A HANDBOOK ON FIGHTING CORRUPTION · 2019-09-06 · Phyllis Dininio Phyllis Dininio is an anti-corruption specialist with the Center for Democracy and Governance. She manages a $2

CENTER FOR DEMOCRACY AND GOVERNANCES..promoting the transition to and consolidation of democratic regimes throughout the world. ”

A HANDBOOK ONFIGHTING CORRUPTION

February 1999

Technical Publication Series

Center for Democracy and GovernanceBureau for Global Programs, Field Support, and Research

U.S. Agency for International DevelopmentWashington, D.C. 205233100

ABOUT THE TECHNICAL PUBLICATION SERIESThe USAID Center for Democracy and Governance Technical Publication Series was launched in March1998. The series includes publications intended principally for USAID personnel; however, all personsinterested in the sector may benefit from the series. Authors of individual publications may be USAIDofficials and/or other individuals from the public and private sector. The Center for Democracy andGovernance reserves the right to review and edit all publications for content and format and all are subjectto a broad USAID review process. The series is intended in part to indicate best practices, lessons learned,and guidelines for practitioner consideration. The series also includes publications that are intended tostimulate debate and discussion.

A list of other relevant publications and ordering information are included at the back of this document.

ABOUT THIS PUBLICATIONThis handbook is intended to help USAID field staff make informed decisions withregard to developing anti-

. corruption strategies. It outlines a framework for evaluating country-specific causes and appropriateresponses to corruption, and describes anti-corruption work carried out by USAID and other organizations.

Comments regarding this handbook and inquiries regarding USAID’s ongoing work in the area of anti-corruption should be directed to:

Diana Swain, Team Leader, Governance Phyllis Dininio, GovernanceTel: (202) 712-4234 Tel: (202) 712-0319Fax: (202) 216-3232 Fax: (202) 2 [email protected] [email protected]

Center for Democracy and GovernanceBureau for Global Programs, Field Support, and ResearchU.S. Agency for International Development ’Washington, DC 20523-3 100

ABOUT THE CENTERThe Center for Democracy and Governance is the U.S. Agency for International Development’s focal pointfor democracy and governance programming. The Center’s role is to provide USAID and other developmentpractitioners with the technical and intellectual expertise needed to support democratic development. Itprovides this expertise in the following areas:

. Rule of Law

. Elections and Political Processes

. Civil Society

. Governance

For further information regarding the Center or the Technical Publication Series, please contact the Centerfor Democracy and Governance Information Unit at (202) 661-5847.

113re Center would appreciate your comments as to the appropriateness and utility of this handbook Pleasecontact the Center with any comments or suggestions.

Phyllis DininioPhyllis Dininio is an anti-corruption specialist with the Center for Democracy and Governance. Shemanages a $2 million grant with Transparency International to launch anti-corruption programs in ninecountries. While writing this handbook, she carried out corruption assessments and proposed anti-corruption interventions in Bulgaria and Romania. Dr. Dininio initiated and currently chairs an intra-agency anti-corruption working group. She has designed and led sessions on fighting corruption forUSAID training workshops, and has developed an anti-corruption training module for new USAIDdemocracy officers. She also organized and chaired a panel on the role of bilateral donors in fightingcorruption for the 8th International Anti-Corruption Conference in Peru, and presented USAID anti-corruption activities at a World Bank workshop in Benin and an OECD/UNDP conference in Paris. Priorto joining the Center, she taught classes on democratization at Yale and Harvard Universities; wrote casestudies for the Harvard Business School; analyzed Latin America issues for the Congressional ResearchService; and carried out country risk analyses for Baybank Boston. Among her other publications, ThePolitical Economy of East German Privatization is forthcoming from Greenwood Publishing. Dininioholds a B.A. in economics and sociology from Harvard University, an M.A. in political and economicdevelopment from the Fletcher School, and a Ph.D. in political science from Yale University.

Sahr John KpundebSahr John Kpundeh is a consultant with experience in governance and anti-corruption issues. He has beena consultant to the Economic Development Institute of the World Bank, the United States Agency forInternational Development, the United Nations Development Programme, and several commercial fums.He is the author of Politics and Corruption in Aj+ca: A Case Study of Sierra Leone (University Press ofAmerica, 1995); co-editor of Corruption and Integrity Improvement Initiatives in Developing Countries(UNDPIOECD, 1998); co-editor of Curbing Corruption: Toward a Model for Building National Integrity(forthcoming, the World Bank); editor of Democratization in AjEca: Ajkican Views, African Voices(National Academy Press, 1992); and author of several published articles on governance, democracy, andcorruption. From 1991 to 1995, Dr. Kpundeh was a program officer on the Panel on Issues in Democracyand States in Transition at the National Academy of Sciences, Washington, D.C. Kptmdeh holds a Ph.D.from Howard University.

Robert L&kenRobert Leiken consults on governance for public and private organizations and is president of NewMoment, Inc., a nonprofit group that works on democracy issues worldwide. He has publishedextensively on issues of governance and corruption. Among his publications are Governments for Sale:Coping with the New Surge of Corruption (forthcoming, with Ambassador Michael Skol) and “The NewSalience of Corruption,” (Foreign Policy, September 1996). He has held appointments at HarvardUniversity, the Carnegie Endowment for International Peace, and the Center for Strategic andInternational Studies. Dr. Leiken also worked for the United States Information Agency and FreedomHouse and taught economics at two universities in Mexico. He holds a B.A. in English literature fromHarvard University and a Ph.D. in politics from St. Anthony’s College, Oxford University.

A HANDBOOK ON FIGHTING CORRUPTION

CONTENTS

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

II. COSTS OF CORRUPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

III. DESIGNING A RESPONSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

A.CausesofCorruption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7B. Inventory of Anti-corruption Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8C. Assessment Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15D.ProgrammingGuidance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Iv. USAID ANTI-CORRUPTION EFFORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

A.USAID/Washington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19B.FieldMissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20C.Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

V. PARTNERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

A. USAID Implementing Mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23B. International Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23C. Private and Nongovernmental Organizations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23D. Other United States Government Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24E.WebSites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

EXECUTIVE SUMMARY

This handbook presents a framework to assist USAID missions develop strategic responses to publiccorruption. The framework sets out root causes of corruption, identifies a range of institutional andsocietal reforms to address them, and introduces a methodology for selecting among these measures.

In general terms, corruption arises from institutional attributes of the state and societal attitudestoward formal political processes. Institutional attributes that encourage corruption include wide authorityof the state, which offers significant opportunities for corruption; minimal accountability, which reducesthe cost of corrupt behavior; and perverse incentives in government employment, which induce self-serving rather than public-serving behavior. Societal attitudes fostering corruption include allegiance topersonal loyalties over objective rules, low legitimacy of government, and dominance of a political partyor ruling elite over political and economic processes.

Possible responses to these underlying causes of corruption include institutional reforms to limitauthority, improve accountability, and realign incentives, as well as societal reforms to change attitudesand mobilize political will for sustained anti-corruption interventions. While the handbook offers detaileddescriptions of different types of institutional and societal reforms, a strategy to fight corruption cannotand need not contain each of the institutional and societal reforms discussed. Strategy choices must bemade after taking into account the nature of the corruption problem and the opportunities and constraintsfor addressing it.

