Fighting corruption the Utstein way status and challenges

Transcription

1 Fighting corruption the Utstein way status and challenges Harald W. Mathisen Chr. Michelsen Institute October 2003 In July 1999 the Development Ministers of Germany, the Netherlands, the United Kingdom and Norway met at Utstein Abbey in western Norway to discuss future strategies for cooperation on a number of development issues 1. Among these were the issue of corruption. They decided that by working together within the multilateral organisations, by co-ordinating bilateral initiatives, and by improving administrative procedures and capacity, their common cause of fighting corruption would be strengthened. The initiative was laid down in an anti-corruption action plan, which was drawn up and endorsed, thus complementing national anti-corruption strategies 2. Even though the Utstein co-operation like the overall international effort to fight corruption still is in a relatively early stage, the time has now come to have a first look at the progress of the Utstein co-operation through an analysis of the project portfolio of the Development Agencies and the Ministries of Foreign Affairs in the Utstein countries. A project database on all relevant anti-corruption projects of the four partners is available on the U4 Anti-Corruption Resource Centre webpage ( The U4 resource centre is based at the Chr. Michelsen Institute in Norway. First, we will make a short revue of the national anti-corruption strategies and the Utstein action plan as it is summarised in a previous study titled Utstein partners anti-corruption policies 3. The analysis will then use the U4 project database to investigate which agencies are implementing what kinds of projects in which countries and regions. Next, we will look at the size and character of the projects across regions, and finally we will analyse whether the projects are aligned to national and/or the anti-corruption strategy as outlined in the Utstein partnership. Permeating the analysis will also be a concern for the level and form of donor co-ordination based on country studies and the latest research. In this discussion we will pay special attention to Colombia and Zambia as part of a regional outlook. What this report will not do, is to review the different projects in terms of their contribution to actually reducing corruption. This is a separate issue demanding a series of more lengthy reports. 1 See the documents Utstein principles and Four Development Ministers on a Common Course, available at 2 The full text of the Joint statement on Combating Corruption in Development is available at 3 The full text of this study is available at U4 reports 1

2 The Utstein partnership and the country specific plans of action The anti-corruption policies and strategies of the Utstein partners have the general international development policies of the four countries as their point of reference. Several of the themes set out in these principles are reflected in the anti-corruption strategies formulated by the Utstein partners, both collectively in the Utstein anti-corruption action plan, and individually in the various strategy documents drawn up by the respective development co-operation agencies. The Utstein anti-corruption action plan contains four main policy elements with the following objectives: Main components Strengthen the international anti-corruption framework, principally the OECD Convention to combat bribery and the Inter Governmental Financial Action Task Force (FATF). Provide co-ordinated support to developing countries committed to fighting corruption. Improve capacity in the development assistance administration of the Utstein partners to assist developing country efforts to combat corruption, and to protect development assistance co-operation from corruption. Learn from the experience of others and develop resources for anti-corruption activities. Objectives Promote additional adoption of OECD Convention. Promote adherence to OECD Convention. Support efforts to curb money laundering. Improve standards of corporate governance. Promote the inclusion of anti-corruption programmes in partner country PRSP documents. Adopt common and integrated approaches to anti-corruption efforts in selected countries. Increase anti-corruption efforts in poorer and transitional countries. Support implementation of anti-corruption programmes in partner countries. Continue to improve financial management and procurement systems, in particular in developing countries. Co-ordinate and strengthen sanctions/blacklisting against corrupt suppliers and institutions. Increase transparency of donor systems/operations Improve capacity to develop anti-corruption strategies and programmes. Establish capacity to provide information and advice Establish capacity for monitoring and review of anti-corruption activities. Increase exchange of information. There is broad agreement between the partners that corruption must be confronted at several different levels and that it is necessary to strive for increased policy coherence in integrated and holistic anti-corruption strategies. The action plan commits each of the Utstein partners to take common action, particularly in international forums (OECD, Council of Europe, UN and the World Bank) in support of the common objectives set out in the plan. Additionally, each of the Utstein partners has incorporated parts of this joint plan of action into the elaboration of their U4 reports 2

