Confronting Corruption, Building Accountability: Lessons from the World of International Development Advising

208 Pages·2010·0.99 MB·English

by  Lloyd J. Dumas

CONFRONTING CORRUPTION,
BUILDING ACCOUNTABILITY
CONFRONTING CORRUPTION,
BUILDING ACCOUNTABILITY
LESSONS FROM THE
WORLD OF INTERNATIONAL
DEVELOPMENT ADVISING
Lloyd J. Dumas, Janine R. Wedel
and Greg Callman
CONFRONTING CORRUPTION, BUILDING ACCOUNTABILITY
Copyright © Lloyd J. Dumas, Janine R. Wedel, Greg Callman, 2010.
Softcover reprint of the hardcover 1st edition 2010 978-0-230-10020-6
All rights reserved.
First published in 2010 by
PALGRAVE MACMILLAN®
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this is by Palgrave Macmillan, a division of Macmillan Publishers Limited,
registered in England, company number 785998, of Houndmills,
Basingstoke, Hampshire RG21 6XS.
Palgrave Macmillan is the global academic imprint of the above companies
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the United Kingdom, Europe and other countries.
ISBN 978-1-349-28634-8 ISBN 978-0-230-11535-4 (eBook)
DOI 10.1057/9780230115354
Library of Congress Cataloging-in-Publication Data
Dumas, Lloyd J.
Confronting corruption, building accountability : lessons from
the world of international development advising / Lloyd J. Dumas,
Janine R. Wedel, Greg Callman,
p. cm.
1. Economic assistance—Moral and ethical aspects. 2. Corruption.
3. Responsibility. I. Wedel, Janine R., 1957– II. Callman, Greg. III. Title.
HC60.D797 2010
333.91—dc22 2010017699
A catalogue record of the book is available from the British Library.
Design by Newgen Imaging Systems (P) Ltd., Chennai, India.
First edition: December 2010
10 9 8 7 6 5 4 3 2 1
Transferred to Digital Printing in 2013
To the spirit of Grażyna Gęsicka, a valuable participant in our
Working Group, who perished in the tragic plane crash
near Katyń, Russia, on April 10, 2010.
CONTENTS
Preface ix
Acknowledgments xiii
1 Corruption, Accountability, and Economic
Progress 1
2 Origins and Approach 7
3 Structural Problems in International Economic
Consulting 21
4 Measures across Organizations and Contexts 33
5 Measures within International Development
Organizations 65
6 Summary and Conclusions 93
Appendix A: Workshop on Building Accountability into
International Development Advising in an Age of
Diffused Governance 101
Appendix B: Host Governments and Multinational
Corporations: Enron Comes to Nepal 153
Dipak Gyawali
Appendix C: Guidelines and Recommendations for
Officials in Recipient Countries for Use in Contracting
and Negotiating Consulting Services 155
Gonzalo Rivas and Belma Ejupovic
Appendix D: Prototype Consultancy Agreement 161
Ibrahim Fawzy
Appendix E: A Closer Look at the World Bank Process 167
viii CONTENTS
Appendix F: Recurrent Themes among Recipient and Donor
Representatives 183
Appendix G: World Bank Guidelines Regarding Conflicts
of Interest: An Analysis and Taxonomy 187
Notes 191
Index 201
PREFACE
This book addresses the broad problem of confronting corruption
and building accountability through the method of examining in
detail the particular case of international economic consulting for the
useful insights it provides. There are two parts to this problem:
(1) enhancing the ability of recipient governments and donor organiza-
tions to identify competent and unbiased advisors, know their track
records, monitor their performance, and hold them to account; and
(2) creating the conditions that maximize the incentives of develop-
ment advisors to adhere to a high standard of ethical behavior, reward
those who do and sanction those who do not. The book grows out of
a multiyear project, funded by the Ford Foundation, aimed at encour-
aging the development of mechanisms that work toward a solution of
that problem. To this end, we have explored actual and potential prac-
tices at development-oriented institutions, including consultant roster
systems, debarment, and other sanctions, and have considered the value
of creating other tools, such as codes of ethics, consultant registries,
and improved training.
In addition to providing an analysis we believe will be useful to the
wider community of institutions and individuals interested in the
many-sided problems of corruption and accountability, the book is
intended to serve as a resource and discussion document for develop-
ment organizations, officials in developing or transitional countries,
consultants and consulting firms, and other parties to and observers of
international economic development consulting practice. While the
project’s primary focus is international economic development consult-
ing, many of the issues we raise pertain to international consultants
more widely construed. We seek to facilitate knowledge sharing and to
