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Friday, 7 December 2007

Corruption Wars – Part 2 (Corruption & The Poor)

There has been much discussion lately on the state of corruption in Zambia. The Public Accounts Committee chaired by Charles Mulipi was the first to draw the blood with accusation that billions of Kwachas had been lost from corrupt civil servants. In recent weeks and months we have witnessed the relevant heads of the Drug Enforcement Commission (DEC) and the Anti-Corruption Commission (ACC) come under fire for supposedly corrupt / criminal activities. Last week, the Former President FTJ Chiluba, himself facing corruption charges, has been quoted as saying that perhaps corruption is more rampant in the current government than in previous administrations.

In the first part of the "Corruption Wars" series, I argued that the “first best” approach to dealing with corruption was to treat it as part of a broader debate on moving forward as a nation. It is germane to development, but perhaps much more important are broader areas like institutional reform, improvement in local financial markets, and most importantly improved infrastructure that supports agricultural, educational, mining and tourism policies. But with so many cases of corruption being highlighted left right and centre, just where should this "institutional" fight against corruption begin?

A while back I did a quick poll among friends, with the following simple question:

Thinking back over the last few years, what do you regard as the most corrupt Zambian department that we should urgently seek to reform?

Most of the respondents suggested the Ministry of Education! A number mentioned Ministry of Lands, and a few suggested Home Affairs (some specifically mentioning the Police) with Health registering some high numbers as well. I was amazed by the variety of the answers, but also challenged on just how a government faced with limited resources should decide where to concentrate the fight against corruption.

Economic intuition would certainly suggest that while corruption may have some detrimental effects on growth (an issue for debate in its own right), its likely that the severity of impacts would vary by the type of corruption. Given the limited resources available to government, the challenge should be to focus on those areas of corruption which may be more harmful in terms of growth and equity. There are at least three possible areas where I think corruption may have serious effects, and therefore should warrant more government focus compared to other areas, all things being equal.

First, corruption is likely to be more detrimental where it is likely to disproportionately affect the poor compared to the rich, leading to larger income inequalities over time. The question is whether some form of corruption possibly leads to poor people paying more bribes as a proportion of their incomes compared to the rich. Literature evidence on this is few and far between, but some studies have shown that in several African countries, the poor generally pay more bribes than the rich. This would suggest that, faced with limited resources, our fight against corruption is perhaps better focused on tackling rural based corruption e.g. corruption in local institutions where the poor are likely to be hit hardest.

Second, corruption is likely to be most harmful where it “hits people twice”. Some authors have suggested that there are instances where people pay bribes in connection with misfortune or adverse events they experience, with the consequence that the expense and possible disutility of bribery compound the original problem. The central point is that misfortune or adverse events can lead an individual or household to bribe simply by increasing their need for public service. For example, victims of crime will want to report the crime to the police, an act that may require a bribe to ensure police cooperation. Or if you are sick, you may be compelled to use the public hospital, which could involve a bribe to jump the queue! Its difficult to know which problems are most likely to lead to bribery, and hence hit people twice. The magnitude of the effect would depend not only on the severity of the problem, but also on the degree of the institution to which victims would have recourse. The challenge for government is to identify these areas and focus the fight there, since that is where more damage to individuals might occur. For example, the assessment might suggest that police and health authorities should be the focus of any fight against corruption.

Third and finally, corruption is likely to be more damaging to society where it affects those institutions that are there to prevent it. Corruption in institutions which are tasked with combating corruption is likely to encourage corruptions in other areas, since the possibility of detection is reduced. For this reason, many people have emphasised that any fight against corruption must begin with eradicating corruption in the police force and the various watchdog organisations. In many ways the current problems facing DEC and ACC are more likely to damage the fight against corruption than any corruption taking place in education or elsewhere. Criminal activity in watchdog organisations could send the wrong signal to other areas of society. Part of the current problem in Zambia is that watchdog institutions fall under the Ministry of Home Affairs. To really improve the way these organisations function new legislation is needed that gives these organisations true independence and the appointments of relevant heads to occur through open competition, coupled with appropriate independence that allows them to investigate, arrest, and prosecute without reference to any other authority.

