Anti-Corruption Policy Concepts of Three Bilateral by umt19474

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									                                                                   Dr. Brigitte Hamm
                                                Institute for Development and Peace (INEF)
                                                                    hamm@uni-duisburg.de
                                                                    H                         H




       Anti-Corruption Policy Concepts of Three Bilateral Donors
                                                –
                           Commonalities and Differences




For presentation at the European Consortium for Political Research (ECPR) Joint Sessions of
                      Workshops, Nicosia, Cyprus, 25-30 April 2006
                Workshop 2: The International Anti-Corruption Movement


           Work in progress! Please do not cite without the author’s permission.




                                   Duisburg, April 2006
Contents

Contents                                                                                    2


Abbreviations                                                                               3


Introduction                                                                                4


1 Theoretical Context of Anti-Corruption Policies in Developing Countries                   5
       1.1 Definition of Corruption                                                         5
       1.2 Causes of Corruption                                                             6
       1. 3 The Precarious Relation between Democracy and Corruption                        8
       1.4 Strategies against Corruption                                                    8


2. The International Anti-Corruption Regime                                                 9


3. Corruption as Major Topic in Development Aid                                             12
       3.1 Common Anti-Corruption Efforts of Bi- and Multilateral Donor Agencies            13
       3.2 Anti-Corruption Strategies of Bilateral Donors                                   14
                3.2.1 Ethics and Integrity in the Agency’s Own Organisation                 16
                3.2.2 Measures to Safeguard the Use of Development Co-operation Funds in
                Projects and Programmes                                                     16
                3.2.3 Strategic Contributions to Counteract and Prevent Corruption in the
                Partner Countries                                                           16
                3.2.4 Participation in Global Anti-Corruption Work and International Co-
                operation                                                                   18
                3.2.5 Exchange of lessons learnt and evaluation.                            19


Conclusion                                                                                  19


Literature                                                                                  21




                                                                                                 2
Abbreviations

ADB         Asian Development Bank
AU          African Union
CoE         Council of Europe
DAC         Development Assistance Committee, OECD
DANIDA      Danish International Development Agency
DFID        Department for International Development
EITI        Extractive Industries Transparency Initiative
FCPA        Foreign Corrupt Practices Act
GOVNET      DAC Network on Governance
INEF        Institut für Entwicklung und Frieden
MLA         Mutual Legal Assistance
OAS         Organization of American States
OECD        Organisation for Economic Co-operation and Development
TI          Transparency International
TNCs        Transnational Corporations
UK          United Kingdom
UNCAC       United Nations Convention Against Corruption
UNO         United Nations Organisation
UNODC       United Nations Office on Drugs and Crime
USAID       United States Agency for International Development
U4          Utstein Group




                                                                     3
Introduction

Scandals about corrupt politicians, e. g. Berlusconi, illegal donations to political parties and
transnational corporations (TNCs) paying bribes, etc., have become more or less a day to day
topic in the media. Corruption is no longer considered as a peccadillo. In contrast, corruption
is taken up by civil society organizations, above all Transparency International (TI) but as
well by the International Commission of Jurists and also Amnesty International. Corruption is
blamed and shamed and to some extent made responsible for a lack of atmosphere of
departure by the media and the civil society as well.


In addition to corruption in Western countries, developing countries have become a focus of
corruption critique. While in the 1970s and 1980s corruption was considered to be a
stabilizing factor in modernizing societies, today and especially since the early 1990s,
corruption is perceived of as a hurdle for economic growth and the development of the society
as a whole. E. g., in the book of Kempe R. Hope and Bornwell C. Chikulo (2000) on
“Corruption and Development in Africa” empirical studies show the negative effects of
corruption on Foreign Direct Investments and the erosion of the legitimacy of the government
and more fundamentally the State. Riley (2000: 138) sees catastrophic effects with especially
poor people suffering. New inequalities arise because of corruption.


The following presentation is based on a study for the German Gesellschaft für Technische
Zusammenarbeit which is an executing body of the German Federal Ministry for Economic
Cooperation and Development. It was carried out together with Bernd Ludermann, an
independent journalist specializing on development problems. Prior to this study of concepts
of anti-corruption strategies by different donors, we designed a raster for capacity assessment
for the participation in the international anti-corruption regime in single countries with a focus
on Africa, which is considered to be aside with Eastern Europe the region with most severe
corruption problems (Riley 2000: 147).


