Presentation of Boyko Todorov, SELDI Coordinator, at the international conference Building Competitive Advantage in Nations: Increasing Transparency, Combating Corruption and Improving Corporate Governance
Traditionally an "exotic" issue, out-of-bounds for the diplomatic exchanges during the cold war, corruption was catapulted into the agenda of the international community in the early and mid-1990s. A number of reasons had kept corruption low on the priorities of international organizations prior to that. Among these, and relevant to our analysis, was the consideration of corruption as an issue closely linked to domestic politics and thus not appropriate for development assistance. This is important to note, as similar considerations still compromise the effectiveness of both assessment and assistance efforts in this area. By 2001,however, most international institutions and multilateral agencies have mainstreamed corruption into their programs. It has also become an important issue in Euro-Atlantic integration, particularly in the enlargement of EU and NATO.
As globalization has made corruption much more difficult to contain, this has significantly diminished its treatment as a sensitive issue in international exchanges and has facilitated its inclusion into the development plans of many international institutions. Diplomatic considerations of non-interference in internal politics no longer apply when there is international consensus that a particular issue belongs to the core of development concerns.
Placing corruption high on the agenda of international cooperation, however, puts Bulgaria's governments in an awkward position. On the one hand, they are under pressure from domestic constituencies to accelerate the coming of membership in much coveted international institutions - EU, NATO, etc. - with its expected immediate returns. What Bulgaria expects to gain from joining these organizations easily outweighs most concerns about the state of preparedness as benefits are expected to be instant and universal. This creates an incentive to "sell" the country better and quicker, dealing as quickly as possible with any perceived problems in the negotiations with the Union. On the other, the international institutions and their member executives urge the Bulgarian government to address the difficult and painful issues of reform before they would consider membership for Bulgaria. None of these issues is, however, a natural image-enhancer for a country. Least of all this could be said of corruption.
The concern of the international community with corruption in a particular country needs to be based on explicit procedures employed to evaluate its scope and impact on reforms. These procedures are quite important since diminished diplomatic considerations cannot warrant diminished objectivity in assessing sensitive areas such as corruption. The legitimacy of consequential political statements about the spread of corruption need to be based on reliable data and analyses. Claims about the spread of corruption in a country cannot be credible unless they acknowledge that corruption - as many other political, economic and social phenomena - is amenable to verifiable measurement.
Admittedly, diagnosing corruption is a difficult and sensitive exercise. Using, for example, the frequency of media allegations of corruption as a rule of thumb measure risks being misled by the hype of current politics, particularly in a transition context. Also, it is possible that what is domestically an awareness campaign by civil society aiming to sensitize policy makers and increase public intolerance by emphasizing corruption issues in the public debate, internationally could be construed as deteriorated governance, thus mistaking the cure for the decease. In Bulgaria, Coalition 2000, a process of cooperation between public institutions and NGOs in the field of anti-corruption, has developed a unique methodology of corruption assessment. It combines a detailed evaluation of the regulatory environment and institutional practice with quarterly survey data about public trust in institutions and actual spread of corruption practices.
The Bulgarian experience in this area has highlighted a number of key reasons for the significance of cooperation between governmental institutions, including international organizations and development agencies, and civil society in assessing corruption in transition countries.
The first one relates to the scale of the problem of corruption in these countries. Many transition societies, particularly those in Southeast Europe, are faced with a corruption cultures that permeates all structures of the body politic and has become a systemic feature of their political structures. The spread of corruption throughout the whole spectrum of possible forms - from the usual bakshish to the traffic police to the entry of organized crime into the mainstream economies through corrupt privatization practices - presents a challenge that goes beyond the effectiveness of administrative measures.
The second relevant aspect relates to the factors bringing about corruption on this scale. The institutionalization of corruption in the SEE countries cannot be explained by the national circumstances alone. A number of region-wide causes need to be taken into account if we are to comprehend the nature of the problem. In general, regional instability in the past ten years has undermined effective law enforcement throughout the region, has raised considerably the cost of regional trade, and thus the stakes of smuggling, which consequently has become a breeding ground for organized crime on a regional scale. Driving the SEE economies into the gray, and even criminal zone, has been the main dynamic behind high levels of corruption.
The gravity of the problem, therefore, calls for bold and radical measures if corruption is to be stemmed. These measures should upset already entrenched interests which fuel the institutionalization of corruption. For this to happen, broad public coalitions need to be formed both within countries, and region-wide. Traditional bureaucracies - be they national or international - cannot muster the type of public support needed if these reforms are to be successful. It should be pointed here that it is often wrongly assumed that anti-corruption efforts would be opposed only by corrupt local politicians but somehow automatically supported by the general public. Corruption flourishes - or diminishes - not just because of the legal framework or government law enforcement but also in a social environment whose rules and sanctions are sometimes more effective than those of law enforcement. Any anti-corruption program needs to ensure that it is tailored to these local social networks in way that makes them receptive to government policies.
