CORRUPTION ASSESSMENT HANDBOOK - World …

1 CORRUPTION ASSESSMENT HANDBOOK DRAFT FINAL REPORT This publication was produced for review by the United States Agency for International Development. It was prepared by Bertram I. Spector, Michael Johnston, and Svetlana Winbourne, Management Systems International. MAY 8, 2006 CORRUPTION ASSESSMENT HANDBOOK DRAFT FINAL REPORT May 8, 2006 Management Systems International Corporate Offices 600 Water Street, SW Washington, DC 20024 Contracted under USAID Contract No. DFD-I-02-03-00144, Task Order 02 International Governmental Integrity and Anticorruption Technical Assistance Services DISCLAIMER The author s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. DRAFT PLEASE CITE AS DRAFT Table of Contents 1.

2 Introduction Background Objectives Using this HANDBOOK 2. Understanding CORRUPTION CORRUPTION Defined The Major Features of CORRUPTION 3. CORRUPTION ASSESSMENT Framework Why is a New CORRUPTION ASSESSMENT Approach Needed? Rationale of the CORRUPTION ASSESSMENT Framework How does this Framework Relate to Other USAID Considerations? 4. Applying the Framework: Ukraine (2005) Annexes 1. CORRUPTION ASSESSMENT Implementation Guide 2. CORRUPTION Checklist 3. Diagnostic Guide 4. Review of Existing CORRUPTION ASSESSMENT Approaches and Indices 5. Legal and Institutional Framework Report Outline 6. Review of Existing Anti- CORRUPTION Toolkit Resources 7. CORRUPTION Case Database Tool 8. Annotated CORRUPTION ASSESSMENT Final Report Outline 9. Methodological Notes on Applying CORRUPTION Syndromes 10. Illustrative Scope of Work for a CORRUPTION ASSESSMENT 1.

3 Introduction Background As demonstrated by the recent adoption of USAID s Anticorruption Strategy (2005), there is clear recognition that new approaches need to be taken by host country governments, their civil society and business communities, and international donor organizations to address CORRUPTION issues that are potential obstacles to development programs. A first step in implementing this USAID strategy is to assess exactly how CORRUPTION manifests itself in a particular country, where the vulnerabilities lie, and the effectiveness of existing institutions and control mechanisms meant to deal with the problem. Based on this ASSESSMENT , a strategic analysis of the CORRUPTION problem can be formulated and a range of programs can be identified and prioritized to deal with the problem in a customized and effective way.

4 Objectives The purpose of this HANDBOOK is to provide USAID Missions and their implementing partners with an integrated approach and set of practical tools to conduct tailored CORRUPTION assessments efficiently, but at a level detailed enough to produce targeted and prioritized recommendations for programming. As well, the framework supports an ASSESSMENT of in-place anticorruption initiatives: their achievements, their deficiencies, obstacles they have faced, and their sustainability, This ASSESSMENT approach builds upon a body of international experience in assessing and acting against CORRUPTION . The HANDBOOK is constructed around several fundamental principles: 1. All CORRUPTION is not the same. CORRUPTION may manifest itself in similar ways across countries and over time bribery, extortion, embezzlement, influence peddling, nepotism, and so on but the underlying causes can be different and the areas that CORRUPTION attacks can vary across geographic region and over time.

5 The ASSESSMENT framework is built to help governments and other interested parties identify trends in different types of CORRUPTION (both grand and administrative CORRUPTION , as well as state capture and predation), and the sectors and functions that become vulnerable to CORRUPTION in particular locales or points in time. Based on a better understanding of the nature of the problem and its root causes, the framework supports development of a thoughtful and comprehensive strategic outlook that offers a more customized approach to controlling CORRUPTION . 2. All countries do not possess the same proclivity toward CORRUPTION . Rather, based on different patterns of development and political economic dynamics, countries manifest differing CORRUPTION tendencies and vulnerabilities.

6 The ASSESSMENT methodology incorporates a way to distinguish among countries along these dimensions so that country-specific programs can be developed and recommendations can be customized to the situation at hand. 3. All countries are not at the same level of anticorruption readiness. The political will and commitment of governmental and nongovernmental leaders defines only one aspect of a country s readiness to deal effectively with the problem of CORRUPTION . In addition, there needs to be a basic framework of anticorruption laws, regulations and institutions in place that serve as the prerequisite for all initiatives. As well, government officials and civil society, mass media, and business leaders must have the training, resources, and capacity to act with meaningful resolve if anticorruption initiatives are to be adequately implemented.

7 Using This HANDBOOK Conducting a comprehensive ASSESSMENT of CORRUPTION can begin the process of designing and implementing initiatives that will reverse negative trends. But to avoid government and donor responses that only treat the symptoms of CORRUPTION , it is essential to take a strategic perspective that addresses underlying causes and the deeper political-economic dynamics that have influenced the evolution of CORRUPTION problems in a country. The CORRUPTION ASSESSMENT methodology described in this HANDBOOK offers a systematic approach to understand the nature of CORRUPTION in a meaningful way and to translate that understanding into a strategic outlook and prioritized programmatic recommendations for USAID missions. It is intended to help users move from a general understanding of CORRUPTION issues to problem definition and then to programming.

8 The ASSESSMENT approach takes into account many key ideas about how corrupt systems develop and persist through a multi-sectoral focus that looks at the balance between grand and administrative CORRUPTION , the existence of political will among key actors, their levels of institutional capacity, and the obstacles to real reform. Traditionally, CORRUPTION has been assessed as primarily a legal and institutional problem; this methodology puts this legal-institutional analysis into a country context of what are often complex political-economic dynamics. This offers users a richer strategic understanding of the CORRUPTION problem and what reform paths are likely to be meaningful and effective. In these ways, the methodology addresses the major issues discussed in the USAID Anticorruption Strategy.

9 This ASSESSMENT approach seeks to provide analysts and programmers with a more detailed and straightforward alternative to the aggregate CORRUPTION indices and CORRUPTION perception surveys that may be available. The HANDBOOK provides a framework that facilitates both a broad view of the factors influencing CORRUPTION and a way to drill down to understand the detailed dynamics of the problem on a sector-by-sector basis. Most importantly, the HANDBOOK also presents tools to assist the ASSESSMENT team in identifying and ranking appropriate and practical program options to deal with detected CORRUPTION problems based on international best practice. The ASSESSMENT methodology is divided into four steps, each step complete with helpful tools and techniques to support the team in conducting its analysis.

10 The first step involves the collection and integration of relevant information, as well as guidance on appropriate staffing of the team. At the second step, the methodology supports development of a comprehensive strategic outlook that helps in the formulation of a tailored anticorruption program. In this regard, the team will be guided to describe the country s development dynamics and its proclivity to particular types of CORRUPTION in terms of CORRUPTION syndromes. The syndrome helps the team understand the broad dynamics of CORRUPTION beyond institutional and procedural weaknesses -- why CORRUPTION affects the country as it does, how the CORRUPTION problem can be framed in general terms, and what broad implications might be drawn about different approaches to anticorruption reform.