In a nation with limited resources, our fight against corruption must provide value for money. This requires a much clear understanding of which areas are most harmful for growth and equity. Measures which help to tackle rural based corruption, reduce corruption that “hits people twice” and repair institutions that are at the forefront of fighting corruption are likely to be more effective and less costly compared to wide and expensive efforts against corruption.

Update (8th December 2007) - I have finally got round to watching Sorious Samura's much advertised Living with Corruption on CNN International, it had already been shown on Channel 4 in the UK as part of Dispatches - under the title How to get ahead in Africa in October 2007. The real life documentary provides a vivid potrayal of ways in which corruption "hits the poor twice". It shows how the very poor in Kenya (and much of Africa) are squeezed to their last coin by petty officials who line up to extort from those who have literally nothing to even get by. I strong urge you to see Samura's latest offering if you have not done so already.


  1. In the fight against corruption in Zambia, I think there could possibly be no better beginning that where LPM has started off! That is, the continuing prosecution of the former President Chiluba.

    I am sure you are familiar with the process of "normalization" in society where an idea takes a long time to, well, "nomarlize"! Put differently and addressing this subject matter directly, the idea of laws, of public governance based on those laws and the responsibility thereof, has taken many generations to become "widely" accepted in many communities.

    The notion that ALL citizens, regardless of standing in society, engaged in unlawful conduct SHOULD be prosecuted has to continually be reinforced. By mounting the prosecution of former President Chiluba on crimes he has already been found guilty of (Courts in the UK at least), LPM has created a welcome foundation which serves to discourage corruption at ALL levels of public office.

    Yes, there's always the misplaced argument that corruption is comparatively more costly than it is beneficial? Unfortunately, in a country like Zambia where perceptions thrive that resources in the fight against corruption can instead be deployed to seemingly more beneficial causes, this perception risks creating a compacent and perhaps indifferent attitude towards the fight against corruption. This perception based on some bizarre belief that punishing perpetrators of corruption, and criminal activity for that matter, is expensive, creates an age old conundrum - a real social dilemma!

    The dilemma being, whereas its easy to measure the cost of the criminal justice system - i.e. investigating and prosecuting criminals such as corrupt public officials, the actual cost of corruption to society is impossible to measure accurately! In fact, the very idea of a criminal justice system is inherently costly! However, unlike a business decision, the benefits of a criminal justice system cannot be measured against cost. The same way business ethics cannot be measured against profits?

    In the criminal justice system, the cost to pay for Police, Investigators, Prosecutors, and Judges to bring criminals to book, then further costs to accomodate, cloth and feed the criminals in our prison systems cannot be considered un-economical? It is a necessary cost! After all, what specific monetery measure is there to such criminal activities like rape, child abuse, murder, theft of public funds, abuse of office, and all other vices that are unlawful?

    Therefore, without the full economic measure of unlawful activity (including corruption by public servants), can we correctly say "too much" money is being spent on the fight against corruption? Can we honestly argue that the resources spent to investigate, prosecute and then rehabilitate criminals could have been placed to better alternative use?

    Would it not be best, instead, to bare the cost now so that the idea that men ought to be governed by laws is normalized! This normalization has started somewhere - President Mwanawasa!

    After 10 years of corrupt rule by FTJ and his cronies, where the onus to investigate corruption in public office was thrown to citizens whilst bodies tasked with the prosecution of offenders where systematically weakened, President Mwanawasa has re-invigorated our belief in the justice system! The lack of political will and commitment on the part of the former President Chiluba to fight corruption during his reign, created an environment where even the lowest ranking civil servant felt protected against prosecution for unlawful activity. It was a top down process where corruption was being harvested from the very top echelons of public office!

