Photo Credit: Waging Nonviolence
This article was originally published by the Carnegie Endowment for International Peace:
A former U.S State Department official with a unique vantage point on global anti-corruption efforts wrote a visionary essay on what governments, civil society, and business can do to build upon current momentum. In her blog for the Carnegie Endowment for International Peace, Abigail Bellows laid out a roadmap for consolidating efforts, breaking down silos, and generally streamlining work in the anti-corruption field. Her approach is grounded in optimism, as well as an intimate knowledge of the sphere’s many players and their capacities.
In 2018, public anger and legal action over corruption have toppled political leaders in Malaysia, Peru, Slovakia, South Africa, and other countries. This is an acceleration of a documented trend: more than 10 percent of nations around the world have experienced corruption-fueled political change in the last five years. And these cases of peaceful transition represent the best-case scenario; elsewhere, corruption has fueled terrorist recruitment and sparked violent insurgencies.
In addition to rocking geopolitical foundations, corruption-linked instability threatens the integrity and durability of U.S. alliances, increasing the burdens placed on the U.S. military. International corruption also cuts to the heart of U.S. economic interests—thwarting the competitiveness of U.S. corporations as bids are diverted to the highest briber. Overall, the World Bank estimates $1.5 trillion in bribes are paid every year, squandering business capital and stymying development. Russia and China have weaponized corruption in several weak states to gain influence, win deals, and undermine sovereignty. And across Latin America, corrupted officials are more likely to turn a blind eye at the border, enabling the trafficking of illicit drugs, weapons, and migrants toward the United States. The December 2017 U.S. National Security Strategy (NSS) references these dynamics.
Yet, in practice, the administration of U.S. President Donald Trump has broken little new ground when it comes to fighting corruption. Here are ten ideas for doing more that could be implemented immediately. The first half are new external initiatives that would serve as legacy achievements of appointees at the State Department or the U.S. Agency for International Development (USAID), though career officials could also pursue them. The second half are internal actions that the State Department or USAID could pursue that—while not flashy or high-profile—would yield a substantial impact and could be executed by energetic working-level staff. The extent to which these officers remain creative, persistent, and proactive on anticorruption—using the NSS as a form of top cover—will be decisive.
1. Launch a Rapid Response Fund
Political will is essential for anticorruption reform and infamously difficult to create from the outside—as years of nation-building can attest. As a result, donors must anticipate and quickly capitalize on homegrown openings when they emerge. USAID’s analysis of 300 past anticorruption programs established the importance of focusing on such ripe opportunities.
Upswings in political will often occur in the wake of a corruption scandal that results in a change of government. Yet public outrage tends to be short-lived. According to research by Carnegie senior fellow Rachel Kleinfeld, a new reform-oriented administration has to act quickly to take advantage of momentum before opponents can regroup. As political will fades, public disillusionment deepens, eroding state legitimacy further.
The U.S. government can help break that cycle by establishing a dedicated tranche of flexible funding to boost support for local reformers trying to quickly deliver on reform promises. Doing so would address three gaps in current U.S. anticorruption programming: it is small in size ($115 million annually) and thus not proportional to U.S. interests; it lacks geographic flexibility, with most funds allocated to country accounts; and it lacks temporal flexibility, with programming typically planned two years in advance. USAID’s Office of Transition Initiatives has the statutory authorities and culture to address the latter two factors, but the office focuses on conflict settings rather than openings for governance reform.
Such an initiative could be funded through normal appropriations—ideally earmarked for this purpose—or a cost-sharing arrangement with the private sector or the World Bank (see proposal 3 below). The State Department should be in the lead—as diplomats are frontline sensors of changes in political will—and work collaboratively with Central Intelligence Agency forecasters and USAID programming experts.
