Foreign Aid and Corruption
FOREIGN AID AND CORRUPTION IN POST-CONFLICT COUNTRIES
Gul M. KURTOGLU ESKISAR
PUBLICATIONS
ISTANBUL 2015 183
Kurtoglu Eskisar
WISE MEN CENTER FOR STRATEGIC STUDIES
Mecidiyeköy Yolu Caddesi (by Trump Towers) No:10 Celil Ağa İş Merkezi Floor: 9 Flat: 36-38 Mecidiyeköy / İstanbul / Türkiye Tel: +90 212 217 65 91 Fax: +90 212 217 65 93 www.bilgesam.org
[email protected] Atatürk Bulvarı Havuzlu Sok. No:4/6 A. Ayrancı / Çankaya / Ankara / Türkiye Tel : +90 312 425 32 90 Fax: +90 312 425 32 90 Copyright © July 2015 All rights reserved This publication cannot be reproduced in parts or in whole without consent and permission by Wise Men Center for Strategic Research
Author: Gul M. KURTOGLU ESKISAR Cover and design: Sertaç DURMAZ ISBN: 978-605-9963-14-5 Print: Gülmat Matbaacılık Litros Yolu 2. Matbaacılar Sitesi 1NE 4 Zeytinburnu / İstanbul 0212 577 79 77
184
Foreign Aid and Corruption
FOREIGN AID AND CORRUPTION IN POST-CONFLICT COUNTRIES Gul M. Kurtoglu-eskısar
i
Kurtoglu Eskisar
For my parents Olcay and Halil Kurtoglu, with love and gratitude.. And for Tilda, who almost made it.
ii
Foreign Aid and Corruption
Gül M. Kurtoğlu Eskişar Gul M. Kurtoglu Eskisar received her B.A. in International Relations from Bilkent University in 1995 as valedictorian. She continued her graduate studies in the USA as a Fulbright scholar, and received both her M.A. degree in international relations in 1997 and Ph.D. degree in political science at the University of Chicago in 2003. During her graduate studies, she was awarded several scholarships and grants, including those from the University of Chicago and Andrew Mellon Foundation. Since 2010, Dr.Kurtoglu Eskisar has served as an associate professor in the International Relations department at Dokuz Eylul University. Some of her published works include a co-edited book on political Islamist movements around the world and several articles devoted to the same theme. She also has publications on democratization, patronage and corruption in English and Turkish. Gül M. Kurtoğlu Eskişar Bilkent Üniversitesi Uluslararası İlişkiler Bölümü’nden 1995 yılında birincilikle mezun oldu. Ardından Fulbright bursuyla gittiği ABD’de ilk olarak University of Chicago’da 1997 yılında uluslararası ilişkiler dalında M.A derecesini ve sonra yine aynı üniversitede 2003’de siyaset bilimi üzerine yaptığı doktorasını tamamladı. Bu dönemde yaptığı çalışmalar nedeniyle University of Chicago bursu ve Andrew Mellon doktora bitirme bursu gibi pekçok ödül aldı. Kurtoğlu Eskişar 2010 yılından beri İzmir Dokuz Eylül Üniversitesi İngilizce Uluslararası İlişkiler bölümünde doçent doktor olarak görev yapmaktadır. Kendisinin dünyadaki farklı siyasal İslam akımları üzerine ortak editör olarak hazırladığı derleme bir kitabı ve aynı konuda çeşitli makalelerinin yanısıra, demokratikleşme, patronaj ve yolsuzluk gibi konularda İngilizce ve Türkçe yayınları bulunmaktadır. iii
Kurtoglu Eskisar
TABLE OF CONTENTS 1. Introduction.................................................................................1 1.1 The scope and goal of the book...............................................1 2 Defining Corruption and Foreign Aid.......................................9 2.1 Defining corruption..................................................................9 2.2 Corruption as a security problem.............................................10 2.3 Causes of corruption...............................................................11 2.4 Regime types and corruption................................................14 2.5 Effects of corruption on war torn countries.............................16 2.6 Corruption as an informal institution in post-conflict societies 17 2.7 Poverty as a cause of corruption..............................................19 2.8 Corruption, development and good governance......................20 2.9 Defining foreign aid..............................................................21 2.10 Forms of foreign aid............................................................22 2.11 Who are the donors?............................................................23 2.12 Explaining the causes of foreign aid: normative factors.......24 2.13 Explaining the causes of foreign aid as an extension of foreign policy goals.................................................................................25 2.14 Political Realism and foreign aid.......................................26
iv
Foreign Aid and Corruption
2.15 Social constructivism and foreign aid.................................28 2.16 Liberalism and foreign aid..................................................29 2.17 Modernization theories, development and corruption..........30 2.18 Development, international organizations and foreign aid..31 2.19 Conclusion..........................................................................32 3 Corruption and aid: Changing Patterns................................33 3.1 Introduction: patterns of foreign aid......................................33 3.2 Neoliberalism, democratization and foreign aid objectives in the post-Cold War era.................................................................34 3.3 Changing reactions to corruption.........................................35 3.4 The global rebirth of corruption as a crime..............................37 3.5 States as principal actors in forming and enforcing anticorruption laws...........................................................................38 3.6 Problems related with tracking corruption through global indices....................................................................................................39 3.7 Critical approaches to global anti-corruption campaigns......39 3.8 Good governance debate.......................................................41 3.9 International aid and economic development.......................45 3.10 Now and forever? Defining the limits of foreign aid..........46 3.11 Foreign aid and corruption in divided societies..................47
v
Kurtoglu Eskisar
3.12 Foreign aid for peacebuilding and corruption.....................48 3.13 Peace settlements and corruption in post-conflict societies ....................................................................................................48 3.14 Organized crime networks, corruption and political elite in post-conflict settings...................................................................49 3.15 Foreign aid as a rent source in post-conflict societies.........50 3.16 Foreign aid and social cohesion in post-conflict societies..50 3.17 Donor awareness of conditions in recipient countries........51 3.18 Corruption networks and inter-group conflict in post-conflict societies......................................................................................52 3.19 Weak judiciary and corruption in post-conflict societies....52 3.20 Conclusion..........................................................................53 4 Afghanistan...............................................................................55 4.1 Foreign aid and Afghanistan during the Cold War................56 4.2 The effects of foreign aid to Afghanistan during the Cold War.57 4.3 Afghanistan War (2001-2014) and its impact on intra-ethnic relations.......................................................................................57 4.4 Corruption in Afghanistan since 2001...................................63 4.5 Public perceptions of corruption...........................................64 4.6 Assessing the impact of foreign aid in Afghanistan...............66
vi
Foreign Aid and Corruption
4.7 Anticorruption efforts of Afghan government: the good the bad and the ugly..........................................................................67 4.8 Corruption and criminal networks........................................69 4.9 Corruption and justice...........................................................70 4.10 The unexpected effects of foreign aid: some examples......72 4.11 The input of Afghans really matters....................................76 4.12 Conclusion: Afghanistan—a net gain or a net loss for donors?........................................................................................78 5 Bosnia-Herzegovina:.................................................................80 5.1 Bosnia: a model for successful international aid?.................80 5.2 Corruption in Bosnia: is culture to blame?...........................86 5.3 Dayton Peace Agreement and its aftermath..........................87 5.4 Bosnian state and consociationalism....................................89 5.5 Bosnian administrative structure and economy.....................91 5.6 Foreign financial aid to Bosnia: some figures.......................93 5.7 Taking the front seat: international community and the Bosnian elite.............................................................................................96 5.8 The (unexpected) consequences of external led reforms......97 5.9 Bosnian elite and corruption...............................................100 5.10 Political parties and organized crime................................102
vii
Kurtoglu Eskisar
5.11 Conclusion........................................................................104 6 Iraq:..........................................................................................107 6.1 Introduction.........................................................................107 6.2 Corruption in Iraq since 2003: some anecdotes..................110 6.3 Corruption as a security problem in Iraq.............................111 6.4 A culture of corruption?.......................................................111 6.5 Foreign aid and corruption in Iraq before 2003..................114 6.6 Foreign financial aid after Iraq War (2003): some figures..116 6.7 Statebuilding efforts in postwar Iraq: lack of postwar planning.........................................................................................120 6.8 Lack of information, poor choices......................................122 6.9 Iraqis as decisionmakers: the missing link..........................124 6.10 De-Baathification..............................................................126 6.11 Aftereffects of de-Baathification: security crisis...............129 6.12 The institutionalization of corruption in Iraq?..................130 6.13 Conclusion........................................................................132 7 Conclusion: Quo Vadis Foreign Aid—and Corruption?......134 8 Bibliography............................................................................140 9 Appendices...............................................................................165
viii
Foreign Aid and Corruption
B. Foreign Direct Investment to Afghanistan in Years.................165 C. Foreign Direct Investment to Bosnia in Years........................166 D. Foreign Direct Investment to Iraq in Years.............................166
ix
Kurtoglu Eskisar
Acronyms: AIA: Afghan Interim Administration AID: The United States Agency for International Development ATA: Afghan Transitional Authority BiH: Bosnia and Herzegovina CPA: Coalition Provisional Authority CPI: Corruption Perceptions Index DAC (DCD-DAC): Development Co-operation Directorate-Development Assistance Committee of OECD EU: European Union EULEX: European Union Rule of Law Mission EUSR: European Union Special Representative HRBH: High Representative for Bosnia and Herzegovina IFOR: Implementation Force ISAF: International Security Assistance Force MCC: Millenium Challenge Corporation MDG: Millenium Development Goals NGO: Non Governmental Organization ODA: Official Development Assistance (by OECD)
x
Foreign Aid and Corruption
OECD: Organization for Economic Co-operation and Development OHR: Office of the High Representative in Bosnia and Herzegovina RS: Republika Srpska SIGAR: Special Inspector General for Afghanistan Reconstruction SIGIR: Special Inspector General for Iraq Reconstruction SFOR: Stabilization Force TI: Transparency International UN: United Nations UNSC: United Nations Security Council WGI: Worldwide Governance Indicators
xi
Kurtoglu Eskisar
2
Foreign Aid and Corruption
CHAPTER 1
INTRODUCTION
1.1 The scope and goal of the book This book explores the nexus between foreign aid1 and corruption in post-conflict settings.2 It particularly focuses on the experiences of some of the countries that have received foreign aid in order to initiate or accelerate their economic reconstruction and state building3 efforts after experiencing a violent conflict during the post-Cold War period. Corruption is an oft-quoted factor by both international donors and key nation-level actors to explain the setbacks that arise during the statebuilding efforts in such countries. Moreover, corruption is commonly portrayed as a phenomenon with internal rather than external roots; culture and domestic factors are often assumed to play key roles in nurturing it.
1 As explained in further detail in the second chapter of this book, the term “foreign aid” refers to both financial and non-financial support offered by international actors. 2 The term “post-conflict settings” throughout the book exclusively refers to those conditions where violence broke out between the conflicting parties. 3 In reference to statebuilding, this study adopts the following description of Heineman Jr. and Heimann (2006: 77): “state building ... consists of institutional reforms designed to create a society of laws, not men, and to build a transparent, accountable, and durable legal, economic, and political foundation.” For a general overview of alternative (and sometimes contradictory) definitions for statebuilding in the literature, see Marquette (2011: 1873-1875). 1
Kurtoglu Eskisar
Similar to cultural approaches, neoliberal discussions on economic development and governance also associate corruption with various domestic factors like inefficiency and bad governance, stressing its detrimental effects on economic development. As this neoliberal outlook has dominated policymaking circles worldwide since the early 1990s, foreign aid flows have become increasingly dependent on the level of corruption in the receiving country. Today, high levels of corruption detected and reported by international organizations like Transparency International (TI) and the World Bank (WB) can seriously reduce the amount of aid received or altogether prevent it. Notwithstanding the culturalist or neoliberal assumptions, however, the role of external factors like foreign aid on corruption in post-conflict settings has not been adequately explored. This neglect needs remediation, as the end of the Cold War marked the rise of democratization as a key exogenous variable behind international interventions (Belloni 2007: 25). In tandem with the democratization movements in the post-Cold War era and the rise of neoliberal ideals on governance and economic development, both corruption and foreign aid have received increasing attention from scholars and policymakers alike (Maipose 2000: 94). This interest seems congruent with the exponentially increasing levels of corruption observed throughout the world during 1990s (Johnson and Sharma 2004: 1). The overall impact of foreign aid in world politics and economics is hard to ignore. As Easterly (2008: 1) puts it, currently “[f]oreign aid is in the headlines more than ever before in its sixty-year history, and it has big ambitions.” Indeed, when it comes to explaining the pivotal role of foreign aid for both modern day international economies and politics, numbers speak for themselves. The DAC
2
Foreign Aid and Corruption
members gave $80 billion in 2004 and $106 billion in 2005 as aid to various countries around the world (Lancaster 2008: 39). Private donations made through NGOs of the same countries amounted to $6.9 billion in 2000 and over $11 billion in 2004 (ibid.: 44). During the same year, the United States Agency for International Development (USAID) alone distributed more than $26 billion in aid and grants to various recipients. Approximately 30 percent of this amount was received by Iraq and Afghanistan, which were trying to reconstruct themselves in every possible sense following their exposure to prolonged period of wars and conflicts (Taffet 2007: 1). Meanwhile, Turkey has also been receiving increasing international attention in recent years due to its steadily rising amount of foreign aid worldwide. According to Turkish official sources, the amount of ODA that has been made available has increased 30 fold during the past decade, reaching $3.4bn in 2012.4 Although this dramatic increase is to some degree attributable to the recent Syrian refugee crisis and the following complications5, the steadily rising trend in years is nonmistakeable. Similar to many of its Western counterparts, the majority of Turkish aid targets “social infrastructure and services, notably education and health, as well as governance and civil society.” (ibid) While different forms of international aid exist, the type that is offered for nation-building is regarded as “the most ambitious form” of its kind, and for a good reason: “in nationbuilding programs, ex4 http://kdk.gov.tr/sayilarla/turkiyenin-dis-yardimlari-2012/35 (accessed on 27 April 2015). 5 See, for instance, the OECD webpage on Turkish foreign aid at http://www.oecd. org/dac/dac-global-relations/turkeys-official-development-assistanceoda.htm (accessed on 04 November 2014). 3
Kurtoglu Eskisar
ternal donors seek to create, reestablish, or strengthen the capacity of the state to govern and also to support a policy framework that will enable civil society to achieve political, economic, social, and physical development.” (Rondinelli and Montgomery 2004: 225226) Many times, the aid offered by the international community goes beyond finance and takes the form of building a nation or state building from scratch in order to reconstruct what was destroyed during the war. As Rondinelli and Montgomery (2004: 225-226) point out, “[d]onors are compelled to practice nation-building when war displaces an existing regime or when it can no longer function effectively.”6 Since the end of the Cold War, a rising portion of the foreign aid offered by the international community to post-conflict societies has thus aimed for their reconstruction and development along liberal principles, including the formation of a democratic government and a liberal economic market. The ongoing liberalization efforts promoted by both domestic and external actors in post-conflict regions, however, do not guarantee the end of corrupt activities in a given setting (Roberts 2008: 548; Ateljevic and Budak 2010: 379). Contrary to donor expectations, in many of these settings, the inflow of foreign aid for state building purposes was followed by high levels of corruption, and less than optimum outcomes (Fearon and Laitin 2004). As a result, neoliberal policies have received increasing levels of criticism in recent years.
6 According to Diamond (2006: 176), following a conflict, successful statebuilding rests on fulfilling the following four interacting conditions: 1) the formation or restoration of a state capable of functioning of its own, and widely recognized by citizens, 2) the restoration of state economy and infrastructure, including both physical and social aspects (e.g. economic rules), 3) forming a functional civil society and political culture, which supports democracy and counterweights state power and 4) restoration of security. For a similar approach, see Doig and Tisne (2009: 374). 4
Foreign Aid and Corruption
Exploring the reasons behind this puzzling outcome therefore constitutes the main goal of this study. As discussed in further detail in later chapters, although foreign aid can function as an exogenous factor that can help establish or maintain peace, it can also become a source of instability and cause humanitarian crises and security problems both in the receiving country and abroad (Robb 2004: 29; Calderisi 2006: 153-156; Easterly 2008: 2). Ironically, and regardless of geographic location, in many conflict prone settings “aid programs ignored signs of impending conflict or inadvertently exacerbated the problems that led to violent confrontation” (Muscat 2004: 93). While studying the links between foreign aid and corruption in postconflict societies undergoing reconstruction, three factors particularly stand out. First, formulaic adaptations of neoliberal principles that are routinely employed for statebuilding in such environments often seem to achieve the contrary results that they originally target. Emphasizing a minimalist state with carefully circumscribed capabilities as favored by international donors tends to fall short of addressing the needs of post-conflict societies and can inadvertently promote such practices. Ironically, corruption in these settings can become both a means for survival and an avenue for criminal networks to reinforce their income and increase their influence over the society. Second, poor monitoring mechanisms due to lack of funding or structural difficulties, exacerbated by the already limited capabilities of the newly established or reconstructed states, seem to play an important role in the failure of foreign aid in reaching its original targets. Worse, in such cases foreign aid often paradoxically ends 5
Kurtoglu Eskisar
up supporting corruption networks or individuals in post-conflict societies. Complex administrative mechanisms are often originally required or encouraged by donors to maintain the peace and protect the interests of all members of the society. However these same measures can gradually build and perpetuate corruption networks, which prove surprisingly resistant to the adoption of anti-corruption measures. Third and possibly the greatest shortcoming of anti-corruption measures and campaigns promoted by international donors is the failure to incorporate the nation-level elite in policy formulation and enforcement. Foreign actors’ disinclination to increase active participation by the local elite in establishing the rules of engagement in anti-corruption campaigns, to some degree, is understandable. The preoccupation of foreign actors to build a viable state and accompanying political structure as quickly as possible rises from the real fear that the vacuum created in the absence of state is unbearable by the local society. In such settings, security and the formation of a predictable, safe environment become the primary goals, as such elements are crucial to the reconstruction and maintenance of economy, as well as the reestablishment of political legitimacy (Diamond 2006: 176). As a consequence, in post-conflict settings, security concerns often trump every other need, and time is of essence. Letting the local elite play an active role in setting the rules for anti-corruption campaigns may lead to inadvertently bolstering the power of those groups that initiated or prolonged hostilities during the war. These individuals may use such measures as a convenient way to establish their domination over other societal groups; additionally they may hinder or even derail democratic structures that the new state hopes
6
Foreign Aid and Corruption
to install in the first place. However, ignoring or downplaying national input in favor of internationally dictated rules and measures risks overlooking local nuances that can prove vital to long-term efficacy and legitimacy. Finally, in addition to discussing the above stated points in detail, this study aims to review some of the outstanding arguments that prevail in recent literature on corruption and foreign aid. Notwithstanding the large volume of studies dedicated to these subjects individually, there have been relatively few attempts to knit together a seamless map of the terrain of current discussion. For scholars and policy makers alike, this gap presents a disadvantage, as nuances on corruption, foreign aid and their interaction are easy to miss when viewed from a single perspective. This study therefore aims to provide a multi-layered outlook that can offer a more balanced view of the subject, which, in turn, can help develop better methods to address it. Although this book mainly concentrates on the shortcomings of foreign aid toward corruption and statebuilding in post-conflict societies, it does not claim that the overall effects of such involvement are altogether useless or undesirable. Contrary to pessimist approaches on the effects of foreign aid, some scholars claim that it can succeed if supported by “progressive forces” who govern the state (Goldsmith 2001: 127). Indeed, some of the earlier examples of foreign aid with extensive goals have achieved impressive results. Countries that received aid after experiencing violent conflicts (ranging from South Korea to Mozambique) or for economic development purposes (like Turkey and Taiwan or Thailand) are usually counted among the successful cases, where the donors reached or
7
Kurtoglu Eskisar
even exceeded their initial goals (Muscat 2004: 93; Rondinelli and Montgomery 2004: 225). Based on their findings concerning ODA data and the outbreak of civil war, Savun and Tirone (2012) similarly conclude that foreign aid can help reduce the possibility of the outbreak of a civil war in recipient countries experiencing economic shocks. While meager, the data in Annex E of this study also suggest that international assistance for the purpose of increasing transparency and fighting corruption can yield positive results in some fields. While a degree of generalization is useful for displaying repetitive patterns across countries and regions and therby drawing the general framework of debate, accounting for the nuances can help understand persistant and pervasive issues in many post-conflict societies receiving foreign aid. In order to discuss these arguments in greater depth, this book therefore discusses in detail three countries that to date have received massive amounts of foreign aid: Afghanistan, Bosnia-Herzegovina,7 and Iraq. In addition to these countries, this text also offers occasional glimpses and anecdotal reference to other countries that have received international aid in order to support the main arguments and provide the reader with contextual information. While not claiming to be representative of all available cases, the countries discussed in some detail here offer both interesting and important aspects of the links that seem to tie international aid, corruption and state building efforts. Of the three countries being analyzed, Afghanistan has been the longest recipient of foreign aid, with beginnings dating back to the early years of the Cold War. Poor, underdeveloped and deeply tra7 Henceforth simply referred to as “Bosnia” in this study. 8
Foreign Aid and Corruption
umatized by decades of long invasion and violent internal conflict, Afghanistan remains a quintessential example of a country in dire need of foreign recovery assistance. Yet, as the chapter on Afghanistan aims to show, contrary to expectations, the impact of international aid within that country has remained shockingly limited in effect. What is worse, it also seems to have fostered corruption and made little progress in state building. A broad discussion of the possible causes and consequences of this condition occupies the rest of this chapter. Compared to Afghanistan, Bosnia seems far better off as an aid recipient; however, it also has its own reasons for being regarded as an ideal case for international aid. Bosnia was among the hardest hit places in the world concerning the effects of the end of the Cold War and the collapse of the communist bloc. Torn apart by the ethnic and inter-communal war that also brought the end of Yugoslavia, Bosnia came under the tutelage of international actors like NATO, UN, USA and EU who aimed to rebuild and reintegrate this now independent state. Unlike Afghanistan and Iraq, Bosnia was also promised a much coveted EU membership upon satisfactory completion of expected reforms—including fighting rampant corruption. Yet, as the violent protests against corruption in its various cities during the winter of 2014 have shown, not all is well in the country. The rest of this section is dedicated to finding out why this is so. Iraq is the final country that this book investigates. Similar to Afghanistan and Bosnia-Herzegovina, Iraq has experienced foreign intervention followed by intense inter-communal and ethnic conflict. Although the US-led international occupation of Iraq in early 2000s promised to bring democracy and wealth and eradicate corruption
9
Kurtoglu Eskisar
to Iraqi citizens, none of these promises have been materialized to date. Polarized by intense internal conflicts and left with little state power to the central government (despite earlier foreign aid), Iraq also remains riddled by massive corruption rates. While foreign aid cannot be blamed for initiating corrupt practices in Iraq, there is compelling reason to assume that it has exacerbated the volume and strength of such conditions. The rest of the book is organized as follows. Chapter 2 and Chapter 3 aim to provide the theoretical background of this study. Following the sections that define and discuss some of the key issues concerning “corruption” and “foreign aid” in Chapter 2, Chapter 3 explains how foreign aid that aims to restore the central state power and promote liberal market economy in post-conflict settings can generate or exacerbate corruption networks. Germane to these definitions and discussions is their coverage in different bodies of literature, including international relations and economics. Chapters 4, 5, and 6 discuss Afghanistan, Bosnia, and Iraq respectively. Chapter 7 summarizes the presented arguments and offers concluding remarks.
10
Foreign Aid and Corruption
CHAPTER 2
DEFINING CORRUPTION AND FOREIGN AID
2.1 Defining corruption Due to its complex nature, defining corruption, its subtleties and its effects has generated intense debates in academia in years (Underkuffler 2009; Bracking 2007: 3-13; Johnson and Sharma 2004: 3). The key problem about the issue rises from the amorphous and subjective nature of the phenomenon. Corruption can take many forms;8 some of them more easily monitored than others (Johnson and Sharma 2004: 2). As the following observation by Smith (2007: 34) on Nigerian approaches to corruption suggests, defining the phenomenon remains a tricky task outside academia as well: “Nigerian notions of corruption encompass everything from government bribery and graft, rigged elections, and fraudulent business deals, to the diabolical abuse of occult powers, medical quackery, cheating in school, and even deceiving a lover.” As a result, the term is often used interchangeably with clientelism, political patronage and similar practices. Some scholars, however, differentiate corruption from clientelism and its cousins, like po8 See, for instance, Kaufmann and Vicente (2005) for a discussion on “legal corruption.” 11
Kurtoglu Eskisar
litical patronage and pork barrel politics, as it “has no durability of relationship, whereas patronage is characterized by stability of relationship and reciprocity between a powerful person and a client, both commanding unequal resources.” (Emizet 1999: 206) Notwithstanding these intricacies and possible pitfalls on reaching a universal definition of corruption, internationally acclaimed scholars on the subject, such as Susan Rose-Ackerman and Michael Johnston, simply describe it as “the misuse of public power for private gain” (Muno 2013: 34). This definition will be adopted for the purposes of this book. Some of the outstanding features of the existing literature on corruption include its generally normative tone as well as the tendency to stress its negative effects on economic development and governance (e.g. Diamond 2008: 67; Debiel and Gawrich 2013: 3; Yeh 2011; Cockcroft 2010; Heineman Jr. and Heimann 2006). Displaying the strong normative undercurrents concerning the debates on corruption, Rotberg (2009: 1) asserts that “[u]ntil avarice and ambition cease to be human traits, corruption will continue to flourish.” While discussing the diversity of opinions on corruption, Underkuffler (2009: 39) similarly concludes that it is ultimately tied to moral issues: “We are not outraged about corrupt politicians because their existence in office proves a lack of efficiency or government transparency; we are outraged because of the evil, the arrogance, the flagrant disregard of deeply entrenched social norms that their tenure exhibits ... If governments or reformers fail to respond to such popular emotions, their refusal can fuel forces of social and governmental instability.”