3 own anti-corruption strategies, thus demonstrating a common outlook on the issues 4. In terms of concrete actions and points of emphasis, there is some diversity among the four partners. United Kingdom The Department for International Development (DFID) has developed the most comprehensive anti-corruption strategy within the Utstein Group. DFID has contributed extensively to the analytical work underlying current anti-corruption approaches. The DFID strategy underlines the necessity of a holistic approach to combat corruption and that a piecemeal approach is largely to blame for the lack of success in curbing corruption. DFID seems to play a more active role also on the domestic arena than the other partner agencies. In bilateral development assistance relations, the approaches pursued by DFID are broadly similar to approaches of the other Utstein partners. The commitment to an active partnership and to let the partner country in question take charge of its own development through the PRSP process is underlined. DFID provides support to anti-corruption programmes within government structures as well as to civil society more broadly, like through NGO channels. These interventions are guided by three major principles for DFID anti-corruption work: Reducing opportunities for corruption through administrative and structural reforms, including decentralisation and economic liberalisation. Changing the incentives for corruption, through public service reform. Developing constraints on corruption, through legal reform and strengthening of public oversight functions (including parliamentary public accounts committees, national auditing bodies, ombudsman institutions etc.). Efforts to increase transparency are important, and support to civil society, including NGOs and independent media, may contribute towards such ends. The Netherlands The Netherlands (through its implementing agency for development co-operation, the Ministry of Foreign Affairs) adopted the anti-corruption agenda for development co-operation later than its compatriots. Efforts to combat corruption in development are structured along the same lines as seen in Norway and Germany. In bilateral development assistance relations the Netherlands supports a diversity of anti-corruption activities through its various programmes. The management of Dutch development assistance is highly decentralised, so there can be considerable variation with regard to the prominence of anti-corruption projects and the detailed design of anti-corruption intervention. The fight against corruption is in principle a concern that, according to policy strategy documents, should cut across all sectors and be mainstreamed into all Dutch development assistance policies. Specific anti-corruption projects aims to improve transparency and accountability within government. Support is to be provided to legislative and administrative reform, training of civil servants, strengthening of parliamentary oversight and national audit institutions and other public sector interventions. Civil society projects, principally support to strengthen independent mass media, is said to be important anti-corruption projects. Norway The Norwegian Agency for Development Cooperation, NORAD, has implemented a 2-year Good Governance and Anti-Corruption Action Plan ( ) to integrate anti-corruption efforts as a cross-cutting issue in its support to poverty alleviation in developing countries. The action plan concentrates most of its attention on bilateral development assistance relations, with 4 Most of the national and agency specific anti-corruption strategies for development co-operation and related documents (and some progress reports) are available at: U4 reports 3

4 less thought given to multilateral and international anti-corruption efforts. Anti-corruption efforts should now be mainstreamed into all aspects of Norwegian development assistance. In the near future Norwegian development assistance will be reorganised with more autonomy given to the stations. The result might be more flexible approach which is better adapted to taking on local challenges and opportunities for donor co-ordination. Germany The German bilateral development co-operation is formulated by the Federal Ministry for Economic Co-operation and Development, BMZ, and the Gesellshcaft für Technische Zusammenarbeit, GTZ, is the principal agency for implementing co-operation and development projects in general, and anti-corruption projects in particular. The German co-operation is said to depend on extensive policy dialogue with partner countries. Direct anti-corruption interventions are to have legal/judicial reform and the restructuring of public management. as a primary goal. Anticorruption efforts are seen as cross-cutting issues within a number of sectors, particularly in relation to the equitable distribution of essential social services (health, education, water) and public goods (land, trade licences etc.) and social safety nets. GTZ projects that work within the respective sectors is expected to elaborate on and include anti-corruption measures in the project design. Basic facts and figures All the relevant anti-corruption projects of the four Utstein partners is listed in the U4 project database, which is a searchable database by country/region, agency, keyword and various combinations of these. Each project is listed with the following key information: title, responsible agency, project number, agreement partner, implemented by, type of aid, approval date, end date, project stage, amount committed, DAC sector, anti-corruption relevance, recipient countries/regions, keywords, most important lesson, summary and finally a listing of a contact person for the project. This makes the database a potentially unique source of information on the activities of the Utstein donors, at the forefront of the fight against corruption. Ideas can be shared within the group, and donors outside can get input and ideas on interesting types of projects that they may pursue. There is also the opportunity for co-ordination at country or regional level, thus avoiding overlapping commitments and duplication that may lead to overfunding and confusion on the part of the recipients. This analysis will have as its primary goal to see who is doing what and where. But the interesting question of donor co-ordination will also be discussed, as it constitutes the core of the Utstein co-operation. The following basic statistics encompassing all the agencies are available: Figure 1: Basic statistics Total number of projects 375 Numbers by region Americas East Asia and the Pacific Eastern Europe and Central Asia Middle East and North Africa South Asia Sub-Saharan Africa Western Europe U4 reports 4

