocrati!ation an# 'overnance, !mall-!cale cre#it an# !upport for ?"O!% Competin' for relativel& !mall mar*et! force! #onor! to i'nore 4arnin' !i'n! of lac* of capacit&, ;ualit& or inte'rit& amon' recipient!% Donor! have no incentive to loo* for proof of corruption 4hen 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'et for 7overfun#in') ho4ever% Ina#e;uate #onor co-or#ination ha! been blame# for overfun#in'% The 9orl# :an*)! O,D blame! ina#e;uate 7ab!orptive capacit&) for much pro@ect failure% Oo!eph 9arioba =199E>, chairman of Tanzania)! 199F .re!i#ential anti-corruption commi!!ion, ma#e a !tron' ca!e for tracin' the !ource of corruption in ai# to the ai# a'encie! them!elve!% 9arioba !ai# that ai# to countrie! li*e Tanzania Pfrom bilateral #onor! an# the International 8inancial In!titution! con!i!t! of ver& lar'e amount! of mone& an# the !um 4hich #i!appear! throu'h corruption i! al!o ver& lar'e%P 9arioba !in'le# out ai# for infra!tructural pro@ect! an# tie# ai#, 'ivin' the e-ample 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! poor performance% The tentacular nature of ai# mean! that an& corruption relate# to implementin' particular 'overnment policie! u!uall& involve! ai# mone&% 9arioba relate! e-ample! of corruption in the privati!ation proce!! 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 e-ample 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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9th International Anti-Corruption Conference, 10-15 October 1999, Durban, South Africa

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!t ai# 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% C10D

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

T%e ai! in!"s ry&s response o %e #orr"p ion #%a''en$e

6avin' i#entifie# corruption a! a central 'overnance i!!ue an# a con!traint on economic 'ro4th an# !ocial #evelopment, the ai# in#u!tr& procee#e# to !et up pro'ramme! an# pro@ect! aime# at curbin' corruption% 9hat the& faile# to #o 4a! to problemati!e their o4n role in facilitatin', fuellin', con#onin' an# i'norin' evi#ence of 'ro4in' corruption re!ultin' from their ai#% C11D Thi! !ection criticall& revie4! #onor a'encie!) re!pon!e! to the challen'e of corruption% a 4i#e ran'e of pro@ect! promotin' !tate an# private !ector 'overnance inclu#in' !pecific anti-corruption pro@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 !tructural a#@u!tment pro'ramme! are inten#e# to level the economic pla&in' fiel#, eliminate unnece!!ar& re'ulation an# encoura'e inve!tment an# 'ro4th% Thi! i! not the place to revie4 the !ucce!! of the!e pro@ect! in #etail% (an& are too recent to have &iel#e# an& concrete re!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!% A rule of thumb+ if #onor-fun#e# anti-corruption initiative! be'in to threaten e-i!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! C15D

<en&a i! cite# a! a countr& 4here corruption ha! force# #onor! to !u!pen# ai#% Thi! i! in#ee# the ca!e% 6o4ever, to put thi! achievement into per!pective, it i! 4orth rememberin' the follo4in'% 8ir!t, countrie! !houl# not have to reach the <en&an level of corruption before #onor! !tart to pull the plu'% Althou'h corruption in <en&a reflect! the 4or!t t&pe of patrona'e politic!, man& other African countrie! are not far behin#% Secon#, there are

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

!till fifteen 9orl# :an* pro@ect! bein' implemente# in <en&a, an# mo!t #onor! !till have pro'ramme! coverin' all !ector!, albeit on a re#uce# !cale% =A number of bilateral! are plannin' to pull out for 'oo#, ho4ever>% Thir#, the I(8 ha! been #e!peratel& !ee*in' e-cu!e! for 'ettin' a !u!pen#e# ,SA8 bac* on trac*, inclu#in' 7con#itionalit&) that <ACA, the ne4l& e!tabli!he# anti-corruption bo#&, !houl# fill vacancie! for top official!, rather than !eein' 4hether the bo#& ha# an& teeth% =It i!, of cour!e, t&pical for #onor! to allocate ai# on ple#'e! for future chan'e!, not for pa!t achievement!>% Appen#i- 1 !peculate! on 4h& 2'an#a !houl# be ple#'e# t4o billion #ollar! of ai# in a conte-t of obviou!l& e!calatin' corruption% Donor! to 2'an#a are effectivel& un#erminin' local anti-corruption effort! b& thro4in' mone& at the 'overnment% The concept of con#itionalit& i! no4 challen'e# in the #ominant ai# para#i'm b& the concept of partner!hip% In thi! !cenario, the national 'overnment i! re!pon!ible for implementin' polic& reform!, not @u!t #oin' 4hat #onor! tell them% The local 7o4ner!hip) of the polic& pro'ramme !till be'! the ;ue!tion of 74ho)! polic&5) It i! unli*el& that #onor! 4oul# fun# a reform pro'ramme ba!e# on the reveale# polic& preference! of rulin' Jlite!, 4hich are fre;uentl& #iametricall& oppo!e# to much that #onor-in!pire# reform proramme! aim to achieve% All ma@or #onor! attach =theoretical> con#itionalitie! to their ai#, inclu#in' human ri'ht!, 'en#er, environment, #emocrati!ation, liberali!ation, an# !o on% Thou'h of lar'el& !&mbolic value, the!e con#itionalitie! !en# the me!!a'e to African 'overnment! that all 'oo# thin'! come from abroa#, inclu#in' 7#evelopment) mo#el!, an# &ou 4ill have to chan'e &our =e!!entiall& ba#> 4a&! if &ou 4ant u! 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# Oean-.a!cal Daloz =1999+11F> put it li*e thi!+ Donor! %%% !eem on the 4hole to have accepte# a #e'ree of non-compliance 4ith the !tate# aim! of ai# an# a level of failure 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 9orl# :an* !uffer! from no !uch

