Political corruption
Challenges and options
In this section we present strategic options available to donors confronted with three broad challenges when key persons in recipient governments are corrupt:
CHALLENGE: HOW SHOULD THE LACK OF POLITICAL WILL BE ADDRESSED?
When political corruption is endemic the political will to address it is weak. Sometimes government policies and individual government members' actions will contradict what donors see as sound approaches, sometimes there will be lip-service paid but circumventions in practice, and sometimes there will be direct resistance to anti-corruption efforts. Corrupt politicians will defend their vital interests, vehemently and sometimes even violently.
The means and tools available to donor agencies for addressing this problem are constrained. The political leverage of donor agencies is limited. Furthermore, the political will of the donors themselves can be questioned. Aid priorities and other political concerns motivating aid may work in direct opposition to apparent interference in the domestic affairs of sovereign states. Certain aid policies and modalities, such as direct budget support, decentralisation and privatisation, may become rather problematic when seen from an anti-political corruption perspective. Donor coordination on such politically sensitive issues is a formidable challenge. The ambitions of donors differ greatly, and so does their emphasis on corruption. There have been instances where some donors have withheld or withdrawn support, at least temporarily, because of corruption, whereas at the same time others have increased their support. How can donors ensure that they speak with one voice and send a clear message?
There are at least three types of strategic option available to donors - to support democratisation processes, to improve information on and analysis of how political systems work, and to strengthen the coordination of responses among donors.
Option: Support to democratisation processes
It can safely be argued that democratisation is the only long-term sustainable strategy available to eradicate systemic political corruption. Democratisation includes two basic processes: increased horizontal accountability (efficient and credible institutional checks and balances), and increased vertical accountability (deepened popular control through voice and participation).
Horizontal accountability is of particular importance in combating political corruption. This refers to the system of institutional checks and balances, of constitutional and institutional controls in-between elections. These include, among others, the executive (government and state administrative agencies), the judiciary and the legislature, and the various special institutions of oversight and control like ombudsmen, investigators, attorneys and auditors. Most political systems include formal rules and procedures meant to restrain the exercise of political power and to safeguard human and political rights, but the formal establishment and existence of institutions of horizontal accountability does not in itself mean that they are efficient. In developing countries with embedded political corruption these institutions are particularly weak.
There are two basic institutions of checks and balances that have not
received sufficient donor attention as yet: the parliament and the judiciary.
Both are pivotal for any meaningful, democratic control of political corruption,
but at the same time they are in many countries an important part of the
corruption problem.
Strengthening parliamentsThe basic approach to strengthening parliaments is to push for constitutional reforms that help to secure their autonomy. Parliamentary autonomy refers to its independence from the executive branch. It is its ability to carry out its mandate, to interact with and not be subjected to pressure from the presidency, and to play the vital democratic role of checks and balances. In practical terms, it is about constitutional guarantees, and autonomy in respect of personnel and finance. This is a long and cumbersome process, but should nevertheless be the ultimate aim of any engagement with parliamentary systems. There are medium-term possibilities in terms of support to specific
parliamentary committees, research and evaluation capacity, administrative
capacity, and issues like the disclosure of parliamentary votes
and better communication between legislators and their constituencies.
One example is the Vietnamese parliament, which is weak in terms
of its mandate and in terms of one-party rule. Still, with some
donor assistance it has become a relatively proactive institution,
fulfilling some of its accountability functions.
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Strengthening courtsTo assist courts to fulfil their accountability function and serve as institutions of political checks and balances, the most promising approach is to push for constitutional reforms that help to secure their autonomy. A main aspect of this autonomy would be freedom to choose personnel (e.g. in many countries judges are nominated by the president) and financial security. One should also demand transparency, and justification for court
decisions and actions (answerability). Even within presidential
systems with little autonomy, the accountability function of courts
can be strengthened through improvements in infrastructure (library,
computers, and court records), court administration, education of
judicial personnel and support staff, legal aid and literacy, and
research assistance, in addition to reform of appointment procedures
and budgetary autonomy.