    This necessarily means that corruption in different sectors of public office (police, headmasters, nurses etc etc) was a result of a more pervavsive corrupting influence originating from senior members of the public service - if not the top most. It would therefore be counter-intuitive to target low ranking public officials with a hope of addressing the wider scourge and its origin!

    Thus, by taking the fight against corruption to the very top - to a former President, President Mwanawasa is sending a clear signal that corruption an ANY and ALL levels of government will result in prosecution and possibly imprisonment for the perpetrator!

    President Mwanawasa's drive to fight corruption from the top is synonymous with Wests fight against drug trafficking where the heads of cartels, rather than their minions, are targetted! Punishing the big fish, puts the small fish in line!

    Of course, we continue to urge President Mwanawasa to do more as we feel this fight is taking too long. The discerning citizens who are fully appriased with the vice that corruption really is are awaiting the continued "normalization" in our society where it is impressed upon Zambians that unlawful behaviour will be punished, regardless of position in society.

    Let there be less whispering and plotting at funerals - lock him up!

  2. As ever, very constructive and thoughtful; a shining light for Zambia.

    It is the poor who bear the cruel yoke of corruption, and it is corruption which impacts most on the poor's attempts to attain their basic needs. It is no accident that it is the very inputs needed to improve the lot of the poor that have so cruelly and grievously been neglected by Government. As the Auditor-General has reported - admirably revealed by Transparency International Zambia, over the last 20 years only 16% of national expenditure went on agriculture, health, education and local government. Those are clearly the areas we need to target. But given Government's record, is the present policy of donors to give money direct to Government not a major part of the problem?

    The other issue is that there is a massive need for an honest appraisal of the culture and customary workings of Zambian communities and society. The survival patterns and workings of families, extended families, clans and interlocking clan systems have for too long been neglected. The withdrawal of a Government forty-three years ago, which was so instrumental in producing western civilization and the basis of modern life in Zambia, has had a marked effect on Zambian society; for nothing has taken its place.

    Zambia needs now to look back to its roots for a way out of this impasse. The donors cannot help - indeed they remain the major hindrance. Where then be your renaissance men brave enough to question the status quo? Where be your Marx?

  3. Ntheye Lungu,

    This necessarily means that corruption in different sectors of public office (police, headmasters, nurses etc etc) was a result of a more pervavsive corrupting influence originating from senior members of the public service - if not the top most. It would therefore be counter-intuitive to target low ranking public officials with a hope of addressing the wider scourge and its origin!

    How much of this is also the result of the overuse of political appointments?

    If advancement in the civil service was based on meritocracy (civil service exams, performance review boards), and no longer about appointment by the president himself, they would be more accountable. There would be more of a process of selfselection, rather than appointment to office.


    Leaving alone whether a government introduced 'western civilisation' (which would be a debate all of it's own, not in the least because it presumes that what it introduced in Africa is the same as what it had in Europe and not some laughing mirror type reflection; also, it presumes that you can't go back in recent western history and find clans, extended families, etc.; talk about a loaded use of language)...

    The survival patterns and workings of families, extended families, clans and interlocking clan systems have for too long been neglected. The withdrawal of a Government forty-three years ago, which was so instrumental in producing western civilization and the basis of modern life in Zambia, has had a marked effect on Zambian society; for nothing has taken its place.

    What colonial governments always failed to introduce, was an efficient system of local government, let alone a democratic one. No colonial government ever introduced democracy.

    This is what is hampering the actual relevance of government to local people. This is also why extended families have remained important, while they became less so in the West.

    Instead, there is rule from the ministries, and everything has to be run past the minister, or even the President.

    My solution would be to empower local government with much of the national revenues (say, half) that are now spent on 29 or so ministries. But more interestingly...

    The survival patterns and workings of families, extended families, clans and interlocking clan systems have for too long been neglected.

    Perhaps there could be a melding with local traditions and local government, in a positive manner.

    Do you have ideas on this issue? What would a local government that was fully adjusted to local traditions look like?

