Ideas to Action:

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The topic of “country ownership” drew many people to the event organized Monday by CGD’s Nandini Oomman and her HIV/AIDS Monitor team. The rapt audience first heard remarks on the theme of country ownership delivered by the Ethiopian Minister of Health Tedros Adhanom Ghebreyesus, who argued that the form of donor support most conducive to country ownership is budget support, such as that provided by the typical World Bank-organized SWAp in the health sector. “With budget support,” he said, “the country is in the driver seat.” He admitted that some donors are reluctant to provide budget support though, he said, they are often reticent regarding their reasons.

It wasn’t until the last minutes of the session that Ed Scott, a member of the audience and CGD’s founder and chairman, suggested that the reason for donor reluctance is fear of “corruption,” which he called “the 500 pound gorilla in the room.”

Ed pointed to the recent experience in Zambia, where the Global Fund moved millions of dollars of AIDS funding away from the government to another implementing agent as a response to allegations of government corruption. Several speakers then spoke candidly about the need for donors to assure their tax-paying constituencies that money is appropriately spent. (Lest our African visitors and readers think that we Americans are preaching sanctimoniously about government corruption in Africa while believing ourselves to be incapable of such crimes, here’s an example of fraud in America’s public service that is so egregious that it verges on the risible. In the period from 1999 through 2008, employees of the Washington, DC tax office issued 160 fake tax refund checks to themselves and their friends and relatives, for a total theft of $44 million. Though the perpetrators have been jailed, this public money, which could have been used, for example, to renovate my city’s dilapidated public school buildings, has never been recovered.)

Perhaps it was the airing of the “corruption” word that then stimulated two of CGD’s country partners on Monday’s panel, Dirce Costa from Mozambique and Freddie Ssengooba from Uganda, to make a connection which we don’t often hear in discussions about SWAps, country ownership and corruption. They pointed out that it is not only the donors and their domestic constituencies who have an interest in whether aid program money is spent as intended. The local citizens of recipient countries have an even more vital interest.

Why don’t the people on the ground, from whom the money is actually stolen, realize it’s missing? As Dirce and Freddie eloquently testified on the panel on Monday, this is partly the donors’ fault! Due to almost complete obfuscation of the amounts donors spend in country and of the amounts that should go through various channels to various destinations for various purposes, the local citizens have no way of telling whether the money has been stolen before it gets to them. Even professional analysts such as Dirce, Freddie and the HIV/AIDS Monitor’s Zambian collaborator, Caesar Cheelo, could not get access to these numbers, despite repeated, persistent trips to visit the donors and the government.

Local public disclosure might be part of the solution. Freddie Ssengooba cited an experiment that was conducted in the Ugandan education sector which showed that simply posting each school year on the outside of a local school the money and supplies that school has been budgeted to receive was enough to dramatically reduce the leakage of school funds. The paper by Reinikka and Svenson analyzing this experiment was published in 2004 in the Quarterly Journal of Economics here (gated) but is available in several places referenced at the back of this 2007 CGD working paper (ungated). Freddie said that this practice is not yet followed in Uganda in the health sector and suggested that such a practice, combined with the timely publication of government and donor budgets, would empower the people of Uganda, through journalists and through researchers like the HIV/AIDS Monitor’s three collaborators, to provide checks and balances against corruption.

The HIV/AIDS Monitor’s mandate has been to analyze donor performance as viewed from places like Washington and Geneva, and the Monitor has argued forcefully for better disclosure by PEPFAR and the Global Fund. But Dirce and Freddie want the donors and their national partners to go much further: they are asking for public disclosure of the full funding flow down to the most peripheral clinic. Such disclosure would allow not only the recipient government, but also the local people to “own” their program. Their local awareness and surveillance of health program expenditures would make them the natural ally of the rich-country aid watchdogs who are concerned about aid leakage. I’ll bet that every $10 spent publicly disclosing donor and government health expenditures and the activities they are supposed to finance at that health facility or district, would prevent as much corruption as spending $100 or more in expensive top-down financial controls and audits.