The Annual Bank Conference on Development Economics (ABCDE) is fast approaching. The theme of this year’s conference is "Political Incentives and Development Outcomes" and papers selected for this year’s ABCDE are now posted online.
It’s not often you get together the very people working on the frontline to sit down together and discuss why and how irregular practices occur in their sector – and what can be done about them. But that’s just what we did with a group of frontline health workers at a workshop in Bangladesh’s capital Dhaka in December 2017. We wanted to understand why corrupt and irregular practices occur in the health sector - what are the underlying incentives and processes? And what are some feasible and impactful ways to change these practices?
Many developing countries, including the three where our research consortium, the Anti-Corruption Evidence research consortium is working, Bangladesh, Nigeria and Tanzania, struggle to provide free or low-cost healthcare to all their citizens. Instead, citizens are often forced to buy services from the private sector at higher fees or worse, approach untrained or traditional healers. There is agreement in the literature that a large proportion of these inefficiencies occur due to corrupt practices (though there’s an active debate about whether using the c-word is helpful in this debate, which is why we talked about ‘irregularities’ during this workshop). Many of these practices are related to the way societies in developing countries are organized around patron-client relations, where tax resources are insufficient, and resources, jobs and promotions require lobbying powerful politicians.
Technological advances have made it possible to dramatically increase the accountability and transparency of public financing to reduce corruption. For example, if a government decides to construct a road, it can now track how each dollar is being spent, identify all the users of the funds, and ensure that only those authorized to spend money do so on originally intended expenses within the permitted time. Fraud and corruption investigations that now take on average 15 months could be performed at the touch of a button and at a fraction of the cost. More importantly, this type of financial tracking would be a deterrent for bribes in the public sector, which amount to between $1.5 trillion and $2 trillion annually, roughly 2 percent of global GDP. This in turn would increase development impact. All it would take is adopting a cryptocurrency and using blockchain software.
These are some of the views and reports relevant to our readers that caught our attention this week.
Fast-forward progress: Leveraging tech to achieve the global goals
The UN Sustainable Development Goals (SDG) adopted in 2015 invite global action by 2030 in three overarching areas: end poverty, combat climate change and fight injustice and inequality. Today we see ICT as a powerful enabler for each of the 17 goals, and an essential catalyst in driving rapid transformation of nearly every aspect of our lives.
The Commitment to Development Index 2017
Center for Global Development
The Commitment to Development Index ranks 27 of the world's richest countries on policies that affect more than five billion people living in poorer nations. Because development is about more than foreign aid, the Index covers seven distinct policy areas: Aid, Finance, Technology, Environment, Trade, Security, Migration. Why does Commitment to Development matter? In our integrated world, decisions made by rich countries about their own policies and behaviour have repercussions for people in developing nations. At the same time, greater prosperity and security in poorer countries benefit the whole world. They create new economic opportunities, increase innovation, and help reduce risks posed by public health, security, and economic crises. The Commitment to Development Index (CDI) celebrates countries whose policies benefit not only themselves, but also the development of others, and promote our common good.
Public procurement of services, works and supplies is estimated to account for 15-20% of GDP in developing countries, and up to 50% or more of total government expenditure. Efficient and effective procurement is vital to core government functions, including public service delivery and provision of infrastructure. Weaknesses in procurement systems can lead to large-scale waste of public funds, reduced quality of services, corruption, and loss of trust in government.
These are some of the views and reports relevant to our readers that caught our attention this week.
Commodity crash has dragged back world’s poorest countries, finds UN
Public Finance International
In a report on the progress of the world’s least developed countries (LDCs), published yesterday, the United Nations warned that a drop in international support also means these countries are likely to remain locked in poverty. It predicted the world will miss its target to halve the size of the LDC group by the end of the decade. The 2030 Sustainable Development Goals, which were agreed by world leaders last year and include targets on ending extreme poverty, are also at risk. “These are the countries where the global battle for poverty eradication will be won or lost,” said Mukhisa Kituyi, secretary general of the UN Conference on Trade and Development, which produced the report. “A year ago, the global community pledged to ‘leave no one behind’, but that is exactly what is happening to the LDCs.” Global poverty is increasingly concentrated in the 48 LDCs, which comprises mostly of African and Asian nations alongside some Pacific island states and Haiti.