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

con!traint!% "eor'e an# Sabelli =1991+/09> ;uote the 8inancial Time! =(arch 1990> commentin' on the 9orl# :an*)!+ relation!hip! 4ith !ome of it! African client! C4hichD are profoun#l& unhealth&+ protective, !ecretive or #efen!ive, !ometime! all three%%% all too often, information that !houl# be in the public #omain remain! !ecret% 9hen information about '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 our conditionalities 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 face of 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 9orl# :an* 4ill tell &ou that tho!e re!pon!ible for !upervi!in', monitorin' an# evaluatin' pro@ect! are full& 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#er fift& percent of mi!u!e# pro@ect mone& 4oul# be acceptable to him% In Azania, the 9orl# :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&cle 4hile increa!in' over!i'ht of e-i!tin' pro@ect!%) Accor#in' to thi! unpubli!he# !ource, 79hile each 9orl# :an* pro@ect ha! an e-ternal au#it on a re'ular ba!i!, thi! ha! proven to be in!ufficient in trac*in' an# accountin' for fun#!% %%% public procurement i! a hi'h priorit& tar'et for re#ucin' corruption%) ,-ample! aboun# 4here e-ternal au#it! have faile# to pic* up or follo4 up evi#ence of corruption% (o!t !uch e-erci!e! limit them!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 of the bi' five accountin' companie! to #o an in#epen#ent pro@ect au#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!

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

The min#!et of the po4erful rea!on! thu!+ if the me#icine #oe!n)t 4or*, increa!e the #o!eQ "enerall&, a#optin' a punitive approach on matter! of public polic& - for e-ample, concernin' crime an# puni!hment, or international #ru' traffic*in' - ha! the oppo!ite effect of that inten#e#% In man& ca!e!, anti-corruption e-erci!e! have le# to mi!tru!t, lo4 morale amon' !taff, the po!!ibilit& of other 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 public a#mini!tration% C1FD The 7zero tolerance) option ha! ha# all the!e pre#ictable effect!% Competitive bi##in' ha! been intro#uce# for contract! 4orth @u!t a fe4 thou!an# #ollar!% Donor! intro#uce proce#ure! to 4ee# out the lea!t !u!picion of malpractice, !uccee#in' in !lo4in' #o4n pro@ect implementation an# fru!tratin' the hone!t actor! alon' 4ith the re!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& or competition% :oth ai# 4or*er! an# recipient! re!ent the a!!umption of 'uilt until proven innocent% The 9orl# :an* recentl& be'an to publi!h the name! of procurement 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 the ban* 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 "lobal Alliance for Africa an# Tran!parenc& International, that aim! to clean 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 be lin*e# to a more 'eneral vie4 of ai#-relate# corruption alon' the line! #e!cribe# in thi! paper% Thi! 4oul# allo4 the inclu!ion of pro@ect! an# non-pro@ect loan! 4here international procurement i! not a central feature%

So(e op ions )or ra#kin$ #orr"p ion in ai!

