U4 Helpdesk Query

U4 Helpdesk reply

The query encompassed a number of different far-reaching issues and sub-areas. While there is sufficient emerging literature on sequencing of anti-corruption measures in post-conflict countries in general, there seems not much of it to be available on aspects of it dealing specifically with making provision for maintaining incentives for former combatants to participate in post-conflict governmental arrangements.

The Helpdesk Researchers have attempted to touch upon most of the sub-areas, but, given further time, will be happy to focus in-depth on one or more of the sub-areas that are of particular interest to the enquirer. Should this be the case, please do not hesitate to contact the researchers for further assistance.

In addition, it may be worth bringing to the attention of the enquirer, that CMI (Chr. Michelsen Institute), Bergen mentioned that they had been looking at putting together a research project focusing on some of the sub-areas of the query, so, should this be of interest to you, we suggest you establish contact with them with regards to possible ways of collaborating.

Reply produced by: U4 Helpdesk research team, London (with input from a CMI Researcher, Bergen)

I. Introduction

The sequencing and timing of anti-corruption reform is, alongside the existence of political will and commitment to its successful implementation and the design appropriate to the respective institutional context, crucial in determining its success or failure. In post-conflict environments as elsewhere, the design and enactment of anti-corruption reform is a politically sensitive issue, since powerful groups within society stand to loose out in a well governed state. The challenge is thus to define a strategy based on the thorough examination of the formal and informal institutional environment, while taking into account the potential of political and economic interests susceptible to undermining the sustainability of the reform process.

Before listing relevant literature resources, a summary of some key points, captured from the various consulted sources on corruption patterns and anti-corruption reform in post-conflict environments, is outlined:

Institutions:
In post-conflict countries, even more than in other environments, an assessment of the existing (or remaining) post-conflict institutions and their capacity, if any, is a crucial first step to precede the design and later the implementation of anti-corruption reform. The reform effort should have a strong emphasis on institution-building.

One example of such set of institutions suffering devastating effects in post-conflict situations is the Public Finance institutions. Domestic revenue collection systems are highly fragile and non-transparent and inefficient expenditure practices provide fertile ground for the diversion of public resources for private use: i) tax collection mechanisms are notoriously weak - often tax instruments need to be created, or the ad hoc wartime tax regimes reformed; ii) borders have often changed (or changed hands) with conflict and remain porous in aftermath, with weak border controls; iii) budget management is weak (or even non-existent in "new" states) and may indeed be captured by the dominant nationalist powers; iv) similarly, audits and mechanism of public disclosure of financial information are often non-existent.

Interest Groups and Incentives for Engagement in Reform:
The definition and implementation of anti-corruption strategies will inevitably create tensions among those who stand to loose out from the reform process. What is considered, by the political elite or the donor community, to be in the best interest of civil society as a whole, may not coincide with the interests of powerful groups within society who have successfully built their lives on the proceeds from maladministration and corruption. While problems of this kind exist in every state, the post-conflict environment brings with it a number of problems that further threaten to undermine the chances of a successful implementation of reform.

Moreover, the pursuit of profit and corruption clearly unite supposed enemies and produce unlikely alliances, as demonstrated by several conflicts, such as those in the Democratic Republic of Congo, Chechnya and the Indonesian province of Aceh.

All these specifics pertinent to armed conflict and post-conflict environments make the need for finding ways to minimise the amount of apparent losers from reform even more crucial than in other environments.

In the context of post-conflict societies, particular attention could be paid to:

• enlisting support from powerful individuals who openly stand in for reform; these could be former leaders of rebel groups, well-regarded politicians and representatives of the private sector who are generally perceived to be of the highest integrity. The problem lies in identifying reliable champions of reform, who, at the same time, have the authority to rally behind them at least some sections of society, but to stay clear of those who may have the potential to alienate more people than they are able to convince.
• considering the use of amnesties. The question of the past remains one of the main stumbling blocks of reform. Corrupt individuals will stand to loose out most from reform, in that they not only face the loss or restriction of their former field of action, but also the threat of legal action in the name of a new state in which the rule of law prevails. Although the question of amnesties is problematic, much can be said in their favour. Firstly, the granting of amnesties can be used to clearly mark the departure from an old regime and old standards towards a new regime of integrity and ethics. Secondly, new, stricter rules and procedures, if retrospective, may bring about a spate of allegations that the new institutions will find overwhelming and paralysing. And most importantly, the political will to defeat corruption may well be at risk of being undermined by those in positions of influence who could be adversely affected by competent anti-corruption action, in particular where the rules are applied to past action as well. If an amnesty is considered, then it is important that it be accompanied by a comprehensive public awareness campaign, and that it be considered that clearly defined exceptions be taken in cases where past actions were of an unforgivable nature.

