"God must be a white man"

An excellent, heart-felt lament in the Sudan Tribune from a man with what must be an incredibly difficult job, the Auditor General of South Sudan, Steven Wöndu.

Donors beware! The African big man eats without limit. He accumulates without consideration for the needs of others. ‘Enough’ does not exist in the dictionary. Africans in power do not want to consider the fundamental zero-sum concept that the more you scoop from the common pot, the less everyone else gets. They refuse to ponder the life or death consequences of misappropriating resources intended for interventions in maternal care, solid waste management, infant vaccination, and clean drinking water. They do not feel the danger of living in a massive mansion surrounded by tragic slums. In the rare event that an African big man visits a village, he would ‘donate’ a class room, or a clinic or a road that would never exist except in the government’s financial expenditure schedule of that year. The announcement of the fake donation is proof that the big men know the needs of their people. Why they choose not to do the right thing beats imagination. But then, they are modern African big men! 

We are very efficient in taxing our poorest people mercilessly. In Africa, a woman with three chicken eggs to sell because the baby has fever is taxed in the village market. Nobody knows the destination of Africa’s tax proceeds. We only know they do not go to municipal services. Municipal services my foot! In Africa, every upper class household is a municipality with a mayor, a generator, a bore well and a septic tank. In Africa top government officials proudly import 4-wheel drive SUVs duty free. 

In other parts of the world, corrupt officials risk prosecution, fines, imprisonment or even hanging. There is a judicial deterrent to graft. In Africa, impunity is the norm. In the best case scenarios, selective justice is applied. Only the ‘small fish’ see the jail house. Reports about major embezzlement in high places only warrant inconclusive investigations. That is why African corruption is not practiced discretely. There is no need to disguise sleaze. Conversely, scruples are equated to stupidity. That is why African auditors have no difficulty reaching adverse findings.

via Abhijeet Singh 

The political economy of Nigeria and Indonesia

A Nigerian and an Indonesian attend a foreign university together in the 1960s and become friends. After graduation, each returns home to join the government. Several years later, the Nigerian visits his colleague in Jakarta, and finds him living in a big, luxurious house with a Mercedes car parked outside. ‘How can you afford such a nice house on a politician's salary?', asks the Nigerian. ‘Do you see that road?', replies the Indonesian, pointing to a magnificent highway outside. ‘Ten per cent.' Some time later, the Indonesian goes to visit his Nigerian friend, and finds him living in a vast palace with ten Mercedes cars parked outside. Amazed, he asks where the money had come from. ‘Do you see that road?' asks the Nigerian, pointing to a thick tangle of rain forest. ‘A hundred per cent.'

From the Economist (old, but good)

Sudan Links

Or rather, John Asworth's Sudan links:

1. An important statement from the UN recognising that the basis for demarcating the border is the 1956 border, not the current de facto border that Khartoum has been pushing as a basis for negotiation.

2. "Has the AU become a pawn in the hands of the Khartoum regime?" A question apparently on the lips of many South Sudanese.

3. An excellent open letter from South Sudanese to Salva Kiir on corruption. Really well written. Members of the international community concerned about corruption might want to start here.

4. The Budget Speech. Including details on financing plans. Of a total SSP 6.4 billion budget, 10% is expected to come from domestic non-oil revenues, 15% from reserves, 15% from domestic borrowing, and the remaining 60% from yet to be negotiated international loans and oil/mineral concessions. So, er, good luck with that (and let's really hope that Khartoum will be pressured into making a fair deal on oil soon).

Kenyan Political joke of the week

No, not the election news, but this:

Little Njoro of Buru estate in Nairobi wanted Kshs 1,000 badly and prayed to God for two weeks but nothing happened. 

Then he decided to write God a letter requesting the Kshs 1,000. When the postal authorities received the letter addressed to God from Buru buru in Kenya, they decided to send it to State House. 

The letter never even got to the president but an aide was very touched and so he sent the boy Kshs 200. He felt that this was a lot of money for a small kid.
Njoro was delighted when he received the Kshs 200 and sat down to write a thank you note to God, which read: 

Dear God, 

Thank you very much for sending the money.
I don’t want to sound ungrateful but I noticed that for some reason you had to send it through State House and, as usual, those crooks deducted a whole Kshs 800. My teacher tells me that you never forget, but did you not this once forget that Kenya is one of the most corrupt countries in the world and that as my dad is always saying corruption starts at the top? 

I suggest you send an angel next time.
Thanks,Njoro.

HT: @RichardTrillo 

Stationary Bandits

The 2009 World Bank Report Sudan: The Road Toward Sustainable and Broad-Based Growth and the 2010 GoSS Growth Strategy both highlight the issue of informal road checkpoints as a major constraint to trade within South Sudan, but primarily based upon (extensive) anecdote.