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

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

a! u!ual) ma*e! it incumbent on the critic to loo* for ori'inal !olution! to the corruption problem% :efore an&thin' can be #one to a##re!! corruption in ai#, the problem ha! to be properl& #efine# an# #elineate#% 8or thi! to happen, corruption mu!t be conceptuali!e# in !&!temic rather than in#ivi#uali!tic term!% I have al!o ar'ue# above that corruption i! a problem inherent in the ai# relation!hip, not !pecificall& a problem of one !i#e or the other con!i#ere# !eparatel&% It i! al!o important to tr& to #elineate the relation!hip bet4een corruption a! a factor un#erminin' ai# an# other factor! 4or*in' in the !ame #irection% In practice thi! i! a ver& problematic propo!ition !ince !o man& factor! are involve#, there i! little a'reement on the un#erl&in' cau!e! of the failure of ai# to achieve it! ob@ective!, an# 7proof) 4ill al4a&! be conte!te# b& alternative interpretation!% Con!e;uentl&, political-i#eolo'ical intere!t! 4ill continue to pla& a ma@or role in #eci#in' the fate of ai#, in Africa an# el!e4here% .ut #ifferentl&, !olution! to the problem of corruption in ai# are li*el& to ta*e political rather than polic& form!% I have alrea#& commente# on the ill-a#vi!e#ne!! of a#optin' punitive approache! to corruption control% .reventive mea!ure! are re;uire#, 4ith puni!hment a nece!!ar& but not all-perva!ive or intru!ive a#@unct% Option! for trac*in' corruption in the ai# a'encie! 8or both ai# a'encie! an# recipient! a##re!!in' corruption in ai# re;uire! evi#ence of the nature an# !cope of the problem, a broa# commitment to !olve it, an# a !trate'& to a##re!! it% The ai# a'encie! mu!t reali!e that their o4n !urvival an# le'itimac& re;uire a ra#ical revi!ion in their mo#e of operation% Thi! mean! e-po!in' their 7inte'rit& !&!tem!) to the ri'our! of tran!parenc& an# accountabilit&% The ma@or 'overnment! fun#in' the I8I!, the ,uropean 2nion an# the 2nite# ?ation! have the proven capacit& to !ha*e up the!e or'ani!ation!% 9hat the& 'enerall& lac* i! the political 4ill to #o !o% ,vi#ence that the!e or'ani!ation! are not #eliverin' on their #evelopment man#ate, that internal or recipient-countr& corruption i! a ma@or cau!e of thi! failure, an# that the poor countr& #ebt bur#en continue! to 'ro4 heavier a! a re!ult, are po4erful force! that coul# eventuall& precipitate a melt-#o4n of the entire ai# e#ifice% Donor!) repeate# commitment to povert& re#uctionKelimination ma& force them to ;ue!tion the role of ai# if

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

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 #onor communit&, the ma@or #evelopment ?"O! an# foun#ation!, the re!earch an# con!ultanc& in#u!trie!, the private !ector, a!!ociation! of ai# 4or*er!, an# political partie!% .artner or'ani!ation! are re;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! of corruption% The critici!m that the C.I i! unfair in concentratin' on the 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 recipient countrie! an# a'encie! on their propen!it& to corruption% :ut 4ho 4oul# compile !uch an in#e- an# #efen# it! fin#in'!5 6ubert! =199F> a!*e# a panel of /5L e-pert! about the level of corruption an# frau# in !i-teen multilateral or'ani!ation!% The avera'e !core 4a! 0 on a !cale of 1 =ver& hi'h> to 5 =little or none> 4ith a ran'e from /%E =8AO> to 1%0 =?ATO>% 6ubert!) !ample con!i!te# of #ele'ate! to anti-corruption conference!%%% Iin*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 correct le!!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!ible len#in' perpetrate# b& the I8I! an# other len#in' in!titution! can be brou'ht un#er control, the ne-t 'eneration of forei'n #ebt 4ill not be 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!earch or'ani!ation! an# thin* tan*!%

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

(an& ?orthern ?"O! are !till ar'uin' for more rather le!! bilateral ai# 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 #ifficult for 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!ition that the onl& 'oo# I8I i! a #ea# one% 9hile thi! po!ition mi'ht be intellectuall& attractive, it i! hi'hl& ;ui-otic in it! ambition! to ri# the 4orl# of the I8I!% C1LD A carefull& or'ani!e# an# evi#enceba!e# buil# up of pre!!ure from multiple an# cre#ible !ource! !houl# have 'reater impact in the lon'-run% Oubilee /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*en the po!ition that #ebt relief !houl# be lin*e# to povert& re#uction pro'ramme! to be finance# from #ebt !avin'!% Thi! approach i! har#l& li*el& to en#ear Oubilee /000 to relief-!ee*in' 'overnment!% ecentl&, Oubilee /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!h companie! pa&in' bribe! for contract!% TI ha! al!o influence# the 4a& #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, !ince the 9orl# :an* ha! ta*en up the anti-corruption initiative, it mi'ht appear churli!h for TI to be'in !nipin' at the :an*)! o4n recor#, or that 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!earch or'ani!ation! to earn their *eep from contractual 4or* allo4! #onor! to #efine re!earchKcon!ultanc& prioritie! in 4a&! that primaril& !erve their o4n intere!t!% African aca#emic! !uffer from the !ame con!traint!% C1ED 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 can breath ne4 life into an otio!e an# !clerotic in#u!tr&% .unitive mea!ure!+

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

,!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, 4ith appropriate !anction! Option! for trac*in' ai#-relate# corruption in ai#e# countrie!

African 'overnment! naturall& re!ent an# re!i!t anti-corruption initiative! b& #onor!% In Tanzania, for e-ample, #onor repre!entative! 4ho !pea* out a'ain!t corruption have been publicl& critici!e# for e-cee#in' their man#ate% The e!i#ent epre!entative of a 2? a'enc& 4a! 4ith#ra4n from hi! po!t 4hen he trie# to publici!e evi#ence of corruption lin*in' hi! re'ional office 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 for 7unfairl&) ran*in' Tanzania a! one of the mo!t corrupt countrie! in the 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! in monitorin' an# a!!e!!in' the impact of ai# pro@ect! on the poor% C19D 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!!ue of corruption in ai#, !houl# the& be convince# that the i!!ue merit! their attention% The problem i!, TI chapter! rel& on #onor! for their core fun#in' an# other activitie!, an# are therefore unli*el& to 4ant to 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#!

