Combating Corruption in Madagascar:

An Analysis and Assessment

Derick W. Brinkerhoff

Leslie M. Fox

July 1999

Abt Associates Inc.

4800 Montgomery Lane, Suite 600

Bethesda, MD 20814 USA

Report prepared for:

U.S. Agency for International Development

Global Bureau, Center for Democracy and Governance

Washington, DC 20523-3100 USA

Implementing Policy Change Project, Phase II

# I. EXECUTIVE SUMMARY

"Izay atao dia tsolotra aby (trans. Everything is bribes)." This quote
from an informant in a recent survey of users of the justice system
succinctly encapsulates Malagasy citizens' views of the level of
integrity in the public sector. Corruption in Madagascar is systemic and
pervasive. Petty corruption at the lower levels of the public service is
the most widespread form of corruption, although large-scale corruption
is also a problem. The latter reputedly permeates government contracting
procedures, issuance of business licenses and permits for exploiting
natural resources, the operations of the customs service, the justice
system, and the electoral process. A major contributing factor to
widespread corruption is poverty, particularly for petty corruption. But
poverty alone is not responsible for corruption in Madagascar,
particularly larger-scale corruption at the higher levels of government;
there is a structural dimension that creates the conditions conducive to
the emergence of corruption: monopoly plus discretion minus
accountability. The historically strong role of the state plus the
executive branch's domination of government creates a near monopoly on
power, and high levels of discretion unchecked by accountability and
sanctions. Laws and regulations tend to be either not applied or
selectively enforced, sometimes as a result of lack of institutional
capacity, sometimes by design. Low levels of transparency and
responsiveness contribute to the discretionary power of public
officials, and to lack of accountability. Finally, basic information is
often unavailable to citizens, further impeding the possibilities of
checks on the abuse of power and privilege.

The government has undertaken some efforts to combat corruption, and the
Minister of Justice espouses an anti-corruption platform that promises
to clean up the justice system and tackle the worst abuses throughout
the public sector. However, a summary assessment of political will to
tackle corruption suggests that it is limited, shallow, and untested.
Few concrete measures have been taken to date. On the supply side,
public sector institutional capacity is very weak. Besides the severe
weaknesses in the judiciary, investigatory and regulatory agencies are
inadequate to provide even minimal levels of accountability and
enforcement. On the demand side, civil society's current capacity to
participate in the fight against corruption is not particularly strong
or encouraging. Civil society organizations remain relatively fragmented
and weak. There is a very small set of groups interested in corruption,
including a nascent national chapter of Transparency International and a
task force operating under the aegis of an umbrella association of
protestant churches. The media are also limited in what they can do;
press independence is a problem, and journalists' ability to pursue
investigations and report on alleged corrupt practices is highly
circumscribed.

Donor-supported activities that relate to fighting corruption are
largely integrated into broader governance improvement efforts, in the
case of the World Bank, or into programs intended to make the economic
climate more hospitable to private sector investment, in the case of
USAID's legal, regulatory, and justice program. Many of these activities
are not labeled as anti-corruption efforts per se, although the donor
agency officials involved recognize their potential for addressing
corruption problems of various types.

An ongoing dilemma in fighting systemic corruption is how to address
systemic issues with limited, pinpoint interventions. Corruption is at
base a governance issue; thus a range of governance enhancing efforts
can be effective against corruption even if fighting corruption is not
their explicit focus. Recommendations to USAID/Madagascar include:
continuation of ongoing efforts to increase transparency,
accountability, and citizen participation, particularly with local
government; continuation of selected capacity-building efforts with the
National Assembly, the Ministry of Justice, and financial oversight
agencies; encouragement of the creation and use of fora and mechanisms
that can bring government, the private sector, and civil society
together for interchange and discussion; limited ongoing support to
current anti-corruption "champions" in government, and to emerging civil
society advocates in the process of self-organizing; and consideration
of a sector-specific approach (environment, health, and/or education) in
developing new anti-corruption initiatives.

# II. PURPOSE AND METHODOLOGY

The Center for Democracy and Governance in AID/Washington (AID/G/DG) has
identified and targeted public sector corruption as a critical
democratic governance and economic development problem. Public sector
corruption undermines government legitimacy by subverting the rule of
law, diminishing transparency, reducing credibility, increasing
cynicism, and limiting accountability. It also negatively affects
economic development by increasing the costs of doing business,
diverting investment to nonproductive uses, distorting competition, and
siphoning budget resources away from their assigned purposes. Among the
activities that the DG Center has undertaken have been the preparation
of an anti-corruption handbook and a series of country anti-corruption
assessments. The Center contacted USAID Missions worldwide to determine
which ones would be interested in hosting an assessment. To date
assessments have been conducted in Romania, Bulgaria, Thailand,
Philippines, Indonesia, Lebanon, and Paraguay. This study in Madagascar
is the first African country to be analyzed.

The purpose of this assessment is to evaluate the broad parameters of
corruption in Madagascar and survey efforts to combat it. This
evaluation focuses on: assessing the degree and incidence of corrupt
practices, identifying causes and consequences of corruption, reviewing
current and planned anti-corruption efforts, assessing political will
and institutional capacity to fight corruption, and developing a set of
recommendations for USAID/Madagascar's consideration. The findings and
analysis are also intended to contribute to the DG Center's efforts to
draw comparative lessons across cases, and to refine the guidance
contained in the anti-corruption handbook.

A two-person team consisting of Dr. Derick W. Brinkerhoff (Abt
Associates Inc. staff), a governance/public administration specialist
and Research Director for the DG Center's Implementing Policy Change
Project (Phase II), and Mr. Leslie M. Fox (Abt Associates Inc.
consultant), a governance/civil society specialist, spent ten days in
Madagascar during the period May 15-25, 1999. The assessment methodology
consisted of data collection via interviews and focus group meetings
(Annex 1) complemented by document review (Annex 2). The interviews and
meetings were held with major stakeholders in several categories: a)
government, including representatives from the executive, judicial, and
legislative branches; b) civil society, including NGOs, church groups,
and advocacy associations; c) the private sector; d) the independent
media; and e) international donors. In-country, the team was supported
by the Mission's coordinator for legal, regulatory, and judicial reform,
Mr. Franois Vzina, and by the head of the core exploratory group for the
establishment of a national chapter of Transparency International (TI),
Ms. Yveline Rakotondramboa. Following meetings with members from
USAID/Madagascar's Strategic Objective teams, the American Ambassador
and Deputy Chief of Mission, the team visited as many people as possible
in Antananarivo during our time in-country. On the last day of data
collection, the assessment team held a debriefing for Mission management
and other interested staff. Annex 1 to this report contains the full
list of persons and organizations contacted during the team's visit.

It should be noted that the assessment relies on perceptions of
corruption, not factual data. Other than cross-checking views obtained
from informants and looking for consistencies (triangulation of data
sources), the team did not seek verifiable evidence of what we were
told. Given the available level-of-effort for this assignment and the
difficulties inherent in authenticating and confirming corrupt
practices, more in-depth investigation was not possible. However, our
rapid overview is not the only effort to investigate corruption in
Madagascar, but merely the latest in a series of studies, workshops, and
roundtables on the topic. Confidence in our findings and analysis is
heightened by the fact that most of what was reported to the team is
also reflected in these other investigations.

# III. THE PROBLEM OF CORRUPTION IN MADAGASCAR

Corruption is not a new problem in Madagascar, but it is one that is
currently at the forefront of public concern. A growing number of
analyses have begun to amass information related to corruption and its
practice. For example, an opinion poll conducted in 1995 in the capital,
Antananarivo, sampled 400 households (885 individuals over the age of
18), asking questions on a broad range of economic and social issues.
The pollsters found that 96 percent considered corruption a major issue,
and 40 percent had personally experienced corruption in the last year in
the form of being solicited for a bribe by a public official.
Thirty-nine percent of those sampled perceived corruption among senior
officials as one of the key constraints to Madagascar's development. A
1998 survey of users of the justice system conducted in the capital and
12 other cities and towns found that the most frequent complaint about
the justice system was the extent of corruption, both in the form of
bribery at all levels and exploitation of personal relationships. In May
1999, a roundtable on strategies for fighting corruption was organized
by the International Development Law Institute (IDLI) and supported by
USAID and the Ministry of Justice. The Roundtable assembled a group of
around 80 Malagasy participants who sought to characterize the nature
and scope of corruption in the country, and to suggest remedies.

The documents reviewed by the team and the interviews conducted lend
support to the widespread sense that corruption is a critical and
growing problem. Our findings reconfirm earlier investigations and
analyses, both those cited above and others, and provide further
substantiation and corroboration of the scope and nature of the
corruption problem. The discussion here summarizes the views obtained
during our mission.

