Sharing Responsibility for Managing the Public Fisc: Another Way to Borrow Integrity

In two recent posts I wrote about innovative ways to “borrow” or “outsource” integrity.  In Guatemala, the government has delegated responsibility for investigating corruption allegations implicating senior political and military leaders to an independent agency accountable to the United Nations Secretary General.  In a number of countries, governments have hired private firms to oversee the assessment of import duties and fees.  Today’s post describes a third variation on the borrowing or outsourcing of integrity: sharing authority over a government’s spending and revenue collection decisions with an international adviser.

This was the core of the Governance and Economic Management Assistance Program, an initiative the international community “persuaded” Liberia’s government to adopt in September 2005.  And the results were immediate and dramatic.  Revenue collection jumped by 75 percent and travel expenses fell by 65 percent in the program’s first year.  Although the program was a response to the rampant corruption plaguing Liberia in the aftermath of a brutal and long-running civil war, it could be easily adopted by any nation committed to dislodging deeply entrenched corruption in a ministry, agency or state-owned enterprise.

The way it worked in Liberia was like this:

First, the Economic Governance Steering Committee, an oversight body made up of Liberian officials and representatives of the international community was established with Liberia’s President as chair and an international representative as co-chair.  Then, with the aid of a technical team also consisting of Liberians and internationals, the committee drew up terms of reference for an expert international adviser for 12 key government ministries and state-owned enterprises including the Finance Ministry, the Central Bank, the National Port Authority, and those agencies responsible for granting natural resource concessions.  The donor agency funding the adviser for the particular agency then selected an individual for the position.

Each adviser shared responsibility with the minister or agency or SOE-head for all financial and operational matters.  That is, if the adviser refused to sign off on an expenditure, it could not be made.  Advisers also had to agree to any changes or exceptions to revenue collection procedure or to the grant of exemptions. If there were a disagreement between the adviser and his or her Liberian counterpart, it was taken up by the Economic Governance Steering Committee with ultimate authority for a decision resting in the hands of the Liberian President.

The most significant dispute during the program arose over the adviser placed in the National Ports Authority.  Authority management had asked the steering committee to fire its USAID-funded adviser on competence grounds, and the U.S. ambassador objected, arguing that it was authority management which was incompetent.  While the steering committee did agree to move the port authority adviser to the forestry department and put the forestry adviser in the port authority, the more significant action was its decision to replace the Liberian management of the authority wholesale.  Press reports suggested this was a critical step in cleaning  up an agency key to Liberia’s economy.

As with the case with the Guatemalan government’s agreement to outsource the investigation of grand corruption, it took a great deal of “persuading” by the international community to convince the Liberian government to agree to such an arrangement.  As in the case of Guatemala, the Liberian government at the time was particularly open to such “persuasion.” It owed its existence to a peace agreement brokered, and enforced, by the international community, and the government was almost completely dependent on foreign assistance.  Even under these conditions, the transitional government held off finally signing until September 2005, just before the election that would replace it with a democratically chosen government, leaving it to that government to deal with the outcry from Liberian politicians over sharing control of lucrative agencies with outsiders .

Fortunately, although as a candidate she, like the other presidential contenders, had denounced the program as an infringement of Liberia’s sovereignty, upon taking office in January 2006 President Ellen Johnson Sirleaf saw its advantages and embraced it.  Her  willingness to embrace it might have also been helped by the support many citizens offered for it and by the donors’ supporting her government insistence that it was critical to their willingness to continue that support.

GEMAP ended in March of 2008, two and one-half years after it began, and clearly it was in existence too short of a time for it to have had any long-term effect on corruption.  Its critics say even had it been in place longer, shortcomings in elements of the program besides the international adviser component made it more of a band-aid than a long-term fix.  The most significant critique was that little attention was paid to programs that helped Liberian nationals assume full responsibility for managing their own government agencies.

But building that kind of capacity takes years, and at least during its short-life GEMAP was a tourniquet applied to the hemorrhaging of public monies from the Liberian fisc. The Liberia of September 2005 – March 2008 is not the only country requiring such treatment, and for those who live in countries where the bleeding from corruption is equally sever, a GEMAP-style program provides a life-saving fix.

Source note.  This post on draws on several fine discussions of GEMAP.  Ones that were particularly helpful and provide additional information are:

Monica Clark, “Combatting Corruption in Liberia: Assessing the Impact of the Governance and Economic Management Assistance Program (GEMAP), Journal of Development and Social Transformation 5: November 2008. (Click here.)

Louise Andersen, “Outsiders Inside the State: Post-Conflict Liberia between Trusteeship and Partnership,” Journal of Intervention and Statebuilding 4: June 2010. (Click here for abstract only.)

Amitabh Tripathi, “Public Financial Management Capacity Building: Post-Conflict Liberia,” International Consortium on Government Financial Management, 2012 (Click here.)

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s