Allocations from this new initiative, which could be called the Governance Opportunities Fund, could be disbursed through a range of structures:
- consortium of preselected grantees, modeled on the Fundamental Freedoms Fund;
- quarterly grant competition across embassies—an expanded version of the Fiscal Transparency Innovation Fund; or
- standing funding pool that ambassadors could tap into to assist local anticorruption efforts—comparable to USAID’s Disaster Assistance Authority, from which ambassadors can quickly access up to $50,000 for emergencies.
This fund would complement the Center for International Private Enterprise’s nascent Rapid-Reaction Anti-Corruption Project, which will deploy international experts to countries experiencing political openings for reform. These experts will produce recommendations for international donors, but those recommendations will go unmet without a corresponding capacity to quickly mobilize resources in the U.S. government and elsewhere. If windows of opportunity are targeted, progress that might otherwise take generations to achieve can be spurred.
2. Create a Network of Reformers
Even during windows of opportunity, zealous reformers can quickly get derailed, distracted, or—in the most extreme cases—disappeared. These leaders often have access to technical advice but need help navigating treacherous political terrain. The United States could support them by launching a global network of reformers, composed of newly minted government officials seeking anticorruption impact. The network would support these reformers before they flame out or get co-opted by providing various services:
Executive coaching: Drawing on what is termed the Adaptive Leadership framework and organizational change management, participants would map out potential allies and spoilers and would develop strategies for sustaining public support.
Subject matter expertise: Participants would analyze international lessons for triaging and sequencing anticorruption priorities. For example, high-profile prosecutions provide useful quick wins, but prevention efforts (such as e-government platforms or procurement reform) often offer more enduring impact and invite less backlash.
Solidarity: Peer mentorship can provide practical advice and mutual accountability. That vision drove the creation of the World Bank’s International Corruption Hunters Alliance, which focuses on law enforcement. Lessons could be drawn from the Justice Leadership Group, an organization that fosters mentorship relationships between former and current justice officials.
For such a network to be compelling to reformist national leaders—such as South Africa’s new president, Cyril Ramaphosa—it would need to be elite and discreet. It could be linked to existing groups like the Elders and the Mo Ibrahim Foundation, or it could be convened by an official with anticorruption credentials like former UK prime minister David Cameron. A pilot targeting subnational leaders could be a component of the Integrity Cities initiative (see proposal 4 below). It would be best for the U.S. government to launch such a network with other donors, as was done with the Global Anti-Corruption Consortium.
3. Incubate a Public-Private Partnership
The Departments of State or Commerce could launch a public-private partnership (PPP) to provide a platform for businesses to invest in anticorruption reform. Why would companies want to do so? Compared to other forms of corporate social responsibility—such as building schools—combating corruption ties directly to a company’s self-interest in improving overseas investment climates.
In addition, companies like General Electric and Unilever may want to continue signaling their pro-compliance values. Prospective donors could be drawn from the ranks of sector-specific collective action mechanisms like the Maritime Anti-Corruption Network and the Extractive Industries Transparency Initiative, country-specific integrity networks facilitated by the UN Global Compact, and those that have obtained antibribery compliance certification based on new International Organization for Standardization standards. For these corporations—which have already committed to not pay bribes—it is valuable to reduce demand for bribes to stay competitive. After the group’s reputation is established, the PPP could admit companies eager for so-called reputational rehabilitation following a bribery investigation. Just as Siemens launched its $100 million Integrity Initiative as part of its corruption-related settlement with the World Bank, companies like Odebrecht may soon seek anticorruption investment vehicles, either voluntarily or as part of settlements.
How would the funds be used? The PPP could bankroll the rapid response fund above or an initiative targeting the investment climate in strategic locations. Alternatively, support could be channeled through the new Open Government Partnership (OGP) Multi-Donor Trust Fund, hosted by the World Bank. Companies could provide financial or in-kind support. In the latter instance, telecommunications firms could offer toll-free calls to corruption hotlines and law firms could assist with legislative reform. The initiative could build on lessons from the Public-Private Partnership for Justice Reform in Afghanistan—established in 2007 by then secretary of state Condoleezza Rice; this initiative received over $1.3 million in monetary and in-kind contributions from U.S. law firms.
