Find us on Google+

Monday, 24 August 2009

Refocusing the fight on corruption..

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".


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.

4 comments:

  1. Task Force Executive Chairman Nkole fired
    Tuesday, August 25, 2009

    Secretary to cabinate Joshua Kanganja has terminated the contract of Task Force Excutive Chairman Maxwell Nkole.

    Announcing the expiration of employment in a statement to ZANIS this evening, Dr Kanganja says the new Task Force chief is Drug Enforcement Commission Director General, Godfrey Kayukwa.

    The new appointment of Mr Kayukwa as Task Force Executive Chairman is with immeadiate effect but for administrative convinience until further notice.

    And earlier today, the Committee for Citizens (CC) has appealed to President Rupiah Banda to fire Task Force Executive Director, Maxwell Nkole and to disband the grouping for alleged abuse of resources.

    Mr Chifire charged that the Task Force should be disbanded owing to the manner they are handling former second republican president Frederick Chiluba’s acquittal case.

    Mr Chifire further urged the Law association of Zambia (LAZ) to bar Mr Nkole and Task Force prosecutor Mutembo Nchito for dragging the association into disrepute.

    According to Mr Chifire, if Zambians want to appeal against the acquittal of Dr. Chiluba, let legal institutions like the Anti Corruption Commission (ACC) and Police service continue with the case on behalf of the Zambian people.

    Meanwhile Mr Chifire appealed to President Banda to strengthen the existing law enforcement agencies such as the ACC and the Police.

    Mr Chifire alleged that the Task Force is selective and only targeting at individuals in pursuing the corruption fight.

    He charged that the Task Force Executive Chairman, Maxwell Nkole’s continued stay at the Task Force is to enrich himself and others because the graft crusade has not yielded positive results for Zambia.

    Mr Chifire said a lot of time and resources has been spent on the Task Force when the funds can be channeled to other key sectors of the economy such as education, agriculture, mining and tourism.

    ZANIS

    ReplyDelete
  2. Firing Maxwell is correct, and consistent with the post above.

    The approach to combine DEC, ACC and Task Force is consistent with practice in the UK and other places.

    The Task Force was a waste of money. The FTJ trial has simply demonstrated the bankruptcy of expertise.

    We need a broader approach along the lines that I have articulated.

    ReplyDelete
  3. Cho,

    Educate me on this, Am I biased to be in favour of regulatory bodies like the Financial Ombudsman, Communications Ombudsman etc in the United Kingdom, which would address grievances from grieved parties with specialism with a positive view to forge ahead.

    Secondly if we have any, the framework lacks integrity (for lack of a better word)due to a number of factors, low salaries, etc( I will dwell on this one)

    An analogy goes, a lady, employed by small scale enterpreneur, complains about being denied statutory maternity leave, tells her,when you go on leave thats it. Go and complain to the tribunal,if you want,I will just bribe all the guys they will send in and that will be it. (Your case will be finished)

    Shouldn't the government be dealing with this first. Misdirected objectives.

    I will blame the officers, but hey! Government,would they not research these matters and put recommendations forward into trial and continue to truthfully evaluate procedures and results as we go along, surely there is a solution to many of our problems if we want to.

    The task force on corruption in my view was far away from corruption, unless it was to solve FTJs case only.

    Pat

    ReplyDelete
  4. Pat,

    Thank you for your question.

    I think what you are essentially asking is how can we make the these agencies more effective? Related to that is the question of whether the models observed in the UK and other countries provides the best way forward.

    We have previously touched on this. I think the first point to recognise is that each of the agencies you have named are different and therefore face different challenges towards institutional reform. However, in general there are essentially two issues that comes to mind.

    The first one relates to ensuring there’s clear independence between the various agencies in government and also between the agencies and and the "sponsor ministries" or the Executive.

    The second is to ensure that within those organisations sufficient incentives are embedded that encourages the best talent to emerge or makes the place attractive for people to go there.

    So taking three examples - one that you have mentioned, and another that you haven't - I would envision the following :

    1. Communications : I would say that the current problems have been that CAZ has been very weak. It has had a weak regulatory mandate. CAZ was created by the Telecommunications of 1994. The ACT mandated the regulator to promote competition among providers of telecommunication services and infrastructure to ensure the benefits of the telecommunication sector accrue to all of our people and the economy in general, and to take reasonable steps to extend the provision of services in rural and urban areas. CAZ failed to fulfill its objectives because it did not have the power to issue and enforce regulations without the approval of the Ministry of Communications and Transport. It couldn't compel the operators to behave in certain way. Government has recognised this and is trying to change things through the ICT Bill 2009. However, problems remain between ZICTA (the new CAZ) and its role with respect to the Zambia Competition Commission (ZCC). The general trend in other countries has been for the sector regulator to take the lead in enforcing economic regulation if the sector is at an early stage of development. Implementing the basic elements necessary to ensure a competitive environment, such as drafting interconnection rules and creating a licensing framework, requires a high degree of expertise. Once there is full competition and the market has developed, the competition commission would tend to play a more significant role in enforcing competition law, working in tandem with the sector regulator. It remains to be seen whether a similar picture will emerge.

    2. Anti Corruption Commission and Drug Enforcement Commission : These institutions should be harmonised but more importantly they should have freedom. The Patriotic Front Manifesto proposal is my preferred approach. Para 3.4 states “ Watchdog institutions will not fall under the Ministry of Home Affairs but instead there shall be an autonomous board reporting to Parliament. To this end the PF government will enact enabling legislation to provide for the appointment of the members of the Board. The above institutions shall have power to investigate, arrest, and prosecute without reference to any other authority”. This in my view is the only way to strengthen their independence.

    3. Electoral Commission of Zambia : the Mungomba Draft Constitution para 112 – 119 provides a solid basis. Essentially the ECZ is independent of the Executive. It is appointed by the Appointments Committee, which is appointed by the National Assembly.

    Now that is for cross-govt institutional reform. The other dimension is one of “intra institutional” reform. But note that in all these cases, there’s a need to improve the quality and expertise of the bodies and that can only come with greater competition for places. Especially with the CAZ - but its not just them even the Ministry itself can do with some help given the news we often hear that can't find Zambian trade economists to help with EU negotiations!

    ReplyDelete

All contributors should follow the basic principles of a productive dialogue: communicate their perspective, ask, comment, respond,and share information and knowledge, but do all this with a positive approach.

This is a friendly website. However, if you feel compelled to comment 'anonymously', you are strongly encouraged to state your location / adopt a unique nick name so that other commentators/readers do not confuse your comments with other individuals also commenting anonymously.