Because a strategy must be tailored to fit the particular circumstances of a country, designing a strategyrequires assessing the level, forms, and causes of corruption for the country as a whole and for specificgovernment institutions. In particular, strategy formulation requires taking a hard look at the level ofpolitical will for anti-corruption reform in government and civil society. Opportunities for reform canstem from reformists’ tendencies within the government, a change in government, public outrage overscandals, an opposition movement, an economic crisis, or external pressure. It is also essential to takecareful stock of potential supporters and opponents within the ruling parties, the opposition, the judiciary,and the military, among others. The assessment must consider each party’s interests and motivations andhow these might play into an anti-corruption strategy.

If there is little or no opening to work in anti-corruption, the strategy should focus on societal measures toincrease awareness of the problem and develop a constituency for reform. However, if openings arepartial or significant, the strategy should combine societal reforms to institutionalize political will withtargeted institutional reforms. The strategy should target institutions (such as the judiciary, police, orcustoms, licensing, procurement, and tax offices) where the problem of corruption is serious, yet theopening to work there is substantial (e.g., where there is a pro-reform minister).

Coordination with other multilateral and bilateral organizations and NGOs is critical to USAID’s work.Accordingly, the final section of the handbook describes the work of other organizations involved withanti-corruption initiatives.

A Handbook on Fighting Corruption 1

I. INTRODUCTION

This handbook aims to assist USAID missionsand their partners develop anti-corruptioninitiatives. It draws upon the growing literatureand practical experience in this field to provideguidance on strategies for fighting corruption.Although the problem itself is not new,opportunities to work in this area have emergedonly recently. Indeed, corruption is no longer ataboo topic, but one that policymakers,businesses, civil society organizations, media,and donors from all regions are confrontingopenly.

A number of factors explain new interest in theissue. Since the end of the Cold War, donorgovernments have placed less emphasis onideological grounds for foreign assistance andmore emphasis on trade and development, bothof which are undermined by corruption. At thesame time, businesses have faced ever stiffercompetition with the globalization of trade andcapital markets, and have become less willing totolerate the expense and risk associated withcorruption. On the other end of the tradeprocess, countries with high levels of corruptionhave found themselves less able to attractinvestment in a competitive global market. Overthe same period, transitions to democracy haveenabled citizens to use the vote and new-foundcivil liberties (e.g., freedom of speech, ofassembly, etc.) to confront corruption,prompting leaders and opposition figures toshow strong anti-corruption commitment.

This handbook on anti-corruption programmingcontains five sections. Section II lays out thedevelopment problems posed by corruption andarticulates the need for anti-corruptionprogramming. Section III provides a frameworkfor developing responses to these problems. Itidentifies root causes of corruption which callfor both institutional and societal reforms toaddress them. For both categories of reform, thehandbook presents an inventory of anti-corruption measures. The handbook then lays

out a framework for selecting among thesemeasures to design a USAID anti-corruptionstrategy in a specific country. This frameworkincludes a methodology for assessing the natureof the corruption problem and the opportunitiesand constraints for addressing it. The frameworklinks the assessment to a strategy, offeringguidelines for prioritizing and sequencing anti-corruption activities in various situations.

Section IV of the handbook provides anoverview of USAID anti-corruption efforts todate. It describes global bureau and regionalbureau initiatives in Washington as well asmissions’ initiatives since 1996.This section alsosuggests indicators for reporting results.

Section V provides an overview of the activitiesof other donors and organizations working inanti-corruption and lists contracting mechanismsavailable for obtaining assistance in this area. Itdirects readers to additional information onrecent anti-corruption initiatives by internationalorganizations such as the World Bank, theOrganization for Economic Cooperation andDevelopment (OECD), the InternationalMonetary Fund (IMF), and the Organization ofAmerican States (OAS); private andnongovernmental organizations; and otheragencies of the US government.


II. COSTS OF CORRUPTION

In broad terms, corruption is the abuse of publicoffice for private gain. It encompasses unilateralabuses by government officials such asembezzlement and nepotism, as well as abuseslinking public and private actors such as bribery,extortion, influence peddling, and fraud.Corruption arises in both political andbureaucratic offices and can be petty or grand,organized or unorganized. Though corruptionoften facilitates criminal activities such as drugtrafficking, money laundering, and prostitution,it is not restricted to these activities. Forpurposes of understanding the problem anddevising remedies, it is important to keep crimeand corruption analytically distinct.

Corruption poses a serious developmentchallenge. In the political realm, it underminesdemocracy and good governance by subvertingformal processes. Corruption in elections and inlegislative bodies reduces accountability andrepresentation in policymaking; corruption inthe judiciary suspends the rule of law; andcorruption in public administration results in theunequal provision of services. More generally,corruption erodes the institutional capacity ofgovernment as procedures are disregarded,resources are siphoned off, and officials arehired or promoted without regard toperformance. At the same time, corruptionundermines the legitimacy of government andsuch democratic values as trust and tolerance.

Corruption also undermines economicdevelopment by generating considerabledistortions and inefficiency. In the privatesector, corruption increases the cost of businessthrough the price of illicit payments themselves,the management cost of negotiating withofficials, and the risk of breached agreements ordetection. Although some claim corruptionreduces costs by cutting red tape, an emergingconsensus holds that the availability of bribesinduces ofIIcials to contrive new rules anddelays. Where corruption inflates the cost of

business, it also distorts the playing field,shielding firms with connections fromcompetition and thereby sustaining inefficientfillllS.

Corruption also generates economic distortionsin the public sector by diverting publicinvestment away from education and into capitalprojects where bribes and kickbacks are moreplentiful. Officials may increase the technicalcomplexity of public sector projects to concealsuch dealings, thus further distorting investment.Corruption also lowers compliance withconstruction, environmental, or otherregulations; reduces the quality of governmentservices and infrastructure; and increasesbudgetary pressures on government.

These distortions deter investment and reduceeconomic growth. In quantitative terms, Mauro’sanalysis of 94 countries suggests that a reductionin corruption of 2.38 points on his lo-point scalewould increase a country’s annual investment by4 percent of gross domestic product (GDP), andwould increase annual growth of GDP per capitaby 0.5 percent (Mauro 1997). ‘Ihe World Bank’sThe State in a Changing World, WorldDevelopment Report 1997 further refines thisrelationship between corruption and investmentby distinguishing between the level ofcorruption and the predictability of paymentsand outcomes. It suggests that investment dropsoff most in countries where corruption levels arehigh but the predictability of payments andoutcomes is nonetheless low.

A Handbook on Fighting Corruption

III. DESIGNING ARESPONSE

A. Causes of Corruption

Responding to the development challengesposed by corruption requires an understandingof its causes. From an institutional perspective,conuption arises where public officials havewide authority, little accountability, andperverse incentives. This means the moreactivities public officials control or regulate, themore opportunities exist for corruption.Furthermore, the lower the probability ofdetection and punishment, the greater the riskthat corruption will take place. In addition, thelower the salaries, the rewards for performance,the security of employment, and theprofessionalism in public service, the greater theincentives for public officials to pursue self-serving rather than public-serving ends. Thisinstitutional perspective suggests fightingcorruption through the following:

l Reducing the role of government in economicactivities (to limit authority)

l Strengthening transparency, oversight, andsanctions (to improve accountability)

l Redesigning terms of employment in publicservice (to improve incentives)

While this perspective gives us a parsimonious Responses to corruption, therefore, includecut on the problem, it does not take into account institutional reforms to limit authority,socially-embedded incentives to participate in or improve accountability, and change incentives,withstand corrupt practices. Independent of as well as societal reforms to change attitudesopportunities, costs, and professional incentives and mobilize political will for sustained anti-within government institutions, general attitudes corruption interventions. Within these two broadtoward formal political processes influence categories, the list of potential responses isconuption levels. A number of factors can extensive. What follows is an inventory ofpredispose groups or societies to disregard institutional and societal reforms. Clearly,formal rules. In many cultures, particularly in however, it is not possible or even necessary tothe context of poverty or conflict, allegiance to undertake all these initiatives in an anti-personal loyalties such as one’s family or ethnic, corruption effort. The mix of initiatives, thereligious, or socioeconomic identity outweighs relative emphasis placed on them, and the

allegiance to objective rules. Patronage systems,in fact, represent a common means of securingadvantage through personal rather thanformalized channels. In other cases, the lowlegitimacy of government (because it isrepressive, ineffective, discordant with culture,or imposed by foreign rule) induces disregardfor formal rules. Similarly, dominance of apolitical party or ruling elite over political andeconomic processes, or exclusion ofmarginalized or poorly organized groups fromthe same, creates incentives for thosedisadvantaged by the system to operate outsideit.

