It has been fascinating reading the on-going debate on whether the "Task Force on Corruption" should be disbanded, having failed to secure a successful sentence against Former President Frederick Chiluba. The anti-Task Force brigade has largely been led by so called - "one man NGOs" and other pro government parties. Recently, Committee for Citizens stated "that people are now supposed to urge government to consider disbanding the Task Force on Corruption for being selective in the way it was handling the corruption cases". With his job at stake, the Head of the Task Force Maxwell Nkole has signalled the intention to forge ahead, pointing to two pending cases worth $28 million : "A lot of money for Zambians to forego hence the resolve by the taskforce to pursue the two issues to their logic conclusion. Those calling for the disbandment of the entity should tell Zambians how they intended to pursue the two scandals".
Monday, 24 August 2009
Refocusing the fight on corruption..
Both sides are right but are poorly articulating their positions, which has prevented a more informed discussion on the way forward. The anti-Task Force brigade are correct that the Task Force should be disbanded probably for three reasons :
Lack of credibility. The revelation that the Task Force has no legislative framework but was created through a Presidential Executive Order has rightly conveyed the impression that it was a personal creation of the former President designed to fulfill whatever he had in mind. It was not by all accounts a "Zambian Project", as there was no broad consultation on its scope and powers. In short ordinary Zambians do not understand the purpose of the Task Force. A damaged brand is difficult to repair especially one that is solely owned by the State House and not the Zambian people. More importantly if the fight against corruption is to be long term and successful it needs ownership among ordinary Zambians. Creating private presidential armies to fight corruption is not good governance, no matter how successful those armies might be.
Poor value for money. It is true that there's no price that we can put on rule of law and justice in general. But we have to remember that the Task Force was not designed to achive these things, as that is the task for our entire Justice System. The Task Force was created to investigate and help recover the plunder of President Chiluba's government. Many of us were led to believe that Chiluba stole billions of dollars from Zambian coffers. Not even 1% of that has been recovered. I believe a cost benefit analysis would reveal that it has negative net present value. The quantified cost of running the task force far outweigh the benefits. That is even before we consider the gross inefficiencies (duplication of tasks with other law enforcement agencies). If GRZ wants an economic assessment of the Task Force, we are available to advise on how such an exercise can be done. Cheaper than RP Capital :)
Poor institutional design. The fundamental problem with the Task Force is that it is poorly designed. The Task Force has no clear definite end, it serves at the pleasure of the President. This has created the pervese incentives for Nkole and his band of lawyers to prolong the work for as long as possible, as they enrich themselves. They know full well that if President Banda stops it now they would be out of employment. On the other hand, they also know doing nothing will make it easier to spotted and fired. So they do just enough to continue and earn money. Small cases are prosecuted successfully, with the big cases accomplishing nothing! I suspect the reason why Mwanawasa made it indefinite was to ensure it had sufficient time - no one knew really how long it would take. A short period would have allowed criminals to "play out" for time. We could create a definite end to the Task Force (e.g. give it an additional two years), hopefully incentivising Nkole and his friends to conclude investigations quickly. But clearly, whose to tell how long the Carlington Maize deal investigation will last? Also if you know your job will end tomorrow, why bother to do more today? So we are stuck . The only logical solution is to think broader and subsume the Task Force within the day to day tackling of corruption. More on that in a second.
If one was to take these three reasons together, it becomes apparent that Nkole has no leg stand on. But he does have an important point. His critics have not provided a viable alternative. Abolishing the Task Force without a replacement is not ideal. Crimes were allegedly committed. If we accept that projecting justice is crucial in building a law abiding society then we can't be seen to turn a blind eye to corruption. Where Nkole is wrong is that he has conveniently focused on a narrower objective of prosecuting two cases. What we actually need is a broader approach to fighting corruption. The following areas seem essential :
Improve detection : There are many ways in which this can be achieved. One way is through legal protection for whistle blowers. Whistle blowing is a "public good" whose benefits go beyond the individual. In econ-speak the social benefits outweigh the private benefits. But more importantly, no one is going to be a whistle blower if the private costs outweigh the private benefits (there are psychological benefits and of course, reduced corruption benefits all Zambian citizens, including employees in government). So what we need is the change in incentives so that employees find it attractive or less costly to blow the whistle. We don't want to give government employees rewards for whistle blowing because that defeats the overall objective of keeping government costs to the minimum. What we need is something fairly simple : effective legal protection against whistle blowers which protects the employee-employer relationship. This has the effect of substantially reducing personal costs. Another important source of detection (and deterrence) is greater press freedom. Evidence is quite clear that a government dominated press is positively associated with corruption. A free press provides greater information than a government controlled press to the public on government and public sector misbehaviour including corruption. The best way to encourage corruption therefore is to ensure Government owns the television and owns the main newspapers. If you want to know how serious a Government is in fighting corruption, just look at how much media it controls. Finally, we can also improve detection through through innovative mechanisms such as the one discussed here. When detection improves it will lead to less corruption through the "deterrence effect".
Improve prosecution : Detection is only one part, the other part is prosecution. The current approach to sentencing and prosecution of corruption is costly to the tax payer. It is long and by the time cases are done people serve short sentences. For justice to work, it is critical that people are not just punished but are seen to be punished. We need a new judicial process for convicting corrupt criminals, that is swift and definite (I have previously suggested "special corruption courts"). No point of having long prison sentences and good detection, if you cannot actually convict people efficiently and at minimal cost to the tax payer. In fact I would say that a corruption fight without an efficient court system has little deterrent effect on corruption - and is therefore a pure social cost. While we are sorting out the courts, we should also examine whether the burden of proof in cases involving corruption ought to be reduced.
Prioritize : We have very little financial resources, therefore we need to be intelligent in our fight against corruption. We should focus on those areas of corruption which may be more harmful in terms of growth and equity : 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; corruption is likely to be most harmful where it “hits people twice” ; and, corruption is likely to be more damaging to society where it affects those institutions that are there to prevent it. I discuss these issues in more detail here.
Refocus institutional reform : Corruption is best addressed as part of a wider debate on what we think are the key obstacles for Zambia’s economic growth. The days of long running editorials on one person are a distraction to real debate, which should focus on how we can make our institutions better and indifferent to the personalities of the day. Zambia's number one problem is that we have a "poor institutional framework" – but an institutional framework goes beyond simply tackling corruption, it is about introducing stronger governance and accountability structures. Participatory democracy and effective decentralisation are among those things that have been empirically verified to work.