5 Numbers by agency Numbers by topic World 23 Ministry of Foreign Affairs (the Netherlands) 36 GTZ (Germany) 61 NORAD (Norway) 34 Ministry of Foreign Affairs (Norway) 6 DFID (UK) 219 National anti-corruption strategies and policies Government oversight and control bodies Public (civil) service reform and management Non-governmental insight, participation and control International crime and crime prevention Donor strategies and policies About half of the projects are completed, while the other half is in the implementation stage. Obviously, some projects stretch beyond one country or region and some projects cover more than one topic, making this overview too crude. All projects in the U4 project database are listed as either explicit or implicit anti-corruption projects, meaning focussed and direct on anti-corruption or projects with a possible anticorruption effect in addition to its main purpose. Implicit anti-corruption projects can also be projects in quite other sectors, for instance health and education, with an important or innovative anti-corruption component. According to the database, 108 projects are listed to have an explicit anti-corruption target while 256 projects are listed as having an implicit anti-corruption component. When reviewing the explicitly anti-corruption projects of DFID (40), NORAD (9), Minbuza (26), and GTZ (29), it looks like if the partner agencies have used different standards when uploading projects to the U4 database. Note also that not all projects are listed correctly. However, a very interesting pattern emerges relating to the funds committed to explicit versus implicit anti-corruption projects. The average sum committed by the donors to explicit anticorruption projects is just over 1 million Euros, compared to 7 million Euros for projects listed as having an implicit anti-corruption focus. Although it is to be expected that projects that focus explicitly on anti-corruption are smaller than projects with a broader focus, the actual ratio of 1:6 is very large. This discrepancy is mainly due to the large projects within the headings of National Anti-corruption Strategies and Policies and Public Service Reform and Management category, which have projects listed with a budget of up to 65 million GBP. Analysis by agency, topic and region Even though Germany is listed with the Federal Ministry for Economic Co-operation and Development (BMZ) and two implementing agencies (GTZ and KfW), only GTZ is listed in the database as having anti-corruption projects. In Norway, both the Ministry of Foreign Affairs and NORAD are funding anti-corruption initiatives. For this analysis there will for the sake of clarity be made no distinction between the two. As a starting point for the discussion, basic figures are broken down by country and theme. U4 reports 5

6 Figure 3: Projects by country and theme National corruption strategies and policies Gov. oversight and control bodies Public service reform & managem. NGO insight, particip. & control Intl. crime and crime prevention Donor strategies and policies Norwegian Dutch British German Sum Sum From the summations it emerges that the total number of projects on topics differs from the total of projects. This is due to the fact that some projects are cutting across several topics (and regions) and may therefore be registered twice or more on the topics list. However, we can also see that there are relatively few projects in the category of donor strategies and policies, and even less support to international crime prevention. The bulk of donor support is (of course) to recipient countries state institutions and civil society organisations. And, we can see there is a slight difference in emphasis between the agencies. Roughly one third of NORAD s projects are support to NGO insight, participation and control, one quarter are projects to support public service reform and management, and a little less than one quarter is support to government oversight and control bodies. This distribution is largely similar to the Dutch. DFID, on the other hand, is concentrating its efforts on public service reform and management projects, with almost half its entire project portfolio in this sector. We can also see a relatively stronger UK support to national corruption strategies and policies, and this adds up to a very heavy DFID support for recipient state reforms. At the same time, DFID is only to a very small extent supporting NGO insight, participation and control. The Germans are also leaning more towards projects in support of recipient state reform on the expense of NGO support, but not to the same extent as the British. Another very interesting point is the size of the projects. The average amount committed for a Norwegian project listed in the database is Euros, while the Dutch spend Euros, Germany double that amount committing Euros pr. project, while the United Kingdom is spending over Euros in average per project. These numbers are surprising and needs to be substantiated further. Figure 2: Projects by country and region Americas E. Asia and the Pacific E. Europe and C. Asia Middle East and N. Africa South Asia Sub- Saharan Africa World Sum Norwegian Dutch U4 reports 6

7 British German Sum Another tabulation which will act as a reference point for the analysis is the above table of support broken down on country or region for support. Again we can see that the number of projects by region deviate from the basic statistics, mainly due to the fact that some projects are registered on regions. The Americas Starting with the Americas, the database shows that the Utstein agencies have had 39 anticorruption related projects listed in the region during this period. 5 Colombia, Nicaragua and Bolivia have received most attention, and projects have most often been related to public service reform and management, followed by government oversight and control bodies, including all stages of the judicial process. While the Utstein action plan is not very specific on what kinds of projects that are to be perused, the project portfolio is clearly in line with the agencies stated anti-corruption policy. Though with one exception the Utstein plan and the agency strategy papers spell out the need for an integrated and holistic approach to combating corruption in developing countries a position that is well supported by research (OECD 2003) 6. Taking the TI National Integrity Study (NIS) 7 of Columbia as an example of a wider trend, it seems like the donors have put all their efforts into strengthening institutions, thus neglecting one important component of creating constraints, namely support to civil society and citizen participation. The NIS study for Colombia reads: However, beyond the changes and legal reforms, it is important to note an interesting surge in Colombian society that is beginning to become aware of the need to defend the frontiers of ethics, honesty and public efficiency. As has been mentioned, although the results are not yet palpable, Colombian society, accustomed to living with a high rate of corruption, has begun to understand that it is necessary to build a solid public culture that values collective wellbeing over individual interests. Furthermore: There is an enormous pedagogical, educational and cultural vacuum in the Colombian population. It is necessary to spread to the masses the knowledge of citizen rights and duties, instruction for their protection and, above all, about the actions that may be taken to fight corruption. Only one Utstein project listed in the database for Colombia seems to address this challenge, i.e. the German funded Programme for the support of decentralization and local development for peace running from 2000 to Two other smaller projects exist elsewhere in the region, but these are completed and only seem to scratch the surface of what has proven to be a necessary strategy for complementing the more traditional programmes focusing on the judiciary and state institutions. 5 Projects in the database date back no more than 10 years, but the bulk of projects are implemented (and half completed) over the last three years. 6 OECD (2003): Synthesis of Lessons Learned of Donor Practices in Fighting Corruption. DAC Network on Governance. Bruce B. Bailey (lead consultant). Available at: 7 All completed National Integrity Studies, as well as background material and an overview report is available at TIs website: U4 reports 7

