Fighting Corruption in Africa

Stephen DeAngelis

December 1, 2006

I have discussed corruption and development before and noted that corruption remains an anchor keeping underdeveloped nations from progressing. I believe that corruption is the first thing that must be addressed after security has been established if a Development-in-a-Box approach is to gain enough traction to make a difference. Development relies on attracting foreign direct investment as well as official development aid and NGO assistance. None of these funding streams will continue if the money simply ends up lining the pockets of corrupt officials. A new player has emerged in the effort to address corruption in Africa, Sudanese billionaire Mo Ibrahim [“To Fight Corruption, One African Offers Presidents Cash,” by Tina Rosenberg, New York Times, 24 November 2006]. How bad is corruption in Africa — especially sub-Saharan African? “Every year at this time,” writes Rosenbery, “a private organization called Transparency International ranks countries on how corrupt they are perceived to be. The current index is notable for what has not changed: the sad persistence of sub-Saharan Africa at the bottom of the heap.” Rosenberg continues with the story about Ibrahim:

What is new this year is that Transparency International has new company in fighting corruption. A Sudanese cellphone billionaire named Mo Ibrahim announced recently that he will give an annual prize worth more than $5 million to an African head of state who was freely elected, turned over power to a freely elected successor and governed well while in office. Skeptics might ask how the cause of fighting corruption will be served by awarding what will be the world’s largest individual prize to a powerful leader for doing his job. The answer can be found in the dreary immutability of Transparency’s list. Any first-year business school student can design successful strategies for fighting corruption. It persists because political leaders in many countries, especially in Africa, have little incentive to do any of these things.

Ibrahim is simply engaging in realpolitik to try and help move his continent away from the bottom feeders that currently govern many African states. Development-in-a-Box™ is all about helping countries implement best practices so that they can foster the trust and confidence of important economic players. Without leaders of integrity, however, this is difficult.

Corruption is tamed when government agencies are set up to make corrupt behavior difficult. Two examples of how far the world is from this goal: Many government agencies in poor countries cut costs by paying workers a pittance or even nothing, expecting them to live off bribes. Before Mexico reformed its customs posts as part of its bid for the North American Free Trade Agreement, Mexico City’s airport effectively kept no registry of what came in on 100 planes a day. There are lots of examples of how to do this right. Australia, Hong Kong and Singapore, now all among the very cleanest countries, used to be corruption cesspools.

Rosenberg laments that there is more rhetoric than action when it comes to tackling corruption. Politicians like to talk tough on corruption (taxpayers like to hear those kinds of things), but if they actually do something, it normally involves going after corrupt officials of past regimes rather than dealing with currently corrupt practices.

Leaders have a bad record of doing what really works: open government to public scrutiny, carry out bidding for government contracts transparently on the Internet, pay government officials decently, investigate public officials who buy Mercedeses, cut red tape and restructure government offices to remove opportunities for bribery. Corruption benefits leaders personally. It rewards supporters and greases the political machinery. And anyone who really tries to fight corruption makes a host of inconvenient and perhaps dangerous enemies. That’s where Mr. Ibrahim’s prize comes in. In most countries in Africa, leaders today have unlimited opportunities to plunder and no checks on their power. But once they leave office, they lose everything. With rare exceptions, they receive no further salary or perks. This is a perfect system for encouraging presidents to steal as much as they can and cling to office. The Ibrahim prize seeks to help change this equation. A panel of experts in African governance will choose a former president to get $5 million over 10 years, and $200,000 per year for life after that. The ex-president will also receive $200,000 a year to give to charity. (The prize may not be awarded every year.) The prize increases the appeal of leaving office, and helps presidents feel less need to pilfer their way into a comfortable retirement. It will also give them an incentive to improve the lot of their people. Its limitation is that it mainly affects the behavior of the chief executive. Addressing big-fish corruption is not a full solution. Even a puritanical leader can run a very corrupt government, especially if he suffers from the misimpression that his own probity is enough.

Rosenberg ends her article with a bang, discussing why structural changes are as important as leadership changes.

What counts is how the system is structured. To change that, Africa, like elsewhere, needs more than an Ibrahim prize. It needs a permanent source of political pressure from citizens and business groups — not just general disgust, but advocacy for specific reforms. Corruption always carries its own powerful lobby. Honest government needs one as well.

That sentiment reflects the basic philosophy behind Development-in-a-Box — change the system for the better by adopting best practices from countries that have pulled themselves out of poverty or rate high in a particular area (like high on the anti-corruption scale). Lives will change for the better when people can rely on decent wages rather than bribes and when competence replaces nepotism as the basis for employment.