12
Foreign Aid and Corruption
2.2 Corruption as a security problem In addition to its various definitional intricacies, corruption is also often regarded as a transnational security problem by both scholars and policymakers alike (Chayes 2014). While discussing corruption networks in the Balkans, for instance, Giatzidis (2007: 328) points out that they are interlaced with crime networks, which, in extreme cases, not only weakens the state capacity but also legitimates the act. Going beyond regional concerns, some scholars regard the spread and persistence of corruption as serious contemporary global security problems. Corruption has even been quoted in some cases as a formal cause for international intervention, such as the US led international occupation of Iraq in 2003 (Le Billon 2005: 685; Woods 2005). The security-centric approach to corruption views it as a highly pervasive phenomenon. It can promote the accumulation of mass destruction weapons, encourage the spread of terrorism and other criminal practices, and hamper the “noble international efforts to improve the health, educational attainments, welfare, prosperity, and human rights of the inhabitants of the troubled planet.” (Rotberg 2009: 2) Therefore, the same approach regards developing efficient measures to prevent and eliminate the phenomenon as a must, as failure to do so can promote international terrorism and decrease global security. As Johnson and Jolyon (2008: 17) put it, “as long as western governments continue to supply weapons to corrupt regimes that oppress their people, terrorism will find recruits.” Some scholars have gone even further, positing corruption as a cause of global nuclear proliferation (Bunn 2009). Finally, as this chapter discusses in more detail further on, addressing corruption as a security problem coincides with the increasing general tendency of international do13
Kurtoglu Eskisar
nors to channel counterterrorism related aid toward recipients since September 11 attacks (Barratt 2008: 21).9 2.3 Causes of corruption Similar to the plethora of arguments on defining corruption, its causes have also generated a lot of debates. Cultural factors in particular are commonly used to explain the existence and prevalence of corruption in certain settings as opposed to others. Classic studies often portray such activities as a primordial practice that would gradually fade away with modernization and economic development. Even earlier, imperialist approaches considered corruption and economic underdevelopment as signs of “primitiveness” and lack of civilization for states (Whyte 2007: 153). Today, the impact of culture on the growth and persistence of corruption is still debated. In a cross-sectional study on the causes of corruption, Treisman (2000) identifies at least six factors that can contribute to corrupt dealings across the globe. According to Treisman, possessing a “Protestant heritage” and exposure to British rule in its past decreases the likelihood of experiencing high corruption levels in a polity (ibid.). Based on these arguments and related research, at a first glance, there is a compelling reason to explain the level of corruption in a society with its culture. Numerous surveys carried out in regions like the Balkans, Latin America and elsewhere suggest that corruption, while not approved, is not universally condemned by people either (World Bank 2000: 16; Irrera 2006: 9; Hislope 2011; USAID 2009: 8). Scholars like Whyte (2007: 154) further claim that it is impossible to understand corruption outside the culture in which it 9 Some authors trace the link between development policies and security concerns to nineteenth-century liberalism (Duffield 2010: 27). 14
Foreign Aid and Corruption
operates. Meanwhile according to Heineman and Heimann (2006: 77) fighting corruption also requires a cultural dimension, “which involves transmitting positive values and norms that can strengthen the enforcement, prevention, and state building measures.” Contrary to such arguments, critiques of culturalist approaches to corruption point out the pitfall of relegating such a complex phenomenon to a single and equally complex factor. On the one hand, by lending ahistorical qualities to cultural traits, such approaches tend to neglect how the term itself has evolved in time.10 The fact is, many forms of actions that routinely took place in developed countries not so long ago would be dismissed as corrupt today. While discussing different forms of foreign aid, Morgenthau (1962: 302) mentions that bribery was an essential part of international diplomacy until early 19th century, and adds, “[n]o statesman hesitated to acknowledge the general practice of giving and accepting bribes, however anxious he might be to hide a particular transaction.” While discussing the evolution of the concept of corruption in developed societies, Huntington (1968: 63) similarly draws from the British and US history, when the sale of ambassadorial or peer positions were regarded as perfectly permissible. While discussing the evolution of the definition of what constitutes corruption in USA, Johnson (2004: 23) argues that many former actions in US politics would be defined as corrupt in current settings, with the latter one primarily defined by changing public opinions. Prevalent debates on corruption and development can be also profoundly misleading due to their cultural relativism and their inherent 10 As the later parts of this chapter discusses in further detail, neoliberal definitions of corruption similarly shares this ahistorical outlook. For a critical Marxist discussion on the latter subject, see Bedirhanoglu (2007: 1241). 15
Kurtoglu Eskisar
ties to the interests and strategies of donors. According to Bracking (2007: 15), for instance, “more often than not, corruption is seen as culturally relative (to the South), while expertise is given a universal value (but principally resides in the North!).” Yet, as critiques of the culturalist approach to such activities point out, elevated levels of corruption or its acceptance within a society does not imply its acceptance as a positive value by the perpetrators. Instead, it may simply reflect helplessness, “because there is no way out.” (Uslaner 2008: 6) While discussing the impact of corruption in Nigerian culture, for instance, Smith (2007: 35) similarly points out that the “culture of corruption” there persists simply because the involved actors are unable to change or control the conditions that produce it in the first place. Some scholars have gone even further to claim that associating corruption with cultural practices has become a political act in and of itself. According to Whyte (2007: 154), during the heyday of imperialism, its proponents routinely used terms like corruption “as an ideological weapon in the struggle for the moral high ground as the British Empire sought to triumph over its commercial competition.” Ahistorical and universalistic in its outlook, the cultural perspectives toward corruption also coincides with the “good governance” approach based on neoliberal principles, discussed later on in this chapter. A major criticism directed against the good governance debate is its tendency to ignore the possibility of cultural relativism and deny the rights of societies, which are instead imposed with universal prescriptions to deal with the phenomenon (Barratt 2008: 21). Similar to the culturalist approach, the good governance approach has been labeled “one of the ways in which the North maintains
16
Foreign Aid and Corruption
and legitimizes its continued power and hegemony in the South.” (Abrahamsen 2000: ix) 2.4 Regime types and corruption Contradicting the cultural approaches to corruption and those that rely on income level to explain its presence or absence in a country, a closer examination reveals that corruption can be found in all parts of the world. Unlike earlier assumptions, recent research reflects that corruption is not endemic to underdeveloped, poor or post-conflict societies; rather, it can thrive in a variety of regime types (Rotberg 2009: 1-2). In fact, a growing number of studies reflect that corruption may exist regardless of regime type and income level across the globe. Contrary to intuition, for instance, corrupt activities can and do take place in well-established democracies (e.g. Nelen 2014; Bull and Newell 2003; Johnson 2004; Uslaner 2008: 1-2; Sun and Johnston 2009). It is certainly misleading to assume that elections are an antidote to corruption (Manzetti and Wilson 2007: 952). As Mungiu-Pippidi (2013: 101) has pointed out, “[m]any of the countries that do a poor job of controlling corruption are electoral democracies. In fact, among the countries where corruption is prevalent, those that hold free elections outnumber those that do not.” Notwithstanding the ubiquity of corrupt practices worldwide, corruption that prevails in countries undergoing transition are often worth further instrospection. While democracy is not immune to hosting corrupt activities, in the absence of democratic consolidation, transitions into democracy themselves seem to carry a greater risk for harboring corrupt activities. As Lancaster (2008: 35) has pointed out, “it is far from clear that in the short or medium term democracy leads to improved governance. It is not proof against corruption and conflict—indeed, transitions from autocracy to democ17
Kurtoglu Eskisar
racy often intensify conflict.” In countries undergoing democratic transition, weak parliaments may turn out to exacerbate corruption due to their inability to shape the flow of public funds or monitor their effective spending (Carnahan et al 2004: 86). Finally, recent findings suggest that there is no clear relation between holding regular elections and declining levels of corruption (Mungiu-Pippidi 2013: 102). 2.5 Effects of corruption on war torn countries Corruption is assumed to have a particularly deleterious effect on the reconstruction of war torn countries (Le Billon 2008; Phillips 2010:93; Rose-Ackerman 2009: 66). Such settings often quickly turn into a hotbed of corrupt activities, as they frequently to encourage “extraordinarily high opportunities and low punitive risks.” (Bolongaita 2005: 2) Furthermore, Johnston (2005: 1) explains the negative impact of corruption as pervasive and argues that it affects several fronts in state building process in countries with weak institutions: “[c]orruption benefits the few at the expense of the many; it delays and distorts economic development, preempts basic rights and due process, and diverts resources from basic services, international aid, and whole economies.”11 The economic conditions prevailing in a country in both pre- and post-conflict period can also prove substantial to the existence, prevalence and type of corruption links (Rose-Ackerman 2009: 70). Since in post war countries administrative infrastructure and state institutions that normally deliver basic public goods and services 11 For a more detailed discussion on the negative effects of corruption in such settings, see Ateljevic and Budak (2010: 377-378). 18
Foreign Aid and Corruption
are either completely absent or weak, the negative effects of corruption can quickly multiply in such settings (Damania et al. 2004). Furthermore, peace settlements tend to include convoluted rules and regulations, which often reflect the complex dynamics of the often fragile bargaining process that the negotiating sides experience. As a result, they can contain what seems like endless details and regulations that are difficult to achieve and maintain in ordinary conditions by a regular state, much less in post-conflict settings (Johnson and Jolyon 2008:16). 2.6 Corruption as an informal institution in post-conflict societies In addition to the ever growing body of literature that is dedicated to tracking and discussing the negative aspects of corruption, a number of studies in recent years have been revisiting its unexpected—and not always undesirable—side effects (e.g. Houston 2007).12 Most of these studies start with the assumption that the role of corruption in transitioning societies in particular tends to be more complex than often acknowledged. Some scholars further posit that in deeply divided societies, corruption may function as a form of bargaining between conflicting parties. Put differently, corrupt practices can form a type of cohesion among divided societies, which is otherwise not provided by the existing state institutions. “Corruption coalitions,” consisting of national elite of state, military, political, social or economic origin in such settings can provide political stability at the cost of preventing change (Johnston 2005: 89). In Kosovo, for instance, Phillips (2010: 96) informs that crime networks have 12 For the debate between the revisionist approach to corruption in 1960s and 1970s and modernist approaches to development, see the “Modernization theories, Development and Corruption” section in this book. 19
Kurtoglu Eskisar
helped to maintain peace in places like Mitrovica, which is “a potential flash point for the resumption of hostilities between Serbs and Kosovar Albanians.” Some of the recent studies on post-conflict societies receiving foreign aid therefore refute the earlier depiction of corruption as a nonpermanent form of relationship between actors. Instead, they argue that it can assume institutional characteristics, if allowed to exist for a prolonged period. As a result, some scholars have suggested studying corruption as a type of “informal institution.” (Muno 2013: 34) Consider the case of Macedonia. In that country, corruption networks fostered by the coalition governments have led to the cooperation of opposing political elites representing different ethnic groups (Muscat 2004: 108). While discussing Macedonian politics following its independence, Hislope (2011: 150) noted the country’s remarkable success in maintaining inter-ethnic peace despite its remarkably heterogeneous social composition and pressing problems with its neighbors. According to Hislope (2011: 144), a significant reason behind the Macedonian domestic peace during that period may well have been a pragmatic alliance between its key ethnic elites that heavily utilized corruption. Other studies have also revealed similar explanations (Ilievski 2007: 6). Ultimately, in a region riddled by past conflicts, “[b]y promoting a policy of zero-tolerance for corruption, the international community may in fact undermine frail states by eliminating the only political mechanism that stands between politics-as-bargaining and politics-as-war.” (Hislope 2011: 143) The long-term positive effects of corruption, however, remain under suspect. A prevalent scholarly view is that unlike institutions
20
Foreign Aid and Corruption
that help to maintain and extend the longevity of a state and lend it power to reinforce its legitimacy, corruption cannot limit or reverse its long term negative effects, even despite the numerous pragmatic reasons that justify its existence (Rose-Ackerman 1999: 16-17; Debiel and Gavrich 2013: 5). Indeed, in some settings, corruption can become a self-justifying mechanism with destructive effects on any attempts to create formal institutions and accompanying norms (ibid.). In sub-Saharan Africa, for instance, practices dating back to the colonial era have created their own institutions within the state structure and have avoided intrusion or eradication efforts to date (Yeh 2011: 630). After discussing the Macedonian experience with corruption, Hislope (2011: 144) similarly acknowledges that the short term benefits of corruption networks in Macedonia have not stopped the involved elite from disrupting the status quo in favor of what they perceived as a better equilibrium later. Finally, some scholars have claimed that corruption can be used as a mechanism of control for external parties, including international donors. Based on the actions of the US-led coalition in Iraq following their occupation, Whyte (2007: 164), for instance, argues that “corruption in complex state-corporate symbioses can equally be a rational use or technique of power that is entirely consistent with the overarching purpose of government.” 2.7 Poverty as a cause of corruption Similar to culture, poverty is another frequently quoted factor behind corruption (Phillips 2010: 97). Academic discussions on the issue notwithstanding, the following words of an Afghani policeman from 2003 summarize this proposition rather well: “I have four children, they are all at school. Each child needs at least 1,000 Afg-
21
Kurtoglu Eskisar
hanis a month; tell me, how can I not be corrupt? We cannot live on 1,500 Afghanis [US$30] a month – it is not possible.’” (Johnson and Jolyon 2008: 194) This is a circular relationship, however, as corruption is also regarded as a major factor behind global poverty (Eigen 2009: 417). Meanwhile, foreign aid has long been treated as manna for poverty. This stance also resonates with the official claims of international donors, who often assert that they offer aid to eradicate such conditions (Bracking 2007: 16). As Woods (2005: 394) has noted, since 1990s, but particularly after September 11, 2001 attacks, the international community has approached foreign aid as an effective tool to fight poverty, which itself is regarded as a chief problem for security. Since poverty and corruption are generally assumed to share a link, and foreign aid has been available to address both issues on a global scale in recent years, it is useful to take a closer look at these issues. 2.8 Corruption, development and good governance Along with its assumed ties to morality, as pointed out earlier, many observers also regard corruption to have tangible—and negative— effects on development, social welfare and governance. Stapenhurst, Ulrich and Strohal (2006:1), for instance, report that the Global Organization of Parliamentarians Against Corruption (GOPAC) regard corruption as the most significant detrimental factor that leads to the decline of the basic principles and institutions that form and support democracies. A research study carried by Méon and Sekkat (2005: 71) similarly reached the conclusion that “corruption becomes even more harmful when governance is poor.” Meanwhile, corruption is similarly assumed to have a negative effect on foreign aid too:
22
Foreign Aid and Corruption
“Corruption ... slows down economic growth and development. Corrupt practices ... are costly to companies and thereby reduce chances for corrupt states to attract necessary amounts of foreign capital ... Therefore, it is legitimate to say that corrupt behavior of governments creates one of the most important obstacles to economic development. Corruption in developing states may also reduce the effectiveness and efficiency of foreign aid.” (Schudel 2008: 507) In order to understand the links between corruption and foreign aid better, first it is necessary to define foreign aid, which the following section aims to cover. 2.9 Defining foreign aid Similar to corruption, the term foreign aid has a wide array of definitions in literature. “Official Development Assistance” (ODA), which is a form of foreign aid is defined by Lancaster (2008: 39) as “concessional public resource transfers from one government to another (or to international or nongovernmental organizations) with at least a 25 percent grant element, one purpose of which is furthering development in a poor country.”13 ODA has three general forms: The first kind consists of grants that do not require repayment. The second type of ODA are “concessional loans.” Although 13 For ODA, Lancaster (2008: 39) further explains that “[t]his definition does not include export credits or trade financing, funding for cultural exchanges, remittances, private charity, or funding for covert action by intelligence agencies. It omits public resource transfers to countries not classified by the DAC [Development Assistance Committee (DAC), which is a part of the Organisation for Economic Co-operation and Development (OECD)] as ‘poor’ (such as Russia or Israel).” 23
Kurtoglu Eskisar
they do require repayment, the receiving countries can stretch it over time, and generally enjoy lower interest rates than those normally available on the market (Soubbotina 2004: 100 ). The final type of ODA involves helping the international organizations that promote global development, including the UN and the World Bank (ibid). This study adopts the approach that foreign aid can occur in the form of technical assistance or know-how that does not directly involve pecuniary elements as well (Collier 2010: 214). Just as it is important to understand what constitutes foreign aid, so too it is necessary to identify aid recipients. Although it is not possible to determine the exact threshold after which a state is considered aid dependent, Goldsmith (2001: 125) explains that 10 percent of gross national product (GNP) is a good starting point. Being a member of the OECD or the DAC does not mean automatic exclusion from receiving aid. In fact, OECD reports that some of its members, including Turkey and Thailand have both been recipients of aid (ODA) and donors (DAC) for a long time. However, the OECD does remove those recipients that have been able to maintain a highincome per capita (based on the Gross National Income reports of the World Bank) threshold for three consecutive years.14 2.10 Forms of foreign aid Foreign aid can be between two countries—a donor and a recipient—or can be multilateral in nature. It can also be delivered in many forms, some of them more prone to wastage than others, such as those that are available through a program. In this type of aid, donors allocate resources like money directly to the recipient government. Aware of the enticing flexibility that such a transfer al14 The conditions for ODA eligibility are available at http://www.oecd.org/development/stats/daclistofodarecipients.htm (accessed on 11 December 2014). 24
Foreign Aid and Corruption
lows the recipients, the donors often seek to monitor or control the use of these funds “by accompanying it with conditionalities and an increasing preference for enclave projects and parallel management structures.” (Maipose 2000: 88; 95-96) Some of the common forms of international aid include the following: “development and poverty reduction, good governance (including democratization, elections and corruption), fiscal reform and management, security (including communism, internal disturbances and terror), trade (including specific considerations regarding petroleum), Commonwealth or colonial history, aid effectiveness, humanitarian crises and rights.” (Barratt 2008: 38) In addition to regional specialists, economists, and foreign policy specialists, IR theorists also offer their own types of foreign aid. According to Morgenthau (1962: 301), there are six general forms of foreign aid: “humanitarian foreign aid, subsistence foreign aid, military foreign aid, bribery, prestige foreign aid, and foreign aid for economic development.” Of these, he reflects, only humanitarian aid is non-political in nature, and even that form can have a political function in a particular political setting (ibid.). Recently, Van der Veen (2011: 10) distinguished seven general categories for foreign aid goals, including “security, power and influence, economic selfinterest (wealth), enlightened self-interest, self-affirmation and reputation, obligation and duty, and humanitarianism.”
25
Kurtoglu Eskisar
2.11 Who are the donors? Foreign aid is available both through individual countries and international organizations. Regardless of whether action is independent or collaboative, western donors offering foreign aid often pursue similar goals (Akhand and Gupta 2002: 16-17). Until recently, notwithstanding exceptions, countries within the developed world, including Europe, North America and Japan, were leaders in offering foreign aid. Following the relatively brief lapse that followed the end of the Cold War during 1990s, this pattern seems to be changing with the former Soviet Bloc re-entering the picture, to include Russia and Eastern Europe, China, and other regional actors like South Korea and Turkey.15 2.12 Explaining the causes of foreign aid: normative factors From a normative perspective, it is easy to grasp the logic behind the foreign aid. According to Calderisi (2006: 156), the moral roots of foreign aid can be traced back to Judeo-Christian teachings: “With two billion people in the world—a third of all humanity— living on less than $2 a day, how can the affluent begrudge a portion of their wealth to help others?” Meanwhile, Hattori (2003: 230-231) traces the nonreligious roots of foreign aid to liberalism, and summarizes them under three headings. The first line of that argument follows a deontological16 approach and posits foreign aid 15 The reasons behind the eagerness of these “new” players to provide aid are varied, and fall outside the scope of this book. While not thematically listed, the following studies outline some of the prevailing discussions related to the subject Woods (2008); Lancaster (2008: 40-43); Sörensen (2010); Woods (2008); Rowlands (2008); Quadir (2013). 16 Stanford Encyclopedia of Philosophy explains deontology as follows: “The word deontology derives from the Greek words for duty 26
Foreign Aid and Corruption
as a form of duty for developed countries to help provide for the crucial human necessities—considered as a basic human right—of their underdeveloped brethren. The second line of argument adopts a more utilitarian17 approach and regards foreign aid as a remedy for the technical failures and shortcomings of the receiving society or country. In its general outlook, it resembles “a doctor-patient relationship, in which moral agency is attributed to (donor) doctors by virtue of their technical capabilities and moral regard to (recipient) patients because of the larger social benefit that can accrue from their cure.” Hattori (2003: 230) The final perspective approaches foreign aid from a humanitarian perspective, and seeks to justify its presence and continuity through substantial amounts of public support. (ibid.: 230-231). 2.13 Explaining the causes of foreign aid as an extension of foreign policy goals As the normative and security concerns given here suggest, giving and receiving foreign aid is a serious business that defies solely economic concerns and explanations. While referring to the aid patterns of the World Bank, Akhand and Gupta (2002: 17) assert that “[t]here is a myth that the Bank makes its loan decisions entirely on the basis (deon) and science (or study) of (logos) ... Deontology falls within the domain of moral theories that guide and assess our choices of what we ought to do (deontic theories), in contrast to (aretaic [virtue] theories) that—fundamentally, at least— guide and assess what kind of person (in terms of character traits) we are and should be.” (http://seop.illc.uva.nl/entries/ ethics-deontological/, accessed on 10 December 2014). 17 According to Stanford Encyclopedia of Philosophy, “utilitarianism is generally held to be the view that the morally right action is the action that produces the most good.” (http://plato.stanford.edu/entries/utilitarianism-history/, accessed on 11 December 2014) 27
Kurtoglu Eskisar
of economic factors, but ... such is simply not the case.” Their study further concludes that contrary to the claims of donors that aid is primarily to eradicate or reduce poverty, data does not support them (ibid.: 35-36). Aside from altruistic intentions, national interests can also motivate the basis and flow of foreign aid.18 According to this viewpoint, exceptions notwithstanding, countries or international organizations take an active interest in the welfare of less fortunate countries when it serves their interests (Bossin 2004: 75-76; Robb 2004: 29; Woods 2005: 394). As Taffet (2007: 2) argues, “[f]oreign aid is not, and cannot be, divorced from foreign policy goals. Foreign aid is a tool that policymakers use, and have used, to achieve their larger aims of dominating, pacifying, protecting, strengthening, or changing certain countries.” Bearce and Tirone (2010: 837-838) further explain that while factors like military interests or political gains significantly influenced the amount of aid flowing from the Western world throughout the Cold War years, other concerns have also been rising to the forefront in recent years.19
18 While the focus here is on the factors that lead countries to become donors, it is important to note that its absence, i.e., withholding foreign aid can also be an important policy instrument. While explaining the withhold of the US foreign aid toward Latin America during 1950s, Baldwin (1969: 432), for instance, makes the following observation: “Although strategic use of non-aid has been an important means of influencing developing states, its significance is rarely recognized... Why should this be regarded as a ‘curious’ situation? It is precisely the kind of behavior we should expect from a nation for which avoidance of competition with private capital is one of the basic guiding principles of its aid program. After we grow accustomed to thinking of non-aid as a technique of statecraft, there is nothing at all puzzling about the situation described.” 19 See, for instance, Radelet (2003). 28
Foreign Aid and Corruption
2.14 Political Realism and foreign aid Since many scholars tend to approach foreign aid as a function of foreign policy goals, it is useful to briefly explore this relationship from the perspective of leading IR theories. While discussing the role of aid in foreign policy Hans Morgenthau (1962: 301), who is one of the best known scholars of classical Realism, describes the role of aid in foreign policy in those settings where the foreign interests of a country cannot be solely addressed by military means or diplomacy. Morgenthau (1962: 304) criticizes purely economic approaches toward aid, “as though it were a self-sufficient technical enterprise to be achieved with the instruments, and judged by the standards, of pure economics.” Instead, he insists, “foreign aid ... is not a science but an art.” (ibid.: 309) Similar to classical realism, neorealism also considers states as both rational and main actors in international relations. Furthermore, neorealists consider anarchy as the main determinant of international structure, which both constrains and shapes state behavior. In such an environment, there is little to no room for state preferences that may be based on humanitarian or non-survival causes. However, unlike the classical realist approach, some neorealists have proposed studying economic factors in further detail to assess their role in various security issues (Schraeder et al 1998: 311). The neorealist interest in economic factors stems from the idea that economic capabilities can affect military strength and thereby also the impact the overall state capabilities in any given international system. As a result, similar to classical realists, neorealists quote economic or strategic concerns of donors rather than humanitarian reasons as main determinants of global foreign aid decisions. They view any
29
Kurtoglu Eskisar
foreign aid to have a potentially significant impact on constantly shifting equilibria in global politics and security (Schraeder et al 1998: 298). While discussing the US motives behind being a donor for Afghanistan, for instance, Stone (2010: 2) points out that “the United States has compelling incentives to use its aid to promote economic development in countries with friendly regimes that are important to long-term U.S. strategies.” According to Schraeder et al (1998: 311), the US foreign aid pattern towards Africa near the end of the Cold War supports this view: “[S]everal of the top recipients of U.S. foreign aid during 1989, such as Nigeria, Ghana, Senegal, and Kenya, were also those countries with which the U.S. enjoyed important trade relationships relative to other countries in Africa.” 2.15 Social constructivism and foreign aid: Critics argue that neorealist approaches often fail to grasp all the intricacies underlying the logic of foreign aid. The fact that it is possible to explain literally any kind of foreign policy decision as a result of security interests or strategic requirements of states further diminishes the power of neorealist arguments on foreign aid (Palmer and Morgan 2006: 18-19). Furthermore, the realist explanations tend to neglect or underestimate the equally strong—yet ultimately clashing—coexisting undercurrents of foreign aid patterns of global actors like USA from mid 1940s until 1980s , like fulfilling strategic or political goals vs. developmental aid stemming from humanitarian sentiments (Rossiter [1985] cited in Akhand and Gupta 2002:1516).
30
Foreign Aid and Corruption
The proponents of social constructivist explanations for foreign aid argue that instead of national interests or security concerns, ideas that motivate the reasons and aims of foreign aid can also explain why and how they occur (Van der Veen 2011: 2). According to the social constructivist perspective, ideas form the basis of actor preferences, which ultimately generate from beliefs, and are variable. Unlike realist and liberal explanations of foreign aid, constructivist approaches can therefore explain how ideas can shape the goals behind foreign aid (Van der Veen 2011: 26). As Goldsmith (2001: 127) points out, ideas as foreign aid matter, since “[p]olicy advice, and training and education programs, can spread new ways of thinking about governing and management.” As a result, scholars like Van der Veen (2011) posit that while realist explanations can explain the general tendencies of causes behind foreign aid toward corrupt countries, constructivist explanations may uncover the underlying intricacies better. The view that the constructivist approach is superior to neorealist explanations of foreign aid also dovetails with those recent findings, which conclude that the causal factors indicating the aid decisions in the UNSC can be so complex as to defy any general rules (Collier 2010: 83-84). 2.16 Liberalism and foreign aid: The classic liberal view adopts a bottom-up perspective to explain why or how foreign aid occurs. Instead of external factors like anarchy that shape the state behavior as explained by neorealism, liberals posit that the society’s preferences based on the interactions of its members affect the state views and goals on foreign aid. Nonetheless, liberal explanations do not clarify how society decides on their preferences and neglects the role that perceptions and ideas play in the process (Van der Veen 2011: 25).
31
Kurtoglu Eskisar
In order to understand the liberalist perspective toward foreign aid better, an example from the US foreign policy is helpful. Travis (2010: 799) explains that the US foreign aid patterns after mid1970s are often congruent with that country’s increasing interest in democratization and observance of human rights in receiving countries. While the reason behind the US aid during these years could generate from a real care for the welfare of the recipient countries, it is also possible that the US emphasis on such conditions generated from the goal of supporting other countries with similar values. If the second argument holds, then foreign aid has acted both as a form of prize for those countries that adopted such principles and as an invitation for other potential recipient countries to do so (ibid.). 2.17 Modernization theories, development and corruption Modernist theories, which rest on the utopian assumption that links economic development and foreign aid while eradicating corruption, also need acknowledgement. The roots of modernist theories can be traced both to antiquity as well as to the 20th century. On the one hand, scholars like Easterly (2008: 4) argue that teleological aspects of the modernist outlook date back to Aristotle, who considered economic development as a “Final Cause” that applies to all polities, regardless of their differences. Modernization theories and their approach to development played a key role in foreign aid decisions for countries like USA during the Cold War. According to Huntington (1970-1971: 164) it was during those years that “[i] ndeed, ‘aid’ and ‘development’ came to be so closely linked as to be almost interchangeable.” Yet other scholars attribute the roots of modernization theory to the Weberian concepts of rational authority and bureaucratic state or-
32
Foreign Aid and Corruption
ganization. According to this perspective, corruption is an anomaly that is bound to become extinct in time with modernization. Later, the critiques of the modernization theory during 1960s, refused to treat the phenomenon as an aberration. Huntington (1968: 59), for instance, wrote that contrary to the claims of the modernist approach, modernization intensifies corruption. This revisionist approach treats corruption as a functional or utilitarian role for the societies that heavily practice it (Chang and Chu 2006: 260).20 2.18 Development, international organizations and foreign aid The debates that challenge or promote the necessity of good governance for state building is not only restricted to academic circles, but remains a policy issue too (Marquette 2011: 1872). Many donor countries continue to use modernization debates, which prevailed policy making during 1960s, to justify their approach to development in transition countries. As a result, statebuilding theories borrow more from modernization theories than the good governance debate (ibid.). Interestingly, states are not the only actors that seek to maximize their interests as international donors. More often than not, international organizations are not above pursuing their self-interests when it comes to international aid. Calderisi (2006: 156), for instance, argues that the establishment of the International Bank for Reconstruction and Development (the forefather of World Bank) after the Second World War was not based on altruistic reasons, as idealism would dictate, but rather on economic concerns propelled by selfinterest. Since then, not much has changed. As Duffield (2010: 26) 20 Some classic examples of the 1960s revisionist approach toward corruption include Huntington (1968); Leff (1964) and Leys (1965). 33
Kurtoglu Eskisar
puts it, “[r]ather than a steady, experience-based refining and progression of policy ... every decade or two similar pronouncements are repackaged by a new generation of policy-makers and presented afresh as the way forward.” Le Billon (2005: 693) similarly contends that the oil-for-food program targeting Iraq during the Saddam regime has been subject to intense manipulation by UN Security Council members, who ruthlessly used the scheme to secure or improve their own political/economic goals. Another stark example of foreign aid serving the donors rather than the recipient country can be seen in the case of former Zaire. According to Maipose (2000: 94), due to foreign political interests, international aid continued to flow to Zaire during the Mobutu regime, even though the donors were “fully aware of the abuses.” The results of this policy proved devastating, as the country owed over US$10 billion due to foreign debts in 1991: “In this special case, aid was certainly abused and could not have contributed to meaningful development due to a combination of wrong government policies, macroeconomic instability, economic misfortune, high debt-servicing obligations, massive corruption and, equally important, flight of capital.” (Maipose 2000: 94) 2.19 Conclusion As this chapter has tried to outline in detail, the definitions and causes of both foreign aid and corruption are diverse, and have been subject to controversy among both scholars and policymakers alike. However, certain definitions and debates have found more favor than others in recent years, including the idea that corruption is related to the use of public goods and services for private gains and that maintaining good governance habits by governments can
34
Foreign Aid and Corruption
help overcome it. While linked with the modernization theory and Weberian notions of public administration and efficiency, as well as the more recent neoliberal approaches to the state-society relations, this outlook has also received heavy criticism in both academic and policymaking circles in recent years. Based on these debates, the next chapter will overview the changing aid patterns, corruption definitions, and their impact on postconflict societies.
