Catch me if you care: International development organizations and national corruption
Many international development organizations (IDOs) have officially mandated anti-corruption criteria for aid selectivity. Substantial debate remains over whether corruption deters aid and whether anti-corruption rules are effectively implemented. We argue that the extent to which both corruption and anti-corruption mandates factor into IDO allocation depends on the composition of the donors. Using existing data on corruption alongside newly collected data on anti-corruption mandates, we demonstrate that organizations composed of corrupt donors are just as likely to adopt, but less likely to enforce, anti-corruption mandates. Organizations composed of less corrupt donors, by contrast, tend to divert aid away from corrupt states, with or without formal anti-corruption rules in place. The findings have implications for the debate over whether international efforts to institutionalize “good governance” standards are sincere or cheap talk, whether multilateral strategies are in fact less politicized than bilateral aid allocation strategies, and whether international organizations should be inclusive, open to membership by many or even all states, including those with dubious track records.
KeywordsCorruption Good governance Foreign aid International development organizations Anti-corruption mandates
We thank Sarah Bermeo, Axel Dreher, Andreas Fuchs, Susanne Mueller, Jon Pevehouse, Tal Sadeh, Mike Tierney, and the participants at the PEIO conference (2017), the speaker series at the University of Konstanz (2017) and the University of Wisconsin at Madison (2018), the International Studies Association annual conference (2017) and the International Political Economy Society conference (2017) for helpful comments. Hafner-Burton gratefully acknowledges support from the MacArthur Foundation and the Laboratory on International Law and Regulation at the University of California, San Diego. Schneider gratefully acknowledges financial support from the UCSD Academic Senate (#RP85G-SCHNEIDER) and the Lifelong Learning Programme of the European Union. We thank Rachel Schoner for her research assistance.
- ABC News (2014). Asian Development Bank bans 31 companies for fraud, corruption. 14 March. Retrieved October 2019, from http://www.abc.net.au/news/2014-03-14/an-adb-corruption/5321624.
- Asian Development Bank (1998). Anticorruption policy. Retrieved October 2019, from https://www.adb.org/documents/anticorruption-policy.
- Bauhr, M. (2016). Does corruption reduce public support for foreign aid? Aid effectiveness, accountability and foreign aid cuts. In Paper presented at the “public opinion and foreign aid: Policy and methodology perspectives” conference, April 29–30. Colchester: University of Essex.Google Scholar
- Bearak, M., & Gamino, L. (2016). The U.S. foreign-aid budget visualized. The Washington Post. 26 September. Retrieved October 2019, from https://www.washingtonpost.com/news/worldviews/wp/2016/09/26/the-u-s-foreign-aid-budget-visualized/
- Broz, L. J., & Hawes, M. B. (2006). Congressional politics of financing the international monetary fund. International Organization, 60(4), 367–399.Google Scholar
- Chamberlain, G. (2016). Aid minister and the scandal school tsar. Daily Mail: United Kingdom. 2 April. Retrieved October 2019, from http://www.dailymail.co.uk/news/article-3520897/Aid-Minister-scandal-school-tsar-Pakistan-700m-year-education-supremo-probed-5-000-schools-don-t-exist-Justine-Greening.html
- Correlates of War Project (2016). Colonial Contiguity Data, 1816-2016. Version 3.1 Retrieved from http://correlatesofwar.org.
- Dreher, A., Eichenauer, V., & Gehring, K. (2018a). Geopolitics, aid, and growth: The impact of UN Security Council membership on the effectiveness of aid. The World Bank Economic Review, 32(2), 268–286.Google Scholar
- European Commission (2003). Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee – A comprehensive EU Policy against Corruption. COM(2003)317. Retrieved from http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Al33301.
- Gleditsch, K. S., & Ward, M. D. (2001). Measuring space: A minimum distance database. Journal of Peace Research, 38, 749–768.Google Scholar
- Greenberg, J. (2017). PolitiFact: Paul exaggerates degree of foreign aid theft. Tampa Bay Times. 19 January. Retreived October 2016, from http://www.tampabay.com/news/business/politifact-paul-exaggerates-degree-of-foreign-aid-theft/2310252
- Greenhill, B. (2015). Transmitting rights: International organizations and the diffusion of human rights practices. New York: Oxford University Press.Google Scholar
- Hafner-Burton, E. M. (2009). Forced to be good: Why trade agreements boost human rights. Ithaca: Cornell University Press.Google Scholar
- Knecht, T. (2010). Paying attention to foreign affairs: How public opinion affects presidential decision making. University Park, PA: Penn State University Press.Google Scholar
- Lockwood, N. J. (2013). International vote buying. Harvard International Law Journal, 54(1), 97–156.Google Scholar
- NPR (2017). Is corruption really a big problem in foreign aid? 4 August. Retrieved October 2019, from http://www.npr.org/sections/goatsandsoda/2017/08/04/539285319/is-corruption-really-a-big-problem-in-foreign-aid.
