The truth is, democracy is getting lazy. Citizens in donor countries do not play an active role in the democratic process, including monitoring where their taxes go and how they are used. Whereas citizens from donor countries often have possibilities for involvement, citizens in countries receiving development assistance often are not invited to participate in the aid process. As a result, they are not aware of the amount of money coming into the country, and most often they, and possibly their elected representatives, are not involved in deciding priority areas for its use and ways of spending it to achieve the best results.

Without the public eye on these extremely large flows of money, the potential for corruption is high.

Aid is intended to reduce poverty and support sustainable development, but its effectiveness is seriously undermined when those that are giving and those that are receiving are not brought into the process in a participatory way. Corruption diverts resources from their intended purpose, and from the people who need them most. The poor therefore, have the greatest stake in preventing corruption.

What is worse, aid can actually encourage corruption. Conflict, reconstruction and post-disaster situations are particularly vulnerable. Increasing reliance on budget support can feed corruption where domestic accountability is weak. On the supply-side in development cooperation, private sector firms have frustrated clean governance efforts by offering or accepting bribes.

Transparency International’s policy paper on Poverty, Aid and Corruption takes on the challenge of showing how to safeguard aid. It begins from the idea that the aid process itself must be designed in a way that prevents corruption. The paper emphasises that development partners - aid providers and aid recipients - have a shared role and responsibility to prevent corruption from reducing aid effectiveness.

At the heart of such an approach is the idea of mutual accountability, as reflected in the 2005 Paris Declaration on Aid Effectiveness. Donor governments must be accountable to their citizens on how they spend their taxes and what results they have achieved with it. The aid process does not stop with giving, but with supporting recipient governments in their efforts to reach intended beneficiaries and prevent corruption in aid.

Recipient governments also need to involve citizens and beneficiaries of aid in a more effective way. Inviting them to suggest how aid should be used, and empowering them to monitor its use by including them in decision-making forums is necessary to give meaning to the word ‘participation’. Citizens must have easy access to information about budgets to prevent money from being lost to corrupt hands along the way. In short, more public ownership of the process and more involvement and transparency on where and to whom the money goes.

Donors have a critical role to play in supporting such processes. Participation costs money and aid must support recipient governments to set up these processes to build public ownership and accountability as a very first step.

This already has happened to some degree where donors have recognized the value of involving civil society in public spending. For example the German development organisation, GTZ, has sought to increase civil society participation in its poverty-reduction work in Zambia by supporting the establishment of Sector Advisory Groups that monitor and discuss implementation of the poverty reduction strategy. (GTZ: Poverty and Corruption, 2004). Similarly, the United Kingdom’s Department for International Development (DFID), has supported civil society organisations in Mozambique increase their capacity to monitor governance and advocacy activities and contribute to the debate over policies affecting the public. (DFID Mozambique: Anti-Corruption Strategy, 2006).

Another good example of effective citizen participation, not only related to aid, is participatory budgeting . Participatory Budgeting is a process where citizens can take part in the decision making as well as exercise oversight over the distribution of public funds. This creates opportunities for engaging citizens in the political process and increases transparency in the use of funds. Originating in 1985 in Brazil, this process has spread to more than 40 countries, a total of 300 municipalities, including China, Dominican Republic, Ecuador, India, Indonesia, Italy, Mexico, Serbia, South Africa, Spain, and Uruguay.

These are important steps forward and should serve as examples of good practice. But the fact that they are so few and far between shows the need to make such practice an institutionalised part of the aid process.

TI recommends making the promotion of good governance, transparency and accountability on all levels of cooperation an integral part of aid programmes. This will ensure aid is actually received by those for who it was intended. The fundamental objective of fighting corruption and making development cooperation more effective must be to strengthen transparency and accountability in donor and recipient countries. Strengthening the role that civil society can play as a partner in development increases the number of stakeholders able to demand accountability from governments in both recipient and donor countries. Transparency in budgets and access to information on public financial management are minimum prerequisites to prevent corruption in aid.

The credibility of aid, both in donor and recipient countries, will depend on the ability of donor organisations and governments to address the corruption problem. The success in fighting corruption relies on efforts from all sides of the development partnership.

* the photo used with this story is taken from Transparency International's Annual Report 2006. Photo credit: Thomas Grabka