1.  [Corruption]{.underline} in Madagascar is systemic and it is
    pervasive. It exists at all levels, from the reputed award of
    billions of Malagasy francs in government contracts to firms with
    personal ties to high officials, to 500 or 1000 francs (about 8-16
    US cents at current exchange rates) requested by the "go-fer" at a
    rural mayor's office to obtain routine documentation (e.g., birth
    and death certificates). Corruption pervades governance practices
    from the top to the bottom of the public sector -- the sale of
    decisions by a high court judge to the decision by a park ranger to
    overlook the cutting of trees in a protected forest in exchange for
    an illicit payment-- and the length and breadth of the nation.

2.  [Petty corruption]{.underline} takes place at the lower levels of
    the public service in the form of solicitation and payment of
    bribes. It is the most widespread form of corruption and while the
    actual amounts involved are relatively small, it is the form of
    corruption that touches the largest number of citizens. Petty
    corruption is insidious as it draws in many thousands of largely
    innocent citizens who actively or passively support it to ensure
    that their survival needs are met, and/or that they receive basic
    services. Civil servants, whether working in ministries such as
    health and education, or in constitutionally mandated institutions,
    particularly the justice system, routinely insist upon some form of
    payment for access to and/or the provision of basic services.
    Consider the following:

-   Medical staff (doctors, nurses and pharmacists) in public facilities
    routinely solicit payment for health care services and medicines --
    nominally available free of charge; this practice is so widespread
    that citizens treat it as normal procedure.

-   Security of tenure is uncertain and subject to capriciousness. A
    piece of land or a house that has been in a family for generations
    can be lost because it was either not formally registered or the
    title was arbitrarily transferred to someone able to purchase
    preferential access to legal decisions.

-   School officials frequently tell parents that no space for their
    children is available for the next academic year, and then upon
    receipt of a gratuity "discover" that there is room for them after
    all.

3.  [Large-scale corruption]{.underline} reputedly permeates government
    contracting procedures with the private sector, such as award of
    contracts for public works projects and the purchase of vehicles and
    equipment for use by the public service. It extends to the issuance
    of business licenses and permits for exploiting natural resources,
    such as the sale of timber cutting permits and the award of mining
    concessions. Another major area of large-scale corruption involves
    the operations of the customs service, particularly the award of
    exonerations for the payment of duties and the falsification of
    documentation. The justice system, including the highest levels of
    the judiciary and police, is routinely cited as rife with instances
    of large-scale corruption, from the sale of bail and paroles to
    overturning of lower court rulings. Finally, reported instances of
    significant electoral fraud and campaign finance abuses during the
    last elections have cast a negative pall over Madagascar's young
    democracy.

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4.  With the economic downturn and uncertainty for the future,
    corruption is perceived as worse than at any previous time in
    Madagascar's history (which may be a function of the salience of the
    current situation relative to previous times, less well remembered,
    since earlier periods saw extensive corruption as well). Officials
    make little effort to disguise their illicit activities, and those
    in positions of power seek to make the most of the opportunities for
    amassing wealth during their turn at the public "trough." Cynicism
    and disrespect for the public and its welfare characterize
    corruption under Madagascar's Third Republic.

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5.  Corruption has become systemic and institutionalized. It is no
    longer a phenomenon restricted to a few "bad apples" in the public
    sector barrel, but has become part of the grain of the wooden barrel
    itself. It is firmly entrenched in the way the public sector
    operates, in interactions with individual citizens, and in relations
    with the private sector. This trend is reinforcing a return to the
    earlier days of clientelism, where people's relationship to
    government was determined not by their rights as citizens enforced
    by the rule of law, but by access to the favors of powerful patrons.

# THE CAUSES OF CORRUPTION IN MADAGASCAR

Corruption has its roots in Madagascar's history and the evolution of
the country's governance arrangements to their present form. The causes
of corruption can be linked to a complex interplay between economic,
political, social, and cultural factors. This section provides a rapid
overview and analysis.

## A. Background and History

Throughout this island nation's history the state has been the major
source of political and economic power---society was organized
vertically to serve the interests of a small elite at the top. It
started first under the Merina kingdom, was strengthened under French
colonial rule, and then carried over into the post-colonial First
Republic, and later following the coup of 1972, into a series of
military and socialist regimes culminating in the Marxist Second
Republic of Didier Ratsiraka in 1975. Under the Second Republic, with
nationalization of most enterprises and the centralization of planning
and economic management, public decision-making was concentrated in the
hands of a small coterie of government officials. Policy implementation
was carried out by heavily bureaucratized state management structures
with elaborate procedures and regulations. Political and economic power
remained within a closed circle of interlocking elites. The majority of
the population eked out a living in subsistence agriculture and sought
to stay as far away from government as possible.

Earlier governments had managed to maintain modest annual growth in the
three percent range, but following the installation of the Second
Republic with its ineffective and inappropriate public policies;
Madagascar's economy stagnated and then slid into a serious decline.
Isolationist, protectionist, and socialist economic measures cut the
economy off from the rest of the world, populated it with inefficient
and clumsy state-owned enterprises, and burdened it with subsidies and
numerous "white elephant" projects. Since 1975, growth rates have
averaged a meager half a percent per year, but with a population growth
rate of three percent, in per capita terms growth rates have been
negative, exacerbated by deficit spending and high inflation. During
this period civil servants have seen their incomes ravaged and their
standard of living in precipitous decline. Salaries no longer cover the
basic necessities for family food, shelter, health, and education. At
the senior levels, officials whose monthly salaries in the 1970s were in
the \$800-900 range are now paid the equivalent of roughly \$125-175. At
the lower levels of the state bureaucracy, salaries fail to provide a
living wage. Over the past 25 years, Madagascar's subsistence farmers
have been increasingly joined by "subsistence civil servants" in the
struggle to make ends meet.

## B. A Framework for the Assessment of the Causes of Corruption

This negative economic evolution, resulting in the inability of the
system to generate a living wage for the large numbers of citizens, has
produced the phenomenon most frequently cited in our interviews as the
major contributing factor to widespread corruption: poverty.
Particularly for petty corruption, widely practiced among those at the
bottom of the state bureaucracy, the need to fill the gap between a
minuscule salary and basic survival requirements was consistently cited
as the root cause of corrupt practices today. At the middle and higher
levels, while civil servants are not faced with the inability to
purchase the bare essentials, they are nonetheless unable to maintain a
decent standard of living based solely on their salaries and related
allowances. Besides taking second jobs in many cases, not surprisingly,
they too have turned to rent-seeking and influence peddling to keep
themselves out of poverty. As a result, corrupt practices have become
ingrained in the relationship between Malagasy public officials and
citizens, an accepted part of how the system works, albeit decried from
all quarters.

But poverty alone does not explain the causes of corruption in
Madagascar, particularly larger-scale corruption at the higher levels of
government. Robert Klitgaard's frequently cited adage highlights a
structural dimension that creates the conditions conducive to the
emergence of corruption, that is, corruption derives from situations
characterized by monopoly [plus]{.underline} discretion but
[minus]{.underline} accountability (monopoly + discretion -
accountability = corruption).

### **1. Monopoly: The Centralization of Political, Economic and Social Power** 

In the case of Madagascar, the state, and especially the executive
branch, maintains a high degree of monopoly power in almost all spheres
of national life. The executive dominates the legislative and judicial
branches of government---they are little more than extensions of
presidential power. Despite periodic government calls for economic
liberalization and actual reforms in a number of areas, the state
remains heavily involved in economic activity via state-owned
enterprises and continues to dominate private sector access to economic
opportunity.

Relative to decentralized local government, civil society and the
private sector, the central state holds the principal sources of
societal power. Despite plans for decentralization that have been in the
making for years, little power has so far been devolved to local-level
authorities. Civil society in Madagascar remains in a nascent stage of
development, weak and fragmented---little changed from its emergence
during the democratic transition in the early 1990s. The traditional
private sector continues to be closely tied to government through
cronyism and clientelism, and has largely sought to accommodate
government rather than to challenge it. The Malagasy state, through its
control of the National Assembly and public media, dominates political
dialogue and public discourse. Specifically we note:

-   Access to public media, particularly television and radio, has been
    severely limited to opposition political parties as it is to civil
    society. Although many of the independent daily newspapers are
    affiliated with opposition political parties, because they depend to
    varying degrees on government advertising, their public oversight
    role is considerably reduced. Permits for meetings and rallies
    (freedom of assembly) are routinely denied to opposition political
    parties.

