D+C Development and Cooperation (No. 2, March/April 2002, p. 26 - 27)

A lot is said and written about corruption in developing countries. But corruption is also part and parcel of development cooperation, as a new book published in Germany shows.

Once upon a time there was a young economist. He had heard a lot about the misery in the world and his heart was full of sympathy with the poor and the needy whom he wished to help to improve their lot. So he decided to go out and work where there was great need and his help would be welcome. Fortune was on his side and to his great joy he soon found a well-known development assistance organisation in Germany that was prepared to employ him and second him to one of its projects in a far away country. After some months of thorough preparation he travelled out there and began work. But, unfortunately, he did not live happily ever after until the work was done. He was rudely awakened from his naive utopian ideals when the reality of the project dawned on him.

He noted there were a lot of people in his host country and project environment who were interested less in his advice and the developmental content of the promotion than in financial inputs. He was astonished to learn of the tricks used by some of his counterparts, and government officials in particular, to cut large slices from the project 'cake' for themselves. Shocked, he reported the cases to his employer in Germany. But to his great discomfort the organisation implied that the practice was an old and familiar part of day-to-day project life, which was not talked about. And, above all, it should not be written about in official reports.

Reporting from field experience:
corruption in relief work

Professor Georg Cremer, a longtime staff member and now secretary-general of Caritas International, a leading German Catholic Church relief organisation, has written a book on the subject titled Korruption begrenzen - Praxisfeld Entwicklungspolitik (Limit Corruption - Practical experience from Development Cooperation). In it he describes the "practice shock" suffered by many inexperienced, idealistic development aid workers and experts on their first assignments abroad. He does not name his employer of his early days in the field, but expressly thanks the Caritas for having "encouraged me to make corruption control issues a subject for open discussion, although this is unusual in the aid agencies".

There are many reasons, both at the material and psychological level, for creating the taboo. The psychological factors were probably the decisive ones at first. They have as much to do with the Christian-charitable approach of the Western democracies as with an unconscious, paternalistic, post-colonial attitude involving a mix of sympathy and patronage. In view of the poverty and miserable living conditions of the people in many developing countries, helpers and their employers certainly closed an eye now and again when small sums were misappropriated or certain services were obtainable only on payment of a small 'baksheesh'. Westerners were ashamed of their wealth and willing to part with a bit of it, especially since a small sum triggered enormous gratitude and zealousness.

The day had to come when without giving a 'tip' (not as a thank-you for a good service, but in advance for what was actually a routine duty), nothing would work and modest requests would turn into brazen demands. So the noble helpers developed the thesis that corruption was a cultural phenomenon in the countries affected by it, and indeed the 'lubricant' that kept poorly organised administrations running at all. It did not occur to them that this is really an insult to all honest people in these countries and a slap in the face for all those who at great personal risk come out against abuse of power and corruption. Cremer comments critically: "Of course corruption is widespread, but that does not mean that it is part of the [local] culture. We have corruption in disparate cultures. Also in our own. I am convinced that corruption is a matter of unbridled power and a lack of structures that could ensure transparency."

In other words, where there are shortcomings in democracy there is also a lack of control mechanisms, or the organs of control are too weak to prosecute and punish exposed corruption cases. Many examples make clear that in societies which are going through radical change not only great creativity is released, but also criminal energies. Today's rapid global changes are nullifying proven traditional mechanisms to control power. This means the especially 'clever' and 'ruthless' very quickly use loopholes in the law or weak spots in controls to gain advantages for themselves.

Cremer shows this on the basis of many examples from the practice. It begins with the suppliers' almost routine 'customer service' of issuing exorbitant or otherwise 'doctored' bills in order to falsify settlements of accounts. And it by no means ends with the millions lost due to bribery, fraud in calling for tenders, and poor quality control. In Asia there is an apt saying: "The officials eat asphalt." Cremer writes: "The characteristics of infrastructure investment include the ease with which the quantity of output can be increased at the cost of quality." He illustrates this by citing an alarming example from Bangladesh. To protect the people from tidal waves, concrete shelters were built to provide refuge for them when floods threatened. Due to poor quality control some of the shelters were so badly built that they collapsed during the first storm to hit them and the people who had sought safety in them were swept into the floodwaters.

Large-scale projects offer
opportunitin for corruption

Cremer, who knows his material from many years of experience, also points out the harm that wrong setting of priorities causes in development cooperation. That includes not least the popularity of large-scale projects, which offer manifold opportunities to divert funds. On every step of the tortuous administrative path from conception of a project to awarding of a contract to implementation, something 'remains behind' for the officials involved. The greater the project volume, the greater the profit. The result is that in some countries the 'shrinkage' of project funds due to corruption is put at 20 - 30 per cent. But this 'general rule' does not cover possible total losses arising from prestige projects which sometimes are not only completely uneconomic but also cause unforeseeable follow-up costs. Examples include unsuccessful resettlement programmes to clear the way for dam-building as well as irreparable environmental damage. Cremer comments briefly: "For me, the only explanation for the many large-scale projects that have failed is that those who were responsible for them made money out of them."

But this gloomy and critical stocktaking should not give the impression that Cremer is resigned and pessimistic about corruption in development cooperation. True, he has no illusions that it would be possible to eliminate corruption entirely. But he makes many detailed and very useful suggestions on how it can be curbed drastically. First of all, he calls for doing away with blockades on information. "As long as the project implementing organisations claim that their own work is always free of corruption - due to whatever secret powers that might be at work - it is not opportune for their staff to note cases of abuse and report them to their organisation's management", he says. He also and above all takes a strong line on the need for project staff to be briefed before and during their assignment on the dangers of corruption and the diverse tricks with which they could sometimes be confronted. "That is simply part of a professional preparation", he argues. Second, he says, field staff need the unqualified backup of their head offices. Foreign experts often face considerable local risks, particularly in countries in which systematic corruption is linked with organised crime. In such cases the World Bank, for example, offers its field staff a 24-hour emergency hotline service. German organisations are still a long way from doing that.

To mention only a few other measures considered as desirable by Cremer, they include clear conditions for financial control, systematic price comparisons, better controls on awarding contracts, stricter controls of quality in project implementation, exchange of information and cooperation with other donors, checking with target groups to see if planned development goals have actually been realised, and making anti-corruption agreements with local partners and partner governments. He adds that as a last resort donors should not shrink from ending a cooperation.

Credibility gap

Taking this line, however, calls not only for courage and sensitivity but also for determination. But it is worthwhile. When aid projects fail due to corruption, the build-up work of many years is destroyed. The material and psychological harm done among donors and target groups can hardly be estimated. Therefore aid organisations should think about their credibility and disprove the ironic definition that "development assistance takes money from the poor in the rich countries and gives it to the rich in the poor countries". The Germans are still known as being among the most generous people when it comes to donating for a good cause. The great majority of them also approve of official development assistance from tax revenue. But they are also confronted with contradictory information. Competing for donations and grants the relief organisations in their glossy brochures emphasise the great success of their work and vow that "Every Euro gets there". On the other hand, TV viewers see daily pictures of need and poverty, blatant injustice and brutal armed conflicts in developing countries. How long will taxpayers and donors continue to ignore these contradictions?

But assisting organisations owe credibility also to the aid recipients. Better controls against abuse have nothing to do with mistrust. "Opportunity makes the thief" is an old German saying. Who can resist pocketing other people's money when it is made so easy? That is why ensuring 'clean' working conditions is part of the responsibility of the donors. This is not a sign of disrespect for the recipients of external aid, on the contrary. We owe it to those people in the partner countries who are honest and correct and fight hard and persistently against corruption in their own society.