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After several starts and stops, the Nigerian government has finally removed fuel subsidies, resulting in an overnight price hike of 67 percent. The economic logic of subsidy reform is clear. What’s notable, and potentially problematic, is that the government is planning to use any savings from lifting the fuel subsidy in the regular budget.
“For too long there has been a taboo about tackling [corruption] head on. The summit will change that.” That, at least, is the optimistic pronouncement from the leader of Her Majesty’s Government ahead of the UK anti-corruption summit in London this week.
Donors frequently suggest corruption is the biggest obstacle to development and aid effectiveness, and that they can accurately measure corruption risk while protecting their projects from it at a reasonable cost. It isn’t and they can’t. Below, a brief synopsis.
The Millennium Challenge Corporation is a model aid agency in a lot of ways, one of which is its commitment to learning from experience and evidence on what works and what doesn’t when it comes to development programs. Despite that, it still has an egregiously flawed way to deal with the risk of corruption. The MCC takes a slippery and poorly measured concept and puts it to the most blunt of zero tolerance tests: if a country is below the median in its income group on the Worldwide Governance Indicators measure of control of corruption, it doesn’t get a compact.
Aside from lurid revelations about individual companies and the big four accounting firms, the leaks of multinationals’ tax deals with Luxembourg confirm—and expose to a wider audience—the true nature of the tax ‘competition’ that prevents the emergence of effective international rules.
Last years’ G-20 and G-8 meetings produced important commitments to bolster tax systems and to fight corruption. The upcoming G-20 meeting in Brisbane will show just how serious member countries are about delivering on them.
Yesterday I was excited to see that the UK Independent Commission for Aid Impact (ICAI) had a report out on UK Department for International Development’s (DFID’s) anticorruption activities. It was a great topic for independent analysis by a group that didn’t need to worry about the politically correct thing to say, and could get beyond sloganeering (‘zero tolerance for corruption’) to a careful, evidence-based analysis of how corruption impacts development, what the role is for donors, and how DFID’s existing portfolio stacks up. My excitement didn’t last long—this report is not that analysis. I feel like a kid who got empty wrappers in his trick or treat bag.
One of the biggest hopes people expressed about Jim Kim’s nomination to become president of the World Bank was that he would bring a fresh perspective, focused on achieving results, rather than reinforce the institution’s bureaucratic machinery. Unfortunately, President Kim’s recent remarks at the Center for Foreign Relations suggest that bureaucratic inertia is winning.