8 Another issue is to see whether the Utstein donors have used the opportunity to share commitments and co-operate between themselves along country and sector lines. What one would expect to find is that donors have projects in all countries and across all sectors without reference to the involvement of others. Country-wise, there is some variation. DFID shares its commitments between the Caribbean and Latin America, while the three other agencies have focused their attention on Colombia, Nicaragua and Bolivia. GTZ seems to have a clear strategy, structuring efforts on fewer issues, while NORAD and the Dutch Ministry of Foreign Affairs have very modest portfolios. When sorting the agencies by topic, it did not emerge that donors were funding the same projects or over-funding within different sectors in recipient countries a problem that has been known to fuel corruption. However, discussing the level of involvement and donor co-ordination without reference to the engagement of other donor groups is insufficient at best. For example, USAID has a component linked to anti-corruption under its Democracy, Conflict and Humanitarian Assistance programme in Colombia for 2004 totalling USD 17,000,000. In addition, other bilateral donors, the EU and the UN system and the International Financial Institutions are involved. In this environment the Utstein group seems to have followed the lead of others and concentrated on traditional anticorruption programmes. The question then emerges: what should be the level and scope of the Utstein-group anti-corruption programmes in a region where other donors are more heavily involved? One of the strengths claimed by all U4 agencies is to have flexibility relating to decisions over what to fund and where to do it. This is potentially a great asset. At the same time the group has promised to support and push World Bank initiatives relating to the inclusion of anti-corruption chapters in poverty reduction strategies (PRSP). So, while donors pull in the same direction, some of the flexibility of bilateral donors may be reduced. With funds being the scarce factor, any ambition to have a holistic anti-corruption strategy might suffer as the group has less of a chance to focus where others are in neglect. With the WB involvement often being somewhat top heavy and focused on financial management and institutions of the state, local needs like those identified in the NIS study of Colombia loose out. A flexible approach would mean that the U4 agencies would have the opportunity to find other innovative projects, which for instance aim to foster local coalitions against corruption. Like in all aspects of public life, prevention gives a far greater value for money than repression. Examples of projects the donors could consider is funding the training of journalists, funding programmes running investigative journalism, or more directly to support radio and/or television programmes that educate the population soaps included. In addition, donors could support more traditional NGOs involved in outreach activities. Two examples of such programmes already listed in the database are 8 : TV program, 'This Week', Nicaragua Responsible agency: NORAD (Norway) This project aimed to contribute to refocus the public debate by bringing to the national agenda issues such as the public and private sectors accountability, decentralisation of the state and citizens participation. Also, to incorporate to the national debate new voices and proposals from emerging 8 All projects listed below is to be found in the searchable U4 project database, which include not only this summary but more information on project size, partners, dates, etc. plus contact persons for more information and in some cases also downloadable project documentation. U4 reports 8