These considerations suggest anti-corruptionefforts should also address attitudes towardcorruption. Most generally, such efforts need toraise awareness about the costs of corruption forthe country’s political and economicdevelopment. This means convincing the publicthat corruption is an extremely damagingpattern of interaction for society as a whole, andthat the collective damages over time outweighany possible short-term personal benefits. Alongwith raising awareness, these efforts need tostimulate demand for reform, helping mobilizecitizens and elites to push anti-corruption ontothe political agenda. To the extent possible, anti-corruption efforts should also address theunderlying structures that create anti-systemattitudes, for example, by improving the accessof marginalized groups to the political arena.


sequence in which they should be pursued willvary from country to country and from time totime. For this reason, the handbook does notprescribe a model strategy for fightingcorruption. Rather, it presents a framework foranalyzing the problem and designing a strategyto fit the context. After presenting the inventoryof possible initiatives, the handbook introduces aframework for deciding what needs to be done,in what sequence, and with what sort of politicaland economic support.

B. Inventory of Anti-corruption Measures

As discussed above, efforts to fight corruptioninclude institutional reforms and societalreforms. Institutional reforms include measuresto reduce government authority, increaseaccountability, and align official incentives topublic ends. These measures target governmentinstitutions and processes in all branches andlevels of government. Societal reforms, on theother hand, include measures to change attitudestoward formal political processes and tomobilize political will for anti-corruptionreform.

I. Institutional Reforms: Limiting Authority

Privatization-Privatization offers a clearmeans to limit the authority of government. Byremoving the government from economicactivities, it eliminates opportunities forrecurrent corrupt dealing in sales, employment,procurement, and financing contracts. However,as many privatization programs have revealed,the process of privatizing state-ownedenterprises and government services itself isvulnerable to corruption. To ensure the integrityof the process, privatization requires specialmeasures of transparency. In addition,successful privatization programs requireadequate regulatory and commercial legalframeworks to protect consumers and investorsand to create conditions for competition.Without these frameworks in place, privatizinggovernment operations may only shift

rent-seeking from the public to the privatesector. Indeed, in many developing andtransitional countries, unregulated or poorlyadministered privatization has enriched insidersthrough skewed prices and conversion of publicmonopolies to private ones.

Liberalization-Liberalization offers a morestraightforward means to limit state authority.Eliminating tariffs, quotas, exchange raterestrictions, price controls, and permitrequirements simply strips officials of the powerto extract bribes. At the same time, removingsuch controls reduces transaction costs,eliminates bottlenecks, and fosters competition.In recent years, accession requirements to theWorld Trade Organization (WTO) have pushedmany countries to liberalize their economies.For example, in joining the GATT (the WTO’spredecessor) Mexico dropped the percentage ofimports subject to licensing from 92 percent to22 percent and reduced the average tariff from23.5 percent to 12.5 percent. Transitions fromcommunism have also entailed substantialrecision of controls. A special presidentialcommission in -Ukraine, for example, recentlyreduced the number of licenses required to opena business from 100 to about 55.

Competitive Procurement-Competitiveprocurement limits the authority of governmentofficials thereby guarding against corruption.Competitive procurement removes personaldiscretion from the selection of governmentsuppliers and contractors by prescribing an openbidding process and laying out clear proceduresand criteria for selection. Because a corruptprocurement process can derail theirdevelopment efforts, donors are makingprocurement reform a priority. For example, asan outcome of the 1997 Global Coalition forAfrica’s Policy Forum on Corruption, the WorldBank is assisting the governments of Benin,Ethiopia, Malawi, Mali, Tanzania, and Ugandareform their procurement procedures. Yet,absent such government leadership, privateftrms may foster a competitive process. Through

8 A Handbook on Fighting Corruption

anti-bribery pacts such as TransparencyInternational’s “islands of integrity” approach,bidders agree not to pay bribes for a governmentcontract and post sizable bonds that are subjectto forfeiture in the event of non-compliance.Firms in Ecuador, Argentina, and Panama areexperimenting with anti-bribery pacts.

Competition in Public Service-Competitionin public service reduces opportunity forcorruption by removing the monopoly power ofany one government office. In so doing, itdiscourages extortion since customers can taketheir business to a competing office whenconfronted with irregular demands or service.Overlapping jurisdictions, in the case of motorvehicle bureaus or passport agencies, or privateand public provision of service, in the case ofmail delivery or trash removal, are two ways ofinstituting competition in public service.

2. Institutional Reforms: ImprovingAccountability

Improving accountability entails efforts toimprove both the detection and the sanctioningof corrupt acts. Better detection requiresmeasures to improve transparency and oversightwhile better sanctioning involves establishingcriminal and administrative sanctions,strengthening judicial processes, and improvingelectoral accountability. A description of suchmeasures follows.

Freedom of Information Legislation-Freedom of information legislation improvesaccountability by enhancing the transparency ofgovernment operations. It counteracts officialsecrets acts and claims of national security thatimpede corruption inquiries. Freedom ofinformation legislation also informs citizens ofthe procedures for government service,curtailing attempts to subvert the system or todemand gratuities for information that legallyshould be public. The Ugandan government, forexample, now displays in relevant offices theregulations, procedures, and fees for public

services such as registering a vehicle or startinga company.

Financial Disclosure-Financial disclosurelaws improve accountability by enhancing thetransparency of officials’ finances. The lawsrequire public officials to declare their assetsand incomes and so act as a deterrent toprofiting through corruption. Public officials caninclude cabinet ministers, members ofparliament, and top civil servants. In somecountries, laws require declarations uponaccession to and departure from office. Otherlaws prescribe yearly monitoring. Countriesincluding Argentina, Brazil, Chile, Nicaragua,Poland, Sierra Leone, Uganda, Tanzania, SriLanka, and Russia have recently passed suchlegislation. While in most cases the laws haveelicited declarations, public access to them orverification of their accuracy has often been aproblem.

Open Budget Process-Open budget processesimprove accountability by enhancingtransparency of government expenditures andincome. While the principle applies equally tonational and local level budgets, the immediacyof local government provides an impetus andentree for citizens to participate in the processthat are often missing at the national level. Forthis reason, recent efforts to promote transparentbudgeting have concentrated on the local level.For example, decentralization programs inBolivia, Paraguay, and El Salvador havefeatured improved citizen participation in andoversight of local budget processes.