-   Economic activity in Madagascar is largely based: 1) on trade and
    commerce, much of it import-export businesses; and 2) on public
    tenders providing government with a range of goods and services. In
    both cases, government has significant control over the private
    sector's ability to function through its control of the customs
    service and of the public tenders.

-   The executive has virtual carte blanche in the conduct of the
    public's business given the fact that the ruling party dominates the
    National Assembly and the judiciary is subject to oversight by the
    Ministry of Justice.

### **2. Discretion: Capricious and Arbitrary Rule Making and Application** {#discretion-capricious-and-arbitrary-rule-making-and-application .unnumbered}

High degrees of discretion -- arbitrary decisionmaking or the exercise
of power unconstrained by an explicit and predictable rule structure --
exist in Madagascar due to a number of factors. First of all, the
state's monopoly or near-monopoly role in social, economic and political
life allows for excessive amounts of discretionary decisionmaking given
the absence of countervailing power. As noted above, the other branches
of government support executive dominance while citizen oversight --
either through voluntary organizations (civil society) or economic
enterprises (the private sector) -- is minimal. As a result, laws and
regulations tend to be either not applied or selectively enforced,
sometimes as a result of lack of institutional capacity, sometimes by
design. Secondly, low levels of transparency and responsiveness
contribute to the discretionary power of public officials, as does lack
of accountability. Finally, basic information is often unavailable.
Citizens in many cases are not aware of their rights, while confusing,
contradictory and continually shifting regulations keep private sector
operators off-balance and at the mercy of public officials. Consider the
following cases:

-   The award of exonerations on imported goods -- pharmaceuticals are a
    good example -- has been a major source of bribery as eligibility
    criteria are unclear and open to interpretation.

-   The award of public contracts, licenses and permits -- public works,
    logging, foreign investment -- is an equally opaque process leaving
    decisionmaking open to favoritism, side-deals, and kickbacks.

-   Most court cases involve non-jury decisions, where one or more
    judges issue rulings based solely on their---frequently
    idiosyncratic\-- interpretations of the law.

### **3. Accountability: In Public Decisionmaking and in the Provision of Public Services** {#accountability-in-public-decisionmaking-and-in-the-provision-of-public-services .unnumbered}

In Madagascar as elsewhere, the major sources of accountability --
internal institutional norms of procedure and externally mandated and
enforced sanctions -- function poorly or are absent altogether. The
justice system has severe problems in maintaining basic operations; the
courts are clogged with large backlogs of cases, while incompetent and
often venal judges preside over cases, and prosecutors can bend the law
for personal gain. Regulatory and law enforcement agencies extort bribes
and pay-offs with impunity. Poorly performing public service providers
are impervious to sanction in the absence of functioning administrative
procedures and mechanisms for review and redress. The thin veneer of
democracy, the fragmentation and weakness of opposition political
parties and civil society, the timid and self-censoring press, and the
preoccupation of the rural majority with survival all contribute to a
lack of accountability. In addition to the fact that there are few
checks on public officeholders and decisionmakers, perhaps one of the
biggest problems related to ensuring accountability is the lack of
performance standards and related indicators

## C. Contributing Factors {#c.-contributing-factors .unnumbered}

In discussing the causes of corruption, informants noted the importance
of acknowledging its [cultural]{.underline} and [social]{.underline}
dimensions. As in many traditional cultures, gift-giving in Madagascar
is a reciprocal cultural practice that strengthens and reinforces social
solidarity. While entirely proper in its traditional context, its modern
variant is a corrupted distortion of an appropriate cultural practice.
Similarly, traditional social values revolve around a hierarchical,
centralized and male-dominated pattern of relations that extend to
decisionmaking. While the Third Republic is not the Merino Kingdom, many
of values and behaviors of these earlier times have, not surprisingly,
carried over into values and behaviors of today's Madagascar. The
pressure for social solidarity and cultural conformity are extremely
strong in Madagascar, and we heard repeatedly that as result, people
were unwilling to confront those in power over issues of abuse of
position and corruption. While the cultural and social dimensions of
corruption should not be used to excuse corrupt practices, they are
important to consider in devising strategies for addressing the problem
in the future.

# V. THE CONSEQUENCES OF CORRUPTION IN MADAGASCAR {#v.-the-consequences-of-corruption-in-madagascar .unnumbered}

Except for those few who benefit from corruption, the vast majority of
Malagasy feel its negative effects. Its consequences are felt in social,
economic and political life. As usual it is the poor majority who
suffers the most from the consequences of corruption, either directly or
indirectly.

[Economically]{.underline}, the widespread rent-seeking conduct of
government officials has led a large number of enterprises to exit the
formal sector for the relative safety of the parallel economy. While
they are thus able to avoid the egregious behavior of the government,
the impact is to decrease payment of taxes and thus revenue for the
public coffers. At the same time it sets up the situation where those
who play by the rules and pay their taxes are penalized relative to
those who operate in the hidden economy. Furthermore, the difficulty of
registering businesses due to the numerous levels of bribery that have
to be negotiated have ultimately decreased investment in productive
activities by both local and international businesspeople. Given that an
estimated 70 percent of Madagascar's revenue derives from customs
receipts, one can only wonder how much more would have been collected if
the customs service had the best interests of the country at heart
rather than having the reputation as a major source of corruption.

The negative impact of corruption on the [environment]{.underline}, and
by extension the economy, from the illegal exploitation of natural
resources, particularly forest products and unregulated mining in and
around protected areas is beginning to reach dangerous proportions. Not
only is the country's (and the world's) biological diversity suffering,
but ecotourism, an increasingly importance source of foreign exchange
and jobs over the past decade, may be at growing risk.

The repercussions of corruption in the [social]{.underline} sphere are
both immediate and long-term. The results of corruption in the public
health system -- from the sale of ostensibly free medicines to
side-payments for surgery -- are not only sad, they can be deadly, as
reported by several of our informants. Corruption in the education
system largely centers on gaining access to schools and, in many cases,
the payment of bribes for a pass or diploma. Here the immediate impact
can be lack of access to education for a student unable to pay, or a
negative impact on educational quality when unqualified students
graduate through bribery rather than academic achievement. The long-term
costs to Madagascar result from the cumulative effects of these
individual cases: reduced levels of health and education among the
population, and ultimately a lower quality of human resources available
to participate in, and contribute to, the country's development.

[Politically]{.underline}, lack of respect for the rule of law begins to
breed citizen cynicism and damage the fabric of civic life. Public
office is increasingly viewed as little more than a route to
riches---ultimately breaking the link between hard work and its just
reward, and undermining any notion of a service ethos. An atmosphere has
developed in which "anything goes." Stories of senior officials'
exploitation of public resources for their private enrichment are widely
circulated, contributing to the "free-for-all" environment. The
legitimacy of the Malagasy political system has been called into
question by the perception that the recent elections were tainted with
electoral fraud, and that elected parliamentarians have either performed
poorly and/or paid more attention to pursuing their own interests than
those of their constituencies. The high hopes for democracy that swept
the country in the early years of the decade are in retreat at its
close.

# VI. CURRENT ANTI-CORRUPTION RESPONSES AND ACTIVITIES {#vi.-current-anti-corruption-responses-and-activities .unnumbered}

While the picture of corruption painted above is fairly bleak, there is,
in fact, a range of activities being undertaken in Madagascar to address
it. The following discussion reviews the responses and specific
activities being undertaken by the GOM, political parties, civil
society, and donors to address corruption and its consequences.

## A. Government of the Republic of Madagascar {#a.-government-of-the-republic-of-madagascar .unnumbered}

The [Ministry of Justice]{.underline} drafted and submitted an
anti-corruption law to the Council of Ministers in late 1998. After a
review and debate, the Council of Ministers recently rejected the draft
law and sent it back to the MOJ's technical unit for redrafting. While a
number of its provisions were questioned, the principal problem raised
by the Council was what it considered the undermining of the right to a
"presumption of innocence" which the constitution affords to all
Malagasy citizens. This related to a provision in the law that would
allow investigations into the financial dealings of government employees
including ministers when they could not explain the source of their
wealth. A second issue concerned the establishment of a national
anti-corruption agency (Agence Nationale de Lutte contre la
Corruption)*.* The draft law provided this proposed agency with a
mission that addressed both the prevention and the sanctioning of
corruption. The Council questioned whether the establishment of a new
government agency was really necessary as laws and other institutions
already exist that have such a mandate. As of this writing it is unclear
what the MOJ plans to do to address these issues. Other activities being
undertaken by the MOJ include:

-   The Minister continues to make periodic public announcements against
    corruption and its negative impact on the country's development.