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Option: Improve information and analysis
Much of the failure and lack of impact of donor-assisted efforts to combat political corruption has its root in a lack of proper problem analysis and weak research-based programming. Although the ambition of donor coordination and working groups as well as of individual donor agencies has been to collect and share information, inadequate analysis and contradictory interpretations have sometimes got in the way of strong, unified donor approaches. The problem of political corruption varies considerably in form, magnitude and structure. A government rich in mineral wealth (for example, an 'oil cursed' country) is very different from a resource-strained, indebted and aid-dependent regime, both in terms of how resources are extracted and in terms of donor country leverage.
In-depth political economy studies are necessary to get the targeted
action right. Political economy is most commonly used to refer to interdisciplinary
studies that draw on economics, law and political science in order to
understand how political institutions, the political environment and capitalism
influence each other. In the donor community, political economy analyses
have mainly been used to understand informal and customary political systems,
patrimonialism and patronage, predatory political elites and authoritarian
government, and the relationship between economic and political power
within states.
Two types of analysis in recent years have been important in building
this type of knowledge: National Integrity System studies and Drivers
of Change analyses:
Drivers of Change analysisAlthough the Drivers of Change (DoC) approach is broader than political corruption per se, the development community increasingly recognises that effective programmes must be grounded in an understanding of the economic, social and political factors that either drive or block change within a country. The Drivers of Change approach has emerged within the UK's Department for International Development (DFID) as a way of applying political economy analysis to the development of donor strategies. Various DoC studies have been carried out involving in-depth, country-level analysis in order to identify the opportunities, incentives and blockages to pro-poor change in a given country. The DoC methodology seeks to identify the political institutions, structures and agents that can act as key levers for enabling pro-poor change and therefore improving the effectiveness of aid.
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National Integrity System studiesThe concept of National Integrity System studies (NIS) has been developed and promoted by TI as part of its holistic approach to countering corruption. The NIS consists of the key institutions, laws and practices that contribute to integrity, transparency and accountability in a society. When it functions properly, the NIS combats corruption as part of the larger struggle against abuse of power, malfeasance, and misappropriation in all its forms. The NIS approach provides a framework with which to analyse both the extent and causes of corruption in a given national context, as well as the adequacy and effectiveness of national anti-corruption efforts. By diagnosing the strengths and weaknesses of a particular integrity system, an evaluation based on the NIS can help inform anti-corruption advocacy and reform efforts. The main 'pillars' of the NIS are considered to be the following:
The NIS approach underpins many aspects of TI's work, including much of the national and international advocacy undertaken by the TI movement. It also provides the conceptual basis for many TI publications. NIS studies say a lot about legal and institutional loopholes and bottlenecks, but the NIS approach has been criticised for a weak emphasis on the supply side, on international companies as bribe payers and corruption drivers. The studies have also sometimes adopted a legalistic approach, emphasising the legal framework (that needs reform) but less the political framework for democratic control.
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Option: Strengthen donor coordination
Donor coordination is increasingly being understood as pivotal for donor agencies to have any influence over political corruption. In particular, it is seen as important to send a single message and to speak with one voice in cases where sanctions are needed. Therefore, donor cooperation is happening at international, regional and local levels..
DFID recently commissioned a study of in-country donor coordination mechanisms for anti-corruption work (Green, Hubbard and Larbi (2004) Cooperating against corruption [PDF]). Not surprisingly, the report revealed that donor harmonisation and aid alignment are inadequate in most countries where donors are active. More efficient cooperation and coordination can be undertaken at the country level in terms both of programmes and of projects.
The positive initiatives and the organisation/coordination of donors into consultative and working groups in Uganda can serve as a model for others to learn from. The U4 pages on donor coordination as well as the Uganda pages highlight specific examples of donor coordination on the ground. Here you will find interesting analysis, literature and information on donor coordination.
The OECD Development Assistance CommitteeThe OECD Development Assistance Committee (DAC) and its Network on Governance (GOVNET) is the principal body through which the OECD deals with issues related to co-operation with developing countries. DAC has identified corruption as a core issue and donor collaboration as a priority. In the light of the growing need for strengthened donor collaboration in anti-corruption work, the GOVNET Task Team has drafted the DAC Revised Principles for Donor Action in Anti-Corruption [PDF].
