Corruption and Anti-Corruption Strategies: Issues and Case Studies from Developing Countries

CORRUPTION AND ANTI-CORRUPTION STRATEGIES: ISSUES AND CASE STUDIES FROM 3. DEVELOPING COUNTRIES ALAN DOIG AND STEPHEN RILEY Introduction Patterns of corruption vary from society to society and over time. This is particularly the case when we consider the “South”, the “Third World” or the developing countries. In order to understand the immense diversity of its origins, forms and effects across developing countries, we should examine the roles of both the internal 'stakeholders' in developing societies (such as politicians, business cliques and junior civil servants) as well as external actors (including western multinational companies and international financial institutions). In addition, reform strategies should take account of widely differing economic, legal and political contexts. Effective anti- corruption strategies need to be tailored to the social environment in which corruption occurs. As a result of this variety in patterns of corruption, there are problems in evaluating the current diversity of corruption and anti-corruption efforts; many advocate a single universal strategy to fight corruption. The intention of this chapter is to assess corruption and anti-corruption strategies in Botswana, Ecuador, Hong Kong and Tanzania, as well as attempts to reduce customs fraud in Mali and Senegal, in the light of such universal solutions. The chapter starts by outlining the current framework of governance and economic and political liberalisation within which many developing-country reform efforts are situated. This new reform agenda needs to be examined with reference to the huge upsurge in interest in reducing visible instances of public sector corruption in the late 1990s. Why has there been a 'corruption eruption' in recent years? The chapter subsequently outlines the key issues that need to be considered when combating corruption. A central section of the chapter considers the diversity of corruption and anti-corruption efforts found in the cases that were examined during the UNDP-PACT and OECD Development Centre Workshop. The concluding discussion focuses upon the major strategic choices required in designing a short-term, effective anti-corruption effort and reconsiders the universal solutions proposed. CORRUPTION INTEGRITY IMPROVEMENT INITIATIVES IN DEVELOPING COUNTRIES & 45 A Framework: Good Government and Good Governance The academic and policy-orientated debate on of populations and the provision of a responsible the character of corruption – and the effectiveness and responsive political and legal framework. of anti-corruption strategies – has been changed markedly by events in developing countries and This framework – usually termed “good the former Soviet Block in the mid- and late- government” – is expected to contain a number 1980s. Arguments about curbing corruption of key components: political legitimacy for the now take place in a new context: we are in an state through democratic elections and transfer era of political and administrative reform, of power, and an effective political opposition structural adjustment and what Samuel and representative government; accountability Huntington has called the Third Wave of through transparency and the provision of democratisation in developing and transitional information; separation of powers; effective countries. Progress towards the goal of internal and external audit; effective means of reducing corruption in the late 1990s therefore combating corruption and nepotism; official needs to be set in the context of these new competency, such as trained public servants; international policy imperatives. realistic policies and low defence expenditure; human rights as indicated by freedom of Ho w e v e r , the eradication of poverty, participatory religion and movement; impartial and accessible development and the support of human rights criminal justice systems; and the absence of have been long-standing goals (on paper if arbitrary government power. not in practice) for western countries and the international agencies they fund. Whether Good government is also seen as an essential because of the ending of the cold war and thus condition toward the wider goal of good the need no longer to support political leaderships governance. Described as the “use of political in non-aligned or developing countries, or authority and the exercise of control over because of the shift in emphasis that has society and the management of its resources followed the end of Reaganite or Thatcherite for social and economic development”, good approaches to the size and roles of the state, these goals have moved to the top of the agenda governance encompasses the “nature of with a clear emphasis that funding will now be functioning of a state's institutional and targeted to achieve them. The Final Report of structural arrangements, decision-making the Ad Hoc Working Group on Participatory processes, policy formulation, implementation Development and Good Governance of the capacity, information flows, effectiveness of Development Assistance Committee of the leadership, and the nature of the relationship OECD [1997], for example, has stressed the between rulers and the ruled” (Serageldin key themes: poverty reduction, promoting and Landell-Mills, 1991). Good governance, gender equality, raising basic education and therefore, concerns not just the organisation health standards and reversing environmental and activity of government but also the ends degradation. The OECD report, as well as those to which they are put in terms of achieving of other agencies and governments, suggests levels of economic, human and institutional that such themes are best achieved through development which “benefit the population as more participatory, transparent and accountable a whole” and promote the “literary, education societies, with an emphasis on sustainable and employment opportunities” which in turn reform, including the promotion of economic enhance the ability of the population to development and liberalisation, the improvement demand, and participate effectively in, of the social, health and educational prospects good government (World Bank, 1991). CORRUPTION INTEGRITY IMPROVEMENT INITIATIVES IN DEVELOPING COUNTRIES & 46 In general terms, good government is as an be less for self-gain than a belief in the promotion essential precondition for good governance. of, and the roles of, the state to regulate and Good government is intended to lead toward benefit society whose confidence in, and a governmental framework accepted by a acceptance of, the legitimacy of the neutrality participatory public as legitimate, responsive to and responsiveness of the state would be the needs of the population and committed to confirmed by its efforts on behalf of the improving its welfare, competent in providing population as a whole, in turn reinforcing law and order and delivering public services, the state's stability and financial viability and providing an effective policy environment (Theobald, 1993). and open-handed in its conduct. Such a system of government would also want to disengage The new international policy agenda of the late itself from direct involvement in other areas, 1990s thus involves a number of assumptions particularly economic production, to concentrate about corruption and the effective means to its efforts and abilities on societal priorities. reduce it. Corruption is most obviously defined Once political reform is under way and centrally as public office, public sector or institutional controlled economies dismantled, this argu m e n t corruption. The discussion of the reform of suggests, liberal market principles can begin to corruption is almost always conducted in the promote economic development, which in turn context of a 'governance' framework and should promote participation in the political involves optimistic expectations of both processes. The long-term economic and political economic and political liberalisation. It is also objectives would thus complement each other assumed that public sector corruption will be to work toward “an educated population, with reduced if the size of the state is reduced. both political knowledge and the will to act, Corruption will also be minimised through coupled with a modern industrial economy, a general economic liberalisation and through homogenous society, and a long-established set of political liberalisation, that is, moves towards democratic political values” (Riley, 1992, p. 18). liberal, pluralist politics, involving a freer press, competitive party politics, and the Such conditions would produce an internally revival or creation of other independent generated, stable and sustainable tax base and a institutions, reducing corruption by making sizeable economic class outside the political it more vulnerable to exposure. In this way, system whose involvement or participation in corruption will have potentially damaging the political and administrative processes would political consequences. Corruption and Change Governments and agencies are increasingly services and on the legitimacy of the state recognising the “strategic significance that and the law (United Nations, 1989). As a good government plays in the development precondition for sustainable reform, moves process”, and that good government requires toward dealing with corruption have been the “highest standards of integrity, openness emphasised while evidence of so doing is taken and transparency”, as well as strong criminal as a key component of a commitment toward justice systems,

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