-   The Minister of Justice has sanctioned at least two magistrates for
    corrupt practices, although it is unclear as to the nature of their
    punishment.

-   Under the World Bank-financed PAIGEP project, indemnities for
    magistrates have been increased as an incentive for the effective
    and honest performance of their duties, though it appears that in
    the absence of agreed-upon performance indicators the bonuses have
    been evenly distributed among jurisdications.

-   Continued investigations of "all" reported cases of public
    corruption.

-   A code of professional conduct (code de dontologie) for the
    Magistrature has been instituted.

-   The Ministry is in the process of revising bail procedures,
    establishing a commission of three magistrates who will, henceforth,
    determine the right of an accused to receive bail. Current practice
    is that bail is granted or denied by a single judge.

    [The Ministry of Finance, Budget and Autonomous
    Provinces,]{.underline} which is, inter alia, responsible for custom
    duties and tax revenue collection, is in the process of posting on
    the doors of all headquarters offices that deal with the public the
    requirements needed by individuals and firms to receive necessary
    approvals. This effort at increasing government transparency is
    designed to decrease bribes, as the public will now have, in
    principle, all the information it needs to ensure that its rights
    are respected. Additional activities undertaken by this Ministry
    include:

-   Publication in the media of those businesses that are delinquent in
    the payment of their taxes.

-   The creation of a one-stop-shop (guichet unique) for the
    registration of new businesses in cooperation with the Ministry of
    Privatization and Development of the Private Sector (April 1999).
    Ultimately, plan is to have one guichet unique in each province of
    Madagascar.

-   A clamp-down on the award of ad hoc exemptions for customs duties to
    favored businessmen.

## B. Political Parties {#b.-political-parties .unnumbered}

A roundtable on political ethics was held March 3-4, 1999 in
Antananarivo bringing together both the principal opposition and ruling
parties. According to a recent article in the Express newspaper (May 22,
1999) a technical committee formed at the meeting came up with a set of
recommended reforms in the electoral code, called for a reduction in
number of political parties (currently 150) and strongly promoted the
increase in the power and autonomy of the National Electoral Council
particularly in monitoring future elections.

## C. Civil Society {#c.-civil-society .unnumbered}

The response of Malagasy civil society to corruption in the public
sector has been relatively modest, although the level of activity
appears to have picked up in the last few months. Specific activities
that have been undertaken and/or are underway include the following.
There may well be other activities being undertaken by Malagasy civil
society organizations, but these are the ones that the team was able to
identify during our visit.

-   Transparency International is supporting the formation of a local
    Malagasy chapter. To date, a core exploratory group has organized
    itself, and is meeting periodically to discuss and plan for the
    future, including investigating how to meet TI's registration
    requirements.

-   The FJKM, a consortium of three Protestant churches that acts as
    their development arm, has launched an anti-corruption initiative
    and established a national committee to manage it. It has undertaken
    a strategic planning exercise (SWOT analysis---strengths,
    weaknesses, opportunities, and threats) and developed an
    anti-corruption action plan covering the next three years.

-   CNOE (Comit National d\'Observation des Elections et d'Education des
    Citoyens), one of the oldest Malagasy CSOs, has provided voter and
    civic education since the first democratic elections in 1992, and
    was heavily involved in the election monitoring during the last
    elections. Through its country-wide network of branch offices, it
    continues in the area of civic education and particularly human
    rights training.

-   UNA-Civiles (Union Nationale des Associations Civiles de
    Madagascar), a local NGO association with a democracy promotion and
    good governance mission, has conducted an analysis of corruption
    problems and has had published several editorials on governance and
    development issues in local newspapers. UNA-Civiles was established
    in 1996 and held its first national meeting in 1998. Its leadership
    is drawn from the business community, and reputedly has some ties to
    an opposition political party.

-   APIM, the alumni association of IDLI (International Development Law
    Institute) was a local partner in the May 1999 roundtable on
    corruption and it remains committed to fighting corruption. Its
    members meet occasionally to discuss and plan for future activities.

## Donors

Donor-supported activities that relate to fighting corruption are
largely integrated into broader governance improvement efforts, in the
case of the World Bank, or into programs intended to make the economic
climate more hospitable to private sector investment, in the case of
USAID. Many of these activities are not labeled as anti-corruption
efforts per se, although the donor agency officials involved recognize
their potential for addressing corruption problems of various types.
This review concentrates upon what the World Bank and USAID are doing,
both individually and jointly.

### **1. World Bank**

The World Bank's Public Management Capacity Building Project (Programme
d'Appui Institutionnel la Gestion Publique, or PAIGEP) has two main
objectives: strengthening economic management, and strengthening public
administration. Related to this latter objective is a component for
legal and judicial reform, as well as components for civil service
reform and decentralization. PAIGEP is a \$15 million effort over five
years, of which \$4.4 million is allocated to legal and judicial reform;
the project began in 1997 and is expected to end in 2001. A workshop
with representatives of the GOM ministries involved will be held in July
1999 to review progress and discuss plans for the remainder of the
project's life.

The legal and judicial reform component consists of six sub-components:

-   Publication of legal information, reform of commercial and business
    laws,

-   Training and the establishment of a National School for Magistrates
    and Court Personnel (Ecole Nationale de la Magistrature et des
    Greffes -- ENMG),

-   Streamlining of the litigation process in the lower courts,

-   Strengthening the effectiveness of the MOJ and the court system, and

-   Establishing an arbitration mechanism to resolve commercial
    disputes.

    While PAIGEP is not directed specifically at combating corruption,
    its focus on improved governance addresses the broader public sector
    environment that influences corruption. The establishment of ENMG,
    for example, supports improved judicial functioning through
    training. ENMG has been a partner with USAID and IDLI in the
    anti-corruption training for judges and in the recent
    anti-corruption roundtable. PIAGEP is funding institutional audits
    for six ministries, including the MOJ. USAID has collaborated with
    PAIGEP in the institutional assessment of the MOJ, the development
    of an arbitration law, and in providing various training
    opportunities and study tours (see below).

    Apart from the context of PAIGEP's institutional strengthening, the
    Bank is very concerned about public corruption in its entire country
    portfolio. Recently, it considered closing down its entire
    Madagascar program as a result of corruption, but opted instead to
    cut back its financing during the current lending cycle while
    increasing oversight of existing projects. While each World Bank
    project has an external audit on a regular basis, this has proven to
    be insufficient in tracking and accounting for funds. The Bank
    office in Madagascar has recruited a financial manager to install a
    unified financial management information system for all Bank
    projects, and a procurement specialist to oversee projects'
    contracting procedures. The Bank is also consulting with the IMF on
    better tracking of fiscal receipts, in collaboration with the
    Ministry of Finance, Budget, and Provincial Development. From the
    Bank's point of view, public procurement is a high priority target
    for reducing corruption.

    The World Bank's support project to the environment and natural
    resources sector, Environmental Project II, contains a coordinating
    unit called the Multi-Donor Secretariat. The Secretariat provides
    donors working in the sector with a means to coordinate their
    projects and programs and discuss policy with the concerned
    ministries with one voice. Among the Secretariat's proposed
    activities is an effort designed to get the Ministry of Water and
    Forests involved in discussion with the MOJ and the Ministry of the
    Environment around the issue of illegal natural resource
    exploitation. The suggestion has been to set up a small, high level
    committee of Ministers and senior staff to discuss strategies and
    develop an incidence tracking system for illegal exploitation that
    would not name names. This would be a step in the direction of
    addressing the serious problem of corruption in the environment
    sector.

### **2. Joint World Bank and USAID/Madagascar Initiatives**  {#joint-world-bank-and-usaidmadagascar-initiatives .unnumbered}

In addition to frequent discussions around their programs, the Bank and
USAID have collaborated on two activities that have an anti-corruption
focus:

-   An institutional audit of the Ministry of Justice was started in
    July1998 and is to be completed in mid 1999. This in-depth study
    identified in detail the structural and procedural weaknesses in MOJ
    operations that contribute to the inability of the sector to provide
    basic justice services and to the prevalence of corruption.

-   The Foreign Investment Advisory Service (FIAS), a unit sponsored
    jointly by the World Bank and the International Finance Corporation,
    in cooperation with a USAID-funded technical expert, carried out an
    assessment and developed an "investor roadmap" in November 1998. The
    assessment highlighted the lack of transparency, the individual
    discretion introduced by vague directives, plus the vast number of
    steps in the business registration process, all of which create
    opportunities for corruption. FIAS and USAID sponsored a roundtable
    of donor and government officials in March 1999 to discuss the
    assessment. This activity led to the formulation of an action plan
    with a strong focus on reducing and simplifying the procedures
    involved in registering a new business. Efforts are now underway to
    implement the plan.