The South Sudan National Bureau of Statistics (NBS) have now just released the results from the first survey of Check-points on Major Trade Routes within South Sudan. Following an approach used by Ben Olken and Patrick Barron in Indonesia Thailand (oops), the NBS hired enumerators to sit, unannounced, alongside commercial trucks travelling along major trade routes, and make notes of the location of each checkpoint, the amount charged, and time spent waiting. The results are pretty damning.

Check-points are numerous. There are 4 check-points per 100km or 1 per 25km along the major trade routes in South Sudan.  

Payment is widespread. On all except one route surveyed, drivers made a payment at an average of 97% or more of the check-points they stopped at. 

Payment is not confined to the international border posts. While the largest payments occur at the international borders, payment on internal routes can be up to 8% of the value of goods transported.  

Most individual payments are small. 47% of individual payments were less than 20 SDG and only 4% were more than 500 SDG. 

Total payment is significant. For all but two routes surveyed, average payment per 100km exceeds 100 SDG. For more than half the routes surveyed, payment per 100 km exceeds 200 SDG. For 10 of 21 routes surveyed, drivers pay 4% or more of the value of items carried. Even on purely internal routes, drivers pay out up to 8% of the value of items carried. 

Many payments are unreceipted. 47% of individual payments made during the survey were unreceipted. 27% of the total payment made during the survey was unreceipted. 

Waiting times at check-points are high. Across all routes, waiting time is on average 2 hours 9 minutes per 100km or 65% of driving time. 

The most commonly observed officials are police and traffic police, sighted at more than 50% of check-points respectively. In many cases, more than one type of official is present at a check-point.

 If the government is as serious about acting to stop collections at checkpoints as they say they are, this is plenty of evidence to go on.

Development Strategy in Equatorial Guinea

Teodorin, who is Equatorial Guinea's Minister of Agriculture and Forestry, clearly has a three-step plan for development success: (1) pilfer proceeds from nation's natural resources and spend on useless luxury crap in Los Angeles, (2) ?, (3) profit!

Amanda Taub at Wronging Rights

How to Spend It (Paul Collier on Budget Support)

I managed to miss this a couple of months ago*; Paul Collier proposed at an ODI meeting that Budget Support should be given according to a simple decision rule, based upon an independent assessment of country public financial management (PFM).

Mick Foster's response is very interesting, arguing that "It is about managing an aid relationship, not certifying PFM and turning on auto-pilot ... Aid donors are the right people to do this - not agents who don’t have to live with the consequences of their verdicts."

I do like the principal that decisions be made objectively according to a transparent rule, but it is easy to imagine problems. A donor could easily be embarrassed by a democratically elected recipient government with good PFM systems deciding to make spending decisions which look somewhat inappropriate to a British taxpayer. But then that is the whole point of budget support - ceding control over spending decisions to a recipient government which is accountable to local people. Which could get tricky if local people hold values which might be different to the donors' (e.g., "The British government says it will cut aid to African countries that persecute LGBT people").

Foster argues that the economic case for budget support is clear, providing "the most cost effective way to deliver services, including allowing for leakages," which contrasts with the perspective of politicians who are "absolutists, not a penny can be stolen, clearly unrealistic." The trouble is, our politicians are also democratically accountable. To an electorate which is also pretty absolutist about corruption. And kind of understandably so. Being stolen from generates an emotional response.**  

Imagine you want to give £100 to a Kenyan family. Would you rather spend £25 of that on legitimate administration expenses and have £75 go to the family, or have £80 get through to the family, only £10 spent on administration, and £10 stolen by a politician and spent on his new Mercedes Benz? We know from a large literature on psychological experimental games that individuals often value procedural "fairness" above  monetary gain. People can choose inferior outcomes when they think that they are getting stiffed. Does this extrapolate to aid? I can certainly understand both a rational economic acknowledgement that corruption often isn't the main issue, alongside a kind of emotional moral revulsion which makes me want to absolutist.

If the economic case really is so strong compared to the political constraints, how can supporters of budget support make it more effectively? 

Read the ODI meeting summary here, and Mick Foster's response slides here.

*Thanks for the reference to Stephen Peterson at a recent Oxford Seminar.
**And as an aside, it's interesting that proponents of budget support argue that the economic case needs to trump the political one in this case, when they are often the kind of folks who criticise economists for focusing only on the economic case with scant regard to political constraints.

The Political Economy of Aid to Africa. In Poetry.

‘The Innumerate Ministry of Education’
by Stephen Partington (from the East African)

‘Here’s a little pocket money:
Buy yourself some books!’
A patronising-noble act,
But now it seems that crooks

Have stolen from DfID
And lost its billions.
Some have blamed the Minister,
And him, his minions.

Blame is being handed out
Like the British handed Pounds:
Seems no-one is responsible
For what’s lost and won’t be found.

Forgotten are the pupils, who
Lack books and dorms and desks
Or any hope of realising
Free Primary’s promises.

