Friday, September 19, 2014

Africa: Is Africa losing the battle against corruption?

Source: ISS
Is Africa losing the battle against corruption?

Corruption remains one of the most pressing challenges facing developing states and Africa in particular, as it substantially undermines development and general prosperity on the continent.

This is despite the emergence of strong international legal frameworks, such as the United Nations Convention Against Corruption (UNCAC), which was adopted in 2003 and has been ratified by 140 countries. This was quickly followed by the African Union Convention on Preventing and Combating Corruption (AUCPCC), which the Africa Union (AU) adopted in 2003 and which has been ratified by 35 AU member states.

Indeed, the past decade has seen the proliferation of national anti-corruption commissions and the establishment of offices of ombudsmen, as prescribed by the above conventions.

The donor community has provided millions of dollars to governments and civil society to bolster efforts to address corruption and its root causes. Nevertheless, it seems as though little, if any, positive results have been accrued. Given that the theory and practice in this field are clearly not working, it may be time to revisit this problem and explore alternative options.

According to most of the available indicators, the war on corruption is at a standstill. In fact, these indicators show that corruption is actually increasing in countries where its impact is likely to be most harsh. Globally, the average country scores produced by Transparency International (used for their ranking system), between 2000 and 2013 have gone down by 0,5 on a scale of 1 to 10 (1 representing low levels of perceived corruption, and 10 the highest).

The World Bank indicators on control of corruption provide a more nuanced variation. These indicators show that between 1996 and 2012, corruption has become worse in low and high-income states that are members of the Organisation for Economic Cooperation and Development (OECD), while lower-middle, upper-middle and high-income non-OECD countries show marginal improvements. For sub-Saharan Africa, the score dropped from 33,213 to 30,515 (out of 100, where a high score indicates less corruption).

To be fair, much criticism has been levelled at these indicators, as they are primarily based on perception surveys and don’t provide any quantitative evidence for actual levels of corruption. The ranking system used by Transparency International’s Corruption Perceptions Index, in particular, has been heavily criticised for its methodological bias against African and other developing states.

That said, measuring corruption is problematic, as by its very nature it is a concealed and secretive practice, and can thus only be measured by public perceptions or proxy indicators. Similarly, efforts to combat corruption have increasingly focused on contextual factors, such as transparency, accountability, and rule of law; an absence of which allows corrupt practices to flourish.

Closer consideration of such contextual indicators can help better explain the lack of progress in fighting corruption. Of the 46 sub-Saharan African states tracked by the Mo Ibrahim Foundation from 2000 to 2012, progress in the field of accountability has also stagnated, with only a marginal average increase (1,36 on a scale of 100). Some 21 of the 46 countries show negative results since the year 2000. Although human development has risen significantly (an average increase of 10,8, on a scale of 100), both rule of law and human rights have experienced an average decrease (-1,8 and -2,4, respectively).

Corruption in bureaucracy has shown a marginal increase (3,4 on a scale of 100), however this is due only to several strong exceptions, with 30 of the 46 countries showing a zero or negative change. In sum, when looking at a graph of most governance-related indicators for countries in sub-Saharan Africa, the last 15 years display a consistently flat, if not negative, line. Viewed in tandem with high rates of economic growth, the conclusion could be drawn that the benefits of the mainly resource-extraction-fuelled economic boom are being accrued by a few: the political and economic elites who are becoming increasingly distant from those they govern, and who are willing to go to greater lengths to protect the status quo.

The discourse on corruption is beset by a troubling argument, namely that all modern states went through a period of high corruption, and that this is a normal part of development. Some even argue that corruption actually benefits development, as it ‘greases the wheels’ and, in this way, makes doing business easier and more efficient.

That a period of corruption is a ‘historical imperative’ should be dismissed as nonsense. While it may contain some factual basis, it cannot be used as an argument to lessen condemnation of corrupt practices; particularly in contexts where resources are scarce and rates of poverty extreme.

Similarly, it is generally accepted that businesses prefer a stable political and economic environment in which to operate, where the rules of the game are clear and applied equally to all.

Of course, business actors should also be recognised as amoral; intrinsically motivated by profit rather than some moral or principal good. Hence, such actors will operate where there is profit to be made, and many, such as the trucking companies transporting goods across the continent, must simply incorporate petty corruption of traffic officials within their overall costs.

Unscrupulous behaviour by the larger multinational companies, however – those who have the means and resources to avoid engaging in explicitly corrupt practices – is one of the reasons why the definition of corruption continues to be hotly debated. Many anti-corruption actors claim that UNCAC and AUCPCC do not extend far enough, and exclude practices that, although technically legal in most cases, should fall under their umbrella.

For instance, transfer pricing, tax avoidance and secrecy jurisdictions, issues emanating and resulting from the legal frameworks and agreements within the developed world, and often to the benefit of multi-national companies and the wealthy elite globally, should also be included in the discourse on corruption. Modernisation and increased international communication – or, put another way, the increased complexity of the globalised world – has seemingly made it easier to engage in legally or ethically questionable behaviour.

In finding alternative approaches to preventing and combating corruption, one would do well to heed the observation (made by a team reviewing the effectiveness of development aid in this sector), that giving money to governments where corruption is systemic is a waste of resources. One cannot expect the beneficiaries of corruption to engage in a sincere effort to stop the gravy train. Closer attention must therefore be paid to what governments do, rather than say, in order to avoid situations where a reluctant approach to tackling corruption is rewarded.

More importantly, however, the developed world must shed the hypocrisy in which their arguments are cloaked. For as long as they retain their secrecy jurisdictions, which provide safe havens for the looted money and loopholes for companies cheating national tax systems, they function as enablers for the problem that they are dedicated to eradicating. At the root of all this is a serious moral and ethical crisis, shared by politicians and economists the world over, sustaining a system that is inherently biased towards those with resources, and increasingly excluding and marginalising those who do not.

Stefan Gilbert, Senior Researcher, Governance, Crime and Justice Division, ISS Pretoria