    Finally, USAID, the World Bank and a number of other donors have put
    strong pressure on the GOM, especially the Minister of Environment,
    to desist in awarding licenses for mining of sapphires without
    environmental impact assessments first being undertaken. They also
    raised the issue of logging in and around protected areas.

### **3. USAID/Madagascar** {#usaidmadagascar .unnumbered}

USAID/Madagascar's Legal, Regulatory, and Judicial Reform (LRJ) Activity
operates under its Special Program Objective (SPO), which targets
activities that enable and encourage private sector initiative and
investment. Within the parameters of the SPO, the Mission has undertaken
a number of anti-corruption activities. Besides the joint efforts with
other donors enumerated above, USAID has directly funded and supported
the following:

-   Through a grant to IDLI a roundtable on anti-corruption was held in
    May 1999 that included GOM officials, NGOs, the private sector and
    donors. This was a high profile event that was co-sponsored by the
    MOJ. The roundtable was preceded by a preparatory team visit that
    undertook a rapid review of corrupt practices as input to the design
    of the roundtable. Sessions addressed the forms and consequences of
    corruption in Madagascar, and working groups deliberated on possible
    strategies and measures to combat corruption.

-   The Mission also financed IDLI to conduct a course on judicial
    control of corruption at the ENMG during May 1999. This course, held
    in conjunction with the roundtable, addressed the topic of ethics
    for magistrates as one of the topics covered.

-   A cooperative agreement, awarded to PACT, finances Projet Rary, a
    three-year activity designed to promote government-citizen dialogue.
    The project is helping to increase budget transparency at the local
    government level in two secondary cities. Rary cooperates with the
    Ministry of Decentralization; it provides training to local
    government financial officials in budget preparation; works with
    city councils and municipal officials on effective public hearings;
    and educates civil society groups in the area of budget analysis and
    formulation, plus participation in civic affairs. In addition, Rary
    facilitates citizen participation in the governance of municipal
    services. The project has improved transparency in the collection of
    property taxes, and worked on public-private dialogue on
    privatization of water systems, including transparent payments
    procedures. Journalist training is another project component. Rary
    is not explicitly an anti-corruption initiative, but its components
    deal with several structural factors that influence corruption:
    transparency and accountability, information sharing, and media and
    citizen oversight.

-   USAID-supported technical assistance to the National Assembly from
    the US's National Conference of State Legislatures resulted in the
    first-ever public hearing on governmental ethics in late 1998.
    Several deputies from the National Assembly are being financed to
    participate on study tours, including ethics training, in the United
    States. The Minister of Justice was supported to attend Transparency
    International's Eighth International Anti-Corruption Conference in
    Peru in 1997, and he made a number of radio and television addresses
    on the topic of conference subsequent to his participation at the
    conference.

-   The Mission provided support for the Executive Director of
    Transparency International, Miguel Schloss, during his visit
    Madagascar in March 1999, and training for TI's chapter formation
    core group leader and co-leader, who have received funding to attend
    several anti-corruption seminars, workshops, and courses.

-   Support was also provided to the MOJ in the drafting of a new
    arbitration law that was passed by the National Assembly in
    December 1998. The passage of this law was a World Bank
    conditionality with the purpose of supporting the use of arbitrators
    to deal with the resolution of commercial disputes. Follow-up to
    this effort includes training arbitrators and pilot testing of
    commercial dispute resolution in the city of Tamatave.

-   Using staff in the Mission's controller's office, audit training has
    been provided to contribute to improved financial accountability. A
    series of seminars has been held for accountants and auditors in the
    Chambre des Comptes and the Inspection Gnrale.

# VII. AN ASSESSMENT OF POLITICAL WILL AND INSTITUTIONAL CAPACITY IN THE FIGHT AGAINST CORRUPTION

Above we have examined the causes and consequences of corruption in
Madagascar as well as its many forms. In this section we provide an
assessment of government's political will to take up the fight against
corruption as well as of the institutional capacity to carry out
specific interventions by the several concerned actors that would
necessarily have to be involved in such an effort.

## A. Political Will Assessment

The only government pronouncements regarding fighting corruption have
come from the Minister of Justice who has on numerous occasions made
statements about his and the ministry's desire and intent to attack
corruption by improving the administration of justice and increasing
citizen confidence in the judiciary. The Minister has been praised
within the region for his public stance on fighting corruption, having
been named one of the five "Men of the Year" for 1997 by a regional
magazine, the *Revue de l'Ocan Indien*, as well as receiving recognition
from donors for his commitment. In terms of actions taken, the GOM has
increased the MOJ's budget by 43 percent in 1997 (a World Bank
conditionality), the Minister issued a judicial code of ethics, and in
1999 he sanctioned two judges for abuses, apparently reassigning them.
Most recently, the Minister presided over the opening of, and was a
keynote speaker at, the May 1999 IDLI-organized roundtable and the
IDLI-ENMG seminar. In both venues he repeated his commitment to the
anti-corruption struggle.

Besides the Minister of Justice, however, other GOM voices professing
willingness to combat corruption are few and/or very quiet. For example,
the Prime Minister's meeting with TI's Miguel Schloss in March 1999
yielded little beyond vague statements about corruption being a problem.
The team's interviews with the media revealed that articles in the press
decrying irregularities and questionable practices elicit no government
response. Senior officials have not commented on corruption or proposed
measures to address it. At the level of technocrats, for example, in the
Inspection Gnrale and the Chambre des Comptes, there appears to be
genuine concern about being capable of carrying out their organizational
missions in a manner that could contribute to dealing with corruption.
This concern, though, does not at present translate into political will.

Thus, the team's sense of the level of GOM political will for fighting
corruption is that it is:

a)  [Limited]{.underline} and localized within the person of the
    Minister of Justice;

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b)  [Shallow]{.underline} in that the Minister's statements do not
    appear to be echoed by the President, other senior officials, or
    members of the majority AREMA party; and

c)  [Untested]{.underline} in that only a few concrete actions have been
    initiated.

We are hesitant to go beyond this impressionistic conclusion because
while essential for pursuing anti-corruption efforts, political will is
notoriously difficult to assess. Everyone recognizes that government
statements of intentions to deal with corruption and to root out
wrongdoing may or may not be backed up by the will to follow through to
action. Central to the difficulty in examining political will is the
challenge of separating intent from ability to act. Are actors sincerely
committed to tackling corruption and are limited by resource and
capacity constraints, or is the talk simply a smokescreen, hiding a
basic unwillingness to address the problems behind pronouncements
designed for public and/or donor consumption?

Political will involves the commitment to undertake actions coupled with
sustaining the costs of those actions over time, and in Madagascar the
transition to concerted action has yet to take place. Preliminary
efforts used in assessing political will propose five constituent
elements that can be examined:

-   The locus of initiative for anti-corruption efforts,

-   The degree of analytical rigor applied to understanding the causes
    and consequences of corruption,

-   The mobilization of constituencies in support of anti-corruption
    efforts,

-   The application of credible sanctions, and

-   The continuity of effort in pursuing reforms.

    Using these elements, the team makes the following observations:

    1\. [Locus of initiative]{.underline}: As with many other
    development actions, it is unclear whether in the absence of donor
    concern, the GOM would be making even the limited statements it has
    regarding corruption. Agreeing to fulfill conditionalities is far
    from synonymous with genuine commitment. The silence from
    Madagascar's political leadership is a bad sign for political will.
    Interviewees varied in their opinions regarding the extent to which
    the Minister of Justice is a real source of initiative for reform,
    or whether his espoused sincerity and commitment is part of the
    GOM's "donor management" strategy.

    2\. [Degree of analytical rigor]{.underline}: The MOJ is
    participating in the various fora at which the causes and
    consequences of corruption are discussed and debated (e.g., the IDLI
    roundtable, the Comit de Rflexion sur la Comptitivit, and the
    National Business Law Reform Commission). Some appropriate measures
    are underway, but so far crafting feasible solutions has not been
    addressed. At a minimum the fact that the GOM is talking about
    corruption is good; at least it is an acknowledged issue and in the
    public domain.

    3\. [Mobilization of constituencies]{.underline}: Very little in the
    way of constituency mobilization for reform has been undertaken to
    date within the MOJ or the government more broadly. The MOJ
    technical team working on drafting the anti-corruption law operates
    nearly totally cut off from the rest of government. Nor does it seem
    aware of the importance of mobilizing support for the passage of the
    law, or if it does, then it does not consider itself to be the
    appropriate locus for mobilizing a constituency around this
    endeavor.