Financial Management Systems and AuditOffices-Modem financial managementsystems improve accountability by enhancingtransparency and oversight in governmentoperations. Originally developed in response tothe 1987 financial collapse in New York City,these systems apply high technology to the fightagainst financial mismanagement andcorruption. Measures to improve financialmanagement systems involve design of financial


software, installation of hardware, and trainingof accounting and audit staff. Tools for financialmanagement systems include the following:

l High-speed computer comparisons of data thatcan disclose such abuses as duplicatepayments to suppliers, double-salaried staff,and retirees drawing remuneration

l Computer-assisted audits allowing selectedsampling of activities subject to abuse

l Automatic flash points that call attention torepetitive or inappropriate budgetarymaneuvers, or to deviations in areas of highvulnerability

l General ledger controls over valuableresources such as land, buildings, vehicles,computers, and electronic equipment

l Single bank accounts used to consolidatepublic funds and eliminate “off-budget”expenditures

Many governments in Latin America areinstalling financial management systems. Forexample, in 1996 Argentina announced aprogram to use modem methods of financialmanagement to detect and prevent fraud indecentralized social security, customs, taxation,health insurance, and medical assistanceagencies.

Inspector General/Ombudsmen/Anti-Corruption Agency-These governmentoffices improve accountability by overseeinggovernment operations. In general, they lookinto allegations of mismanagement and reviewadministrative systems to ensure they adhere toanti-corruption procedures. Specificresponsibilities and titles of these offtces varyfrom country to country. For example, review ofcorruption allegations is undertaken by theInspector General in Uganda, the Anti-Corruption Bureau in Tanzania, and the Unit forMonitoring Accountability and Transparency in

Sierra Leone. In many cases these officesfunction narrowly as ombudsmen, registeringcitizen complaints and serving as publicadvocacy offices. In other cases, such as withBolivia’s UDECO (Unidad de Defensa DelCiudadano contra la Corrupcih), theycoordinate anti-corruption efforts amongagencies. Still others have investigatory andprosecutorial powers (e.g., Peru’s Tribunal forPublic Ethics, Uruguay’s Defensoria del Pueblo,and Botswana’s Directorate on Corruption andEconomic Crime). The Directorate onCorruption and Economic Crime (DCEC),modeled after a similar agency in Hong Kong,not only investigates and prosecutes offenders,but designs strategies to prevent corruption andengages in public education. Officially under thepresident’s jurisdiction, it is operationallyindependent and can prosecute whomever itwishes. Although hampered by a slow courtsystem, it boasts a high conviction rate and hascollected fines in excess of its operating costs.

Legislative Oversight-Legislative oversightprovides a powerful check on executiveauthority, enhancing accountability where adominant executive branch might otherwiseoperate with impunity. To be effective, however,legislatures require such resources as atechnically competent staff, strong committees,budgetary independence, significantbureaucratic oversight powers, and aconstitutional role in approving politicalappointments. In many countries, legislatureslack such resources and are thus manipulated orbribed by strong executives. Programs tomodernize legislatures and workshops to helpmembers of parliament understand their role ingovernance aim to strengthen their oversightcapacity. Requiring that anti-corruption agenciesreport to parliament, rather than the executive,also facilitates legislative oversight. Recently,amendments to legislation in Zambia andUganda have directed the Anti-CorruptionCommission and the inspector-general,respectively, to report to parliament rather thanthe head of state.


Since the late 197Os, restoration orestablishment of democracy has producedstronger legislative bodies in many countries.Most notably in Latin America, newly-restoredlegislatures have taken a leading role incombating executive branch corruption. Themost conspicuous example of this was thecongressional impeachment of BrazilianPresident Fernando Collor de Mello, initiated bythe Parliamentary Commission of Inquiry. Morerecently, the Brazilian Senate formed a specialcommittee to investigate allegations thatgovernment officials had been involved infraudulent sales of government bonds. Asanother example, the Kuwaiti parliament hasbecome quite assertive since its reinstatementfollowing the Gulf War. Recently, it divulgedthe royal family’s practice of demandingkickbacks for favors and exposed corruptprocurement procedures in the Ministry ofDefense.

Hot Lines and Whistle-Blower Protection-Hot lines improve accountability by enlisting co-workers, businesses, and citizens to reportcorrupt acts. The government office responsiblefor investigating such acts often operates a hotline. For example, in Hong Kong, theIndependent Commission Against Corruptionruns a hot line and guarantees that everyallegation is investigated. It also protects thosewho make reports by granting file access toofficers on a “need to know” basis only.However, in cases where anonymity cannot beguaranteed, those who protest corruption oftenplace themselves at risk. In many countries,whistle blowers are often fired or punished,subjected to administrative harassment, andexposed to violence. For this reason, anti-corruption efforts need legislation ‘to protectwhistle blowers from official sanctions or evento reward them. Uganda, in fact, is nowconsidering a recommendation to rewardofficials who provide information leading to thesuccessful recovery of embezzled public funds.

Sanctions-Applying sanctions to corrupt actsis an important step toward establishingaccountability. In large part, sanctions arecentered on legislation to criminalize corruption,which many countries have introduced in recentyears. For example, in Uganda in 1995, the LawReform Commission established that allembezzled monies must be returned to the state;misappropriated properties or goods must beforfeited; and mandatory minimum sentencesmust be given for each offense. Similarly, inMalawi, the Corrupt Practices Act of 1995prescribed criminal penalties for soliciting,offering, and accepting bribes, and authorizedrecovery of illicit proceeds from corruption.

In some countries, penal codes allowprosecution not only for direct evidence ofbribery, but also for possessing wealth andincome that cannot be traced to lawful activities.Such laws have been used successfully againstdrug lords in Colombia and against the brotherof former President Carlos Salinas de Gotari inMexico. A few countries, such as Thailand andHong Kong, even place the burden of proof onthe accused-a government official can berequired to show that his or her wealth, andperhaps that of immediate relatives, wasacquired legally. This issue was a point ofdisagreement during deliberations over the 1996Inter-American Convention against Corruption.Many Latin American countries argued thatrequiring the government to prove illicitenrichment would be ineffective and that theburden of proof should be placed on theaccused. The United States argued that thepresumption of innocence ought to be aconstitutional principle. Negotiations ultimatelysettled on the latter position.

In addition to criminalizing corruption,governments can establish sanctions for smallercases of corruption outside the formal legalsystem. Authorities can fire public officialsengaged in corrupt deals and render themineligible for pension distributions or futurepublic employment. Authorities can also deny


public services to users found offering bribes, orrevoke their eligibility to bid on procurementand privatization contracts, either on apermanent basis or for a period of time.

Judicial Reform-Accountability requires notjust establishing sanctions, but enforcing themon an impartial basis. Without enforcement,tough laws have no impact on reducingcorruption, and may foster general cynicismabout reform efforts. Yet to hold public officialsaccountable to anti-corruption laws, judiciariesneed independence from the executive branch aswell as institutional capacity. Strengtheningjudicial independence involves revisingprocedures for appointing, assigning,remunerating, and removing judges andprosecutors to insulate them from politicalinfluence. In some cases, judicial reforms haveestablished an independent prosecutor, inaddition to the public prosecutor, to carry outinvestigations of senior officials. Strengtheningthe institutional capacity of the judiciary,meanwhile, involves modernizing court systemsto facilitate swift and fair procedures. This canbe done by augmenting and upgrading staffs,improving legal training, establishing codes ofconduct for judges, attorneys, clerks andlitigants, and strengthening investigatorycapabilities.

