In a new report on U.S. foreign assistance, To Fight Corruption, Localize Aid, OxFam America urges radical changes in the way the United States helps developing nations combat corruption. Providing funds to strengthen anticorruption agencies, write new laws, and other traditional “top-down, donor-driven methods of fighting corruption” have had little impact on corruption the American member of the international Oxfam confederation asserts. U.S. aid should thus be redirected to “locally driven approaches” to fighting corruption. By this the report means U.S. assistance would go directly to “local change agents” so that they could “tackle institutional challenges, including corruption, in their towns, cities, and countries.”
The rhetoric of a community-based, “bottom up” approach to fighting corruption has an appealing ring, and the report showcases successful efforts to combat corruption at the local level in Guatemala, Liberia, and the Philippines to support its claims. But a closer reading of these stories, and of the report itself, shows that the rhetoric outstrips the reality.
The report describes how citizens of Chinique de las Flores, a small town in western Guatemala, mobilized to have a corrupt mayor removed from office, how in Liberia a citizen found a way to deliver information that bolstered government accountability, and how in the Philippines citizen oversight curbed corruption in the provision of textbooks to primary school students. Each of these cases shows that citizen activism was essential, but in each that was only half the story. In Guatemala removal of the mayor required an agency of the central government to charge him with corruption and the courts to convict him. In Liberia it was the office of the President that used the information to enhance accountability, and in the Philippines text book theft was ended only because the citizen group worked closely with the ministry of education.
At various place in the text the report’s authors acknowledge that the battle against corruption requires that at least some government agencies function effectively: “a locally driven approach empowers citizens and their state to collaboratively . . . reduce corruption” (p. 8); “locally driven efforts involved a combination of citizen activism with a willing government to respond to the needs of citizen voices” (p. 10); “great example of how the civil society activism and oversight combined with willing and effective government leadership” (p. 19). What the report’s authors don’t say is that a collaborative or “willing government” must be an able one as well and that that ability is often the product of the “top-down, donor-driven methods of fighting corruption” it derides. Methods that have included, for example, providing training to Guatemalan investigators, prosecutors, and judges to successfully pursue cases against corrupt officials, that have funded the automation of Philippine audit agencies so they can track payment for textbooks, and that provided training and equipment to senior officials in Liberia so they could hold bureaucracies to account.
On the other hand, if the “locally driven” rhetoric draws attention to the many sensible recommendations the report advances, that’s fine. Among the best are:
- Get Congress to stop micromanaging U.S. foreign assistance by earmarking so much of the aid budget for pet projects. (Note to OxFam: Congressmen Gerald Connolly and Chris Van Holland should be enlisted in this fight. Both served on the Senate Foreign Relations the last time that committee wrote a foreign assistance bill and have first-hand knowledge of how the foreign aid pork barrel defeats aid effectiveness.)
- Invest more in preparatory studies to understand local context and thus how aid can best support citizen efforts and the government agencies that must work in tandem with citizens. Note of course that this will result in greater expenditures on consultants, both international and local, who know the country and its institutions. Aid proponents often look askance at such expenditures but greater appreciation of local conditions is essential and thus higher overhead costs cannot be avoided.
- Stop relying on the TI Corruption Perceptions Index and other aggregate measures of corruption perceptions to evaluate program success. Readers of this blog know how welcome this recommendation is (doubters should click here, here, and here).
- Make aid more transparent. Governments receiving assistance and their citizens should have easy access to readily understandable data showing which agencies, NGOs. and so forth are getting how much and for what.
Successful efforts to combat corruption require an engaged, active citizenry and a willing, capable government. Stripped of the rhetoric, the new OxFam report makes a powerful case for why U.S. foreign assistance should advance both objectives.