35
Kurtoglu Eskisar
36
Foreign Aid and Corruption
CHAPTER 3
CORRUPTION AND AID: CHANGING PATTERNS
3.1 Introduction: Patterns of foreign aid The development of the practice of international foreign aid as understood in contemporary times is frequently associated with the US attempts after the Second World War (Akhand and Gupta 2002 citing Rossiter [1985] :15-16). Colonial powers like Britain, the Netherlands and Belgium soon also developed aid programs for developing their own colonies during the same period, which were gradually replaced by “development assistance programs.” (Van der Veen 2011: 7) The following decade was similarly optimistic in outlook, with the general idea being that newly independent postcolonial states could take the fast track to development by using prescribed goals and methods (ibid.). Although global foreign aid patterns are neither homogenous nor universal, they seem to conform to the political and economic leitmotivs that prevail in various time periods. For instance, during the Cold War, Bossin (2004: 86) concludes that the American and Soviet aid patterns remarkably differed from one another in Afghanistan. The Soviet Union sought to replicate its economic development pattern during the 1930s, whereas United States aimed to provide the country with widely used general methods or “know-how” skills. Such methods would provide a wider application basis but no im37
Kurtoglu Eskisar
mediate tangible results. The Soviet strategy therefore focused on offering a larger volume of credits with extended repayment dues and reduced interest rates (ibid.).21 3.2 Neoliberalism, democratization and foreign aid objectives in the post-Cold War era After the Cold War, with the threat of communism no longer present, the foremost concern of the Western world was the spread of democratic ideals and neoliberal teachings on liberal market economy worldwide. In this approach, democratization, in tandem with the empowerment of the civil society, aims to act as the main propeller of the transition into liberal market economy and politics. The logic behind the aid for democratization is straightforward: giving voice to the public through elections can help to create more responsive governments who will pay attention to remain efficient and reliable (Goldsmith 2001: 136). The system is supposed to be self-corrective, in that those governments that fail to do so will be replaced through the ballot box. Among other gains, such reforms also aim to eradicate corrupt practices or seriously weaken them in favor of the private sector and civil society, which would gradually gain the upper hand (Yeh 2011: 630). US policy preferences during the first decade of the 2000’s confirms this change well. In 2005, USAID, which is the chief organization responsible for distributing US aid abroad expressed their main goals as “(1) conflict resolution and state transformation, (2) development of civil society, and (3) relief and development, both 21 Misdaq (2006: 84) similarly refers to the favorable financial aid conditions offered by the former Soviet Union to Afghanistan during mid-1950s in an effort to win over the Afghan ruling elite. 38
Foreign Aid and Corruption
social and economic.” (Picard and Groelsema 2008: 7) A year later, Condoleezza Rice, the former US Secretary of State, officially declared the unification of USAID with the Department of State. US priorities in providing aid were also redefined to include “regime change, governance, and security issues” and a gradual exclusion of developmental concerns (ibid.: 3). As of 2014, the official emphasis on democratization and combating poverty worldwide to increase US security and wealth remains intact.22 Discarding the state-led development models favored by communism and its variants and aiming to empower the individual vis-àvis the state, democratization reforms in many transition countries have involved restricting state capacity and minimizing its direct intrusion into market dynamics. The underlying idea here has been that scaling back state involvement in economics and lending power to the private sector would help increase transparency in governance. In addition to curbing any excessive leanings in governance, this approach has also aimed to increase overall state efficiency. 3.3 Changing reactions to corruption In tandem with the varying definitions of corruption discussed earlier, global reactions to its existence have also changed in time (Bracking 2007; Jakobi 2013; Manzetti and Wilson 2007: 950-951). Whyte argues that (2007: 154) the tendency to regard corruption as a deviant activity, which can be objectively measured, generates from the classic liberal assumption on the division between the public and the private realm in a society. Liberalism regards the state as
22 USAID official site, located at http://www.usaid.gov/who-we-are/missionvision-values (accessed on 28 August 2014). 39
Kurtoglu Eskisar
the primary defender of public interests, while the market and the economic activities are dominated by private actors. If these two realms contradict, it is due to the abnormal behavior of private actors, who seek to increase their own payoffs or gain advantages in the existing environment to the detriment of public interests (e.g. Eigen 2009: 424). This is “abnormal” (i.e., corrupt) behavior, in the sense that such action transgresses what is supposed to be the “normal” segregation between the two realms, as it also “normally involves a conspiracy of elites.” (Whyte 2007: 155) According to this view, then, corruption emerges as a major block against rational economic development (ibid.). Notwithstanding its traceable roots to classical liberalism, the global fight against corruption as an undesirable practice that needs eradication at all costs is a relatively new development. Up until 1997, bribery of foreigners in business or other transactions was a legally permissible act in Germany for export companies, which could be officially used by them for tax deduction purposes (Jakobi 2013: 244; Eigen 2009: 419-420). Germany was not an isolated case among the developed countries, either; many other Western countries also followed this pragmatic approach in their dealings with the developing world. The globalization of the fight against corruption dates back to 1970s, when certain domestic reasons, such as the Watergate scandal, propelled the US to make new legal arrangements that outlawed the bribery of foreigners by US citizens (Jakobi 2013: 246; Warren 2006: 160-162). However, American companies soon found themselves at a significant disadvantage over their Western competitors, which
40
Foreign Aid and Corruption
continued to manipulate corruption networks in various countries “where bribes were accepted or even expected.” (Jakobi 2013: 247) To address this imbalance, the US government began to increase its efforts to spread its norms and regulations on corruption to international platforms like the OECD during 1980s (ibid.). Despite initial resistance, Europe also followed suit, and gradually adopted the US-led OECD convention in 1997, which declares bribery as a criminal activity (ibid.: 248).23 3.4 The global rebirth of corruption as a crime While initially limited to mainly economic and international business concerns, as a consequence of these efforts, international anti-corruption efforts have gradually spilled over to cover political and administrative realms (ibid.: 245). They also changed their tune: beginning with the Clinton period, international anti-corruption campaigns led by successive US administrations adopted an increasingly moral tone (ibid.: 247). As an extension of neoliberal approaches to economic development and governance, detecting and eradicating corruption have thus become increasingly important global concerns. Tracking corruption levels on a global level is a relatively recent development. In tandem with the rising number of regime transitions to democracy since 1990s, statebuilding efforts have routinely involved anti-corruption measures.24 International donors have also 23 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions is available at http://www.oecd.org/corruption/oecdantibriberyconvention.htm (accessed on 11 August 2014). 24 For further discussion on this topic, see Heineman Jr. and Heimann (2006: 77). 41
Kurtoglu Eskisar
increasingly adopted the belief that any efforts to promote transparency and less state involvement would act as a dynamo for the selfdevelopment of recipient countries and democracy (Barratt 2008: 21). State building aid provided by international actors in postconflict societies has thus become tightly related to anti-corruption campaigns and “good governance” approaches on a more general level. Furthermore, fighting corruption has become important to attract and maintain high levels of foreign investment to a country (Donais 2005: 64). 3.5 States as principal actors in forming and enforcing anticorruption laws Non-state actors have been indispensible helpers of states in further empowering their efforts during anticorruption campaigns and spreading the associated norms (Jakobi 2013: 245-246). Here, “global norm diffusion” refers to the condition where a particular policy that is spread is attractive for normative reasons to other players (ibid.). During this process, the input of some of the international organizations has been particularly important. The U.S. based MCC, for instance, is an organization that tracks large amounts of aid flow to receiving countries based on their levels of corruption, among other statistical indicators of good governance (Heller 2009: 47-50). Notwithstanding the increasing involvement of international organizations on issues related to foreign aid in recent years, states remain pivotal for creating and enforcing international norms on corruption (Jakobi 2013: 245-246). More often than not, “governments strategically promote their own norms on the international level as a binding standard for all.” (ibid.) The impact of international norms 42
Foreign Aid and Corruption
is often contingent on their compatibility with the existing aid principles of a donor country (Van der Veen 2011: 17). A clear indication of the prevailing state power over international organizations on foreign aid decisions can be seen in the historical evolution of the World Bank. Although the World Bank today is internationally reknowned for its efforts to promote global development and plays a key role to combat poverty, these ideas were inculcated by the US government (Ayres [1983] cited in Akhand and Gupta 2002: 16). 3.6 Problems related with tracking corruption through global indices Despite its widespread use and convenience, tracking corruption through global indices like TI or WGI also carries significant risks for both methodological and ethical reasons. Scholars like Apaza (2009) and Bader et al (2013) point out the inherent conceptual and methodological weaknesses of such aggregated data. While evaluating corruption, adopting the same criteria indiscriminately to evaluate both countries that operate on ideal democratic norms and possess well-functioning liberal economies and those countries that undergo transition can prove misleading. On a more general level, aggregate data representing a country or a region can include wide variances, and thus turn out to be misleading on a micro level. While not directly related to the measurement of corruption, the following example is informative in this respect. When asked about their opinion of Afghani state’s progress (whether it is “moving in the right direction or wrong direction”) 84% respondents in the Helmand region of Afghanistan replied affirmatively, as opposed to 32% of the respondents in Nooristan (Asia Foundation 2013: 21). The aggregate survey result for the whole country, however, has
43
Kurtoglu Eskisar
revealed that on average, 57% of the people believe that it is moving in the right direction, and 38% believe that it is not (ibid.: 16). 3.7 Critical approaches to global anti-corruption campaigns Relegating corruption to the realm of its legality or illicit nature, however, can create more problems than solutions. On the one hand, the increasing tendency to link corruption with illegality can help to load “all of the safeguards that we associate with legal procedures and legal rules into our treatment of this phenomenon.” (Underkuffler 2009: 29) On the other hand, the illegality concept depicted as such can fail to fully cover the wide spectrum of corrupt actions, or, contrastingly, prove far broader than the latter concept implies. (ibid.) As Underkuffler (2009: 34) has pointed out, while prevalent among economic approaches to corruption, this view is problematic in that it does not explain why the legal framework is superior to the alternative path (act of corruption) adopted by the practitioners. In fact, the proponents of this approach seem to miss that corruption may result simply due to the unwanted aspects of the formal system due to inefficiency or other flaws. Furthermore, scholars like Findlay (2014: 180) argue that treating corruption as merely a criminal activity without examining the underlying economic and political power relations lends the defining agents power. Anti-corruption measures adopted globally often not only declare such behavior as criminal but also depict them as apolitical acts and tend to isolate them from surrounding economic or political activities. Such an approach mostly focuses on the perpetrator of the “crime” instead of reflecting on its founding dynamics, thereby failing to identify and understand the full net of players involved in the act. By doing so, “the discourse and procedure of cri44
Foreign Aid and Corruption
minalization emphasizes pathology and illegality, rather than commercial and social utility.” (ibid.: 180) Such measures create the illusion that corruption can be eradicated or kept in check through prescribed institutions and applied definitions instead of identifying and addressing the power relations that produce it in the first place (ibid). The result is increased power to its evaluators that can prolong economic dependence (Bracking 2007: 15). Finally, recent research on foreign aid patterns suggests that donor reactions to corruption in recipient countries is not uniform, but rather depends on their own level of corruption. Schudel (2008: 508), for instance, has found out that while those countries with a low level of corruption are sensitive to the corruption levels of the recipient country and would tend to donate less amounts to them, their more corrupt counterparts would have no such reservations. Schudel explains this discrepancy in donor behavior with the differing relations of each donor government with their own society: the low corruption governments care about the preferences of their public and expect their aid to make a positive difference to the development of recipient country. In contrast, high corruption governments value personal gains over public interests and make aid decisions based on strategic calculations (ibid.). 3.8 Good governance debate Due to the aforementioned issues, among others, an increasing number of scholars have been requesting a more critical approach to explaining corruption and development. Instead of taking development as a given, some scholars posit that its rationale requires dismantling. Bracking (2007: 14), for instance, argues that if deve-
45
Kurtoglu Eskisar
lopment is taken as a concept that is constructed, rather than given, corruption becomes another term where those that attribute criminal characteristics to its definition seek to alter the perception of viewers, thus creating the illusion that it is an objective and universal fact. Furthermore, attributing universality and objectivity to the definition of corruption through statistics and other mathematical measurement techniques, as used by international organizations like CPI, ultimately creates a timeless reading of the issue. This approach, however, is problematic at best, as it reinforces “dominant view of reality, such that knowledge is created conditioned by the power and positionality of those party to constructing the index.”(Bracking 2007: 14)25 Scholars like Khan (2004), Le Billon (2005: 686) and Barratt (2008: 21) similarly explain the tendency to attribute negative characteristics to corruption in the literature with the “good governance” bias. According to Coles (2007: 240), “[d]emocracy promotion by the humanitarian industrial complex less often features the popular struggle for democracy and more often touts the transition to welldefined practices of good governance and efficacy.” Khan (2004) similarly contends that the “good governance” approach attempts to measure up the developing countries with an idealized notion of a democratic state with a fully developed liberal free market economy. Any measurable discrepancies between the ideal and the existing conditions are then taken as evidence of underdevelopment or a failing/weak economy.
25 The tendency of international institutions to “standardize knowledge” is hardly unique to corruption related issues. For a similar approach on democratization, see Coles (2007: 240). 46
Foreign Aid and Corruption
Meanwhile, an increasing number of scholars point out that defining corruption and developing responses to it is not solely an intellectual exercise particular to academic settings, but can have immense political implications particularly for those countries that receive foreign aid. Encouraging good governance while tracking corruption levels in particular has a direct impact on the availability and amount of foreign aid (Heller 2009: 47). The UN international conference that led to Monterrey Consensus in 2002, for instance, explicitly tied development with good governance and promised increased availability of aid to those underdeveloped countries with a good record on corruption (ibid.). The lessons gained from earlier failures and problems concerning the transfer and consequences of international aid have also had a substantial impact on the growing efforts to increase public involvement in demanding the eradication of corruption (Groves and Hinton 2004: 4). The message of these efforts was clear: the donors expected the recipient countries to make a real effort to check and reduce corruption levels and implement development programs associated with good governance to ensure the flow of aid. The problem with the good governance argument, Khan (2004: 16) argues, is that it contrasts with factual evidence from the past. Indeed, recent data from developing countries seems to indicate that different corruption practices can lead to different effects, not all of them negative (Khan 2006; Mironov 2005).26 Lancaster (2008: 49) similarly argues that it is misleading to evaluate country performance by simply labeling them as “good” or “bad”, as many countries would probably possess both forms at any given time. Furthermore, 26 Between these types exists yet another type, which Khan (2004: 20-21) refers to as “quasi-legal rent-seeking,” exemplified by patronage and/or clientelist networks. 47
Kurtoglu Eskisar
examples like China and Indonesia suggest that significant amounts of economic growth are possible despite remarkable levels of corruption and under institutionalized legal structure (ibid.). Meanwhile, Marjit and Mukherjee (2007: 19) warn that overemphasizing labels like “good policy” or “corruption” can lead to a paradox: Selecting recipients based on such criteria may end up overlooking countries that desperately need assistance but remain under the radar due to their sluggish development rates. Some scholars have criticized the neoliberal tendency for minimal state intervention as “state-lite” and their preoccupation with full force market economy as an obsession (Sörensen 2010: 78). A critique has bluntly accused the neoliberal definitions of corruption as being “ahistoric, biased, contradictory and politicised, and has been induced by concerns over market competition rather than morality.” (Bedirhanoglu 2007: 1239) However, for international donors, a less inquired but nonetheless plausible explanation for adopting neoliberal principles in making foreign aid decisions can involve institutional factors. Although various ideological, strategic or moral causes are routinely offered for adopting neoliberal principles in foreign aid and corruption, it is also possible that actors—states, international organizations or other actors alike—also follow it due to path dependency. When international donors set good governance as their priority and make administrative and institutional reforms based on universal guidelines instead of paying attention to local nuances and existing balances, they can worsen, not improve, the existing conditions in receiving countries. Taken to its extreme, “good governance” can resemble little more than a universal to-do list on achieving econo-
48
Foreign Aid and Corruption
mic efficiency, which can widen social inequalities as well as increase overall levels of instability (Barrett 2008: 21). According to critics, the main problem with the neoliberal approaches that dominate the global aid patterns today is that they tend to neglect the aftermath of development, and more importantly, the distributional effects of sheer economic calculations (Esman 2004: 160). They also fail to explain the emergence and flow of international aid in post-Cold War era. What is deeply problematic with neoliberal approaches to economic development and corruption is that they implicitly assume that such cases can be objectively classified and evaluated without offering convincing methodological or other justification (Bracking 2007: 15). Indeed, the followers of this approach themselves acknowledge the methodological shortcomings of “measuring” a phenomenon like corruption, an act itself primarily subject to individual perception and reporting in the first place. Furthermore, over time, the measurement of concepts like corruption and good governance have come to include a broad set of other hitherto excluded concepts, such as “human rights, democracy, civil society, accountability, business transparency, fiscal accountability, and the rule of law,” without thoroughly justifying their use (Heller 2009: 54). Without making such clarifications, any achieved results through such indices risk being meaningless (ibid.). The greatest problem concerning the neoliberal approach toward corruption, therefore may be its disinclination to explicitly acknowledge its limits. As Lancaster (2008: 49-50) has pointed out concerning US aid during the Bush administration in the US, sometimes right policies may not suffice to reach intended goals. Since the motivating factors behind foreign aid tend to be complex and its 49
Kurtoglu Eskisar
use and “efficiency” is not subject to objective factors, studies that solely rely on statistical data analysis are likely to come up with misleading conclusions (ibid.). 3.9 International aid and economic development According to the research of Easterly, Levine and Roodman (2004), there is no relationship between international aid and economic growth, including those cases where the aid-receiving countries follow the recipes prescribed by donors. Bearce and Tirone (2010: 838) argue that foreign aid can help economic development only if the outcome results in little direct benefit for donors. They stress that the opposite is not effective, as the “the strategic benefits” that the donors expect to receive by their donation decrease their ability to convince the receivers that they can enforce their conditions without jeopardizing their gains. Johnson and Jolyon (2008: 203) similarly claim that in countries like Afghanistan, much touted neoliberal measures like privatization do not have any positive effects on an already corrupt government. The positive impact of foreign aid on helping to establish law and order in recipient countries has also been subject to criticism. A common argument against foreign aid states that it encourages the recipient countries to decrease or not try to increase services commonly associated with states, such as keeping law and order (Goldsmith 2001: 126). Goldsmith (2001: 124) uses the term “moral hazard” to describe the negative effects of foreign aid on recipient countries. These effects are a result of the rising tension between donors, who press for political reforms, and recipients, who avoid them. In moral hazard debate, local authorities are assumed to eschew the political
50
Foreign Aid and Corruption
responsibilities of the existing status quo due to receiving aid.27 3.10 Now and forever? Defining the limits of foreign aid Aside from deciding on the form it takes, one of the most pressing donor concerns about offering aid is timing. Agreeing on the starting and ending time of the aid can become a bitter subject of controversy both within the donor and recipient states. Meanwhile, for the recipient countries that are heavily or exclusively reliant of foreign aid, fulfillment of aid pledges can become a matter of survival. After the end of a violent conflict, donors often fail to follow up on their aid promises or end up giving far less than what is initially pledged. The negative effects of the failure to fulfill the earlier promises of aid are numerous. Statebuilding and related anticorruption efforts rarely produce immediate and dramatic results. More importantly, such projects often demand a lot of time and patience, which may well exceed the attention span that donors are willing to offer due to their own domestic constraints28 and other agendas. Since most donors are interested in getting immediate results, they tend to focus on offering humanitarian aid or physical reconstruction efforts rather than investing in time consuming and oftentimes invisible steps that would bring long lasting results (Easterly 2008: 517; Maley 2006: 98).
27 Interestingly, Goldsmith (2001: 124) also likens moral hazard debate for foreign aid to the opponents of social welfare in domestic politics, on the grounds that “welfare supposedly reduces the work ethic.” 28 For a detailed overview of the literature on public opinion and foreign aid, see Milner and Tingley (2013). 51
Kurtoglu Eskisar
3.11 Foreign aid and corruption in divided societies Transition periods, which involve dramatic political or economic changes, can often produce unintended byproducts (Le Billon 2005: 689). As Balkan countries (as well as the countries depicted by this study) well exemplify, external assistance can unwillingly exacerbate the existing corrupt networks or play a role in the formation of new ones (Kurtoglu Eskisar and Komsuoglu 2015). Financial aid or political reform packages often attract existing local players who are already involved with corrupt activities and wish to enrich themselves with the illicit spoils unwillingly offered by the donors. Fulfillment of rigid bureaucratic rules or regulations required by donors in return for assistance can also encourage local actors to implement superficial measures that lack longevity. 3.12 Foreign aid for peacebuilding and corruption The formulaic outlook of neoliberal approaches toward foreign aid already covered in the previous section neglects the nuances that underline the existing forms of corruption in a given setting. For instance, the type of conflict that a society went through can also affect the type of corruption that it will experience later on (RoseAckerman 2009: 66). More often than not, the cause of conflict or conditions that weaken a former state also persist in the post-war state. (Doig and Tisne 2009: 374). External actors that are willing to intervene to end the conflict—and often become donors following the cessation of hostilities—find themselves in a dilemma: excluding the sides that played a key role in the eruption or sustenance of conflicts initially risks the premature dissolution of peacekeeping efforts and provoke further armed conflict (ibid.: 376).
52
Foreign Aid and Corruption
3.13 Peace settlements and corruption in post-conflict societies Although attaining and maintaining peace is a much desired ending, the particulars of the peace agreement can also have a serious impact on the existence and type of corruption in a setting (Rose-Ackerman 2009: 68). Peace settlements that rely on inter-group cooperation can also prove hazardous grounds for corruption: “The division of state power allows more hands to reach into the pot. Each group may feel pressure to provide benefits to its supporters, thus exhausting the pool of rents. Furthermore, if power-sharing means that those in government feel that their tenure is shaky or incomplete, they may try to take what they can for short-term gain.” (Rose-Ackerman 2009: 68) A similar risk also exists during international assistance following a conflict for peacebuilding purposes, which may have the unexpected effect of monopolizing and even institutionalizing corruption networks to ensure “economic and political stability.” Practices, particulary those that are loosely related with corruption, such as “nepotism, fraud, over-invoicing, lack of transparency and accountability, and tax avoidance” during post-conflict foreign assistence based on liberal principles, further challenge the validity and usefulness of such efforts (Le Billion 2008: 345). 3.14 Organized crime networks, corruption and political elite in post-conflict settings In some post-conflict settings, close ties between organized crime networks and political elite, often built prior to or during the conflict, can also exacerbate the leanings toward corruption. Greenhill
53
Kurtoglu Eskisar
(2009: 97) refers to such relations as “kleptocratic interdependence” and defines them as follows: “a set of profit- and power-driven, self-reinforcing domestic and international relationships between criminal groups and government officials. In its most basic form, criminals provide financial succor to receptive (would-be) political leaders, who, once in power, in turn strive to protect those providing their largesse. These activities concomitantly serve to strengthen and enrich both the criminals and the corrupt politicians, helping them to consolidate their power while heightening their mutual dependency.” Such liaisons are particularly worrisome as they often prevent the establishment or reinforcement of institutions that can monitor or punish corruption (Rose-Ackerman 2009: 67). Though unintentional, international aid can foster or reinforce corrupt networks between criminal gangs and political elite. International aid available after post-conflict to reconstruct the wasted infrastructure can be used by political elite and bureaucrats and their cronies to line their pockets (ibid.). Lack of reliable statistical data forms a serious problem for making accurate assessment of what is available or needed in post-conflict regions (Bossin 2004: 89). 3.15 Foreign aid as a rent source in post-conflict societies In post-conflict societies, using international aid as a form of rent constitutes another problem (Rose-Ackerman 2009: 67). More often than not foreign aid is used to deflect an approaching or existing emergency or crisis, and therefore lacks sufficient mechanisms to monitor its expenditure, thus reinforcing corrupt habits (ibid.: 71).
54
Foreign Aid and Corruption
The disinclination of donors to require well defined rules that monitor the aid flow under such conditions further exacerbate the problem (ibid.). 3.16 Foreign Aid and social cohesion in post-conflict societies Yet another condition often ignored by international donors is the disinclination of different or opposing groups to form state institutions that would represent the whole population in post-conflict societies. A condition often ignored by western donors is that “in the societies of the bottom billion, ethnic identity usually trumps national identity.” (Collier 2010: 51) Furthermore, democratization efforts in weak states with existing ethnic or other group divisions can lead to centrifugal tendencies by strengthening ethnic or other group identities (Belloni 2007: 26). A strong emphasis on group identity in societies where it plays an important role in politics can increase corruption. A recent research by Banerjee and Pande (2009:4) has found out that emphasizing ethnic identity can encourage politicians to get involved in corruption. Finally, Belloni (2007) argues that in societies divided by ethnic or other identity based cleavages, neoliberal recipes are unlikely to succeed, as corruption in economic and political realms adopts a predatory stance concerning state or private owned goods. Furthermore, such quick paced reforms can further destabilize the society by increasing inequality and increasing the likelihood of renewed conflict. 3.17 Donor awareness of conditions in recipient countries International donors often remain oblivious to the nuances that underline the prevailing political and social conditions in a given setting, including ethnic and/or political conflicts, and cultural values (Sörensen 2010: 100). Worse, they miss the fact that any aid made 55
Kurtoglu Eskisar
available in such a setting is likely to be used by one of the conflicting parties, to the exclusion or detriment of other groups (Picard and Groelsema 2008: 13). In Kosovo, for instance, international aid for democratization and building civil society has ended up serving mostly ethnic Albanians, to the detriment of other ethnicities, and ended up undermining the Serbian state there during 1990s (Sörensen 2010: 95). In Bosnia and Herzegovina, the dysfunctionality of the central authority that is formed by the consensus of all formerly conflicting groups has eased the path to corrupt activities (Divjak and Pugh 2008: 375). Economic conditions preceding the Bosnian war, followed by the war conditions later, also influenced the approach of people toward post war corruption opportunities (ibid.). While discussing corruption in Nigeria, Okojie and Momoh (2007: 113) similarly point out the difficulty of undertaking any meaningful action, as any attempt to fight corruption among state employees is often regarded as a political act with ethnic undertone. 3.18 Corruption networks and inter-group conflict in post conflict societies Although often presented as an outcome dependent on a variety of factors, the above discussed points suggest that corruption can also become a source of instability and induce inter-group conflict. Corruption networks, which exclude certain groups in favor of others, combined with repression, can lead to the outbreak of violent conflicts. International donors can use aid to promote inter-group cooperation in a post-conflict setting. However, if earlier injustices are not addressed, or aid distribution does not address the expectations of all players, instead of the expected benefits, it may have an 56
Foreign Aid and Corruption
adverse effect on long-term peace. Worse, donors themselves can become accused of discriminating against specific actors or groups, which can decrease the credibility of the goals set by the donor and increase the likelihood of transgression. 3.19 Weak judiciary and corruption in post-conflict societies Lack of institutions can exacerbate tendencies for corruption in post-conflict societies (Rose-Ackerman 2009: 67). The lack of institutionalized rules and their universal implementation seriously impedes the efforts to fight corruption on a decisive and long term basis (Maipose 2000: 90). In some cases, like Afghanistan, the resistance of corruption networks to follow existing legal framework has acquired a systematic nature, where the authorities in charge of combating corruption actually foster such behavior (USAID 2009: 4). In order to eradicate rampant corruption in Kosovo, Phillips (2010: 94) asserts that establishing the rule of law is a must, and it needs to be reinforced by a legal system fully independent from the executive. Meanwhile, addressing corruption related problems does not only concern taking administrative measures, but also requires serious (re)arrangements in the judiciary for at least two reasons. First, people seem to be more sensitive to discrepancies in law enforcement (e.g. selective law enforcement based on nepotism or patronage) than the existence of corruption per se. Second, fighting corruption with an institutionalized legal framework also promotes democratic consolidation in the long run (Johnston 2005: 3).
57
Kurtoglu Eskisar
3.20 Conclusion As this chapter discussed, the changing definitions of corruption have had a significant influence on foreign aid patterns in recent years. Compared to the Cold War years, developing countries with high levels of corruption in particular have found it increasingly difficult to receive aid. The assumed link between corruption and lack of good governance has also led international donors to encourage aid receiving countries into adopting neoliberal principles to reshape their economies and politics. The donor tendency to push for the adoption of similar practices in post-conflict societies, however, have generated a number of problems hitherto unexpected by them. A major factor behind this unpredicted outcome is the level of complexity of postconflict environments, which are often neglected by donors. The following chapters will now try to cover the particular examples that the theoretical debates raised in chapters 2 and 3.
58
Foreign Aid and Corruption
CHAPTER 4
AFGHANISTAN
“Mr. President, I urge you to undertake a sweeping, coordinated, and decisive counter-corruption campaign. Here time is not on your side. Acknowledging that the US and West bear some of the responsibility for the state of corruption in Afghanistan, the great challenge to Afghanistan’s future isn’t the Taliban, or the Pakistani safe heavens, or even an incipiently hostile Pakistan. The existential threat to the long term viability of modern Afghanistan is corruption. Indeed, across your great country, the ideological insurgency, the criminal patronage networks, and the drug enterprise have formed an unholy alliance, which relies for its success on the criminal capture of your government functions at all levels.” John R. Allen, General, Former Commander, NATO ISAF, and U.S. Forces in Afghanistan (2014) “The water is dirty from the source ... Governors and ministers, businessmen and bureaucrats — everyone is involved.” Khan Jan Alokozai (Deputy Chairman of the Afghanistan Chamber of Commerce and Industry, cited in Walsh [2014]) “You should cooperate with me on these reforms. You have accused me of making deals. Yes, I have done so, but I had reasons. And now I am changing this. I am bringing reform from the inside…” Hamid Karzai (President of Afghanistan [2004-2014]; cited in Riechmann [2012])
59
Kurtoglu Eskisar
4.1 Foreign aid and Afghanistan during the Cold War Afghanistan is no stranger to receiving foreign aid: the beginnings of international aid flow into the country dates back to the late 1940s.29 From the 1950s until the end of the 1970s, the Afghan state received about $2 billion worth of foreign aid, which has comprised more than 40% of its income since 1960s (Dorronsoro 2005: 63). During those earlier decades of the 20th century, aid flow to the country was not dominated by a single donor or international agency. Rather, most of it occurred in the form of bilateral agreements, led by the USSR (54%) and USA (31%), respectively (ibid.). The prevalence of aid from these two donors in particular was mostly related to their rivalry throughout the Cold War, from which Afghanistan significantly benefited, especially during the earlier years (ibid.). In tandem with global changes to foreign aid and the rising importance of international organizations in general, bilateral aid agreements were gradually replaced with multilateral patterns during 1970s throughout the world. In the meantime, funding from the US and USSR receded. As these international organizations began to offer more aid to Afghanistan, they also became more important actors for the country (ibid.) The rise of international organizations during the same period also marked the decline of direct US aid to Afghanistan, even though the Soviet aid remained significant well until the end of 1970s: “At the time of the communist coup in 1978 ... US aid ... made up merely 42 per cent of Russian aid, and consisted of loans and grants for training, education, road building, and an agri-
29 For more information on the foreign aid flow to Afghanistan before this period, see Misdaq (2006: 66-69). 60
Foreign Aid and Corruption
cultural project near Kandahar. Soviet aid was actually greater than the combined aid Afghanistan obtained from the US, the different agencies of the UN, the World Bank and the NATO countries combined.” (Misdaq 2006: 70) 4.2 The effects of foreign aid to Afghanistan during the Cold War Foreign aid to Afghanistan in earlier decades did not achieve its purported goals. Contrary to the arguments of the modernization theory, instead of penetrating all segments of Afghan society and promoting its rapid economic and political development as expressed by donors, it “succeeded only in creating modernized enclaves.” (Dorronsoro 2005: 64) Moreover, in a country that was already fragmented by complex ethnic and sectarian differences, the ensuing social polarization turned out to cripple the efforts for a lasting peace. Later, its effects on general governance and corruption levels during the Cold War era were hardly any better. As Maley (2006: 52) has boldly stated, “[t]he old state bureaucracy before 1978 was one of the most corrupt in human history.” Country observers therefore often explain the Taliban’s success in controlling Afghanistan during 1990s and lasting appeal to the Afghan people by its local reputation for being less corrupt than its predecessors (Ahmed 2015). 4.3 Afghanistan War (2001-2014)30 and its impact on intraethnic relations Since it falls outside the scope of this book to discuss in depth the reasons and military dynamics of the War in Afghanistan that began in 2001, this section will only highlight a few key points. Following the terrorist attacks launched by the international Islamist terror or30 The years here mark the official beginning and end of the war operations in Afghanistan by the US and UK. Furthermore, 2014 marks the transition of security keeping from NATO forces to Afghan army. 61
Kurtoglu Eskisar
ganization named al-Qaeda in the USA on September 11, 2001, the US launched a war campaign against Afghanistan in October 2001 to eradicate its leader and headquarters. The same campaign also targeted the Taliban, another radical Islamist group that had maintained control over most parts of Afghanistan since 1994. Declaring itself as the legitimate Afghan government after coming into power, the Taliban was known to host al-Qaeda camps on Afghan soil prior to and following the September 11 attacks and refused to hand its leaders over to the US. After the US-led invasion of Afghanistan began in late 2001, the UNSC formed the ISAF31 by the end of that same year. The initial goal of the ISAF was to ensure the general security in Kabul and its immediate surrounding areas. However, the efforts to incrase international involvement on the ground, expand the newly established state authority outside of the Kabul region, and provide security throughout Afghanistan led to changes in the structural organization and functions of the ISAF. Its operational area gradually expanded to cover the whole country, and NATO assumed its leadership in August 2003. NATO leadership over the ISAF lasted until the end of 2014, when the responsibility of Afghanistan’s security officially passed to the NATO trained Afghan army. Following the Taliban’s fall from power, international efforts and aid flow to reconstruct Afghanistan gained velocity. However, the task awaiting the international donors who were willing to get involved in the reconstruction of Afghanistan was formidable. In 2006, the 31 For a brief overview of ISAF and its actions in Afghanistan, see NATO (2015), ISAF’s mission in Afghanistan (2001-2014), http://www.nato.int/cps/en/natohq/topics_69366.htm (accessed on 29 January 2015). 62
Foreign Aid and Corruption
Afghan government officially announced its need for roughly US$4 billion each year for the next five years for its immediate recovery plan (Maley 2006: 136). As in other post-conflict settings, aside from the reconstruction of the physical infrastructure, donors also regarded speed in statebuilding to be of essence, as it would help prevent any anti-democratic inclinations that may flourish in an atmosphere of desperation (Diamond 2006). Therefore, soon after the start of the US-launched war campaign, a UN led international meeting in Bonn at the end of 2001 declared the establishment of the new government as “Interim Authority,” to be followed by a “Transitional Authority,” which later became the “Transitional Islamic State of Afghanistan.” Afghan Interim Administration, which was established on 22 December 2001 lasted until 13 July 2002, and left its place to Afghan Transitional Authority, which functioned until 7 December 2004. The US-led war campaign against al-Qaeda and Taliban not only brought military results but also had a lasting impact on both ethnic balances and the overall political panorama of Afghanistan (Rotberg 2007: 10). During the initial phase of the campaign, the lack of broad international involvement on the ground led the US to heavily rely on the Afghan warlords to fight against al-Qaeda and the Taliban. While militarily effective, the prevalence of the Northern Coalition on the ground during the war brought the unintended byproduct of lending further power to these armed groups at the expense of Kabul in the long run, which also balked at the later attempts for state centralization (Weinbaum 2006: 139; Maley 2006: 39; Lister and Wilder 2007: 244-245).