In recent years, targeted efforts to strengthenjudicial independence and capacity have beenmost extensive in Latin America. A number ofcountries in the region have undertakenambitious reforms to improve the skills,procedures, and infrastructure of the courts,often with donor assistance. Most notably,efforts to strengthen the office of prosecutorhave gathered force. In Colombia, for example,the 1991 Penal Process Code grants significantinvestigatory powers to its Fiscalia General(Attorney General). This official is appointed toa four-year term by the Supreme Court andcannot be dismissed or reappointed. Colombia’sFiscal General, Alfonso Valdivieso, hasachieved international renown for his

prosecution of drug lords and high governmentofficials. Operating with administrative andbudgetary autonomy, the office investigates andbrings charges before judges, directs andcoordinates the functions of the Judicial Police,and protects victims, witnesses, and othersinvolved in proceedings. As another example,the Honduran Public Ministry Law of 1993created an independent and autonomous FiscaliaGeneral Among its five agencies is the FiscaliaGeneral contra la Corrupcidn (AttorneyGeneral against Corruption), which hasconsiderable resources and staff. For the firsttime in the country’s history, the FiscaliaGeneral leveled charges against widespreadcorruption in the military.

Independent of such judicial reforms, politicalshifts can also provide openings for judicialassertiveness. The Indian Supreme Court,responding to a public interest lawsuit byjournalists, put pressure on investigators to stopdelaying a trial process. Public opinion pollsshow widespread backing for the court’sactivism that now extends to environmental andconsumer protection, public health, campaignfinance, and market reforms. Surveys rate itIndia’s most trusted institution, followed by thepress, with parliament last.

Elections-Free and fair elections provide animportant mechanism for holding publicofficials accountable. Citizens can withholdvotes from incumbents as a sanction againstcorruption, and elect opposition candidatesdenouncing such dealings. In Mexico, Tanzania,and Bulgaria, for example, voters have electedopposition candidates running on anti-corruptionplatforms. However, to work as a check onofficials’ actions, elections must be accompaniedby meaningful guarantees of civil liberties tovote and nm for office, as well as by fair votingprocedures. Campaign finance poses a particularchallenge for fairness and can be a significantsource of corruption. For this reason, campaignfinance reforms that limit or regulate donations,require disclosure of funds, provide free


television time, and eliminate off-budgetgovernment funding sources are an importantcomponent of accountability.

3. Institutional Reforms: RealigningIncentives

Institutional reforms to fight corruption alsoinclude incentives to promote ethical behavior inpublic service. Such incentives feature activehuman resources management to develop aprofessional, committed work force. As a firststep, personnel systems can eliminateunnecessary positions and reduce the number ofemployees through hiring freezes and attrition,retirement packages, dismissals, and removal ofghost workers from payrolls. Personnel systemscan also tighten job requirements, establish anti-nepotism regulations, develop codes of ethics,and provide training where needed.Compensation systems must then provide aliving wage, but also ensure sufficientremuneration to attract and retain qualifiedpersonnel. In some cases, salary increases canbe financed through reductions in force. Inaddition, performance-based incentives canbolster morale, professionalism, andproductivity. Systems can link performance tocompensation or to such non-monetary rewardsas more challenging tasks, influentialassignments, public recognition, andprofessional awards. Regular performanceassessments become necessary components ofan incentive system.

In the 198Os, Ghana introduced institutionalreforms in tax and customs administration. Thegovernment dismissed or retired the mostcorrupt officials, improved wages and workingconditions, and offered performance incentivesfor individuals and for the National RevenueService as a whole. Revenue targets wereestablished, and the National Revenue Servicewas given a bonus of 3.5 percent of tax revenueand 2.5 percent of customs revenue. As a result,tax and customs revenue rose from 6.6 percentto 12.3 percent of GDP between 1984 and 1988.

4. Societal Reforms: Changing Attitudesand Mobilizing Political Will

In addition to institutional reforms, efforts tofight corruption include societal reforms tochange attitudes toward formal politicalprocesses and to mobilize political will forchange. Societal reforms generate newinformation about the costs and causes ofcorruption to stimulate demand for change andprovide guidance on what to change. Societalreforms also foster structures to facilitatemonitoring and advocacy by civil society.Without the mobilization of civil society,governments are unlikely to follow through onanti-corruption reforms once they enterpolitically difficult terrain.

Surveys-Surveys work to change attitudes andmobilize political will by defining the problemand focusing efforts to address it. Surveys canaddress the issue of corruption directly (e.g.,corruption perception surveys) or approach itindirectly in politically sensitive situations (e.g.,service delivery surveys). Corruption perceptionsurveys ask individuals or businesses for theirperception or experience of corrupt practices,often generating comparisons across branchesand levels of government for national surveys,or across countries for international surveys. Inits annual Corruption Perception Index,Transparency International draws upon seveninternational surveys of business people,political analysts, and the general public to rateapproximately 50 countries on perceived levelsof corruption. Service delivery surveys, bycontrast, ask public service users about theirsatisfaction with specific services, such asutilities, housing, health, or education. Whilethey may ask the total cost, waiting time, andnegotiating time for service, these surveys donot ask for an appraisal of the level ofcorruption. They nonetheless provide essentialinformation to help design reforms, monitorresults, and ultimately make services moreresponsive to citizens’ demands. The EconomicDevelopment Institute (EDI) of the World Bank


and CIET International have assistedgovernments conduct service delivery surveys inBosnia, Nicaragua, Tanzania, Uganda, Mali, andJordan.

Public Relations Campaigns-Public relationscampaigns work to increase understanding aboutthe harm done by corruption and the ways tofight it. Using the mass media, communityactivities, or school programs, they highlight thelink between corruption and poorer publicservices, lower investment, smaller growth rates,and more inequality. They also emphasizecitizens’ rights to services and demonstrate thatcorrupt officials are stealing the public’s money.At the same time, these campaigns articulateprocedures for reporting corrupt practices andadvocating for reform. Once people feel theyhave a stake in eliminating corruption and themeans to do something about it, they candemand more action from their representativesand strengthen political will. Notable sponsorsof public relations campaigns include PoderCiudadano, an Argentine NGO that developedimaginative television and radio spotsdenouncing corruption and sponsored an anti-corruption poster contest for school children;and Hong Kong’s Independent CommissionAgainst Corruption which has used pressreleases, public information announcements,interviews, documentaries, posters, informationleaflets, meetings, public speaking, and work onschool and university curricula to convey ananti-corruption message to the public.

Investigative Journalism-Investigativejournalism fosters anti-corruption attitudes andmobilizes political will for reform. In exposingcorrupt acts, investigative reporting elicitspopular indignation about corruption and putspressure on the government to change. It isprecisely this risk of exposure that motivatesgovernments to censor the press and jailjournalists. A free press, however, is notnecessarily sufficient in the fight againstcorruption. In many countries, journalists needtraining about investigative techniques,

professional standards, and newsroomorganization. In Tanzania and Uganda, ED1organized workshops to train investigativejournalists. These workshops were designed toraise the skills and confidence of journalists andto cultivate the media’s commitment to fightcorruption.

Civic Advocacy Organizations-Civil society,where it is free to organize and act, can becomea vital partner in developing and strengtheningethical practices in the public sector. While agrowing number of civic advocacy organizations(CAOs) have emerged to fight corruption, arange of other civil society organizations cancontribute to the cause without being organizedspecifically for that purpose. Most prominently,business and professional associations can beweighty advocates for government reform and atthe same time effective champions ofprofessional standards and self-regulation. Forexample, in 1996, the International Chamber ofCommerce adopted rules of conduct thatprohibit extortion and bribery for any purpose.The Chamber is working with nationalgovernments to enact or strengthen legislationcombating extortion and bribery. Similarly, barand accounting associations have establishedtask forces on corruption and added the topic tomeeting agendas. Religious groups, such as theIslamic community in Indonesia, can also exhorttheir members and political leaders to resistcorruption.

