Donor coordination in anti-corruption
Coordinating anti-corruption in 'hostile settings'
Donor to donor harmonisation and aid alignment is often in place
where there is a well-developed framework and where there is at least
a partial political will to fight corruption (e.g. Uganda, Tanzania,
Mozambique, Vietnam, Cambodia and Nicaragua).
In non-aid dependent countries (e.g. Nigeria, Angola), isolationist
states (e.g. Zimbabwe, Myanmar), fragile states (e.g. Nepal and Tajikistan)
and in conflict and post-conflict countries (e.g. Sudan, Haiti), frameworks
for aid coordination and donor collaboration on corruption is usually
poorly developed. In these countries the government not only fail
to provide a framework for donors to align to, but the donors themselves
are often fragmented and sometimes even compete.
The different contexts donors operate under require that response
is tailored to the level of political will and the capacity to implement
reform. What might be the avenue in an isolationist state like Myanmar
(little will to reform) might differ greatly from what should be prescribed
for a post conflict country like Haiti (little state capacity). The
considerations and advice made beneath should be seen 'a shopping
list' of ideas that donors can adopt for their particular context.
See also the U4 Theme page on Anti-Corruption in Fragile States
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Where possible, align support with local policies and systems
Substituting for local capacity
Commitment to reducing AC levels and improving governance is by
most donors seen as the entry-point for their work with the government.
Where this is lacking, donors tend to move to state-avoiding activities
which place low emphasis on policy and systems alignment. This often
results in setting up parallel institutions, which jeopardises long-term
indigenous development of state institutions. Donors bent on getting
quick successes and/or protecting their own development funds have
bypassed the budget process, parliament, local government institutions
and engaged in a range of problematic practices like giving high salaries
for local staff or those working on "their" projects within
a Ministry.
It often seems like the international community is less concerned
with the lack of willingness to fight corruption than lack of
capacity to implement reforms. Donors have tools to deal with low
capacity and are always willing to provide capacity themselves. One
extreme example of this is Mozambique where the donors have taken
over the running of the customs administration - likewise Bosnia where
the reform of the customs administration has been extremely donor
driven. There can be raised questions of the sustainability of these
efforts.
Lesson: Support local priorities
The general rule should always be to align assistance on anti-corruption
behind government strategies. If there is genuinely no government
policy or framework which it has signed up to, then it is important
to note that an uncoordinated response on the part of the donor community
can complicate the situation. The government will have difficulties
in prioritising as they receive different signals from donors.
In many instances we find the presence of multiple policy frameworks
on corruption with unclear and highly politicised interrelations.
Donors must make sensible choices about which framework to align to,
or help authorities reconcile these different policies.
Bosnia can serve as an example to this. The country has signed up
to all the regional and international conventions and monitoring mechanisms
on corruption. Those in charge of following up these commitments are
not spending enough time on harnessing change, and are often accused
of spending time participating in endless conferences and workshops.
Where there is weak capacity, donors and recipients should work to
focus on a limited number of task rather than to try to spread limited
human, financial and institutional capital over a range of tasks simultaneously.
A process of mapping out all current activities and commitments
and select and sequence these to ensure appropriate selectivity
and focus should be started. The attempt to carry out a range of activities
across multiple agencies and sectors at once will lead to failure.
Coordinate donor responses
Create pressure for change
Donor coordination can also amplify pressure on governments to take
action in the field of AC. Kenya is a case in point. An Economic Governance
Group, composed of multilateral and bilateral donors, established
a collective position on AC which they used to negotiate with authorities.
Acting as 'one voice' not only reduced the transaction
costs on the government of dealing separately with each donor but
also enabled donors to increase their leverage vis-à-vis officials.
One lesson that has emerged is that the absence of government leadership
on AC or an inability to prioritise can be abetted by a harmonised
donor community. (Like where? Ex.)
Leadership of "donor coordination groups" should
be held by one designated donor who facilitates communication between
the government and the donor community at large. Bilateral donors
often serve as lead since they are often considered less "political"
that the World Bank, for example, and cultivate special relations
to certain countries. Joint efforts among donors can include
common assessments, joint funding of sectors and institutions, common
procurement systems and common reporting and financial requirements.
Find allies both inside and outside the government
Find champions
Where no strategies exist and were there is little interest in developing
one, much less implement what is agreed upon or signed up to, international
actors should consult a range of national stakeholders and seek opportunities
for interventions inside the regime, in the governing party or wherever
reform-minded individuals are located. Where commitment is weak there
is at least a possibility for a dialogue, even though implementation
may be sluggish.
Lesson: Often analysis concludes that there is 'no political
will' to reform. But practitioner experience has it that there will
always be groups within a power structure, and within sectors
and institutions, who can 'champion' anti-corruption.
It has been shown that whole sectors can be reformed in an environment
of large scale corruption in government and society at large (The
successful reform of the Supreme Audit Institution in Bosnia can be
taken as an example). Rather than allowing a hostile governance environment
to lead to passivity, international actors should take action in a
coordinated manner.