63
Kurtoglu Eskisar
As a result, a significant post-war outcome has been observed: incorporated factions have had a tendancy to carve off their own respectives niches at the expense of the center. The case of Abdul Rashid Dostum constitues a good example here. As the former leader of the Uzbek fighters during the Soviet invasion of Afghanistan and a part of the Northern Alliance that fought against the Taliban later, Dostum is known to have de facto control over several provinces in north Afghanistan (Johnson and Jolyon 2008: 8-9; Lister and Wilder 2007: 245). Despite his prominent place in Afghan politics and proximity to the center, however, Dostum has also been accused of getting involved in criminal acts, numerous human rights violations and generally acting outside the existing legal framework on numerous occasions (ibid.). The former Helmond Governor, Mohammad Gulab Mangal, constitutes another example. Similar to Dostum, Mangal played a crucial role in enabling the success of NATO in ousting Taliban and reconstituting peace in Helmand during the early 2000s. Due to his military successes on the field and his general ability to maintain peace in his province, Helmand was able to remain its governor from 2004 to 2012. During that period, he also kept close ties with foreign donors, particularly with the British, who had sent troops to his province to help maintain order and security there after 2001. Notwithstanding his close Western relations which enabled him to maintain his position for years, Mangal remained a controversial figure for some Afghans, who blamed him for diverting public funds for his benefit and his generally failing to provide regional security (Peter 2012; Ghanizada 2012).
64
Foreign Aid and Corruption
In retrospect, the resistance of the Northern Alliance and its supporters to become subservient to the newly reestablished central state authority is an ironic outcome for the international community. Due to the long history of conflicts that tore the country apart for years, the donors that were directly involved in the statebuilding project since 2001 considered separatism of any sort as the greatest threat to the immediate existence of Afghanistan (Starr 2006: 111). While international concerns helped to observe ethnic balances in the new Afghan government and overall contributed to keeping a delicate peace, it may have also also prevented national unification in the long term (Jalali 2007: 30). After winning the war, the Alliance and their supporters did not want to share their newly gained power with groups left outside their circle (ibid.: 29). Following their move to the capital, the Alliance therefore immediately took over the most coveted posts in the government, in addition to controlling the national intelligence services (Starr 2006: 111). The eagerness of the Northern Alliance and its supporters to occupy the key spots in administration have had both political and economic dimensions on a national scale, since all groups seeking positions in the government do not only covet political benefits but also a portion of the foreign aid originally earmarked for development (Weinbaum 2006: 132). In a country where unemployment is the norm, the newly established government backed by the international donors has played the pivotal role of acting as the primary job and resources provider. Therefore, in such an environment being an insider has meant a lot in both political and economic sense for all Afghans.
65
Kurtoglu Eskisar
Aside from keeping ethnic tensions balanced and ensuring equitable representation for all groups in the country, international donors have had two other main concerns: the establishment of a sovereign state with intact borders (Starr 2006: 107). Both concerns stem from harsh reality; for many years now the porous borders of Afghanistan have enabled the flow of illegal traffic for terrorists, narcotics, or arms and made the country a safe haven for all kinds of illicit activities. Notwithstanding the series of measures undertaken by the international community after the war, border control has remained a serious problem for both security and corruption reasons (SIGAR 2014). Meanwhile the economic and political costs of the lack of border controls remain high: experts guess that the exorbitant amounts of bribery at the customs cost the Afghan government around $500 million dollars each year. Since customs revenue constitues around a quarter of the Afghani state income, it represents a substantial loss for a state that is trying to rebuild itself on foreign assistance (Walsh 2014). While not denying the importance of these issues for donors, the most pressing issue for Afghans was the legitimacy of the new state, which would also determine peoples’ overall willingness to obey its rules and regulations (Starr 2006: 109-110). It mattered that the new government had to convince all conflicting groups and factions in the country that they would be represented in an equitable manner. However, the international community in Bonn mostly neglected these sensitivities, and implicitly accepted the existing status quo—i.e., the domination of the Northern Alliance over the new government (ibid.:112). This decision on the part of the international donors turned out to have significant future implications on statebuilding process and corruption (ibid.: 110).
66
Foreign Aid and Corruption
In the meantime, a growing amount of data have become available in recent years to assess the legitimacy of the post war Afghan states. Some of this collected data rests on the idea that people with a high level of confidence in public institutions are more likely to believe that their country is progressing as desired (Asia Foundation 2013: 21; Weinbaum 2006: 126). These findings, among other points, also seem to support the earlier concerns of the Afghan people. The available data from 2013, for instance, suggest that over 50% of the Afghan respondents (57% to be exact) believe that their country is “moving in the right direction.” (Asia Foundation 2013: 16) While this response is encouraging for statebuilding purposes, it also suggests that more efforts are required to achieve long-term results. 4.4 Corruption in Afghanistan since 2001 Despite years of foreign aid and state rebuilding efforts monitored by the international community, the persistence of corruption in Afghanistan has attracted increasing attention in recent years. The Afghan case is interesting and important; Afghanistan is not only among those countries where corruption is widespread but also has assumed a systemic character. In fact, a remarkable aspect of corruption in Afghanistan is not only its ubiquity but also its persistence. Despite the anticorruption measures of statebuilding aid and good governance assistance from international organizations and donors since 2001, corruption levels have hardly changed. In fact, as the post-2001 CPI scores of the country given in Appendix F in this book shows, Afghanistan remains among the most corrupt countries in the world. As a report by USAID (2009: 4) has pointed out, “corruption has become pervasive, entrenched, systemic and by all accounts now unprecedented in scale and reach” in the country.
67
Kurtoglu Eskisar
Meanwhile, the sheer financial cost of corruption is staggering. It is speculated that roughly US$103 billion in aid has been lost to corrupt practices in Afghanistan since in 2001 (Swarts 2014). The recent collapse of the biggest private bank in Afghanistan due to corruption is another good example of its financial effects on that country. The fact that over 90% of its disappearing funds (some $395) were siphoned off by just 19 individuals adds a grim tone to the already bleak picture (ibid.). 4.5 Public perceptions of corruption In tandem with the recent surveys that track the perceived levels of corruption in the country, more and more Afghans seem to conclude the inevitability of corruption in nearly all aspects of their lives. The UN surveys undertaken in 2009 and 2012 further support this possibility by reflecting a sharp increase concerning the acceptance of corruption among Afghan respondents in recent years. The UNODC (2012: 27) report on the subject informs the following: “a large share of civil servants across all sectors (between 38 and 69 per cent) consider some forms of administrative bribery ... acceptable. At the same time, an even higher percentage of civil servants (between 53 and 75 per cent) consider nepotism or patronage in recruitment ... acceptable.” Recent surveys conducted in Afghanistan also point out a significant rise in the number of respondents who consider the corruption levels in the country (from 14% to 23% in one year) (Asia Foundation 2013: 21). As these numbers suggest, corruption has remained a leading cause of concern for Afghan people after security problems. However, while recent surveys reveal that a steadily increasing part
68
Foreign Aid and Corruption
of the population is willing to get involved in corrupt activities, such as bribing an official, there is no clear indication that people consider such interactions as normal or desirable (Chayes 2014). The figures in Table 1 can help to understand the stance of the Afghan people toward corruption better. According to a recent survey, 24% of the Afghan people feel insecure about the progress of their country, followed by 23% of people, who are dismayed about the prevalence of corruption (Asia Foundation 2013: 19). The same survey has similarly revealed that following 30% of Afghan respondents who regard insecurity as the most serious problem, 26% regard corruption as the second most serious problem (ibid.: 22). Table 1: “In your view, what is the biggest problem facing Afghanistan as a whole?”32 2006
2007
2008
2009
2010
2011
2012
2013
%
%
%
%
%
%
%
%
Insecurity
27
46
36
36
37
38
28
30
Unemployment
32
27
31
35
28
23
27
25
Corruption
19
16
14
17
27
21
25
26
Poor Economy
24
19
17
20
11
10
11
10
Education
10
11
9
11
11
10
10
9
Poverty
13
5
8
11
10
12
9
9
Suicide attacks
-
-
-
4
5
4
5
9
Presence of Taliban
6
13
13
8
8
4
8
7
32 The table and all its contents are taken from the survey of Asia Foundation (2013: 23) survey on Afghanistan. 69
Kurtoglu Eskisar
As Table 1 suggests, while corruption ranked as the fourth most important problem for Afghani respondents in 2006, it became their second biggest concern by 2013. While it is possible to explain the Afghan people’s general dissatisfaction with the high levels of corruption with the increased awareness of corruption in public due to rising expectations, it may also be a result of the insufficiency or failure of hitherto undertaken policies to deal with the phenomenon. However, the fact that Afghanistan is the lowest ranking country in corruption perception index in recent years coupled with the numerous anecdotes given below seriously weakens the probability of this explanation. 4.6 Assessing the impact of foreign aid in Afghanistan Many scholars and country experts agree that foreign aid remains critical to the reconstruction of Afghanistan and eradicating corruption (Weinbaum 2006: 127). They also concur that the international involvement in Afghanistan has brought lasting effects on the nature of aid and corruption there in general. Yet, the net effects of the USled international presence in Afghanistan and the ensuing foreign aid remain debated. On the one hand are the cautious optimists, who argue that not all is doom and gloom after the invasion: “by mid2005, Afghanistan had a relatively liberal constitution, a president chosen in a credible national election, and plans for a popularly chosen parliament later in the year.” (Weinbaum 2006: 125) This approach further argues that, notwithstanding many shortcomings, the international community has left a “light footprint” on the overall state reconstruction efforts in that country. Some Afghans also seem to share this view and, as Table 1 in this chapter reflects, display
70
Foreign Aid and Corruption
a cautious optimism that their country is being led in the correct direction. On the other hand, however, are the pessimists, who portray the past decade as one of missed opportunities and worsening conditions— particularly concerning corruption—in Afghanistan. Donor efforts have been increasingly associated with the persistence of rampant corruption in Afghanistan (SIGAR 2014: 4). Critiques of foreign aid point out that the international efforts since 2001 have not fared much better than their predecessors. They assert that the current Afghan state is no closer to supporting itself and enforcing its rules and institutions over its people than earlier decades. Due to the various problems and mistakes in these efforts, some observers further claim that a valuable window of opportunity to unite Afghanistan is missed: “$4.5 billion raised by international sources for the first three years of the Karzai government has vanished without making a cent’s worth of change to the lives of ordinary people ... The opportunity to unite the country and form an integrated government after two and a half decades of war has been missed.” (Misdaq 2006: 269) The critiques also underline the irony that the international reform efforts by organizations like the UN lack universal support from the new regime (Dorronsoro 2005: 313). As a result of the general misuse, incompetency, and lack of plan to spend the donor aid, it is therefore no coincidence that currently “Afghanistan has schools built so badly they are in danger of collapsing, clinics with no doctors or medical supplies, police and army barracks that are not fit
71
Kurtoglu Eskisar
to use, and roads that are disintegrating for lack of maintenance.” (SIGAR 2014: 6). 4.7 Anticorruption efforts of Afghan government: the good the bad and the ugly Partially in an attempt to appease the donors and to supplement their efforts, the Afghan government has also taken some steps to fight corruption in Afghanistan in recent years. As a result, guided by the international community, there has been some reasonable progress to build the necessary legal framework to curb corruption, to reinforce any existing administrative institutions that would monitor any misdeeds, and to make much needed appointments to fill the vacant staff in the judiciary. During these efforts, top ranking Afghani officials like the former President Hamid Karzai have also repeatedly underlined corruption as a major problem for the state and society and vowed to fight it (Mohseni 2012: 151-152). In July 2012, Karzai officially announced a 23-page list of new rules and regulations dedicated to attacking corruption related issues and urged the judiciary to take the necessary steps to increase its efficiency in ongoing corruption related cases (Taylor and Harooni 2012). Later, he also removed several governors as a part of the anticorruption efforts, including some of them who had close links with donors (Peter 2012). His successor, President Ashraf Ghani introduced additional anticorruption decrees targeting the judiciary (Stancati and Totakhil 2014). As data in Appendix E suggest, these efforts have not been all in vain, as the state has made significant progress in increasing the transparency of its budget and expenditures. Although the beginning score of Afghanistan in 2008 was a mere 8, in 2012 the coun72
Foreign Aid and Corruption
try received 59 (out of 100), compared to Bosnia, which received 50 and Iraq, which trailed far behind at 4. However, the Afghan government’s fight against corruption has also remained cautious in outlook and did not bring any radical changes (Weinbaum 2006: 133-134). Instead, more often than not, the government has sought to co-opt or at least not alienate the circles involved in corrupt activities to prevent them from attacking the new state and dismantle its modest gains. As a result, even in the absence of illicit trading activities, eschewing any formal monitoring, flexible funding available to the minister of finance and the president has further provided ample grounds for corruption in Afghanistan. Corruption, fostered through the unholy alliance of politicians and criminals has become a difficult trap to break up. Country experts point out that “a picture emerges of such rampant bribery and extortion that corruption can no longer be described as a cancer on the system: It is the system... And it is deeply enmeshed with Afghan politics.” (Walsh 2014) 4.8 Corruption and criminal networks One of the reasons behind the reticence of the Afghan government to tackle corruption in earnest is its links with crime. The easy accessibility of aid funds to criminal gangs has rendered corruption not only a political or an economic problem but also one of security (Carnahan et al 2014: 123). The involvement of many rich or leading Afghanis in the highly lucrative yet illegal narcotics trade also significantly complicates the issue and decreases the chances of making meaningful progress in the fight against corruption (Morgan 2007: 148; Carnahan et al 2004: 123). The stakes for anyone to fight against the flow remain high: Afghanistan is reported as the biggest (90%) producer of heroin in the world, which is estimated 73
Kurtoglu Eskisar
to generate as much as $2.8 billion annually (Mohseni 2012: 142). As Maley (2006: 63) has put it, “some groups may have enough resources at their disposal to corrupt the embryonic policing and other bureaucratic structures of an infant state.” 4.9 Corruption and justice For international donors, corruption in some parts of the Afghan administrative structure constitutes a far greater and immediate threat than others, such as the judiciary. Not so long ago, an international organization monitoring Afghanistan has observed that the “justice system is in a catastrophic state of disrepair.” (International Crisis Group 2010: i) Aside from a general lack of functional institutions that are crucial to state building and empowerment, distrust in the existing legal framework and judiciary is widely assumed to stoke corrupt behavior throughout the country. Most Afghans have expressed that they would prefer seeking justice in informal courts and gatherings led by community leaders than relying on the existing legal institutions (USAID 2009: 7). The increasing lack of faith of Afghans in justice, which is more and more becoming regarded as “a market commodity to be bought and sold” is worrisome (ibid.: 8). The inefficiency and corruption of the Afghan judiciary is also frequently underlined by various country experts and high ranking officials of international anticorruption agencies (Taylor and Harooni 2012; Latifi 2012). Meanwhile, the ubiquity of corruption among the judiciary has led the locals to increasingly find ad hoc solutions to their problems, including solving their conflicts within their respective community using local customs and sharia (Saltmarshe and Medhi 2011: 2). However, in the absence of serious attempts to rebuild the national judicial system, there is no reason to assume that
74
Foreign Aid and Corruption
such practical measures can be maintained in the long term (ibid.:6). Aside from its immediate systemic effects, observers also note that high levels of corruption in the judiciary can seriously affect state legitimacy and security in the long run (Saltmarshe and Medhi 2011; Sarwary 2012; International Crisis Group 2010: 1). As the following comments of an Afghan man reflect, being fed up with the shortcomings and failures of the existing system risks driving more people into supporting the Taliban or other extremist groups at the expense of the newly reestablished order: “The Taliban courts were swift and strict ... A thief would be given the death sentence after a short trial. But under Mr. Karzai’s rule, it will take a century to prove a thief guilty and even then there is no guarantee that he will be punished.” (quoted in Sarwary 2012) A major problem with the donor efforts in Afghanistan arises from the fact that they often do not match with the existing reality. Consequentially their offered solutions are not what Afghan people truly need (International Crisis Group 2010: 10). Many donor attempts have failed by their inability to pick up suitable international experts who know the country well and are able to help the Afghan officials in the real sense. The international attempts to reorganize and reconstruct the Afghan justice system in recent years remains a good case in point. The international teams of experts who were selected by donors to provide help and counsel the local people indeed fulfilled the criteria required by the donors for their particular subfield. However, a country report also informs that some of these assigned foreign experts in the justice sector had no previous knowledge of Afghan politics or its justice system, and others were not even 75
Kurtoglu Eskisar
directly related to the legal field itself (International Crisis Group 2010: 10). As a result, the overall assistance of these experts to the local community of judicial personnel who really needed it turned out to be minimal at best (ibid.; Latifi 2012). 4.10 The unexpected effects of foreign aid: some examples Notwithstanding the already well demonstrated political and administrative shortcomings of the Afghan government since 2001, it would be misleading to blame it for all of the failures that have lead to the current state of affairs in that country, including corruption. Insufficient donor funding and ill-suited foreign assistance also seem to have played a key role behind this disappointing outcome. Due to the above mentioned problems in the judicial sector, for instance, the EU, which remains one of the biggest donors for Afghanistan, has halted its financial aid. These funds, originally earmarked to undertake the desparately needed reforms to the Afghan judiciary and its institutional infrastracture, were forfeited due to insufficient progress in anticorruption efforts (Latifi 2012). The international aid for the reconstruction of the Afghan judicial system has been often termed as “miserly,” and its initial targets far from grasping the reality (International Crisis Group 2010: 1-2). Furthermore, while seeking to reconstruct the Afghan judicial structure, the donors more often than not have sought for their establishment, ignoring the Afghan views and input to follow their own preconceived notions of universal, standard or good rules. Perhaps the most worrying aspect of corruption in Afghanistan is its general image as being abetted or simply ignored by the Afghan society. As earlier mentioned, international donors involved with the country are often oblivious to the opinions of the locals and retain their
76
Foreign Aid and Corruption
support for the local administrations despite their blatantly criminal practices solely for the reason that they support the donors (Johnson and Jolyon 2008: 10). Numerous times, the attempts by the Afghan government to remove certain governors due to their controversial reception by the locals in the past were vetoed by the key international donors like the U.K on the grounds of compatibility (Peter 2012). Yet recreating order and institutions in Afghanistan under foreign tutelage has also led to the unexpected outcome of disturbing the local socio-political balances. Many Afghanis seem to remain frustrated by their own elite who, despite all the havoc they created during the civil war, have been able to maintain and even expand their political and economic capabilities, mostly thanks to their ties with the international community (Johnson and Jolyon 2008: 8; Peter 2012). A closer look at the flow of foreign aid and its results in Afghanistan seems to confirm the following observation pointed out by Maley (2006: 98) earlier: “The political reality ... was and is that donor priorities and the Afghan government’s priorities do not necessarily coincide.” Yet the Afghan government, mostly developed according to donor assesed needs and monitored or directly controlled by donor sent or administered technical experts, “progressively lost control of its development programme.” (Dorronsoro 2005: 64) Giving what they think or imagined that the country needed, international donors thus failed for years to predict or deflect the crises, such as in agriculture that later occurred (ibid.). Another problem concerning the statebuilding attempts in Afghanistan concerns the inconsistent or contradicting decisions of the international community on different fields. (Weinbaum 2006: 131).
77
Kurtoglu Eskisar
International donors have often failed to coordinate their efforts, which further limited the impact of their aid in the first place (Johnson and Jolyon 2008: 194). Ironically, instead of aiding and quickening the pace of state building and fighting corruption, certain steps taken by the international community may have inadvertently encouraged corrupt practices in Afghanistan. Approached from this perspective, the following example is noteworthy: “In the run-up to the Emergency Loya Jirga, the UN gave out hundreds of expensive satellite phones. No one ever asked for them back. In Kabul, ISAF has a contract for ten tankers of fuel a day from, as it happens, a very close associate of a very important minister. Often it takes only three tankers to refill their tanks, the other seven get sold on the city streets. Stories like this abound, the message is, it does not matter, money is there to be wasted, accountability is just a word.” (ibid. 45) Yet another controversial outcome of the international efforts for statebuilding and fighting corruption is observable in its effects on the current Afghan police force. Although corruption among the police officers well predates the international intervention, it is disturbing for the locals to see that they “now wear uniforms, bear weapons and drive vehicles paid for by external assistance.” (ibid. 9) Ironically, since the police officers have become annoyingly aggressive in their pursuit of bribery and other corrupt behavior, Afghans mostly bypass them during times of need. Furthermore, this condition risks becoming a serious security problem in the forthcoming years, as Afghan officials admit that it is common among policemen and other security personnel to “sell their bullets and weapons in the market to the highest bidder and that sometimes includes Taliban or other insurgent groups.” (Sarwary 2012) The cookie cutter approach of donors to statebuilding, economic 78
Foreign Aid and Corruption
development and corruption has worked at cross-purposes in Afghanistan, and sometimes even generated paradoxical outcomes, as summarized below: “Development in Afghanistan has for a large part been based on the assumption that introducing a public administration and democratic elections based on Western models would allow Afghanistan to move forward as an autonomous and sovereign state able to effectively manage its own affairs. This is not what has happened. Insecurity has increased, as has corruption. The democratic process has been subject to massive vote rigging, and abuses of power are widespread.” (Saltmarshe and Medhi 2011: 9) Consider the international zest to balance any tendency for accumulation of centralized power by empowering the periphery through the support of local governance. These programs funded by donors aim to encourage local communities to increase their political participation (Johnson and Jolyon 2008: 207). Foreign observers generally concur that developing local governance can significantly aid the statebuilding efforts in the country and help to decrease corruption (Saltmarshe and Medhi 2011: 6). The following comments of US General Allen further underline the idea that the impact of such efforts can have a positive effect on both statebuilding and lowering corruption levels in Afghanistan: “[W]hat I observed when I was there ... was the importance of district level and sometimes -- and village level leadership ... [W]hat we’re looking at for success is a model that includes a strong government in Kabul where corruption is brought down over time and it has resources that are able to provide not just for its own protection, but provide in part an
79
Kurtoglu Eskisar
avenue of resources ... back down to the local levels, and at the same time continue to build that from ... the grass roots, if you will, at the village and district level, build strong governance.” (Allen 2014: 27) In the absence of international funding and resources available to the center, however, such measures run the risk of worsening the already high levels of corruption (Johnson and Jolyon 2008: 208). Due to the lack of a functioning and legitimate national judicial system, the current foreign efforts to strengthen the local councils in an attempt to tie them to Kabul can also lead to the reinforcement of informal institutions at the expense of formal ones and ultimately play into the hands of Taliban (Ahmed 2015). 4.11 The input of Afghans really matters As explained in the previous section, notwithstanding the impending threat, the current attitude on foreign aid to Afghanistan is not much concerned about the Afghan peoples’ input in setting the goals and strategies to achieve them. In fact, some observers have argued that while the international community acting as a watchdog limits the Afghani government’s overall capabilities, the foreign advisors can ensure the optimal use of foreign aid (Morgan 2007: 148-149; SIGAR 2014: 4). Many observers also argue that external monitoring and intervention is crucial to undertaking the intended reforms required for statebuilding, combating corruption, and achieving the results expected by the international community (Latifi 2012).
Notwithstanding the efforts to increase political participation among local governance mentioned earlier, the international community has consistently either limited or entirely overlooked Afghan views or
80
Foreign Aid and Corruption
preferences on numerous statebuilding measures based on good governance principles, including the privatization of public services, such as healthcare. For instance, the post-2001 privatization scheme (e.g. health sector) in Afghanistan disregarded existing services, dismantled them with possible adverse effects on people already working in the sector, and generated the inclination to get involved in corruption. More importantly, experts claim that the new health system is unsustainable in the long run and can further weaken the already emaciated state functions, thus ultimately detracting from the legitimacy of the new state (Johnson and Jolyon 2008: 205-206). However, it is far from clear that the Afghan people concur with this approach. The following words of a member of the Afghan cabinet are rather meaningful: “they say we can have whatever we want –as long as it is what they’re offering.” (cited in Johnson and Jolyon 2008: 15) Moreover, the opinions of Afghans matter, as they are crucial to creating social cohesion, promoting institutionalization, and thus dealing with the leading causes of corruption in the long run. Failure to do so certainly risks losing all gains that were aimed through international aid, and more. Country specialists warn that, if not dealt with, local frustration can lead to explosive, violent behavior in the long run (ibid. 2; Allen 2014: 13). Reminiscent of earlier decades, a point that contemporary donors seem to miss is that politics in Afghanistan is mostly “a ‘recurrent process of fission and fusion’, where the integrating tendency of the state is opposed to the centrifugal force of the tribes.” (Dorronsoro 2005: 7) Therefore, ignoring the impact of foreign aid on ethnic or inter-group balances by donors is not only likely to render any efforts as useless or ineffective, but also unlikely to promote any long
81
Kurtoglu Eskisar
lasting peace in Afghanistan (Esman 2004: 160). 4.12 Conclusion: Afghanistan—a net gain or a net loss for donors? As this chapter sought to underline, Afghanistan has had a long history of receiving foreign aid. Despite the steady flow of foreign funds to the country for many years, their total amount remains far less than other postconflict countries, which also received aid during the same time period (Weinbaum 2006: 131; Maley 2006: 137; Johnson and Jolyon 2008: 210-211). Furthermore, much of the available foreign aid remains channeled to meeting humanitarian needs instead of being invested in long term projects (Maley 2006: 98). Ad hoc or short term solutions, however, are likely to increase the already elevated level of corruption in Afghanistan. To make things worse, throughout the country, including its capital, the lack of security remains a major problem. This problem leaves donors seriously concerned and has a negative effect on the foreign aid flow. Yet leaving Afghanistan to its own devices may no longer work, either; along with fast declining levels of international financial aid, country experts argue that the premature withdrawal of international security forces can threaten the future of the Afghan statebuilding efforts and the hitherto taken measures to combat corruption (Saltmarshe and Medhi 2011: 9). Paradoxically, it may also aggravate the very thing that the international donors are desparately trying to eradicate in the first place. The persistence of corruption in Afghanistan, even after the steady international efforts that began in 2001, seems to be associated with the local belief that it would be only transitory: The prevailing instinct for many Afghans, therefore, is to grab as much as possible while the foreign cash continues to flow in and foreign troops help maintain the security
82
Foreign Aid and Corruption
(Walsh 2014; Sarwary 2012). While discussing the role of foreign aid in the reconstruction of Afghanistan and fighting corruption, some observers have pointed out the moral obligations of the international community. According to this view, after invading Afghanistan, the international community holds a responsibility for its people, and it is obliged to help it get back on its feet (Johnson and Jolyon 2008: 13). While this argument is valuable and requires contemplation, it is nonetheless unlikely to find a unified response from the donors. In the meantime, it is reasonable to assume that the international donors are more likely to fail than succeed in accomplishing both goals with their current methods in Afghanistan in the foreseeable future.