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

.ublic Sector evie4! to inclu#e 'reater #i!clo!ure of ai# input! an# the rationale for public inve!tment choice! 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 public opinion an# e-perience of corruption, inclu#in' it! impact on the availabilit&, co!t an# ;ualit& of public !ervice!% Such !urve&! are alrea#& 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 of corruption in ai#, a po!!ible !ource of the DCI =Donor Corruption In#e->% There i! a ten!ion, ho4ever, bet4een the TI an# the 9orl# :an* approach to !ervice #eliver& !urve&!% 8or TI, civil !ociet& an# the private !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 poor performance 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 involvement of out!i#e re!earcher! an# con!ultant! coul# lea# to the re!earch bein' bran#e# a! a 7forei'n plot #e!i'ne# to #i!cre#it u!%) 8or !ome time the 9orl# :an* ha! been !pon!orin' inve!ti'ative @ournali!m 4or*!hop!, national inte'rit& 4or*!hop!, an# other anticorruption activitie!% A roun# of inve!ti'ative @ournali!m 4or*!hop! coul# be run on the theme of corruption in ai#% Corruption in ai# !houl# fi'ure in inte'rit& 4or*!hop!% It i! 4orth rememberin' that the t4in ri!*! to inve!ti'ative @ournali!t!, e#itor! an# ne4!paper e#itor! - bein' bribe# or bein' *ille# - 4ill be of ma@or proportion!, !ince !o man& 7bi' people) have !o much to hi#e% 9hi!tle-blo4er! al!o ri!* their live! if the& !tart tellin' the

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

truth about certain t&pe! of 7ai#)% .unitive mea!ure!+ .arliamentar& committee! empo4ere# to revie4 ai# performance 4ith po4er! to ;ue!tion !enior official! on ai#-fun#e# pro@ect! an# pro'ramme!% Se!!ion! to be public 2nannounce# value for mone& au#it! of an& loanfun#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! informationempo4erment mea!ure!, 'ivin' all !ta*ehol#er! the mean! to ta*e an 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 in the international anti-corruption !tru''le% Corruption i! a ri!* factor for all ai# venture!, ho4ever 4ell inten#e#% (ulti-billion #ollar !tructural a#@u!tment loan! from the I8I! =In#one!ia, u!!ia>, an# ,uropean 2nion po!t-conflict recon!truction 'rant! =:o!nia>, have been !ub@ecte# to !&!tematic embezzlement an# international rec&clin'% C/0D 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 3/00 billion o4e# b& !ub-Saharan countrie! to ai# a'encie! an# other international cre#itor! i! har#l& incon!e;uential% :& contra!t, the 3/0 billion !o far earmar*e# for #ebt relief amon' the nineteen poore!t countrie! loo*! li*e a #rop in the ocean, even if it ha! been toute# a! a 7victor& for Oubilee /000)% The mechani!m! for i#entif&in' an# #ealin' 4ith corruption in ai#recipient relation! are not #ifficult to i#entif&% The ma@or precon#ition for a##re!!in' corruption in ai# i! to #efine the i!!ue

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

correctl&% 9hat i! currentl& lac*in' i! the 4ill to a!!imilate the le!!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 9orl# :an* in #efinin' the term! of the #evelopment #ebate, inclu#in' corruption, I !peculate on 4hether a more fun#amental criti;ue of corruption in Africa can be invo*e# in the intere!t of 'oo# !en!e an# in the !earch for practical !olution!% C/1D The ai# in#u!tr&, le# b& the 9orl# :an*, ten#! to #efine corruption in 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 anticorruption a'enc&>% In all the!e an# more, it i! a!!ume# that corruption i! an in#i'enou! problem, to 4hich ai# offer! an a!!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 political phenomenon, ai# a'encie! 4oul# have to a!* 4ho their local 7anticorruption) allie! mi'ht be in an& 'iven conte-t% It i! not enou'h for a hea# of !tate to a#opt a formall& anti-corruption !tance+ he ma& #o thi! @u!t to placate #onor!% If ai# a'encie! an# their local 7partner!) have #iametricall& #ifferent #efinition! of the !ituation it i! #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 e-ternal pre!!ure! are brou'ht to bear to force the pace of #emocrati!ation, 'overnance an# anti-corruption initiative!% Get a 'ro4in' number of ob!erver! no4 !ee ai# a! a ma@or cau!e of the corruption an# 'overnance problem! 4hich it i! concerne# to a##re!!% At be!t, #onor! have ten#e# to turn a blin# e&e to the mi!u!e of their ai#A at 4or!t, certain ai# a'encie! an# a'enc& official! have them!elve! been activel& 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' that future ai# #oe! not lea# to the !ame #i!a!trou! re!ult! a'ain%

