Category Archives: Guest Commentary

Guest Post: Berlusconi and Corruption, Stability and Change

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Andrea Lorenzo Capussela, an independent researcher who worked on Kosovo and Moldova’s development, and has written on Kosovo and Italy’s political economy, contributes today’s guest post:

There has been some discussion on this blog, prompted by the discussion at last fall’s “Populist Plutocrats” conference, on how corrupt, wealthy politicians can successfully position themselves as populists. One of the leading examples of this seeming paradox is Italy’s Silvio Berlusconi. In a recent post, Matthew Stephenson built on conference remarks from Giovanni Orsina and Beppe Severgnini to suggest that Berlusconi succeeded in part through a “politics of absolution”—the idea that by suggesting to Italian voters that “Italians are fine as they are, with all their vices, and need not change,” Berlusconi secured the support of many ordinary Italians who may themselves have bent or broken the rules, and who as a result of Berlusconi implicitly forgiving them, were willing to support him and to overlook Berlusconi’s own (much larger) infractions.

But as Professor Stephenson points out, there’s still a puzzle here: Voters consistently claim that they dislike corruption, and sometimes they are willing to take to the streets in protest. Indeed, during the two years that preceded Berlusconi’s electoral victory of March 1994, Italy saw frequent and large anticorruption demonstrations. Moreover, the particularism, clientelism, tax evasion, and corruption that Berlusconi both implicitly forgave and further entrenched are likely detrimental to the interests of a vast share of Berlusconi’s own electorate. So why did this message, and this so-called “politics of absolution,” work in the Italian case?

The missing piece of the story, as I argue in my recent book, has to do with the disruptive effect of the Italian anticorruption investigations of the early 1990s, and the fact that despite the success of that campaign in rooting out corruption, it ultimately destabilized Italian politics without offering Italian citizens sufficient reason to believe that the system would change for the better. Berlusconi offered the reassurance of a return to the old ways of doing things—and since most voters expected that such a return was likely, it became a kind of self-fulfilling prophecy. Continue reading →

Guest Post: Global Forum or Global Farce on Asset Recovery?

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GAB is delighted to welcome back Susan Hawley, Policy Director at Corruption Watch, to contribute today’s guest post:

The global record on recovering assets looted from public treasuries is not good. The World Bank and UNODC estimate that between $20-40 billion is stolen each year. Between 2006 and 2012, $2.6 billion stolen assets were frozen in so-called “destination” countries, and $423.5 million was returned. That means of the roughly $120 billion (taking the lowest end of the World Bank and UNODC’s estimate) thought to have been potentially looted globally in that 6 year period, only 0.3% was actually recovered.

To strengthen international efforts to combat this problem, the 2016 London Anti-Corruption Summit called for the creation of a Global Forum on Asset Recovery (GFAR); the World Bank and UNODC’s Stolen Asset Recovery Initiative organized the inaugural Global Forum on Asset Recovery (GFAR), in December 2017 in Washington, D.C., with the US and UK governments as co-hosts. The GFAR, which welcomed over 300 participants from 26 jurisdictions, focused on four countries: Nigeria, (thought to have to have lost $32 billion to corruption under previous President Goodluck Jonathan); Sri Lanka (where former President Rajapaksa allegedly stole up to $5.38 billion); Tunisia (where former ruler Ben Ali and his family are thought to have amassed wealth of over $13 billion); and Ukraine (where former president Yanukovych and his associates are thought to have stolen around $7.5 billion). These countries were selected for their political will to recover stolen assets and the considerable assets they have to recover.

