U4 Helpdesk Query

U4 helpdesk reply

This reply has been produced without having access to the WB PRSC (5th grant) documentation, as an e-copy was not available. However, emails have been exchanged containing some of its content, on which this answer is building on. Given the tight deadlines, the Helpdesk is only able to provide an overall guidance on the issues raised at this stage. Should the time permit so, we will be happy to conduct further research on the query. The query is sub-divided and answered in three parts.

Content

• Query 1: An overall assessment of the set of indicators that are included in the attached national strategy paper; for example what would be a reasonable timeframe for the implementation of such activities?
  
• Query 2: Information about experiences from other countries where defined anti-corruption actions have been used as preconditions for World Bank lending/grants; for example are there cases where this approach has generated genuine domestic commitment? Eventually, what are the negative effects of such a donor driven A-C approach?
  
• Query 3: It would be useful if someone already by the beginning of next week could propose/send me some reports that provide an overview of anti-corruption strategies in other countries.
  

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Query 1

An overall assessment of the set of indicators that are included in the attached national strategy paper; for example what would be a reasonable timeframe for the implementation of such activities?

In your most recent email, you list about 7 anti-corruption actions that are tied to the release of the next phase of WB PRSC5 next year. You note that while some of them must be met by June 2005 and before the release of the funding, others are more flexible benchmarks. In order to give you an idea of whether the implementation of such measures is realistic within the currently planned timeframes, we would like to guide you to some examples of other country strategy timetables.

Of course, each country's strategy and the timetable should be adjusted to local circumstances and capacity, thus there are no standard 'commonly accepted' timeframes for any given measures, but these comparisons could serve as a good starting point. Estonia's national anti-corruption strategy, for example, has been highlighted by practitioners as a good practice driven one. So, drawing some comparisons we find that for their strategy for the period 2004 - 2007 they have allowed the following timeframes for some of the planned anti-corruption measures similar to those tied to Uganda's strategy and the PRSC5:

Asset Declaration of Public Officials
1 year (by 2005) to prepare the framework and guidelines on types of officials that need to submit such declarations as well as the precise scope of the declarations;
2 years (by 2006) to put into the operation the actual platforms for the declaration along with methodology for verifying the declarations, etc.

Whistleblower Protection
Less then 1 year (within 2004) to make amendments to the Anti-corruption Act to include measures to protect whistleblowers and all those involved in assisting to detect corruption cases.

Looking at examples of other country strategies (Pakistan's national strategy, for example, is a very comprehensive one and, although the political will and commitment to its implementation is yet to be assessed, is cited as good practice for its content and the participatory approach in drafting, which has involved local stakeholders as well as top international experts), we note that:

• Asset Declaration of Public Officials is set as a priority to be achieved within the first year of the strategy implementation;
• Aspects such as organizational evaluation and internal accountability mechanisms are set to be achieved within "quick win" (immediate) to 1-5 years timeframes, depending on the tier and level of the reform;
• Whistleblower protection measures are to be achieved within the first year of strategy implementation;
• Access to Information Law is scheduled to be enacted immediately in the timetable (on the basis of an already available draft at the time of planning);
• Judicial reform and various aspects of court procedural reforms vis-à-vis improved proceedings against corruption cases are set to be reformed within 1-3 years timeframe.

These are just some of the examples of measures contained in the above-mentioned two strategies and their corresponding timetables. For detailed list of measures and proposed timelines please refer to the strategy papers and their matrices:

• Estonian strategy/timetable
• the Pakistan strategy/timetable is attached for ease of reference (the timetable can be found on page 95) [contact helpdesk@u4.no if you want an electronic copy].

To conclude the guidance on this part of the query, the overall advice is that the measures set in Uganda strategy's timetable can be achievable as set in the drafts, if some of the processes have already been initiated and some of the policy processes are already underway - which is what we understand is happening according to your recent email.

To be more realistic, it is recommended to allow extra time when planning for such activities as passing of legislation as there can always be unplanned delays and constraints both at drafting stages as well as during parliamentary discussions and enactment.

So, for example, the recent South African anti-corruption law (the Prevention and Combating of Corrupt Activities Act 2004), a very comprehensive and strong piece of legislation, took years of debates, negotiations and hearings until finally being passed into law this April. It is important for timeframes to be realistic so as not to compromise the quality of the legislation, which will also affect the future prospects for proper enforcement.

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Query 2

Information about experiences from other countries where defined anti-corruption actions have been used as preconditions for World Bank lending/grants; for example are there cases where this approach has generated genuine domestic commitment? Eventually, what are the negative effects of such a donor driven A-C approach?