Now Britain wants its money back
And someone brought to book,
Wants government to hunt them down
Not let them off the hook.

But do our middle-classes
Or elites whose pampered young
Attend our rich Academies
Care if justice isn’t done?

International Thief Thief

Global Witness drop some UK development-policy-beyond-aid wisdom.

British banks have accepted millions of pounds from corrupt Nigerian politicians, raising serious questions about their commitment to tackling financial crime.

…

Without access to the international financial system it would be much harder for corrupt politicians from the developing world to loot their national treasuries or accept bribes. By taking money from such customers, British banks are fuelling corruption, entrenching poverty and undermining international development assistance.

…

The UK regulator, the Financial Services Authority (FSA) needs to do much more to prevent banks from facilitating corruption. As yet no British bank has been publically fined, or even named, by the regulator for taking corrupt funds, whether willingly or through negligence. This is in stark contrast to the U.S., where banks have been fined hundreds of millions of dollars for handling dirty money.

…

The UK’s aid to poor countries has been ring fenced against budget cuts. Meanwhile, banks - themselves propped up by taxpayer’s money - are getting away with practices that fundamentally undermine the effect of aid. This is not just illogical, it is immoral

Beyond Aid - Going after corruption

Owen Barder has written a great post on the difference between aid and development policy - between providing temporary alleviation from the worst effects of poverty, and supporting structural transformation.

Aid is best-suited to poverty alleviation, and other “beyond aid” policies such as trade, security and migration are more suited to transformational development.

Hilary Myers mentioned one of these “beyond-aid” issues on this blog: cracking down on tax havens, improving transparency and tackling corruption - particularly by making it harder for western banks and financial institutions to facilitate that corruption.

How important are these illicit financial flows out of developing countries? Derrill Watson draws my attention to these figures from the Global Financial Integrity Programme of the Center for International Policy.

Quite important.

Michela Wrong on Aid

Scandalously, I’ve only just finished reading the fantastic “It’s Our Turn to Eat,” Michela Wrong’s telling of the story of John Githongo, the Kenyan anti-corruption czar.

In the book, she comes down quite heavily on international donors for turning a blind eye to corruption. Her solution, offered in this interview with Guernica Mag, is not to go all Dambisa Moyo and cut aid completely, but simply to speak up a bit. 

If you cut all aid to Kenya, people are going to die. So I don’t think that’s a solution. But I will say that aid donors have to look very closely at what they do. If you have a government whose ministers are setting out to steal the equivalent amount of money that they receive in aid, then you have to wonder why western donors are continuing with that relationship. I don’t think the answer is to cut them off, but the answer lies very much in doing what Edward Clay, the British high commissioner of the day, was doing. Which is to be very confrontational, to humiliate these people in public, to call them to account, to deny them visas. The aid relationship needs to be less automatic, less lazy, less complacent, and much more abrasive.

Richard Dowden on Nigeria

“Would ordinary Nigerians have felt Yar’Adua’s absence? Since the experience of the Nigerian state for most Nigerians is limited to demands for bribes by officials and policemen, the government and who is running it is of little consequence to them. Everything positive in their lives is achieved by themselves in spite of the ruling elite and their officials, not because of it. Many might say that Nigeria would be better off without a government at all.”

Pretty damning.

What does corruption have to do with development?

A commentator suggests that a "tolerable administration of justice" needs to incorporate "zero-tolerance of corruption." I agree about the importance of predictability, but corruption is a pretty broad concept, and is it always the most binding constraint?

Mushtaq Khan at SOAS has some great work skewering the cross-country approach to corruption and growth which dominates the literature. This chart in particular articulates that old favourite: Correlation does not necessarily mean causation.

-----

Update: Mushtaq Khan and Daniel Kaufmann are on the next Development Drums, send your questions to Owen Barder

Karaoke and Corruption

This morning had the potential to go quite badly. Hungover (Karaoke at Global Camp on Fridays is truly awesome. Ended the night with the whole bar singing "We are the World"), I was stopped by the police not once but twice for having the wrong licence plate. First time I haggled them down to $20. Second time I was pissed off, and as it's a Saturday I thought, sod it, I have time to kill so I'll argue with the guy. And guess what it worked! I shouted at him long enough that he just let me go, and this after I'd already seen a Sudanese guy pay him $20. I'm more Sudanese than the Sudanese!

And as I drove off in glory, Top of the Pops (cancelled in 2006 in the UK) comes on the BBC World Service with Michael Jackson. Score!

The Economics of Extortion

Ben Olken has a great recent paper on the bribes paid by truckers in Indonesia, in which his researchers actually sat on 300 trips by truckers and witnessed 6000 bribe payments (an average of 20 bribes per trip!!).

Sounds like what we need in Southern Sudan. There are loads of anecdotal accounts of unofficial tax points along the roads coming into Sudan from Uganda, it'd be great to see some data. Maybe I have a phd topic in the making...