Post-conflict Reconstruction and Humanitarian Aid Aspects:
Rebuilding the physical infrastructure of war-torn economies, often largely relies on huge inflows of aid. The large amounts of funds involved in aid and various investment projects require particularly strong internal controls and sound financial management to ensure proper use of resources and safeguard against corruption and embezzlement. There are instruments related to such concerns in post-conflict reconstruction, such as the Stability Pact Anti-Corruption Initiative for South East Europe.

The problem of corruption in the context of foreign aid (unfortunately rarely on the priority list of the reformers), along with proposed regulatory mechanisms should not be missed or understated when designing and implementing an anti-corruption reform strategy in a post-conflict environment.

Public Engagement:
Public awareness campaigns, anti-corruption education of all citizens and the establishment of codes of ethics and conduct will be crucial in bringing about long-term change in the way business and government are conducted. A people with little or no prior experience in dealing with properly regulated and functioning institutions will not be in a position to positively contribute to change if they are unaware of their rights and the way things should work.
Finally, it is of utmost importance that everyone in the society feels the anti-corruption reform is in their personal best interest. A workable maximum of stakeholders should be involved in the formulation of the reform strategy in order to create a feeling of pride and ownership of the reform process and to counteract claims of "imperialism" and imposition of external reform measures.

Comprehensive Reform Strategy:
Finally, for selected and fully annotated literature resources on designing and implementing effective anti-corruption strategies and reform efforts in general (for varied environments), please refer to the following link. All papers selected on that site by U4 experts are fully annotated and most are electronically downloadable:
http://www.u4.no/document/literature.cfm?key=2

I.1. Sequencing Post-Conflict Anti-Corruption Reform: Selected Literature and Resources

For selected literature and initiatives on anti-corruption reform efforts, specifically relevant to post-conflict situations, please consult:

Aron, Janine (2003): Building Institutions in Post-Conflict African Economies, World Institute for Development Economics Research (WIDER), United Nations University (UNU), 2002 [cited 10 August 2003]. Available from: www.wider.unu.edu/publications/publications.html

Abstract: Institutions are altered by conflict, depending on the scale, duration and type of war. At one extreme, formal, political, social and economic institutions may be completely destroyed (e.g. Somalia), while the importance and type of informal institutions may be changed. This survey addresses some of the current issues in the design and implementation of institutional building and reform in developing countries, and highlights the particular difficulties faced by post-conflict countries. However, research on practical policy interventions toward institution-building is still at an early stage.

IACC Rapporteur Report (2003): Corruption in Post-War Reconstruction, 11th IACC Workshop on Post-War Reconstruction, Seoul, South Korea, Transparency International Workshop Reports Series

Summary: The primary objective of the workshop was to establish whether there are characteristics of corruption particular to the post-war reconstruction process. Some have argued that corruption in this phase is no different from corruption in poor countries or in development assistance more generally. The principle objective, therefore, was to establish what these characteristics might be and what particular consequences they might have on a nation and public institution building process. Experiences were provided from Balkans, Middle East perspectives, etc.
The summary report is available from TI. Email: ahakobyan@ti-cir.org

Le Billon, Philippe (2003): Buying Peace or Fuelling War: The Role of Corruption in Armed Conflicts. Journal of International Development 15 (4):413-426

Abstract: Although corruption may have a corrosive effect on economies and rule-based institutions, it also forms part of the fabric of social and political relationships. This endogenous character means that conflict may be engendered more by changes in the pattern of corruption than by the existence of corruption itself. Such changes, frequently associated with domestic or external shocks, can lead to armed conflict as increasingly violent forms of competitive corruption between factions fuel war by rewarding belligerents. Controversially, buying-off belligerents can facilitate a transition to peace; but sticks such as economic sanctions, rather than carrots , have dominated international conflict resolution instruments. While buying peace can present a short-term solution, the key challenge for peace-building initiatives and fiscal reforms is to shift individual incentives and rewards away from the competition for immediate corrupt gains. This may be facilitated by placing public revenues under international supervision during peace processes.