After a short discussion of causes and types of corruption and the emergence of an
international anti-corruption regime, the concepts of anti-corruption policies of three donors –
USAID, DFID and DANIDA – will be presented. This is based predominantly on a content
analysis of documents of these three donors. The practical experience with these concepts can
be only touched, because it would need case studies.

                                                                                                4
1 Theoretical Context of Anti-Corruption Policies in Developing Countries

The purpose of the following theoretical discussion of corruption in developing countries is
putting anti-corruption measures of donors into a broader frame and asking if and how these
strategies reflect theoretical considerations of corruption. It starts with a short definition of
corruption and continues by differentiating between various types of corruption that might be
of relevance in anti-corruption measures of donor agencies. The focus is on the different
causes of corruption; a short thought will be on the relation between corruption and
democracy. This seems important as most anti-corruption measures are part of broader good
governance projects that refer to the democratic development of the countries concerned.




1.1 Definition of Corruption

Up to now, no official definition of corruption exists. Definitions centre on public office
holders, relate to public duties, and deviations from norms and regulations binding office
holders. In this sense, corruption may be understood as the misuse of authority or office for
personal gain. A very close definition to this is used by the World Bank, who defines
corruption as a problem of governance because of the abuse of public power for private
benefit (Tanzi 1998: 564). These definitions do not cover private-to-private corruption.


Corruption appears in different forms, e.g. bribery, nepotism, and speed-money. It can be
distinguished according to actors involved and/or how it is rooted in the structure of a society.
Actor-oriented explanations of corruption that focus on corrupt leadership, individual actors at
middle levels of bureaucracy and private sector misbehaviour are important because fighting
corruption asks for the integrity of individuals and especially the leadership (e. g.
Coolidge/Rose-Ackerman 2000). Often found distinctions are:
   •   grand (high-level, political, institutional),
   •   petty (low-level, bureaucratic, incidental),
   •   state capture (political).




                                                                                               5
Grand corruption, also known as high-level or political corruption, is also characterized as
lootocracy or cleptocracy and takes place at the level of the government with the state as the
prey within clientelist structures of the ruling elites. Examples are the privatization of state
owned firms or a Cabinet Minister who accepts bribes, trading his power for money. In cases
of grand corruption a sociological explanation may not be as useful as in cases of petty
corruption (Mc Mullan 2000).
Petty corruption or low-level-corruption means corruption at a lower level of the government
or bureaucracy, the level at which a lot of petty officials enforce the law on the general public.
Low-level-bureaucrats have impact on political decisions.
State capture “[…] refers to the actions of individuals, groups or firms in both the public and
the private sectors to influence the formation of laws, regulations and […] governmental
policies […] to their own advantage by means of illicit and non-transparent provision of
private benefits to public officials.” (Philp 2001: 2, accentuation by Philp) Thus, state capture
refers to the domination of state institutions by non-state actors in pursuit of private interests.
As a consequence, the State no longer pursues common welfare tasks but particular interests.


In addition and cross-cutting to the three types of corruption described, is systemic or
endemic corruption. Systemic corruption permeates the political system and the whole
society. Institutions, norms and rules of behaviour are affected by a corrupt modus operandi,
with bureaucrats often following the predatory of their principals in the political arena
(Gray/Kaufmann 1998). Such structural embedding of corruption is typical in patrimonial and
neopatrimonial systems. For Africa, Dia (1996: 44) criticises that “[…] the patrimonial
privatization of the state […] leads to a lack of service orientation of the state.”




1.2 Causes of Corruption

According to the various types of corruption one can differentiate causes for corruption and
more generally bad governance:
   •   Systemic reasons: Rooted in the political and social system;
   •   individual reasons: Weak and corrupt leadership;
   •   institutional reasons: Weak institutions, allocative inefficiency;
   •   political/situational reasons: Transnational crimes; transformation processes.