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

,?D?OT,S C1D Iac* 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) 4here full @u!tification for !tatement! ma#e i! lac*in'% (uch of 4hat follo4! i! ba!e# on per!onal e-perience of over t4ent& &ear! 4or*in' in an# aroun# the ai# in#u!tr&, mo!tl& in ,a!t Africa% C/D See for e-ample A#am! =1991>, Caufiel# =199F> "eor'e an# Sabelli =1991>, 6ancoc* =19E9>, .a&er =19E/, 1991>, Samp!on =19E1>% The 9orl# :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 e-ample, recommen# that in 4ea* an# corrupt polic& environment!, #onor! !houl# not 'ive financial a!!i!tance but merel& polic& a#vice, a recommen#ation 4ith profoun# implication! for the future of ai# to Africa% C0D See Chabal an# Deloz =1999> an# Coo*!e& =199E, 1999>% C1D The bi''er picture for !ituatin' ai# =in>effectivene!! nee#! to inclu#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'% C5D It i! !ai# that !ome #onor! u!e the TI in#e- a! one criterion for @u#'in' a countr&)! ai#-4orthine!!% CFD The 9apenhan! eport =199/> foun# that 7borro4er! re!pecte# their a'reement! in onl& t4ent&-t4o percent of the loan! e-amine#%) A! a re!ult, Pthe hi'h inci#ence of non-compliance un#ermine! the :an*)! cre#ibilit&%P "eor'e an# Sabelli =1991+//1>% CLD The :an*)! O,D evaluation! of :an* len#in' performance ma*e #epre!!in' rea#in', thou'h the& 'enerall& avoi# the 7C) 4or#% O,D i! mar'inal to :an* len#in' activitie!, an# !taff ne'otiatin' ne4 loan! are often una4are of the hi!tor& of loan! to the countr&K!ector in ;ue!tion% The :an* i! fre;uentl& 7tr&in' a ne4 approach), ma*in' hi!torical concern! irrelevant% CED 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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9th International Anti-Corruption Conference, 10-15 October 1999, Durban, South Africa

co!t+ over 31F0 million !ince Oanuar&>% 9e mi'ht a!* 4h& Nimbab4e i! involve# in thi! =relativel& #i!tant 4ar>% Other !imilar e-ample! 4oul# inclu#e 2'an#a =Su#an, D C>, u!!ia =Chechn&a>, an# In#one!ia =,a!t Timor>% On the criminali!ation of the African !tate, !ee :a&art et% al% =199E>% C9D .oor pro@ect performance ha! le# #onor! to tr& an alternative #eliver& mechani!m of ba!*et-fun#e# !ectoral pro'ramme!% The con!traint! on !ector-4i#e pro'ramme! are even more #auntin' than tho!e on pro@ect!+ !ee Coo*!e& =1999a>% The 9orl# :an* claim! a fall in the proportion of un!ucce!!ful pro@ect! in recent &ear! =Dollar an# .ritchett 199E>% 9h& pro@ect! fail i! #i!cu!!e# in :er' =1990, 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 e-ample, in #e!cribin' the impact of ai# to Africa, van #e 9alle an# Oohn!ton =199F> a!!ert that+ 7Countle!! e-ample! of hi'hl& !ucce!!ful ai# pro@ect! e-i!t%%% the impact of ai# i! clear, an# the re!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 much ai# lea#! to currenc& overvaluation an# #i!coura'e! a'ricultural e-port!>, 7enclave) pro@ect! that are un!u!tainable =mentione# above>, lac* of #onor co-or#ination%%% C10D The :an*)! culture 4a! characteri!e# b& 7an-iet& to meet annual len#in' tar'et!), 7reluctance to #ele'ate authorit& an# an un4illin'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! are in!ufficientl& e;uippe# to i#entif& the ri'ht *in# of pro@ect! for their nee#!%%% %%% there are !ome in#ication! that political pre!!ure! ma& have le# to the inclu!ion of inappropriate pro@ect!%%%) =pp10-11>% 7:orro4er o4ner!hip i! not an i!!ueA beneficiar& an# communit& participation i!%) =p10>% .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! no a!!e!!ment of the !eriou!ne!! of the problem! nor their impact on pro@ect implementation or !u!tainabilit&%) =pE>% C11D On the 2? !&!tem "eor'e an# Sabelli =1991+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 than the :an* it!elf% Some are run a! per!onal baronie!, li*e the 8oo#

