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.

 
 
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