                                                                                                 6
It is evident that corruption cannot be explained by single individual factors but the causes of
corruption may intermix and reinforce each other. Systemic causes, above all
neopatrimonialism, refer to a system that awards benefits to politicians and their followers.
Individual explanations reduce the phenomenon to individual persons. Social and institutional
explanations, on the other hand, seek the causes of corruption in cultural institutions, poverty,
imperfect systems of law, weak and corrupt leadership, weak institutions and allocative
inefficiency (Rose-Ackerman 1978). Modernization processes as a situational explanation has
also been seen as a source of corruption (Huntington 1968).


In order to understand the causes of corruption in connection with development issues, these
causes may be relevant and have to be dealt with differently. Thus, both Rose-Ackerman’s
cultural explanation as well as Huntington’s recourse to modernization as a source of
corruption in developing countries may be appropriate to explain specific traits of corruption
in developing countries.
It is alleged that corruption can increase at periods of rapid modernization and political
change, because the latter induces changes in basic values of society. This includes the
development of achievement-based norms and identification with the state, and also deviation
from known behaviour and accepted norms. New standards can lead to a new perspective and
consequently to the condemnation of traditional practices as corrupt. E. g. traditionally, no
distinction exists between obligations and responsibilities to state and family. However, when
such distinctions are accepted associated behaviour may become nepotism and hence corrupt.
Thus, corruption can be perceived of as a product of the distinction between public and
private interests which is a dimension of modernization. Huntington argues that
modernization changes basic values, creates new sources of wealth; new classes may aspire
power by sometimes corrupt means. Modernisation may change the boundary of
governmental authority and activities (Osei-Hwedie, Bertha et al. 2000).


In the concept of Rose-Ackerman the focus is laid on the cultural aspect. Similar to
Huntington, she describes that corruption assumes a distinction between a person’s private
and public role. However, in many developing countries, this distinction does not exist in the
same way as in Western countries. Thus, the definition of bribes and gifts may be a cultural
matter and may lead to different interpretations in developing and Western countries.
Attitudes, in developed countries handled as corruption or nepotism can be interpreted as gifts
or responsibility for a member of the family in developing countries (Rose-Ackerman 1999).


                                                                                               7
Stephen Riley (2000: 138) sees many dimensions to corruption in contemporary Africa but he
puts an emphasis on the transnational dimension of corruption, including illicit trade in drugs
and guns. Riley states that the relation between corruption in Africa and transnational crime
has been neglected in research up to now.




1. 3 A Precarious Relation between Democracy and Corruption

A lot of donors emphasize good governance and especially democratization as appropriate
anti-corruption strategy. In principle, a relation between democracy and low corruption may
be assumed. However, there is corruption also in democracies as the Corruption Perception
Index of TI reveals. The correlation between democracy and corruption is debated for
processes of democratization where there is a high risk of corruption (Huntington 1968).
Coolidge and Rose-Ackerman (2000) argue that democracy is neither necessary nor sufficient
to control corruption. There may be chaotic democracies, especially in phases of transition.
They see the irony of democratic reform that may weaken undemocratic, but stable possibly
corrupt structures and lay ground for instability and even more corruption. As examples, they
refer to autocratic leaders such as Suharto in Indonesia. Looking at Botswana, Coolidge and
Ackermann argue that socio-economic development may function in spite of some corruption,
because of a responsible leadership.




1.4 Strategies against Corruption

Riley (2000) sees three distinct approaches to the analysis and control of corruption:
   •   The economic approach prioritizing the principal market relationship;
   •   The mass public opinion approach emphasizing the necessity for a mass attitudinal
       change;
   •   The somewhat newer institutional approach putting public sector and institutional
       reform first.


This last approach has its roots in neoclassical or neoliberal economic theory arguing that
officials are corrupt because of a wide discretion in their actions, too little accountability and
considerable monopoly which brings them into a position to extract economic rents. The

                                                                                                8
remedy seen here is decreasing state power by decentralization and explicit rules for
transparency and accountability within and between ministries. Thus, anti-corruption
measures become part of the liberalization and deregulation policy of the World Bank at three
levels:
    •     At the economic level liberalization;
    •     At the political level public sector reform;
    •     At the society level encourage civil society growth.