83
Kurtoglu Eskisar
84
Foreign Aid and Corruption
CHAPTER 5
BOSNIA-HERZEGOVINA
“Europe, you owe us, do you remember 1992-1995?” (Written on a protester’s sign during 2014 protests, cited in Arsenijevic 2014) “You have been stealing from us for 20 years” (Written on a protester’s sign during 2014 protests, cited in Giovanni 2014) “My theory is that outsiders, the international community, cannot impose a new positive system ... [But] [w]ithout them the changes would not have happened. By ourselves we could have changed some things, but there would have been other things that dragged us back—people, traditions.” (Nada Majinovic, Lawyer in Brčko district, cited in Pond 2006: 148) 5.1 Bosnia: a model for successful international aid? Although the world is no stranger to statebuilding efforts in the postCold War era, few such endeavors are as impressive as those made for Bosnia in its post-Dayton phase, for they have sought to achieve several goals at once. The political institutions and economic frame-
85
Kurtoglu Eskisar
work outlined by the Dayton agreement that ended the Bosnian war in 1995 not only promised peace but also aimed to bring together a severely divided society through democratization and introduce full scale economic reforms needed for a liberal market economy (Donais 2005: 1). Another remarkable aspect of the Bosnian state building experience was the intense level of international donor involvement. While foreign involvement in conflict resolution and peace negotiations is hardly uncommon, as Chandler (2000: 43) has emphasized, “[t]he peace agreement signed at Dayton was unlike any other peace treaty of modern times, not merely because it was imposed by powers external to the conflict, but because of the far-reaching powers given to the international community which extended well beyond military matters to cover the most basic aspects of government and state.” On a more general level, Chandler (2000: 34-36) has further commented that the signature of Dayton Treaty was a step that directly challenged the hitherto internationally prevalent understanding of sovereignity on the state level. The underlying reasons for foreign involvement have similarly been debated, with some scholars interpreting the international efforts for democratization in that country after Dayton “as an early node in the professionalization and standardization of democratic techne and democratic knowledge as tools of foreign policy aims—that is, the liberal and neoliberal transformation of regimes in the name of peace and security.” (Coles 2007: 237) In addition to the leading factors that initiated international aid to Bosnia and its significance, its long term effects on that country also
86
Foreign Aid and Corruption
remains debated. On the one hand is the argument that foreign aid has been pivotal for all major achievements that have taken place in post-Dayton phase. The idea is that without constant external monitoring provided by donors, Bosnians themselves could not have achieved anything significant (Pond 2006: 142). According to this viewpoint, the international donors originally aimed to transform Bosnia into a model democracy with a well-functioning market that is fully ready to become a member of the European Union (Dobbins et al. 2003: 92). The line of argument that emphasizes the role of foreign aid to explain the positive developments in Bosnia is not without its merits. In retrospect, the resulting impact of international community on achieving long-term peace and overall stability in Bosnia has been considerable. Despite its highly bureaucratic and complex administrative structure, the country has managed to survive since the end of the war. Moreover, once established, the sovereign status of Bosnia has remained intact, and with constant international assistance, the new state has had a number of successes, including the following achievements: “single license plates ... a single currency and passport system; a single customs system, with Bosniak, Serb, and Croat officials assigned to border crossings irrespective of the majority ethnicity of the neighboring district; a single army command; a single criminal intelligence agency ... and the return of more than a million refugees. Moreover, in the RS they have effected a managed transition from the de facto rule of a still-triumphant Radovan Karadzic in 1996 to his ouster; and in 2004, the first public apology by the RS government for the
87
Kurtoglu Eskisar
Srebrenica massacre, and its delivery to prosecutors in 2005 of a list of 17,000 Serb perpetrators and abettors.” (Pond 2006: 141). Some of the political and administrative reforms introduced by the international community are also regarded as net gains for the new state. According to Dominik Zaum (2007), the annulment of payment offices, which were remnants of the previous Yugoslav state is a good case in point. Zaum (2007: 103-106) argues that while their removal reduced direct state involvement over the economy, the new administrative measures did not remove its control altogether either, and offered some legitimacy to the new state in other aspects, including tax collection. Begić (2014: 37) similarly points out that the active involvement of the OHR has “enabled the functioning of legal state.” The overall positive depiction of the international community’s capabilities and functions over the Bosnian state since its inception also requires counting in their favor. In other war settings like Afghanistan or Iraq, direct foreign involvement in statebuilding has often drawn serious criticism from both national and international actors alike. Unlike its counterparts, however, foreign aid to Bosnia has generally been viewed under a more positive light by both Bosnians and the international community alike (McMahon and Western 2009). On the other hand, notwithstanding these intense and generally positively regarded donor efforts, many scholars argue that the foreign-led statebuilding efforts since Dayton Agreement have brought mixed results at best. As a scholar has bluntly put it, “[t]hirteen years after the Dayton Peace Agreement, and with a tremendous 88
Foreign Aid and Corruption
international engagement of aid, post-conflict reconstruction, statebuilding and support to civil society, there are still few signs of reconciliation, multi-ethnic integration and democratisation.” (Sörensen 2010: 92) Other critiques similarly describe the failure of international efforts to rebuild the country following the end of the war as follows: “Bosnia was once the poster child for international reconstruction efforts. It was routinely touted by U.S. and European leaders as proof that under the right conditions the international community could successfully rebuild conflict-ridden countries ... In the past three years, ethnic nationalist rhetoric from leaders of the country’s three constituent ethnic groups -- Muslims, Croats, and Serbs -- has intensified, bringing reform to a standstill. The economy has stalled, unemployment is over 27 percent, about 25 percent of the population lives in poverty, and Bosnia remains near the bottom of World Bank rankings for business development.” (McMahon and Western 2009)33 What is worse, despite the anticorruption campaigns funded and supported by international donors for years, Bosnia has sported surprisingly high levels of corruption, which has proven itself quite resilient to all efforts to eradicate it. Some observers estimate that during mid to late 1990s alone, approximately 20 percent of international aid money to the country—roughly over $1 billion in worth—evaporated (McMahon and Western 2009). The overall levels of corruption in the country has not changed much in recent years, either: According to CPI results, Bosnia ranked at 72 (out of 33 For a similar view, see also Judah (2014). 89
Kurtoglu Eskisar
175 countries) in 2013.34 While discussing the level of corruption in Bosnia, Ateljevic and Budak (2010:386) have remarked that: “[c]orruption is embedded into the entire fabric of the country’s socio-economic and political environment through theft of public funds including the misuse of international donations, buying of state positions and court decisions, bribery, payment of favours in customs, telecommunications, building licenses and medical services and education.” The public dissatisfaction with corruption finally reached a cataclysmic end in 2014, when a series of violent protests attended by thousands of Bosnians shook the country.35 Interestingly, this so-called “citizen tsunami” caught most international observers and donors by surprise, who had always feared the return of inter-ethnic hostilities instead (Giovanni 2014). Yet, during the protests, rather than inter-ethnic woes, corrupt politicians and skewed income distribution proved to be at the core of the public complaints. Summarized in the following words of an observer: “’There are so many valid reasons to protest in Bosnia ... Nontransparent and criminal privatization of state-owned companies, widespread corruption, nepotism and general misery - to name just a few.’” (ibid.) Some observers explain these unexpected turn of events and the less than ideal results concerning statebuilding efforts in Bosnia with the overly self-interested approach of the international actors. While 34 The country ranked the same in 174 countries in the previous year (72/174 in 2012). For corruption scores of Bosnia as reported by CPI between 1995 and 2013, see Appendix E in this book. 35 Although corruption is regarded as a universal problem for Bosnia, the RS regions interestingly did not participate in the chain of protests that took place in the rest of the country. 90
Foreign Aid and Corruption
discussing the anticorruption protests in 2014, Kurtović (2014: 101), for instance, has bitterly noted that the comments of international spectators “reminded citizens of Bosnia and Herzegovina of something they had learned long ago: that the International Community is a self-serving, self-interested and alienated center of power that never has been working in support of citizens’ own interests. The truth is, the ‘democratic transition’ which the International Community promoted was always supposed to be limited, and done according to the terms of its own design.” Regardless of the factors that motivated the international community to aid Bosnia in the first place, foreign-led state building strategies and related aid programs may have played a significant role in both prolonging the state building efforts and persistence of high levels of corruption in postwar Bosnia. As this chapter aims to discuss, the Bosnian state built on democratic and neoliberal economic principles as envisioned by international donors after Dayton Agreement originally targeted to overcome the societal fragmentation along ethnic lines, while promoting rapid accumulation of economic wealth for the whole society. A wide array of measures, ranging from ensuring equal ethnic representation at all administrative levels to the privatization of state enterprises were regarded as the required handmaidens to achieve this outcome. Instead, various congenital shortcomings associated with the post Dayton administrative and economic structure seems to have created a vicious circle that has primarily benefited those actors who are involved in the corruption networks. The rest of the chapter outlines some of the reasons behind this unexpected outcome.
91
Kurtoglu Eskisar
5.2 Corruption in Bosnia: is culture to blame? Before discussing the role of international aid on the Bosnian state building and anticorruption efforts, the impact of culture as another possible independent variable requires brief mention. Culture is often counted as the chief factor behind the prevalence of corruption in places like Bosnia and Herzegovina (Divjak and Pugh 2008: 373; Pržulj and Kostadinović 2014: 474). International anticorruption efforts, including foreign aid flow to Bosnia in particular has routinely treated the subject as a primordial phenomenon with cultural underpinnings that is solely intrinsic to the region, and is ‘curable’ by Western or foreign induced recipes (Kurtović 2014: 99). While this assumption seems simple and compelling, it is not necessarily proven. On the one hand, a survey in that country by the World Bank has revealed that “73 percent of the general public respondents and 71 percent of public officials agree with the statement that in BiH ‘corruption is a part of culture and mentality.’” (World Bank 2000: 16) The fact that corruption was also widespread especially during the later years of Yugoslavia, Bosnia’s predecessor, also supports this view. On the other hand, however, the same World Bank (2000) survey also revealed that over 50% of the respondents would report any exposure to corruption to the authorities (ibid.). Furthermore, the majority of respondents in the public service stated that if implemented, they would support anticorruption reforms and that they would favor a system based on meritocracy (ibid.: 17). It is therefore reasonable to assume that, instead of an ingrained and permanent cultural trait, Bosnians regard corruption as a dynamic phenomenon that is responsive to different settings and approaches.
92
Foreign Aid and Corruption
5.3 Dayton Peace Agreement and its aftermath In order to understand the impact of Dayton Agreement on the current state of affairs in Bosnia, it is useful to sketch some of its key points. Dayton Agreement, which effectively ended the Bosnian war was finalized on 21 November 1995, and was signed three weeks later.36 Led by USA, it is a complex document, which draws on the military results of the Bosnian war, and the ethnic and communal demands that produced it in the first place. The agreement originated from the Vance-Owen plan developed in 1993, which divided the land into two cantons with limited autonomy, the FBiH and RS. Dayton also further divided the FBiH into ten cantons, each with their own administrative units (including parliaments and ministries) (Divjak and Pugh 2008: 374). After a while, Brčko region in the north became a separate administrative district, with its own appointed international head, police and judiciary. All of these divisions effectively have become five different interconnected levels of administration, including “state, entity, canton, city and municipality.” (International Crisis Group 2001: 2) Other inherent administrative characteristics of the new state also include its divided military structure (each administration is granted their own forces), and the central government’s lack of independent income. Yet, the Bosnian state also happens to be subject to some very strict regulations (Donais 2005: 79). In recent years, an increasing number of critiques have pointed out that the existing over-complex and decentralized state structure int36 Discussing the factors behind the demise of Yugoslavia and the subsequent outbreak of war fall outside the scope of this study. For a brief summary of the events that led to the Bosnian war, see Paris (2004: 97-98); Pond (2006: 144-145). 93
Kurtoglu Eskisar
roduced by Dayton Agreement not only detracts from state building and democratization efforts, but also fosters corruption in the country (De Launey 2015; Juncos 2005: 90; Stubbs 2001: 100; Donais 2005: 78; Giatzidis 2007: 335; von der Brelie 2014; Pond 2006: 158; Reuters, 10 September 2014). According to this viewpoint, the primary—or only—goal of Dayton Agreement was to end the war and stop the bloodshed (Pond 2006: 151). The preoccupation of the agreement with achieving peace, however, may have affected its long-term viability as a state and its anti-corruption policies. As McMahon and Western (2009) have pointed out, “[a]s successful as Dayton was at ending the violence, it also sowed the seeds of instability by creating a decentralized political system that undermined the state’s authority.” Lending support to this argument is the existing ratio of administrators in the country to the population, which is staggering: “Each of the thirteen political units has between six and twelve ministries, effectively amounting to at least 181 ministers for 3.7 million people. If this ratio were applied to Germany, that country would have 4,240 ministers.” (International Crisis Group 2001: 2) The overcomplex administrative structure of the country has also received criticism from the Bosnians themselves. During the widespread anticorruption protests in 2014, a student, for instance, has frustratedly pointed out that “[i]n Bosnia-Herzegovina we have 13 regional governments, more than 130 ministries and ministers, and on the top of that we have five presidents. We have a whole bunch of leaders but they don’t lead.” (von der Brelie 2014).
94
Foreign Aid and Corruption
5.4 Bosnian state and consociationalism Some scholars have pointed out that the Bosnian state established by the Dayton Agreement displays many characteristics of consociationalism, including its positive aspects and pitfalls (Paris 2004: 193; Donais 2005: 78). Consociationalism is the term initially introduced by the political scientist Arend Lijphart to describe a particular form of governance in democracies with segregated groups that provide generous amounts of autonomy and veto rights to all major identity groups. Paris (2004: 193) explains that in ideal settings, democracies built on consociationalist principles adhere to the following rules: 1) All major identity groups that form the society are represented in all segments of the administration (including government), 2) The appointment of these representatives need to be reflective of their size in population, 3) Decisions that involve the whole society need to be taken together; with input and agreement from all groups, 4) Decisions concerning in-group matters do not require approval or intervention by other groups. As the earlier outlined highlights suggest, Bosnian administrative structure often followed these consociationalist principles, which has ensured equitable representation of all major ethnic groups in the country, including the guarantee to preserve their identity in democratic setting. At the same time, however, consociational principles can also create deadlocks for political cooperation between groups in the long run (Donais 2005: 78). Another unexpected outcome of the consociational administrative framework is its negative effects on the institutionalization of state functions. As Begić (2014: 39) has pointed out, under the auspices and dictation of international actors, any important decision making process is restricted to private dealings
95
Kurtoglu Eskisar
among the elite of the leading ethnic parties, without ever being brought up for public inspection. Notwithstanding democratic representation for all ethnic groups, in Bosnia the main dilemma ultimately seems to center on the vague Bosnian state identity itself that was prescribed by Dayton Agreement (Dobbins et al. 2003: 90; Juncos 2005: 90). This vagueness becomes a particular cause for concern, as it is directly linked with high levels of corruption. Simply put, the ethnic enclaves that are originally created to ensure fair representation of all groups have gradually become hotbeds of corrosive clientelist networks and encouraged wasteful behavior (McMahon and Western 2009). A prime example of this condition is observable in Republika Srpska, where the political elite has actively resisted any efforts to build central state power, fearing that doing the opposite would divest them of their near-independence and privileges guaranteed by the Dayton Agreement (Donais 2005: 80). To summarize, then, the consociationalist tendencies of Dayton Agrement to power sharing within the Bosnian society, seem to have promoted (ethnic) group interests over societal interests (Hajdarpašić 2014: 105), and ultimately eliminated its chances to become a “normal state,” where “reciprocity and sharing of risk in which all citizens have a responsibility for raising revenues which are then disbursed, on the basis of need. Instead, separate ethnicized claims and loyalties are legitimated, leading to three separate welfare regimes underpinned by a social vision which limits reciprocal obligations on the basis of ethnicized belonging.” (Stubbs 2001: 101) 96
Foreign Aid and Corruption
5.5. Bosnian administrative structure and economy In addition to its negative impact on governance, the administrative division of Bosnia, especially in terms of municipalities, is also criticized for lacking an economic rationale and hindering economic development (Divjak and Pugh 2008: 374; World Bank 2009: 1). The inefficiency of the existing Bosnian administrative network in terms of economic performance is well described in the following excerpt: “Any would-be foreign investor in Sarajevo, for example, would have to deal with five separate levels of government in order to obtain the requisite licences to set up a company: state, entity, canton, city, and municipality. Even if matters proceeded smoothly at all five levels, the multiplication of effort would still be wasteful and require several months.” (International Crisis Group 2001: 1) As a consequence, public spending percentage in Bosnia is estimated as over three times more than the neighboring Hungary, which is roughly 64% (Donais 2005: 71). Furthermore, while trying to appease all ethnic groups in state representation, administrative units often work at cross-purposes, and further sap the already feeble economic activities in the country (Donais 2005: 67; De Launey 2015). This administrative inefficiency, among its other effects, has also negatively affected the unemployment levels among young Bosnians, which already ranks among the highest in the world (De Launey 2015). The effects of economic stagnation have been almost circular: Economic inefficiency for Bosnia has not only meant a loss in revenue
97
Kurtoglu Eskisar
for the state, but also serious political repercussions, since, combined with the consociational administrative characteristics of the Bosnian state, it renders political cooperation very difficult –if not downright impossible—to achieve. More often than not, Bosnian politicians avoid collaborating with each other in this winner-takeall environment, to avoid losing their gains (Donais 2005: 67). As a result, the newly created institutions in Bosnia are not only frail in economic terms, but they have also been accused of contributing to the existing high levels of political polarization. Notwithstanding the belief that the Bosnian state would respond to the various welfare needs of the Bosnians to increase social cohesion after the war, its inherent structural deficiencies and economic frailty have also prevented it from fulfilling these expectations, and thus may have weakened the overall public faith in its long-term viability (Stubbs 2001: 101). 5.6 Foreign financial aid to Bosnia: some figures In assessing the impact of external aid on statebuilding and corruption in Bosnia, along with the internationally drawn and monitored Dayton Agreement, international financial aid also requires reflection. While signing Dayton Agreement in 1995 was a great achievement in terms of officially ending the war, the daunting task of building a new state and ensuring social cohesion out of the ruins of a bloody conflict that lasted for years remained. The Bosnian war had cost the lives of 250,000 people; about half of the new country’s population was forced to move due to ethnic cleansing, and well over a million people fled abroad as refugees. The physical effects of the war were equally devastating: The war had taken its toll on the infrastructure, by either completely destroying or heavily dama-
98
Foreign Aid and Corruption
ging schools, hospitals, homes or power lines alike (Dobbins et al. 2003: 92). Eighty percent of the people had to rely on international aid for food (ibid.: 90). Therefore, once the hostilities formally came to an end with the Dayton Accord, and the Bosnian state was officially established, the foreign involvement in the economic reconstruction of the country also quickly picked up pace. According to OECD data, which are available in Appendix A of this book, in 1995 alone Bosnia received US$733.99 million in aid, in comparison to US$106.05 million disbursed to Afghanistan and US$238.95 million to Iraq during the same year. As data in that chart indicate, the ODA flow to Bosnia also remained high in the following few years, and reached a peak in 1999, when the country received US$702.77 million, compared with US$104.16 million delivered to Afghanistan and US$79.07 million to Iraq. The following paragraph similarly outlines the magnitude of foreign aid and involvement in Bosnia during the initial years following Dayton Agreement well: “Soon after the war’s end, the country was flooded with attention and over $14 billion in international aid, making it a laboratory for what was arguably the most extensive and innovative democratization experiment in history. By the end of 1996, 17 different foreign governments, 18 UN agencies, 27 intergovernmental organizations, and about 200 nongovernmental organizations (NGOs) -- not to mention tens of thousands of troops from across the globe -- were involved in reconstruction efforts. On a per capita basis, the reconstruction of Bosnia -- with less than four million citizens -- made 99
Kurtoglu Eskisar
the post-World War II rebuilding of Germany and Japan look modest.” (McMahon and Western 2009) During this time period, the leadership in international efforts to aid Bosnia also gradually shifted. The events and negotiations that eventually culminated with the signing of Dayton were almost exclusively dominated by USA (Chandler 2000: 36). In the post Dayton period, however, the US orchestrated efforts gradually left their place to the EU, which took the front seat as the leading foreign donor and supporter of Bosnia’s economic and political development (Juncos 2005: 88-89; Pond 2006: 140). The joint efforts of the EU and World Bank culminated in the Priority Reconstruction and Recovery Program for Bosnia, which spent more than US$4 billion in the next four years with the goal to resuscitate its economy (Pond 2006: 142; Suhrke and Buckmaster 2006: 343-344).This amount excluded other international projects and aid that came independent of the aforesaid program. In tandem with the changing leadership concerning international aid to Bosnia, its amount that is offered by the leading donors has also gradually changed. While the Kosovo crisis during late 1990s, combined with the US-led war against terror in Afghanistan and Iraq reduced the amount of financial aid flow to the country, the EU-led international efforts, including financial aid, to reconstruct the country have continued to date. In December 2014, European Commission announced its decision to spend 166 million euros on Bosnia to help prepare the country to become eligible for EU membership. With this aid, the Commission has aimed “to support democracy and governance, rule of law, competitiveness, local development, education, employment and social policies” in Bosnia (Reuters, 16 December 2014).
100
Foreign Aid and Corruption
The overall declining levels of foreign financial aid to Bosnia, however, has nonetheless remained a persistent trait. Notwithstanding the EU efforts, since the peak aid flow in 1999, Bosnia overall has received gradually declining levels of financial aid from international donors. The following examples can help to frame this condition clearer: According to OECD data in Appendix A, in 2002, for instance, the country received $292.35 million in aid in comparison to $991.73 million to Afghanistan. While the following year brought in a slight increase to the aid flow, which was $335.45 million, it still remained significantly lower than the aid flow to Afghanistan, which reached $1227.2 million, and $2178.2 million to Iraq. Interestingly, these declining levels of financial aid to the country have also run parallel to the increasing tendency of the international community to adopt a policy of noninterference with Bosnian affairs, which is explained later in the chapter. 5.7 Taking the front seat: international community and the Bosnian elite Aside from ensuring the flow of significant amounts of financial aid already mentioned, the novelty of Dayton Agreement and its responsibilities also meant making difficult administrative and economic decisions for international donors. More precisely, the international donors that were directly involved with Bosnia’s reconstruction on the economic front faced a dilemma: While the need to build state capacity through functional institutions for the Bosnians remained a real need, the neoliberal norms that influenced the international aid patterns at the time also called for lean governments, and a fast paced privatization of state-held entities (Zaum 2007).
101
Kurtoglu Eskisar
Cognizant of the economic factors that contributed to the Bosnian war in the first place, international donors therefore primarily targeted economic efficiency and political legitimacy in their privatization efforts by adopting a developmental model earlier tried in other transitioning countries. With these steps, the donors expected the country to have a viable market economy within the course of several years, in pace with the ongoing democratization efforts. Moreover, by urging the adoption of these measures by the Bosnian state, the donors also expected to curb, or lessen corruption (Zaum 2007: 98-100). During the same period, in order to speed up the reforms and prevent what was perceived as fruitless debates and contentions within the newly formed state at any administrative level, the international community also formalized its leadership in the rebuilding process of Bosnia. In 1997, the Office of the High Representative, which represented the international actors involved in the country gained “the power to impose legislation directly, giving the international community both executive and legislative control over the formally independent state.” (Chandler 2000: 65) The intensity of international involvement in Bosnia is also traceable in the formal goals of the OHR, which are stated as follows: “The High Representative is working with the people and institutions of Bosnia and Herzegovina and the international community to ensure that Bosnia and Herzegovina evolves into a peaceful and viable democracy on course for integration in Euro-Atlantic institutions. The OHR is working towards the point where Bosnia and Herzegovina is able to take full responsibility for its own affairs.”37 37 Office of the High Representative, http://www.ohr.int/ohr-info/gen-info/default. asp?content_id=38519 (accessed on 16 February 2015). 102
Foreign Aid and Corruption
5.8 The (unexpected) consequences of external led reforms In the short run, taking the front seat in making decisions have ensured the donors that their preferences and priorities are observed in the reconstruction process, and gave them direct control over their initial implementation period. As earlier predicted, direct international involvement also quickened the overall decision making process. Furthermore, throughout the earlier phases of statebuilding, the new rules based on neoliberal principles set by the international donors were never seriously questioned (Chandler 2000: 35). In the long run, however, the privatization efforts in the country have generated few tangible results; certainly far less than the original targets of international donors, and their regional effects have remained erratic (Bayliss 2005: 45). It is possible to explain the limited effect of neoliberal economic reforms on the Bosnian economy with at least two main factors. First, privatization has attracted little interest from outsiders, who have remained reluctant to make investments, due to the country’s violent past, its small economic scale and excessive red tape (ibid.: 46). Second, some of the paradoxical aspects of the Bosnian state mentioned earlier cast doubts on its legitimacy as well its capability to promote and maintain social cohesion in the long-run. The Bosnian war and its devastating effects required an administrative framework that would help to firmly establish its legitimacy both domestically and abroad, and help to lay down the rule of law. Meanwhile, the same state was also expected to fulfill the neoliberal principles of limiting state capacity in favor of expanding private sector involvement in economics and political involvement on a grassroots level (Zaum 2007: 102-103). In the absence of social cohesion, where political involvement primar-
103
Kurtoglu Eskisar
ily occurs through consociational outlets, privatization has taken a much more different course than originally intended. More specifically, the donor decision to adopt neoliberal principles for statebuilding purposes gradually culminated in “a strong corporate governance structure” in Bosnia (Bayliss 2005: 38). Reducing state power to achieve efficiency in neoliberal terms in a setting where the new state lacked a well established infrastructure and the support of its national political elite in the first place turned out to bring self-defeating results for donors. Begić (2014: 36) argues that the original plan of the reformers, which involved transforming the status of public property into state property gradually played into the hands of “the party elites, which dictated the structure of state institutions,” leading, ultimately, to their privatization. While privatization was the primary goal of the international community from the start, the resulting ownership pattern, combined with the unexpected strengthening of patronage networks fed on corrupt practices came as an unexpected outcome. According to Ibrišimović (2014: 27) “[p]eople championing the nationalist parties ... support the policy of destroying once strong state-owned firms, by devaluing them and burdening them with huge loans. The firms that were thus led to bankruptcy were then bought, as private companies, by those same people, or those close to them.” Yet, in the end, many Bosnians were left with no choice but adopting themselves to clientelist practices and corruption, in hopes
104
Foreign Aid and Corruption
of finding employment or ensuring their job security (Kurtović 2014: 99). Kurtović (2014: 98-99) similarly refers to the privatization process in Bosnia as an example of “accumulation by disposition” and argues that it was the leading reason behind the 2014 protests in the country. Observers who explain the spark in Tuzla that grew into fierce antigovernment protests throughout Bosnia as a result of the earlier “rip-off privatization” of some state companies in the region, followed by increasing levels of corruption, and an overall lack of new investments to the region (Deutsche Welle 06 February 2014; Bayliss 2005: 45). Gordy (2014: 113) describes the region’s ruthless economic transition with the following words: “the industrial infrastructure that provided the base for Tuzla’s labour activism was ... gradually dismantled, its capacity hit ... in greater measure by asset-stripping, budget-skimming and credit-bouncing privatizations.” Unpaid for over a year, the former workers believed that “bad privatization and the corruptness of political parties” effectively demolished the existing institutions, and reacted to it by a series of protests, which were also backed up by their supporters in other cities (Giovanni 2014). 5.9 Bosnian elite and corruption A further complicating factor to the above stated conditions were the inefficient or poorly executed earlier attempts of help by the international community. Notwithstanding the general willingness of the international community to help Bosnia, there have been an increasing number of accusations about earlier attempts as not necessarily being well planned, or executed (Pond 2006: 151). Furthermore, similar to other postwar settings like Afghanistan or Iraq, 105
Kurtoglu Eskisar
in the name of encouraging adherence to central authority, the international actors involved in Bosnia may have turned a blind eye to the existing corrupt practices on the local level (Donais 2005: 80). Critiques of the international community point out their paradoxical failure to see that the initiated reforms turned out to create more problems for the people they aimed to aid in the first place (Kurtović 2014: 99). To complicate the existing state of affairs further, the international domination of all state-related affairs in Bosnia lasted until 2006, at which point the international community decided that it was time the Bosnians themselves took the driver’s seat for decision making from the OHR. One of the reasons behind this decision of noninterference stemmed from the growing desire of the international community to exit from Bosnian politics and governance and encourage “local ownership.” (ibid. 98) Similar to the criticisms that targeted the international community earlier for turning a deaf ear to the demands and frustrations of the Bosnians and imposing their blueprints for reforms earlier, this decision has also been predicted to lead to negative results for the future of Bosnia (ibid.: 97-98; Begić 2014: 38-39).38 The strategy of excluding national actors from making key decisions by international donors for many years following Dayton Agreement effectively meant that the Bosnians had little chance to officially intervene into the reforms initiated and monitored by the international actors since the end of the war (Donais 2005: 71). For international actors, it also meant undertaking some measures, which were often strongly resisted by the local actors, and probably 38 A counterview, however, has pointed out that, in practice, the external control over the Bosnian affairs has hardly abated since that time period (Chandler 2010; Chandler 2006). 106
Foreign Aid and Corruption
had a role in the suboptimal results in installing law and order, and negatively affect the survival capabilities of the new infrastructure in the long run (Zaum 2007: 102-103). The resistance of national elites to the international reform efforts in issues like corruption, and the general failure of the newly brought changes to take root within the Bosnian society later became important subjects that greatly diminished the effects of foreign leadership. Worse, as discussed later, the same approach enabled the Bosnian elite to pass the buck of responsibility to the international community at the first sign of dysfunction, shortcoming, or failure of the new structure (Pond 2006: 155). The end result, as most observers agree, is “a weak state built upon a complex and highly unstable set of compromises between unity and partition, between monoethnicity and multiethnicity, and between individual and collective rights. These compromises, rife with ambiguity and contradiction, were aimed far more at stopping a war than at establishing a solid foundation for a liberal democratic state, and have resulted in a complex, fragmented, competitive, and arguably unsustainable set of governing structures.” (Donais 2005: 78). The dubious commitment of the national elite at the apex of the Bosnian administration to the ideals lined up by the international government based on “good governance” principles is already well outlined by observers (ibid.: 79) Political parties representing the main ethnic groups in Bosnia are often accused of directly benefiting from the existing political system, and striving to maintain the status quo, which enables them to enjoy unlimited access to state goods and their revenues, at all costs (Belloni 2007: 32; Donais 2005: 67-
107
Kurtoglu Eskisar
75). The political and national elites have therefore strongly resisted the reforms that effectively stripped their privileges (Donais 2005: 71; Zaum 2007: 103; Bayliss 2005: 46). As a result, instead of promoting economic efficiency and triggering development, privatization in Bosnia seems to have generated the transfer of public goods to predatory national elite, who, as discussed later, have used the opportunity to enrich themselves and their allies, or use it as a means to reinforce their existing status and power (Donais 2005: 75). 5.10 Political parties and organized crime In addition to the growing problems of the Bosnian state, the institutionalization of corruption patterns in Bosnia that often goes hand in hand with crime networks has also become a point of concern (ibid.: 67). There are increasing accusations on the alleged symbiotic ties between the leading political parties of all ethnic groups and crime groups (ibid.: 75). In the current state of affairs, these parties do not only represent the political interests of their respective groups, but also dominate the economic environment through their “sweeping control of state-run enterprises, government jobs, and the issuing of lucrative state contracts. These new political elites now function as mafia-like economic syndicates, tightly controlling companies, cash, and jobs. That has stunted the country’s economy and politics.” (Rohde 2014) Begić (2014: 37) similarly argues that “[p]owerful party elites control absolutely everything,” including legal decisions, which are increasingly undertaken “to fit the needs and desires of individuals within the parties, all facilitated through a developed network of party sympathizers within the institutions of government.” Some observers claim that the arrest of several people in the country, 108
Foreign Aid and Corruption
including two ministers in September 2014 of on corruption and organized crime charges remains a clear indicator of the power of the leading political parties in the country (Reuters, 10 September 2014). Begić (2014: 39) further blames the international community for tacitly encouraging the strong leadership patterns, at the expense of debilitating the institutionalization process of the new state. The roots of growing ties between illicit activities and political parties are often traced to the incomplete democratization process in Bosnia. According to Donais (2005: 77) rules dating from Yugoslavia, maze-like administrative apparatuses and measures implemented by the national political elite to fulfill their self-interests all trump the post-Dayton liberal reforms. Instead of initiating the beginnings of a working parliamentary system, the first elections that took place after Dayton were used by the leading ethnic political parties as leverage for official approval (Pond 2006: 153-154). Later, the ability of political parties to control both political and economic relations in Bosnia has reinforced “neo-feudalist” tendencies among leading political figures, and have promoted clientelism in that country (Donais 2005: 72). Concurring with the neo-feudal characteristics of the Bosnian state, Stubbs (2001:101) similarly describes them as the power accumulation in local administrations “based on patronage, influence peddling, and mafia-like elites.” This concern is similarly raised by Begić (2014: 39), who points out that “[e]very day we see prime ministers, assembly presidents, envoys and other senior public officials appointing their closest relatives as directors of public companies. We see the government giving grants from public funds to private firms run by 109
Kurtoglu Eskisar
the spouses of ministers who work in that same government, or employing immediate family members in public institutions and companies.” 5.11 Conclusion As in any other country with a violent past and riddled with a multitude of issues and problems, overviewing some of the leading factors behind persistent corruption in Bosnia remains a complex task. Notwithstanding other contributing factors, however, the points brought in the chapter attribute more importance to the overall role of foreign aid in the final outcome than often assumed. Similar to the Afghan experience outlined in the previous chapter, corruption in Bosnia seems to have been largely dependent on the misappropriation of public goods for private purposes, including the foreign aid proffered by the international community (Arsenijevic 2014). Ultimately, despite the active involvement of the international community, the goals it had set earlier may have sown the seeds of their its own hubris in the long run. Aside from its presumed effects on economy, corruption in Bosnia remains regarded as a threat against the accumulation of its social capital, in the sense that it seems to promote vertical, rather than horizontal ties. As Begić (2014: 39) argues, “[w]ith all this, arrogance “becomes the basic principle in communication with citizens.” Arguably the internationally structure implemented by the Dayton Agreement has aggravated corruption through its sheer complexity, and inability to build inter-group or individual-state cohesion, which is needed for statebuilding (Divjak and Pugh 2008: 374).
