Why we shouldn’t be complacent on corruption

This week saw international anti-corruption day. So what? Few of the over 100 official ‘days’ observed by the United Nations are widely celebrated. Like International Jazz Day (30 April) or International Day of Yoga (21 June), Anti-Corruption Day doesn’t make the cut.

Part of the problem with corruption is that its victims are anonymous. Over 75 million people paid a bribe last year in Sub-Saharan Africa, according to Transparency International; but nobody counted how many were deprived of services because they didn’t pay a bribe. Global Witness estimates that over £100 billion of property in England and Wales is owned by off-shore companies. Not all of that is corrupt money. But it deprives governments of taxes and drives up house prices for Londoners.

There is no evidence that corruption has fallen since the first systematic attempts to measure it, two decades ago. In dollar terms, it has probably increased as the world economy has grown. So what have we learned in the fight against corruption? I can’t speak for the movement as a whole, but I can speak from my own experience of studying and fighting it in a few places over the past 15 years.

First, corruption is a political phenomenon – and the solutions to it have to be political too. Anti-corruption agencies look good but rarely work: Kenya has had three of them since the 1990s. Technology is no use if officials can hack into the system to steal, as the Malawi ‘cashgate’ scandal showed. Successful attacks on corruption usually require an existential crisis, like the Great Depression, exceptional leadership, or both. Even the most determined reformers know the system bites back, and they may be deposed or assassinated if they take it too far.

Second, you can’t fight corruption from outside. The IMF has tied its loans to ‘good governance’ reforms since the 1990s, but determined operators find a way around them. Liberia and Bosnia were subjected to intrusive ‘trusteeship’ arrangements by the U.S. and European Union, which worked for a while. But there is little evidence that the billions spent on building new systems in Iraq or Afghanistan had any effect. Donors face an unappealing choice: lecture and look like hypocrites, or gloss over corruption and appear complicit.

What governments can do, however, is put their own house in order: make bribery a criminal offence, stop their banks and lawyers from laundering corrupt money. Investors should publish what they pay and donors what they fund. Transparency initiatives like EITI (for natural resources) or IATI (for aid) won’t eliminate corruption, but they make it much harder to hide.

That is why David Cameron’s promise to hold an anti-corruption summit in London in 2016 is so important. The UK is a leading donor, and DFID scores highly in our Aid Transparency Index. But their good work is undermined if corrupt money can be laundered through the City of London and tax havens that fly a British flag. On 3 December the UK’s overseas territories agreed to create beneficial ownership registers – but not to publish them. On 23 November, Chancellor George Osbourne announced that he would make all government departments publish high quality aid data, but left a giant exemption for ‘commercial confidentiality’ that allows agencies like the International Finance Corporation, CDC or private contractors to get around it.

Charity may not begin at home. But the fight against corruption does.

Rupert Simons
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