advance accountability practices and mechanisms that can be adapted
and implemented.
x PREFACE
The Problem and Background in Brief
The research project that underpins this analysis grows in part out of our
experience studying economic and policy advisors and the international
development process. Although the role of consultants has expanded sub-
stantially over the past two decades, the capacity of international organi-
zations and governments to hold consultants to account or simply gather
accurate independent information about their track records and activities
has not. At the same time, much anecdotal evidence points to instances
in which economic advisors have played multiple and conflicting roles
and engaged in activities (including for personal gain) that did not sup-
port and may have undermined the development goals of the countries
and organizations they supposedly served.
During roughly the same period, the international development com-
munity made anticorruption a key priority. But while combating corrup-
tion in developing and transitional countries is now considered an
important part of the international development agenda, corruption per-
taining to donor organizations and the consultants they engage has been
largely invisible as a topic of open discussion until recently. It is our hope
that the analysis contained in this book will contribute to the advance-
ment of this critical discussion.
A Novel Approach
Under the assumption that officials in developing and transitional coun-
tries who had been recipients of foreign advisors would be our most astute
and authoritative observers of the “the problem,” we initially turned to
them as our primary informants for defining the issues, gathering infor-
mation, and developing potential solutions. Accordingly, we began the
project (with the support of an initial Ford Foundation grant) in early
2003 by organizing a workshop and an international working group
composed primarily of officials from developing and transitional coun-
tries. The members of the working group included individuals from more
than a dozen representative countries on five continents. At the work-
shop, the officials outlined the kinds of corruption and accountability
issues that they had encountered as recipients of international consultants,
discussed potential remedies, and provided feedback on a draft code of
ethics. During our deliberations, working group members suggested the
idea of producing guidelines to help recipient officials like themselves in
their own countries to better select, interrogate, contract with, and mon-
itor international consultants, as well as to improve their effectiveness in
PREFACE xi
dealing with development and consulting organizations. As a result,
appendixes C and D of this book include short sample guidelines and a
prototype consultancy agreement (respectively), drafted by members of
the working group, for use and further elaboration by concerned recipi-
ent country officials.
As we embarked on the second phase of the project (funded by a sec-
ond Ford Foundation grant) following our workshop deliberations, we
became involved in discussions with the larger realm of stakeholders in
the international economic consulting enterprise. We turned our atten-
tion to the donor side, specifically enlisting representatives of interna-
tional development institutions, especially the United Nations
Development Program (UNDP) and the World Bank. We sought to learn
about practices currently in place in major international donor organiza-
tions and to discern where the monitoring and accountability gaps lie.
The analysis in this book draws on a diversity of sources, including
officials and representatives of developing and transitional countries,
internal worldwide electronic “e-discussions” at the UNDP, information
gathered within international development organizations, donor, recipi-
ent, and consultant discussion groups, and numerous conversations with
parties to and analysts of the consulting process. We also consulted a vari-
ety of published and unpublished materials from disparate sources.
By laying out key issues, synthesizing current discussion, explaining
practices in place, and detailing experiments underway, it is our belief
that this book can serve as a basis for fruitful discussion and thus begin the
process of developing practical solutions to the problem of accountability
in international development consulting.
Project Organizers and Co-principal Investigators
Lloyd J. Dumas
Professor of Political Economy, Economics and Public Policy,
School of Economic, Political, and Policy Sciences,
University of Texas at Dallas
Janine R. Wedel,
Professor of Public Policy,
School of Public Policy,
George Mason University
Project Manager and Researcher
Greg Callman