Diagnosing Corruption in Ethiopia Perceptions, Realities, and the Way Forward for Key Sectors Janelle Plummer, Editor B 382059 14fc I Canadian International Agence g canadlenne de T Development D l t Agency A developpement d l iinternational THE WORLD BANK Washington, D.C.
Contents Foreword Preface About the Edi Abbreviations tor and Authors xiii XV xix xxiii Chapter 1 Chapter 2 Overview Unraveling the Issues and Challenges Methodologies for Sector Diagnostics Contributions of This Volume The Overall Picture Note Health Sector Corruption in Ethiopia Context for Analysis Framework for Analysis Extent and Sources of Corruption: Findings 1 1 2 3 5 12 17 17 19 19 21 29 34
vi Contents Next Steps 54 62 63 Chapter 3 Education Sector Corruption in Ethiopia Analytical Framework The Education Sector in Ethiopia: An Overview Mapping Corruption in Education in Ethiopia Other Study Findings Summary and Conclusions Recommendations 67 67 71 75 78 107 113 116 117 119 Chapter 4 Rural Water Supply Corruption in Ethiopia Corruption in the Water and Sanitation Sector Ethiopia's Water Sector Rural Water Supply Corruption in Ethiopia Summary and Recommendations Annex 4.1 Ethiopian RWS Borehole Study and Perception Survey Results 121 121 124 129 134 164 172 174 177 Chapter 5 Justice Sector Corruption in Ethiopia The Justice Sector and Corruption Defined Justice Sector Value Chains Ethiopia's Justice Sector: An Overview 181 181 186 194 194 Corruption and Political Intervention in Ethiopia's Justice Sector 208 Conclusions on Justice Sector Corruption in Ethiopia 224 Recommendations 226 230 233
Contents vii Chapter 6 Construction Sector Corruption in Ethiopia 237 237 Corruption in Construction 241 Corruption Risks in Ethiopia's Construction Sector 246 Assessment of Corruption Risk in Ethiopia's Construction Sector 258 Perceived Lack of Effective Competition in Parts of Ethiopia's Road Sector 267 Conclusions and Recommendations 275 281 283 Chapter 7 Land Sector Corruption in Ethiopia 285 285 Corruption in the Land Sector 288 Corruption and Land Governance 295 The Land Sector in Ethiopia 296 Corruption in Ethiopia's Land Sector 299 Mapping Corruption to the Value Chain 304 Recommendations 315 Annex 7.1 Country LGAF Scorecard for Ethiopia 320 324 324 Chapter 8 Corruption in the Telecommunications Sector in Ethiopia: A Preliminary Overview 327 327 Corruption in the International Telecommunications Sector 329 The Context: The Ethiopian Telecoms Sector 333 Corruption in the Ethiopian Telecoms Sector 343 Procurement of Equipment Suppliers: The 2006 Vendor Financing and Supply Agreement 346 Current Anticorruption Mechanisms for Ethiopia's Telecoms Sector 353 Recommendations 367 Concluding Remarks 372 373 374
viii Contents Chapter 9 Corruption in the Mining Sector: Preliminary Overview 377 377 Corruption in the International Mining Sector 380 Overview of the Ethiopian Mining Sector 384 The Legislative and Institutional Framework for Mining in Ethiopia 385 Corruption Risk in the Ethiopian Mining Sector 390 General Recommendations 412 '- 416 417 Boxes 4.1 S An Uneasy Coexistence of State and Private Drilling? 136 4.2 The Intergovernmental Fiscal Transfer Formula: Dividing Money Fairly among Regions 140 4.3 Contract Design, Tendering, and Procurement: Corruption Risk Examples 146 4.4 The Drillers'Take on Corruption Risk 147 4.5 The Costs of Shallow Well Construction: Where Are the Corruption Risks? 152 4.6 Calculating Total Variance in Borehole Construction 156 4.7 Borehole Design and Construction: What Role for Community Oversight? 160 4.8 Proclamation on the Establishment of Rural Water Users'Associations 163 6.1 Market Entry Strategies for Chinese Construction Companies in Africa - 270 7.1 Land Administration and Management Defined 288 7.2 Land Governance Assessment Framework 294 7.3 Areas of Weak Land Governance in Ethiopia 299 7.4 Urban Land Speculation in Ethiopia 301 7.5 Access to Land in Addis Ababa 302 7.6 Use of Forged Land Documents in the Finance Sector 303 7.7 Key Areas of Land Sector Corruption in Ethiopia 305 7.8 New Process to Allocate Leases in Addis Ababa 318 8.1 Stakeholder Perceptions of Corruption in the Ethiopian Telecoms Sector 351 8.2 General ETC Safeguards Applicable to All Projects 363 9.1 Falsification of Quality: Corruption Investigation bythefeacc 411