  4. I have not been able to read your blog of late due to a heightened workload for the course I am pursuing.
    Had I participated in your survey, I would have mentioned the Passport Office as the most corrupt government department (per capita) followed by ZRA by sheer volume of ilicit money changing.

  5. *by sheer volume of money changing hands.

  6. A local government that was fully adjusted to local traditions would inculcate all that was best of the Native Authority that grew out of Indirect Rule - supported by all that was best of the now extinct Natural Resources Act of 1962, melded with the chiefdom trusts accepted by the House of Chiefs and presented to the workshop on the 5th NDP. This model, based on the Landsafe Investment Trust model, would ensure that customary land was never alienated - either to foreigners or Zambians, and that investors would receive fair and equitable treatment in a trust partnership ensuring their sustained input, which would include elements of government as well as a democratically represented village community, and the chiefs. Zambia therefore would head more towards the Swiss model of cantons, rather than the present 'winner take all' system.

  7. The Anti-Corruption commisioners issueing an official statement in support of their boss, Nixon Banda sends a very wrong message. They were better off staying mute and letting responsible authorities exonorate Mr. Banda, than comment on on-going investigations and therefore using their positions to sway investigations in favor of the accused. That, is just unethical, plain and simple. How can we have unethical people, incapable or realizing a clear conflict of interest heading a fight against unethical cunduct;corruption? Also, our government have reached some sort of understanding/settlement on the case they had against Moses Katumbi, who I believe should be some state witness against Chiluba. They might as well call it quits on the FTJ case. How do you proceed from 'pardoning' Katumbi, and then arrest Chiluba? LPM has very good intensions against corruption, but clearly lacks the know how to execute his wishes. The fight against corruption has outlasted the good will it initially received. It is in a a mess, to put it mildly. Levy needs another forum to stand on. He can surely use this time to prepare us for transition for the next president. I hope he can leave a better legacy than Chiluba; hand picking his successor. For some reason, LPM seems to be a slow learner. This is bad for a lay person with regards to following the law. It is even worse for LPM, a lawyer by profession.

  8. Something interesting on corruption:

    On Fourth Annual International Anti-Corruption Day, Global Financial Integrity Urges Action

    On Fourth Annual International Anti-Corruption Day,
    Global Financial Integrity Urges Legislative, Executive Action to Combat Corruption

    Washington, DC, December 9, 2007—Today, as countries around the world observe International Anti-Corruption Day, Washington, DC-based research and advocacy organization Global Financial Integrity (GFI) calls upon the President and Congress to take a critical step against corrupt government officials by mandating that corruption be among the criteria used in compiling the annual State Department Country Report on Human Rights.

    “Despite increased efforts by the U.S. and other countries, many poor and developing nations remain plagued by endemic corruption, which undermines foreign aid,” said Global Financial Integrity Director, Raymond Baker. Including corruption in the annual State Department review of human rights abuses around the globe “is crucial to making an official link between egregious official corruption and human rights abuse. This step will put additional pressure on regimes that facilitate the bribery, theft and malfeasance which strip money out of developing and transitional economies and perpetuate human suffering,” Baker concluded.

    Adding egregious official corruption criteria to the human rights report will demonstrate that the United States takes seriously its obligations under the U.N. Convention Against Corruption, which the Senate ratified in October 2006. Further, it would be consistent with the administration’s “No Safe Haven” policy, initiated in January 2004, which prohibits corrupt government officials from entering the United States.

    GFI estimates that for every $1 of foreign aid that goes into a developing nation, $10 exits by way of corruption, corporate graft, and other forms of illicit capital flight abetted by dishonest officials. “Corruption undermines the goals of foreign aid and, by bringing to light the governments that abuse the public trust, the U.S. can play a key role in making aid programs more effective,” insists Baker.

    Global Financial Integrity works in coordination with governments, corporations, think tanks, and non-governmental groups to push for the curtailment of illegal cross-border financial flows. Raymond Baker, a Senior Fellow at the Center for International Policy and Director of GFI, is an internationally respected authority on corruption, money laundering, economic growth and foreign policy issues, particularly as they concern developing and transitional economies. He has written and spoken extensively, testified often before Senate and House committees, been quoted worldwide, and has commented frequently on television and radio in the United States, Europe and Asia including appearances on Nightline, CNN, BBC, NPR and Four Corners, among others.


