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Inconvenient truths about corruption and development

Written by Marta Foresti

Corruption has never been more prominent in the development debate.  Here in the UK, eliminating corruption is at the heart of the Prime Minister’s golden thread, and has been a leitmotif of his government’s approach to aid:  we will commit to 0.7%, but we will be tougher on how it is spent. 

In a recent blog Chris Blattman takes issue with this current focus on corruption and suggests that corruption is ‘an Anglo-American fetish’: we give it too much importance. Is he right? And if he is, what are the implications for development policies and practice?

Clearly, corruption can hurt poor people and increase inequality, and it can lower the returns to development investment. But there are different types of corruption and its effects vary. It can be very harmful in some political and social contexts, while in others its impact might be relatively limited, at least in the short term.

So corruption certainly matters, but the evidence on exactly how it matters, and how much, points to some inconvenient truths that make the question of ‘what to do about corruption’ unexpectedly complex.

The first inconvenient truth is that corruption does not affect aggregate development performance as much as we might think. Here, the evidence suggests that what matters most is how corruption is managed and how it relates to different forms of political systems. More generally, the direct causal impact of corruption levels on economic growth and other development outcomes is difficult to prove.

Which leads us to the second, perhaps most important, inconvenient truth. 

Corruption is a symptom of existing problems, not a cause of poverty or slow development. Typically these underlying issues are political in nature. They are related to lack of incentives,  lack of programmatic (rather than patronage) politics  and/or checks and balances on politicians who, faced with a choice, continue to protect their own interests and those of the elites who support them, in the absence of any good reason to do anything different.

The third inconvenient truth, related to the first two, is that various attempts to eliminate corruption have not worked all that well. Many things have been tried by development agencies over the past 20 years, including anti-corruption commissions, strengthening horizontal or vertical accountability mechanisms with more effective audits and greater citizen pressure.  The results have been mixed, at best. So, we are still in search of ‘what works’ in the fight against corruption.  

There is no doubt that in the current political climate, where support for aid is diminishing by the day and politicians cannot afford to lose any ground with their voters (or in the case of the UK, with their backbenchers), corruption will remain a high-profile topic.   However, a sensible approach to fighting corruption needs to take account of the inconvenient truths and the evidence behind them.

This is normally where we get stuck: contested evidence, a complex problem and a political bombshell: how to explain to ‘the public’ that tackling corruption head on may not be the best way of supporting long-term development?  How do we put over the conclusion that we may be justified in giving aid to governments and countries where corruption persists?

According to recent research by ODI and IPPR the UK public is ready for a more open and honest conversation about what generates development. ‘The public’, i.e. voters and tax payers, are tired of being fed simplistic stories about global poverty, whether through pictures of starving children or through the never changing (but never entirely convincing) message that if only they were to contribute enough money the problem would be fixed.  People want to know why things work, or not, and how solutions can be found.

This does not mean, of course, that there is going to be an outbreak of tolerance for corrupt practices, nor should there be. But it may imply a window of opportunity for fresh thinking about what to do differently about corruption.

Among other things, this could entail a refocusing of priorities to tackle the causes of corruption, such as the nature of political systems, support for political parties and arrangements for political funding, rather than just dealing with the symptoms.  It could mean placing anti-corruption objectives in the wider context of efforts to alleviate constraints to effective delivery of services by addressing the often complicated incentives that shape individual choices.  This could include the use of new interactive technologies that have the potential to support collective action - relationships and networks – to address the root causes of corruption.  

It looks like the space is opening for a more honest, and potentially complex, conversation about corruption, how it works, its causes and what can be realistically done about it. The UK public may be ready for this, but are the UK’s politicians?