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CHALLENGE: HOW CAN THE HOLES OF ILLICIT EXTRACTION BE PLUGGED?
This question has a supply and a demand side. The supply side issue concerns donor country companies offering bribes in business transactions, while the demand side issue concerns opportunities for enrichment used by recipient governments. How can donors help remove such opportunities?
Option: International and supply side issues
Among the options available to donors for assisting in curbing extractive political corruption, the international and supply side issues are indeed important. See for instance the U4 overview pages on anti-corruption conventions for an update on the scope and powers of international legislation, and the OECD Fights Corruption [PDF] brochure for an overview of OECD approaches, which focus largely on supply side issues like export credits, tax deductibility and business conduct. Indeed, the OECD convention itself, which bans the bribery of foreign public officials, has a strong international supply focus.
On the supply side we also have issues like transparency in international
banking and trade, the role of market power, monopolies, competition and
anti-trust measures, which are addressed for instance by the International
Competition Network. In this category, the Extractive Industries Transparency
Initiative (EITI) is particularly interesting.
Extractive Industries Transparency Initiative (EITI)EITI is supported by DFID and other donors, and aims to ensure that the revenues from extractive industries contribute to sustainable development and poverty reduction. The EITI works to ensure due process and transparency in payments by the extractive industries and companies to governments and public bodies, and that the revenues collected are properly reported by those governments. At the core of the initiative is a set of Principles and Criteria that establish how EITI should be implemented. A number of companies and two countries (Nigeria and Azerbaijan) have now signed the initiative.
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Option: Special institutions of control
The internal, demand side issues in partner countries are addressed to a lesser extent, but there are options for donors also on this issue. Basically, it is a question of increasing transparency and accountability, and of strengthening the special institutions of oversight and control.
In addition to the two core institutions of checks and balances, the parliament and the courts, there are special state institutions of control and accountability such as the Directorate of Ethics and Integrity, the Directorate of Public Prosecutions, the Police, the Inspector General of Government and the Office of the Auditor General. These are often in need of comprehensive reform of their mandate and autonomy, as well as in their capacity, and they have received much (but sometimes biased) attention and donor support.
One of the most over-estimated (and over-supported) institutions is the
anti-corruption commission, an institution whose independent role is impossible
in highly corrupt countries and whose effect on political corruption has
been very limited.
African Anti-Corruption CommissionsAfrican Anti-Corruption Commissions "Our study found a lack of synchronicity and compatibility between the needs, aims, motivations, capacities and expectations of governments, donors and ACCs. This leads to a lack of coordination, complementarity and confidence between the three parties, which, in turn, is connected to their differing 'lifecycles". The lifecycle of a new ACC is characterized by initially high expectations from governments and donors but the ACC is an infant organization unable to meet the unrealistic expectations imposed upon it. This failure usually means that there is no sustained support for the ACC which limits its capacity to develop as an organization. This failure 'to thrive' encourages disillusionment in governments, donors and in ACCs themselves. The lifecycle of governments involves the gradual displacement of anti-corruption as a high priority and indeed political commitment is frequently confined to exposing the crimes of previous regimes. Governments experience periods of instability and, where ACCs investigate corruption at the highest political levels, the response is not often supportive. Rather, ACC Directors are dismissed, authority to prosecute is withheld in sensitive cases and under-resourcing of the ACC becomes the norm, further undermining its capacity and reputation. When discredited governments are toppled or new leaders emerge, donors become enthusiastic again and the neglected ACC is reborn or reconstituted. Where once donor support had been difficult to obtain, or had even been withdrawn, suddenly there is a rush to support the ACC with a new set of expectations. The previous famine of resources is replaced by a feast but the ACC often lacks the infrastructure and capacity to make effective use of the sudden increase in funds. Donor neglect is, at worst, replaced by donor competition and, at best, by inadequate and irregular donor coordination.