9 sectors that usually are excluded from TV audience. Of particular relevance was the training of young journalists who had the opportunity for practicing production of television, NGOs communicators and social movements on production of TV, as an immediate objective of the project. Strengthening the participation of citizens in ethical and democratic themes, Bolivia Responsible agency: Ministry of Foreign Affairs (Netherlands) The Ethical and Democratic Foundation is an organisation that has only recently been formed. Its main goals are to increase public participation in the Bolivian democracy and to create a greater knowledge among citizens in relation to the development of Bolivia s democracy. For this reason they especially want to target their activities on the strengthening of ethics in both public and private life, as a mechanism to combat corruption. Through the enlargement of the public knowledge on ethical and democratic values, especially aimed at anti-corruption, the Foundation will strengthen the public participation of civil society needed for the further development of the Bolivian democracy. For this reason, it has created an Award for Anti-corruption Journalism, and is currently working on an Ethical Code of Conduct for the private sector, with the participation of businessmen. Furthermore, it is developing ethical courses for the curriculum of primary, secondary and higher education. The Ethical and Democratic Foundation is on its way to becoming a fully self-sustainable organisation. East Asia and the Pacific For East Asia and the Pacific, 25 projects are listed. DFID has been most active in the region, focusing on China and Cambodia. The Netherlands and Germany have chosen to concentrate on Indonesia. Norway for its part has no registered bilateral programmes, although the support to the Governance Cooperation Fund of the Asia Development Bank follows up its multilateral commitments. Like in the Americas, projects address government oversight and control bodies, national anticorruption strategies and public service reform. The database shows no sign of any clear thematic focus within the agencies, but the total involvement of the group may be too modest to expect any clear trends. One interesting type of project that the bilateral donors could be looking closer at in this region is experiments with e-government. This can increase accessibility and transparency in government operations where internet coverage is satisfactory. E-government seems to be best suited in the justice systems and for procurement agencies. NORAD has for instance recently made contracts and procurement offers available on its website Business opportunities ( Because the East Asia and the Pacific is a region with many emerging economies and increasing sophistication, the fight against corruption may be strengthened with donors helping to facilitate more transparency in government, through e-government. GTZ has registered the following project in Latin-America in the database: E-Governance approaches in local and regional promotion of the economy Responsible agency: GTZ (Germany) The digital divide goes along with the divide of opportunities for social and economic development, and the ongoing marginalization of less developed regions of the world. E-Government means the planned and co-ordinated use of information and communication technology to fulfil core function in at least one public institution. Though the notion is on the way to become a driver for modern and transparent government and administration, the potential of the new technologies have to be embedded in a broader political and administrative reform process and a professional management. In this broader sense, the project supports applications based on demonstration projects in the field of e- local-governance and promotion of local economy (SME) in Latin America (selected municipalities). In particular, improved transparency in areas such as e-procurement is considered as a means to prevent corruption, which will be subject to further research in the course of the project. U4 reports 9

10 Eastern Europe and Central Asia The international community has been extremely important in fighting corruption in Eastern Europe and Central Asia. Most initiatives have been multilateral, with an emphasis on implementation of international conventions, imposing pre-accession requirements, peer reviews and providing funding. The various co-ordination efforts have also been multilateral, under the OECD and the UN umbrella. In this picture, the Utstein group is a very small actor, or rather several small actors with an intention of working in unison. Thematically, the donors have concentrated their efforts on public service reform and management (43), herein projects on good governance administrative reform (23), public service training (9) and expenditure management (8). DFID seems to be very active, while Norway is only involved in one project. Up till now the Utstein agencies have 72 projects listed in a range of countries, but Romania, the Russian Federation and the (former) Federal Republic of Yugoslavia receive the most attention. As mentioned earlier there are considerable difference is the size of projects between the donors. Another find is that the size of the projects in the three countries receiving most funds are close to double the size in those countries receiving one or just a few projects. This, of course, opens the discussion of what a few stand alone projects with modest funds can actually achieve. With three of the Utstein countries being EU members, they can also take credit for a large part of what has come about through the work of the European Commission in the various former East Block countries. An example of a typical project in the region would be one agency supporting a World Bank or EU Commission initiative in raising the standards of the public administration, in order to reach WB targets or EU accession criteria: Improving Public Sector Performance - Estonia, Latvia & Lithuania (IPSPELL) Responsible agency: DFID (UK) The proposed programme of support for the Governments of Estonia, Latvia and Lithuania arises from DFID's Country Strategy Paper for the Baltic countries, which identified reforming the public administration in the three countries as one of three priority outputs. This project will focus on supporting mainstream initiatives in public administration reform at central government level and helping to develop strategic and performance management systems and capability. This is complementary to other support being given to the three countries, particularly from the European Commission, and is of significant relevance in helping equip the countries for accession to the European Union. In Latvia the World Bank is actively engaged in supporting the Government s PAR Strategy. The governments of the three countries have responded positively to the offer of assistance from DFID and have agreed programmes of support that cover: *Assistance to organisational units responsible for managing the implementation of Public Administration Reform (PAR) strategies, *Assistance to organisational units responsible for developing policy co-ordination and performance related budgeting procedures, *Assistance to organisational units responsible for developing human resource management strategies and procedures, *Assistance to training institutions responsible for providing high level management development programmes. It is worth noting that most projects in the Baltic States have an implicit rather than an explicit anti-corruption focus. One example of an interesting project listed in the database which explicit focus on anti-corruption is, however: The Pulse Initiative and Monthly Magazine Responsible agency: Ministry of Foreign Affairs (Netherlands) The aim of the Pulse Initiative and Monthly Magazine is to bring together all anti-corruption initiatives in Serbia. The first stage of the project consisted of an electronic publication. The second stage of the project will undertake the publication of a printed magazine. The Electronic Pulse has U4 reports 10