CAOs also have been formed to analyzecorruption problems, monitor public officials,and advocate for government reform. A few,like the 70-plus national chapters ofTransparency International, are dedicatedentirely to fighting corruption, while others havea broader focus. In Bulgaria, The Center for theStudy of Democracy, for example, focuses morebroadly on economic and legal reform; AkmzaCivica in Mexico aims to increase competitionand the accountability of the political system;and Groupe Nouvelle Ethique in Benin works tochange public attitudes toward work, education,

f4 A Handbook on Fighting Corruption

and democracy, as well as corruption. NGOs inother sectors, such as environment and health,are also developing their capability to advocatetransparency and integrity. Consequently, inmany countries, broad coalitions of CAOs haveformed to fight corruption. Measures tostrengthen their efforts include providingtechnical assistance and training on technical,financial, and organizational issues, and buildingan enabling environment to allow for theirfinancial independence.

Workshops-Workshops offer an effectivevenue for changing attitudes about corruptionand mobilizing political will for reform.Workshops strive to increase understanding ofcorruption and to generate practical strategiesfor reducing it. To do so, they rely onparticipatory diagnosis of the problems anddevelopment of an action plan, usually over thecourse of two to three days. Workshops-ranging from national integrity workshops withparticipants from the highest levels ofgovernment and civil society, to subnationalworkshops that bring together local political,economic, and social leaders, to workshopstargeting a particular ministry or agency-cantarget many levels and parts of government.Transparency International and ED1 have helpedorganize national integrity workshops inUganda, Tanzania, Malawi, Mauritius, Ukraine,and Nicaragua.

International Pressure-Pressure from foreigngovernments and international organizations canmobilize and sustain domestic efforts to fightcorruption. Bilateral diplomacy at the highestlevels or through embassies, exhortations frominternational bodies such as the United Nations,and strong recommendations or conditionalityfrom development assistance agencies can pushreluctant reformers to address conuption issues.For example, World Bank president JamesWolfensohn has effectively used his position toprod governments into action. International orregional treaties against corruption, such as theOAS Inter-American Convention Against

Corruption, can also contribute to increasingofficial resolve to tackle the issues and initiatepositive change.

C. Assessment Methodology

A strategy to fight corruption cannot and neednot contain each of the institutional and societalreforms described. Rather, a strategy should fitthe particular circumstances of a country, takinginto account the nature of the corruptionproblem as well as the opportunities andconstraints for addressing it. Therefore,designing a strategy requires an assessment ofthe extent, forms, and causes of corruption forthe country as a whole and for specificgovernment institutions. At the same time,strategy formulation requires taking a close lookat the political will for anti-corruption reform ingovernment and civil society. Such anassessment entails a political economy analysisof the reform process to identify supporters andopponents of anti-corruption reform and theirrespective interests and resources.

The extent of corruption provides the firstanalytical cut of the assessment. The extent ofcorruption can range from sporadic, occurring inisolated intervals with no apparent order, topervasive, permeating most governmentinstitutions in a country or affecting mostactivities within a specific institution. Sporadiccorruption can pose problems for development,but does not have the same corrosive effect onpolitical and economic systems as pervasivecorruption. While the detriment caused bypervasive corruption makes it a keydevelopment issue, the comparatively lesserdamage caused by sporadic corruption may notmerit spending resources that could be investedin other development objectives.

Determining the form of corruption is the nextstep of the assessment. Is the corruption petty,involving lower-level officials and smallerresources, or is it grand, operating at the highestlevels of government with huge sums of money?


Is the corruption organized vertically, linkingsubordinates and superiors in a system of pay-offs? Is it organized horizontally, linkingseparate branches of government or agencies ina corrupt network? Is it not organized at all?Does the corruption entail unilateral abuses bygovernment officials (e.g., embezzlement andnepotism) or does it link public and privateactors (e.g., through bribery, extortion, andfraud)? Similarly, is the corruption linked toorganized crime or the military, entrenched inpatterns of patronage, or embedded in elitenetworks? Finally, in what governmentinstitutions is corruption concentrated? Forexample, is the chief problem found in thecustoms agency, in government procurement, intax collection, or in the police?

The next level of analysis examines the causesof the different forms of corruption. For thecountry as a whole, what institutional problemsor societal attitudes contribute to corruption?How do these institutional and attitudinalproblems vary across institutions and regionswithin the country? For example, is the issue ofwide government authority problematic in allareas or just in certain activities? Are thereeffective mechanisms of accountability orproper incentives in some institutions or levelsof government? How do these operate? Are theyreplicable? Do anti-system attitudes vary acrossgovernment institutions-between publiceducation and tax collection, for example-orbetween national and subnational governments,or between different regional governments?why?

Following an analysis of the corruption problem,the assessment must examine the opportunitiesand constraints for addressing it. The centralissue for strategy development is the opportunityfor reform in a country. While in manycountries, there is limited or no opportunity toaddress the issue of corruption directly, inothers, there may be partial or significantopening for reform. Openings to work in anti-corruption can arise from the following:

l A change in government (e.g., the election ofStoyanov in Bulgaria, the impeachment ofBucaram in Ecuador, the resignation ofSuharto in Indonesia, or the death of Abachain Nigeria)

l Public outrage around scandals (e.g., the 1973scandal involving a high-ranking policeofficer in Hong Kong)

l An opposition movement focusing attentionon corruption (e.g., Mexico’s two oppositionparties campaigning against the ruling PRI)

l An economic crisis (e.g., South Korea’sfinancial market collapse)

l External pressure (e.g., the IMF and WorldBank conditionality imposed on Kenya)

Beyond such openings, the assessment needs toascertain the broad level of support for andopposition to anti-corruption reform. That is, theassessment needs to identify supporters andopponents of reform among the ruling party, theopposition, the bureaucracy, subnationalgovernments, the judiciary, the military,business, labor, civic groups, organized crime,donors, and foreign governments. It is alsoimportant to identify motivations and resourcesfor supporting or opposing anti-corruptionefforts. Motivations can be political, economic,or moral in nature, while resources can includeinvestment capital, foreign assistance, coercion,votes, policy instruments, and moral authority.

D. Programming Guidance

A strategy to fight corruption must respond tothe nature of the problem and the opportunitiesand constraints for addressing it. As suggestedabove, the extent of corruption provides the firstdecision-point in developing a strategy. Wherecorruption is sporadic, USAID missions’resources should probably best be used on otherprogramming areas. However, where corruption


is pervasive, USAID missions should furtherevaluate anti-corruption program options.

The degree of opening for reform is the secondfactor to consider when crafting a strategy. Ifthere is little or no opening for reform, thestrategy should concentrate on societal measuresto increase awareness of the problem andmobilize political will for fighting corruption.

.les of societal measures useful when

le or no onenin~ for refort9;

l Supporting critics of corruption

l Fostering anti-corruption networks

l Publicizing procedures and rights

l Conducting service-delivery or corruption-perception surveys

If, on the other hand, there is partial orsignificant opening for reform, the strategyshould combine societal and institutionalmeasures to combat corruption. Even thoughsupport for fighting corruption exists, societalmeasures are still needed to broaden awarenessand institutionalize political will.