I.2. DRC - Interests and Conflict: Selected Literature

Samset, Ingrid (2002): Conflict of Interests or Interests in Conflict? Diamonds and War in the DRC. Review of African Political Economy 29 (93/94):463-480

Abstract: This article explores how the exploitation of key natural resources, diamonds in particular, has contributed to prolonging the war in the Democratic Republic of Congo. It affirms that the motivation and feasibility of resource exploitation largely explain why external military contingents have remained active in the country since August 1998. Driving forces of war can be identified among elites of Rwanda, Uganda and Zimbabwe, for whom DRC resources have proven decisive to sustain positions of power. Although most exploitation has been carried out at gunpoint, the use of existing networks suggests that withdrawal of forces will not necessarily stop the massive resource diversion. While a lasting resolution to the crisis needs to ensure due benefits to the local population from their resources, it also requires that stakeholders see peace as a more attractive option than continued war.

I.3. Corruption and Foreign Aid/Intervention: Selected Literature

Alesina, Alberto, and Beatrice Weder (1999): Do Corrupt Governments Receive Less Foreign Aid? Cambridge, Massachusetts: National Bureau of Economic Research

Abstract: Critics of foreign aid programs argue that these funds often support corrupt governments and inefficient bureaucracies. Supporters argue that foreign aid can be used to reward good governments. This paper documents that there is no evidence that less corrupt governments receive more foreign aid. On the contrary, according to some measures of corruption, more corrupt governments receive more aid. Also, we could not find any evidence that an increase in foreign aid reduces corruption. In summary, the answer to the question posed in the title is 'no.'

Szeftel, Morris (1998): Misunderstanding African Politics: Corruption and the Governance Agenda. Review of African Political Economy 25 (76):221-240

Abstract: Political corruption - the misuse of public office or public responsibility for private (personal or sectional) gain - has been an important theme of the neo-liberal policies of adjustment, conditionality and democratization in Africa. Having identified the state as 'the problem', and liberalization and democratization as 'the solution' to that problem, it was inevitable that efforts to eradicate and control the widespread corruption characterising post-colonial politics would be given a high priority by 'the donors'. From the outset, proponents of structural reform linked political corruption to authoritarianism as an explanation of developmental failure, thereby identifying the arguments for democratization and 'good governance' with those for liberalization. This paper explores the way in which corruption has been understood in this 'governance' agenda and the efforts that have been made to control it by improving institutional performance and policing - greater transparency and accountability, more effective oversight and punishment - and by building apolitical culture intolerant of corruption. In general, however, legal and administrative reform has produced disappointing results and corruption has flourished and even increased. Failure has compounded cynicism and weakened faith in democratic change. Such failures suggest: firstly, that the anti-corruption strategies pursued by international donors and imposed on African debtors are inadequate because of weaknesses in their conception of the state; secondly, that the reforms introduced through liberalization (a weakening of the state, deregulation and privatization) create new conditions in which corruption can flourish; and, thirdly, that fundamental features of African politics will need to change before such anti-corruption measures can hope to succeed.

Szeftel, Morris (2000): Clientelism, Corruption, and Catastrophe. Review of African Political Economy 27 (85):407-441

Abstract: International anti-corruption efforts create conflicts between aid donors and African debtor governments because they attack the ability of local interests to control and appropriate state resources. The control of corruption is an essential element in the legitimisation of liberal democracy and in the promotion of global markets. However, it also threatens the local accumulation of wealth and property (dependent as it is on access to the state) in post-colonial Africa. This article explores another dimension of this problem, namely the way in which clientelist forms of political mobilisation have promoted corruption and intensified crisis. Clientelism has been a key mechanism through which political interests have built the electoral support necessary to ensure access to the state's resources. In turn, it has shaped a politics of factional competition over power and resources, a politics obsessed with the division of the political spoils. The article argues that this process is not unique to Africa. What is different, however, is that factional conflict and its attendant corruption have had such devastating consequences. This reflects the particular forms which clientelism has taken on the continent. There is a need, it concludes, to find ways to shift African politics towards issues of social justice and government performance and away from a concern with a division of the state's resources.