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Addressing the International Drivers of Corruption at the Country Level: Draft Framework

Dr. Rachel Flanary, theIDLgroup, UK

European Commission Training Seminar: EC Support to Governance

in Partner Countries (Africa focus)

4-8 July 2011

EuropeAidScope

• Introduction• International Drivers•The Approach•Case Studies

o Sierra Leoneo Cameroon

•Questions?

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What do we mean by ‘International Drivers’?

Ideas from the floor??

EuropeAidIntroduction• Corruption is a global phenomenon •Has roots within the domestic political economy•Major international factors interact with these domestic processes

o Globalisation, cross border banking, multinational

corporations and trade liberalisation have benefited the

globe in many ways – but have also had negative effects.

The infrastructure that facilitates processes between

businesses worldwide and legitimate international financial

transactions is also vulnerable to being used for illicit

purposes.  Laundering proceeds of corruption abroad,

paying bribes or transferring stolen public funds into

accounts that benefit

EuropeAidIntroduction

• International instruments and initiatives (e.g. EITI, EU’s Forest Law Enforcement Governance and Trade – FLEGT, Financial Action Task Force etc.)

•Growing recognition of importance of international drivers

•OECD DAC - analytical tool to help understand the processes by which international drivers affect governance and corruption in different country contexts

EuropeAidInternational Drivers

“the global or regional factors that influence the

domestic political economy”Include:

1. Economic processes at global/regional scale2. International relations and security trends 3. Other aspects of globalisation e.g. ease of

communication

• Changes in the global economy affect incentives facing

political and economic elites in poor countries,

But

• The impact of the global environment on poor countries is

not all negative

EuropeAidInternational Drivers

1. Sources of rents and unearned incomes

2. Opportunities and constraints to conceal and move

illicit assets

3. Foreign investment

4. Global and regional security threats and responses

5. International legal measures and sanctions against

domestic elites

6. Reputational pressures on political elites from

regional and international actors

7. External ideas and skills

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1. International drivers interact with the domestic political economy

2. The key interactions include the way that international drivers affect elite strategies for winning, using and maintaining power, as well as the conditions for state-society bargaining.

3. The interaction between the international drivers and the domestic political economy generates governance outcomes. This may be assessed in terms of corruption or a broader shift from exclusive to inclusive forms of political behaviour.

InternationalDrivers

Governance& Corruption

Outcomes

DomesticPolitical Economy

EuropeAidThe Approach – The Four Key Steps

Four-step process which:

1. Examines a country’s domestic political economy

2. Identifies international drivers

3. Tracking effects of international drivers

4. Assessing scope for action

EuropeAidSierra Leone: Diamonds and Drugs

• Poverty, unemployment & history of poor governance and economic mismanagement• Protracted civil war that ended in 2002- formal state

institutions not robust or deeply rooted• Political system dominated by narrow group: Freetown based;

range of ethno-linguistic, geographic & religious groups• At decentralised levels, chiefs form a powerful elite with

considerable control • Diamonds has historically been an important source

of ‘income’ for political elite- many diamonds traded through both official and unofficial channels and international networks• West Africa, including SL, growing importance as transit route

for cocaine

EuropeAidSierra Leone: Diamonds and Drugs

• SL signed up to EITI with some measure of success. Forced large volume of illicit diamonds out of underground networks and into official channels• UNODC played important role in raising awareness of growing

importance of drug trade in W. Africa• UNIPSIL supports strengthening of SL Joint Drug Interdiction Task

Force• BUT, with huge profits from diamonds and drugs, war weakened

government institutions and highly porous borderscoupled with…

• High demand and profit for international players plus high levels of political complicity that is needed to sustain these illicit activities, unlikely to change in short- to medium-term

EuropeAidBenefits for the EC

• Better understanding of how international drivers effect governance of the countries you are working in

• Better able to identify international instruments to address domestic governance challenges

• Greater confidence in your understanding of the interactions;

• Better decision-making on: new interventions :programming : re-directing projects : better targeting of anti-corruption resources.

EuropeAidQuestions