The stated objectives for the GFAR were “progress on cases achieved by the four focus countries, increased capacity through technical sessions, renewed commitment to advancing asset recovery cases, and increased collaboration among involved jurisdictions.” As measured against these objectives, was the GFAR a success? Should it be a regular event? More generally, do asset recovery forums like this have sufficient positive impact to justify their cost? Continue reading →

Guest Post: Global Progress on Beneficial Ownership Transparency

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Joseph Kraus, Director, Transparency and Accountability at The ONE Campaign, contributes today’s guest post:

Readers of this blog are likely familiar with the pernicious effects of anonymous companies, those all-too-secretive corporate vehicles that can be – and often are – used to facilitate corruption. Such entities thwart the ability of investigators, journalists, and civil society watchdogs to “follow the money” and hold bad actors accountable. Despite this obvious problem, there has been little political will to better regulate such entities.  Yet that is changing. In the past five years, there has been growing political momentum to put an end to corporate anonymity. Most recently, last month the European Union agreed on landmark regulations that will require public registers of company beneficial ownership information. (The EU also agreed to allow law enforcement, financial institutions, and anyone with an as-yet undefined “legitimate interest” to access trust ownership information.) These groundbreaking new rules will be implemented across the bloc’s 28 Member States.

Given the recent victory in the EU, it’s worth taking stock of global progress and tracing what has helped fuel gains that few thought plausible just a few years ago. Continue reading →

Guest Post: We Need To Talk About Donors

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GAB is delighted to welcome back Mark Pyman, Senior Fellow at the London Institute for Statecraft, who also served as Commissioner of the Afghanistan Joint Independent Anti-Corruption Monitoring and Evaluation Committee until November 27, 2017.

When it comes to fighting corruption and promoting accountable government, donors provide funds, expertise, and support, often over many years. They face many difficult challenges, and we all sympathize with the hard issues they have to contend with. Yet at the same time we have to forthrightly acknowledge that, for all their good intentions, when it comes to corruption, international donors easily become part of the problem. Donors, researchers, politicians and grantees have all been too silent on this.

Let me illustrate this with problems at one large, well-intentioned donor program in Afghanistan, the Comprehensive Agriculture and Rural Development Facility (CARD-F) Program. This Program, funded by the UK’s Department for International Development (DFID) and Denmark’s aid agency DANIDA to the tune of $120 million over two phases, was established to increase rural employment, incomes, and business opportunities through the design and implementation of projects, such as infrastructure work (such as building irrigation canals), provision of grants to producers and processors, establishment of greenhouses and poultry farms, and training for farmers.

Between March and October 2017, the Afghanistan Independent Anti-Corruption Monitoring and Evaluation Committee (MEC) made an inquiry into corruption concerns at CARD-F, based on allegations from five whistleblowers. MEC is the premier anti-corruption entity in Afghanistan, set up by Presidential decree in 2010, led by a Committee of six (three eminent Afghans and three international experts), and with an Afghan Secretariat of some 25 professional staff. It is funded by international donors. MEC found plenty of malpractice, including nepotism and cronyism in the Management Unit; multiple irregularities in the awarding of grants and procurement contracts; poor monitoring provided by expensive UK companies (that, to be blunt, were not doing their job); and international (UK) contractors with a built-in incentive to use up more of the available budget for their own “technical assistance.” MEC found that only 33% of CARD-F funds in the first phase reached the intended end users, instead of the planned 60% (the other 40% planned to going on technical assistance and administration; eventually 67%). Moreover, not one of the five separate whistleblowers whose concerns were passed to MEC felt protected enough to complain through the CARD-F program, nor through DFID or DANIDA. At least two of these whistleblowers were fired, and others felt they had to leave.

At the same time the donors vigorously opposed MEC’s plan to do the inquiry, suggesting that MEC surely had other more important priority topics to examine, and that MEC shouldn’t be concerned because the donors had already done an audit (which was not shared with MEC) in response to a previous whistleblower. Not-so-subtle pressure was applied: MEC’s own core funding, which comes partly from DFID and DANIDA, would need to be “reviewed” if MEC persisted. Ultimately, MEC had to request the President of Afghanistan to intercede, before DFID Afghanistan offered its support to MEC’s inquiry.

Any organization doing or sponsoring work in a tough environment like Afghanistan can expect to have corruption issues. But trying to hide the problem, and then to bully it away? As an anticorruption professional who has seen DFID do good work elsewhere in the world, and indeed in Afghanistan, I was really shaken. Less naïve than me, the Afghans are well aware that such internationally sanctioned malpractice is taking place, and they too see this as evidence of dishonesty and hypocrisy.