OECD Recommendation of the Council for Development Cooperation Actors on Managing Risks of Corruption
There is strong awareness among the global community that corruption poses serious threats to development goals and that international development agencies have a common interest in managing and reducing, to the extent possible, the internal and external risks to which aid activities are exposed, in order to obtain effective use of aid resources. This Recommendation of the Council for Development Co-operation Actors on Managing the Risk of Corruption (Recommendation) promotes a broad vision of how international development agencies can work to address corruption, including the bribery of foreign public officials, and to support these agencies in meeting their international and regional commitments in the area of anti-corruption.
Culture gives cities social and economic power, shows UNESCO report
Culture has the power to make cities more prosperous, safer, and sustainable, according to UNESCO’s Global Report, Culture: Urban Future to be launched in Quito (Ecuador) on 18 October. The Global Report presents evidence on how development policies in line with UNESCO’s conventions on the protection and promotion of culture and heritage can benefit cities. Current trends show that urbanization will continue to increase in scale and speed, particularly in Africa and Asia, which are set to be 54 and 64 percent urban by 2050. The world is projected to have 41 mega cities by 2030, each home to at least 10 million people. Massive and rapid urbanization can often exacerbate challenges for cities creating more slums and poor access to public spaces as well as having a negative impact on the environment. This process often leads to a rise in unemployment, social inequality, discrimination and violence.
Sustainable Cities: 3 Ways Cities Can Contribute to a Renewable Energy Future
This week, global policy makers gather in Quito for the Habitat III Conference to reinvigorate the global commitment to the sustainable development of cities. Meeting every 20 years, the Habitat Conference will this year focus on setting a new Urban Agenda. Within this context and for the first time ever, the Conference will also discuss the rapid deployment of renewable energy as a means to achieve a sustainable urban future. This could not be timelier. Dramatic cost declines and technological innovations, present cities with an unprecedented opportunity to transform and decarbonise their energy supply on the basis of a positive economic case - an option that did not exist when the Habitat Conference last convened in 1996. This is great news, considering cities are home to 54% of the global population and generate 70% of global emissions.
As Blair Glencorse states, “bureaucrats and civil servants can serve citizens in the way that they are supposed to.” With this in mind, the organization he founded, Accountability Lab, created Integrity Idol, a global campaign run by citizens in search for honest government officials. It aims to “highlight the good people in the system” as way to establish a culture and expectation of honesty and personal responsibility in government postings. Integrity Idol began in Nepal in 2014, spread to Liberia in 2015, and now includes Pakistan and Mali.
The process of selecting an Integrity Idol is participatory from beginning to end. Local teams of volunteers travel across their countries gathering nominations from citizens, hosting public forums and generating discussion on the need for public officials with integrity. From the long list nominees, five are selected in each country with the help of independent panels of experts. These finalists are then filmed and their episodes are shown on national television and played on the radio for a week, and citizens can vote for their favorites through SMS short-codes and on the website. The winner in each country is crowned in a national ceremony in the capital.
Here, Glencorse discusses Integrity Idol back in 2014, when the program was just getting started in Nepal. Nominations are now open in Pakistan, Nepal, and Mali. To nominate a candidate in one of these countries visit www.integrityidol.org.
Over at the Center for Global Development, Charles Kenny wants comments on the draft of his book on Aid and Corruption (deadline end of May). Let’s hope this becomes standard practice – it worked brilliantly for me on How Change Happens – more varied voices can chip in good new ideas, spot mistakes or contradictions, and it all helps get a buzz going ahead of publication.
But let me take it one step further. As a contribution to the corruption summit, hosted by David Cameron on 12 May 2016, I thought I would summarize/review the book. Charles gave the green light, provided I stress the ‘preliminary, drafty, subject-to-revisiony nature of the text’. Done.
The summit is about a lot more than aid – for example the rich countries putting their houses in order on tax havens. Which is just as well, because the book poses some real challenges to the whole ‘anti-corruption’ narrative on aid. What’s more, it is erudite, engagingly written and upbeat – as you’d expect given Charles’ optimistic previous takes like Getting Better. He’s got a great eye for telling research and ‘man bites dog’ surprise findings. Example: ‘Taking a cross section of countries and comparing current income (2010) to corruption perceptions in 2002 and income in 2002, results suggests more corrupt countries in 2002 have higher incomes in 2010.’
His core argument is pretty striking – when it comes to aid and corruption, corruption does indeed matter, but the cure is often worse than the disease: ‘an important and justified focus on corruption as a barrier to development progress has led to policy and institutional change in donor agencies that is damaging the potential for aid to deliver development.’ Ouch.