Controlling Corruption in Afghan Aid as the U.S. Withdraws

Foreign aid has flooded into Afghanistan over the past decade and a half, including over $104 billion in US aid dollars alone; indeed foreign aid currently comprises 60% of Afghanistan’s budget expenditures. But despite—or perhaps because of—these immense expenditures, corruption still plagues the Afghan government and economy (Afghanistan ranks 175/177 on Transparency International’s Corruption Perception Index)–and this greatly concerns the Afghan people. Since 2008, the American effort to address corruption in Afghanistan has been overseen by the Special Inspector General for Afghanistan Reconstruction (SIGAR). SIGAR, currently headed by attorney John Sopko, conducts audits and investigations, and issues recommendations and reports to reduce fraud, waste, and inefficiency. SIGAR’s unique approach—centralized, independent oversight over all agencies involved in Afghan reconstruction—has yielded tangible benefits, including saving almost half a billion dollars through a single audit. Reform efforts by the United States and the international community have improved Afghan legal structures, including by crafting comprehensive anticorruption laws and strategies, though serious problems remain.

Yet maintaining accountability and oversight over foreign aid will be even more challenging as U.S. troops leave. In SIGAR’s most recent quarterly report, Sopko points out that “[l]arge areas of the country . . . will soon be off limits to U.S. personnel due to base closures and troop withdrawals.” Nonetheless, the U.S. will continue providing external financial assistance as Afghanistan even as America’s footprint shrinks, and the United States will continue to foot the bill for much of Afghanistan’s public sector even as the US withdraws all but 9,800 troops by December 2014. What can American policymakers to do address the problem of corruption in development aid to Afghanistan during and after the withdrawal?

At first blush, perhaps not much. The US has struggled to stem misallocation of American funds previously, and its levers will weaken as its presence diminishes. Nevertheless, the US will retain significant influence in the near future, and there are a number of concrete steps the US can and should take to limit the extent of corruption in US development aid to Afghanistan, and to support anticorruption efforts in Afghanistan more generally:

  • First, the US should narrow the scope of its foreign aid programs, and focus more of its resources on measuring outcomes and ensuring accountability. The loss of leverage and monitoring capability associated with the withdrawal will require offsetting investments in auditing, oversight, and other efforts to limit corruption and misappropriation, even if this entails reducing the overall amount of money transferred to Afghanistan.
  • Second, and closely related to the above point, the US can and should target its aid at a few high-priority sectors, particularly sectors that may contribute more generally to good governance and anticorruption. Prior efforts have been wide-ranging, and driven in large part by necessity—Afghanistan lacked basic governing capacity following the invasion, and security concerns have dominated the anticorruption agenda since then. But now that the US is withdrawing, concentrating more resources in a smaller number of high-priority areas such as education, access to justice, and supporting the development of an independent media and civil society could help the U.S. effectuate lasting change and shore up anticorruption efforts.
  • Third, the US can and should reduce its reliance on private actors in dispensing aid. Though the public sector is rife with corruption, some scholars have pointed out that the US government’s over-reliance on private actors in dispersing aid may have impeded the development of public sector capacity. Channeling future expenditures through the government could help in the difficult work of building effective institutions, even if it comes with some short-term costs.
  • Fourth, notwithstanding the withdrawal, the US needs to continue to use its influence to press Afghan public officials to comply with Afghanistan’s anticorruption laws. After all, although Afghanistan now has decent laws on the books, laws are only as strong as their implementation, and in Afghanistan, applying  written law has been spotty at best. As the scope of the US mission narrows, maintaining pressure on public officials to comport with the laws as written will be key.

Getting the balance right will be hard, but it’s crucial. Otherwise, incompetent and corrupt government could undermine the significant gains Afghans have realized over the fifteen years.

8 thoughts on “Controlling Corruption in Afghan Aid as the U.S. Withdraws

  1. Of your four suggestions, the third one — channeling more foreign aid through public officials rather than private actors (NGOs and the like) — strikes me as the most interesting, most potentially controversial, and least obviously right. So perhaps it might be worth focusing a bit more attention on that one.

    On the one hand, your point is well-taken: If one wants to build up the Afghan government’s administrative capacity, then it’s important to give the government bureaucracy significant resources and responsibilities, rather than circumventing it at every turn. On the other hand, if corruption really is pervasive in the Afghan bureaucracy, and it’s going to be even harder for the US to monitor its aid dollars after the pullout, then greater reliance on the government, rather than NGOs or other private actors, in administering this aid might be a recipe for disaster. And here it might be worth observing that in some of the recent asset repatriation actions — most recently the one involving Equatorial Guinea — there was a considered decision to funnel the aid through private charities rather than the government.

    So, while I think your position is certainly defensible, perhaps it would be worth pressing a little bit on why you think, on net, it makes sense in this specific context to rely more on the public bureaucracy rather than private actors in overseeing the dispensation of US aid.

    • Great point–it is certainly a tough balance to strike. It’s worth noting that the U.S. has encountered corruption in both the private and public sectors. But more to your point: Broadly speaking, I think focusing on the public sector in Afghanistan *right now* makes sense because of the unique relationship between the U.S. and the Afghan governments.

      For now, the U.S. retains significant influence in Afghanistan. Channeling aid through the government provides ongoing visibility into Afghan government operations during the drawdown. Lots of news reports point out that Afghan institutions have thus far performed best (most effectively and transparently) under close scrutiny by U.S. military personnel and aid workers. The U.S. may be able to shore up these gains by maintaining close involvement.