2. The International Anti-Corruption Regime

Since the late 1980s an international anti-corruption regime has emerged, which is composed
of several anti-corruption treaties and also non-binding agreements on the international and
regional level (see table 1). Partly, this endavour can be traced back to efforts of the USA to
enhance the international discussion on corruption after a national anti-corruption act, the
Foreign Corrupt Practices Act, had been released as a consequence of the Lockheed scandal in
1976. This act raised the fear of competitive disadvantages in the world economy for US
firms. Thus, the US government had pressed for the elaboration of the OECD Convention
against Corruption.


Two trends contributed to further intensify the discussion about corruption at the international
level. One is the end of the Cold War which freed Western governments from a perceived of
need to cooperate with corrupt politicians and with repressive regime. A further push to the
fight corruption came from September, 11, 2001 because steps against organised crime that is
related to corruption became part of the fight against transnational terrorism.




                                                                                              9
Table 1        International Instruments to fight Corruption
Organisation   Instruments                                            Coming into         Open to      Members of     State of       Signature
                                                                      Force                            Organization   Ratification
Hard Law
EU             Convention on the protection of the European           26.07.1995          EU           25             25             25
               Communities’ financial interests                                           members
OAS            Inter-American Convention Against Corruption           06.03.1997          All states   35             33             28

EU             Convention of the EU on the fight against corruption   25.06.1997          EU           25             25             25
               involving officials of the European Communities or                         members
               officials of Member States
OECD           OECD Convention on Combating Bribery of Foreign        15.12.1999          All states   30             36             36
               Public Officials in International Business
CoE            CoE Criminal Law Convention on Corruption              01.07.2002          All states   46             30             16
CoE            Coe Civil Law Convention on Corruption                 01.11.2003          All states   46             25             15
CoE            CoE Additional Protocol to the CoE Criminal Law        01.02.2005          All states   46             16             14
               Convention
UN             United Nations Convention Against Corruption           14.12.2005          All states   193            50             140
AU             African Union Convention Against Corruption            30 days after the   AU –         53             11             39
                                                                      15th ratification   member
                                                                                          states
Soft Law

OECD           OECD Guidelines for Multinational Enterprises          Revised Version     All states   OECD           Non-OECD-
                                                                      27.06.00                         Members 30     members 9

UN             UN Global Compact                                      Established 2000                 About 2300
                                                                                                       enterprises
ADB OECD       Anti-Corruption Initiative for Asia-Pacific            December 2000      25
                                                                                          States of
                                                                                         participating
                                                                                          Asia
                                                                                         countries
Sources: OAS 2006, OECD 2006a, b, AU 2006, CoE 2006a, b, c, UN 2006, Utstein 2006a (12.04.2006)




                                                                                                                                                 10
In the following discussion, only the UN Convention against Corruption (UNCAC) is
considered, because this international treaty disposes of the highest number of ratifications
worldwide. In the region of Africa more States have ratified UNCAC than the African Union
Convention against Corruption which is in respect to content very similar to UNCAC.
UNCAC goes back to a decision of the General Assembly from the year 2000, who
underlined the need for a convention against corruption in addition to the UN Convention
Against Transnational Organized Crime. In January 2002 the Ad Hoc Committee on the
Negotiation of a Convention against corruption to design the UNCAC was established (UN
General Assembly 2003: 1-3; A/58/422). In October 2003 UNCAC was adopted by the
General Assembly and signed on a high-level political conference in Merida, Mexico and
went into force in December 2005, after having been ratified by 30 States.


    Table 2: UNCAC Ratification according to region (up to date: 11.04.2006; totalling 50 States)
    Sub-                                     Asia and                               Eastern Europe
  Saharan    Middle East and America and      Pacific            West and                 and
                                   the
   Africa     Northern Africa Caribbean                      Central Europe           Central Asia
     18              5             10             5                  7                     5
   Benin          Algeria        Brazil      Australia            Austria               Belarus
  Burundi         Yemen          Bolivia       China              Croatia             Azerbaijan
 Cameroon         Jordan       Ecuador       Mongolia             France              Kyrgyzstan
  Djibouti         Libya      El Salvador   Seychelles           Hungary                 Latvia
               United Arab
   Egypt        Emirates       Honduras      Sri Lanka           Romania             Turkmenistan
                                                                 Serbia &
   Kenya                        Mexico                         Montenegro
  Lesotho                     Nicaragua                      United Kingdom
   Liberia                     Panama
Madagascar                     Paraguay
 Mauritius                        Peru
  Namibia
  Nigeria
  Senegal
   Sierra
   Leone
South Africa
 Tanzania
    Togo
  Uganda
Source: UNODC 2006: http://www.unodc.org/unodc/en/crime_signatures_corruption.html (read at 11.04.2006).
H                                                                                                          H