11 prepared the audience for a printed edition that would be distributed to officials and the general public who do not regularly use the internet but are interested in anti-corruption. This includes for example young police officers who hold responsible positions and are interested in being regularly informed about anti-corruption policies, findings and experiences. It might seem a surprise that the Utstein group have not registered one single project to the database in the Eastern Europe and Central Asia region on international crime and crime prevention. In fact, the UK with its strongly stated focus on these issues has only registered two projects across all regions. The partner agencies seem to have chosen not to include support for international measures in their portfolio of anti-corruption projects at the U4 database. Obviously there is discrepancy between the agencies on what constitutes an anti-corruption project, a point that will be discussed later. Even so, there are some good explanations to why this crucial topic seems to be neglected at the bilateral level. One possible explanation might be that specific projects on this issue are implemented by other parts of the Foreign Service, the military or the intelligence services, institutions which are not registering its projects with the U4 database. Or, with the nature of issues like trafficking and money laundering being international, the partner agencies have left the issue to organisations like the OSCE, which has a presence across the region, which is a sensible thing to do. The Dutch has for example, in line with its partners, chosen to support the Viennabased UN Centre for International Crime Prevention which is set up to combat the growing threat of trans-national organised crime. With the Utstein agencies engaged in both bilateral projects and multilateral efforts the strategy seems to be well fitted but is in line with the latest analysis of what works in the region? Recently, both country specific and regional reports have tried to sum up the most important lessons learnt and future challenges facing donors. The Utstein agencies have identified certain comparative advantage it feels it has over other groupings. NORAD and the Netherlands Ministry of Foreign Affairs hold that they have an autonomous and neutral character when compared with other major donors, while the GTZ and DFID emphasise their role in engaging recipient countries directly in dialogue over corruption issues. DFID and NORAD rightly also emphasise its experience and capabilities in the fight against corruption. If the Utstein group has influence over recipient governments due to their neutral character, size and competence, it is something they should make good use of. It is evident that while political conditionality has been a relative success in the EU pre-accession process, the concerted effort of the donors in the region has given modest results at best, due to a large part to the lack of political will. 9 In addition, donors should recognise that being the main driving force behind complex anticorruption strategies, setting up a detailed range of institutions to fight corruption is not enough. Donors need to follow up on each institution to ensure that they get to be fully independent, operational and effective. Unfortunately, this more active approach has not been given an adequate chance in most countries across the region. If donors keep neglecting the key factor of political will, all present and future donor funded anti-corruption projects will fail. 9 See: Anusiewicz, Tomasz (2003): Fighting Corruption in Post-Communist States: Where are we now? Where do we go from here? UNDP, Oslo Governance Centre. See also: Mathisen, Harald W. (2003): Donor roles in face of endemic corruption - Albania in the policy debate U4 Report. Downloadable from the U4 research & reports page at U4 reports 11

12 Unfortunately the World Bank, as the main actor in anti-corruption work, is not able to confront governments of endemically corrupt countries due to its non-political mandate. The Utstein agencies have therefore a clear role to play in engaging more directly the political leadership in recipient countries. But the analysis of the U4 project database suggests that the Utstein agencies to a large extent are duplicating the WB. Apart from the apparent danger of over-funding, donors therefore need to consider what affect their support to multilateral initiatives have on their own stated comparative advantages autonomy and flexibility. In order to engage governments more actively, there is also reason to question the present project portfolios of the Utstein agencies. Currently 72 project have been or still is running across a vast array of countries and topics, and even though some countries receive more attention than others the overall impression is that there is a lot of stand alone initiatives, which amount to little more than costly experiments. Suggestions are that donor initiatives need to be grounded in wider governance initiatives in building substantial government capacity and an active civil society. For obvious reasons such a refocus cannot be sustained over a vast number of countries. For the Eastern Europe and Central Asia region, the countries with less state capture and mafia style government should be targeted, simply because donors should avoid increasing the capacity of those who are bent on enriching themselves and their cronies. Middle East and North Africa In the Middle East and North Africa region, Yemen and Palestine has received most attention. Still only six projects are registered by the Utstein group. GTZ and DFID have put together quite large and targeted projects. The project highlighted below was completed at the end of 2001, and it had a total budget of 1,4 million GBP, making it a large and ambitious project by anticorruption standards. Automated System for Customs Data, Strengthening Economic and Financial Management - Yemen Responsible agency: DFID (UK) The goal of the project is to increase the yield from Customs revenue. The project purpose is to improve the efficiency and effectiveness of customs operations through the introduction of ASYCUDA (working with UNDP and UNCTAD) at the Yemeni Customs Authority. The IMF and UNDP is providing assistance to the Government of Yemen in implementing a number of improvements in tax and customs administration. These improvements will help strengthen public finances, enhance confidence in the banking system, and provide more reliable economic and social statistics. The programme represents the beginning of a capacity building process which needs to be sustained for several years to underpin the Government's comprehensive reform program aimed at achieving sustainable, enduring and equitable growth. South Asia In South Asia, the Utstein donors have been quite active with 39 different projects. Efforts have been quite targeted geographically with Bangladesh receiving 23 projects and Pakistan 6. The Netherlands Ministry of Foreign Affairs, NORAD and DFID have all targeted Bangladesh while DFID has also have been active in Pakistan. Sri Lanka, which is of special interest to Norway because of the Norwegian involvement in the peace process, has also received its share of projects. Again most efforts have gone into public service reform. Among the recipients TI Bangladesh has been able to attract funding from all U4 donors active in the country. Even in a country with so many projects as Bangladesh there seems to be no duplication of projects among the U4 group. It is noteworthy though that only one project is registered in Afghanistan, a number that is bound to rise in the future. U4 reports 12