GAB | The Global Anticorruption Blog 
Prof. Messnick – thanks for the mention, glad you found value in the substance of the report. Great call re Congressman Connolly; he was a featured speaker at the launch event for the report today on Capitol Hill: http://nsp.performedia.com/gc/oxf15/user
Hello Prof. Messnick,
Thank you for reading the report! I’m glad you agreed with our recommendations. I wanted to make one clarifying point. When we advocate for a locally driven approach, we isolate the term “local” to mean only civil society. There are leaders in governments as well who, with the right kind of aid, can be empowered to correct institutional dysfunctions around them. In fact, in the launch of the report, we featured Mr. Gyan Mani Nepal, a district education officer in Nepal. Without any external assistance, he created an accountability program simply using his phone to capture images of teacher absenteeism and publicizing those images. Because of his work, teacher absenteeism rates decreased dramatically and quality of education is increasing. And just a few months ago, his fellow countrymen voted him “Accountability Idol” in Nepal. Our point is that donors have their hands tied behind their backs. Too much donor emphasis is placed on supporting normative institutions (the traditional top-down anti-corruption approaches,) which are important, at the cost of supporting emerging solutions to governance and development challenges that come from people like Mr. Nepal, a pro-reform government official.
Glad to take this conversation further!
This is a very helpful clarification, and also raises (in conjunction with Rick’s post) a more general point: When describing approaches to anticorruption, or development projects more generally, we can all sometimes be a little to cavalier about throwing around terms like “top down” and “bottom up” (usually, though perhaps not always, celebrating the latter and criticizing the former). But the reality is a lot more complex. It always is, of course, so just saying that is a tad banal. But sometimes the language of top-down and bottom-up may obscure the ways in which we need to cultivate integrated approaches, including approaches that can’t be neatly categorized as top-down or bottom-up. That’s hardly a deep thought, but I think this exchange helps to drive it home.
One correction to the post above: When we advocate for a locally driven approach, we do not isolate the term “local” to mean only civil society.
I am glad to know that Mr Gyan Mani Nepal is being reported to be mentioned. Actually, I come to know about his works three years back. Definitely, his individual efforts are praiseworthy. But the important question is: To what extent an individual effort alone change the corrupted system? As I read in the newspaper, just last year he is being picked for the award. For me it is too late for the donor agencies here in Nepal to put him into limelight. Had there been no donor money, he would have gone into oblivion. Here lies the basic fallacy with donor support. I am opposing the very idea of calling so called “concept notes” for funding support by donor agencies. At first sight, it gives an impression of competition, participation, equity, impartiality etc. In reality, those calls for concept notes are already “targeted” to specific individuals and institutions. The localized, demand driven social accountability initiatives need to go beyond the call for concept notes to incubation of ideas and even to the extent of establishing a CSO to materialize this idea.
This is a great report (and a great distillation/slight critique of it) – I completely agree that locally driven efforts are the most sustainable and that donors should invest much more time in understanding their aid recipients. However, I’d like to question a premise of the report: to what extent were some of these efforts successful _because_ they happened without donor resources? Of course, social change requires financial and technical support and it should be provided. But donors are often all too willing to throw money at attractive, new interventions. Money can corrupt, or at least distort, particularly in communities unaccustomed to handling such large amounts of it. I worry that enthusiastic donors will rush to finance local projects without recognizing that moderation and structural development could be the most important factors. There is a fine line between facilitation and interference.
As an illustrative example recounted by a staff member of a major international donor agency: tribal leaders in an area of Afghanistan would regularly gather in a village near to where the staff member was based to discuss local issues and coordinate security patrols for the surrounding countryside. The donor agency liked the practice and supported it, which included providing an exorbitant amount of money for tea at each meeting. Inevitably, the group would purchase tea and split the rest of the money (how could anyone spend $1,000 on tea for a group of 20 in southern Afghanistan?). It soon came to be that the leaders would refuse to meet until they received the tea payment. The agency continued to pay it because it didn’t want its budget cut in the following year and because $1,000 was a drop in the bucket to its funders (albeit, notably, not to the tribal leaders).
I suppose the solution is just what the report recommends: thorough knowledge of the recipient community. I’m just a bit skeptical that donors will make the real time commitment this requires.