110
Foreign Aid and Corruption
The lack of a sound legal framework to encourage accountability, as well as the tendency for over-regulation, which stifles the economic and business environment has not improved the existing condition either (Donais 2005: 75). The domination of political parties to the detriment of existing laws has also played a role in gravitating politicians toward corrupt activities. Since the political elite profit from the existing status quo, they also resist any significant changes that would alter or end it, leaving the rest of the society to utilize corruption as a necessary means to stay afloat. (ibid.) In some aspects, it is possible to conclude that the foreign aid to Bosnia has acted much like a piece of amber, locking the combatting sides and their spectators into a permanent status quo, and preventing the outbreak of inter-group violence at the expense of inducing political, administrative and economic stagnation in the long-run.
111
Kurtoglu Eskisar
112
Foreign Aid and Corruption
CHAPTER 6
IRAQ
“[W]e were left dealing with what seemed like the fifth string… Nobody who was left knew anything.” (A US expert describing the state of Iraqi Ministry of Transportation and Communications following the Coalition led de-Baathification process in Anderson (2004) “Corruption is the second insurgency, and I use that metaphor to underline the seriousness of this issue.” (Stuart W. Bowen, the Special Inspector General for Iraq Reconstruction (SIGIR) in Borger and Pallister (2006) “These guys, these units are demoralized. They are underpaid and ripped off constantly by their commanding officers, who steal their allowances and use their commands as a way to build a personal nest egg.” (A former US officer in Iraq explaining the defeat of the Iraqi army by the Islamist fighters in Parker and Ryan (2014)
113
Kurtoglu Eskisar
6.1 Introduction In March 2003, an international coalition39 led by USA entered Iraq with the goal of removing its leader Saddam Hussein from power by force and replace his authoritarian regime with democracy. Among its other goals, the “Operation Iraqi Freedom” aimed to increase the security both in Iraq and in the Middle East, and promote the spread of democracy worldwide (Dobbins et al 2003: 167; Kaplan and Kristol 2003; Anderson and Stansfield 2004: 185-186). The US-led international coalition also frequently brought up the corrupt nature of the Saddam regime as a major factor that initiated the occupation, sometimes stressed to the level of ignoring more important issues, such as serious human rights violations of the same regime (Whyte 2007: 156). Notwithstanding its estimated payoffs by the Coalition, however, the invasion of Iraq divided the international community even before it occurred. While the UNSC permanent members like China, France and Russia firmly opposed any military operations to Iraq, USA and the UK supported it on the grounds of eliminating any security threats from Saddam Hussein’s regime to the region, particularly based on the claim that it possessed and could utilize Weapons of Mass Distruction (ibid.). Differences of opinion among countries
39 It is not the purpose of this chapter to discuss the causes and the dynamics of the war in Iraq in 2003 in detail, which has already formed its own substantive literature in years (e.g. Rogers 2006; Ricks 2006). A few important details, however, requires pointing out: The coalition forces (referred to as “the Coalition” throughout the chapter) that carried out the Operation Iraqi Freedom and the following war in that country consisted of USA, UK, Australia and Poland. Despite the technically international nature of the invasion, since the size of the US troops and their overall involvement in the war and its aftermath far exceeded the other coalition members, unless explicitly noted otherwise, the term Coalition throughout the chapter refers to the US institutions established and led by USA to govern Iraq following the war. 114
Foreign Aid and Corruption
during any international intervention is hardly uncommon. However, the polarization of some of the leading international donors regarding the occupation into opposite camps from the outset raised questions concerning its legitimacy and the underlying motives of the Coalition forces, particularly USA as their leader, that are involved in it (Diamond 2006: 185). These concerns, combined with a series of unexpected problems following the war have turned out to play a crucial role in limiting the effectiveness of the original plans of the Coalition and its postwar statebuilding goals in Iraq. Despite the international reactions against it, at the beginning the Coalition members had some cause for cautious optimism for the war to fulfill its purported goals. It was no secret that Saddam Hussein was already disliked by many Iraqis who really wanted his removal from power. Furthermore, the war was over in a few weeks and the freedom it brought seemed to be welcomed by the Iraqis (Fontan 2009: 25). During the war and in its immediate aftermath, the much feared sectarian differences in the country did not seem as pronounced as earlier feared by the Coalition, either (ibid.). Yet, merely acouple of months later, these factors were completely reversed, and an increasing number of Iraqis seemed to resent the foreign presence in their midst (ibid.: 26). As a former British officer has pointed out, “[t]he British boasted to the Americans about how they had fought successful guerrilla wars in Malaysia and Northern Ireland, but in both those places we were backed by the majority of the population. In Basra [Iraq] we had no allies.” (cited in Cockburn 2015) In fact, a considerable number of observers now regard the Iraqi experience of democratization and statebuilding attempts since 2003 115
Kurtoglu Eskisar
as the worst one of its kind when compared to places like Afghanistan, Bosnia, Cambodia or East Timor (Arato 2009: viii). A scholar has remarked that “the failure in Iraq” was like “a car crash when a drunken teenager gets behind the wheel of a dilapidated car on a bad road in heavy traffic: each factor in itself may be sufficient for the accident.” (Byman 2008: 601) Whyte (2007: 159) has similarly criticized the postwar statebuilding efforts of the Coalition in Iraq as follows: “[T]hose measures culminated in the ‘creative destruction’ of the Iraqi economy, which fatally weakened indigenous industry and indigenous capital ... In the aftermath of the invasion, the CPA regime acutely reduced the chances of a genuine resurgence of Iraq’s indigenous industries.” 6.2 Corruption in Iraq since 2003: some anecdotes One of the most disappointing outcomes of the war in Iraq has been its adverse impact on the corruption levels in the country, which, according to the TI data, have remained among the highest in the world. While corruption was already rampant during the prewar period, postwar efforts to improve matters not only seem to have backfired, but ironically may have exacerbated the phenomenon. Corruption in Iraq today remains ubiquituous and vast, spanning almost all aspects of life, ranging from the military or administrative offices to the judiciary (Bassem 2015). Indeed, a former Iraqi statesman has gone so far as to describe the contemporary Iraqi state as “an institutionalized kleptocracy.” (Cockburn 2013) While this remark may seem excessive, it is to some extent backed up by data: Recent research undertaken in 2011 has found out that 11.6 per cent of the adult population was involved in bribery (UNODC 2013: 5). 116
Foreign Aid and Corruption
Yet another Iraqi, a political scientist, similarly summarizes the existing conditions on corruption as follows: “The corruption is unbelievable ... You can’t get a job in the army or the government unless you pay; you can’t even get out of prison unless you pay. Maybe a judge sets you free but you must pay for the paperwork, otherwise you stay there. Even if you are free you may be captured by some officer who paid $10,000 to $50,000 for his job and needs to get the money back.” (Cockburn 2013) 6.3 Corruption as a security problem in Iraq Apart from its already well known effects on the Iraqi politics and economy, corruption may well have also become a serious problem for its domestic security, and territorial integrity. Among other incidents, the recent government efforts to crack down on corruption has revealed that it had been paying 50,000 soldiers who only existed on paper, which roughly estimated to be worth US$300 million (Mohammed 2014). The devastating effects of corruption on the Iraqi army recently also came under scrutiny during its defeat by the radical Islamist fighters who seek to establish an Islamic state known as the Islamic State of Iraq and the Levant (ISIL), sometimes also referred to as the Islamic State of Iraq and ash-Sham (ISIS) by carving out territory from several Middle Eastern countries, including Iraq (Hussein 2015). Due to the artificially inflated numbers of soldiers in the army, a high ranking Iraqi officer estimated the actual combat capability of the Iraqi troops against the Islamist fighters to be roughly around 20% (“How Iraq’s ‘ghost soldiers’ helped ISIL,” 2014).
117
Kurtoglu Eskisar
6.4 A culture of corruption? While discussing the factors that underline the corruption networks in Iraq in recent years, some observers have referred to “a broader culture of corruption that no one has been able to change, despite government efforts enlisting international assistance.” (Bassem 2015) A closer look at the patterns of corruption and how it is perceived in Iraq, however, offers a quite complex picture. To begin with, recent data on corruption patterns in Iraq gives a broad idea about the level of general acceptance of corruption as a “normal” behavior by Iraqis themselves: “In almost four out of five cases Iraqi citizens are prompted to pay bribes, as opposed to offering bribes voluntarily themselves. Specifically, in about two-thirds (65 per cent) of cases bribes are requested, either explicitly or implicitly, by the civil servant taking the bribe, and in another 14 per cent a third party requests the bribe on behalf of the bribe taker.” (UNODC 2013: 6) Furthermore, corruption levels in Iraq are not uniform, but show variations across regions. It is remarkable that the Baghdad region representing the central government boasts the foremost levels of corruption, whereas the autonomous Kurdish region has far lower levels (ibid.: 5). One possible explanation for this outcome would be the existing (or absent) administrative infrastructure in different regions in Iraq. Byman (2008: 608) describes those parts of the country controlled by the Sunnis and Shia as a failed state, which exacerbated the existing problems, including security. Another reason behind this diversity might be the disinclination of post-conflict societies to unite around a central state structure. Foreign aid with 118
Foreign Aid and Corruption
neoliberal approaches toward state may exacerbate such tendencies (Sörensen 2010: 100). Although more research is needed for an affirmative conclusion, it is possible to hypothesize that countries where post-conflict national reconciliation is missing are likelier to boast higher levels of corruption than countries where such reconciliation has been reached. While discussing corruption in post-conflict societies, Rose-Ackerman (2009: 68) argues that “[e]ven if a person wishes to report a corrupt offer, there may be no effective way to do so that does not invite harassment or worse.” Iraq constitutes an appropriate example to this reflection. Despite the high levels of corruption in the country, Iraqi people have remained hesitant to bring up their experiences to demand retribution or institutional change, mostly due to fear: “Not all Iraqi officials are corrupt. But all are vulnerable to anti-corruption charges. This has a crippling impact. A US businessman explained that he was dealing with a ministry in which he thought only 10 per cent of officials took bribes. ‘But the other 90 per cent know they might be targeted for investigation and therefore the safest course for them is to take their salaries and do nothing. The ministry is effectively paralysed.’” (Cockburn 2013) Such anecdotes are further supported by systematic data gathered in recent years. According to a recent UN report on Iraq, for instance, “[t]wo thirds (66.3%) of civil servants would not feel adequately protected if they had to “blow the whistle” (report an act of corruption) in their own ministry. Notably, 38.9% of those who do not feel adequately protected are afraid of losing their job and 22.8% fear physical harm.” (UNODC 2013: 11) 119
Kurtoglu Eskisar
As these arguments suggest, rather than being a primordial feature of the Iraqi society, this “culture” of corruption attributed to the Iraqi society may be supported by the extraordinary conditions that the country has experienced for years. While discussing corruption and its effects in postwar Iraq, Borger and Pallister (2006) underline the contribution of foreign intervention in the outcome by stating that “[a] culture of waste, incompetence and fraud may be one legacy the occupiers have passed on to Iraq’s new rulers more or less intact.” Indeed, according to Cockburn (2009), “Iraqis resent paying a bribe for almost everything, but do not see what they can do about it.” As an Iraqi man on paying a bribe to get a job confessed; “[p] eople know this is wrong, but there is no way round it.” (cited in Cockburn 2009) The next section, which covers the pre-occupation conditions in Iraq regarding corruption can help to grasp some of these extraordinary conditions better. 6.5 Foreign aid and corruption in Iraq before 2003 Before discussing the impact of the foreign aid on the subsequent Iraqi statebuilding and anti-corruption efforts since 2003, it is useful to take a brief look at the conditions that prevailed in the country in earlier years. To start with, it is important to remember that Iraq has had a long history of corruption exacerbated by foreign aid. As Cockburn (2009) explains, “Iraq was not always uniquely corrupt. Its 1970s administration was probably more efficient and honest than that in most oil-producing countries: the aftermath of the invasion of Kuwait in 1990 criminalised Iraqi society.” Indeed, prior to its US-led international occupation in 2003, most observers concur that the UN sanctions had already exacerbated the already high levels of corruption in the country, and strengthened a small
120
Foreign Aid and Corruption
but increasingly powerful elite who used them to enrich themselves and their clans (Whyte 2007: 157). The economic sanctions on Iraq began on 6 August 1990 with the UN resolution 661, after the Iraqi invasion of Kuwait, which lasted until another UN resolution (1483) replaced it on 22 May 2003. The elevated levels of corruption during the sanctions period were not primarily a result of Iraqi state inefficiency in economic terms, but were more influenced by its deteriorating public welfare functions (Whyte 2007: 158). Shortage of basic public goods and services during this period exacerbated corrupt behavior among civil servants, and promoted the emergence of black markets (ibid). Another observer similarly concludes that “the approach came at a heavy cost: massively depressed Iraqi living-standards, a failure to satisfy Washington and some others of Iraqi disarmament—eventually producing a second Western invasion in 2003, and massive corruption of the sanctions regime that severely damaged UN credibility after 2003.” (Malone 2006: 17) While scholars generally agree on the negative impact of economic sanctions on corruption levels in Iraq during the Saddam era, they disagree on their outcome as deliberate or unintended. On the one hand are claims that climbing levels of corruption during these years were either a deliberate and promoted result or the international community turning a blind eye in the hopes to weaken Saddam’s regime. Following the occupation, Whyte (2007: 159-160) argues that the corruption rhetoric was used as an excuse to apply the neoliberal reforms to Iraqi economy, which ultimately led to their institutionalization in its new economic structure. On the other hand, 121
Kurtoglu Eskisar
however, it is possible to explain the same outcome with the inability of the sanction supporters to see that their proclivity for complex administrative measures and overdependence “on agents—either the staff of the UN, or the Member States themselves—who implemented, monitored, and enforced the rules it laid down. That created the opportunity for those agents to corrupt, in a variety of ways, application of the regulatory regime.” (Malone 2006: 294) In support of earlier claims, international investigations later discovered that during the UN led Oil-for-Food Program, bribing became a common practice among foreign companies to get oil from the Saddam administration, which was later sold at a much higher price abroad. The US investigations similarly found out that while the US administration knew about these corrupt activities all along, its officials chose to ignore it (Whyte 2007: 158). Following the end of the Iraqi war, the Coalition initially underlined the corrupt nature of the Saddam regime as an excuse for the poor economic conditions and serious levels of mismanagement in the country (ibid.: 157). This line of argument, however, has been mostly discarded in recent years, mainly due to the following reasons. First, as already stated earlier, nothwithstanding the heavy damage that the Saddam era did to the Iraqi economy and society, it was not completely defunct, either (Byman 2008: 611). Second, the problems and failures associated with the decisions taken during the postwar period has been increasingly acknowledged in the official reports of the Coalition or by people who served in the region. Today, country experts mostly concur that a string of inefficient or wrong decisions taken following the occupation by the Coalition has played an important role in the persistence of corruption in Iraq.
122
Foreign Aid and Corruption
6.6 Foreign financial aid after Iraq War (2003): some figures Once the war was over, the Coalition quickly formed the Coalition Provisional Authority in April 2003, which acted as the de facto government for Iraq until its powers were transferred to the Iraqi Interim Government in June 2004.40 The Iraqi Interim Government was later replaced by the Iraqi Transitional Government in May 2005, which finally left the floor a year later in May 2006 after the first postwar general elections in Iraq for the first permanent Iraqi government. Consequently in December 2007 the US troops began to exit the country, which was finally completed in December 2011.41 For many reasons, Iraq following the invasion resembled a minefield for the Coalition. A country already wrecked by war damages, internal divisions, human rights abuses and sheer mismanagement, among other factors, made the task of rebuilding the Iraqi state in every sense—including fighting corruption—a daunting task at best (Byman 2008: 602). Another unexpected outcome of the war was the local resistance to the Coalition troops in its aftermath. Although the invasion of Iraq was complete in roughly three weeks, in some locations like Fallujah violence against the troops had begun even earlier (Fontan 2009: 11). The key to ending postwar violence in Iraq rested both on successfully undertaking the necessary military measures, and to adopt the 40 In other words, soon after the fighting ended, “[t]he CPA, which is to say the United States, had become the de facto government of Iraq, responsible for all the things people usually expect of their governments.” (Shimko 2010: 174) 41 Although the US troops did return to Iraq after three years in 2014, it was by the invitation of the Iraqi government, and it aimed to aid the Iraqi army against the rising threat by ISIL/ISIS (Garamone 2014). 123
Kurtoglu Eskisar
necessary means to quickly ensure a political representation system that would obtain its legitimacy from the Iraqi society (Diamond 2006: 181). Meanwhile, the power vacuum that briefly emerged after toppling Saddam Hussein and his regime led to a fierce and bloody fight for political domination among the contending groups in that country. The attacks, which were earlier restrained to mostly Sunni parts of Iraq, but slowly gaining pace elsewhere later on, forced the coalition powers to concentrate on peacekeeping, and further slowed down or hampered their efforts on statebuilding, including those directed against corruption (Byman 2008: 604-605). Furthermore, they also played a key role in determining the later Sunni dominance over the Iraqi state (ibid.: 605). Many of the resisting people consisted of the former Iraqi administrative, military or intelligence ranks, who did not seek to reestablish the prewar state structure (ibid.: 604). Rather, they were “Iraqis (mainly Sunnis) who turned against the occupation because they believed it was excluding them politically.” (Diamond 2006: 181) As mentioned earlier, the international community was already sharply divided before the Iraqi war. This disunion, followed by the rising security problems in Iraq following the war further curtailed the international involvement in the country, including assistance on the ground and the UN relief work. Numerous terrorist attacks or threats on capable foreign professionals experienced in peacebuilding processes proved particularly worrisome, and even affected the future outlook of such organizations toward providing aid at conflict prone zones (ibid.: 185-186). Therefore, security problems limited the overall effects of the available international aid in Iraq in general (SIGIR 2013: 9).
124
Foreign Aid and Corruption
As a result, following the end of the war, USA and Iraqis quickly emerged as the primary financial donors of the reconstruction efforts in the country (SIGIR 2013: 9). According to a US official report, “[d]uring its existence, the CPA controlled over $23.4 billion in Iraqi funds composed of $20.7 billion.” (ibid.: 9) Compared to the US and Iraqi funds, the portion of direct international financial aid remained somewhat smaller, but still significant. Although the international community pledged to give over $13 billion to the country a few months after the invasion, the amount that was actually sent was smaller, and came in much later (ibid.: 10). Nevertheless, the international community did also take some immediate steps to relieve the Iraqi economy and help its reconstruction, by cancelling a significant portion of the country’s earlier debts in late 2003 (ibid). The general trajectory of the international aid flow to Iraq in years can also be traced with a quick glance at the available ODA data. The massive donor input into Iraq can also be better appeciated if compared with some of the other aid receiving countries during the same period.While the aid flow from ODA to Iraq has widely fluctuated in years, its overall amount has consistently remained higher in the postwar period. As figures in Appendix A at the end of this book point out, while the country received only US$85.39 million of aid in 2002, this amount quickly rose to US$2178.2 billion in 2003. In comparison, during the same year Bosnia received only US$335.45 million and Afghanistan US$1227.2 million, respectively. Consistently rising international aid flow to Iraq finally peaked at US$21983.36 million in 2005, meanwhile, Bosnia received only US$268.51 million and Afghanistan received US$2184.96 million during the same year. Since 2005, aid flow to Iraq, however, has taken a steady downturn: The country received US$1113.79 million in 125
Kurtoglu Eskisar
2012; a much higher amount than the previous decade, but nonetheless significantly lower than the amount sent in 2005. Afghanistan, however, received US$5660.93 million during the same year, which becomes an even more impressive figure when compared to the aid received by Bosnia at US$213.41. Notwithstanding all these substantive amount of financial aid from foreign donors, various reports and investigations in recent years have repeatedly pointed out at the misappropriation and abuse of donor money that was supposed to be used for the reconstruction of Iraq. The final report of SIGIR (2013: 9), for instance, admits that “[i]n 2003 and 2004, more than $10 billion in DFI cash was flown to Baghdad on U.S. military aircraft in the form of massive shrinkwrapped bundles of $100 bills stored on large pallets. This money was not managed particularly well, either by the CPA or its successors.” Many observers, including Iraqis themselves, also concur with this view, and conclude that corruption levels got higher following the flow of large amounts of financial aid to the reconstruction efforts in the country after the war (Bassem 2013). Critiques of foreign aid to Iraq further argue that, instead of producing the intended positive results the flow of financial aid, it has helped to create “a ‘triangle of political patronage’ among Iraq’s political parties, sectarian groups and government officials that sparked corruption and terrorism.” (Wood 2013) 6.7 Statebuilding efforts in postwar Iraq: lack of postwar planning Notwithstanding its immense humanitarian and economic costs, one of the foremost criticisms directed against the occupation of Iraq has been the lack of afterwar planning by the US-led Coalition. 126
Foreign Aid and Corruption
Some critiques have even claimed it to be “the least well-planned American military mission since Somalia in 1993, if not Lebanon in 1983, and its consequences for the nation have been far worse than any set of military mistakes since Vietnam.” (O’Hanlon 2004) This lack of afterwar planning is not only given as a leading reason behind its failure to restore order and democratize Iraq and curb corruption, but also a key element in reducing its chances to realize them for the foreseeable future, too (SIGIR 2013: 12). While discussing the overall effects of the Iraqi war, scholars generally concur that the postwar plans of the Coalition were mostly unrealistic (Diamond 2006: 174). In fact, once the war ended, a leading shortcoming of the US-led Coalition reconstruction efforts quickly emerged as the “poor American knowledge about what Iraq needed.” (SIGIR 2013: 11) The people who made the decisions at the CPA did not have sufficient amount of people who could directly communicate with the Iraqis, or had sufficient knowledge of the region or the Iraqi society (Diamond 2006: 181-182). To begin with, the timing of the US investments in Iraq, when security was not completely restored, has received a lot of criticism from the US officers. The following example given by Wood (2013) offers an idea about the cost of such neglect of the realities on the ground: “In 2004 ... the U.S. launched an ambitious project to build a sewer and water system in Fallujah, a center of intense and bloody sectarian fighting. Originally slated to cost $35 million and take 18 months to complete, the project so far has cost $195 million and is scheduled to be finished in 2014.” (Wood 2013) 127
Kurtoglu Eskisar
Furthermore, the US-led attempt for a massive rebuilding of the country instead of concentrating on a few select projects complicated the donor efforts to get quick but politically meaningful results, and left the country scattered instead with “hundreds of ill thoughtout projects and half baked ideas ... [which] marred the American reconstruction efforts.” (Boyle 2013) As a former Iraqi minister has complained, “[w]ith all the money the U.S. has spent, you can go into any city in Iraq and you cannot find one building or project [built by the U.S. government] ... You can fly in a helicopter around Baghdad or other cities, but you cannot point a finger at a single project that was built and completed by the United States.” (SIGIR 2013: 14) As a result, numerous US-led reforms were also often resisted by the regional elite and in those instances when the reforms went through, the expected outcomes did not address the needs or expectations of the Iraqi society (Le Billon 2005: 686; SIGIR 2013: 14). 6.8 Lack of information, poor choices Another problem concerning the Coalition decisions was the lack of transparency, competition and planning while making appointments or distributing projects. Observers generally concur that loyalty and personal networks instead of merit played a chief role in the appointment of senior level positions for administration or the distribution of reconstruction projects following the war (Whyte 2007: 160). As the leader and the primary force behind the Coalition, the US and the Bush administration has particularly received criticism for neglecting the importance of transparency:
128
Foreign Aid and Corruption
“[T]he US government ... split the economy into sectors and shared them out among nine big US corporations. In most cases the contracts were distributed without competition and on a cost-plus basis. In other words the contractors were guaranteed a profit margin calculated as a percentage of their costs, so the higher the costs, the higher the profits. In the rush to get work started the contracts were signed early in 2004. In many cases work did not get under way until the year was nearly over. In the months between, the contractors racked up huge bills on wages, hotel bills and restaurants.” (Borger and Pallister 2006) As a result, inconsistent, even contradicting approaches of the coalition forces in their reconstruction efforts have further increased the level of corruption in Iraq. Due to mismanagement, corrupt practices and the overall chaotic environment, which clouded the decisions taken by the CPA, Iraq is estimated to have lost at least $8 billion of its oil income during this relatively short period (Whyte 2007: 159). Ironically, the end of the CPA era in 2004 did not improve matters for Iraq, either. Unlike the earlier period, when reconstruction spending was poorly monitored or accounted for, this time the USsent funding became subject to over regulation and bureaucratic measures (ibid.: 162). Although the increased concern for control during this period may have aimed to reduce corruption caused by lack of monitoring, it also effectively barred the Iraqi society, including entrepreneurs, from playing an active role in the reconstruction of their country. The following observations of Whyte (2007: 163) are remarkable in this regard: “The second phase of reconstruction, structured around a U.S. procurement system, with all of its attendant claims of pre129
Kurtoglu Eskisar
venting corruption, effectively established a system of structural advantage for U.S. firms, while retaining the formal appearance of equal access. It effectively establishes a system of ‘clean corruption’ in the allocation of reconstruction funds. The same prime contractors that reaped windfall profits during the CPA’s regime (without having to comply with U.S. procurement standards) are well positioned to use their alliances with Iraqi partner firms to benefit from the structural advantages the procurement system provides. Firms that are not involved in those networks stand little chance of securing contracts unless they form partnerships with U.S. firms or ‘hire an American.’” In tandem with this argument, the former Iraqi prime minister Nuri al-Maliki confirmed in an interview that during the reconstruction process, the U.S. personnel in charge more often than not “’depended on others’ (local subcontractors) who frequently turned out to be illinformed or dishonest. Thus, ‘there was misspending of money.’” (SIGIR 2013: 11) Another former Iraqi minister made a similar remark and expressed that the “U.S. rebuilding managers governed ‘in a vacuum, so they were responsible for everything,’ to the exclusion, in his view, of meaningful Iraqi input.” (ibid.: 13) 6.9 Iraqis as decisionmakers: the missing link Another main reason behind the failure of foreign led efforts to rebuild Iraq and fight corruption is the exclusion of Iraqis themselves from making crucial decisions for themselves. On the one hand, some initial efforts of the Coalition are worth mentioning. For instance, it took some steps to involve the Iraqis in the reform and reconstruction process, including the formation of the Iraqi
130
Foreign Aid and Corruption
Governing Council (IGC). According to Shimko (2010: 176), the driving force behind this quest was the idea that “[Paul] Bremer did not want to be seen as the American dictator of Iraq and felt there needed to be some move toward Iraqi self-government, no matter how symbolic.” As a result of these efforts, in some regions, some simple elections were conducted under the tutelage of the occupying forces. On the other hand, despite the well intentions of the Coalition, such measures were far from sufficient to bring consistent and satisfactory results for Iraqis as they were excluded from making their future decisions for themselves. Indeed, according to the former chair of the Iraqi Commission on Public Integrity, the greatest problem that generated waste and corruption in Iraq was that the “Americans excluded Iraqis from the planning and prioritizing of projects.” (Wood 2013) For instance, the prescribed function of the IGC was merely consultative, and its decisions were nonbinding (Diamond 2006 184-185). It also had other shortcomings that severely limited its efficacy or legitimacy in the eyes of Iraqis, such as, many of its members consisted of the former Iraqi exiles or expatriates, who had little knowledge of the existing dynamics and conditions that prevailed in Iraq. Since these people were outside the country and constantly travelling, most of them hardly remained in contact with their respective constitutents, or get involved in intensive and long-term social cohesion building efforts (ibid.:185). The aforementioned electoral processes for local councils were not foolproof either, as instead of the one-man one vote principle each household voted as a single unit (ibid.: 184). The greatest problem facing these councils, however, was not due to
131
Kurtoglu Eskisar
lack of efforts on the part of their participants, or the apathy of the Iraqi society. Rather, it was “their evident powerlessness and lack of resources—to the point that many of them had to wait for months even to receive their salaries, and most of them felt frustrated by their impotence.” (Diamond 2006: 184) This turned out to mar the legitimacy claims of the Coalition further, and put a further strain on the long-term efforts to democratize Iraq (ibid.) Although the initial elections after the war could have encouraged the emergence of new political elite with no past ties to the corrupt networks or power cliques of the past era, the prevalence of political exiles from Saddam era in the IGC also removed this possibility (Arato 2009: 22-23). While the latter group was not directly appointed to governing positions in the post war Iraq, they played a major role in the de-Baathification process, as well as the formation of new patronage networks (ibid). An Iraqi doctor expressed the increasing dissatisfaction of Iraqis being excluded from all vital decisions as follows: “[w]e need to know what’s going to happen. There is no transparency to the American role in Iraq, and this gives rise to more rumors. We need to know more.” (Anderson 2004) 6.10 De-Baathification While making plans for Iraq’s postwar reconstruction, instead of focusing on what was present on the field, the US administration often drew on the experiences of Germany and Japan after the Second World War (Goldsmith 2007: 26; Fontan 2009: 6-7; Anderson 2004; Feldman 2004: 1). The impact of drawing on the postwar experiences of Germany to orchestrate the statebuilding efforts in Iraq can be perhaps best seen in the de-Baathification decision that the Coalition adopted shortly after the occupation. The ad hoc nature of