13 Africa south of the Sahara As expected, a large number totalling over 171 projects are filed by the Utstein agencies in Sub-Saharan Africa. Again DFID seems to be more active than it peers with its 135 projects, while NORAD has 36, GTZ has 19 and Netherlands is listed with 17 projects. As mentioned earlier, the big discrepancy in numbers indicates that there is disagreement between the donors on what actually constitutes an anti-corruption project. If we look at two projects listed by DFID in Tanzania, Capacity Building in the National Elections Commission (2000) and Assistance to the National Elections Commission (2000), it is clear that the anticorruption component is quite weak, although present when using a generous definition. Still, when it emerges from the project information that the Norwegian and Dutch governments has been co-sponsors to the same project, but have not listed it as an anti-corruption project in the database then the variable for the number of projects listed seems to offer limited information. Still, DFID are clearly the most active agency across the continent as can be expected from its superior funds and its long term focus on corruption. One more evident problem relating to the number of projects is that some donors seem not to have uploaded all its projects. One example is NORAD s involvement in Malawi where no projects are listed, while internal documentation mentions five or six projects directly linked to corruption. The same can be said for DFID, as many of the projects mentioned in its anticorruption strategy from 2001 are not listed. Even though there should not be competition on the number of projects uploaded, for the database to be a working tool, all donors should have a second look to see if they have included all anti-corruption activities. When reviewing the targeted countries in Sub-Saharan Africa (as with any other region, in fact), the selection of partner countries seems sensible when for instance held against the TI Corruption Perceptions Index. Even when some of the most corrupt countries receive little attention, there might be very good reasons for this one being the lack of political will evident in many of the countries that are worst off. Taking a closer look at the U4 portfolio for Zambia, a country where political will is a novelty, gives some reason for optimism. Zambia has the most anti-corruption projects in Sub-Saharan Africa (21), indicating that the Utstein donors are particularly ambitious here. There are projects at all levels from community education, through various NGO initiatives, media strengthening, all the way through supporting anti-corruption watchdog agencies and government institutions. From the NIS study on Zambia it emerges that the EU, IMF, WB and UNDP and at least eight other bilateral donors are active in the country. 10 The Zambian government is therefore met with a host of initiatives by a donor community, which has also increased its use of conditionalities. With so many active projects from the U4 agencies and other,s it is very positive that NORAD has followed up on its stated policy of cost sharing by appointing a lead donor in co-ordinating anti-corruption initiatives. The donors established a Quality of Government Expenditure Group which in 2001 commissioned a mapping study of donor practices. It was also decided to set up a Working Group on Anti-Corruption (WGC) with representation from Norway, Netherlands, DFID and IMF. The group has met regularly and has also had meetings with their Zambian 10 Transparency International (2003): National Integrity Systems, TI Country Study Report, Zambia Project supervisors: Alan Doig and Stephanie McIvor. (All TI NIS studies are downloadable, see footnote 7). U4 reports 13