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

an# A'riculture Or'ani!ation in ome 4here ,#ouar# Saouma hel# !4a& until late 1990, 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 the local 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% C1/D It i! claime# that .re!i#ent (itteran# !ac*e# hi! (ini!ter of Co-operation Oean-.ierre Cot on the in!i!tence of !ome African pre!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 Central African epublic, the Cameroon!, Ivor& Coa!t, (auritania, ?i'er an# 2pper Holta% Accor#in' to the 9all Street Oournal+ PIn man& of the!e countrie!, the e-i!tin' re'ime! are heavil& obli'ate# to .re!i#ent Haler& "i!car# #),!tain')! 'overnment for the 8rench militar& !upport that *eep! them in po4er%P =;uote# b& A#am! 1991+11/-0>% C10D In Tanzania, one bilateral a'enc& recentl& pulle# out pro@ect 4or*er! from a certain re'ion becau!e the 'overnment coul# not 'uarantee their !afet&% Ai# vehicle! 4ere tar'ete# for theft an# !ale in nei'hbourin' countrie!% C11D Thi! 7blame the victim) attitu#e i! fre;uentl& note# in relation to the 9orl# :an*)! criti;ue of the pre-a#@u!tment perio#, 4hen the :an* 4holehearte#l& !upporte# interventioni!t an# non-mar*et oriente# 'overnment! in Africa% The heav& inve!tment in !tateo4ne# enterpri!e! #urin' the (c?amara epoch =19FE-E1> helpe# buil# up the ma!!ive #ebt! that are the centre of attention to#a&% C15D 9olfen!ohn 1999% The author 74arn! 'overnment! in #evelopin' countrie! that the& 4ill @eopar#i!e their forei'n a!!i!tance an# inve!tment b& con#onin' corruption%) An earlier =199L> :an* !ource =;uote# b& ile& =199E+10L> !tate! that 7the evi#ence of !&!temic corruption in it!elf i! not a rea!on to 4ith#ra4 the :an*)! !upport%) C1FD A 'oo# e-ample i! the American 'overnment)! approach to the Colombian #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 ?e4 Gor* cocaine% C1LD 50 Gear! i! ,nou'h ?et4or*, 1/1L , Street, S,, 9a!hin'ton

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

DC /0000 - 2SA% C1ED 8ailure to confront the corruption i!!ue 4ea*en! other4i!e authoritative 4ritin' on ai# to Africa% 8or e-ample, in 7Improvin' Ai# to Africa) van #e 9alle an# Oohn!ton =199F> #evote one !entence to corruption =pLF> 4herea! ile& =199E>, 4ritin' on the 7.olitical ,conom& of Anti-Corruption Strate'ie! in Africa), inclu#in' the 9:)!, fail! to con!i#er ai# a! a potential incentive to corruption% C19D 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!% =See Coo*!e& 1999e>% 8or the moment, there i! a !i'nificant 9orl# :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% C/0D The I8I! claim there i! a! &et 7no evi#ence) that their loan! to u!!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 #irect evi#ence of embezzle# ai# fun#! a re# herrin'% C/1D The omen! are not 'oo#% 8or e-ample, the 9apenhan! 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! of the :an*)! contribution to !u!tainable #evelopment%) Ruote# b& "eor'e an# Sabelli =1991+//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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9th International Anti-Corruption Conference, 10-15 October 1999, Durban, South Africa

eference! A#am!, .atricia =1991> Odious Debts: loose lending, corruption and the third world's environmental legacy, ,arth!can, Ion#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, O-8%, S ,lli! an# : 6ibou =199E>% $he #riminali%ation of the &tate in Africa, O-for#, Oame! Curre& for the International African In!titute :er', ,lliott =1990> 'ethin(ing $echnical #ooperation: 'eforms for #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*!, Ion#on Chabal, .atric* an# Oean-.a!cal Daloz =1999> Africa +or(s: Disorder as political instrument, O-for#, Oame! Curre& Coo*!e&, :rian =199La> #orruption in Aid: .ow much is acceptable/ "overnance, Hol%1, ?o% 1, ,conomic Development In!titute, 9orl# :an*, 9a!hin'ton, pp 10-1E, Oanuar& 199L% eprinte# in Africa Anal&!i! ?o% /FL =(arch 199L> ----- =199Lb> +ho is responsible for corruption in aid/ Tran!parenc& International ?e4!letter, :erlin, Oune 199L ----- =1999a> Does Aid #ause #orruption/ ,a!t African Alternative!, Hol% 1, ?o% /, ?airobi, Oanuar&-8ebruar& 1999 ----- =1999b> &hould Aid &urvive/ ,a!t African Alternative!, Hol% 1, ?o% 0, ?airobi, (arch-April 1999 ----- =1999c> #orruption and ,overty: +hat are the lin(ages/ Technical evie4 9or*!hop on the Socio-economic Con!e;uence! of .overt& an# Corruption, International Centre for ,conomic "ro4th, ?airobi, =/Fth (a&>