The convening power of the U.S. government would help jumpstart the PPP and broaden its reach. The partnership would also benefit from incubation at Boldline, a PPP accelerator recently co-launched by the State Department.
4. Think Globally, Act Municipally
No government is a monolith. Even if kleptocracy reigns at senior levels, pockets of reform at lower levels can prove that corruption is not inevitable, sparking broader calls for reform. While “islands of integrity” rarely produce systemic change, and may be quashed, they provide useful pilot cases. Particular opportunities exist in cities. As urbanization continues, subnational governments have an increasingly large share of the burden—and the budget—for service delivery. As a result, they can be vital innovators on anticorruption and raise citizen expectations at the national level, a model piloted by Partners Global.
To jumpstart these efforts, the Departments of State and Commerce could launch an Integrity Cities Initiative, a forum for municipalities to exchange good practices and commit to rigorous standards for public procurement. Inspired by the success of TRACE, an “anti-bribery business organization,” in administering a comprehensive due diligence review that results in a detailed compliance report that can be shared without limit, completion of a rigorous compliance standard as a requirement for an “integrity city” would draw new investment and expand markets for U.S. exports. The initiative could incorporate lessons from similar projects, including the Strong Cities Network (which the United States co-launched to support countering violent extremism) and the C40 Cities Climate Leadership Group (which addresses climate change). The project could partner with OGP Local, a nascent program that facilitates peer learning and the development of subnational action plans.
5. Elevate and Coordinate Internally
Within the Department of State and USAID themselves, the cause of anticorruption has historically been buried at the expert level, with inconsistent senior-level attention. While that has started to change in recent years, there is room for substantial expansion. Secretary of State Mike Pompeo could name a senior anticorruption champion, as the UK has done, to coordinate and drive efforts, and he could ask regional bureaus to each identify a deputy assistant secretary (DAS) to cover accountable governance. Similar to the designation of DASs with an economics portfolio in the last administration, this new cadre of DASs could meet regularly to address a number of issues:
- Building an accessible inventory of anticorruption programming across the State Department, USAID, and the Millennium Challenge Corporation (MCC).
- Mainstreaming corruption considerations into country- and region-specific strategies. For example, this could entail incorporating into relevant Africa strategies greater attention on hardening countries against China’s use of corruption to buy influence and win contracts.
- Expanding training. The twice-yearly anticorruption course at the Foreign Service Institute could be supplemented by in-region trainings for embassy officers, as was done in Europe in 2015.
- Creating a new interagency award for leadership in the promotion of accountable governance, in line with other themed awards for frontline officers.
Similarly, the intelligence community could scale up collection, analysis, and dissemination of products on kleptocrats and their networks, including via updates to the National Intelligence Priorities Framework. Pertinent corruption information could be incorporated into classified biographies on foreign officials so that the United States can pick its partners carefully and spot corruption risks. These steps would help meet the congressional requirement (in the 2017 and 2018 appropriation bills) to report on foreign “networks of corruption.” Moreover, decisions about who receives funds from the intelligence community should be made at a sufficiently senior level and should be subject to interagency debate.
New senior champions at the State Department, at USAID, in the intelligence community, and/or on the National Security Council could collaborate on integrated anticorruption strategies for key countries or issue sets. This effort could build on the successes of the two dozen posts in Central and Eastern Europe that developed anticorruption action plans starting in 2014. The UK undertook a similar initiative in 2012 for all twenty-eight countries where the UK Department for International Development operates, and London has now incorporated anticorruption components into annual operational plans. Officers could proactively help posts apply the anticorruption toolkit that the State Department and USAID developed in 2016, a toolkit that consolidates highlights from the practitioner guides of the State Department Bureau of International Narcotics and Law Enforcement Affairs and USAID.
