Mon, Nov 27, 2006 - Page 9 News List

Curbing Africa's corruption will not be so easy

A Sudanese billionaire has founded a prize for outstanding African leaders, but political pressure is more important in the ongoing fight against corruption


Every year at this time, a private organization called Transparency International ranks countries on how corrupt they are perceived to be. The current index is notable for what has not changed -- the sad persistence of sub-Saharan Africa at the bottom of the heap.

What is new this year is that Transparency International has some new company in fighting corruption.

A Sudanese cellphone billionaire named Mo Ibrahim announced recently that he will give an annual prize worth more than US$5 million to an African head of state who was freely elected, turned over power to a freely elected successor and governed well while in office.

Skeptics might ask how the cause of fighting corruption will be served by awarding what will be the world's largest individual prize to a powerful leader for doing his job. The answer can be found in the dreary immutability of Transparency's list.

Any first-year business school student can design successful strategies for fighting corruption. It persists because political leaders in many countries, especially in Africa, have little incentive to do any of these things.

Corruption is tamed when government agencies are set up to make corrupt behavior difficult. Two examples of how far the world is from this goal.

Many government agencies in poor countries cut costs by paying workers a pittance or even nothing, expecting them to live off bribes.

Before Mexico reformed its customs posts as part of its bid for the North American Free Trade Agreement, Mexico City's airport effectively kept no registry of what came in on 100 planes a day.

There are lots of examples of how to do this right. Australia, Hong Kong and Singapore, now all among the very cleanest, used to be corruption cesspools.

But success depends on leadership. In his 1988 book, Controlling Corruption, Robert Klitgaard tells the story of a president not generally known as a graft-buster, Ferdinand Marcos of the Philippines. It is amusing to recall that Marcos' stated reason for declaring martial law in 1972 was in part to combat corruption.

Tax corruption was especially rife. In 1975, Marcos installed a respected judge, Efren Plana, as commissioner of internal revenue. Plana fired the most corrupt officials and banned the hiring of relatives.

Previously, tax assessors won promotion by bribing their superiors. Plana gave promotions and cash prizes to the most effective and fairest assessors. He brought in outside auditors and instituted frequent audits and spot checks. He rotated agents to avoid collusion with taxpayers. He recommended changes to simplify the tax laws, which reduced agents' discretion.

Plana was highly successful. But after he left office, tax corruption began creeping back. Then, before the 1986 presidential elections, Marcos installed cronies in the tax bureau to help his family evade taxes and steal money for his election campaign.

Political leaders talk about fighting corruption because voters care about it. They also like to prosecute corrupt past officials -- even though this does very little to fight present graft -- because it is showy, and those officials tend to be adversaries.

But leaders have a bad record of doing what really works -- open government to public scrutiny, carry out bidding for government contracts transparently on the Internet, pay government officials decently, investigate public officials who buy Mercedes, cut red tape and restructure government offices to remove opportunities for bribery.

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