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

----- =1999#> #orruption *nde0: Don't &hoot the "essenger1, ,a!t African ?airobi, Oul& 5-11 ----- =1999e> Dar( deals that cast a long shadow, 9O IDAID)99 Director&, <en!in'ton .ublication!, Ion#on, pa'e! L-E ,uro!tep, ICHA =199L> $he 'eality of Aid 233456: An *ndependent 'eview of Development #ooperation, ,uro!tep, ICHA, Actionai#, ,arth!can .ublication!, Ion#on 8er'u!on, =1991> $he Anti7,olitics "achine, :er*ele&, 2niver!it& of California .re!! "eor'e, Su!an an# 8abrizio Sabelli =1991> Faith and #redit: $he +orld )an('s secular empire, Ion#on, .en'uin 6ancoc*, "raham =19E9> ords of ,overty, Ion#on, (acmillan In!titute of ,conomic Affair! =199E> Our problems, Our solutions: an economic and public policy agenda for 8enya, ?airobi 6ubert!, I =199F> !0pert views on public corruption around the globe, Department of .olitical Science an# .ublic A#mini!tration, 8ree 2niver!it&, Am!ter#am <no-, A Davi# =1991> $he 9uest for 9uality: 'eport of the $as( Force on ,roject :uality for the African Development )an(, O-for#, ?uffiel# Colle'e .a&er, Cherl& =19E/> $he +orld )an(% ?e4 Gor*, (onthl& evie4 .re!! ----- =1991> ent and ost, Ion#on, Ne# :oo*! ile&, Stephen =199E> PThe .olitical ,conom& of Anti-Corruption Strate'ie! in AfricaP, in (ar* obin!on =,#%> #orruption and Development, 8ran* Ca!! .ubli!her!, Ion#on obin!on, (ar* =199E> =,#%> #orruption and Development, 8ran* Ca!! .ubli!her!, Ion#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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9th International Anti-Corruption Conference, 10-15 October 1999, Durban, South Africa

#epen#ent countr&P, .ublic A#mini!tration an# Development Oubilee Conference, St% Anne)! Colle'e, O-for# 2niver!it&, April 1/-115 Thoma!, (eli!!a an# Ooel :ar*an =199E> #orruption and political finance in Africa, 9orl# :an*, . ,( Seminar Serie!, December 11 2nite# ?ation! Development .ro'ram =1999> .uman Development 'eport, ?e4 Gor* 2nite# epublic of Tanzania =199E>% 'eport of the #ontroller and Auditor7;eneral for the Financial <ear ended =>th ?une 2334, Dar e! Salaam To&e, Oohn =1991> PI! There a ?e4 .olitical ,conom& of Development5P in Colclou'h, Chri!topher =e#> &tates or "ar(ets/ -eo7liberalism and the Development ,olicy Debate, Claren#on .re!!, O-for# pp 0/1-0E van #e 9alle, ?icola! an# Timoth& Oohn!ton =199F>% *mproving Aid to Africa, Over!ea! Development Centre, .olic& ,!!a& ?o% /1, 9a!hin'ton D%C% 9arioba, Oo!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, <uala Iumpur, (ala&!ia, 1/-1F September 9olfen!ohn, Oame! =1999> A bac(7to7basics anti7corruption strategy, ,conomic .er!pective!, 2%S% Information A'enc&, :ureau of Information, 9a!hin'ton 9orl# :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, 9a!hin'ton D%C% ----- =199Ea> 8enya: #ountry Assistance &trategy, 9a!hin'ton D%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(, O,D evie4, eport ?o% 1E111, 9a!hin'ton DC

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

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

In Tanzania, 2'an#a an# <en&a the annual report! of the Controller an# Au#itor "eneral la& bare the e-tent of !&!tematic plun#er of public revenue! b& 'overnment official! an# private !ector !upplier!% Thou'h e-treme, the!e report! probabl& !eriou!l& un#ere!timate the actual level of plun#er in central an# local 'overnment!% The .ublic Account! Committee! are 'enerall& not empo4ere# to !anction public official! for the mi!u!e of 'overnment revenue!% In <en&a, the 199E CA" report reveale# Pe-ce!! e-pen#iture incurre# 4ithout the authorit& of .arliamentP #urin' 8G95K9F reachin' <!h!% 0%5 billion, or 1/%FM of the initial #evelopment bu#'et%P A total of <!h!% 10L billion =31%L billion> of public !pen#in' 4a! ;ue!tione# b& the CA"% The "ol#enber' ca!e i! alle'e# to have loote# up to 2S3 100 million of public fun#!, e;uivalent to F%5M of "D.% In 2'an#a, the Au#itor "eneral e!timate! the #iver!ion an# mi!u!e of public fun#! amount! to a! much a! 10 to /0 percent of e-pen#iture!% In Tanzania, t4o-thir#! of the account! e-amine# b& the CA" in 199FK9L receive# a#ver!e opinion!, reflectin' ma@or error! in the account! an# a common failure to prepare ban* reconciliation !tatement!% 2nvouche# an# improperl& vouche# e-pen#iture amounte# to nearl& T!h!% 0/ billion, of 4hich F billion 4a! totall& unvouche#% Althou'h the& have the man#ate, Au#itor! "eneral 'enerall& lac* the re!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& percent of #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>A 9orl# :an* =199Ea> an# =199Eb>A 2 T =199E>