    4\. [Application of credible sanctions]{.underline}: The Minister's
    sole act has been the sanctioning of two judges, though little
    information on what was actually done is available. The rumored
    reassignments do not seem like terribly harsh punishments,
    particularly since it is not known to where they were reassigned.
    Diluting the impact of such sanctions is the fact that there are
    many instances of recognized "culprits" being untouched and even
    promoted.

    5\. [Continuity of effort in pursuing reforms]{.underline}: It is
    too early to tell if the GOM will pursue anti-corruption reforms.
    Cynical interviewees expressed the view that the GOM would not move
    beyond symbolic gestures and that the anti-corruption law stands a
    limited chance of ever being passed.

## B. Institutional Assessment {#b.-institutional-assessment .unnumbered}

The following brief assessment overview primarily treats institutions in
government and those in civil society. It largely focuses on those
organizations that the team met with, and draws upon analysis from
earlier reports on the principal actors in state and civil society.

### **1. The Central State** {#the-central-state .unnumbered}

[Ministry of Justice]{.underline}: The justice system in Madagascar is
based on the French model. The MOJ is part of the executive branch, with
the Minister charged with assuring the rule of law and overseeing the
administration of justice throughout the country. The Ministry consists
of a ministerial cabinet, three major divisions (Directions Gnrales),
plus the school for magistrates (Ecole Nationale de la Magistrature et
des Greffes, described below). The divisions include the following:

1\. Secretariat Gnral, with the Direction Financire and the Direction
des Ressources Humaines;

2\. Direction Gnrale des Affaires Judiciaires, de l'Administration
Pnitentiaire et du Contrle du Fonctionnement des Juridictions; and,

3\. Direction Gnrale des Etudes, des Rformes Legislatives, et des
Relations Extrieures et avec les Dpartements Ministriels.

The two Directions Gnrales (DGs) handle the core functions of the
Ministry. The DG of Studies handles legal and judicial analysis, the
drafting of new laws, technical advice and coordination with other
ministries, and monitoring of Madagascar's compliance with international
treaties and conventions. The DG of Judicial Affairs administers the
courts and the prisons. There are 13 regional divisions for prisons
under this DG. The court system consists of a hierarchy of tribunals and
courts throughout the country, extending from the local level to the
Supreme Court. Figures vary, but there are about 350 magistrates (judges
and public prosecutors). The Supreme Court is comprised of the Cour de
Cassation, the Conseil d\'Etat and the Cour des Comptes, and is headed
by the First President of the Supreme Court and the General Prosecutor
of the Supreme Court. The Cour de Cassation sees to the proper
enforcement of laws by the judicial jurisdictions; and the Conseil
d\'Etat oversees the legality of the lower administrative courts'
decisions (Tribunaux administratifs et financiers). The role, function,
and capacity of the Cour des Comptes (the former Chamber of Accounts) is
discussed separately below.

The courts and the prisons are widely recognized as inefficient,
ineffective, and riddled with corruption. Bribery and influence peddling
pervade the justice system. MOJ salaries are very low. A lack of basic
information hampers magistrates in trying to do their jobs, and leaves
citizens in the dark as to their rights and responsibilities. As noted
above, PAIGEP provides major assistance to the MOJ, supported by USAID's
LRJ program. The French government provides a long-term advisor to the
DG of Studies. The soon-to-be-completed institutional audit of the MOJ
makes some recommendations for improving the functioning of the
ministry, but the draft audit report just appeared in May 1999, and no
decisions have been made regarding the suggested options.

Several MOJ internal oversight bodies exist or are to be created; those
already in existence have had little effect on curbing abuses within the
justice system. The Conseil Supérieur de la Magistrature has been in
existence since 1976 but it is currently subject to an amendment. This
is a safeguarding and sanctioning body, which is responsible for seeing
that the provisions of the magistrates\' status are respected. The
Inspection Général de la Justice (IGJ) is not yet set up. The IGJ is
intended to be an investigatory body in charge of assuring the
application of ethical standards and rules by the MOJ personnel. The
Conseil National de la Justice is not yet legally established. This
entity is to be a think tank that is supposed to make recommendations
for improved administration and regulation of the justice system. The
Minister of Justice recently submitted to the Council of Ministers
several draft bills related to establishing and operationalizing these
oversight bodies.

In sum, it must be recognized that regarding corruption, the MOJ is a
big part of the problem. While the Minister proposes that it become part
of the solution and has taken a public stand against corruption, it is
not at this point a bankable position to base a program on.

[Chambre des Comptes (Chamber of Accounts):]{.underline} The Chamber is
attached to the Supreme Court with jurisdiction over financial matters
concerning the accounts of state entities (e.g., ministries), public
establishments (e.g., the university, public hospitals), sub-national
governments (territorial collectivities) and public enterprises (defined
as a minimum of 51% state participation in ownership). The Chamber is a
tribunal and tries cases related to malfeasance related to the public
accounts; and, 2) undertakes audit reports of the four types of public
accounts noted above. It issues an annual report on the national budget
reconciliation law ("loi de reglement"), which the National Assembly
must pass each year. Currently it is working on the FY 1996 report. In
line with its responsibilities for monitoring local governments, the
Chamber recently finished audits of the accounts of two municipalities,
and has two other audits underway with a fifth in the planning stage.
The Chamber of Accounts has a total of 11 judges to cover all these
responsibilities, two of whom are at the Public Prosecutor's Central
Office.

As noted above, USAID has furnished some training in modern audit
techniques, which has included five seminars for 30 people with some TA
follow-up. The participants were auditors from the Chamber and the
Inspector General's office. The French government has provided some
technical assistance to improve financial record keeping at the Chamber.

The team does not see the Chamber as playing a significant role in the
fight against corruption any time soon. In addition to its weak
institutional capacity, the Chamber's principal responsibility is to
monitor financial matters at the "macro-governmental" level; it does not
appear to deal with details of individual agency accounts. It has so few
resources and its staff are already so far behind in their normal
responsibilities that we do not see this agency as being capable of
implementing its enforcement and sanctions mandate in a way that would
significantly reinforce a GOM anti-corruption program. Taking the
Chamber's "bricks and mortar" set-up as an informal indicator reveals
the discrepancy between reality and its impressive espoused mission. The
Chamber is located in the upstairs of a small, dilapidated government
building, accessible only through a parking lot leading to an entryway
filled with dusty stacks of used furniture. The Chamber's few offices
are sparsely equipped, and piles of file folders sit on counters, desks,
and in assorted cabinets. No visible signs identify the offices as those
of the Chamber of Accounts.

[Direction Gnrale de l'Inspection de l'Etat]{.underline}: The Inspector
General's Office is currently attached to the Prime Minister's Office,
though under the new constitution it will be under the President's
Office. It is charged with financial oversight of all public agencies,
state-owned enterprises, and any entity that receives any form of state
financial support. Its mission is to seek out financial
mal-administration and the misuse of public funds, to assure correct
procedure regarding the maintenance of required financial and accounting
records, and to monitor government contracting procedures. The Office
has a staff of 25 professionals, of which 12 are located in the
provinces (two per province). The staff develops an annual schedule of
inspections and also responds to requests for investigations from the
President's and the Prime Minister's Offices.

However, the Office's capacity to implement this mandate is sadly
lacking. Basic operating funds and equipment are grossly insufficient.
Staff have no means of travel, and when conducting investigations are
forced to rely on the kindness of those under investigation for lodging,
transport, and food. In the main office in the capital, the aged and
dust-covered computers, the majority of desks with no telephones, the
stacks of moldering files in battered metal cabinets, and the pleas of
the senior staff for donor assistance attest to the magnitude of the
Inspector General's institutional weaknesses. USAID has provided some
training for staff in audit techniques, and there are organizational
revisions underway on the part of the GOM. Without a substantial
injection of resources and capacity-building, however, this Office will
remain a classic example of a paper tiger in the fight against
corruption.

[Ecole Nationale de la Magistrature et des Greffes]{.underline}: The
ENMG was created by decree in August 1996 and established in December of
that same year. It is a semi-autonomous entity attached to the MOJ, and
is located in a modern office tower at a convenient distance from the
capital's congested downtown. Major financial support for the school
comes from the World Bank through PAIGEP with additional funding for
particular activities from other donors. Through courses, seminars,
conferences, workshops, training of trainers, and information campaigns,
ENMG seeks to upgrade the technical skills of judges, prosecutors, and
court personnel; instill norms and standards of professional conduct and
ethical behavior; and improve the quality of Madagascar's judiciary
system, including combating corruption. ENMG's director is upbeat about
the school's potential to contribute to building the human resources
capacity of the justice sector, though she is concerned about its
sustainability given that PAIGEP is due to terminate soon and future
financial support is in doubt.