132
Foreign Aid and Corruption
the de-Baathification decision can be assessed from the following comments of a foreign officer in Iraq. When asked about the possibility of dissolving the Baath party in Iraq, “the French commander of the Baghdad military sector demurred and noted that ‘we will only remove a handful of Iraqis from power—no more than would fit on a deck of cards.’” (Byman 2008: 600) Briefly after his arrival, however, Paul Bremer III, who was appointed by the US President George W. Bush to lead the CPA announced the ban on the Baath Party, and fired its members from administrative ranks, regardless of their rank or involvement with the excesses of the Saddam era, which included “teachers, doctors, and mid-level civil servants.” (Malone 2006: 203) Fontan (2009: 27) summarizes the underlying logic of this decision as follows: “Because Saddam Hussein’s rule represented a brutal dictatorship in the eyes of many Iraqis, any remnant of this former regime had to be eliminated. This initiative stemmed from the post–World War II Germany’s denazification policies, which were thought to have paved the way for the country’s successful reconstruction.” Scrapping the administrative structure or informal networks dating from Saddam era without understanding how they functioned for so long, however, turned out to be a costly experiment for international donors, and had an adverse effect on the fight against corruption in the long run. To start with, the de-Baathification process involved the disbandment of the Iraqi Army, which meant that 500,000 people with military training and weapons suddenly became loose (Malone 2006: 203). On a wider scale, this decision also meant sacking a significant part
133
Kurtoglu Eskisar
of the existing state administration and the loss of jobs for more than two million Iraqis (Diamond 2006: 182-183; SIGIR 2013: 12). Furthermore, while many of the purged individuals were officially party members, many of their ties to their party stemmed from pragmatic, rather than ideological reasons, and were not directly involved with the violent excesses of the Saddam regime (Fontan 2009: 29; Anderson 2004). More importantly, they “filled jobs at every level of society and anchored the middle class.” (Anderson 2004) However, since the expulsion criteria were mechanical and concentrated on the ranks of individuals instead of their actual deeds, the whole process was regarded as unfair and inefficient by most Iraqis, and further stoked the sectarian divisions within the Iraqi society (Sissons and Al-Saiedi 2013: 32; Fontan 2009: 29). The polarizing effect of the de-Baathification process and its impact on the subsequent Iraqi politics and anticorruption efforts are better appreciated under the light of the heterogeneous nature of the Iraqi society. During the early period following the occupation, the leadership of the main groups in Iraq did not display similar characteristics: While the Shia community was led by religious networks, the Sunnis mostly had nonreligious or traditional leaders (Byman 2008: 606). Furthermore, the support for the Coalition was not universal in Iraq, with Shia generally being more favorably disposed to them than the Sunnis (ibid.: 607). As a result of these factors, the coalition forces may have overestimated the sectarian rivalries in the country prior to their invasion. As Fontan (2009: 26) has pointed out: “In the spring of 2003, while the Coalition sought to establish its occupation of Iraq on the basis that its departure would trig-
134
Foreign Aid and Corruption
ger a civil war, most Iraqis I met deemed such a catastrophic scenario laughable ... I was made to realize that, after all, both Sunnis and Shiites took part in the war against Iran from 1980 to 1988. Divisions there were, but not along ethnic lines, at least for Sunnis and Shiites.” The US-led efforts to curb smuggling activities in Iraq following the occupation constitute another example to the problem of eradicating the existing albeit illegal practices without understanding their exact functions or sufficient planning for the possible aftereffects of their absence. In return for retaining a firm political grasp on the country, the prewar regime of Saddam Hussein had earlier had turned a blind eye to the illegal activities like smuggling by certain tribes in western Iraq. After the occupation, however the Coalition tried to put an end to such activities without offering any incentives to those people who are involved in such networks, thus gaining their ire, and contributed to the ongoing instability in the country (Byman 2008: 610). 6.11 Aftereffects of de-Baathification: security crisis Another unexpected but grave outcome of de-Baathification turned out to be the increase of looting and destroying the existing infrastructure with alarming frequency (Anderson 2004). Soon after the entry of US-led international troops to Iraq, looting followed (Byman 2008: 603). As described by Shimko (2010: 175), “Iraqis saw American soldiers perched on their tanks and fighting vehicles watching looters haul off anything not bolted down, apparently unable or unwilling to intervene. With only two U.S. divisions in a city of five million, it is not clear what
135
Kurtoglu Eskisar
they could have done even if they were inclined to act.” The passivity of the Coalition troops to stop the street violence turned out to bear an important and mostly negative effect on the Iraqi perception of the war. In fact, one of the most serious barriers against the success of the postwar statebuilding and anticorruption efforts in Iraq has been the Iraqi perception of them. Unlike in other conflict settings like Bosnia, except for the brief period at its beginning phase, many Iraqis did not regard the foreign intrusion to their country as benign, or even tolerable. Rather, it was mostly seen as “an invasion and occupation by Western, Christian, essentially Anglo-American powers that evoked powerful memories of previous subjugation and of the nationalist struggles against Iraq’s former overlords.” (Diamond 2006: 182) What made matters even worse was the occupiers themselves seemed unaware of these sentiments, until it was too late (ibid.: 181). Despite the seriousness of the situation, not only the invading troops remained passive to the ongoing destruction and havoc it created, they also did not take action even after realizing that “the looting was not a one-time breakdown of social order—that, in fact, an elaborately organized, armed, and financed resistance to the American occupation had emerged.” (ibid.: 175) Instead, such events were mostly dismissed as transitory, or insignificant, as the following words of the former US Defense Secretary Donald Rumsfeld suggested: “Freedom’s untidy, and free people are free to make mistakes and commit crimes and do bad things ... They’re also free to live their lives and do wonderful things. And that’s what’s going to happen here.” (Loughlin 2003) Aside from the extreme violence that surrounded all these events, 136
Foreign Aid and Corruption
what made them further problematic was their dubious contribution to the increasing levels of “street crime,” which further limited social cohesion and hampered the long-term efforts for statebuilding (O’Hanlon 2006). Meanwhile, from the perspective of corruption and statebuilding, the impact of the violent conflicts that followed the intervention in Iraq proved disastrous, as it had a seriously negative effect on the perceptions of the locals, who gradually came to view “the United States standing by helpless or being a party to the conflict.” (Byman 2008: 608) 6.12 The institutionalization of corruption in Iraq? Ultimately the de-Baathification process did not open the path for a new and well defined set of criteria to be followed for government appointments either. This missing factor effectively meant that a considerable amount of people who were sacked earlier for party membership could get back into the various echelons of the state without facing any serious setbacks (Sissons and Al-Saiedi 2013: 36). In fact, among its other effects, de-Baathification seems to have also encouraged the growth of patronage networks: “The law, along with weak governmental controls, rampant patronage, and the effects of corruption and conflict, meant that civil service personnel procedures slipped almost entirely out of government control and into the hands of those with the most extensive patronage networks.” (Sissons and Al-Saiedi 2013: 23) De-Baathification, followed by the growing polarization of sectarian factions supported by militias within the different parts of the Iraqi administration not only further deteriorated its already fragile foundations, but also decreased its overall efficiency and promoted 137
Kurtoglu Eskisar
the rise of corruption into a political goal in itself (SIGIR 2013: 13; Kroft 2008: 2). During the period when the new Iraqi constitution was written and general elections subsequently followed in 2005, sectarian tensions reached new heights which, among its other side effects, also led to the employment of an excess number of personnel based on patronage links (Sissons and Al-Saiedi 2013: 15). While discussing the roots and effects of corruption in Iraq, observers remain pessimistic about its remediation in the foreseeable future, mainly due to its systemic characteristics (Kroft 2008: 2). Behind this doubt lies the observation that more often than not, the misuse of funds in reconstruction efforts in Iraq are intimately interwoven with political corruption, and those who are involved in the network keep each other’s secrets (Bassem 2015). As a result, “[t] he system cannot be reformed by the government because it would be striking at the very mechanism by which it rules. State institutions for combating corruption have been systematically defanged, marginalised or intimidated.” (Cockburn 2013) 6.13 Conclusion Similar to other postwar settings like Afghanistan and Bosnia that are earlier covered in this book, despite some successes, attempts to eradicate or at least weaken corruption in Iraq have largely proven unsuccessful. The invasion of Iraq and its subsequent foreign-led reconstruction efforts have generally failed to achieve any significant results. The overall lack of infrastructure or the serious shortcomings of what is already available in the country are also regarded as a major reason behind the ubiquity of corruption in Iraq (UNODC Iraq 2013: 12) In retrospect, it is possible to explain a considerable amount of the economic failure of the Iraqi state and its consequent
138
Foreign Aid and Corruption
problems with security vulnerability, exacerbated by the administrative disarray due to the mismanaged de-Baathification process, crowned by the decisions undertaken by the CPA during the initial period following the invasion (Arato 2009: 51). Instead of helping the Iraqis as were their original claim, some scholars contend that the true goal of international actors like USA in rebuilding the Iraqi state and fighting corruption was to fulfill their national interests and foreign policy goals. Whyte (2007: 164), for instance, claims that “counter-corruption rhetoric has been a legitimating narrative for the neoliberal transformation of the economy. The CPA and interim Iraqi governments legitimized neoliberal reforms as a means of breaking from an era of government theft and patronage. They did nothing of the sort, but merely replaced Saddam’s nepotism with a new structure of elites and a system of patronage and favoritism.” Whyte (2007: 159) has also drawn some similarities between the economic reconstruction efforts in Iraq and the earlier neoliberal reforms undertaken in places like Chile and Indonesia. In proof, the radical measures implemented by the CPA are given, which removed all protectionist policies aimed at local producers and laborers, and aided the privatization of public resources (ibid.). Starting reconstruction efforts without ensuring nationwide stability and security, however, decreased efficiency and the legitimacy of the new built state, and overall increased the gravitation towards corrupt activities. Other observers, however, reject that all postwar statebuilding ef-
139
Kurtoglu Eskisar
forts in Iraq had an ulterior agenda. While discussing the transfer of money to Iraq immediately after the invasion, some authors, for instance, have also noted the good intentions of the Coalition: “The money was meant to demonstrate the invaders’ good intentions and boost the Iraqi economy ... But it also fuelled a cycle of corruption left over from Saddam Hussein’s rule.” (Borger and Pallister 2006) As the overall postwar reconstruction efforts in Iraq suggest, when the donors are perceived to gain from their acts, their reform attempts are unlikely to produce the intended results. Following the international coalition’s intervention, the job of rebuilding the war damaged or destroyed structures were mostly given to a select few US companies. This preference, combined with the general failure to advance the living conditions of most of the Iraqi society later has seriously weakened the credibility of the international community in that country (Le Billon 2005: 686).
140
Foreign Aid and Corruption
CHAPTER 7
CONCLUSION: QUO VADIS FOREIGN AID—AND CORRUPTION?
The ongoing debates on the causes and effects of corruption are unlikely to end anytime soon. Aside from its theoretical implications, such a state of affairs is also significant news for regions that are reported to harbor such activities. Notwithstanding the corrosive effects of corruption on states and societies, Underkuffler (2009: 41) argues that it is probably not the key or sole factor behind state failure and related problems. A closer look at Afghanistan, Bosnia and Iraq, as covered in this book, supports this conclusion. Treating corruption as a merely cultural phenomenon or a technical problem with uniform characteristics across the globe increases the risk of overlooking its diverse functions under different settings.42 In fact, based on the arguments and country synopses covered in this book, it is possible to conclude that the leading factors behind corruption in post-conflict societies cannot be explained only by cultural factors. As numerous examples (ranging from Afghanistan to Bosnia) suggest, corruption can become a significant component of governance, serving a variety of purposes for a large and diverse set of actors. While discussing the leading factors that generated cor42 Smith (2007: 35), for instance, argues that the Nigerian culture is “as much a ‘culture against corruption’ as it is a ‘culture of corruption.’” 141
Kurtoglu Eskisar
rupt activities in the Balkans, Sioussiouras and Vavouras (2012:97) boldly state that “[i]n an extreme but plausible scenario, what we are dealing with is an administrative mechanism that does not work unless one contributes the necessary ‘supplement.’” As Goodhand (2008:419) argues in the case of Afghanistan, another land torn apart by numerous conflicts and long-time recipient of foreign aid, labeling the fight against corruption as a “Western crusade” and tossing it aside in post-conflict settings is likely to miss the cry rising from these countires to eradicate it. At the same time, undertaking austere campaigns without understanding the exact role of corrupt activities in post-conflict politics or strengthening those institutions that form the backbone of democracies is unlikely to generate results that will satisfy all involved players in such regions in the long run. While not covered in this book, the unexplored effects and functions of corruption in the countries used as examples here are therefore worth further introspection. Given the paradoxes that riddle the current administrations in Afghanistan, Bosnia and Iraq, dismissing corruption as a merely criminal activity also neglects its function as a survival mechanism for involved actors. In a World Bank survey, for instance, Bosnian respondents admitted that not getting involved in a corrupt behavior like bribery can lead to isolation or even mobbing (World Bank 2000: 20). Similar sentiments were echoed by the Iraqi public servants, as mentioned in the previous chapter. Furthermore, notwithstanding its negative effects, certain forms of corruption in economics and politics also seemed to contribute to building social ties in Bosnia (Divjak and Pugh 2008: 374). Since the 1990’s, most western donors have been left facing a dilemma. The neoliberal teachings of development argue that privatization and reduction of state power, coupled with the adoption of free 142
Foreign Aid and Corruption
market economy, is needed for faster and more efficient economic development. In these settings, a lean state with limited interfering power over budding market economy is regarded as key. The idea is that once economic efficiency is reached and development ensues, corruption networks are likely to become redundant and eventually dissipate. The neoliberal approach to corruption has taken further strength from the fact that in many post-conflict settings—including the three countries examined in this study—corruption was already endemic prior to the start of hostilities, sometimes constituting a source of conflict in and of itself. While scholars disagree on the reasons that motivate aid in international relations—norms diffusion, altruism or self-interest—they generally concur that its recipients often do not benefit from the intended results. In order to empower the center, international aid (following the neoliberal teachings) provides universal or generic prescriptions on how to build the institutions associated with a functional state. Accepting little input from local actors while prescribing numerous reforms, the donors often miss, neglect or simply underestimate the distributional consequences of the new institutions and regulations that accompany statebuilding efforts on different portions of post-conflict societies. Worse, many times the foreign dictated or recommended reforms exacerbate the already existing imbalances between conflicting factions, which frequently evokes the outbreak of hostilities earlier. The problem is, many post-conflict societies either do not have functioning states with centralized powers (e.g. Bosnia and Herzegovina) or posess weak poltical centers where capbilities are severely reduced (e.g. Afghanistan and Iraq). This is especially true in the periphery or those portions of society which do not consider
143
Kurtoglu Eskisar
themselves as part of the center. The agreements that end the conflicts in these settings primarily focus on halting violence; as such they tend to concentrate on wartime balances and other complex factors, such as military capabilities and inter-group dynamics that would pacify all involved parties. A remarkable characteristic traced in all three cases discussed earlier is the international community’s insistence to stick to general guidelines that were expected to work universally. Without making an in-depth analysis of the pros and cons present in the existing institutions, the international donors in all cases requested removal and replacement of existing regimes with their own requested or downright mandated administrative structures (e.g. the health organization in Afghanistan, the Bureau in Bosnia, and the references to the post World War II statebuilding experiences of Germany and Japan during the reconstruction of Iraq). To a certain level, in all of these examples, the international community’s insistence on requiring its own brand of institutions makes sense. In all of these countries, time was considered to work against the respective societies; peace was fragile. The donors were preoccupied with keeping the peace at all costs, and thus regarded the in-depth assessment of existing institutions as hazardous to the perceived overall success of their aid campaigns. Meanwhile, the donors’ general lack of knowledge regarding the recipient countries’ societies further exacerbated already existing issues and problems,and misled the aid goals. Furthermore, in virtually all three cases, the state was either collapsed (e.g. Afghanistan), nonexistent (e.g. Bosnia), or simply written off as illegitimate by the international community (e.g. Iraq). Thus there was reason to sus144
Foreign Aid and Corruption
pect the health, viability, and impeccability (in terms of corruption) of any existing institutions. From the perspective of international actors, the existing infrastructure in all cases mostly represented a nest of inefficiency and corruption that needed to be replaced at all costs. It was thus logical to conclude that starting with a clean slate, which would pay heed to all segments of the respective society and comply with the existing favored approach to development and governance (i.e. neoliberalism), was preferable to existing structures. Disregarding existing local institutions in favor of the international blueprints may have also worked better if more efforts had been made to involve local actors. In all of these cases, however, the international donors mostly ignored native participants and their demands on the grounds of being nationalistic, secessionist, nonsecular and corrupt, among other things. In those cases where the local elites were successfully incorporated, it often created more problems than solutions: some were incorporated because they either played a significant role during the war era or their disinclusion could prove hazardous to peacekeeping. Others were incorporated to the new administration as they were seen to share the Western ideals of statebuilding or economic development (or, at least not stand directly against it). In many instances, the local elite, who were known to be corrupt or otherwise inappropriate for the intended goals of the international community, were still left intact, as disturbing the status quo was seen as too costly in terms of the overall image of the donors. Finally, the experiences of all three countries examined here suggest that successful state building and anticorruption campaigns rely on extended involvement on behalf of the international community. 145
Kurtoglu Eskisar
Donor failure to fulfill earlier aid pledges negatively affected the locals and reduced their faith in the achievability or durability of the preset goals. As Afghanistan exemplifies, without reassurance that the international community is committed to supporting the country long-term, the local elite may engage in predatory behavior, lining their pockets at the expense of local welfare and development. In retrospect, the end results have proven inefficient at best and disastrous at worst (depending on the reader’s level of optimism) for statebuilding and the eradication of corruption in the countries discussed above. Learning from the past mistakes of donors in these countries will help increase the efficacy of future international aid.
146
Foreign Aid and Corruption
BIBLIOGRAPHY
Abrahamsen, Rita. (2000) Disciplining Democracy: Developm Discourse and Good Governance in Africa, London: Zed Books. Ahmed, Azam. (31 January 2015) “Taliban Justice Gains Favor as Official Afghan Courts Fail,” The New York Times, http://www.nytimes.com/2015/02/01/world/asia/taliban-justice-gains-favor-as-official-afghan-courts-fail.html?_r=0 (accessed on 03 February 2015) Akhand, Hafiz A. and Kanhayal Gupta. (2002) Foreign Aid in the Twenty-First Century, New York: Springer Science and Business Media. Allen, John R. (30 April 2014). “Testimony,” A Transformation: Afghanistan Beyond 2014, Subcommittee on Near Eastern and South and Central Asian Affairs, United States Senate Committee on Foreign Relations, http://www.foreign.senate.gov/imo/media/doc/Allen_Testimony.pdf. (accessed on 08 September 2014). Anderson, John Lee. (15 November 2004) “Out on the Street,” The New Yorker, http://www.newyorker.com/magazine/2004/11/15/outon-the-street (accessed on 18 April 2015). Anderson, Liam and Gareth Stansfield. (2004) The Future of Iraq: Dictatorship, Democracy, or Division?, New York, N.Y.: Palgrave Macmillan.
147
Kurtoglu Eskisar
Apaza, Carmen R. (January 2009) “Measuring Governance and Corruption through the Worldwide Governance Indicators: Critiques, Responses, and Ongoing Scholarly Discussion,” PS: Political Science and Politics, v. 42, no. 1, pp. 139-143. Arato, Andrew. (2009) Constitution Making Under Occupation: The Politics of Imposed Revolution in Iraq, New York: Columbia University Press. Arsenijevic, Damir. (28 February 2014) “After 22 years of being bullied Bosnians are desperate, and must protest,” The Guardian, http://www.theguardian.com/commentisfree/2014/feb/28/bosniaprotest-citizens-change-corruption (accessed on 05 February 2015). Bader, Florian, Patrick von Maravić, B. Guy Peters and Michael Tauch. (December 2013) “Corruption, method choice, and constraints—exploring methodological pluralism in corruption research,” Zeitschrift für Vergleichende Politikwissenschaft/ Comparative Governance and Politics, volume 7, supplement 1, special issue 3, pp.13–32. Baldwin, David A. (April 1969) “Foreign Aid, Intervention, and Influence,” World Politics, v. 21, no. 3, pp. 425-447. Banerjee, Abhijit V. and Rohini Pande (2009). Parochial Politics: Ethnic Preferences and Politician Corruption, http://economics. mit.edu/files/3872 (accessed on 09.03.2014). Barratt, Bethany. (2008) Human Rights and Foreign Aid: For love or money? London: Routledge.
148
Foreign Aid and Corruption
Bassem, Wassim. (25 February 2015) “Iraq’s corruption continues unchecked,” (trans. Sami-Joe Abboud), Iraq Pulse http://www.almonitor.com/pulse/originals/2015/02/iraq-contracting-corruptionreconstruction-projects.html# (accessed on 12 April 2015). Bayliss, Kate. (August 2005) Post-conflict Privatisation: A Review of Developments in Serbia and Bosnia Herzegovina, ESAU Working Paper no.12, file:///C:/Users/gul/Desktop/bayliss%20privatization%20in%20bosnia%20and%20servia.pdf (accessed on 16 February 2015). Bearce, David H. and Daniel C. Tirone. (July 2010) “Foreign Aid Effectiveness and the Strategic Goals of Donor Governments, The Journal of Politics, v. 72, no. 3, pp. 837-851. Bedirhanoglu, Pinar. (2007) “The Neoliberal Discourse on Corruption as a Means of Consent Building: Reflections from Post-Crisis Turkey,” Third World Quarterly, v. 28, no. 7, pp. 1239-1254. Begić, Zlatan (2014). “War, Peace and the Protests,” Unbribable Bosnia and Herzegovina The Fight for the Commons, Damir Arsenijević (ed.), Baden-Baden: Nomos, pp.35-45. Belloni, Roberto. (2007) State Building and International Intervention in Bosnia, London: Routledge. Bolongaita, Emil. (January 2005) Controlling Corruption In Post-Conflict Countries, Kroc Institute Occasional Paper, no.26: OP: 2, http:// www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source =web&cd=1&ved=0CDQQFjAA&url=http%3A%2F%2Fwww. u4.no%2Frecommended-reading%2Fcontrolling-corruption-inpost-conflict-countries%2Fdownload&ei=_dxQUcnZJ4LmOvOz gMAJ&usg=AFQjCNGFuDmoO3l7mh5tuRQYxl8H73gbBw accessed on 25.03.2013). 149
Kurtoglu Eskisar
Borger, Julian, and David Pallister. (02 December 2006) “Corruption: the ‘second insurgency’ costing $4bn a year,” The Guardian, http://www.theguardian.com/world/2006/dec/02/usa.iraq (accessed on 20 April 2015). Boyle, Michael. (11 March 2013) “How the US public was defrauded by the hidden cost of the Iraq war,” The Guardian, http://www. theguardian.com/commentisfree/2013/mar/11/us-public-defraudedhidden-cost-iraq-war (accessed on 19 April 2015). Bracking, Sarah (ed.). (2007) Corruption and Development: The Anti-Corruption Campaigns, Houndmills: Palgrave Macmillan. Bull, Martin J. and James L. Newell. (2003) Corruption in Contemporary Politics, Houndmills: Palgrave Macmillan. Bunn, Matthew. (2009) “Corruption and Nuclear Proliferation,” Corruption, Global Security, and World Order, Robert I. Rotberg (ed.), pp.124-166. Byman, Daniel. (October-December 2008) “An Autopsy of the Iraq Debacle: Policy Failure or Bridge Too Far?,” Security Studies, v.17, no.4, pp.599-643. Calderisi, Robert. (2006) The Trouble with Africa: Why Foreign Aid Isn’t Working, New Haven: Yale University Press. Carnahan, Michael, Nick Manning, Richard Bontjer, and Stéphane Guimbert (eds.). (2004) Reforming Fiscal and Economic Management in Afghanistan, Washington, D.C.: The World Bank. Chandler, David. (2010) “The EU and Southeastern Europe: the rise of post-liberal governance,” Third World Quarterly, v. 31, no. 1, pp. 69–85. 150
Foreign Aid and Corruption
________. (Spring/Summer 2006) “State-Building in Bosnia: The Limits of ‘Informal Trusteeship,’” International Journal of Peace Studies, v.11, no.1, pp.17-38. ________. (2000) Bosnia: Faking Democracy After Dayton, 2nd edition, London: Pluto Press. Chang, Eric C. C. and Yun-han Chu. (May 2006) “Corruption and Trust: Exceptionalism in Asian Democracies?”, The Journal of Politics, v. 68, no. 2, pp. 259-271. Chayes, Sarah. (6 April 2014) “The Military Must Hunt Corruption, Not Just Terrorists,” Defense One, http://www.defenseone. com/ideas/2014/04/military-must-hunt-corruption-not-justterrorists/81973/?oref=d-river (accessed on 03 February 2015) Cockburn, Patrick. (19 April 2015) “From Iraq to Libya and Syria: The wars that come back to haunt us,” The Independent, http:// www.independent.co.uk/voices/from-iraq-to-libya-and-syria-thewars-that-come-back-tohaunt-us-10187065.html (accessed on 19 April 2015). ________. (04 March 2013) “Iraq 10 years on: How Baghdad became a city of corruption,” The Independent, http://www.independent.co.uk/news/world/middle-east/iraq-10-years-on-how-baghdad-became-a-city-of-corruption-8520038.html (accessed on 19 April 2015). ________. (28 June 2009) “How bribery became a way of life in Iraq,” The Independent, http://www.independent.co.uk/news/world/ middle-east/how-bribery-became-a-way-of-life-in-iraq-1722466. html (accessed on 19 April 2015).
151
Kurtoglu Eskisar
Cockcroft, Laurence. (Spring 2010) “Global Corruption: An Untamed Hydra,” World Policy Journal, v.27, no.1, pp. 21-28. Coles, Kimberley. (2007) Democratic Designs: International Intervention and Electoral Practices in Postwar Bosnia-Herzegovina, Ann Arbor: The University of Michigan Press. Collier, Paul. (2010) Wars, Guns, and Votes: Democracy in Dangerous Places, Harper Collins e-books. Cornell, Agnes. (2013) “Does regime type matter for the impact of democracy aid on democracy?, Democratization, v. 20, no. 4, pp.642–667. Damania, Richard, Fredriksson, Per G, and Muthukumara Mani. (2004) “The persistence of corruption and regulatory compliance failures: Theory and evidence,” Public Choice, v.121, pp.363-390. De Launey, Guy. (2 January 2015) “Bosnians look to dump baffling politics after protests,” http://www.bbc.com/news/world-europe-30599338 (accessed on 05 February 2015. Diamond, Larry. (2008) “Foreign Aid in the National Interest: The Importance of Democracy and Governance,” Foreign Aid and Foreign Policy Lessons for the Next Half-Century, Louis A. Picard, Robert Groelsema and Terry F. Buss (eds.), pp.61-85. __________. (2006) “What Went Wrong and Right in Iraq,” NationBuilding Beyond Afghanistan and Iraq, Francis Fukuyama (ed.), Baltimore: The Johns Hopkins University Press.
152
Foreign Aid and Corruption
Divjak, Boris and Pugh, Boris. (June 2008) “The Political Economy of Corruption in Bosnia and Herzegovina,” International Peacekeeping, v.15, no.3, pp.373–386. Dobbins, James, John G. McGinn, Keith Crane et al. (2003) America’s Role in Nation-Building: From Germany to Iraq, Santa Monica: Rand, available at http://www.rand.org/pubs/monograph_reports/ MR1753.html. (accessed on 30 September 2014) Doig, Alan and Tisne, Martin. (2009) “A Candidate for Relegation? Corruption, Governance Approaches and the (Re) Construction of Post-War States,” Public Administration and Development, v.29, pp.374-386. Dorronsoro, Gilles. (2005) Revolution Unending Afghanistan: 1979 to the Present, John King (trans.), London: Hurst and Co. Duffield, Mark. (2010) “The Development-Security Nexus in Historical Perspective: Governing the World of Peoples,” Challenging the Aid Paradigm: Western Currents and Asian Alternatives. Houndmills: Palgrave Macmillan. Easterly, William (ed.). (2008) Reinventing Foreign Aid, Cambridge: The MIT Press. Eigen, Peter. (2009) “A Coalition to Combat Corruption: TI, EITI, and Civil Society, (ed.). Corruption, Global Security, and World Order, Robert I. Rotberg (ed.), Cambridge: World Peace Foundation, pp.416-429. Esman, Milton J. (2004) Beyond Reconstruction in Afghanistan: Lessons from Development Experience, John D. Montgomery and Dennis A. Rondinelli (eds.), New York: Palgrave Macmillan, pp.132-155. 153
Kurtoglu Eskisar
Ghanizada. (13 May 2012) “Anti-corruption protests erupt in Helmand and Takhar,” Khaama, http://www.khaama.com/anti-corruption-protests-erupt-in-helmand-and-takhar-247 (accessed on 02 February 2015). Goodhand, Jonathan. (June 2008) “Corrupting or Consolidating the Peace? The Drugs Economy and Post-conflict Peacebuilding in Afghanistan,” International Peacekeeping, v.15, no.3, pp.405–423. Gordy, Eric. (2014) “From Antipolitics to Alterpolitics: Subverting Ethnokleptocracy in Bosnia and Herzegovina,” Unbribable Bosnia and Herzegovina: The Fight for the Commons, pp.111-118. Fearon, James D. and David D. Laitin. (Spring 2004) “Neotrusteeship and the Problem of Weak States,” International Security, v.28, no. 4, pp. 5-43. Feldman, Noah. (2004) What We Owe Iraq. Princeton: Princeton University Press. Garamone, Jim. (31 October 2014) “DoD Authorizes War on Terror Award for Inherent Resolve Ops,” DoD News, http://www.defense.gov/news/newsarticle.aspx?id=123542 (accessed on 22 April 2015). Giatzidis, Emil. (September 2007) “The Challenge of Organized Crime in the Balkans and the Political and Economic Implications,” Journal of Communist Studies and Transition Politics, v.23, no.3, pp.327–351. Giovanni, Janine Di. (13 February 2014) “Bosnia’s Corrupt Rulers Hit by an Angry ‘Citizen Tsunami,’” Newsweek, (http://www.newsweek.com/2014/02/14/bosnias-corrupt-rulers-hit-angry-citizen-tsunami-245526.html) (accessed on 16 February 2015). 154
Foreign Aid and Corruption
Goldsmith, Arthur A. (2007) “Does nation building work? Reviewing the record,” Governance in Post-Conflict Societies: Rebuilding fragile states, Derick W. Brinkerhoff (ed.), London: Routledge, pp.25-44. ________. (Winter 2001), “Foreign Aid and Statehood in Africa,” International Organization, v.55, no. 1, pp. 123-148. Groves, Leslie and Rachel Hinton (ed.). (2004) Inclusive Aid: Changing Power and Relationships in International Development, London: Earthscan. Heineman Jr., Ben W. and Fritz Heimann. (May - June 2006) “The Long War against Corruption,” Foreign Affairs, v. 85, no. 3 pp. 7586. Heller, Nathaniel. (2009) “Defining and Measuring Corruption: Where Have We Come From, Where Are We Now, and What Matters For the Future?,” Corruption, Global Security, and World Order, Robert I. Rotberg, (ed.), Cambridge: World Peace Foundation. Hislope, Robert. (2011) “Corrupt Exchange in Divided Societies,” Transnational Actors in Central and East European Transitions, Mitchell A. Orenstein, Stephen R. Bloom, and Nicole Lindstrom (eds), Pittsburgh: University of Pittsburgh, Digital Research Library, pp.142-161. (http://digital.library.pitt.edu/cgi-bin/t/text/textidx?c=pittpress;cc=pittpress;q1=ambiguous;rgn=full%20text;view =toc;idno=31735062135821) (accessed on 15 December 2014) “How Iraq’s ‘ghost soldiers’ helped ISIL.” (11 December 2014) aljazeera.com, http://www.aljazeera.com/news/middleeast/2014/12/ how-iraq-ghost-soldiers-helped-isil-2014121072749979252.html (accessed on 26 April 2015).