6. Enhance Positive Incentives for Reformers
Name-and-shame approaches to fighting corruption have limits. Kleptocrats shield themselves from reputational risk domestically by limiting access to information and smearing global corruption rankings as manifestations of Western imperialism. Critiques from the United States are increasingly dismissed as hypocritical. Yet even authoritarians may tolerate modest reform if it improves GDP or keeps political instability at bay. The U.S. government can creatively leverage these motivations by expanding the carrots in its anticorruption toolkit.
Incorporating transparency and anticorruption provisions into trade agreements is one powerful tool. The last administration developed model transparency and anticorruption standards in the Trans-Pacific Partnership that could be adapted for revisions to the North American Free Trade Agreement (NAFTA). One component of these standards should be pressing economic competitors to crack down on bribes that their companies pay overseas. Curbing the misconduct of these companies (and the willful negligence of their home governments) fits squarely in an America First trade agenda. Similarly, the United States could create incentives for competitors to accede to the WTO’s Agreement on Government Procurement, which the United States signed in 2014.
The U.S. government can also press international financial institutions to make corruption a bigger part of their lending analysis. The International Monetary Fund (IMF) is modeling this approach in Ukraine, where $17.5 billion in assistance was tied to meeting anticorruption conditions, with strong U.S. support. The IMF appears to be extending that approach elsewhere. Similarly, the MCC’s requirement that countries pass a “control of corruption” threshold to unlock compact assistance—typically around $300 million—can be a powerful boost to reform, as seen in Côte d’Ivoire. After failing on fifteen of the twenty indicators on the MCC’s annual scorecard in 2013, Côte d’Ivoire’s prime minister charged a team with improving corruption controls; by 2015, the country passed on thirteen indicators and was awarded a compact. The U.S. government can leverage the MCC as a short-term incentive for reform by ensuring that countries eager to improve their corruption scores can access the technical assistance necessary to succeed, perhaps through the rapid response fund (see proposal 1).
In conjunction with its annual Award for Corporate Excellence, the State Department could establish a recurring category for integrity leadership, selecting a business that is promoting private-sector collective action against bribery. As part of the award ceremony, U.S. officials and trade groups could highlight the economic costs of corruption and share success stories for avoiding corruption (such as through integrity pacts).
Finally, the United States could explore ways to offer a preference in federal public procurement for companies with strong antibribery compliance programs. Such an incentive would align with the Organization for Economic Co-operation and Development’s (OECD) Guidelines for Multinational Enterprises and recommendations from the B20 (a G20 forum for the private sector). This preference could be a milder version of the requirements now implemented in some jurisdictions—such as the Brazilian state of Rio de Janeiro—where companies must have an integrity compliance program to compete for public tenders.
7. Safeguard Security Sector Assistance
Mechanisms exist to address the most egregious forms of fraud, waste, and abuse in U.S. assistance, yet more subtle forms of leakage can persist. The most gaping vulnerability—and the most dangerous one—is security sector assistance; associated funds or weapons that are diverted may directly imperil U.S. interests. In 2015, bribery and bid-rigging in an Afghan Ministry of Defense fuel contract increased costs to the Afghan government and U.S. taxpayers by more than $214 million. Have the gaps that produced that problem been corrected?
Not entirely. Embassies and intelligence agencies are not regularly tasked with assessing security sector corruption in advance of new assistance agreements. Department of Defense officers at post have little training in identifying which units have been criminally captured or are using coercive mechanisms to extract rents. When corruption is discovered, officers do not always report it back to headquarters, out of fear that programs will be cut off automatically.
Risk mitigation measures are also applied unevenly. Sometimes officers prioritize assistance that cannot be easily pilfered (such as training instead of equipment) or require additional end-use monitoring. Yet at other times, some loss of U.S. assistance may be seen as inevitable and acceptable. Frequently, these decisions are made at the country level, on a case-by-case basis, without full information. For instance, U.S. security assistance flowed into Nigeria in 2014 without adequate awareness that, simultaneously, Nigeria’s national security adviser was allegedly stealing $2.1 billion in public funds—leaving soldiers underfed, underpaid, and unable to defend citizens against Boko Haram.
