Can aid be effective in fighting corruption in recipient nations? The question came to my mind by reading the news about a recent report issued by the Independent Commission for Aid Impact (ICAI) a British independent body set up to keep a check on the work of DFID, the overseas British aid agency. The ICAI is not happy on how the work of DFID in tackling corruption.
In a recently published report the independent evaluation body highlighted several inadequacies DFID is having not only in keeping an effective check on corruption but also on the fact that the same aid could be a factor in encouraging more corruption.
In short DFID is not doing enough to tackle corruption and it is unable to change the structural patterns conducive to corruption.
Nepal is a very important country within DFID’s portfolio. It is in Nepal where DFID and other donors have invested huge sums of money in good governance projects, including the massive Local Governance and Community Development Program, LGCDP.
Among other things the program tries to pilot effective local governance institutions at grassroots levesl to offset the lack of locally elected democratic institutions, establishing participatory forms of government.
Simply the program tries to offer new opportunities for development at local levels by ensuring that adequate forms of accountability are in place.
But can such programs produce the desired outcomes in an environment that is prone to corruption and mismanagement?
I just imagine the frustration DFID officers must experience by reading negative evaluations.
I cannot help wondering if the final judgment is really fair.
No doubt that donor agencies could do better to prevent corruption but when we talk about millions and millions of aid money trickling down in a “hostile” environment lacking the underpinnings of accountability, what are we really expecting? Are we really surprised about this?
LGCDP is trying to reset the way local bodies work. This is a massive exercise deserving praise and encouragement. If it worked, all citizens of Nepal would gain tremendously. The problem is that it is really hard to expect miracles from such programs.
Aid can be made more effective, more transparent but it has structural limitations that derive from its intrinsic nature of being money injected in the national system where oftentimes there is not such a system in place for effective spending of aid money.
Any government is very overwhelmed by free money and does not have the capacity to spend all the grants it receives.
Not that aid is all wasted. Aid can still make the difference but it must be well spent and accounted for.
Budget support through international aid won praises as it allows the recipient country to spend the aid money on its own but for example oftentimes I am puzzled by the millions of aid dollars going to the ministry of health when district and zonal hospitals are in a pitiful state and it seems not really cared about.
There is still ample room for DFID to get its hands more “dirty” at the grassroots level to incentivize anti-corruption behaviors but without political will of the recipient government, efforts to fight corruption will yield no results.
The problem is that political will is pretty weak in a country like Nepal besides the rhetoric used by the government though recently the CIAA has been doing a pretty good cleaning up the dirt also at local level.
Surely the country offices of donor agencies cannot finish the job alone. If political will does not emerge in the beneficiary countries, they need political and diplomatic cover from their own governments because if they seriously embrace an anti-corruption approach, they will realize that they have few friends in the host countries.
If adequately backed up, donor agencies could endorse a much reinvigorated action against corruption:
- More resources, not only financial, could go to local grassroots associations provided that donors manage to simplify their requirements. Intermediary organizations, possibly national NGOs, could be selected to coordinate the work of local associations and groups and easing up the administrative requirements
-Set a realistic deadline within which all grants will be phased out (I am aware this is all about killing the aid system and it won’t happen anytime soon)
-Blackmail, yes you read well, blackmail the recipient governments and threaten to withdraw/suspend drastically all the financial support unless there emerges a strong political will to combat corruption. If this does not happen and the political leaders keep going with their usual behaviors, donors should shut down their shops.
-Put more aid resources in impact investment initiatives that create wealth at the local level
More specifically for the case of Nepal, the donors should push for the following:
-Support the extension of CIAA mandates
-Institutionalize and expand the Ward Citizen's Forums, one of the greatest innovations of LGCDP
-Support, even financially, the work of the public accountability committee of the parliament
-Ensure effective implementation of Right to Information (DFID has been trying to do this actually)
-Support a massive advocacy campaign against corruption
Actions in these domains can bring some tangible improvements in the overall level of good governance at the local level.
Matt Wilkins, the ICAI Program Manager that was part of the assessment team, posted in the a ICAI blog “The task for ICAI is now to use all of this information to form a judgment on whether DFID is doing as much as it can– using its “brand” and its programs – to help countries like Nepal emerge from corruption”.
We should all ask not only what donor agencies can do but importantly what their embassies and governments can respectively do to use their leverages to effectively pressurize recipient countries to do their job in eradicating corruption. Without local will, there is no way to put an end to corruption.
PS
If local elections happen, will corruption decrease and good governance increase? I would not be too optimistic on this though local elections should be welcomed, provided that only honest and clean citizens run for elections. An institutionalized Ward Citizen Forum could play an important role, acting as a civic watchdog to the newly elected local bodies.
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