Although I agree that locally driven efforts are extremely important, Liz points out the very real concern that money could also be easily lost in the mix when dispersed among various local projects. I wonder, then, what body or bodies could help to maintain accountability for local projects? Are there ways for international donor agencies to liaise with local partners to ensure that funds are allocated appropriately? Perhaps developing those partnerships, and building up a strong understanding of local needs and risks would be a better use of donations in the long term.
This is a great point, and one that deserves more attention. Just to build on your point, there may often be a kind of perverse selection effect at work here. If there’s no donor funding (or other money) for a particular type of local initiative, the people who choose to work on it are more likely to be dedicated, idealistic types–but it’s hard for them to get anything done (or to scale up any successful programs they develop) because they don’t have the resources. When an external donor shows up with lots of money to throw around–say, to support local civil society initiatives–all sorts of other types, including the smooth-talking underperformers, shysters, and outright fraudsters, are likely to show up to try to get a piece of the action.
Unfortunately, the external donors often won’t have enough local knowledge to figure out whom to work with. The donors can (and should) try to impose various procedures to screen potential aid recipients, but as Rick points out in his comments below, if not designed carefully those procedures can themselves have perverse effects, selecting for the parties who have the skill, time, and wherewithal to fill in all the right forms and establish all the right qualifications–but these might not be the parties who are actually running good programs.
I don’t see a good way out of this, although a few possible implications might include: (1) Donors should be very cautious about infusing very large amounts of money into settings that aren’t used to handling it; of course, there’s a creditable desire to support people and groups doing good work, but perhaps expansion can be pursued more judiciously; (2) Foreign donors should be wary of local agents and intermediaries, and should try their best to develop local expertise, over an extended period of time, when trying to figure out which projects to support; (3) ex ante review and ex post oversight are critical, but they should be designed carefully so as not to impose excessive burdens.
At the risk of infusing too much cynicism: I’ve worked in communities where it is common practice for enterprising individuals (aka “smooth-talking underperformers, shysters, and outright fraudsters”) to specialize in fabricating grant applications and “managing” the follow-on inspection by donor agencies (usually a complete facade). The groups that are the actual aid beneficiaries must give the grant writer a substantial cut, regardless of whether or not the funds come through, so they frequently lose more than they gain. Assistance becomes an economy of its own, without the donor ever knowing the real purpose or use of the money. Women’s groups in very rural areas – where members are often illiterate and have little to no conception of formal budgeting – are especially vulnerable in this framework. (To be fair, there are also many grant writers who do write applications for real projects, but knowing the intermediaries or, better yet, finding a way to channel assistance directly would improve things.)
Wow, this is pretty fascinating — and it’s not cynical if it’s real and if I learn something from it! I repeat my call for more creative monitoring and due-diligence, stated below, but acknowledge that “shysters” might always be one step ahead of clever anti-corruption efforts. That being said, however, any good capital distribution model involves some level of loss — i.e. loan defaults if we’re talking about banks, or company failures if we’re talking about startups. Perhaps some level of waste and fraud is tolerable if the overall benefits are high enough.
Excellent point Liz, and to Prof. Stephenson’s call for such programs to be “designed carefully,” I would propose a model that preserves, somehow, the mentality of scarce resources and competition for funding. For instance, the Bill and Melinda Gates Foundation’s process of selecting projects to support is notably competitive and rigorous — almost as if the Foundation is a venture capital investor looking for the highest returns in an entrepreneurial project, and performing substantial due diligence before consummating any investment. To the extent that the costs of monitoring and fund distribution are falling (see the great piece about Cambridge’s own Root Capital in last week’s Economist magazine! And of course things like Kiva.com, etc.) then this model of competitive funding can be scaled “down” substantially, with ever-smaller investments in ever-more-local projects. One might even coin a buzz phrase like “micro-aid.”
Thanks Rick for great coverage on an excellent report by OxFam! Very promising.
