Development Aid and Corruption

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Development Aid and Corruption
Presentation by Angela Keller-Herzog Manager of
Global Programs Transparency International
Secretariat Berlin
February 16, 2006Dublin, Ireland
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TI Definition of Corruption

• Corruption is the misuse of
• entrusted power for private gain.

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What is TI Doing About It?

• Private Sector Business Principles for
  Countering Bribery
• International Conventions International Rule of
  Law
• Public Contracting Procurement and Integrity
  Pacts
• Political Corruption Standards for Political
  Finance, conflict of interest, support to local
  Initiatives
• Poverty, Development and Corruption
• - Humanitarian Assistance Risk Mapping
• - Education Watch
• - Aid and Corruption Policy Work

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• Ten or fifteen years ago

Would this seminar on Development Aid and
Corruption have happened?
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• Today - the seminar is on - but
• Is your organisation willing to frankly admit
  that corruption is a problem in your sector?
• Is your organisation willing to admit that
  corruption is a problem in the course of
  conducting your organisations business?
• Does your organisation have an anti-bribery
  policy? An anti-corruption policy?
  Anti-corruption program and training? Regular
  anti-corruption performance assessment?
  Evaluation?
• Business? Govt Aid Agencies? Development NGOs?

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Aid can be corrupted, aid systems can be corrupt
and aid itself can cause corruption
Yes, but a great deal of aid does reach intended
beneficiaries. Increasingly, anti-corruption
strategies are built into project and program
designs. Aid effectiveness is improving.
But also aid can be used to prevent corruption
and strengthen governance
The conversation about aid and corruption has
come out of the closet.
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How to Tackle Corruption and Aid? Principles to
Inform Anti-Corruption Approaches

• The power of the local and the political
• No quick fixes and short term solutions to
  governance problems
• Governance is the province of the governed.
• Corruption is largely a political beast that
  feeds on local power bases. External or technical
  interventions typically only succeed if
  sufficient local momentum/ownership for change
  agenda exists.

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How to Tackle Corruption and Aid?
Principles to Inform Anti-Corruption Approaches

• 2. Anti-corruption work in aid must keep primacy
  of focus on accountability for outcomes, though
  enforcing rules and accounting for inputs
  (including money) is important
• Eye on the prize
• Progress on MDGs is the collective report card.
  Must be monitored at very local level.

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How to Tackle Corruption and Aid? Principles
to Inform Anti-Corruption Approaches

• 3. Mutual Accountability
• At the centre of aid delivery is relationship of
  mutual accountability between donor institutions
  and recipient governments
• Public monitoring of Paris Declaration
• Mode of Aid delivery and accountability
  mechanisms must be designed to fit the
  donor-recipient relationship.
• Starting point cannot but be based on trust and
  partnership (change starting point)
• No trust if the relationship is perceived so
  unequal in power as to be coercive (failure of
  conditionality)

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Figure 1 Stylysed Aid Accountability Strong
Governance Scenario
Mutual Accountability
Civil Society
Civil Society
Commitment to Provide Effective Aid
Accountability to Intended Beneficiaries of Aid
Accountability to Public/ Taxpayers in Donor
Countries
Recipient Country Government
Donors
Commitment to Use Aid Well
Accounting for Development Results, Poverty
Reduction MDGs
Civil Society
Civil Society
Globalisation of Civil Society
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Figure 2 Stylised Aid Accountability Weak
Governance Scenario
Use of Access to Information Legislation
Civil Society
Use of Access to Information Legislation
Civil Society
Public/ Taxpayers in Donor Countries
Intended Beneficiaries of Aid
Donors
Weak or No Accountability
Recipient Country Government
Weak Accountability
Weak Accountability
Recourse to Justice System, Police
Recourse / Complaints Mechanisms Donor Sanctions
Civil Society
Media
Media
Media
Monitoring Analysis
Information Transmission
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How to Tackle Corruption and Aid?
Principles to Inform Anti-Corruption Approaches

• 4. Empowerment of the Poor and Intended
  Beneficiaries
• Intended beneficiaries have the strongest stake
• Formalization of recourse mechanismsaccess to
  justice

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How to Tackle Corruption and Aid?
Principles to Inform Anti-Corruption Approaches

• 5. Aid should seek to contribute to the
  prevention of corruption through strengthening
  national integrity systems (NIS)
• NIS consists of the key institutions, laws and
  practices that contribute to integrity,
  transparency and accountability in a society
• Most Transparency International (TI) National
  Chapters have done work in their countries
  applying this framework. This work and
  methodology can guide donors seeking to use aid
  to strengthen integrity and prevent corruption.

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• In closing
• TI supports incremental, multistakeholder
  approach
• Does our own organisation have
• - the safe-guards,
• - training and awareness raising,
• - engagement tools
• - anti-corruption monitoring, and
• - external evaluation in place?
• Local Chapters work with local stakeholders TI
  Ireland is well-established, TI Secretariat and
  international movement support behind the
  Chapter.