Corruption and Fiscal Deficits in Rich Countries

[atseacliff]

Kaufmann Blog is usually a good read - posted yesterday some thoughts on his research looking at correlations between corruption and the fiscal deficit in industrialised countries.  He notes that his inquiry "is motivated by the simple observation that, contrary to popular belief, there are significant differences in the extent of corruption and in the quality of governance among industrialized countries.  Further, it is also well known that there are large differences in the budgetary balances (ranging from large surpluses to large deficits) of industrialized nations...."  Well worth reading....

http://thekaufmannpost.net/corruption-and-fiscal-deficits-in-rich-countries/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+thekaufmannpost+(The+Kaufmann+Governance+Post)&utm_content=Google+Feedfetcher

On a more general point is there a way of providing links to blogs and websites prominently on this site? 

[harnett]

Thanks for this atseacliffe.  Excellent blog.  Am thinking of developing the theme of corruption more on the Board - where do you think it will sit best?  Just done 2 Anti-Corruption jobs in Zambia and Nicaragua which I'll get onto the Board when reports are finalised.

[atseacliff]

Good question.  I suppose this comes down to how mainstream you see your work on corruption being.  As a PFM consultant I sometimes have to address corruption risk in authoring fiduciary risk diagnostics. This tends to build on perception indices and the impact that corruption might have on funds passing through PFM systems.  A separate heading on financial (or fiduciary) risks might be helpful to members but perhaps you have a more specific corruption related heading in mind. 

[harnett]

I'd prefer to keep it PFM related so a section on Fiduciary Risk / Corruption may be a good idea, but keeping the corruption element restricted to PFM, rather than broadening it out to prevention and specific anti-corruption bodies.  The way the aid world is thinking I can see corruption being more and more prominent, especially with respect to Budget Support. 

Certainly when Budget Support was in it's infancy, there was a certain reluctance to promote it in countries with poor fiduciary risk, but it seems with HQ pressure to disburse funds and the drive to achieve MDGs, as well as Paris/Accra, this reluctance has been overlooked to some extent.  Now the pendulum seems to swinging the other way. 

[Napodano]

Harnett,

this could be interesting

Preventing Corruption: A Toolkit for Parliamentarians
'This toolkit aims to provide a framework for parliamentarians to discuss their own performance in preventing corruption. The context for the questions is the United Nations Convention Against Corruption (UNCAC) and the policy positions approved by GOPAC members at the Global Conference in Kuwait November 2008.'

http://gaportal.org/tools/preventing-corruption-toolkit-parliamentarians

[PSCANDIZZO]

On the issue of corruption, a growing evidence shows that collective action and some form of strategic planning ( based on animation, participation and deliberative democracy) may be very effective in improving the situation, both in reducing corruption in the public sector and in reducing its effect on the civil society and the business community. In  this regard, the World Bank has recently created a website:  http://info.worldbank.org/etools/antic/index.asp , to document and guide collective action on the part of the business community and a variety of possible stakeholders.

[petagny]

I'm in Georgia just now and very interested to hear from people how fast things changed after the Rose Revolution. Taxi drivers tell me that the police force now does what a police force should do rather than extracting rents; people have electricity 24/7 (and it's not because of a massive increase in generating capacity!); and more and more people have reliable water supplies. OK, it's not perfect (and I'm getting heartily sick of the ad. on CNN), but it makes it at least conceivable that in some places at certain times a seachange might be possible if a government with a strong mandate behaves courageously (like sacking half the police force).

I'm hoping that Napodano isn't going to destroy my naive fantasies now!

[Napodano]

petagny,

you are absolutely right on the sea change in attitude against corruption after the Rose Revolution.

Unfortunately, the war with / aggression by Russia (and, alas the world-wide economic crisis) has produced distorsions in the policy reform process. Population is divided on how the country should be run and I believe that the relation with donors is skewed towards geopolitical issues rather than on a more productive policy dialogue among development partners.

That said, when the dust settles, Georgians, I believe, will have the opportunity to once again focus on the realization of the promises of the Rose Revolution.

[harnett]

Leadership is the issue.  The collective action seen in Georgia was also seen in Kenya in 2003 with the advent of the Kibaki government.  Police extracting bribes from minibuses (matatus) were surrounded by passengers and forced to give back the money, politicians were routinely hounded by the press, and the President suggested he would open his personal accounts to improve transparency.  However.......... the President was not strong enough to follow through on this sea change and Kenya has subsequently reverted to type.  Let's be clear, the new government had largely been in power under the corrupt Moi regime.

All too often there appears to be a commitment by new governments to fight corruption, which deteriorates into a political point scoring exercise to discredit their predecessors, and corruption continues as before (Zambia is a prime example).  It appears to me that donors are sucked into such games and spend huge amounts of money on establishing the architecture for a Anti Corruption Strategy when in reality little will address corruption if it is deemed acceptable at the top echelons of government.  Certainly in Zambia it appears pointless to continue providing budget support and indeed any aid through government systems if corruption continues at the top. 

And the alternative?  Forget Paris / Accra?  Go down the USAID route?  NGOs?  Unfortunately this is all unclear as in many countries the leverage that donors have as natural resource prices have increased and the Chinese have offered an alternative development route, has seriously diminished.  Certainly something needs to give - because by carrying on with business as usual, it is the donors who are in some countries implicitly fuelling corruption with untied aid and support.  Just because we have pressure to disburse under the MDGs does not mean we should ignore the corrupt use of disbursements.

I would premise that this issue will cause a serious review of donor practices in the near future with Paris / Accra being fundamentally revisited.

[John Short]

Latest TI CPI Report

http://www.transparency.org/policy_research/surveys_indices/cpi/2010/results

[Eugene McQuaid]

I am currently preparing a briefing note on the elements for a governance framework [for state investment - listed and unlisted, in the context of a PIP, CAM framework, sale and disposal of public sector assets etc] and have utilized the most recent TI - CPI, amongst other sources.

However, I am having some considerable difficulty in sourcing a copy of the individual country CPI reports for the MENA region. I am particularity interested in the GCC nations (Qatar, UAE, Bahrain etc). A report with a regionally focused perspective would also help in this context. I have spoken with the regional contact for TI and all to no avail  - most grateful for any guidance or direction to source…

Many thanks, Eugene

[harnett]

Hi Eugene

Sorry for the delay but you might try the U4 website or also the Business Anti Corruption Portal which has reports on at least some of the countries you are interested in.    http://www.business-anti-corruption.com/country-profiles/middle-east-north-africa/