In such contexts, U.S. security assistance must meet its first obligation: do no harm. U.S. interventions sometimes fall short of this standard, as the Office of the Special Inspector General for Afghanistan Reconstruction has documented in devastating detail. There are several steps that the Departments of Defense and State can take to avoid inadvertently fueling corruption via security assistance:
- Instituting mandatory corruption risk assessments and mitigation plans, approved by senior leadership, for assistance above a particular threshold. A useful pilot would be robust implementation of the new strategy on preventing corruption in U.S. reconstruction efforts, tasked in the National Defense Authorization Act for fiscal year 2018. Congress has considered requiring broader risk assessments, as reflected in the draft State Department Authorities Act for fiscal year 2018.
- Applying principles advanced by the Open Contracting Partnership to security assistance agreements, including beneficial ownership declarations, with limited national security waivers.
- Focusing assistance in high-risk places on defense institution building, which could be an emphasis of the newly created Security Force Assistance Brigades.
- Conditioning bilateral security assistance on domestic transparency and procurement reforms, as has been suggested in Ukraine.
The good news is that momentum for reform exists. The United States demonstrated early progress by including corruption questions in the 2016 Framework for Policy Review and Risk Analysis of Proposed Security Sector Assistance Activities (documented by OGP) and the new performance management approach. Lessons could be learned from the Partner Vetting System pilot (instituted to minimize the risk of U.S. funds benefiting terrorist organizations) and USAID’s Public Financial Management Risk Assessment Framework (which guides government-to-government development assistance).
8. Expand Public Diplomacy
While popular protests are fueling reforms in some places, popular acceptance of corruption is calcifying the status quo in others. Problems concerning public mindsets—such as the Brazilian public’s continued support for former president Luiz Inácio Lula da Silva despite corruption convictions—cannot be solved with institutional reform. These problems require public engagement strategies that prove that cleaner governance is possible. Such efforts are gaining momentum. For example, Integrity Idol—a project of the U.S.-based nongovernmental organization Accountability Lab—“names and fames” bureaucrats who are defying the odds to serve the public. The U.S. government can amplify these efforts through its alumni programs and embassy-based events, helping to overcome public resignation.
To that end, the recent uptick in U.S. public diplomacy on anticorruption could be sustained. Participants in the State Department’s anticorruption-themed International Visitor Leadership Programs could gather on the margins of the biannual International Anti-Corruption Conference to foster peer support. The U.S. Young Africa Leaders Initiative (YALI) established a public management track and the Young Leaders of the Americas Initiative created a course on transparency and good governance. These programs could deepen their curricula by partnering with Transparency International’s training program for future leaders or the International Anti-Corruption Academy. In addition, a concerted effort should be made to incorporate alumni from YALI and similar programs into State Department and USAID foreign assistance programs.
Many of these young entrepreneurs are bursting with creative anticorruption ideas that should be cultivated. YALI’s Transparency Small Grants Competition was a step in the right direction, but resources need to match demand. The State Department also organizes tech camps—hackathons that link private sector technologists and local stakeholders to address real-world challenges—some of which have focused on anticorruption themes. These forums provide fruitful outlets for surfacing new ideas, but they require more sustained follow-on support, perhaps in partnership with the Organization of American States’ Open Gov Fellowship, the nonprofit collaborative group Civic Hall, or the PPP described in proposal 3. The State Department should use its convening power to seed partnerships and shift the public conversation on accountable governance.
9. Maximize Multilateral and Sanction Tools
Achieving greater impact from existing tools is just as important as creating new ones. This principle applies to robust U.S. leadership in multilateral initiatives. Given the transnational nature of corruption, multilateral organizations enable collective analysis of the problem, common sets of standards, and mutual accountability. The United States should continue playing a leading role in bodies such as the UN Convention Against Corruption Conference of States Parties, the OECD Working Group on Bribery, the G20 Anti-Corruption Working Group, and the Group of States Against Corruption (GRECO). Through these initiatives, the United States can pursue priorities such as pressing India, Indonesia, and Saudi Arabia to criminalize foreign bribery.
