To Fight Corruption, One African Offers Presidents Cash

[Erasmus]

Editorial Observer
To Fight Corruption, One African Offers Presidents Cash


By TINA ROSENBERG
Published: November 24, 2006
Every year at this time, a private organization called Transparency International ranks countries on how corrupt they are perceived to be. The current index is notable for what has not changed: the sad persistence of sub-Saharan Africa at the bottom of the heap.
What is new this year is that Transparency International has new company in fighting corruption. A Sudanese cellphone billionaire named Mo Ibrahim announced recently that he will give an annual prize worth more than $5 million to an African head of state who was freely elected, turned over power to a freely elected successor and governed well while in office.
Skeptics might ask how the cause of fighting corruption will be served by awarding what will be the world’s largest individual prize to a powerful leader for doing his job. The answer can be found in the dreary immutability of Transparency’s list. Any first-year business school student can design successful strategies for fighting corruption. It persists because political leaders in many countries, especially in Africa, have little incentive to do any of these things.
Corruption is tamed when government agencies are set up to make corrupt behavior difficult. Two examples of how far the world is from this goal: Many government agencies in poor countries cut costs by paying workers a pittance or even nothing, expecting them to live off bribes. Before Mexico reformed its customs posts as part of its bid for the North American Free Trade Agreement, Mexico City’s airport effectively kept no registry of what came in on 100 planes a day.
There are lots of examples of how to do this right. Australia, Hong Kong and Singapore, now all among the very cleanest countries, used to be corruption cesspools.
But success depends on leadership. In his 1988 book, “Controlling Corruption,” Robert Klitgaard tells the story of a president not generally known as a graft-buster, Ferdinand Marcos of the Philippines. It is amusing to recall that Mr. Marcos’s stated reason for declaring martial law in 1972 was in part to combat corruption.
Tax corruption was especially rife. In 1975, Mr. Marcos installed a respected judge, Efren Plana, as commissioner of internal revenue. Mr. Plana fired the most corrupt officials and banned the hiring of relatives.
Previously, tax assessors won promotion by bribing their superiors. Mr. Plana gave promotions and cash prizes to the most effective and fairest assessors. He brought in outside auditors and instituted frequent audits and spot checks. He rotated agents to avoid collusion with taxpayers. He recommended changes to simplify the tax laws, which reduced agents’ discretion.
Mr. Plana was highly successful. But after he left office, tax corruption began creeping back. Then before the 1986 presidential elections, President Marcos installed cronies in the tax bureau to help his family evade taxes and steal money for his election campaign.
Political leaders talk about fighting corruption because voters care about it. They also like to prosecute corrupt past officials — even though this does very little to fight present graft — because it is showy, and those officials tend to be adversaries.
But leaders have a bad record of doing what really works: open government to public scrutiny, carry out bidding for government contracts transparently on the Internet, pay government officials decently, investigate public officials who buy Mercedeses, cut red tape and restructure government offices to remove opportunities for bribery.
Corruption benefits leaders personally. It rewards supporters and greases the political machinery. And anyone who really tries to fight corruption makes a host of inconvenient and perhaps dangerous enemies.
That’s where Mr. Ibrahim’s prize comes in. In most countries in Africa, leaders today have unlimited opportunities to plunder and no checks on their power. But once they leave office, they lose everything. With rare exceptions, they receive no further salary or perks. This is a perfect system for encouraging presidents to steal as much as they can and cling to office.
The Ibrahim prize seeks to help change this equation. A panel of experts in African governance will choose a former president to get $5 million over 10 years, and $200,000 per year for life after that. The ex-president will also receive $200,000 a year to give to charity. (The prize may not be awarded every year.)
The prize increases the appeal of leaving office, and helps presidents feel less need to pilfer their way into a comfortable retirement. It will also give them an incentive to improve the lot of their people.
Its limitation is that it mainly affects the behavior of the chief executive. Addressing big-fish corruption is not a full solution. Even a puritanical leader can run a very corrupt government, especially if he suffers from the misimpression that his own probity is enough.
What counts is how the system is structured. To change that, Africa, like elsewhere, needs more than an Ibrahim prize. It needs a permanent source of political pressure from citizens and business groups — not just general disgust, but advocacy for specific reforms. Corruption always carries its own powerful lobby. Honest government needs one as well.


http://www.nytimes.com/2006/11/24/op...html?th&emc=th