[Agence Nationale de Lutte contre la Corruption]{.underline}: This
to-be-created agency is among the provisions of the draft
anti-corruption law---itself recently rejected by the Council of
Minister and returned to the MOJ for redrafting. As described in the
draft law, the agency would be attached to the Presidency and have
authorization to operate across ministries. Its mission focuses both on
the prevention and the sanctioning of corruption. On the prevention side
the agency would conduct studies and surveys, analyze corruption
problems and propose solutions, and conduct educational outreach.
Regarding sanctions, the agency would also be empowered to undertake
investigations, bring charges, and prosecute cases. Given that the draft
law has been turned back to the MOJ technical team for revision, it is
unclear whether this agency will: a) figure in the next revision, and b)
ever be created. Prospects for passage of the anti-corruption law are,
to be optimistic, unclear; or in the eyes of a number of interviewees,
dim.

[Mdiature]{.underline}: The GOM has an [ombudsman's office]{.underline}
in Antananarivo, headed by an avuncular former school inspector from the
Ministry of Education. The office seeks, in the words of the Ombudsman,
to bring citizens and government together and to assist citizens with
complaints and grievances, some of which are related to corruption.
Though funded by the state, the office retains its independence,
according to the Ombudsman. The office has a staff of 20, based in the
capital. In principle, the staff travels throughout the country hearing
and dealing with citizens' problems. But with its small budget, which
arrived late this year making travel impossible, and meager capacity,
the office cannot be counted as a strong force in the fight against
corruption. The Ombudsman characterizes his office as the ultimate
recourse for citizens in trying to redress injustices done to them by
the state---in which case it cannot necessarily be considered very good
news for Malagasy citizens.

[Ministre du Budget et du Dveloppement des Provinces
Autonomes:]{.underline} Given the responsibilities for revenue
collection, customs operations and budget preparation and management,
this Ministry is key to reducing corruption across sectors and from the
national to local levels. Our brief interview with the Secretary General
was able to confirm that he is in fact a committed advocate for the
reform of government practices and anti-corruption efforts. Our time was
insufficient to undertake more than a cursory review of documents and
this single interview, thus we are unable to say more about its capacity
to address corruption in customs, tax collection and budgetary
oversight.

The Ministry's role in the formulation and implementation of the
government's decentralization policy is relevant to addressing the
structural dimension of corruption. As noted above, one element of
anti-corruption strategy is to break the monopoly of government's
control over various areas of decisionmaking and resource allocation.
Effective decentralization would take significant "chunks" of central
state authority and public resources and transfer them to the
sub-national level. In this regard, Madagascar faces two major problems
concerning its decentralization program. First, only a handful of
necessary implementing laws has been passed and none of the
institutional structures (e.g., elected local and provincial assemblies)
have been put in place.

However, also important in terms of creating the necessary legal and
institutional framework for decentralization is the underlying conflict
built into the law. While the decentralization law is billed as
promoting "provincial autonomy," the provinces are in actuality
considered part of the central state, therefore maintaining the
architecture of a unitary rather than a federalist system of government.
Yet, each province will have an assembly that is elected from the
bottom-up thus giving it an autonomous as well as a representative or
federalist flavor. This poses serious problems in the near future once
the country is confronted with having to put the policy into
effect---revisions to the constitution made in 1997 call for
implementation of the decentralization program within three years, that
is, sometime during the year 2000. Finally, given the experience of
decentralization programs undertaken (or not) elsewhere in Africa, the
amount of resources necessary to create viable local governments is
massive. There is no clear indication that the GOM is either willing or
able to make them available---this is another political will issue.

[Conseil National pour l'Environnement (CNE)]{.underline}: The CNE was
created as one of the governance structures for implementation of
Madagascar's National Environmental Action Plan. It is an independent
advisory council composed of six members drawn from NGOs, the National
Assembly, concerned GOM ministries, private sector organizations,
provincial leaders, and donors. Its mandate is to provide the President
and senior GOM officials with advice concerning environmental matters.
Because it is out of the limelight, it permits frank discussions around
commonly shared problems and the formulation of solutions that are
acceptable to all parties. It is a horizontal structure that is designed
to operate without recourse to hierarchy. It also has the right to
formulate draft policies and legislation in addition to its requirement
of periodic reporting to the President. It is included in this section
because of its potential to serve as a model for an institutional
structure that could be replicated for the implementation of
anti-corruption efforts. By bringing together ministry personnel,
deputies, the private sector, provincial officials, and NGOs around
concrete development problems it offers a non-bureaucratic and
non-political means to tackle public concerns in a collective manner. In
the view of the donors, the CNE is underutilized, and could do more to
serve as a vehicle for governance.

[Autonomous Regulatory Bodies]{.underline}: As a result of IMF and World
Bank conditionalities related to privatization, an increasing number of
autonomous regulatory bodies have been established that not only monitor
compliance with laws but issue licenses and permits and, when required,
take them away. So far, the following independent regulatory bodies have
been established:

-   OMERT: the office, similar to the U.S. Federal Communications
    Commission, which regulates the telecommunications industry,
    including oversight of its privatization.

-   OMH: the office that regulates the petroleum (hydrocarbons)
    industry.

-   OCA: the Office of Civil Aviation, responsible for the regulation of
    air transport.

    The team sees these agencies as being potentially effective in the
    fight against corruption as they take out of the hands of government
    authority over decisions that have been sources of bribery in the
    past. Looking at replicating them in other areas merits
    consideration.

### **2. Malagasy Civil Society** {#malagasy-civil-society .unnumbered}

The brief duration of this anti-corruption assessment permitted only a
superficial review of the status of Malagasy civil society. Having said
this however, we feel confident enough to say that civil society's
current capacity to participate in the fight against corruption is not
particularly strong or encouraging. Overall, the situation differs only
marginally from that found in an earlier 1994 assessment carried out by
one of the team members for USAID/Madagascar. This analysis of civil
society was part of a broader macro-political assessment examining the
transition to democratic governance in Madagascar. The same tendencies
towards the personalization and politicization of civil society
organizations (CSOs) exist today as was noted in the earlier assessment.
The power in CSOs is, for the most part, vested in a few individuals at
the top who are in many cases affiliated with a particular political
party. We also see evidence of an "inter-locking" set of relationships
achieved through the membership of a small number of individuals on
various governing boards, which further centralizes power in an urban
elite---a principal finding of the 1994 assessment. It also appears that
individual organizations are hesitant to join together to address common
problems, whether related to health care or corruption, although we do
note that a number of sectoral networks are beginning to emerge to
address specific problems (e.g., adult literacy, health and family
planning, the handicapped, and the environment).

There is no evidence, outside of a few CSOs that could be categorized as
focusing on democracy and good governance (e.g., CNOE, APIM,
UNA-Civiles, the nascent TI chapter), that the broader NGO/CSO community
has the interest or inclination to become involved in anti-corruption
matters. The principal reason given is that it is too risky for the
individuals and organizations concerned; and/or that it is "not part of
their mandate." While many of the urban-based development and
environmental NGOs have developed significant institutional capacity in
programming and management areas -- the result of years of
donor-sponsored training -- we see little evidence of capacity in the
areas of policy analysis, formulation or advocacy. The following
discussion provides a summary overview of the principal sub-sectors of
Malagasy civil society.

[Development and Environmental NGOs]{.underline}: these organization are
some of the oldest and strongest within emerging Malagasy civil society.
They have received significant donor assistance, particularly from
northern international NGOs, in the areas of health care, primary
education, natural resource management and micro-enterprise development.
As noted above, a number of networks and consortiums bring NGOs together
around shared sectoral interests. However, they remain largely informal
and some, like COMODE (Malagasy Council of NGOs for Development and the
Environment), have remained virtually unchanged (bordering on moribund)
in membership and/or function in over five years. Few development and
environmental NGOs have involved themselves in anti-corruption
initiatives, though informally they recognize the problem of illegal
exploitation of natural resources.

The development NGO community remains largely atomized, with competition
among individual leaders, rather than cooperation among organizations, a
defining feature. A number of sectoral networks are beginning to make
tentative forays into policy issues related their specific needs.
According to our respondents, most NGOs are reluctant to become involved
in anti-corruption activities because it means confronting government
over some of its worst excesses outside of human rights abuses. Due to
the amounts of money involved, many in government would not hesitate to
take retaliatory actions against CSOs that became involved in
anti-corruption work. Threats against individual journalists and media
owners provide a fairly good yardstick in this regard.