  9. I.P.A.,

    We have discussed the specifics of land ownership here. The discussion got stuck on the issue of security of tenure, which was also raised by commercial farmers. There has to be some mechanism that prevents land that has had improvements made to it from being appropriated, not just by the state, but by chiefs, politicians, etc.

    And I also believe that local government will be much more effective in delivering services, and being responsive to local needs, as opposed to governancy through the ministries and the suffocating powers of the President and minister of finance.

    The question I would have to you is - how would you reconcile the needs for far more farmland to be under cultivation, as well as expansion of settlements and infrastructure like roads, with conservation?

    Interesting website by the way.

    How would you incorporate the need for more farmland with conservation?

    Also, check out this short video on permaculture:

    Greening The Desert
    Geoff Lawton's efforts in Jordan.

  10. Response to Mr K:

    An holistic landuse plan which marries traditional knowledge and aspirations (driven by a secure sense of communal ownership) and scientific landuse planning based on the ecological and social verities, will deal quite naturally with the conflicts which may arise between the farming of land and conservation. What is absolutely essential is that villagers and communities and traditional leaders have ownership of the process. At the moment we have open access areas, utilized in particular by central government, leading not only to the tragedy of the commons, but to the actual destruction of the land, the ecology and the survival patterns of a people. There can be no better example of this than the degradation of the Kafue Flats as a result of the impoundment of the Kafue and the criminal failure of ZESCO to allow for a natural flooding regime as was required in the original design. As a result, the Ila have lost in excess of 50% of their cattle, the Lochinvar National Park has been overrun with Mimosa pigra, and the once elysian fields for wildlife has been very severely damaged.

    The individual ownership of land issue appears to be taking a natural and unforced evolutionary path; in some parts land given by chiefs and headmen to individuals is being sold on to others. The problem is that if this be entrenched through a western tenure model (leasehold) in the absence of a landuse plan, customary authority will weaken and the essential glue of custom and culture will be usurped by a rank capitalistic model.

  11. I'll give a fuller response later, but one core question is - does leasehold (as opposed to freehold) give enough security of tenure that improvements can be made to the land, without the land being alienated by a random politician or chief?

  12. For Mr K:

    Leasehold does give as much security of tenure as one could ask for - being 99 year renewable. The question is how to give real security under usufruct arrangements - essential if land is not to be removed from its customary owners, but still encouraging investment in something which could be used as collateral for credit. Of course for real protection we rely on the separation of the powers of the judiciary and the executive - something not yet achieved in our state of democracy.

  13. Ntheye,

    Your assessment makes three clear points that are worth exploring. If I can summarise them:

    (1). The real challenge in Zambia is ensuring we attain "normalisation". The rule of law has been broken for sometime, the challenge is to repair this and ensure that every citizen understands that no individual is above the law.

    (2.) By waging a high profile fight against corruption, LPM has re-established the rule of law [emphasis added]. On the contrary, by focusing on fighting corruption only on those areas that are most "beneficial", we risk creating "an indifferent approach towards the fight against corruption", reversing the "normalisation" process.

    (3.) In any case, it is impossible to measure the full cost of unlawful activity, and therefore it is impossible to say whether too much money is being spent on it.

    Now let me turn to explore your points:

    On (1) I don’t think the real challenge in Zambia is normalization. The real challenge is development. What is needed is a clear vision for how Zambia can develop. Once that is understood then we can look at what is needed to deliver that development. I do accept that part of that process may be “normalization” and general adherence to the rule of law, but it is part of the process, not the goal. We must see all things in the prism of development. That requires that we understand what real development means and work from there to understand where other elements fit in. In the first part of the "Corruption Wars" series I explained in more detail where corruption fits in the scheme of development.

