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Corruption in fragile states: A panel discussion on the intersections of development, conflict and exploitation

Roxanne Bauer's picture

Just say NO to corruptionCorruption is a global threat to development and democratic rule. It diverts public resources to private interests, leaving fewer resources to build schools, hospitals, roads and other public facilities. When development money is diverted to private bank accounts, major infrastructure projects and badly needed human services come to a halt. Corruption also hinders democratic governance by destroying the rule of law, the integrity of institutions, and public trust in leaders. Sadly, the vulnerable suffer first and worst when corruption takes hold.

In fragile environments, however, the effects of corruption can be far more expensive. Corruption fuels extremism and undermines international efforts to build peace and security.

This was the theme of a panel discussion, entitled “Corruption in Fragile States: The Development Challenge,” which brought together Leonard McCarthy, the World Bank’s Vice President of Integrity; Jan Walliser, the World Bank Vice President of Equitable Growth, Finance and Institutions; Shanta Devarajan, World Bank Chief Economist of Middle East & North Africa; R. David Harden, USAID Mission Director for West Bank and Gaza; Daniel Kaufmann, President of Natural Resource Governance Institute; and Melissa Thomas, Political Scientist and author of “Govern Like Us.”

McCarthy noted in his opening address that corruption takes advantage of conflict states by exploiting weak institutions or a lack of governance structures. This was later echoed by Devarajan who stated that not only does corruption establish itself in conflict states, but those states that allow corruption to flourish are also more likely to devolve into conflict and turmoil. Harden followed up by reminding us that it is the systemic nature of corruption that drives conflict because it distorts how power is shared.

While all agreed that corruption is inherently pernicious, there was some debate about what can or should be considered corrupt activity. Devarajan provided the traditional definition that corruption is “abuse of public office for private gain” as the basis for discussion. Thomas answered this with a call to include private sector activity as well, and she argued that corruption should be defined the “misuse of entrusted power for private gain”.

Nevertheless, both definitions present challenges for analyzing and acting strategically to combat corruption in fragile states. The first is that, in fragile states, holders of public offices (national and sub-national) are usually not universally recognized as legitimately “public”. Instead, officials are often perceived to be representatives of factional interests and are treated by large sections of the population as such. In these cases, the power of ‘public officials’ is not legitimate and may even seem predatory. Kauffman suggested that government capture by the military could be considered corruption because it is an action taken to assume power without the consent of the people. Furthermore, many ‘public officials’ do not maintain a clear distinction between what is public and what is private, which is typical in patrimonial systems,  further diluting the meaning of abuse or misuse for private gain.

For these reasons, tackling corruption cannot be disconnected from other tasks that are fundamental to good governance, such as fair elections, professionalizing political office, putting in measures to safeguard institutions from misconduct, and building trust between the state and its citizens. Kaufmann followed up by saying that space for civil society should be carved out so that bottom-up approaches can be pursued.

In tackling corruption, however, it should be noted that the term ‘corruption’ is inherently normative, and according to Thomas, international organizations may undermine the rule of law in labeling some government practices as corrupt. She argues that the international community needs to consider ‘what is possible?’ when demanding that governments take action to curb corruption. Devaranjan pushed back, contending that high standards for ethical behavior should not be compromised because programs that fail to take the integrity and security of public institutions into account may undermine efforts to promote stability. 

Harden responded to this by offering technology as way to open up closed systems. He believes that encouraging technological change can alter the institutional structures in which corruption operates to make it more visible and thus more vulnerable to accountability. He also argued that donors can choose where to spend their money and that it’s ethical to shift funding from one organization or department to another if corrupt activity is discovered. Thomas replied to this by saying that instead of de-funding crucial services where corruption occurs, donors should consider incentives structures. Instead of paying up-front for a project, donors could pay for services to be delivered after they are, in fact, delivered. For example, Devaranjan and Kaufmann suggested that states can employ direct distribution of resource revenues, as exemplified by “oil-to-cash”, to avoid the dreaded ‘resource curse’.

Despite these and other debates, the panel did agree that corruption is taxing for any government, but even more so for states also battling fragility or conflict.  While it's possible to realize discrete victories in the struggle against corruption, sustainability is difficult because people revert to their previous behaviors when attention shifts away. Continuing to educate people, to fight for equality, and ending impunity are all part of the anthem against corruption and will continue to be.

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Photograph by Lars Plougmann via Flickr