The preamble of this treaty describes the dangers of corruption for the stability of societies,
but refrains from a definition of corruption. UNCAC offers a wide interpretation of corruption
offences, including domestic and foreign bribery, embezzlement, and money laundering; it
covers the public and private sector corruption. Corruption is considered to be a transnational

                                                                                                       11
problem that asks for international cooperation against corruption. Major measures proposed
in the UNCAC are directed towards prevention, legislation and penalisation. Important topics
in the context of international cooperation are asset recovery (of illegally transferred means to
foreign countries), technical support and exchange of information, mutual law enforcement
assistance, notably in extradition, and investigations. The level of obligation within UNCAC
is a mixture of mandatory and discretionary provisions. An international state conference that
will take place by the end of 2006 will decide on the control mechanisms for the
implementation and monitoring of the treaty.


UNCAC is divided into eight chapters with 71 articles and has the following structure:
I General provisions
II Preventive measures
III Criminalisation and law enforcement
IV International cooperation
V Asset recovery
VI Technical assistance and information exchange
VII Mechanisms for implementation
VIII Final provisions


In spite of the worldwide reach and the relevance of UNCAC, Utstein (2006) points out to
some weaknesses. Most important is that – up to now – there exist no concrete provisions for
a monitoring mechanism. As many clauses are of non-mandatory nature, Utstein sees a risk of
failure to develop common standards, e. g. for political party funding, private sector
corruption and whistleblower protection. Utstein also criticises the limited coverage of
officials of international organisations involved in corruption.




3. Corruption as Major Topic in Development Aid

Corruption has become a major topic for bi- and multilateral donors. As with the concern of
good governance, the World Bank was the first who riveted on the need of anti-corruption
strategies in the development cooperation context already in the early 1990s. In a report of
1989 on Africa’s development problems, the Bank ascribes the crisis of governance to various
factors such as an insufficient separation of the public and the private sphere, a weak public
                                                                                              12
management and even mismanagement, and corruption connected with rent-seeking of the
elites. Bad governance is understood as a major hurdle to development, economic growth and
contributes to delegitimize the state.




3.1 Common Anti-Corruption Efforts of Bi- and Multilateral Donor Agencies

The view of the World Bank on corruption and more generally on bad governance has
become common and more or less taken over by other donors. There exist two important
networks of donors who try to harmonize and enhance the efficiency of coordinated anti-
corruption strategies.
One is the DAC Network on Governance (GOVNET) of the DAC/OECD which aims at
improving the effectiveness of donor assistance in governance and in support of capacity
development. GOVNET presented Principles for Donor Action in Anti-Corruption in 2005.
They provide a basic and common understanding of how donors can improve their
coordination and provide a basis for dialogue with partner countries, also in respect to
corruption.


Principle No. 1: Collectively foster, follow and fit into the local vision
Meeting the MDGs requires, inter alia, a commitment to fighting corruption and to meet
commitments agreed in relevant international and regional conventions including the UN
Convention Against corruption (UNCAC) and the recommendations of the Financial Action
Task Force (FATF) on antimoney laundering. Whenever feasible, these endeavors should be
led by the host government.


Principle No. 2: Acknowledge and respond to the supply side of corruption
Donors recognise that corruption is a two-way street. Action is needed in donor countries to
bear down on corrupt practices by home-based companies doing business internationally.
The OECD Anti Bribery Convention has helped to underline the responsibilities that OECD
member countries themselves have on the ‘supply side’ of corruption. Donors need to work
more effectively within their own domestic environments, with key relevant departments
responsible for trade, export credit, international legal cooperation and diplomatic
representation, as well as with the private sector.


Principle No. 3: Marshal knowledge and lessons systematically and measure progress
                                                                                         13
It is essential to make better use of existing knowledge and lessons learned, supporting
governments in making it an integral part of the policy making process. It is also important
that clear baselines and targets are set, while progress is systematically assessed against
results.