      Similarly, Afghan institutions are still growing and developing, and may be more receptive to change now than they will be in, say, five or ten years. Even if we get less bang for the buck through the public sector, that might be worth it if it produces an education system, for example, that has better internal checks and balances (even if they aren’t perfect).

      Part of the problem over the past fifteen years has been the vast sums dispersed and complete lack of unified anticorruption plan (which Sopko reiterated recently). As the U.S. mission in Afghanistan narrows, aid administrators may actually be better able to keep track of expenditures and root out problems in projects early on. On the flip side, you could also see American attention diverted from Afghanistan and less oversight as a result. So perhaps that’s not controlling one way or the other.

      Lastly, I think it’s worth highlighting that there have been some hard-fought gains–for example, improvements to anticorruption laws. On one hand, Afghan officials do continue to skirt accountability through political connections. On the other, strong anticorruption laws at least provide a legal basis for local lawyers and/or NGOs to rely on. That legal precedent, coupled with local actions and pressure from foreign governments and organizations, may help incrementally tip the scales against corrupt leaders.

    • Excellent post, Julissa. On the point about channeling aid through the public sector, I would be curious to know a lot more about the nuances of the government of Afghanistan. I don’t know much but I do know that, on the one hand, newly-elected President Ashraf Ghani has actually exhibited an early commitment to improving governance and removing perks for officials. On the other hand, he is widely recognized as a product of the West and has come under fire from national critics for his aggressive approach to reforms. Of course, I wouldn’t give much credence to many of those critics, who were the beneficiaries of the wasteful, lavish system of governance under Karzai. And I am definitely inclined to agree with you that aid must be channeled through the public sector in order to strengthen capacity in the long run. But we can’t ignore politics and Ghani’s detractors warn of a backlash. A part of me wonders, in a country so factionalized and dependent upon coalitions, whether it is possible to go too far, too fast.

      • Absolutely–in such a fraught and fractious political environment, the U.S. will always be limited by a.) the partners available on the ground and b.) Afghan public opinion toward the U.S. It’s a tough balance to strike.

  2. As someone who doesn’t know a lot about this issue, I’m wondering if you see a tension in the first proposal. I’d be interested to know what the U.S.’s sources of leverage are in ensuring accountability in Afghanistan. If the US decreases the amount of aid to Afghanistan generally and focuses more resources on monitoring/accountability, will the US’s ability to ensure accountability be weakened? In other words, if after the wind down the US loses aid as a source of leverage for keeping government actors accountable, how will the US ensure that Afghanistan is following through on anti-corruption efforts?

    • Great questions. There is certainly a tension there, but I don’t think it is controlling. For example, say the U.S. currently spends $1 million/year on ten different activities and 10% of each project budget on monitoring and oversight. My suggestion is to do something like: scale down to 5 core projects, and ramp up monitoring and oversight spending to 15% of each budget.

      While the project budget will drop somewhat, the overall resource allocation to Afghanistan remains the same–$10 million. And the U.S. would have greater leverage over the sectors it is most invested in, and be more focused on ensuring transparency therein.

      It’s true that as U.S. aid totals drop, leverage over the Afghan government will also decrease. Narrowing the scope of aid programs and heightening monitoring can help bolster anticorruption efforts *even as* overall influence wanes.

  3. Also as a non-expert, I’d be curious to hear what you think has prevented the U.S. from either pushing on this issue before or, if it has pushed, from finding success. From your post, it sounds like your third suggestion, even if a good idea for long-term good governance and development, won’t necessarily contribute immediately to anticorruption efforts. You link the prospect for continued leverage to a Ia narrowed scope in aid programs offsetting (at least somewhat) decreased aid, but is there even enough leverage there now? Has the U.S. just not been sufficiently pressing anticorruption efforts there? (I know that’s beyond the scope of your initial post, which is prescriptive and not necessarily based on what is likely to happen, but it would be great to hear your thoughts in regards to the likelihood of any of this occurring, and I think as well the reasons corruption is still a significant problem in Afghanistan may have implications for the effectiveness of your suggestions.)

    • The answer is complex, but has to do with: 1. The primacy of military over development goals for much of the U.S. intervention (a point I’m sympathetic to–building schools doesn’t do much good if you can’t protect the people who use them); 2. The need to create and sustain a central government in a fractured country; 3. Afghanistan’s vast, vast needs for infrastructure, institutions, laws etc.; and 4. The immense burden that running two wars in two countries placed on both the U.S. government and its men and women in uniform.

      Together, these factors created an environment where the U.S. government often overlooked corruption, especially early on. Points 1 & 2 in particular led to distasteful political compromises, but I doubt there were any great solutions to forging a unified government out of the ashes of a regime as repressive as the Taliban–some compromise was inevitable. (Though there are certainly ways we could have done better).

      Once the U.S. and local partners realized hard-fought security gains, there was a strong desire to make tangible development improvements, and to effect such improvements fast. Again, it’s hard not to be sympathetic to American efforts to pour aid into Afghanistan. And the needs were huge. But the byproducts of the aid spike included lack of coordination, poor oversight, emphasis on spending quickly over monitoring closely etc.

      Since 2008, there has been a concerted effort to reign in corruption, driven in large part by SIGAR. As noted, it has had mixed success. Perhaps if the U.S. intended to maintain its broad role for another 5-10 years, we would have seen increasingly significant success in our efforts. My point here is simply that we’ll probably do better, in this particular political situation, if we are more modest in our goals.

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