The record on aid conditionalities has been very mixed and there are differing debates and opinions about their appropriateness and effectiveness. Increasingly, very few donors apply traditional conditionalities and instead engage in policy dialogue and development of common frameworks and benchmarks, which is a more welcoming approach. This seems to be the new direction being adopted by a number of donors.

One such example is DFID's Draft 2004 Policy Paper "Partnerships for poverty reduction: changing aid conditionality", which summarises that the UK Government believes that:

• Mutually agreed terms and conditions linked to poverty reduction benchmarks can protect the effective use of aid. They provide the basis for citizens in both donor and partner countries to hold their governments accountable for the effective use of aid finance. Where conditions are not met, they allow donors to reconsider whether their aid could be more effectively used elsewhere. Reformers in developing countries often favour 'conditionality', as it can signal that they are serious about reform.
• Aid conditions should not be unilaterally imposed by donors, but should be agreed by both partners within the framework of the recipient country's own poverty strategy.

To revert to your question as to whether donor-stimulated anti-corruption efforts can be successful, the answer is that much depends on the process of identifying the reform areas and the agenda. If it has been a participatory process based on consultations and partnership between the donors, the government and the national stakeholders (as opposed to a narrowly defined aid provider - aid recipient relationship) it may well hold successful results.

So, for example, Lithuania received donor support and had strong incentives to fight corruption due to its EU accession bid, as did Romania. Experts comment that the leadership of the former took serious steps and owned the strategy, while the leadership of the latter appeared to have only paid lip service to the fight against corruption.

Further, the success of anti-corruption efforts and national strategies of course depends on a wide range of factors extending far beyond the issue of donor engagement and terms (for an overview, please refer to the attached draft TI Handbook chapter on National Anti-Corruption Strategies).

To conclude the guidance on conditionalities, presented below are some links to papers and articles reflecting varied views on conditionalities that you may find relevant to consult:

Can Aid Conditionality Help Governance Reform in Needy Countries?, Devendra Raj Panday
Abstract: The article is a critique of conditionalities regime, including those tied to anti-corruption measures. The concerned donors have little at their command in terms of tools to set targets or measure performance on governance and anti-corruption behaviour. It concludes that the performance record of the past conditionality regimes is not reassuring. Too much donor activism in governance may also have an adverse effect on the evolution of the democratic process. When the donors, not the government policymakers, become the source of inspiration (or commands and conditions) for a governance reform or any other public program, the public authorities concerned can easily escape accountability. In short, the legitimacy of the democratic process, as we have understood it traditionally, can be in jeopardy.

Can IMF lending promote corruption? Jim Saxton, Vice Chairman, Joint Economic Committee, United States Congress, December 1999
Abstract: The emerging evidence about corruption also raises questions about the policies underlying IMF procedures surrounding such assistance. Analysts, for example, have questioned how borrowed monies are monitored or tracked to ensure they are used for the purposes intended by the donors. Others question the anti-corruption conditionalities attached to lending agreements. While most analysts agree some corruption is present in all countries and is often "home-grown," there are a number of reasons to believe that under certain conditions, government-to-government assistance and lending can actually promote corruption. This paper explores these corruption-promoting circumstances. The relevant foreign aid literature is reviewed and then related to IMF lending before remedies are prescribed. Amongst proposed remedies in the paper is imposition of strong conditionalities on lending. Pre-screening countries by requiring certain legal standards, anti-corruption codes, and accounting practices be established prior to obtaining IMF funds could work to minimize corruption.

Partnerships for Poverty Reduction: Changing Aid 'Conditionality', a draft Policy Paper for comment, DFID, September 2004
Abstract: Views differ widely across the international community about the right approach to aid relationships. Some advocate abandoning 'conditionality' altogether, or removing conditions on particular areas of reform, such as privatisation. Others favour much tougher conditions, for instance in relation to corruption, environment, and human rights. This paper sets the proposed DFID policy, which promotes a new approach to traditional 'conditionality' - one based on mutually agreed terms and conditions as a result of dialogue and partnerships.

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Query 3

It would be useful if someone already by the beginning of next week could propose/send me some reports that provide an overview of anti-corruption strategies in other countries.

A list of recommended annotated readings, case studies, good practice and links on anti-corruption national strategies of various countries can be found in a draft chapter on anti-corruption strategies (prepared as part of an upcoming TI Handbook). The chapter also provides an overview of issues and challenges associated with drafting and implementing anti-corruption strategies. This has been emailed earlier and is attached to this reply for ease of reference.

[For U4 readers of this query answer, please accept waiting for the TI Handbook's publication to see the overview of AC strategies]