I agree with OxFam ‘s call for more, or more high quality, support to local groups. As the report explains, perhaps the critical barrier to doing so is what competition law scholars would call a “barriers to entry” problem. To secure USAID funding applicants must invest significant time and energy to meet the preconditions for receiving a grant — filling out forms, preparing detailed budgets to a certain template, registering with various entities in their country. I imagine few if any small, local groups can do all these things. Thus they have no chance of receiving USG funding.
It is not just USAID either. I saw a request for proposals the other day from the US embassy in Costa Rica. The embassy is looking to provide grants of between $100k and $250k for accountability and right to information projects in Limon, a depressed area in the east. I thought about passing the solicitation along to potential applicants but after looking at what the application required thought it a waste of time. I am sure large, sophisticated AID contractors could fill out the complex form. I doubt any local organization in Limon could. Or if it could, it would cost it an arm and leg upfront to do so.
The OxFam report explains that this red tape is necessary for antifraud/anticorruption reasons. Some if not all surely is. What is needed is to find a way to shift the costs associated with this red tape to either the granting agency (AID, the embassy) or to a third party. Otherwise small, local groups will never get funding.
The report discussed AID’s Local Solutions Initiative but didn’t provide enough detail to determine whether it solves the high barriers to entry problem or not. One thing OxFam might consider is using a technique Hernando de Soto’s group developed, with AID funding, for assessing red tape in Peru. Go through all the steps a local group, say in Limon, Costa Rica, would have to take to submit a proposal for a $100k grant. If the time and effort is so great that no local group could reasonably be expected to do so, then one has a very powerful talking point for reform.
More points well-taken, Prof. One thing about the red tape issue: under current regs, local partners implementing activities under the Local Solutions initiative have no official legal relationship with USAID. Local implementers are required to report to USAID through the lead implementers, typically the large incumbent contractors. In fact, USAID project officers aren’t allowed to deal directly with local groups. In practice, this undercuts USAID’s ability to build relationships with local groups and start building a pipeline, or cadre of locals who could move into the prime contractor slot. The first step in doing this would be USAID starting to require disaggregated reporting of funding and results for local subgrantees and subcontractors, to at least identify who’s doing what and how they’re doing. Save the Children did a great study of this issue last year: http://www.savethechildren.org/tracking-USAID. And the de Soto regulatory burden analysis is a great idea.
Like basically everyone else here, I’m largely on board with locally-oriented approaches, though I do sometimes worry that just tossing out the word “community” or “local” is used as a magic signifier for “we’re thinking seriously about this issue,” without full elaboration as to what the implications of that sort of approach actually are.
One sort of tangential concern I’ve been playing with in relation to donors funding locally-oriented anticorruption efforts, though, is the incentives the money creates to achieve the results donors expect/want–a problem with all types of donor-backed projects, but something that local initiatives, operating on a smaller scale and therefore with a proportionately greater impact made by even a small donation. Say, for example, donors are providing support for pop-up courts operating in villages (not actually paying the judges salaries, but offsetting costs, providing perks, etc.)–I am thinking here of a specific case, although granted not specialized anticorruption courts (these courts largely deal with sexual violence claims but can take on any sort of issue, and it’s something I can imagine coming up as a suggested anticorruption tool)–and those courts have a very high conviction rate. That high conviction rate could be because the people behind the project have been very diligent in supplying resources for applicants, but it could also be that some procedural protections for defendants are getting lost because that’s just not donors’ top concern…and, though this purely theoretical and definitely not to say it’s actually happening, the people hired to run the pop-up courts also have an incentive to want the donors’ desire for convictions to come to pass, and that could perhaps influence their behavior.
That’s all a very roundabout way of saying that I think supporting local-level efforts is very important, but that, as Liz says, there are ways that money can distort the process, so it’s important to be careful. Rick suggests there needs to be less micromanaging by the U.S., and if that micromanaging is largely uninformed/pork-style spending, that makes sense; on the other hand, someone smart somewhere in the process needs to play a significant role in choosing the right places for the money to go (and monitor its use, as Chris discusses). It makes sense for it to be someone with good understanding of the local context–but when you’re looking to support local initiatives, how do you first find those people, without operating through the national nexus?
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