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Corruption in Latin America: a Desk Assessment

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Corruption in Latin America: a Desk Assessment Corruption in Latin America: A Desk Assessment Norma Parker, Team Leader Gerardo Berthin, Roberto de Michele and Yemile Mizrahi Americas’ Accountability Anti-Corruption Project Casals and Associates, Inc. U.S. Agency for International Development (USAID) June 14, 2004 Washington, D.C. Funded under Contract AEP-I-00-00-00010-00. Task Order No. 1 Transparency and Accountability. Table of Contents Abbreviations ................................................................................................................................. i Executive Summary.....................................................................................................................iii I. Overview..................................................................................................................................... 1 A. Introduction............................................................................................................................ 1 B. Purpose of Desk Assessment.................................................................................................. 2 C. Methodology .......................................................................................................................... 2 D. Acknowledgements................................................................................................................ 3 II. Corruption in Latin America and its Consequences ............................................................ 3 A. The Extent of the Problem .................................................................................................... 3 B. Major Consequences of Corruption ...................................................................................... 8 III. Changes in the Fight against Corruption and the Promotion of Transparency in Latin America ......................................................................................................................... 11 A. What has Changed in the Last Decade?............................................................................... 11 B. Major Achievements in the Anti-Corruption Front.............................................................. 15 IV. Lessons in the Fight against Corruption and Challenges for the Future........................ 19 A. Some Emerging Lessons...................................................................................................... 21 B. Challenges for the Future .................................................................................................... 26 V. Measuring Corruption and Evaluating Anti-corruption Initiatives ................................. 29 VI. Legal Mechanisms ................................................................................................................ 35 A. No Safe Haven .................................................................................................................... 36 B. Conventions......................................................................................................................... 36 C. Compliance with the Requirements of the OAS Convention ............................................. 38 D. Is the Mechanism Working to Reduce Corruption?............................................................ 39 VII. Donors: Summary of their Anti-Corruption Efforts and their Role ............................. 40 VIII. Strategic and Policy Options for Programming, 2004-2009.......................................... 41 A. Non-Project Activities.......................................................................................................... 42 B. Strategic Activities ............................................................................................................... 44 Annex 1: Statement of Work Desk Assessment of Corruption in Latin America ................ 52 Annex 2: List of Interviews ........................................................................................................ 56 Annex 3: Bibliography................................................................................................................ 58 Annex 4: Analysis of the OAS and UN Conventions ............................................................... 69 Annex 5: Power Point Presentation........................................................................................... 82 Abbreviations AAA Americas’ Accountability/Anti-Corruption Project ACWB Anti-Corruption Without Borders APEDE Asociación Panameña de Ejecutivos de Empresas BNP Bolivian National Police CAF Corporación Andina de Fomento/Andean Development Corporation CAFTA Central America Free Trade Agreement CAPEL Centro de Asesoría y Promoción Electoral CARICOM Caribbean Community CCCC Comisión de Control Cívico de la Corrupción, Ecuador CEJA Justice Studies Center of the Americas/Centro de Estudios de las Américas CELAP Latin American Journalism Center/Centro Latinoamericano de Periodismo CEMIS The Multimodal, Industrial and Services Center in Panama CIDE Research and Teaching Center for Economics/Centro de Investigación y Docencia Económicas in Mexico CLAD Centro Latinoamericano de Administración para el Desarrollo CLD Corporación Latinoamericana para el Desarrollo, Ecuador CPI Corruption Perception Index CSO Civil Society Organization DAC Development Assistance Committee of the OECD DCD Development Co-Operation Directorate DCHA Democracy, Conflict and Humanitarian Assistance FEMICA Federation of Central American Municipalities/Federación de Municipios del Istmo Centroamericano FLACMA Latin American Federation of Cities, Municipalities and Associations/Federación Latinoamericana de Ciudades, Municipios y Asociaciones FLACSO Latin American Faculty of Social Sciences/Facultad Latinoamericana de Ciencias Sociales GDP Gross Domestic Product G-8 Group of 8 GOVNET DAC Network on Good Governance and Capacity Development IACC Inter-American Convention against Corruption ICMA International City/County Management Association ICGFM International Consortium on Governmental Financial Management ICITAP International Criminal Investigative Training Assistance Program IDB Inter-American Development Bank IDEA International Institute for Democracy and Electoral Assistance IDIF Instituto de Investigación Forense, Bolivia IFMS Integrated Financial Management System IMF International Monetary Fund INCAE Central American Institute of Business Administration/Instituto Centroamericano de Administracion de Empresas INL International Narcotics and Legal Matters Bureau (Department of State) i LAC/RSD USAID Latin America & Caribbean Bureau's Office of Regional Sustainable Development MCA Millennium Challenge Account MERCOSUR South Common Market/Mercado Común del Sur NGO Non-Governmental Organization OAS Organization of American States OECD Organization for Economic Cooperation and Development OPR Office of Professional Responsibility PARLACEN Central American Parliament/Parlamento Centroamericano PFC Periodistas Frente a la Corrupción PRD Partido de la Revolución Democrática, Mexico PTJ Policía Técnica Judicial, Bolivia SAI Supreme Audit Institutions SECODAM Secretaría de Contraloría y Desarrollo Administrativo, Mexico TAM Technical Assistance Module TI Transparency International TILAC Transparency International Latin America and the Caribbean UN United Nations UNDP United Nations Development Program UPD Unit for the Promotion of Democracy, OAS USAID United States Agency for International Development USG United States Government WB World Bank WBI World Bank Institute WHA/PPC State Department/Bureau of Western Hemisphere Affairs, Office of Policy, Planning and Coordination ii Executive Summary Purpose of Desk Assessment This desk assessment provides a baseline overview of corruption in Latin America. It provides the United States Agency for International Development’s (USAID) LAC Bureau inputs for an effective, realistic, and comprehensive regional approach over the five- year strategy period, 2004-2009. Although not exhaustive, it serves as a starting point to document recent trends, programming approaches and potential entry points for anti-corruption activities in Latin America. It draws on the literature reviewed, Casals and Associates experiences and on a series of interviews in Washington D.C.. The purpose of the assessment is to provide a basic description of the existing trends, levels and patterns of corruption, the areas where anti-corruption activities seem to be working, methodologies and advances in measuring corruption and the impact of anti-corruption activities. The assessment will highlight areas of opportunities and recommend feasible approaches. Given time and resources limitations, the assessment is limited in its scope (see Annex 1, Scope of Work). As such, it not intended to be an impact or capacity assessment; much less an evaluation of specific programs and/or projects. Rather, it describes (based on secondary information available in compliance with the Scope of Work (SOW) and time constraints) the state of corruption in Latin America after a decade of activities and transition and highlights major illustrative areas that merit regional anti-corruption attention. It maps out priorities and strategic options. Findings in Brief Corruption in Latin America is widespread, but measuring its extent is inherently challenging. The incidence of corruption in Latin America varies from country to country, ranging from “normal” to “widespread” to “systemic.” If it is normal, it may be relatively easy to identify the problem, sanction
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