An emerging lesson is that the absence of government leadership on
AC or an inability to prioritise can be abetted by a harmonised
donor community which can help bring about country leadership
at a later stage.
Another option is to promote outside actors committed to AC reform.
This could involve support to "coalitions for change" (including
civil society and the media, as well as legislators and the executive).
These have been successfully brought into AC working groups, though
there are countries where non-governmental activist are vulnerable
in AC 'hostile settings'.
Be politically-sensitive
Particularly in countries with an unstable political environment
(for instance Zimbabwe), AC activities may be interpreted as undermining
those in power. In-country donor AC collaboration on priorities/ initiatives
needs to be undertaken with care, with actions directed to upholding
what the state is formally committed to: for example, international
AC conventions and laws relating to transparent and accountable use
of public funds.
Note of caution! Working with corrupt governments can be used
by the regime to entrench their position. Unfortunately, in certain
corrupt regimes reform and plunder go hand in hand.
Make an assessment of areas and sectors particularly prone to
corruption
Still, taking risk in operating in corrupt environments does not
exclude taking responsibility for use of taxpayers' funds. Essentially
donors could support each other in not funding activities vulnerable
to corruption which a government is unwilling to address.
Even though support should be given to national prioritisations that
does not mean accepting everything the government decides. For example,
donors objected when the government of Tajikistan wanted to prioritise
infrastructure construction [highly vulnerable to corruption] over
social sectors.
The assessment and management of fiduciary risk is increasingly becoming
important to those donor agencies that are choosing to shift more
resources to Budget Support (BS). If it is necessary - say, for politico-strategic
reasons - to support a country where there are high levels of corruption,
fund disbursal/use may require a credible reform programme to be
in place, or safeguards against fund diversion. Budget support
has the additional difficulty of having a legitimising effect on the
government and its policies.
Use conditionality with care
Conditionality is ineffective unless supporting government action
The impact of conditionality on pressing governments to address corruption
has been questioned - mainly because aid flows often continue even
if conditions are broken. A broad consensus has emerged from studies
of policy conditionality that policy changes cannot be "bought"
in this way. Domestic political considerations emerge as the prime
factor in determining economic and political reform, and donor pressures
do not easily influence these.
Conditions have also often been too complex and numerous to be practical.
Conditionality does not appear to be any more successful for anti-corruption
than for other purposes, unless it reflects government's real priorities.
Kenya under Moi in the 1990s is an example. Insofar as the new Kenya
government now has a more serious AC effort (which commitment brought
back most donors), genuine electoral competition and active civil
society appear to have been the crucial elements in this change, not
conditionality.
Yet, the lesson is that even in countries which are not aid
dependent there is room for successful external pressure if the government
aspire to join international fora like the WTO or EU.
A good example is Albania where a persistent campaign from
the international actors in Tirana telling everyone, including the
electorate, that the lack of progress is due to the government unwillingness
to address these issues in a genuine way. We now observe that a combination
of diplomatic means and public shaming did not entice the government
to change its position, but rather making the electorate aware of
the fact that their lacking living standards is linked to 1) corruption
2) the sitting government. In July 2005 the governing party lost power
in a campaign that was fought by the opposition on an anti-corruption
ticket.
In other countries the donor community can consider restriction on
travel for regime dignitaries and their families, expulsion from international
fora or even more drastic means. But this kind of pressure should
only be applied with the greatest care as they may backfire into
isolationism and repression.
Prepare for the if/when
Donors should also consider "preparing
the ground' for a future point in which the government is more willing
and able to address corruption. One starting point may be to identify
anticorruption needs likely to emerge after an election, for example,
and plan follow-up action so that donors are ready with practical
support for any new AC commitments that emerge. Again, collective
action allows donors to leverage their relative strengths (some may
have more money available, others expertise).
For example, if the current regime faces allegations
of grand corruption, demands are likely to arise rapidly for action
on recovery of stolen assets once political change takes place. Donor
countries with major financial sectors may want to outline a contingency
plan for how they will assist if/when these demands are made. Work
on asset recovery, for example, can proceed well in advance of a regime
change, since it mainly requires action between and within individual
donor governments.
'Preparing the ground' for a day when the government is ready to
address corruption is another area that would benefit from a collective
donor focus and approach. Collaboration in analysis to identify anticorruption
needs is likely to emerge, for instance, after elections, and follow-up
action could be planned so that donors are ready with practical support
for any new commitment against corruption. Under these circumstances
there is a need for the international community to be able to move
quickly to support that political will. What is the best rapid response?
Arguably donors operating collectively can respond more quickly and
thoroughly by putting together what they can do immediately (some
may have more money available, others expertise).
For example, if there are allegations of grand corruption against
the current regime, demands are likely to arise rapidly for action
on recovery of stolen assets, once political change takes place. Donor
countries with major financial sectors may want to outline a contingency
plan for how they will assist if/when these demands are made. Progress
can be made on this since it involves work between donor governments
and within individual donor governments, much of it outside the country.
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