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Other special institutions of control that receive various levels of donor support are auditors and prosecutors. Without going into detail on the modality of this support, the principle is simple: without these institutions, accountability and democratisation are impossible. Even if they cannot perform and cannot deliver on political corruption control at the moment, and investigators and prosecutors are frustrated about lip service and manipulation, these institutions are needed for support. They should be in place when there is a change in government or a reform-oriented minister takes over, and they can perhaps impose some counter-balancing weight in the meantime. Donors should assist their survival in a hostile climate.
A former Minister of Ethics and Integrity in Uganda said in an interview with U4 that the Inspector General of Government had never prosecuted any 'big fish' or 'political untouchables' because of political restrictions, and expressed doubts that it ever could under the current government. On our asking whether the donors should then simply withdraw all funding from the inspectorate on these grounds, she said "Oh no, the institution will be needed one day! Better to have it, even with a weak mandate and no impact on political corruption, than to re-invent it when the day comes and it is needed again".
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Option: Income and assets declaration
In addition to the supply side issues, donors also have options in various methods to assist in curbing demand-driven political corruption and extraction. Three methods employed with some success, and partly supported by international donors, are the Publish What You Pay Campaign (PWYP), compulsory declaration of assets and incomes by senior politicians and bureaucrats, and various procurement reforms.
The Publish What You Pay Campaign (PWYP) is increasing its momentum.
The PWYP campaign is an international NGO initiative to put pressure on
international companies to publish what they pay in taxes, bonuses, fees
etc. to the governments of certain mineral-rich countries.
Publish What You PayThe Publish What You Pay campaign aims to help citizens of resource-rich developing countries to hold their governments accountable for the management of revenues from the oil, gas and mining industries. Natural resource revenues are an important source of income for the governments of over 50 developing countries. At the same time, twelve of the world's 25 most mineral-dependent states and six of the world's most oil-dependent states are classified by the World Bank as "highly indebted poor countries" with some of the world's worst Human Development Indicators, including Angola, Congo-Brazzaville, Kazakhstan and Venezuela. When properly managed, the revenues could serve as a basis for poverty reduction, economic growth and development rather than exacerbating corruption, conflict and social division. The Publish What You Pay coalition of over 280 NGOs worldwide calls for the mandatory disclosure of the payments made by oil, gas and mining companies to all governments for the extraction of natural resources. This is a necessary first step towards a more accountable system for the management of revenues in resource-rich developing countries. Revenue transparency itself is a fundamental criterion for good governance: you cannot manage what you cannot measure. Natural resources are held in trust by the state for the citizens of a country. Those citizens have a clear right to information about the management of revenues associated with their resources. The campaign calls for multinational oil, mining and gas companies to reveal the same basic information about net payments to a state in the developing world that they already routinely disclose in the developed world. State-owned enterprises must also be financially accountable for payments made to their governments and revenues received. Together, this information will help citizens of resource-rich but poor countries to call their governments to account over the management of revenues and thereby seek a democratic debate over their use and distribution. Companies can often be perceived to be complicit in corruption and the deterioration of social conditions in poor countries where they operate, even though they are providing a valuable source of investment that, when managed transparently and responsibly, should be a source of growth and development that will benefit all citizens.
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Disclosure of assetsMany countries have laws and rules governing the declaration of assets, because disclosure reduces the chance of corruption. The purpose of obtaining public officials' declarations is to identify what wealth is not fairly attributable to income, gifts, or loans. The compilation demonstrates the wide range of approaches to restraining officials' undesirable conduct. Knowing how other countries have approached this issue can help those who are drafting officials' asset declaration laws, or making changes to existing ones. In Uganda, for instance, independent journalists have taken the "The Leadership Code Act" of 2002 seriously. The act obliges all top and middle-ranking officials to declare their assets, and investigative journalists supported by NGOs have been checking the accuracy of the publicly available declarations and documented assets (farms, villas, apartments, cars…) through photos, public registers and interviews with neighbours and tenants. Huge discrepancies have been revealed, sometimes leading to criminal investigation.
