CORRUPTION AND VIOLENT CONFLICT

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1 CORRUPTION AND VIOLENT CONFLICT 17 OCTOBER 2013 Dominik Zaum Professor of Governance, Conflict and Security, University of Reading

2 Costs of Corruption

3 What is Corruption? No universally recognised substantive definition of corruption Corruption is defined with respect to breaches of local norms - different societies have different understandings of what acts are corrupt Three key structural characteristics: administrative or political favours in exchange for inducements, financial or otherwise; the violation of shared norms of public office; the existence of a well-developed distinction between the public and private sphere, which breaks down in cases of corruption.

4 Problems of Measuring Corruption Clandestine activity data is difficult to collect Exacerbated in conflict environments Reliance on Perception Indeces Perceptions rather than experience of corruption Reliance on expert assessments (including foreign experts) Instruments to measure particular types of corruption or cost of corruption in particular contexts (e.g. public expenditure tracking surveys) New methods of collecting data (e.g. I paid a bribe websites, corruption experience surveys) mostly capture petty corruption

5 What do we know about the impact of corruption? Corruption reduces growth Corruption fuels inequality Corruption undermines state legitimacy Reduces quality of public services BUT: know little about corruption and conflict 11 out of 16 countries at bottom of 2011 CPI are in conflict (but what is the causal direction?)

6 Prevalence of Corruption in Fragile States Country CPI Score 2011 Armed internal conflict (2011) since 2006 Fragile (2013) State Afghanistan 1.5 Yes Yes Angola 2 No Yes Burundi 1.9 Yes Yes Chad 2 Yes Yes DRC 2 Yes Yes Equatorial Guinea 1.9 No No Haiti 1.8 Yes Yes Iraq 1.8 Yes Yes Libya 2 Yes Yes Myanmar 1.5 Yes Yes N. Korea 1 No No Somalia 1 Yes Yes Sudan 1.6 Yes Yes Turkmenistan 1.6 No No Uzbekistan 1.6 No No Venezuela 1.9 No No

7 Some suggestions from the literature Some academics and donors associate corruption with conflict Corruption fuels grievances Rents arising from corruption offer economic incentives for conflict Corruption undermines state capacity Poor public services fuel grievances and unrest/undermine state legitimacy Poor coercive capacity of the state enables violent challenges to the state and conflict Growing body of literature that corruption and esp. patronage are central to maintaining stability in environments with weak formal institutions neo-patrimonial marketplace closed access orders joint extraction regimes

8 Corruption Principal-Agent or Collective Action Problem? Klitgaard s famous definition: C=M+D-A Sees corruption as a principal-agent problem ( asymmetric information) Sees it as a failure of governance (e.g. weak institutions), Response: increase opportunity cost of corruption; increase accountability; reduce discretion BUT: are there contexts where corruption is a collective action problem? (Rothstein et al) Corruption imposes a social cost on everybody, and change in behaviour would result in improvement BUT: the cost to the individual to change behaviour if others are not is very high No or few mechanisms to punish free riders In some environments corruption can be rational for the individual Particularly prevalent in conflict-affected environments?

9 Strength of political and economic institutions Political Economies of Corruption strong Influence Markets Elite Cartel Oligarchs and Clans Official Mogul Fragile states weak Fragmented/ competitive Participation in political and economic competition Cohesive/ uncompetitive Source: Michael Johnston 2005

10 Oligarchs and Clans Corruption Divided, polarised political elite Political authority is divided either functionally or geographically Elites compete electorally (or otherwise) over rents to distribute to their clients Access to rents dispersed and often insecure coercive capacity is divided

11 Official Mogul Corruption Cohesive elite, competition tightly controlled Control of rents is concentrated in small group around political leader Single, hierarchical patronage system Patronage system often complemented by ethnic or tribal ties Concentrated control over security forces and coercive capacity

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13 Impact of Corruption on State-Building Elite Settlements Rent-seeking opportunities associated with settlement can support negotiations to reach settlement Corruption and patronage central to maintenance of elite bargain BUT: exclusive settlements key contributor to conflict recurrence settlements can entrench corruption, undermine development and fuel grievances in the longer term Public Service Delivery Can facilitate access to markets and small-scale public goods delivery BUT: overwhelmingly negative impact Reduces resources available for public service delivery Limits access to public services Provision of Security Provides incentives for violence and undermines capacity of security institutions (e.g. ghost soldiers ) BUT: centralised, mogul type corruption can be stabilising resilient patronage networks, cooption of spoilers BUT: what happens if resources needed disappear (e.g. Afghanistan after Soviet collapse)

14 Conclusion To understand impact of corruption on conflict and statebuilding efforts we need to look at the organisation of corruption, rather than its scale While corruption has a high cost, its impact on conflict varies. Stabilising short- to medium term contribution from corruption, especially through maintaining political settlements Corruption in fragile states a collective action problem little political will to change it. Danger that AC efforts can re-ignite violent conflict