The other donor network, the Utstein Anti-Corruption Resource Centre, which is
predominantly internet based, was established by the so-called Utstein Group (U4) in order to
strengthen partnership for international development. U4 was founded in 1999 by Germany,
the Netherlands, Norway and the United Kingdom. In 2003, Sweden and Canada joined. The
U4 databank is designed to be an internal tool for co-ordination and learning among the U4
members and other agencies involved in international development.




3.2 Anti-Corruption Strategies of Bilateral Donors

Major demands for anti-corruption strategies stemming from the three GOVNET Principles
are that international conventions (above all UNCAC) shall be implemented. The
implementation shall be carried out with the developing countries in the ‘driver’s seat’,
meaning the emphasis is on the so-called ownership of these countries. A special focus shall
be on the supply side of corruption, thus underlining the responsibility of the donor countries
and the private sector. Furthermore, learning about appropriate measures against corruption
and exchanging experience – in short the management of knowledge – shall be of concern for
donors.


How do major donors approach these demands? How is the shape of their anti-corruption
policies, where are differences and where are commonalities? In order to answer these
questions, the anti-corruption work of three development agencies USAID, DFID and
DANIDA will be described in the following.
USAID is chosen because it is the only bilateral organisation which explicitly relates its
corruption prevention and anti-corruption policies to national foreign and security interests
and is openly willing to put pressure on governments that are not prepared for reforms.
Among European donors DFID from UK is considered to be the spearhead of anti-corruption
donor policy. UK is not only a founding member of the European donor network U4, but is
considered to be a lead member there. Among all U4 partners, DFID has the highest number


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of anti-corruption projects documented at the U4 website, which of course does not allow for
a conclusion on the quality of the projects.
The third donor agency considered, DANIDA of Denmark, is a comparatively small unit and
working predominantly through multilateral agencies. Compared with the other two agencies,
DANIDA rather abides from pressure through conditionality.


Graph 1 gives an overview of anti-corruption projects of U4 partners differentiated by topics.
72 % of these projects are described as implicit anti-corruption projects, most often these
projects are integrated into more general governance projects; 28 % of the projects listed are
explicit ones. 45 % of all U4 anti-corruption projects are situated in Sub-Sahara Africa,
followed by Eastern Europe and Central Asia with 18 %.

Graph 1: Anti-Corruption Projects of Utstein Partners according to Topics
                                     Donor strategies and
                                           policies
                                                                          National anti-
                                             5%     Other Issues
                      International crime                             corruption strategies
                                                        0%                and policies
                     and crime prevention
                              2%                                              21%

                  Non-governmental
                 insight, participation
                      and control
                          17%
                                                                                       Government
                                                                                   oversight and control
                                                                                          bodies
                                                                                           20%

                                                         Public (civil) service
                                                             reform and
                                                            management
   Source: U4 Data Bank, Download15.01.2006.                     35%



According to TI, donors’ anti-corruption policies normally embrace four levels of activities,
which also have been proposed by the World Bank as adequate anti-corruption strategies.
These levels often are interrelated and can overlap. In the following, principle 3 of GOVNET
is added as fifth level:
(1) Ethics and integrity in the agency’s own organisation;
(2) Measures to safeguard the use of development co-operation funds in projects and
programmes;
(3) Strategic contributions to counteract and prevent corruption in the partner countries;
(4) Participation in global anti-corruption work and international co-operation.
(5) Exchange of lessons learnt and evaluation.

                                                                                                           15
3.2.1 Ethics and Integrity in the Agency’s Own Organisation

Level 1 of the TI and World Bank scheme refers to mainstreaming anti-corruption activities
in-house and to the credibility of donor institutions. For this, steps against corruption within
the donor administration have been taken by many agencies and these seem to work well.
According to an evaluation of Utstein (Mathisen 2003a) most donors have an internal system
of checks and balances at their disposal. This includes an internal code of conduct with
principles of integrity for their staff. DFID appends its code to the work contract. The so-
called „Public Interest Disclosure Act“ of the year 1998 protects whistle blowers in the public
service in the UK, and thus also within DFID. DANIDA extends the demands of its code of
ethics to consultants and private contractors.