14 counterparts. Their report tabled in showed that all donors were interested in fighting corruption, but few had a clear policy in place or procedures and capacity to take up the fight. A part of the study was recommendations to strengthen the donor structures, capabilities, and the sense of common purpose through collective and individual actions. Support to Donor Working Group on Corruption, Zambia Responsible agency: NORAD (Norway) A representative from the Norwegian Embassy was asked to chair a Donor Working Group on Corruption (WGC). To support the work of WGC to e.g. hire external assistance, an amount of NOK was set aside. The goal of WGC was to develop a Common Donor Strategy to fight corruption. Core Activities: Consultancy work, arrangement of seminars, workshops etc. The Norwegian support was financial, but staff was also provided. Main Achievements: Better focus on anti-corruption work, development of a common strategy, better dialogue with Government, NGOs etc. Internal assessments/evaluations: Project is still ongoing. The NIS study for Zambia (2003) points to several positive effects of the donors work on corruption. But it also point to the countervailing forces mostly related to the high turnover of personnel in institutions receiving support and political interference. None the less, the efforts to co-ordinate donor efforts in Zambia are positive and should be duplicated elsewhere. World When searching the database for projects stretching beyond one region, listed as World, a positive find stands out as the U4 donors are honouring their pledge to support multilateral organisations. The donors have a common understanding of which organisations they want to focus on. That includes both important regional actors and NGO, parts of the UN system, OECD, Council of Europe, Transparency International at both country level and at HQ in Berlin, and other minor initiatives. The following project is representative of the 23 projects registered with the database. World Bank Institute Support to a Three Year Programme on Governance and Anti- Corruption Responsible agency: DFID (UK) Most important lesson: Broader understanding of the value of a participatory and inclusive approach in the fight against corruption. This proposal is for multi-year support to a collaborative program between WBI (with Bank Operations) and DFID, with a particular focus on Anglophone Africa and Eastern Europe and, to a lesser extent, South Asia. As well as a three-year co-financing commitment, the proposal recommends annual consultations between WBI/Operations Department and DFID to review progress and make changes in country/thematic allocations, to reflect changing circumstances. Principal elements of the proposal are : i) corruption surveys and diagnostics (in countries where these are not already underway); ii) support to the formation of broad civil society/government/ parliament/private sector coalitions and action planning, using corruption surveys, workshops and seminars as a catalyst; and iii) applied research and dissemination in selected areas (e.g. parliamentaryexecutive relations, public outreach campaigns) based on lessons learned from World Bank and other agency experience. Another area where the Utstein donors have been contributing is in the growth of knowledge about the causes of corruption, and in the last few years also strategies to fight corruption. Very few of these initiatives are registered with the database. This new literature have on several occasions emphasised the existence of different entry points for fighting corruption, often found at sector level. This project listed below is funded by DFID and is interesting as is shows the 11 WGC (2002): A common donor strategy on the fight against corruption. Lusaka, Zambia. U4 reports 14

15 close connection between corruption and money-laundering in the timber trade. Even so with other U4 not listing their support to research projects a decision should be made to either include all or none of the commissioned reports in the database. Controlling the International Trade in Illegally Logged Timber and Wood Products Responsible agency: DFID (UK) This report examines the means by which the international trade in illegally logged timber and wood products can be controlled in other words, how importing/consuming governments might establish and operate a system for denying market access to timber and wood products produced and exported illegally. This can be seen as a way of adding value to producer country enforcement actions, by establishing a system aiming to deny markets to the illegal products that are exported. Corruption in the allocation of concessions, in the award of licences to log, to process and to export, and in the evasion of taxes and charges is currently widespread in many countries. If this were to spread to, for instance, the award of certificates of legality, it would seriously undermine the initiatives described in this report. That is why measures such as reform of laws, transparency of operations, and independent third-party verification of chain-of-custody monitoring are stressed so heavily. There are other means, however, of tackling corruption, including a series of international agreements and initiatives launched over the past few years. In the wake of the terrorist attacks of 11 September 2001, increased international attention is being paid to related activities such as money laundering. To date little connection has been made between agreements on anti-corruption and money laundering and the timber trade, but there are clear opportunities to do so. Another finding from the project database is that several listed projects are cutting across more than one country. One example of one such project listed in the database is the Dutch support to the Institute for Multiparty Democracy (IMD). Covering eleven countries in Sub-Saharan Africa, East Asia and the Pacific, and the Americas, the IMD aims to support the process of democratisation in young democracies by strengthening political parties. With so many countries involved, it is difficult to assess the scope of each national component. While few would argue that there is a governance/anti-corruption component involved, the causal relationships and their effectiveness in reducing corruption is hard to ascertain. Once again returning to the question of uploading projects to the database, it is evident that the Dutch inclusion of the IMD is illogical as long as there is no trace of the German political party Stiftungs or other organisations that are deeply involved in political party and parliament support activities in the other U4 countries. Final thoughts The project database demonstrates that all Utstein partner countries have greatly increased their efforts and spending on anti-corruption activities in the last five years. The Utstein agencies have also been instrumental in raising the anti-corruption awareness among other bilateral donors and in the multilateral system. In fact, donors outside the group now to a greater extent feel compelled to include anti-corruption projects in their portfolios. Bringing the issue forward in tandem with the international financial institutions and the pioneering organisation Transparency International (TI), corruption issues have been elevated to the fore of the public debate in many recipient countries. Governments in countries fraught with corruption have subsequently felt the need to include specific anti-corruption targets and measures in their plans. Still, for the Utstein agencies, real challenges are to be faced not only because corruption is rampant in many regions, but also relating to the way anti-corruption efforts are organised regionally, by country, between agencies and indeed within agencies. This analysis has identified challenges at all levels. The most immediate problem that emerges when studying the project database is that the U4 group has been unable to agree on a definition of corruption, and consequently on what kind of U4 reports 15