Corruption in Infrastructure Corruption in Infrastructure Corruption in Infrastructure Delivery: Delivery: Delivery: A South African Case Study A South African Case Study A South African Case Study Glenn Hollands Local Governance and Corruption 1 Conference: November 2006
Presentation Content Presentation Content � Context � CS strategies to combat corruption � Project purpose � CS partnerships with � Objectives government � Methodology � LG shortfalls in accountability � Obstacles � Examples of LG corruption � Key informants � Different forms of LG corruption � Framework � The importance of LG in service � Overview – SA delivery � Defining corruption � A series of questions about LG � How corrupt is SA revenue and revenue usage � Studies on corruption � Qaukeni case study � Anti-corruption agencies � Conclusion on Qaukeni � Overall conclusion Local Governance and Corruption 2 Conference: November 2006
Context Context “This unseemly scramble for political power in municipal government appears to be driven by the desire to abuse elected positions to lay hands on the economic resources that the local authorities have the possibility to access. This includes the power of members of municipal executive authorities to determine the outcomes of municipal tendering processes, regardless of the fact that the Municipal Finance Management Act expressly prohibits the involvement of councillors and mayors in adjudicating bids for municipal tenders.” President of South Africa, Thabo Mbeki,National Council of Provinces, 4 November 2005 Local Governance and Corruption 3 Conference: November 2006
Project Purpose Project Purpose � … to investigate the causes and effects of corruption as it affects the delivery of infrastructure and services to the poor within South Africa. In addition, the research also assesses the efficacy of anti-corruption measures in protecting the interests of the poor. � In reality…very difficult to selectively focus on the interests of the poor Local Governance and Corruption 4 Conference: November 2006
Specific objectives Specific objectives � Determine the main causes of corruption � Determine the effects of corruption on services and service users who are poor � Assess whether anti-corruption measures impact on pro-poor livelihoods and can be effectively used by the poor � Assess the effect of corruption and anti-corruption measures on shared community assets and the capabilities of the poor � Outline the extent to which the views of the poor are included in policy deliberations on corruption Local Governance and Corruption 5 Conference: November 2006
Methodology Methodology � Literature review � Scan of high profile corruption cases in the Eastern Cape � Further development of flexible research instruments � Research strategy: interact with three distinct groupings, namely: – anti-corruption agencies – service users / community stakeholders (the victims of corruption) – persons involved in or convicted of corruption Local Governance and Corruption 6 Conference: November 2006
Obstacles Obstacles � Reality: victims and perpetrators of corruption very difficult to locate and access – bias towards anti-corruption agencies Dept of Correctional = BUREACRACY Services (1 YEAR APPLICATION PROCESS) Local Governance and Corruption 7 Conference: November 2006
Key Informants Key Informants � The Directorate of Special Operations (Scorpions) - two respondents � The Special Investigations Unit � The internal auditor in a municipality � An internal investigator in the Department of Social Development � A civil servant currently facing charges of irregular conduct � A special advisor from the National Treasury attached to the Eastern Cape Provincial Treasury � Two officials within the Eastern Cape Department of Housing, Local Government and Traditional Affairs � Informal discussions were also held with the Office of the Auditor General � A private investigator (informal) Local Governance and Corruption 8 Conference: November 2006
Framework of the research Framework of the research � Brief look at defining and understanding ‘corruption’ in SA social discourse � Basic comparisons with other countries to ask; “how corrupt is South Africa?” � How corrupt is LG compared to other sectors of the state? � Anti corruption strategies are described including those that come from civil society � Typical problems in LG finance and how these relate to LG service responsibilities – esp. important is the matter of LG’s status and resulting access to significant revenue sources � National examples of municipal corruption – mini-case studies to paint a national picture � Qaukeni municipality as main case study – regarded as an exceptional case but this form of breakdown may be much more endemic to local governance than we think Local Governance and Corruption 9 Conference: November 2006
The neoliberal critique of Overview Overview SA policy would regard this as arguable � SA cannot be regarded as corrupt in the sense that its policies neglect the poor: Since 1994 public spending on health education, welfare, housing and other social services has increased from 52.9% of non-interest expenditure to 58.3 % (2003/2004) [Minster of Finance] � Generally pro-poor policy has been accompanied by a number of safeguards to ensure that fiscal resources earmarked for the poor actually reach them e.g. the Public Finance Management Act � But SA may have had little choice – it became a democracy in an era when the international development and banking community demanded these provisions – the APRM is a regional manifestation of this � SA as a whole is particularly proud and therefore protective of its relatively new democracy; the National Crime Prevention Strategy of 1996 observes that: Fraud, corruption and graft involving government funds are seen to be undermining public confidence in democratic government itself, and therefore deserving urgent attention Local Governance and Corruption 10 Conference: November 2006
Defining Corruption Defining Corruption OPTION 1. OPTION 1. Def: Corruption is the wilful Sam Sole: simple subversion (or attempted definitions of corruption subversion) of a due do not suffice because decision-making process with regard to the allocation corruption may take of any benefit clearly illegal forms, Emphasis: such as fraud or it may � Accountability be the vastly more � Rent-seeking – dislocation from market or square deal subtle practises of rent- concept seeking, patronage and � Need not be illegal abuses of power Local Governance and Corruption 11 Conference: November 2006
Defining Corruption Defining Corruption OPTION 2 OPTION 2 Dr Stiaan van der Merwe: Instead of The abuse of public power for using public power to the benefit private or sectional gain or and well being of relevant sectional profit publics it is used for selfish, Emphasis: greedy and ulterior purposes. � Exercise of power by public Ultimately such abuse of public power takes place directly or officials indirectly, at the expense of � Def weakened by exclusion those supposed to benefit from of private sector and CS exercising public power and � 2 elements: Micro (behave. responsibility. Public power is & attitudes) vs the Macro abused for individual gain or for sectional gain (e.g. my friends, (systemic corruption or my family my race) whole systems that facilitate the abuse of power) Local Governance and Corruption 12 Conference: November 2006
Defining Corruption Defining Corruption Both options seems to offer value: Both options seems to offer value: Vd Merwe Sole: � Highlights connection � Highlights subversion of the between power and corruption official decision-making process � Key element is the elevation � Not necessarily financial in of personal or sectional gain motivation over the public interest � Helps to explain how informal � Alert to the possibility that networks of collusion and ideological differences may be secrecy may become stronger manipulated to entrench a than formal systems for more limited understanding of accountability and transparency corruption � Rent-seeking and patronage � Helps to explain why strong phenomenon can be seen in anti-corruption lobbies are both legal and irregular often labeled “neo- transactions – ‘very SA’ conservative” or untransformed” Local Governance and Corruption 13 Conference: November 2006
How Corrupt is South Africa? How Corrupt is South Africa? Worse than SA: Generally South Africa fares slightly worse than average, Tunisia, Mauritius, South Korea, Greece, Brazil Poland according to the measure Better than SA: used by Transparency Namibia, Taiwan, Italy, Hungary International (TI) in 2001: and Malaysia The 2001 Transparency International Annual But…Afrobarometer 2004 Corruption Perception Index suggests that South Africans ranks South Africa at 36 are likely to see less corruption among the 102 countries it in government in 2005 than surveyed. With a score of 4.8 they did during the 1990s and in many respects SA is better out of 10 than other African states Local Governance and Corruption 14 Conference: November 2006
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