3.2.2 Measures to Safeguard the Use of Development Co-operation Funds in Projects
and Programmes


Level 2 refers to the protection of aid funds from abuse by recipient countries and their
governments. Here, DFID is strictly connecting budget support with the condition to reveal
how the money is used. The demand for ownership is not of major concern. USAID is also
following such an approach.
DANIDA takes a different path by stating that recipient governments are predominantly
responsible to the national stakeholders. In the tension between control and/or ownership
DANIDA chooses ownership: „It may be that in the short term corruption in the
implementation of development aid can be reduced by increasing controls, tightening
procedures, extending the donors’ influence and reducing the partner organisations’
responsibility, etc. – in short, returning to a more hands-on approach. But in the longer term
this will not increase partners’ capacity and change their approaches to governance, and will
therefore not lead to an overall reduction of corruption.” (DANIDA 2003: 9-10)




3.2.3 Strategic Contributions to Counteract and Prevent Corruption in the Partner
Countries


                                                                                             16
Level 3 is the major field for donors’ anti-corruption strategies. It addresses how the practical
work in developing countries should be carried out and is geared towards supporting the
recipient country in its anti-corruption policy. Three aspects are dominating the concepts of
donors:
   •     Understand anti-corruption policy as a cross-cutting endeavour;
   •     Mainstream anti-corruption strategies in all country strategies;
   •     Take a long term perspective in anti-corruption policies.


Most of the concepts considered follow the view of the World Bank that corruption can grow
where state regulation is too strong and civil servants have a broad range or discretion.
Decentralization is perceived of as a means to decrease corruption. Only few agencies, such
as UNDP, warn that with decentralisation other sources for corruption may arise.


For none of the agencies considered, corruption by the private sector is a major topic. Instead,
the focus is on corruption in the public sector. Of the three agencies looked at, only DFID
considers the supply side of corruption comprehensively and thus follows the demands of
Principle 2 of GOVNET. One important initiative in this context is the Extractive Industries
Transparency Initiative (EITI) which was initiated by Tony Blair in 2002. EITI is financially
supported by TNCs of the extractive sector; EITI asks that the governments of participating
countries follow the principles of accountability and transparency revealing how they spend
the money from extractive industries’ revenues.


All donors ask for administrative reforms as an important aspect of anti-corruption policies.
As controlling bodies, they try to strengthen the parliament, media and civil society. Although
donors ask for reform alliances between state and non-state actors, the integration of these
different actors within one project (as asked for by Riley 2000) is not elaborated up to now
and does not seem to work in practice. The focus is on the State as the example of DFID
shows.


Graph 2: DFID Anti-Corruption Activities




                                                                                              17
                                              National anti-corruption
                                              strategies and policies
                                                        28%
                                                                                            Other Issues
                                                                                                0%
                 Donor strategies and policies
                              3%
                                                                                                  Government oversight and
              International crime and crime                                                            control bodies
                        prevention                                                                          15%
                            1%


                   Non-governmental insight,
                    participation and control
                                6%




                                                            Public (civil) service reform
                                                                 and management
 Source: U4 Databank, Download 15.01.06                                  47%




A clear differentiation of countries according to the various types of corruption and the
government’s commitment to anti-corruption policies is only followed by USAID. The
agency distinguishes between reform-willing governments, those with systemic corruption
and failing/failed states where anti-corruption policy will not be of primary concern. USAID
works differently with the three types of countries and uses clear-cut anti-corruption measures
mainly with governments of the first category, while USAID will focus on awareness raising
by strengthening e. g. civil society groups and the media in the second group of countries. In
the third group anti-corruption is not the major topic. Here, USAID seeks to stabilize the
government and its legitimacy. Here, one focus will be on petty corruption.




3.2.4 Participation in Global Anti-Corruption Work and International Co-operation

Level 4 refers to supporting governments of developing countries in participating in the
international anti-corruption regime. In this context the activities of donors are more or less
geared to efforts that these countries ratify UNCAC. The next step of UNCAC will be the
Conference of State Parties by the end of 2006 and it is surprising that strengthening
governments of developing countries in their capacities for participating in these international
negotiations does not seem to be of major concern of donors. In this respect the quest for
ownership is not taken seriously. Also the implementation of the treaty in these countries does
not seem to be an explicit, but more an implicit issue for donors.


