It is not corruption per se but the fragmentation of power that explains Uganda’s crisis
Two things stand in contradiction of one another regarding corruption
in Uganda: On a positive note, it seems not to have undermined economic
growth – at least, not yet. Uganda has sustained impressive rates of
economic growth over the last 25 years. On the negative side, corruption
seems to have led to a precipitous decline in the ability of the state
to deliver public goods (hospitals, schools, roads, bridges, electricity
dams) and public services (education, healthcare, agricultural
extension services, electricity, etc).
But why has corruption eroded the ability of the state to serve its
citizens? There is no evidence that corruption per se undermines the
ability of the state to deliver these vital public goods and services.
Some of the countries that developed the best infrastructure such as
South Korea, Taiwan and Indonesia in the 1980s and 1990s had extremely
high levels of corruption. Equally in the recent past, nations like
Tunisia had high levels of corruption. Yet they had also been successful
at delivering quality roads, hospitals, schools and health and
education services to their citizens.
The experience of South Korea or Tunisia shows that corruption is
like a tax – it only increases the cost of doing business. Instead of
building a road at US$ 50m, this cost may go up to US$ 75m. Companies do
not opt out of areas of investment because of a high tax rate.
Corporation tax in the United States, Canada and Germany is above 35
percent. But this has not stopped companies from investing in those
regions.
One could argue that taxes are credible and predictable costs of
doing business while corruption is the opposite. Granted! But the
experience of South Korea and Taiwan is empirical proof that corruption
does not stop states from delivering quality goods and services. The
problem in Uganda is that the cost of delivering public goods increases
while the quality becomes worse.
Why is this so? It seems to me that the primary source of the problem
is the way political power is distributed. Our country enjoys a rare
and contradictory reality – power is at once centralised and
personalised in the person of the president while at the same time it is
highly defuse among different fragments of the state: the bureaucracy,
intelligence services, oversight institutions (the Inspectorate of
Government, Parliamentary committees, Public Procurement Authority), the
mass media etc.
Public officials everywhere possess power to allocate lucrative
rights over scarce resources. One need not be surprised therefore that
holding other factors constant, public officials would seek to grab for
themselves a share of the rights the help to allocate. The problem for
Uganda, however, is that the power to allocate these resources is
distributed across many yet uncoordinated centers as illustrated above.
Thus, when one of these centers allocates rights to a particular
lucrative contract, other centers can effectively challenge the initial
allocation. For example, assume the ministry of Energy allocated the
right to an oil well to Tullow. You can never be sure that Tullow will
hold this right. Other arms of government can effectively challenge this
initial allocation. In our case, one of the companies that that lost in
the initial allocation may petition PPDA to reverse the decision of the
ministry of Energy oil committee.
Once PPDA decides to investigate the matter, regardless of its
motivations, it will prompt all those who had bided initially to seek to
influence its decision. Money will begin to flow from the various
bidders to PPDA officials. Whoever wins this bribing battle at PPDA can
never be sure he has a deal because anyone of the losers can petition
the IGG – another institution with power to cancel a public contract.
Again, the process of bidders trying to influence the decision of the
IGG begins afresh and more money flows.
Whichever way the IGG decides, his/her decision is not final. Losers
can petition parliament thus shifting the bribing competition to the
committee handling the matter. Finding legislators fresh from an
election (and therefore highly indebted) or about to go into one (and
therefore desperate for cash), competition for the prize will get more
intense.
At this point, many other forces may be mobilised – especially the
press. Bidders may pay off reporters and columnists to support their
cause – or given the paucity of our journalists, simply feed them wrong
or one-sided information. Others will field people on radio talk shows
to argue their case. Whichever is the case, debate in the media will be
ferocious.
But because power in Uganda is equally personalised and centralised
at State House, bidders may try to influence key players – real and
assumed – around the President. Some members of the first family may be
recruited so that the battle for a tender pitches a brother-in-law to
the president against his son-in-law. Intelligence organisations may be
drawn into the battle and will offer their own biased reports to the
chief of state.
Thus, the battle for a government contract will consume parliament
and the mass media, drug in intelligence services and the President. No
one will be spared. The actual financial cost of bribes may be low. But
the resultant uncertainty and the time it takes to resolves such issues
(often more than six years) make it difficult for the country to get a
good deal.
It is not the corruption of the system per se that has made it
difficult for Uganda to get better public services. It is lack of
centralised control over bribe taking that makes matters worse. There
are too many centers of power and therefore many bribe takers. I am not
sure that removing these official centers would solve the problem. This
is because this formal distribution of power seems to reflect its actual
constitution in the country.
No comments:
Post a Comment