Examples of instituti~l and societal measuresu s e f u l

l Targeting government institutions where thecorruption problem is serious and political willfor change exists (often derived from a high-level official who identifies his or her tenurewith fighting corruption)

l Identifying specific interventions based uponroot causes of the problem-wide authority,little accountability, or perverse incentives

l Sponsoring integrity workshopsl Communicating the costs of corruption

l Fostering anti-corruption NGOsl Promoting a free press

l Increasing pressure from internationalorganizations, foreign governments, andinvestors to take the issue seriously

At the same time, USAID missions may be ableto support less politically sensitive institutionalmeasures to reduce corruption. Institutionalmeasures to limit the state’s authority, such aseconomic liberalization, privatization, andprocurement reform, may fit that criteria as theyare often viewed in more technical, apoliticalterms. Institutional measures to realignincentives, such as civil service reform, mayalso be feasible even where there is little or noopening for anti-corruption reform per se. Onthe other hand, measures to improveaccountability are not likely to be supported by agovernment disinterested in or hostile toreducing corruption.

l Encouraging anti-corruption advocacy

l Promoting civic monitoring

l Providing training in investigative journalism

l Promoting private sector efforts to preventcorruption

l Advocating international cooperation andconventions

For example, significant corruption in thecustoms authority and the presence of areformer at its highest level may direct USAIDanti-corruption assistance to that institution. Thespecific reforms in customs may targetpersonnel systems and ethics codes if perverseincentives are the main problem; transparencyand oversight if little accountability is the mainproblem; or elimination and simplification oftariffs if wide authority is the main problem.


More commonly, the reform of any governmentinstitution will incorporate some combination ofthese measures.

As the foregoing makes clear, there is no silverbullet or singular response to corruption that willwork in all circumstances. Just as corruptionstems from a variety of institutional failings andsocietal predispositions, responses to corruptionmust vary to address particular causes.

Moreover, responses must conform to apolitically-constrained reality, adapting to theopportunities and constraints for fightingcorruption at a given time. While the mix ofinterventions will vary, use of societal measuresto build and maintain awareness and politicalwill is key to sustaining the effort. Wherecorruption is pervasive, the fight against it mustbe a public as well as a technocratic affair.


IV. USAID ANTI-CORRUPTION EFFORTS

A. USAJD/Washington

In response to new opportunities and interest inworking against corruption, U&AID/Washingtonhas taken a number of steps to promote Agencyanti-corruption efforts. In December 1997,representatives from the Global Bureau (G), theLatin American and Caribbean Bureau (LAC),the Eastern Europe and New Independent StatesBureau (ENI), the Asia and Near East Bureau(AI%), the Africa Bureau (AFR), the Bureau forHumanitarian Response (BHR), the Genera1Counsel’s Office (GC), and the InspectorGeneral’s Office (IG) convened an anti-corruption working group that meets monthly toexchange information and coordinate work.Given the cross-sectoral nature of corruption,both economic growth and democracy-governance officers participate in the group. Asubcommittee of the working group isdeveloping policy guidance for Agency anti-corruption activities.

Coordinated through the working group, severalbureaus are co-sponsoring anti-corruptionworkshops with the Organization for EconomicCooperation and Development (OECD). Thegroup aims to broaden discussion of the OECDanti-bribery convention signed in December1997. The LAC bureau co-sponsored a regionalworkshop in Argentina in September 1998; theENI bureau co-sponsored a regional workshopin Turkey in October 1998; and the ANE bureauis co-sponsoring a regional workshop in thePhilippines in July 1999. In addition, the Centerfor Democracy and Governance (G/DG), theCenter for Economic Growth (G/EG), and ENIare co-sponsoring an international conference onthe role of the private sector in fightingcorruption. The conference will be held inWashington, D.C. in February 1999.

G/DG is also supporting anti-corruption effortsthrough a grant with Transparency International(II). This grant, initiated in September 1997,provides $2 million for intensive anti-corruptionwork in nine countries and for regional lessons-learned workshops. The country programs willstart with an integrity workshop to help groupsdiagnose corruption problems and developaction plans to fight them. The grant targetsBulgaria, Ukraine, Bangladesh, Philippines,Benin, Ghana, Mozambique, Colombia, and theDominican Republic. G/DG is also contractingwith the Center for Institutional Reform and theInformal Sector (IRIS) to document four casestudies of successful anti-corruptioninterventions that will feed into the regionalworkshops organized by TI.

Regional bureaus are also developing anti-corruption initiatives. In 1998, the LAC Bureauinitiated an assessment of its Regional FinancialManagement Improvement Project II, designedto improve governmental accountability andfinancial management. The bureau plans to issuea follow-on contract in 1999. The LAC projecthosts a donor consultative group, publishes amonthly newsletter entitled Accountability/Anti-comption, sponsors regional teleconferencescalled Respondacon, and provides technicalassistance. In December 1997, the ENI Bureauestablished an anti-corruption working group,developed an anti-corruption strategy for theregion, and set aside funds over two years foranti-corruption support. Building on the LACmodel, the bureau will use a contractor toestablish a donor consultative group, supporttraining workshops, assist assessment andstrategy-design exercises, develop a newsletterand other information linkages, and write reportsand program materials. Similarly, ANE has setaside money for an anti-corruption strategy.

LAC is also consulting with the Organization ofAmerican States (OAS) and the Inter-AmericanDevelopment Bank on follow-up workshops tothe Inter-American Convention AgainstCorruption and the Summit of the Americas.


LAC, USAID/Nicaragua, andUSAID/Guatemala also collaborated with theWorld Bank’s Economic Development Instituteon a Central America Regional IntegrityWorkshop held in September 1998. Theworkshop was designed to yield national actionplans to fight corruption, with a specialemphasis on harmonizing anti-corruption relatedstatutes in the region. ENI is working with theWorld Bank on anti-corruption workshops andprograms in Georgia and Albania and throughthe State Department’s Coordinator’s Office tocoordinate anti-corruption efforts in Ukraine andRussia.

B. Field Missions

A number of USAID missions have begundeveloping anti-corruption programs. Through aG/DG grant to ‘II, missions in Benin, Ghana,Bangladesh, Philippines, Colombia, DominicanRepublic, Bulgaria, and Ukraine are helpingestablish local TI chapters, funding anti-corruption surveys, and launching integrityworkshops. In addition to their work with TI:

l USAIDBulgaria is funding a coalition ofNGOs dedicated to fighting corruption.

l USAID/Ukraine is sponsoring local integrityworkshops in two obhsts (regional levelgovernment), to provide training ininvestigative journalism, and to supportadvocacy for public hearings and freedom ofinformation laws.

l USAID/Benin is providing assistance to theChamber of Accounts of the Supreme Courtand the Inspector General’s Office of theMinistry of Finance.

Other missions have also begun working in this8re8:

l USAID/Nicaragua recently conducted asurvey of public perceptions of corruptionand is carrying out a public education

campaign on citizens’ rights andresponsibilities. It is also supporting localwatchdog organizations, and is providingassistance for an integrated financialmanagement system.

In 1998 USAID/Russia allocated fundstoward new programs in judicial ethics andorganization; the establishment of a courtbailiff service; financial disclosure andgovernment procurement issues; and thedevelopment of standardized auditing andaccounting procedures.

USAID/Georgia and USAID/Albania havefunded surveys of corruption perceptions andare working with the World Bank to developanti-corruption programs.

USAID/Tanzania has supported audittraining in the Office of Controller AuditorGeneral and has funded civil society .organizations to hold anti-corruptionworkshops and produce anti-corruptionpamphlets for students in secondary schools.

USAIDh4adagascar has sponsored a seriesof seminars for the Inspector General’s Officeand the Office of Accounts.

USAID/Peru has provided support for themodernization of the Controller General’sOffke.

USAID/South Africa and USAID/Guatemalahave funded work on ethics legislation.

Missions in El Salvador, Paraguay, and theCentral Asian Republics are funding anti-corruption assessments.