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

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

Tanzania About of thir# of Tanzania)! total bu#'et for 199LK9E con!i!te# of ai#% Debt !ervicin' =intere!t on pa!t loan!> accounte# for 01M of recurrent e-pen#iture an# /1M of total =ie inclu#in' #evelopment> e-pen#iture% ,-ternal #ebt 4a! 2S3/%F billion in 19E0 an# 2S3L%1 billion in 1991, 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# 05M in the earl& ninetie!% It 4a! 11M in 1991, promptin' the 9orl# :an* to note that PTanzania re;uire! e-ceptional #ebt relief mea!ure! to overcome it! e-ternal #ebt !ervice problem%P In 19E0, //M of e-ternal #ebt 4a! o4e# to the 9orl# :an*KIDA, ri!in' to 01M in 1991% 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&% <en&a <en&a)! total forei'n #ebt =out!tan#in' an# #i!bur!e#> ro!e from 31%5 billion in 19LF to 3F%9 billion in 199L, an# the proportion of total #ebt o4e# to 9:KIDA ro!e from 1EM to 0/M #urin' the !ame perio#+ 19LF Total #ebt of 4hich+ I: DKIDA M I: DKIDA 19EF 199L F,9/9 /,1EE 0/

1,190 1,5E9 /F5 1,0E/ 1E 00

?et tran!fer! from 9:KIDA to <en&a fell from 32SF5 million in 19LF to -310 million in 19EF an# -31E million in 199L Source!+ 9orl# :an* =199F> =199Ea>%

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

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

5 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%

5 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!titutionS! performance% The latter i! e-cu!e# for the non-pro#uction of the report an# i! a4ar#e# a further re!earch contract for 31 million% 5 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 the vocational !ector allocate! the a'enc& a 'rant of 3F million, effectivel& un#erminin' the !pirit of the ne4 la4% 5 :ilateral #onor! provi#e capital 'rant! to a non-'overnment !econ#ar& e#ucation tru!t% Other #onor countrie! fun# ?"O! that !upport the !ame tru!t% A! a re!ult, the fe4 !chool! 4hich the tru!t run! receive multiple fun#in' 4hich i! al!o a multiple of 4hat !tate !chool! receive% 5 A bilateral #onor initiate! a !ector 4i#e e#ucation pro'ramme% :efore the pro'ramme i! in place, the #onor #i!bur!e! nearl& 3/0 million on the provi!ion of te-tboo*! an# cla!!room buil#in' an# rehabilitation to be !pent 4ithin one financial &ear% :oth !ector! are *no4n to be vulnerable to 7!&!tem lea*a'e)% In all the above ca!e!, public alle'ation! of corruption have been ma#e a'ain!t the recipient! of the 'rant! in the variou! !ector!% ?o abu!e ha! been prove# to #ate, ho4ever%

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

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

Donor! !earch #e!peratel& for e-ample! of !ucce!!ful reformer! un#er 9orl# :an*KI(8in!pire# !tructural a#@u!tment pro'ramme!% 2'an#a i! the late!t of a 'ro4in' li!t of !uch countrie!% 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 financial ai# to promote economic 'ro4th an# help more people out of povert& than the pre!ent inefficient #i!tribution of ai# mana'e! to #o% Out of E5 countrie! li!te# in Tran!parenc& International)! late!t corruption in#e-, In#ia ran*e# FFth, :olivia F9th, 2'an#a L0r#, an# Hietnam LFth, =,thiopia 4a! not !urve&e#>% In December, 2'an#a)! main cre#itor! met in <ampala, 4here the& ple#'e# 3/%/ billion ai# over the ne-t three &ear!% The #onor meetin' coinci#e# 4ith the late!t in a 'ro4in' li!t of ma@or !can#al! inclu#in' ma!!ive corruption in the privati!ation pro'ramme, 4hich 4a! !ub!e;uentl& !u!pen#e#% Salim Saleh, the .re!i#ent)! brother an# former hea# of the 2'an#an arm&, a#mitte# that he ha# u!e# a (ala&!ian compan& a! a front to obtain a ma@or !ta*e in the countr&)! lar'e!t ban* 4hen it 4a! privati!e#% Saleh)! re!i'nation coinci#e# 4ith the Con!ultative "roup meetin'% The "roup ha# !ome har!h 4or#! to !a& about e-ce!!ive militar& !pen#in' an# rampant corruption in the countr&, ma*in' anti-corruption effort! a precon#ition for future #i!bur!ement!% .re!i#ent (u!eveni !ub!e;uentl& tol# a pre!! conference that the tal* about corruption 4a! P!impli!tic non!en!e%P 2'an#a)! reputation a! an Pa#@u!tment mo#elP no4 han'! in the balance%

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

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

A con!ortium of #onor! 'rante# nearl& 3/0 million to an electoral commi!!ion an# ?"O! to con#uct an# monitor national election!% An e-ternal 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 the performance 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 e-ample 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 five voter!% Inve!ti'ation !ho4e# that the in* coul# have been procure# for a fraction of the actual co!t% 9hen the!e fact! 4ere ma#e public the lea# #onor a'enc& #efen#e# the procurement on the 'roun#! that the ten#er ha# been allocate# to the lo4e!t bi##er an# the e-ternal 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* e-ternal 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'le tran!action% Althou'h the #onor! involve# 4ere a4are of the i!!ue, there 4a! no follo4 up%