155
Kurtoglu Eskisar
Hussein, Ahmed. (7 January 2015) “Fighting corruption within military institution must coincide with fighting ISIL, says MP,” iraqinews.com, http://www.iraqinews.com/baghdad-politics/fighting-corruption-within-military-institution-must-coincide-withfighting-isil-says-mp/, (accessed on 26 April 2015). Ilievski, Zoran. (March 2007) Country Specific Report on Actors and Processes of Ethno-Mobilization, Violent Conflicts and Consequences: Macedonia, Sixth Framework Program, MIRICO: Human and Minority Rights in the Life Cycle of Ethnic Conflicts, Bozen: European Academy http://www.eurac.edu/en/research/autonomies/ minrig/Documents/Mirico/Macedonia%20Report.pdf (accessed on 5 May 2015). International Budget Partnership. (2012) Open Budget Survey 2012, http://internationalbudget.org/wp-content/uploads/OBI2012-Report-English.pdf. (accessed on 28 January 2015) International Crisis Group. (17 November 2010) Reforming Afghanistan’s Broken Judiciary, Asia Report No.195, http://www.crisisgroup.org/~/media/Files/asia/south-asia/afghanistan/195%20Reforming%20Afghanistans%20Broken%20Judiciary.ashx (accessed on 02 February 2015) ________. (7 August 2001) Bosnia’s Precarious Economy: Still Not Open For Business, ICG Balkans Report, no.115, Sarajevo/Brussels, downloaded at http://www.crisisgroup.org/~/media/Files/europe/Bosnia%2041.pdf (accessed on 16 August 2014) Hattori, Tomohisa. (April 2003) “The moral politics of foreign aid, Review of International Studies, v.29, no.02, pp. 229 – 247.
156
Foreign Aid and Corruption
Houston, Douglas A. (Fall 2007) “Can Corruption Ever Improve An Economy?” Cato Journal, v. 27, no. 3, pp.325-342. Huntington, Samuel P. (Winter 1970-1971) “Foreign Aid for What and for Whom,” Foreign Policy, no. 1, pp. 161-189. ________. (1968) Political Order in Changing Societies. New Haven: Yale University Press. Jakobi, Anja P. (December 2013) “The changing global norm of anti-corruption: from bad business to bad government,” Zeitschrift für Vergleichende Politikwissenschaft/ Comparative Governance and Politics, volume 7, supplement 1, special issue 3, pp. 243-264. Johnson, Roberta Ann (ed.) (2004) “The United States: In Search of the Perfect Law,” The Struggle Against Corruption: A Comparative Study, pp.21-52, New York: Palgrave Macmillan. Johnson, Roberta Ann (ed.) and Shalendra Sharma (2004) “About Corruption,” The Struggle Against Corruption: A Comparative Study, pp.1-20. Johnson, Chris and Leslie Jolyon. (2008) Afghanistan: The mirage of peace, London: Zed Books. Johnston, Michael. (2005) Syndromes of Corruption: Wealth, Power, and Democracy, New York: Cambridge University Press. Judah, Tim. (07 February 2014) “Bosnian protests: A Balkan Spring?,” BBC News, http://www.bbc.com/news/world-europe-26093160, (accessed on 14 February 2015).
157
Kurtoglu Eskisar
Juncos, Ana E. (November 2005) “The EU’s post-Conflict Intervention in Bosnia and Herzegovina: (re)Integrating the Balkans and/or (re)Inventing the EU?”, Southeast European Politics, v.6, no.2, pp. 88-108. Kaplan, Lawrence F. and William Kristol. (2003) The War Over Iraq: Saddam’s Tyranny and America’s Mission, San Francisco: Encounter Books. Kaufmann, Daniel and Pedro C. Vicente. (October 2005) “Legal Corruption,” (2nd Draft) unpublished paper available at http://siteresources.worldbank.org/INTWBIGOVANTCOR/Resources/Legal_Corruption.pdf (accessed on 15 December 2014). Khan, Mushtaq Husain. (2006) “Determinants of corruption in developing countries: the limits of conventional economic analysis,” International handbook on the economics of corruption, Susan Rose-Ackerman (ed.), Cheltenham: Edward Elgar Publishing Ltd., pp.216-246. Khan, Mushtaq Husain. (2004) “Evaluating the emerging Palestinian state: ‘Good governance’ versus ‘transformation potential,’” Mushtaq Husain Khan, George Giacaman and Inge Amundsen (eds.), State Formation in Palestine: Viability and governance during a social transformation, London: Routledge Curzon, pp.13-63. Kroft, Steve. (11 April 2008) “Iraq: State of Corruption,” cbsnews.com, http://www.cbsnews.com/news/iraq-state-of-corruption-11-04-2008/ (accessed on 18 April 2015). Kurtoglu Eskisar, Gul M. and Aysegul Komsuoglu. (2015) “A Critical Assessment of the Transformative Power of EU Reforms on Reducing Corruption in the Balkans,” Journal of Southeast European and Black Sea Studies, DOI:10.1080/14683857.2015.1015315, 158
Foreign Aid and Corruption
Lancaster, Carol (2008). George Bush’s Foreign Aid: Transformation or Chaos?, Washington, D.C: Center for Global Development. Latifi, Ali M. (16 November 2012) “EU halts Afghan judicial aid over corruption,” Aljazeera, http://www.aljazeera.com/indepth/features/2012/11/2012111510557286862.html (accessed on 02 February 2015) Le Billon, Philippe (ed.). (2005) The Geopolitics of Resource Wars: Resource Dependence, Governance and Violence, London: Frank Cass. Leff, Nathaniel H. (November 1964) “Economic Development through Bureaucratic Corruption,” American Behavioral Scientist, v.8 no.3, pp.8-14. Leys, Colin. (August 1965) “What is the Problem About Corruption?”, The Journal of Modern African Studies, v. 3, no. 2, pp. 215230. Lister, Sarah, and Andrew Wilder. (2007) “Subnational administration and state building: lessons from Afghanistan,” Governance in Post-Conflict Societies: Rebuilding fragile states, Derick W. Brinkerhoff (ed.), London: Routledge, pp.241-257. Loughlin, Sean. (12 April 2003) “Rumsfeld on looting in Iraq: ‘Stuff happens’ Administration asking countries for help with security,” CNN.com, http://edition.cnn.com/2003/US/04/11/sprj.irq.pentagon/ (accessed on 15 April 2015). McMahon, Patrice C., and Jon Western. (September/October 2009) “The Death of Dayton How to Stop Bosnia From Falling Apart,” Foreign Affairs, http://www.foreignaffairs.com/print/65244 (accessed on 25 February 2015). 159
Kurtoglu Eskisar
Maipose, Gervase S. “Aid Abuse and Mismanagement in Africa: Problems of Accountability, Transparency and Ethical Leadership,” Corruption and Development in Africa: Lessons from Country Case-Studies, Kempe Ronald Hope, Sr. and Bornwell C. Chikulo (eds.), pp.87-103 pp.87-103, Houndmills: Macmillan. Maley, William. (2006). Rescuing Afghanistan, Sydney: University of New South Wales Press. Malone, David M. (2006) The International Struggle Over Iraq: Politics in the UN Security Council 1980–2005, New York: Oxford University Press. Manzetti, Luigi and Carole J. Wilson. (August 2007) “Why Do Corrupt Governments Maintain Public Support?, Comparative Political Studies, v.40, no.8 pp.949-970. Marjit, Sugata and Vivekananda Mukherjee. (2007) “Poverty, Utilization of Foreign Aid and Corruption: The Role of Redistributive Politics,” Theory and Practice of Foreign Aid (Frontiers of Economics and Globalization, Volume 1), Sajal Lahiri (ed.), Amsterdam: Elsevier, pp.17 – 29. Marquette, Heather. (2011) “Donors, State Building and Corruption: lessons from Afghanistan and the implications for aid policy,” Third World Quarterly, v. 32, no. 10, 2011, pp.1871–1890. Méon, Pierre-Guillaume and Khalid Sekkat (January 2005) “Does Corruption Grease or Sand the Wheels of Growth?”, Public Choice, v. 122, no. 1/2, pp. 69-97. Milner, Helen, and Dustin Tingley. (2013) “Public Opinion and Foreign Aid: A Review Essay,” International Interactions, v.39, no.3, pp.389-401. 160
Foreign Aid and Corruption
Mironov, Maxim. (14 November 2005) “Bad Corruption, Good Corruption and Growth,” unpublished paper available at http:// www.mironov.fm/research/corruption.pdf (accessed on 11 November 2014). Misdaq, Nabi. (2006) Afghanistan: Political frailty and external interference, London: Routledge. Mohammed, Riyadh. (03 December 2014) “Iraq’s Two-headed War: ISIS and Corruption,” The Fiscal Times, http://www.thefiscaltimes. com/2014/12/03/Iraq-s-Two-headed-War-ISIS-and-Corruption (accessed on 17 April 2015). Mohseni, Nader. (March 2012) “Corruption in Afghanistan,” Resource Material Series No.86, Work Product of the 14th UNAFEI UNCAC Training Program, http://www.unafei.or.jp/english/pdf/ RS_No86/No86_19PA_Mohseni.pdf Morgan, Matthew J. (2007) A Democracy is Born: An Insider’s Account of the Battle Against Terrorism in Afghanistan, Westport: Praeger Security International. Morgenthau, Hans. (June 1962) “A Political Theory of Foreign Aid,” The American Political Science Review, v.56, no. 2, pp. 301309. Mungiu-Pippidi, Alina. (January 2013) “Controlling Corruption Through Collective Action,” Journal of Democracy, v.24, no.1, pp.101-115.
161
Kurtoglu Eskisar
Muno, Wolfgang. (23 August 2010) “Conceptualizing and Measuring Clientelism,” Paper to be presented at the workshop “Neopatrimonialism in Various World Regions,” GIGA (http://www. politik.uni-mainz.de/cms/Dateien/Clientelism__GIGA_paper_ neopat_workshop_Muno.pdf) (accessed on 11 December 2014) Muscat, Robert J. (2004) “Lessons from Post-Conflict Aid Experience,” Beyond Reconstruction in Afghanistan: Lessons from Development Experience, John D. Montgomery and Dennis A. Rondinelli (eds.), New York: Palgrave Macmillan, pp.93-112. NATO, ISAF’s mission in Afghanistan (2001-2014). (2015) http:// www.nato.int/cps/en/natohq/topics_69366.htm (accessed on 29 January 2015). Nelen, Hans. (2014) “Corruption Dutch Style,” Organized Crime, Corruption and Crime Prevention: Essays in Honor of Ernesto U. Savona, Stefano, Caneppele and Francesco Calderoni (eds.), Heidelberg: Springer, pp.159-168. O’Hanlon, Michael E. (December 2004-January 2005) “Iraq Without a Plan,” Policy Review, http://www.hoover.org/research/iraqwithout-plan (accessed on 20 April 2015). Palmer, Glenn and T. Clifton Morgan. (2006) A Theory of Foreign Policy, Princeton: Princeton University Press. Paris, Roland. (2004) At War’s End: Building Peace After Civil Conflict, New York: Cambridge University Press. Parker, Ned and Missy Ryan. (13 June 2014) “Iraqi military breakdown fueled by corruption, politics,” Reuters, http://www.reuters. com/article/2014/06/13/us-iraq-security-military-analysis-idUSKBN0EO2FK20140613 (accessed on 20 April 2015). 162
Foreign Aid and Corruption
Peter, Tom. (20 September 2012) “Afghan president sacks Helmand governor,” The Guardian, http://www.theguardian.com/ world/2012/sep/20/afghan-president-sacks-helmand-governor (accessed on 02 February 2015) Phillips, David L. (2010) “The Balkans’ Underbelly,” World Policy Journal, pp.93-98. Picard, Louis A., and Robert Groelsema. (2008) “U.S. Foreign Aid Priorities: Goals for the Twenty-First Century,” Foreign Aid and Foreign Policy Lessons for the Next Half-Century, Louis A. Picard, Robert Groelsema and Terry F. Buss (eds.), Armonk, New York: M.E. Sharpe. Pond, Elizabeth. (2006) Endgame in the Balkans: Regime Change, European Style, Washington, D.C.: Brookings Institution Press. Pržulj, Živka and Svetolik Kostadinović. (September 2014) “Cultural Roots Of Corruption - The Case Of Western Balkans,” Mediterranean Journal of Social Sciences, vol.5, no.22, pp.467-478. Quadir, Fahimul. (2013) “Rising donors and the New Narrative of ‘South-south’ Cooperation: What Prospects for Changing the Landscape of Development Assistance Programmes?, Third World Quarterly, v. 34. no, 2, pp. 321-338. Radelet, Steven. (September-October 2003) “Bush and Foreign Aid,” Foreign Affairs, 82: 5, pp. 104-117. Reuters. (16 December 2014) “EU to aid Bosnia with $207 million in bid to spur reform,” Reuters, http://www.reuters.com/article/2014/12/16/us-bosnia-eu-idUSKBN0JU1XF20141216 (accessed on 24 February 2015) 163
Kurtoglu Eskisar
________. (10 September 2014) “Bosnian police arrest two ministers, 9 others on corruption charges,” Reuters, http://uk.reuters. com/article/2014/09/10/uk-bosnia-arrest-minister-idUKKBN0H50UN20140910 (accessed on 08 February 2015) Riechmann, Deb. (27 July 2012) “Afghanistan Corruption: Karzai Issues Ambitious List Of Reforms To Battle Cronyism,” The World Post, http://www.huffingtonpost.com/2012/07/27/afghan-presidentissues-decree-to-curb-corruption_n_1709734.html (accessed on 02 February 2012) Ricks, Thomas E. (2006) Fiasco: The American Military Adventure in Iraq, New York: The Penguin Press. Robb, Caroline (2004). “Power Relations in the History of Aid,” Inclusive Aid: Changing Power and Relationships in International Development, Leslie Groves and Rachel Hinton (eds.), London: Earthscan, pp.21-41. Rogers, Paul. (2006) A War Too Far: Iraq, Iran and the New American Century, London: Pluto Press. Rohde, David. (17 February 2014) “Has International Intervention Helped or Hurt Bosnia?”, The Atlantic, http://www.theatlantic. com/international/archive/2014/02/has-international-interventionhelped-or-hurt-bosnia/283885/ (accessed on 08 February 2014) Rose-Ackerman, Susan. (2009) “Corruption in the Wake of Domestic National Conflict,” Corruption, Global Security, and World Order, Robert Rotberg (ed.), Washington, D.C.: Brookings Institution Press, pp. 66-95.
164
Foreign Aid and Corruption
Rotberg, Robert I. (ed.). (2009) “How Corruption Compromises World Peace and Stability,” Corruption, Global Security, and World Order, pp.1-26. ________. (ed.). (2007) “Renewing the Afghan State,” Building A New Afghanistan, pp.1-21, Cambridge: World Peace Organization. Saltmarshe, Douglas, Dr. and Abhilash Medhi. (June 2011) Local Governance in Afghanistan A View from the Ground, Afghanistan Research and Evaluation Unit Synthesis Paper, http://www.areu. org.af/Uploads/EditionPdfs/1114E%20Local%20Governance%20 in%20Afghanistan%20SP%202011.pdf (accessed on 06 February 2015) Sarwary, Bilal. (2 February 2012) “Why Taliban are so strong in Afghanistan,” BBC News, http://www.bbc.com/news/worldasia-16851949, (accessed on 29 January 2012) Savun, Burcu and Daniel C. Tirone. (Summer 2012) “Exogenous Shocks, Foreign Aid, and Civil War, International Organization, v.66, pp. 363–393. Schraeder, Peter J., Steven W. Hook and Bruce Taylor. (January 1998). “Clarifying the Foreign Aid Puzzle: A Comparison of American, Japanese, French, and Swedish Aid Flows,” World Politics, v.50, no.2, pp. 294-323. Shimko, Keith L. (2010) The Iraq Wars and America’s Military Revolution, New York: Cambridge University Press. Schudel, Carl Jan Willem. (August 2008) “Corruption and Bilateral Aid: A Dyadic Approach Journal of Conflict Resolution, v.52, no.4, pp.507-526.
165
Kurtoglu Eskisar
SIGIR. (March 2013) Learning from Iraq: A Final Report from the Special Inspector Generalfor Iraq Reconstruction, http://www.globalsecurity.org/jhtml/jframe.html#http://www.globalsecurity.org/ military/library/report/2013/sigir-learning-from-iraq.pdf|||Learning From Iraq: A Final Report from the Special Inspector General for Iraq Reconstruction (accessed on 13 April 2015). Sissons, Miranda and Abdulrazzaq Al-Saiedi. (March 2013) A Bitter Legacy: Lessons of De-Baathifi cation in Iraq, https://www.ictj.org/ sites/default/files/ICTJ-Report-Iraq-De-Baathification-2013-ENG. pdf (accessed on 20 April 2015). Smith, Daniel Jordan. (2007) A Culture of Corruption: Everyday Deception and Popular Discontent in Nigeria, New Jersey: Princeton University Press. Soubbotina, Tatyana P. (2004). Beyond Economic Growth: An Introduction to Sustainable Development (2nd Ed.), Washington, D.C: The World Bank, http://www.worldbank.org/depweb/beyond/beyondco/beg_13.pdf (Accessed on 11 December 2014). Sörensen, Jens Stilhoff (ed.). (2010) “Introduction: Reinventing Development for the Twenty-First Century?,” Challenging the Aid Paradigm: Western Currents and Asian Alternatives, Palgrave: Macmillan, Houndmills: Palgrave Macmillan, pp.1-24. Special Inspector General for Afghanistan Reconstruction (SIGAR). (30 April 2014) Quarterly Report to Congress, http://www. sigar.mil/pdf/quarterlyreports/2014-04-30qr.pdf (accessed on 02 February 2015)
166
Foreign Aid and Corruption
Stancati, Margherita and Habib Khan Totakhil. (02 October 2014) “Afghan President Issues New Decree in Bank Fraud Case,” Wall Street Journal, http://www.wsj.com/articles/afghan-president-issues-new-decree-in-bank-fraud-case-1412199021 (accessed on 02 February 2015) Starr, S. Frederick. (2006) “Sovereignty and Legitimacy in Afghan Nation-Building,” Nation-Building: Beyond Afghanistan and Iraq, Francis Fukuyama (ed.), Baltimore: The Johns Hopkins University Press, pp.107-124. Stone, Randall W. (January 2010) “Buying Influence: Development Aid between the Cold War and the War on Terror,” unpublished working paper, http://www.rochester.edu/college/psc/stone/working_papers/buying_influence.pdf (accessed on 03 February 2015) Stubbs, Paul. (2001) Chapter 8, “’Social Sector’ or the Dimunition of Social Policy? Regulating Welfare Regimes in Contemporary Bosnia-Herzegovina,” International Support Policies to SouthEast European Countries: Lessons (Not) Learned in B-H, pp.95107, http://pdc.ceu.hu/archive/00002241/01/covered_ch_8.pdf (accessed on 10 March 2015). Suhrke, Astri and Julia Buckmaster. (October 2006) “Aid, growth and peace: a comparative analysis,” Conflict, Security and Development, v.6, no.3, pp.337-363. Sun, Yan and Michael Johnston. (October 2009) “Does Democracy Check Corruption? Insights from China and India,” Comparative Politics, v.42, no.1, pp. 1-19.
167
Kurtoglu Eskisar
Swarts, Phillip (14 May 2014). “Afghanistan corruption still severe problem, U.S. watchdog says,” The Washington Times, (http://www. washingtontimes.com/news/2014/may/14/afghanistan-corruptionstill-severe-problem-us-wat/?page=all) (accessed on 05 September 2014) Taffet, Jeffrey F. (2007) Foreign Aid as Foreign Policy: The Alliance for Progress in Latin America, New York: Routledge. Taylor, Rob and Mirwais Harooni. (19 September 2012) “Afghanistan’s Karzai targets governors in anti-graft fight,” Reuters (http://in.reuters.com/article/2012/09/19/afghanistan-corruptionidINDEE88I0CM20120919) accessed on 02 February 2015. Travis, Rick. (2010) “Problems, Politics, and Policy Streams: A Reconsideration US Foreign Aid Behavior toward Africa,” International Studies Quarterly, v.54, pp.797–821. Treisman, Daniel, (2000) “The causes of corruption: a cross-national study,” Journal of Public Economics, v.76, no.3, pp.399 –457. Stapenhurst, Rick, Martin Ulrich and Severin Strohal. (2006) “Introduction: Parliamentarians Fighting Corruption,” The Role of Parliament in Curbing Corruption, Rick Stapenhurst Niall Johnston and Riccardo Pellizo, eds., Washington, DC: The World Bank, pp.1-10. Underkuffler, Laura S. (2009) “Defining Corruption: Implications for Action,” Corruption, Global Security, and World Order, Robert I. Rotberg (ed.), pp.27-46. UNODC. (2013) Corruption and Integrity Challenges in the Public Sector of Iraq: An Evidence-Based Study, http://www.unodc.org/ documents/publications/2013_Report_on_Corruption_and_Integrity_Iraq.pdf (accessed on 17 April 2015). 168
Foreign Aid and Corruption
UNODC. (December 2012) Corruption in Afghanistan: Recent Patterns and Trends, http://www.unodc.org/documents/frontpage/ Corruption_in_Afghanistan_FINAL.pdf. (accessed on 27 January 2015) USAID. (15 January 2009-1 March 2009) Assessment of Corruption in Afghanistan, http://pdf.usaid.gov/pdf_docs/PNADO248.pdf. (accessed on 04 February 2015) Uslaner, Eric M. (2008) Corruption, Inequality, and the Rule of Law: The Bulging Pocket Makes the Easy Life, New York: Cambridge University Press. Van der Veen, A. Maurits. (2011) Ideas, Interests and Foreign Aid, New York: Cambridge University Press. Von der Brelie, Hans. (28 February 2014) “Bosnia-Herzegovina: corruption protests fuel a potential political spring,” Euronews, Special Reports, http://www.euronews.com/2014/02/28/bosnia-s-earlyspring/ (accessed on 07 February 2015) Walsh, Declan. (11 November 2014) “At Afghan Border, Graft Is Part of the Bargain,” New York Times, http://www.nytimes. com/2014/11/12/world/asia/in-afghanistan-customs-system-corruption-is-part-of-the-bargain.html?_r=0 (accessed on 26 January 2015). Warren, Mark E. (January 2006) “Democracy and Deceit: Regulating Appearances of Corruption,” American Journal of Political Science, v.50, no.1, pp. 160-174. Weinbaum, Marvin G. (2006) “Rebuilding Afghanistan Impediments, Lessons, and Prospects,” Nation-Building: Beyond Afghanistan and Iraq, pp.125-144. 169
Kurtoglu Eskisar
Whyte, Dave. (2007) “Hire an American! Economic Tyranny and Corruption in Iraq,” Social Justice, v.34, no.2, pp.153-168. Wood, David. (03 June 2013) “Iraq Reconstruction Cost U.S. $60 Billion, Left Behind Corruption And Waste,” Huffington Post, http://www.huffingtonpost.com/2013/03/06/iraqreconstruction_n_2819899.html (accessed on 12 April 2015). Woods, Ngaire. (November 2008) “Whose Aid? Whose Influence? China, Emerging Donors and the Silent Revolution in Development Aid,” International Affairs, v.84, no.6, pp.1205-1221. Woods, Ngaire. (March 2005) “The Shifting Politics of Foreign Aid, International Affairs (Royal Institute of International Affairs 1944), v.81, no.2, pp. 393-409. World Bank. (15 April 2009) Country Partnership Strategy Progress Report for Bosnia and Herzegovina for the Period FY08-FY11, Washington, D.C.: World Bank, http://www-wds.worldbank.org/ external/default/WDSContentServer/WDSP/IB/2009/07/20/00035 0881_20090720112528/Rendered/PDF/482290CAS0CORRIGEN DUM0R20091010411.pdf, (accessed on 16 March 2015). World Bank. (2000) Bosnia and Herzegovina Diagnostic Surveys of Corruption, Washington, D.C.: World Bank, http://www-wds. worldbank.org/external/default/WDSContentServer/WDSP/IB/200 5/08/17/000090341_20050817124341/Rendered/PDF/332550BiH 0Diag1Report0200001public1.pdf (accessed on 13 February 2015) Yeh, Stuart S. (2011) “Ending corruption in Africa through United Nations inspections,” International Affairs, v.87, no.3, pp.629–650. Zaum, Dominik (2007). The Sovereignty Paradox: The Norms and Politics of International Statebuilding, Oxford: Oxford University Press. 170
Foreign Aid and Corruption
APPENDICES A. Aid Disbursement from ODA to Afghanistan, Bosnia, and Iraq (1995-2012)43: 1995
1996
1997 1998
Year 1999 2000 2001 2002 2003
2004
2005
2006
2007
2008
2009
2010
2011 2012
Country Bosnia
733.99
602 521.56 602.03 702.77 453.33 377.61 292.35 335.45 300.12 268.51 335.6 299.11 327.41 283.65 249.36 281.59 213.41
Afghanistan
106.05
84.32 123.35 88.29 104.16 87.58 323.6 991.73 1227.2 1729.27 2184.96 2417.43 3013.65 4001.89 5123.79 5494.45 5949.55 5660.93
Iraq
238.95 284.48 180.32
74.8 79.07 84.16 101.07 85.39 2178.2 4481.56 21983.36 8557.19 9056.19 9764.54 2629.36 2007.51 1807.41 1113.79
Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Value
0.03
1.22
1.26
3.54
4.32
3.37
2.16
0.89
0.62
1.34
0.43
B. Foreign Direct Investment to Afghanistan in Years:44
43 Data derived from the OECD statistics website, available at http://stats.oecd.org/ Index.aspx?datasetcode=TABLE2A#. (accessed 26 September 2014) All figures are current prices in US Dollars (million). 44 Table based on information from indexmundi website, available at http://www. indexmundi.com/facts/afghanistan/foreign-direct-investment. (accessed on 29 September 2014) The figures show the net inflow of FDI with regard to the % of Afghan GDP. 171
Kurtoglu Eskisar
2007
2008
2009
2010
2011
11,81
5,42
0,81
1,98
2,1
2011
2012
2013
1,12
1,57
1,24
2006 6,82 2010 1,01
2005 5,7 2009 1,43
2004 7,08 2008 1,41
2003 4,56 2007 1,09
2002 4,03 2006 0,59
2001 2,06 2005 1,03
2000 2,65 2004 0,82
1999 0,00
3,77 1990
Value
Value
1998 Year
Year
1,62
C. Foreign Direct Investment to Bosnia in Years:45
D. Foreign Direct Investment to Iraq in Years:46
45 Table based on information from indexmundi website, available at http://www. indexmundi.com/facts/bosnia-and-herzegovina/foreign-direct-investment#BX.KLT. DINV.WD.GD.ZS. (accessed on 29 September 2014) The earliest year available for this country is 1998. The figures show the net inflow of FDI with regard to the % of the Bosnian GDP. 46 Table based on information from indexmundi website, available at http://www. indexmundi.com/facts/iraq/foreign-direct-investment#BX.KLT.DINV.WD.GD. ZS. (accessed on 29 September 2014) The figures show the net inflow of FDI with regard to the % of the Iraqi GDP. 172
Foreign Aid and Corruption
E. Budget Transparency in Afghanistan, Bosnia and Iraq:47 Open Budget Index 2008
Open Budget Index 2010
Open Budget Index 2012
--
8
21
59
--
44
44
50
--
--
0
4
Country
Open Budget Index 2006
Afghanistan Bosnia Iraq
F. Corruption Scores for Afghanistan, Bosnia and Iraq:
47 Table data extracted from Annex B data in Open Budget Survey (International Budget Partnership 2012: 50). Open Budget Index is formed by taking the simple average of the coded responses to the survey questions prepared by International Budget Partnership. The score ranges between 0 and 100, with 0 representing the lowest possible score for budget transparency, and 100 representing the highest one (ibid., 2). For more information on data collection and research methods of this survey, see the organization’s website at http://internationalbudget.org/what-wedo/open-budget-survey/research-resources/methodology/ (accessed on 23 March 2015). 173