However, support coming from a cross section of society, involving major public and private actors could only be enlisted in this process if society has a clear view of the severity of the problem. This, in our understanding, warrants the introduction of a new kind of corruption assessment which goes beyond traditional administrative methods. This new kind could only be successful if it is based on cooperation between the public institutions, involved in designing and implementing anti-corruption policies, and civil society institutions which are expected to generate civic support for these policies. For this to happen, the assessment on which these policies are based, needs to be carried out in a public-private partnership.
The interface between the role of governments, including international agencies and civil society in assessing corruption could be illustrated in the following way by superimposing the public sector (left circle) and NGO sector (right circle):
- Area 1: assessment related to measures for streamlining
corruption prevention in law enforcement (customs, police, etc),
prosecution (to the extent that - and if - it is part of the
executive); this area is strictly (inter)governmental, assessment
- Area 2: (the area of public-private cooperation):
assessment of the institutional and legislative adequacy and
efficiency (including performance of public administration and
judiciary), general evaluation of political and institutional
reforms, international assistance evaluation, etc.
- Area 3: monitoring by and of the media, monitoring of
corruption inside civil society, monitoring of public attitudes
(trust in institutions).
Another aspect of corruption in transition countries that necessitates a cooperation between government, including international institutions, and NGOs is that it has turned into a
typical development problem for these countries. Widespread
corruption distorts the restructuring of the economy, the modernization of the education system and public health care, affects social programs, and finally has a negative impact on the public's trust in the emerging democratic and market economy institutions thus breeding disillusionment with reforms in general. All this makes corruption a typical development concern.
Development problems, however, are rarely amenable to administrative solutions. Negotiations conducted between national and international bureaucracies as part of development assistance do not necessarily contribute to shared values as a basis for new governance structures supported by traditional social values. Development problems require partnerships between government and business, between NGOs and public institutions in order to complement enforcement and prevention, to combine government policies and civic involvement.
Anti-corruption is, therefore, not just another technical area in development assistance. Anti-corruption assistance efforts could be ineffective, even counterproductive, if implemented in collaboration between international and national elites without account of public support. This is particularly relevant in Bulgaria, where there have been strong civil society organizations developing throughout the 1990s that could provide sustainability and generate backing for these efforts.
Combating corruption is a matter in which the role
of the international community - the European Union is particularly
relevant here - should be in providing a framework within which
development could take place as a partnership between the public
and the private sectors. In this context, it would be appropriate
for development agencies and international organizations to apply
clear-cut criteria for evaluating the level of corruption in the
country and how the government is dealing with this issue (which is
the case, for instance, with the assessment of a "functioning
market economy" by the EU). This would render the discussions more
specific and diminish misunderstandings. Next, while the results of
corruption assessment exercises are quite public (reports are
usually widely publicized), the process of deciding assistance
priorities and projects - which presumably should address
deficiencies identified in the reports - carried out in cooperation
with the executive, is quite opaque with little public exposure.
Thus both the national governments and the foreign agencies need to
make further effort to allow better scrutiny and public involvement
as regards anti-corruption assistance priorities. This would
guarantee their impact and would help coordinate the priorities of
domestic reforms and international cooperation.
International Anti-Corruption Assistance in Bulgaria
1998-2001:Lessons Learned1. Some development agencies emphasize
corruption prevention in their assistance programs to Bulgaria.
Enhanced transparency and accountability requirements need to be
routinely built into the financing of projects from foreign and
international sources, and implemented by both government and
non-governmental organizations, to prevent corruption in the
absorption of funds;2. Domestic and international aspects of
accountability. Many anti-corruption projects sponsored by
international agencies in Bulgaria receive little publicity about
their objectives and outcomes and thus generate little public
support. International institutions are primarily accountable to
the executives of their shareholders and thus have little
incentives for involving civil society in their anti-corruption
programs. Public-private partnerships are a way of guaranteeing
that accountability to donors and international organizations do
not take precedence over accountability to local constituencies;3.
Linkages. International concern about corruption in Bulgaria rarely
translates into tangible pressure on the government to implement
anti-corruption programs. International assistance - lending,
technical and financial assistance, investment guarantees, etc - in
particular coming from the European Union and the World Bank, needs
to be linked to the implementation of targeted anti-corruption
measures;4. The implementation of anti-corruption programs through
public-private partnerships should become a standard requirement of
international assistance in this area. USAID is the only agency
that has specifically supported this approach. In general,
bilateral development agencies are more willing and better equipped
to involve civil society in its assistance, although few provide
linkages to government assistance projects;5. Although all donor
agencies identify other relevant activities during the feasibility
stage of their anti-corruption programs, few build provisions about
interfacing with other ongoing donor projects into their