Risks of Corruption to State Legitimacy and Stability in Fragile Situations Sarah Dix Karen Hussmann Grant Walton

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Risks of Corruption to State Legitimacy and Stability in Fragile Situations Sarah Dix Karen Hussmann Grant Walton U4 ISSUE May 2012 No 3 Risks of corruption to state legitimacy and stability in fragile situations Sarah Dix Karen Hussmann Grant Walton Anti- Corruption Resource Centre www.U4.no U4 is a web-based resource centre for development practitioners who wish to effectively address corruption challenges in their work. U4 is operated by the Chr. Michelsen Institute (CMI) – an independent centre for research on international development and policy – and is funded by AusAID (Australia), BTC (Belgium), CIDA (Canada), DFID (UK), GIZ (Germany), Norad (Norway), Sida (Sweden) and The Finnish Ministry of Foreign Affairs. All views expressed in this Issue are those of the author(s), and do not necessarily reflect the opinions of the U4 Partner Agencies or CMI/ U4. (Copyright 2012 - CMI/U4) Risks of corruption to state legitimacy and stability in fragile situations By Sarah Dix Karen Hussmann Grant Walton U4 Issue May 2012 No 3 This U4 Publication is a revised version of a paper produced by U4 and Tiri for the UK Department for International Development (DFID) under its Research for Development initiative. Contents Abstract .......................................................................................................................................................... iv Acknowledgements .......................................................................................................................................... v Abbreviations ................................................................................................................................................... v Executive Summary ........................................................................................................................................ vii Part I: Introduction, concepts, and methods .................................................................................................... 1 1. Introduction .............................................................................................................................................. 1 2. Literature review ...................................................................................................................................... 3 2.1 Definitions of key concepts .................................................................................................................. 3 2.2 Corruption, legitimacy, and stability .................................................................................................... 6 2.3 Assumed impact of anti-corruption efforts ......................................................................................... 8 2.4 Summary .............................................................................................................................................. 9 3. Methodology .......................................................................................................................................... 10 3.1 Research question .............................................................................................................................. 10 3.2 Case selection .................................................................................................................................... 10 3.3 Primary data ....................................................................................................................................... 10 3.4 Secondary data .................................................................................................................................. 13 3.5 Limitations.......................................................................................................................................... 14 Part II: Research Findings ............................................................................................................................... 15 4. Country Context: Political Background and Citizen Views of Corruption, Legitimacy, and Stability ...... 15 4.1 Liberia................................................................................................................................................. 15 4.2 Nepal .................................................................................................................................................. 19 4.3 Colombia ............................................................................................................................................ 23 4.4 Summary ............................................................................................................................................ 27 5. Elite Respondents’ Views: Key Issues, Legitimacy, and Stability ............................................................. 30 5.1 Contextualising concern over corruption .......................................................................................... 30 5.2 Legitimacy .......................................................................................................................................... 30 5.3 Stability .............................................................................................................................................. 32 5.4 Summary ............................................................................................................................................ 33 6. Elite Respondents’ Views: Risks of Corruption to State Legitimacy and Stability ................................... 35 6.1 How does corruption affect legitimacy? ............................................................................................ 35 6.2 How does corruption affect stability? ................................................................................................ 37 6.3 Summary ............................................................................................................................................ 40 7. Anti-Corruption Efforts and Their Effects on State Legitimacy and Stability .......................................... 42 7.1 Positive effects of anti-corruption on legitimacy and stability .......................................................... 42 7.2 Negative effects of anti-corruption on legitimacy and stability ......................................................... 44 7.3 Summary ............................................................................................................................................ 45 Part III: Conclusions and Recommendations ................................................................................................... 47 8. Conclusions ............................................................................................................................................. 47 9. Recommendations .................................................................................................................................. 49 References ..................................................................................................................................................... 54 Appendix 1: Interview Guide .......................................................................................................................... 61 Appendix 2: Government and Economic Context ........................................................................................... 64 Appendix 3: Recommendations from Respondents ........................................................................................ 67 iii U4 Issue 2012:3 Risks of corruption to state legitimacy and www.U4.no stability in fragile situations Abstract Examining the cases of Liberia, Nepal and Colombia, this study asks how corruption poses risks to political legitimacy and stability in fragile situations. The report focuses on the key role of elites and their views of the state's legitimacy in determining the extent to which there will be instability or stability. Qualitative interviews of elites show that two particular patronage scenarios are seen as threatening stability. One is when the state or illegal actors sustain a corrupt network by violently eliminating opponents. The other is when corruption benefits few people, the benefits are not distributed “fairly,” and the population’s basic needs are not met. Public opinion data suggest that despite corruption, the legitimacy of governments and public institutions in the three countries studied is reasonably high. The impact of corruption on legitimacy and stability is mitigated by other factors. Anti-corruption initiatives potentially strengthen state legitimacy, but undermine it if they fail to deliver or become too far-reaching. In conclusion, the report makes recommendations to the international community for prioritising action on corruption. iv U4 Issue 2012:3 Risks of corruption to state legitimacy and www.U4.no stability in fragile situations Acknowledgements The authors would like to thank researchers Alberto Maldonado and Ana Carolina González (Colombia); Narayan Manandhar, Rosy Adhikari, T. N. Ghemire, Bimal Gautmam, and C. K. Jha (Nepal); and G. Jasper Cummeh III, Shine Williams, Regina Elliot, Naomi Myers, and Brezhnev Paasewe (Liberia) for the crucial national-level adaptation of the research methodology, as well as for data collection, country profiles, and continuous feedback and guidance. We appreciate feedback on earlier drafts of this report from advisory committee members Liz Hart, Dan Smith, Alina Rocha Menocal, Michael Koros, and Fredrik Galtung, as well as Anna Walters and colleagues
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