In 2010 US $128 billion was spent in development aid across the globe. This money is supposed to save lives and better the livelihoods of millions of distressed people.
Corruption and poor governance can allow aid that should go to the poor to be diverted into the pockets of the powerful, frustrating development efforts, and perpetuating systems of political, economic and social inequality. Good governance has the opposite effect. For example, a recent study by Transparency International shows that when corruption is kept in check, there is a greater chance countries can achieve the Millennium Development Goals such as improving the health of mothers and babies, ensuring boys and girls have equal access to a complete primary education, and halving the number of people who are unable to access or afford clean water by 2015.
This week the most powerful aid decision-makers from across the world meet at the Fourth High Level Forum on Aid Effectiveness in Busan, South Korea, to discuss the future of how money will be given. What they decide affects the destinies of the millions of people that rely on this help to survive, which is why it is important that the issue of corruption in aid is addressed head on.
How corruption creeps in
Corruption in aid is a result of poor governance and mismanagement at the international, regional and local level. It results from a lack of transparency and accountability, allowing decision-makers to divert aid away from those for which it is intended.
Donors and the countries getting the money know this. As part of making aid more effective, aid actors have made commitments to fight corruption and make aid more transparent, predictable and accountable. They have even pledged to support the creation of key institutions for good governance and clean procurement.
The process started in Rome in 2003 and the most well-known consequence was the Paris Declaration, which set targets for developing countries and donors to meet. Principles of mutual accountability were also spelled out, making both donors and recipients responsible for ensuring aid money is used well.
The International Aid Transparency Initiative was launched following the 2008 Third High Level Forum on Aid Effectiveness in Accra, Ghana. More than 20 signatories, including donors such as the United Kingdom and the World Bank, have worked to adopt a common method of reporting how they gave their money. All their aid information is published using the IATI standard, making it possible to see where aid money is going and how and when it is being spent.
Today these donors represent 64 per cent of official development flows. If Canada and the United States were to agree to start publishing their aid information using the same standard, this would take the total to more than 80 percent.
One key challenge now is to ensure that new donors adopt the IATI principle too. New donors include countries, such as the rapidly growing economies of Brazil and China, as well as private foundations and investment funds.
What these actors will commit to in Busan is still unknown. China has already made it clear transparency standards do not apply to its aid programmes.
Civil society's agenda
The meetings in Busan must result in concrete commitments that ensure good aid governance prevents corruption and deliver on aid effectiveness.
Transparency International and other civil society organisations are calling on governments to make the aid process transparent, accountable, and locally-owned to ensure donor monies benefit communities rather than fuel corruption and mismanagement.
In Busan and beyond, this means that:
- Donors must adopt and strengthen, not scrap, aid transparency initiatives
- Independent civil society oversight must be in place to stop corruption
- Anti-corruption principles must apply to all aid donors – including new donors like Brazil and China.
Less corruption, more aid
Accountability, transparency and integrity are the anti-corruption principles needed to make aid better governed. Successes from Transparency International chapters around the world underscore this:
- Guatemala: our chapter, Accion Ciudadana assisted citizens in monitoring the country’s donor-funded cash transfer social programme, Mi Familia Progresa (My Family is Making Progress). The work helps more than half a million people living in extreme poverty, to see whether health and education services were being delivered to communities.
- Uganda: TI Uganda has worked with communities to detect, report and monitor incidences of corruption in health and agriculture. The aim is to give disadvantaged communities a platform from which to communicate with authorities on how to improve public services.
- India: TI India raised awareness about local governance processes and the right to information through grassroots projects that affected 8,000 families living in poverty. The chapter also engages committed public officials though our Development Pacts, voluntary agreements uniting politicians, citizens and service providers to jointly prevent corruption and ensure decision-makers deliver on promises. More than 80 of these pacts have been signed in different countries around the world.
Officials in Busan must recognise these facts. Unfortunately, many governments are pulling in different directions and are not willing to deliver on what is needed.
Although the language on transparency and accountability will be included in the final communiqué, the mechanism to ensure transparency and accountability – in effect the way to hold donors and recipients to account – may be missing. Allowing this to happen would mean a lost future for aid.
Joint NGO Press Release: Aid donors make progress on transparency as key summit opens
Better Aid Press Release: Busan: World governments have failed to make aid work: civil society gives 3 ways to fix it
Read more about aid transparency on the Transparency International blog
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