The huge disconnect between donors’ generally good intentions on the one hand and the, frankly, perverse bureaucratic politics that drives donor agencies is a known problem. Most donors know what is going on in their programs, but feel driven to cover themselves with expensive and often ineffective technical veils – fiduciary risk assessments; supply chain mapping, due diligence, layers of oversight – to protect themselves from charges of lax supervision.

An honest conversation about this is surely overdue. Here are ideas on four of the key topics to start the discussion: Continue reading →

Guest Post: Tackling Corruption in Afghanistan’s Education Sector

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GAB is delighted to welcome back Mark Pyman, Senior Fellow at the London Institute for Statecraft, who also served as Commissioner of the Afghanistan Joint Independent Anti-Corruption Monitoring and Evaluation Committee until November 27, 2017.

One of the successes of the last fifteen years in Afghanistan has been the rise in the numbers of students attending school, especially girls. According to the Afghan Ministry of Education, more than 9.2 million children, 39% of them girls, are now enrolled in school (though these statistics continue to be disputed, with alternative enrollment estimates ranging between 6 and 10 million). Yet the Afghan government, the citizenry, and external observers are all well aware that the education system remains beset by endemic corruption. As one parent put it in a focus group discussion: “A suicide attack isn’t the most dangerous thing for us, because a few people will die…. It is the unprofessional and unknowledgeable teachers that are most dangerous for us because they kill the future of Afghanistan.”

A major new report from the Afghanistan Anti-Corruption Monitoring and Evaluation Committee (known as MEC), carried out at the request of the Minister of Education, evaluates the corruption vulnerabilities across the education system and how they need to be addressed. The study, conducted in cooperation with the Education Ministry, visited 138 schools in nine provinces, and conducted over 500 interviews with a range of stakeholders (including Ministry officials, provincial education officials, teachers, parents, students, and others), as well as 160 focus group discussions. These interviews and focus group discussions assessed a broad range of education corruption issues, including both corruption that arises at the level of schools and districts (such as students paying for advance copies of papers, or teachers using nepotistic influence to avoid having to turn up) and corruption in central government education policy and management (such as corruption in teacher appointments, school construction, and textbook procurement). Some of the report’s main findings are as follows: Continue reading →

Dispatches from the UNCAC Conference of States Parties, Part 2: International Enforcement of Anticorruption Agreements

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Last month, the UN Convention Against Corruption (UNCAC) Conference of States Parties (COSP) was held in Vienna, Austria. In addition to the formal meetings of government representatives, the COSP also featured a number of panels, speeches, and other side events, at which leading experts discussed and debated a range of anticorruption topics. GAB is delighted that Northwestern Pritzker School of Law Professor Juliet Sorensen and her student Kobby Lartey, who attended the COSP, have offered to share highlights of some of the most interesting sessions in a series of guest posts. Today’s post is the second in that series.

The COSP panel on “Corruption and International Laws and Judgments” generated candid conversations about the role of international laws and judgments in the fight against corruption. Moderated by Bart Scheffers of the Open Society Foundation, the panel included one of us (Juliet Sorensen), along with Transparency International’s Gillian Dell; the Helsinki Committee’s Harry Hummel; and France Chain of the OECD. Continue reading →

Dispatches from the UNCAC Conference of States Parties, Part 1: Revisiting the Jakarta Principles of Anti-Corruption Agencies

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Last month, the UN Convention Against Corruption (UNCAC) Conference of States Parties (COSP) was held in Vienna, Austria. In addition to the formal meetings of government representatives, the COSP also featured a number of panels, speeches, and other side events, at which leading experts discussed and debated a range of anticorruption topics. GAB is delighted that Northwestern Pritzker School of Law Professor Juliet Sorensen and her student Kobby Lartey, who attended the COSP, have offered to share highlights of some of the most interesting sessions in a series of guest posts. Today’s post is the first in that series.

