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The White Paper on Governance and Corruption: saying many right things, avoiding to communicate some difficult choices

The UK government is re-enforcing its commitment to improving governance and anti-corruption efforts. To do so, it will work at the national level in recipient countries, at the international level - promoting anti-bribery efforts and greater transparency in paying for natural resources, and it will invest more into ensuring that aid is not lost to corruption. Importantly, the White Paper acknowledges that the distribution of power sits at the root of poor governance; and it strongly embraces the idea of working with civil society in a broad sense - not only NGOs, but also trade unions, faith based organisations, and the like - in order to improve accountability.

The White Paper puts the emphasis on many right things, but it blends out some of the challenges involved in addressing them. This gives away an opportunity to explain to the wider public some of the challenging choices which aid donors have to make. More aid has actually been forthcoming in recent months; which raises the stakes of spending it well. The risks to spending aid well are substantial. In general, they are larger than for other types of public spending, since money is used in places where the UK or other donor governments have less control than they do have when spending money on schools and roads at home.

The White Paper rightly emphasises that effective states are better at promoting development and social inclusion; and that well governed countries are also more likely to use aid effectively. However, the problem is that many poor countries, particularly in Africa, are times and again failing to sustain the momentum. Tanzania and Ghana are held up as the current examples of good performance; but too many past good performers have later on slipped (Uganda and Ethiopia are recent examples; Kenya continues to be mired in corruption after a hopeful change in 2002; Kyrgyzstan - sometimes believed to be a good performer in Central Asia - has become a highly instable state; in Latin America, Bolivia has seen political turmoil over a number of years).

Recurring governance problems are rooted in social and political structures. Donors can support gradual change to these; and sometimes, they have supported more radical forms of change - such as the US supporting land reform in East Asia in the 1950s; or the 'big bang' changes in Eastern Europe in the 1990s. Gradual and radical strategies both involve risks, and may encounter periods of backsliding. In many weaker states in Eastern Europe, corruption became a massive problem as markets were liberalized while effective regulation was still lacking, and the judiciary was weak and politically dependent; but ten to fifteen years later corruption is being reduced again in a number of countries.

The White Paper suggests that budget support will be provided more cautiously in countries where "governance is not so good"; and that ring-fenced accounts and separate implementation units will be used to channel aid to such countries. This contradicts some of the commitments on aid harmonization and alignment which the UK and other governments have made in the Paris Declaration; and it is the majority of developing countries which falls into this category of "so-so" governance.

Finally, the White Paper announces that aid will be more closely monitored. This is welcome, since aid can contribute to corruption; as on the ground there is frequently a degree of unclear 'ownership' of aid funds, and insufficient clarity about who is responsible for ensuring that funds are used well. National audit offices in many developing countries are still weak, and may not have a clear mandate to audit the use of aid funds, or may simply lack the resources to take on this additional task. Political and social structures, as well as limited legal mandates, can make it difficult to establish serious auditing practices.

Making sure that aid is not given "carelessly" is important so as not to fuel corruption particularly in highly aid-dependent countries. But at the same time, to be sustainable and effective, it is important that greater monitoring and auditing involves local people and local institutions alongside or more than international private accountants and investigators; and it will be important to focus on results as much as on regularity. And finally, donors will need to strike a careful balance between greater control and not creating too much of a new bureaucratic burden on the - often already stretched - public administrations in developing countries.