EuropeAid

The View from Inside Anti-Corruption Authorities (ACAs):

Evaluating Performance and Challenges

Prepared for the EuropeAid Anti-Corruption Seminar,Brussels, 18-21 October, 2010

Francesca RecanatiniSenior EconomistThe World Bank

EuropeAidMotivation•Empirical observation and for policy guidance

• 1980s and 1990s: international standards and agreements and parallel mushrooming of ACAs• Increased support of ACAs by multi- and bilateral donors•Observed limited “impact” (Meagher (2005), Doig et al.(2005), Heilbrunn (2004), U4 (2007), UNDP (2005), Pope (1999))

EuropeAidObserved lifecycle of ACAs

Public Awareness & Political Consensus on

Corruption

Crisis

Anti-Corruption Commitments are made (usually by politicians)

ACA is established – work begins with high

expectations

ACA unable to meet unrealistic expectations, gets stuck

Loss of credibility of ACA plus increasing political pressureFunding cut; attention goes

down

ACA quietly expires (Honduras, Peru, Guatemala) or is

suddenly dismantled by the top leadership (SL, Nigeria, Zambia)

Time

Perceived level of corruption in the country remains the same

EuropeAidQuestions•Can ACAs be (or become) an effective tool in the fight against corruption?• If so, are there are policies that can be used to make ACAs more effective?

=> Starting point: a more systematic analysis of ACAs and of “factors” that can affect their functioning and effectiveness

EuropeAidMethodology•Anti-Corruption Authority: a specialized agency, body, unit or department established by a government that has the mandate of addressing corruption.• Initial information based on Workshop (March 2010) with 10 ACAs• Factual information from 30 ACAs collected through a mailed-in survey• Plus 5 case studies (in-depth interviews in the field)•On going

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Latvia (2002)

Sri Lanka(1994)

Singapore(1952)

Uganda(1986)

Estonia(1918)

Anti-Corruption Authorities Sampled

Philippines (1987)

Senegal(2003)

Peru(2010) Tanzania

(2007)

Botswana(1994)

South Korea(2002)

Indonesia(2004)

Brazil (2001)

Guatemala (2008)

Malawi(1997)

Zambia(1982)

Slovakia(2004)

Costa Rica (2004)

Haiti(2004)

Slovenia(2004)

Sierra Leone(2000)

Rwanda(2003)

Kenya(NA)

Mozambique(2004)

Lesotho(NA)

Case Studies: Rwanda, IndonesiaEthiopia, Mongolia, Slovenia

Mauritius(2002)

Namibia(2006)

Ethiopia(2001)

Mongolia(2007)

EuropeAidOutline

1. Challenges2. Structure and mandate of ACAs3. Institutional structure and relation with

other agencies4. Resources and internal organization5. Independence, oversight and accountability6. External stakeholders and expectations

EuropeAidResults (1): Challenges of ACAs•Critical: to have the key institutions and laws in place jointly with support of the leadership• Tension between prevention and prosecution•Big fishes or small ones?• Importance of outreach and education• Perceived unfair evaluation of ACAs and need for more focus on measuring prevention activities as a measure of success• Engaging the private sector• Politics and ACAs

EuropeAidResults (2): Structure and mandate•ACAs can take many forms and display different functions and mandates, from prevention to investigation and prosecution, policy and research and outreach.

• There is a tension among practitioners when it comes to the functions that ACAs should have.

•Organizational theory recommends single mandate to increase effectiveness. In our sample => “effective” ACAs among both single function agencies and multi-function agencies (Hong Kong, Brazil vs Slovenia).

EuropeAidACAs and functions

EuropeAidKPK’s Anti-Corruption Mechanisms

MandatesArticle 6

To coordinateArticle 7

To superviseArticle 8

To pre-investigate, to investigate, to prosecute

Article 11

To preventArticle 13

To review systemsArticle 14

1. Attorney General's Office2. Police3. Supreme Audit4. All Inspectorate Generals5. Others

1. Attorney General's Office2. Police3. Supreme Audit4. All Inspectorate Generals5. Others

6. Agencies which render public services

1.All powers granted to other LEA by the Law of Procedures

2.Certain powers which are not granted to other LEA

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Results (3): Institutional structure and relations with other agencies•Clear mandate leads to better coordination among different agencies•Need for clear agreements among agencies• Important to understand who was performing some of the functions that the ACA is taking over and why it was not working•Good examples of “links” with central banks, judicial agencies and revenue monitoring agencies• Less common => relations with regulatory agencies especially agencies regulating natural resources•Remaining challenge: de jure versus de facto

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EuropeAidInvestigating corruption cases: Indonesia

The Supreme Audit Board (BPK) Provide the Investigative audit report, initial data, state loss estimation

Financial Intelligence Unit (PPATK) Provide the Suspicious Transaction to support investigation process

Bank and Insurance Companies Provide the Financial Statement to support investigation and asset tracing process

Other Departments (National Land Agency, Immigration, Department of Law and Human Rights, etc)

Provide supporting data related to the case (People Movement System, Company Profile, etc)

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Colombia: Agencies with Jurisdiction

Institution Type of ControlAnticorruption Czar Administrative

Comptroller General Fiscal

Attorney General’s Office Disciplinary

Prosecutor General’s Office Criminal

National Accounting Office Compliance

Taxes and Customs Administrative/Criminal

Internal Control Offices Administrative/Disciplinary

EuropeAidResults (4): Resources and internal organization

•Critical to get the technical and organizational foundations established. But…•…resources are a constraint. • Potential factors :

o Lack of a long term horizon commitmento Unskilled staffo Donors’ involvement

• Strategy for coping with limited resources (ex. triage of allegations, focus on innovation and IT)

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0 2 4 6 8 10

Africa

Europe

East Asia

Latin America

South Asia

Figure 5: Donor Involvement

No

Yes

EuropeAidResults (5): Independence, oversight and accountability• Importance of legislative set up• Independence: selection/removal of ACA leadership and freedom of action

EuropeAidAppointment of ACA head

EuropeAidResults (5): Independence, oversight and accountability• Importance of legislative set up• Independence: selection/removal of ACA leadership and freedom of action•Reporting line•Accountability: administrative and judicial• Established mechanism to show results. But…

Political interference remains the key challenge

EuropeAidMonitoring performance: selected examples•Mongolia: number of cases investigated and solved under the law, percentage of public officials who submitted income and asset disclosure forms, number of actions plans adopted by public organizations and local governments• Indonesia: number of cases investigated and conviction rate•Brazil: number of internal investigations completed and penalties enforced, number of companies suspended or debarred, data portals and number of visits, number of training delivered and of participants

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Results (6): External stakeholders and expectations• To manage expectations and to balance sensationalism with prevention work are key (SL, Nigeria, Kenya, Indonesia)•Citizens and the media are powerful tools that can create an enabling environment. But…•…the ACA needs:

o Continuous engagement with public and with the media for inputs and for feedback (KPK)

o To provide unrestricted access to information o To have communication strategy to avoid risks

linked to political pressure (Slovenia)

EuropeAidMain messages•ACAs can have an impact. The challenge may be to be able to measure it. •Replication of “successful experiences” should be done only with caution, after having carefully understood and integrated country-specific factors • Political pressure, vested interests and State Capture are the key challenge• Finally, there is a need for further analytical work based on a broader set of countries.