    On (2), I think there are two elements to your argument here. First, that LPM has re-established the rule of law through high profile pursuit of FTJ. Secondly, focusing the fight on what is beneficial is counter productive. I don’t think your assessment is quite correct. Without being drawn into the politics, I venture that Zambia’s standing on the rule of law is questionable and this has continued to deteriorate under LPM. I won’t bore you with the details but I will direct you to the three blogs on this: has Mwanawasa performed so far?

    Zambia’s corruption…whose to blame?

    A View From Outside - Part 4 : Fighting Corruption

    It’s a myth that Zambia has made progress and re-established the rule of law. If anything independent assessment shows that things have worsened since 2001. Rural corruption has worsened not improved.

    On (3), I think there are two issues. First, you question whether any cost benefit analysis is at all possible. My answer is certainly yes! The problem is simply of expertise. Often people confuse cost benefit analysis with monetization. The emphasis should be on identifying all the impacts whether they can be monetized or not. It is certainly possible and there are a lot of empirical studies that are being done by academia and government around the world looking at the most cost effective way of tackling corruption. The second issue you jhave missed is that the thrust of my argument is simple - it is ensuring that we invest money in those corruption reducing activities that have the largest impact (monetized or non-monetized). The cost benefit for this is therefore less complicated that you assume.

    In general, I think the key difference between our respective approaches boils down to the fact that I place place corruption within the goal of greater development and I am seek to bring an analytical approach to the process. In the two parts on corruption wars, I have argued:

    1. Corruption should be part of a broader discussion on delivering development, for two reasons - 1) it does not significantly impact on development and 2) it can be dealt better through "institutional change" and that requires proper harmonisation with other government policies on infrastructure, education and so on.

    2. Following (1) a focus on institutional change needs to start with where it can have more impact, given the resource limitations in the short term. I argue this should focus on reducing rural corruption, repairing the agencies which fight corruption, and identify key ministries that are critical for the poor.

    Incidentally, this is not the only approach. Indeed Murray Sanderson (Kitwe resident / New Zambia guest blogger) e-mailed me an alternative analytical framework, founded on Bailey’s “intangible wealth” approach:

    1. Corruption should be part of a broader discussion on how you create an environment suited to wealth creation.

    2. Following (1) a more preventative approach is better and ultimately less costly in the long term.

    What is now clear is that Zambia needs a clear framework on corruption resting within a broader pursuit of development, rather than expensive efforts that does little to help the poor.

  14. I.P.A.,

    This is an idea I have been mulling over.

    What if a chief's subjects had full ownership rights (indefinitely), but were limited in who they could sell their land to?

    - Chiefs owned a Trust (a new legal entity)
    - Land could be bought by the chief's subjects only, under freehold
    - Subjects can buy or sell their land whenever they want, but they can only sell to this Trust.

    In other words, the subjects have all the rights of owning their land in perpetuity, but if they want to cash out, they can only sell to the Chief. And they can only buy such land from their own chief.

    The sales price would be some small nominal amount, nothing close to the actual value of the land, or to what the land can produce.

    This would take speculation out of land sales, but at the same time, land would be bought for what it can produce.

    There could be basic common sense limits to the use of the land - for instance, no steaming chemical factory next to fields of corn, for instance. Labour laws, environmental impact and the likes could limit the use the land could be put to.

    But other than that, the land would belong to the subjects indefinitely.

    It would also keep chiefs in the loop, and make them part of the economic system.

    How about that for security of tenure?

    I am basically argueing for the maximum amount of freedom, but with checks and balances included.

  15. "Zambia needs now to look back to its roots for a way out of this impasse - The donors cannot help - indeed they remain the major hindrance. Where then be your renaissance men brave enough to question the status quo? Where be your Marx?". - I.P.A Manning

    We are in full agreement. Zambia will not develop until we develop a unique philosophical consensus consistent with our culture. Importing ideas from outside will never work. I discuss this point under the blog A cultural approach to development .


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