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Procurement reformPublic procurement is broadly defined as the purchasing, hiring or obtaining by any other contractual means of goods, construction works and services by the public sector. Public procurement is alternatively defined as the purchase of commodities and contracting of construction works and services if such acquisition is effected with resources from state budgets, local authority budgets, state foundation funds, domestic loans or foreign loans guaranteed by the state, and foreign aid as well as revenue received from the economic activity of state. Public procurement thus means procurement by a procuring entity using public funds. The items involved in public procurement range from simple goods or services such as paperclips or cleaning services to large commercial projects, such as the development of infrastructure, including roads, power stations and airports. Political corruption takes place mainly within large-scale procurement controlled by central government, and to a large degree in military procurement. An assessment of the defence budget in partner countries is especially delicate but indeed necessary because budget funds are fungible and because budget support is becoming a more and more important form of aid.
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CHALLENGE: HOW CAN THE CORRUPT USE OF RESOURCES FOR POWER PRESERVATION BE CONSTRAINED?
How can practices of buying political support to stay in power be restricted? The corrupt use of public and private money by power-holders to maintain their hold on power is to a large extent a question of democratic accountability. It is a question of democratic reform to strengthen parliaments, courts and other institutions of horizontal accountability (see above), but also a question of vertical accountability.
Vertical accountability is citizen influence through the election channel (electoral processes) and through direct political action. It entails giving the people a voice and creating the conditions for political change from below. It requires real opportunities for citizens to exercise their basic civil liberties like the freedom of assembly, association, speech and the press. It also requires basic political freedoms like free and fair elections (with a level political playing field, real alternatives and elections with a possible impact on the composition of government). It includes the right of citizens to change their government.
Option: Strengthened election channel
The formal side of vertical accountability is the election channel. Free and fair elections are essential, but so are the legal provisions for and functioning of political parties. Multilateral and bilateral donors have been supporting and can further support democratisation processes and the vertical accountability channel through support to the practical sides of the election systems. This can also be done through assistance to the enactment of legislation on party and campaign finance. In this line, electoral commissions and electoral monitoring become important for securing free and fair elections.
Electoral CommissionsAt the core of the administration of an election lies the official body responsible for its conduct. In some countries civil servants run the practical aspects of an election with political party representatives monitoring their conduct. However, the trend is now in favour of a separate, stand-alone Electoral Commission, which drafts in the staff needed to run the poll on election days. The basic approach to strengthening electoral commissions is to push for constitutional and legal reforms that can secure their autonomy. At the core of the Commission's independence lies the constitutional and legal basis for its mandate, the manner in which the commissioners are appointed, and how the commission is financed. Ideally, the commission should make voter registration, receive nominations of candidates and check their eligibility, design ballot papers, physically arrange and conduct the polls, and compile and announce the results.
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Legal provisions for regulating political parties are important, and so is their financing. The 'vote for me' one-man party organisations without a programme, membership base or internal democracy can be reformed through support to party system regulations and training. The democratic function of the political parties can be strengthened by enhancing their internal levels of democracy.
Support to political parties is now increasingly on the donor agenda because
they are understood as an essential part of a representative, constitutional
democracy. However, it is still unclear how political parties can be made
accountable and democratic. See the articles International
Political Party Assistance: An Overview [PDF]
and Analysis and Political
Party Aid [PDF].
Transparent Party FinancingExternal technical support to political parties can be important to "level the playing field", and assistance may include advocacy for equal access to media coverage or legal reforms to ensure equitable and transparent party financing. Support to parties can be oriented to the internal operations of parties, in fundraising, campaign planning, candidate selection and training. When directed strategically, and to the public at large, these initiatives can ensure that parties maintain real links with the community, draw broad and diverse representation, are accountable to their constituents and have democratic internal structures. Political parties often lack favourable conditions and incentives for accountable and transparent party financing, and may be dependent upon local political "barons". A sound regulatory climate should, for instance, ensure openness in who gave how much to whom - both to candidates and to parties - demand audited accounts (with a low threshold for disclosure), bans on contributions from suspect individuals and corporations, and ceilings on contributions. A project example is the NGO monitoring of the 2000 local and national parliamentary elections in Romania. This project was conducted by NGO Asociatia Pro Democratia (APD) and aimed to increase transparency in party financing by focusing attention on the issue, monitoring compliance with financing regulations, and drafting and advocating a new law on political party financing. In the local elections the project monitored political advertising through newspapers, posters, billboards, and banners in four major towns. In the national elections it monitored advertising on TV, radio, press and outdoor ads. Estimates of expenditure on advertising were compared with parties' official income declarations. The findings indicated that spending exceeded declared income tenfold across party lines. The project placed the issue of political party finance high on the public agenda and produced benchmark figures on the cost of campaign activities. The draft law served as input into later legislative amendments adopted by the government in 2003.