In spite of such shortfalls in respect to the negotiation process of UNCAC, DFID emphasises
the international and transnational dimension of corruption. The department played an

                                                                                                                             18
important role that the UK government was one of the first Western countries that ratified
UNCAC. In order to strengthen governments in developing countries in the transnational
dimension of corruption, DFID supports these countries by measures of Mutual Legal
Assistance (MLA). Money laundering and asset recovery are here the major topics.




3.2.5 Exchange of lessons learnt and evaluation.

Exchange of experience and knowledge management is organized by participating in
multilateral forums, above all DAC GOVNET and U4. A study on the knowledge
management on anti-corruption strategies by different donors sees the World Bank und
USAID to be leading in this respect. It also criticises that the U4 databank needs
improvement. However, the methodological approach of this study, evaluating predominantly
the websites of donors and donor institutions may be questionable. Good and extensive
profiling may have influenced the result.




Conclusion

Corruption has become a major topic of donor policies. However, the success of these policies
remains more or less in the dark as evaluations on the basis of transparent criteria are lacking.
In the concepts, there is consensus that long-term strategies are needed to anti-corruption
strategies to be successful. However, this is not reflected in the concepts and attempts to a
quick fix seem to be prevailing.


In 1996 Johan Galtung has written a short essay called an “Early Warning to the Early
Warners”. He asks from the early warners, e. g. in humanitarian catastrophes, to reflect their
own role because their presence, their way of communication and their intervention will have
an impact on the situation. They become part of the situation and influence thus the outcome
of policies. Reflection about the role and responsibility of donors in respect to anti-corruption
is seen at level 1 (ethics and integrity in the agency’s own organisation) and level 2 (measures
to safeguard the use of development co-operation funds in projects and programmes). A
critical assessment of the own role in promoting the probability of corruption seems to be
lacking at level 3 (Strategic contributions to counteract and prevent corruption in the partner

                                                                                              19
countries). As level 3 deals with the projects and the work of donors on site, institutionalised
modes of self-reflection would be very important here. Thus, it is not surprising that African
NGOs and scientists express their critique towards donor agencies which “[…] have been
making loud noises about the deleterious effects of corruption on development […]”
(Hope/Chikulo 2000: 1) without really considering neither the specific causes and cultural
embedding (Rose-Ackerman (1999) of corruption nor reflecting their own role in the spread
of corruption in developing countries (Riley 2000: 137). Riley (2000: 141) also criticises that
anti-corruption initiatives of earlier decades in Africa are now replicated by donors without
reflecting former experiences. The range of efforts made by African governments and civil
society groups seems to him not really to be acknowledged and even played down by donors
(Riley 2000: 151 and 153) and such endeavours will hardly be built in into anti-corruption
policies of donors. Furthermore Riley (2000) sees a responsibility of Western states in respect
to the spread and intensity of corruption in Africa.


Self-reflection would also be important at level 4 (participation in global anti-corruption work
and international co-operation), because this level addresses the responsibility of Western
countries for the spread of corruption and transnational crimes, i. g. trafficking, drug trading,
and money laundering. On the international level it seems that donors are predominantly
preoccupied that developing countries ratify the UNCAC and the governments of these
countries seem to try to please such demands (see table 2). Capacity building for developing
countries to participate actively in the international anti-corruption regime does not seem to
be of major concern.


It seems that donors tend not to look in detail into each country. The theoretical discussions
about causes and different types of corruption, such as systemic corruption or the cultural
roots of corruption or the increase of corruption because of an increase in transnational crime,
seem to be hardly reflected by donors. Such considerations might lead to rather differentiated
approaches according to countries or regions. Instead donors seem to prefer more universal
recipes of anti-corruption strategies and they demonstrate a deep consensus about what they
consider important in anti-corruption work. Remarkable is also that the problem of an
assumed positive relation between democracy and corruption is not further explored. There
seems to be little consideration of what type of State would be appropriate to prevent and
contain corruption. Former statements about stabilizing effects of corruption are no longer in
the discussion. The recipe to go forward seems to be the World Bank type of neoliberal slim


                                                                                              20
State. The discussion of a Weberian approach to administration reform which would
emphasise institution building in the sense of a strong administration with clear rules does not
fit into this mainstream paradigm.




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