C. Indicators

Performance monitoring is a necessary andintegral part of good program management. ForU.S. government-funded programs, it fulfils theintent of the 1994 Government Performance and


Results Act (the Results Act). To this end,performance information is combined withbroader trend information within the Agency’sgoal areas to report results to the Office ofManagement and Budget, Congress, and thepublic. Nevertheless, the primary purpose ofperformance indicators is to assist in makingprogrammatic decisions and learning from pastexperience.

The following indicators are suggestive. A morecomprehensive list of indicators for rule of law,elections, civil society, and governanceprogramming can be found in G/DG’sHandbook of Democracy and GovernanceIndicators (PN-ACC-390). Please refer to thisdocument for more details. For orderinginformation, see back inside cover of thispublication.

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1. Indicators of Government Performance

Public perceptions of corruption in thedelivery or provision of selected governmentservices, as reported in opinion polls

Perceptions of corruption by surveys ofbusiness persons or firms attempting to dobusiness with the state

Time and real cost to customers of getting alicense from a selected licensing agency or aconnection to utilities through a governmentutilities company

2. Indicators of Anti-Corruption Laws andRegulations

Establishment of a code of conduct or otherlegally binding statements for elected andgovernment officials

3. Indicators of Oversight Mechanisms onMaintenance of Ethical Standardk

Maintenance and adequate funding of anindependent auditor-general’s office or

equivalent organization that regularly auditsgovernment accounts; an inspector-general’soffice that regularly monitors governmentcontracting and procurement practices; or anoffice of government ethics to monitor andimplement a code of ethics

Percent of government budget auditedaccording to required standards in the lastfinancial year and/or percent of governmentcontracts and procurements reviewed by theinspector general’s office

Percent/number of governmentdepartments/agencies with audit findings(e.g., that find an error) and/or equivalent forinspections of contracts and procurements

Percent/number of examples of fullinvestigation of significant breaches ofprocedures or ethics at relatively high levelbeing pursued fully and fairly to transparentoutcome, and if necessary, toenforcementipunishment

Effectiveness of legislative oversight

Number of NGOs with specialized capacityto analyze, monitor and publicizegovernment corruption

4. Professionalization of Recruitment andManagement

Percentage of new officers recruited bycompetitive exam conducted in a “fair”manner

Number or percent of governmentfinancial/accounting systems operating underan integrated financial management system


V. PARTNERS

A. USAID Implementing Mechanisms

G/DG supports Transparency International’sprogram to strengthen public support for anti-corruption programs and enhance transparencyand accountability in government through an on-going cooperative agreement. In addition, G/DGhas several mechanisms available to assistUSAID missions in the design, implementation,and evaluation of anti-corruption activities. Themechanisms are described in detail in TheCenter for Democracy and Governance User ‘sGuide. Briefly, they include (1) theImplementing Policy Change contract withManagement Systems International which canbe tapped to help public and privateorganizations manage the development andimplementation of new policies, including thoserelated to anti-corruption; and (2) IndefiniteQuantities Contracts with Associates in RuralDevelopment, Development Alternatives, andCasals and Associates. The three IQCs, all ofwhich are for general governance-relatedactivities, including anti-corruption work, arescheduled to expire March 3 1, 1999. It isplanned that they will be replaced by two anti-corruption specific IQCs. USAID GlobalBureau’s Center for Economic Growth has IQCswith the Center for Institutional Reform and theInformal Sector (IRIS) and Associates in RuralDevelopmentKhecci, both of which can also betapped for anti-corruption work.

B. International Organizations

International organizations actively involved inthe issue of anti-corruption include thefollowing:

l Organization for Economic Cooperation andDevelopment (OECD)

l The World Bank

l The International Monetary Fund (IMF)

United Nations

Organization of American States (OAS)

Global Coalition for Africa (GCA)

Council of Europe

Asia-Pacific Economic Cooperation (APEC)

Regional Development Banks

World Trade Organization (WTO)

International Chamber of Commerce (ICC)

C. Private and NongovernmentalOrganizations

Transparency International O-Founded in1993, TI now has local chapters in over 70countries. TI builds national, regional, andglobal coalitions embracing the state, civilsociety, and the private sector to fightcorruption. TI assists in the design andimplementation of effective integrity systemsand collects, analyzes, and disseminatesinformation to raise public awareness about thedamaging impact of corruption. TI hasdeveloped a Source Book on Integrity Systemsand an annual corruption perception index, bothavailable on their web site.

Soros Foundation-The Soros Foundationprovides assistance to TI and to local NGOs foranti-corruption work in Eastern Europe and theNew Independent States.

The Asia Foundation (TAF)-TAF has a coreregional project in anti-corruption, withprograms in Korea, Indonesia, Vietnam,Thailand, Bangladesh, and Nepal. It specializesin constituency-building and demand-articulation for anti-corruption reform.

Institutional Reform and the Informal Sector(IRIS)-IRIS organized a training seminar on


anti-corruption in Senegal, documented an anti-corruption mechanism for food aid in Nepal, andresearched the effects of weak governance onthe ability of West African nations to mobilizeresources for basic services.

National Democratic Institute (NDIjNDIassisted the South African and Turkishparliaments with adopting ethics codes and hasheld symposiums on ethics and transparency inParaguay and Southern Afi-ica.

International Republican Institute @RI)-IRIheld national conference in Guatemala topromote ethics and accountability in the politicalprocess.

D. Other U.S. Government Offkes

Vice President Al Gore and other high level U.S.government officials have undertaken bilateralmissions to promote anti-corruption initiatives.In addition to USAID, other U.S. governmentoffices have helped a number of foreigngovernments establish ethics offices and developethics codes, worked with OECD to develop anethics checklist, participated in technicalexchanges with the Chinese government onoversight functions, provided technicalassistance to supreme audit institutions in arange of presence countries, broadcast, and/orworked to identify transparency as a theme forPresident Bill Clinton’s trip to Africa in 1998.

They include the following:

l U.S. Office of Government Ethics (OGE)

l State Department’s Offrce of InspectorGeneral

l Department of Commerce

l Department of State

l U.S. Information Agency

E. Web Sites

All of the previously mentioned organizationshave updated web sites to facilitate access toinformation on their work.

The Asian Development Bankhttp:lhvww.adb.org

Asia-Pacific Economic Cooperationhttp://www.rpecsec.org.sg

Council of Europehttp://www.coe.fr/inder.Psp

Global Coalition for k%icahttp://www.gcr-cma.org

The Inter-American Development Bankbttp://www.iadb.org

International Chamber of Commercehttp://www.iccwbo.org

The International Monetary Fundhttp://www.imf.org

The Organization for Economic Cooperation and Developmenthttp://www.oeed.org

Organization of American Stateshttp:hvww.oas.org

Transparency Internationalhttp://www.transparency.de

United Nationshttp://www.un.org

U.S. Agency for International Developmenthttp://www.info.usaid.gov

The U.S. Department of Commercehttp://www.ita.doc.gov/legal

The U.S. Information Agency .http:/Mvw.usia.govltopical/econ/bribes

The U.S. Oftice of Government Ethicshttp:lhvww.usoge.gov

Tbe U.S. State Department (Oi%ice of Inspector General)bttp:/Mvw.state.gov/www/dept/oigliadex.btml

The Vice President’s Of&ehttp://www.whitehouse.gov/WWEOP/OVP/html/Gore~Home.html

The World Bankhttp://www.worldbank.org

World Trade Organizationhttp://v.ww.wto.org


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A HANDBOOK ON FIGHTING CORRUPTION · 2019-09-06 · Phyllis Dininio Phyllis Dininio is an anti-corruption specialist with the Center for Democracy and Governance. She manages a $2