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Option: Strengthened civil society
Vertical accountability can also be exercised through other channels like the media, civil society, and direct political action (demonstrations, petitions, etc.). Business, traditional and religious communities, and a number of different organisations can also raise political demands if they are well organised and not subject to clientelist capture. History has demonstrated how the trading companies and economic elites ('the city bourgeoisie') of pre-industrial Europe managed to reduce the power of the absolutist kings and reform the state. One question is thus what it would take for business communities and economic elites in weak, corrupt states to demand the rule of law and institutional guarantees instead of seeking protection from some 'big men' within the system.
It is still an unresolved question how the donors can support these non-electoral channels of vertical accountability. What interest groups, business organisations, civil society organisations, religious and ethnic organisations, and media can constitute counter-balancing powers and positive change factors? The Drivers of Change analyses are attempts to bridge this knowledge gap.
Donors can, for instance, consult a range of national stakeholders and seek opportunities for intervention from outside as well as from inside the regime, within the governing party, or wherever reform-minded individuals are located. There will always be groups within a power structure, and within sectors and institutions, who are able to champion anti-corruption initiatives. Donors could give special support to these reform-minded people to give them added leverage in their opposition to the regime. Strategic donor thinking around 'drivers for change', 'promoters of change' and 'islands of integrity' fall in line with this perspective, although these approaches need further development.
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Political Corruption |
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Introduction |
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Political corruption cases |
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Challenges and options |
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Literature and links |
Query the U4 helpdesk about political corruption |
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U4 welcomes any | CONTACT |
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Alessandra Fontana
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Corruption and the international financial system| RECOMMENDED READING |
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“It is our money. Where is it gone?” is a short documentary, released by the International Budget Partnership, on an initiative, in Mombasa (Kenya) to involve communities directly in monitoring the Constituency Development Fund, a fund managed by Kenyan parliamentarians. Through social audits, communities monitored budgets and held their government accountable for managing the public’s money and meeting the needs of the poor.  Wrong, M (2009) Corruption fighters are contradictory figures, loved by what they stand for and hated by what they challenge. Michela Wrong’s account of the story of John Githongo, a Kenyan corruption fighter, explores both sides. But it goes further. It is an important read for international donors because it unveils the somewhat upsetting role played by them in the anti-corruption game. As with any view, Wrong’s stance is just one among many opinions on the issue of the international development cooperation involvement on corruption issues. But it is a good starting point for reflection. Corruption and Money Laundering: A symbiotic relationship Chaikin, D and Sharman, J C (2009) Two worlds which are intrinsically linked - the one of those who fight corruption and those who fight money laundering - have been treated in isolation so far, according to the authors. Their effort, in this publication, is to explain the nexus between corruption at the domestic level in developing countries and the international aspect of the issue, and how dealing with them separately has been not very effective at least in regards to grand corruption. Corruption and money laundering regularly appear in tandem and the presence of one reinforces the incidence of the other. This publication presents a good overview of the links between the two and can inform particularly well those interested in the Asia Pacific region. Electoral Accountability and Corruption: Evidence from the Audits of Local Governments Ferraz, C and Finan F (2009) Does the incentive for re-election induce mayors to behave less corruptly? It looks like electoral rules that enhance political accountability play a crucial role in constraining politician's corrupt behavior. This article’s findings suggest so by analyzing the case of Brazilian municipalities, where data showed that mayors in their first term misappropriated, on average, 27 percent fewer resources than mayors in their second-term. This difference was more pronounced among municipalities with less access to information and where the likelihood of judicial punishment was lower (Payment requested for access to article).
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| RELEVANT ORGANISATIONS |
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International Institute for Democracy and Electoral Assistance (IDEA) |