Though specialized anticorruption agencies (ACAs) are dismissed by some as redundant or ineffective, last month’s COSP panel on “Revisiting the Jakarta Principles: Strengthening Anti-Corruption Agencies’ Independence and Effectiveness” made a strong case for ACA’s importance to the fight against corruption. (The Jakarta Principles are drawn from a 2012 statement drafted by anticorruption practitioners and experts from around the world; these broad, aspirational principles help anticorruption to protect themselves, and to offer inspiration for their work.) The panel, which included ACA commissioners from Indonesia, France, Romania, and Burkina Faso, as well as representatives from Transparency International, the UNODC, and UNDP, the panel highlighted the diverse struggles and successes of member states’ ACAs. Continue reading →

Guest Post: The Link Between Perceived Corruption and Sovereign Risk Ratings

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Today’s guest post is from Roberto de Michele and Francesco De Simone, of the Inter-American Development Bank and Ugo Panizza of the Graduate Institute of International and Development Studies in Geneva.

A year ago, at a seminar at the Inter-American Development Bank (IDB), a representative from one of the major private credit rating agencies got everyone’s attention with a single slide. That slide showed a strong positive correlation between corruption perception indicators and sovereign risk ratings. The simple yet compelling message: corruption, or at least its perception, negatively affects a country’s perceived credit risk, in turn may raise the country’s borrowing cost.

What are we to make of this correlation? Does it indeed indicate a causal connection between corruption and high borrowing costs? If so, what are the implications for policymakers? Although there was some discussion of this issue in the academic literature a decade ago, the subject had not received much attention. Intrigued by this simple correlation, the IDB Transparency Fund sponsored a study of this topic, for which one of us (Ugo Panizza) served as principal investigator. That study, published last October, is available in English and Spanish on the IDB website. The main findings were as follows: Continue reading →

Guest Post: Against the “More-Is-Better” Principle in Corruption Survey Design

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Frederic Lesne, a researcher at CERDI/Clermont Auvergne University (France), contributes today’s guest post:

A series of recent posts on this blog have addressed a persistent difficulty with corruption experience surveys: the reticence problem–in other words, the reluctance of respondents to give honest answers to questions about sensitive behaviors–which may be caused by fear of retaliation or by “social desirability” bias (fear of “looking bad” to an interviewer—see here, here, and here.) Various techniques have been developed to try to mitigate the reticence problem, leading to a range of different survey designs.

How can we tell if a corruption survey is well-designed? Some researchers, attuned to concerns about social desirability bias, implicitly or explicitly apply what some have dubbed the more-is-better principle. According to this criterion, the best wording for a sensitive question is the one that produces the highest estimates of the sensitive behavior (and the lowest non-response rates).

Yet there are reasons to question the more-is-better principle. Changing the wording of a sensitive question may not only alter its sensitivity but also the respondents’ understanding of the question and ability to answer it. This may lead to a measurement bias that causes the modified wording to produce higher estimates of the behavior, not because of more effective mitigation of social desirability bias, but because of the exacerbation of other forms of bias or inaccuracy. Consider a few examples: Continue reading →

Guest Post: Going Beyond Bribery? Improving the Global Corruption Barometer

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Coralie Pring, Research Expert at Transparency International, contributes today’s guest post:

Transparency International has been running the Global Corruption Barometer (GCB) – a general population survey on corruption experience and perception – for a decade and a half now. Before moving ahead with plans for the next round of the survey, we decided to review the survey to see if we can improve it and make it more relevant to the current corruption discourse. In particular, we wanted to know whether it would be worthwhile to add extra questions on topics like grand corruption, nepotism, revolving doors, lobbying, and so forth. To that end, we invited 25 academics and representatives from some of Transparency International’s national chapters to a workshop last October to discuss plans for improving the GCB. We initially planned to focus on what we thought would be a simple question: Should we expand the GCB survey to include questions about grand corruption and political corruption?

In fact, this question was nowhere near simple to answer and it really divided the group. (Perhaps this should have been expected when you get 25 researchers in one room!) Moreover, the discussion ended up focusing less on our initial query about whether or how to expand the GCB, and more on two more basic questions: First, are citizen perceptions of corruption reflective of reality? And second, can information about citizen corruption perceptions still be useful even if they are not accurate?

Because these debates may be of interest to many of this blog’s readers, and because TI is still hoping to get input from a broader set of experts on these and related questions, we would like to share a brief summary of the workshop exchange on these core questions. Continue reading →