The United States should also continue to invest in multistakeholder platforms like OGP, which convenes governments and civil society to improve transparency and fight corruption. OGP aligns with the Trump administration’s emphasis on sovereignty, as it allows members to develop their own tailored commitments, while offering a platform to assist countries that aspire to prevailing standards. It is promising that the U.S. government has committed to continue complying with OGP’s standards, as it presses other countries to do so.
The Departments of State and Treasury should also sustain strong application of the U.S. Global Magnitsky Act’s anticorruption sanction authorities, with high-level designees and regional diversity, as reflected in the first tranche of sanctions. These actions can catalyze domestic accountability. For example, mere weeks after the first U.S. designation, one of the thirteen targets—Julio Juarez—was arrested by the Guatemalan government for the conduct that formed the basis of his designation. The State Department should also robustly use its authority to publicize corruption-related visa sanctions, which it did for the first time in February 2018. That public designation, of former Albanian prosecutor general Adriatik Llalla, was praised by reformers and prompted an investigation into Llalla’s alleged corruption. These sanctions tools help protect U.S. markets and interests, marginalize spoilers, and demonstrate solidarity with citizens seeking reform.
10. Step Up Sectoral Mainstreaming
U.S. anticorruption assistance averages $115 million annually. Compare that with the $9.6 billion in foreign assistance budgeted for health in fiscal year 2017, and the message is clear: to reach scale, anticorruption measures must break out of the Democracy, Human Rights, and Governance (DRG) silo and be integrated across all aspects of development assistance.
Integration into the health sector is a smart place to start, as it comprises the largest share of U.S. foreign assistance (aside from Peace and Security funding, as discussed in proposal 7). Mainstreaming corruption considerations into health programming is also in line with the Trump administration’s commitment to tax-payer efficiency and USAID’s desire to move aid recipients toward self-reliance. Imagine the cost-savings if the U.S. government spent less on distributing medicine to rural patients and more on fixing the logistics system of local health ministries so that they could disburse medicine on their own. Where political will exists, reforming logistics and procurement practices, introducing risk-based auditing, and bolstering oversight can have life-saving impacts. These steps could help mitigate the debilitating costs of weak health systems, as demonstrated during the Ebola crisis in West Africa.
It is encouraging that USAID issued its first-ever vision on health systems strengthening, a document that rightly declares that these investments are critical to saving lives, scaling up solutions, and achieving sustainability. USAID’s DRG strategy and recent reports echo the need for more cross-sectoral integration. In fact, USAID acknowledged that, by building up health systems, the United States can save the lives of 5.6 million children between 2016 and 2020.
But what is the path forward? The U.S. government does not appear to have clear benchmarks for progress. A concrete funding commitment would help—such as dedicating 10 percent of overall health spending to health governance investments. Unfortunately, slow progress in this space is not a new problem. USAID’s own analysis of anticorruption programs admits: “Overall, anticorruption objectives were rarely included in USAID calls for proposals for sectoral projects or, if included, they did not filter down to the project components or activity descriptions, were not required for impact measurement, and were not included in the evaluation criteria for proposal selection.” It is time to apply lessons about the power of integrating anticorruption measures into health, security, and other sectors.
The ten actions above have the potential to reduce the harm corruption is causing to global security and U.S. competitiveness. Some would serve as noteworthy deliverables for international summits with high-level officials, while others are ripe for savvy working-level bureaucrats to press forward gradually. All offer timely opportunities for a variety of governmental bodies, multilateral platforms, private sector actors, and NGOs to collaborate. These partnerships will be particularly impactful in places experiencing a brief window of opportunity for reform in the wake of a political transition, such as Armenia, Mexico, and Zimbabwe. With quick and strategic action, the United States can provide meaningful support to countries in tackling corruption while also securing U.S. interests.
Abigail Bellows is a Specialist in anti-corruption, governance and civilian security