Today’s guest post is from Joseph Luna, an economist and consultant on international development projects.
Many reformers hope that democratization in poor countries will foster improved economic and social development. But participating in democratic processes can be expensive. Where do candidates for office in developing countries get the money to pay for campaigns and other political activities? Over the course of 2013-14, I was embedded in 11 local governments across Ghana, observing their operations and interviewing nearly 200 public servants, politicians, construction contractors, traditional chiefs, and party officials. Perhaps unsurprisingly, many politicians told me that they faced numerous demands for money, not just for elections, but also to meet their constituents’ personal needs. As one District Chief Executive (essentially the equivalent of a mayor) from the Ashanti Region put it to me: “It is about the MONEY! The people keep coming to you. ‘I am bereaved, I have to pay school fees, my wife is admitted to hospital.’ And so forth. They expect money from you. It is especially bad with party people! They think that because you are District Chief Executive that you can just open up the district budget to them.” This story repeated itself all across Ghana. Where did local politicians get the money to meet these demands? Much of this political money was extracted from kickbacks paid by firms for public procurement contracts. Indeed, in my research, which I discuss at greater length in my new book, Political Financing in Developing Countries: A Case from Ghana, I found a complex system of collusion among politicians, party chairs, contractors, and bureaucrats—what I call the Iron Square of Political Financing. Continue reading