- O’Neill, J. (2010). Canada wants Kenty to return squandered aid money. Canada.Com. 16 December. Retrieved October 2019, from http://www.canada.com/news/Canada+wants+Kenya+return+squandered+money/3983796/story.html.
- Organization for Economic Development and Cooperation (2013). What do we know about multilateral aid? Retrieved October 2019, from http://www.oecd.org/development/financing-sustainable-development/13_03_18%20Policy%20Briefing%20on%20Multilateral%20Aid.pdf.
- Pevehouse, J., McManus, R., Nordstrom, T., Shannon, M., & Widmann, M. (2015). Codebook for Correlates of War 3. International Governmental Organizations. Version 3.0.Google Scholar
- Pew Research Center (2016). Global attitudes and trends: Europeans face the world divided. 13 June. Retrieved October 2019, from http://www.pewglobal.org/2016/06/13/europeans-disagree-on-promoting-human-rights-moderate-support-for-development-aid/.
- Prather, L. 2019. Values at the water’s edge: Social welfare values and foreign aid. Working paper, UCSD.Google Scholar
- Prizzon, A., Greenhill, R., & Mustapha, S. (2016). An age of choice for development finance. United Kingdom Overseas Development Institute.Google Scholar
- Reuters. (2012). EU joins national donors in freezing aid to uganda over graft. 4 December. Retrieved October 2019, from http://www.reuters.com/article/us-uganda-aid/eu-joins-national-donors-in-freezing-aid-to-uganda-over-graft-idUSBRE8B30DA20121204
- Rodrik, D. (1995). Why is there multilateral lending? NBER Working Paper #5160. Google Scholar
- Sachs, J. (2006). The end of poverty: Economic possibilities for our time. New York: Penguin Books.Google Scholar
- Smith-Cannoy Heather. (2012). Insincere commitments: Human rights treaties, abusive states, and citizen activism. Washington DC: Georgetown University Press.Google Scholar
- Sonawane, Vishakha. (2016). Saudi royal family corruption: Saudi, Abu Dhabi royals bribed top Al Arabiya official, report says. International Business Times. 24 November. Retrieved October 2019, from http://www.ibtimes.com/saudi-royal-family-corruption-saudi-abu-dhabi-royals-bribed-top-al-arabiya-official-2450850
- Special Inspector General for Afghanistan Reconstruction (SIGAR) (2013). Health Services in Afghanistan: USIAD Continues Providing Millions of Dollars to the Ministry of Public Health despite the Risk of Misuse of Funds. Audit 13–17 September. Retrieved October 2019, from https://www.sigar.mil/pdf/audits/SIGAR%20Audit%2013-17.pdf.
- The Guardian (2014). UK and international donors suspend Tanzania aid after corruption claims. Retrieved October 2019, from https://www.theguardian.com/global-development/2014/oct/13/uk-and-international-donors-suspend-tanzania-aid-after-corruption-claims.
- Transparency International (2017). The 2017 Corruption perceptions index. Retrieved October 2019, from https://www.transparency.org/news/feature/corruption_perceptions_index_2016.
- U.S. Office of Inspector General (2016). Statement: Reports of Corrupt Practices in Cross-Border Aid to Syria. 6 May. Retrieved October 2019, from https://oig.usaid.gov/sites/default/files/statement_05062016_usaid_oig_syria_aid.pdf.
- Vreeland, J. R. (2007). The International Monetary Fund: Politics of conditional lending. New York: Routledge.Google Scholar
- Vreeland, J. R., & Dreher, A. (2014). The political economy of the United Nations Security Council. Cambridge: Cambridge University Press.Google Scholar
- Wolfensohn, J. D. (1996). “People and Development.” Address to the Board of Governors at the Annual Meetings of the World Bank and the International Monetary Fund. Reprinted in Voice for the World’s Poor: Selected Speeches and Writings of World Bank President James D. Wolfensohn, 1995–2005. Washington: World Bank.Google Scholar