Aid, corruption and the perils of turning a blind eye

17 January 2017

Corruption is often used in the gathering attack against aid as a reason for scaling back aid efforts and money. Robert Barrington, the UK executive director of Transparency International, gives a frank assessment of how corruption affects development.

We are faced with two harsh realities: aid is desperately needed by many people around the world who live in places where corruption is highly prevalent. The corruption both causes and perpetuates poverty, and also means that aid money intended to help can go astray, be rendered ineffective, or embed corrupt elites who negate long-term development efforts.  

But nobody said delivering aid and development was an easy task, and its fundamental purpose is to help those in need irrespective of the obstacles. Our challenge is to reconcile these harsh realities and overcome the obstacles, and not to let poor people be punished twice - once through living in poverty exacerbated by corruption; and secondly by failing to help them.

The uncomfortable argument against aid

The argument against aid runs something like this: “if we send British taxpayers' money to corrupt places the money is stolen; we end up enriching corrupt kleptocrats and not doing the good we intended - so it's best not to send the money. Having a fixed 0.7% aid budget means the imperative is to spend money rather than to be careful about its use.”
 
This argument can be uncomfortable for the international development community, because the conclusion is that those who live in poverty and desperate need should be denied aid. It’s also uncomfortable for the anti-corruption community, because it’s hard to defend a system in which kleptocrats benefit directly or indirectly from aid money.
 
So, is it possible to deliver effective aid in countries with high prevalence of corruption? The international development community has done an extraordinary job in overcoming obstacles in the past - learning to deliver humanitarian aid in the face of civil war, genocide, terrorism, famine and natural disasters. These are people with enviable skills when they turn their minds to some of the world's most difficult problems. It's no easy task to reduce malaria related deaths by 60% or increase life expectancy in Africa by 9.4 years, both of which have happened since 2000, or to eradicate a major ebola outbreak like we saw in 2015/2016. So why has aid not overcome the obstacle of corruption?

6 key principles we should agree on

NGOs need to consider some important principles, though these won't please some on each side of the argument:

  1. Big chunks of government money attract corruption. That is equally true in the NHS as it is in healthcare systems elsewhere, and whether the money is spent via the public sector, private sector or others.  So we must accept that fraud, corruption and mismanagement mean that you will not find anywhere in the world where 100% of government funds are spent 100% effectively. Conclusion: some aid money will definitely be lost to fraud and corruption however carefully it is monitored; but nobody talks about shutting off funds to the NHS when there is fraud, and it is scarcely logical to do so on aid projects.
  2. A system that shores up kleptocrats is not good for long-term development and prosperity - even if it creates some short-term development wins. It may be tempting to argue that if 75% of aid money gets through, let's not worry about the missing 25% - but if that does damage, it can negate the effect of the 75%. Conclusion: it is not good enough for donors to turn a blind eye or hope for the best or, even worse, be complicit in other countries' corruption. Donors have assumed the responsibility for making the situation better and so should not be making it worse.
  3. The more complex a supply chain or aid project, the higher the risk of corruption and the more difficult it is to achieve transparency. Conclusion: aid donors that do not collaborate or operate incompatible systems for reporting or financial accounting unintentionally increase this complexity and obscurity; NGOs or private sector contractors that work through extensive networks of sub-contractors are significantly increasing the risk of corruption. While working with local partners is necessary to understand and work effectively within local contexts, additional transparency and accountability measures need to be in place to be able to scrutinise where money ends up, so that cash doesn’t end up lining the pockets of local bigwigs running corrupt local contractors.
  4. This is not simply about wastage or leakage: corruption is more insidious than that. Aid donors need to consider the wider environment to make sure their aid is effective. For example, an aid project may spend 100% of its funds, with no wastage, on buying and distributing anti-HIV drugs. That may be entirely useless if the country's medical staff won't administer them without bribes or sell them on the black market because their salaries have been stolen by the Health Minister. Conclusion: anti-corruption planning needs to be hard-wired into development projects. The working assumption should be that corruption exists and will undermine the effectiveness of development projects unless it is understood, managed and mitigated.
  5. Competing objectives usually trump corruption. Whether it is supporting a corrupt governor in Afghanistan because he is important to achieving military objectives, or paying a large bribe to the military to get emergency equipment into a country to save lives during a humanitarian crisis, corruption always goes down the list. That approach embeds corrupt elites and undermines the prospects for successful long-term development. Conclusion: if donors are serious about long-term development, they should not allow short-term expediency to over-ride long-term strategic thinking.
  6. Corruption is complicated and hard to tackle but it is not an insuperable problem. There are plenty of examples of good practice and successful projects in which corruption has been minimised.  At the same time, general lessons can be hard to draw. Corruption can take different forms; it operates at the levels of both petty corruption (small bribes to local officials) and grand corruption (massive looting by high-up officials) and everything in between; some governments are genuinely concerned for their whole populations, others are driven by personal enrichment or may solely want a certain ethnic group to be protected; there is a huge variance between countries, and sometimes within countries.  The context of a natural disaster is different from that of fragile state, and different again from the long-term development needs of a desperately poor country with a corrupt government. Conclusion: we need to work out what has been working - and what has not been working - and build a new approach based on those lessons; we also need national-level anti-corruption strategies that take into account the local context.

It's easy to see why this subject is off-putting to donors, NGOs and the wider public.  Nobody wants to see money wasted: and surely, we want to tackle problems in education and health and poverty, not a country's complex political, social or economic situation?  
 
Sadly, the world is not that simple. For some ideas about what action can be taken, see the next blogpost in this series 6 ways to start tackling corruption in aid.

 

 

About the author

Robert Barrington
Transparency International UK

Robert Barrington is executive director of Transparency International UK.