[Professional and Business Associations]{.underline}: These include
employers associations, manufacturing groups, bar and journalist
associations. The business groups have perhaps the strongest potential
to be stakeholders in the fight against corruption, because they have
the greatest self-interest in ameliorating its worst effects. Within the
context of a weak and fearful civil society, law groups (women judges,
young lawyers) and the Journalists' Association have taken a number of
steps, some bold, in confronting public sector corruption.

The Committee for Reflection on Competitiveness (CRC*):* is a registered
"association of public utility" created by law in 1996. The CRC serves
as a forum that brings together the private sector and concerned
government agencies to discuss and address problems related to economic
competitiveness. Through a very small secretariat, which receives World
Bank support, the CRC examines policy as well as institutional and
infrastructure constraints to improved private sector growth and
performance. The CRC, with branches in 10 regions, is composed of both
business associations as well as individual businesses, and represents
90 percent of the Malagasy private sector. The CRC is a component of the
Technical Support to the Private Sector Project (PATESP) whose basic
objectives are to liberalize markets, particularly those dominated by
the state; promote privatization of state enterprises; modernize fiscal
and customs administration; and strengthen the technical and management
capacity of private enterprises. Specific activities related to
anti-corruption include:

-   Preparations for supporting a journalists' club with an
    investigative function.

-   Discussions of the issue of the customs service's arbitrary award of
    exonerations to favored businesses and lobbying efforts that
    succeeded in getting government to put a moratorium on the granting
    of exonerations.

-   Member dialogue acknowledging that the private sector is part of the
    problem in terms of offering bribes in public works projects
    (procurement) and the importation of external trade goods, and the
    commission of a number of studies that look at the impact of
    corruption on private sector development.

    The Malagasy Chamber of Commerce: This quasi-governmental
    organization is little more than a shell and currently plays no role
    in the representation of the private sector. The law that governs
    its creation and operations is currently under revision with the aim
    of making it more independent from the state---like many
    professional associations that sanction members' right to practice
    their profession, the Chamber has acted more to regulate than serve
    its members. In short, it does not serve as a voice of the business
    sector, rather it has been viewed as the voice of the state. Several
    other business groups do undertake that function and the CRC is
    beginning to serve as broader forum for dialogue between government
    and the Malagasy business community.

    [The Churches and Church Organizations]{.underline}: The churches --
    both Protestant and Catholic -- were in the forefront of the
    pro-democracy movement in Madagascar in 1991/1992. By 1994 with the
    country well into the transition from the Second to Third Republics,
    the churches had largely withdrawn from political life. However,
    with the increasing poverty and economic decline that has marked the
    last two years, their re-emergence as a force for "justice and
    peace" in the life of the nation has once again become increasingly
    noticeable.

    Church groups such as the FJKM -- a coalition of three major
    Protestant missionary groups -- are the strongest and most respected
    CSOs. This is largely the result of the moral authority they command
    in Madagascar and the very real material assistance they provide
    their members, primarily in health and education, but also in the
    areas of agriculture production, income generation and job creation.
    The churches also have resources, human as well as financial and
    material, and a ready-made network of structures and communications
    through which to mobilize citizens and provide information on a wide
    range of issues. FJKM, for instance, has some 35 synods, 400
    parishes and 15,000 communities that cover the length and breadth of
    the country. It has used this grassroots network during the early
    days of the transition to provide, as a component of their justice
    and peace program, civic and voter education to several million
    Malagasy citizens. Today, it intends to use the same strategy to
    launch its anti-corruption initiative.

    The team tried to meet with the "ecumenical" umbrella group, FFKM,
    that coordinates and implements joint programs of the Catholic and
    Protestant churches. Although it declined to see us, passing on the
    message indirectly that it was not interested in becoming involved
    in the corruption issue, it should be noted that the FFKM was a
    major force in the country's pro-democracy movement and may well
    take up the anti-corruption banner at some later date.

    Church-run health and educational facilities have operated on a
    cost-recovery basis for many years now and are trying to now
    increase the percentage of costs covered by its fee based system of
    service delivery. In addition, the communities in which church-run
    facilities are located are highly involved in their management. We
    raise these points to contrast church-run social infrastructure with
    that of the government, which ostensibly provides health and
    education for free, and with little or no community participation.
    If the Malagasy state is unable or unwilling to privatize the health
    care and education systems, then introducing the principles of cost
    recovery and "co-management and co-financing" would likely
    contribute significantly to a reduction of corruption in the
    delivery of these public services.

    [Democracy and Good Governance Organizations]{.underline}: There are
    a number of CSOs whose principal mandate is the promotion of
    democracy and good governance. These include human rights
    organizations, some professional associations (e.g., the bar
    association, women lawyers), and those providing civic and voter
    education. They are virtually all urban-based and elite-led and
    mainly without links to or roots in the majority of Malagasy
    communities. Only a few have been around for any period of time
    (e.g., CNOE) or have grassroots linkages. CSOs in this category with
    whom we met include APIM, CNOE, UNA-Civiles, and the TI core
    exploratory group.

    Our assessment of these organizations and their capacity to
    participate in anti-corruption efforts is mixed. We were fairly
    impressed with APIM, whose members appear interested in contributing
    to efforts to combat corruption, but have not at present developed a
    program of activities beyond holding regular meetings. APIM was a
    key partner in organizing the May IDLI roundtable, however. We
    believe that APIM needs to be a bit more active in identifying and
    promoting activities of interest to their members, and not wait for
    donors to come to them. CNOE has some significant leadership
    (personality) problems at the national level but its branch offices
    appear to be unaffected. The UNA-Civiles leadership evinced a strong
    desire to become a powerful force in addressing corruption, and
    suggested that if donors were considering funding anti-corruption
    activities with civil society, then they stood ready to serve as the
    coordinating body for such assistance. While we have no basis on
    which to question the commitment or sincerity of UNA-Civiles'
    leaders' regarding fighting corruption, it is unclear whether
    UNA-Civiles is anything more than a launching pad for a few
    individuals with political aspirations or the desire to tap into
    donor resources.

    The TI core group is still feeling its way towards creating a
    chapter. The group is very concerned that at this stage it remain
    small and informal. The members cite two reasons for this concern.
    First, they want to avoid infiltration by individuals who might, due
    to connections with some sort of illicit activity, be seen to
    contaminate TI-Madagascar's integrity. Second, they want to avoid
    problems with registering their organization with the GOM until they
    are sure they can surmount them. While this desire to maintain
    integrity and "cleanliness" and to build up strength quietly is
    admirable, the price of remaining small, exclusive, and quiet is
    likely to be isolation from other like-minded people or groups,
    failure to be perceived as a credible force against corruption, and
    a risk of inability to achieve much visibility or impact. These
    issues aside, the group needs to become more proactive about
    developing a vision and work program for the immediate and
    near-term. This is important to developing an indigenous
    constituency for fighting corruption, to building up civil society
    support for growing the chapter, and eventually to becoming a strong
    advocate and watchdog for taking on corruption in its various forms.
    A demonstrated vision and action plan is also important for
    continuing to attract funding from external sources. The founder has
    so far been quite successful in getting USAID to invest in her, and
    TI-Berlin is also quite supportive. Soon, however, the core group
    will need to begin to demonstrate that these investments and support
    have borne some fruit. There is some excellent potential in the
    establishment of a national TI chapter. Several informants mentioned
    that particularly because of the power of the international
    connection to the headquarters organization in Berlin, a TI chapter
    in Madagascar could conceivably become a voice that the GOM would
    pay attention to.

    [Media (newspapers, radio and television)]{.underline}: Press
    independence is a problem. While there is no overt intimidation of
    the press, it is well understood that the GOM will retaliate against
    those journalists and media owners who become too intrusive in
    investigating corruption, using the existing laws on libel and
    slander, as well as other more informal means of issuing "warnings."
    As a result, self-censorship is the order of the day. At the same
    time there are a number of factors inherent to the independent press
    that affects their effectiveness in the fight against corruption.
    Investigations are costly, and media owners are not likely to fund
    their journalists to undertake in-depth reporting. As noted above,
    many of the major daily newspapers are affiliated with a political
    party, although this does not appear to be as great a problem in
    terms of independence as might be thought. Editors appear to be
    given significant leeway in their reporting and editorializing. On
    the government side, the state-run media, particularly radio and
    television, are virtually closed to opposition political parties and
    CSOs.

    Another problem is access to information. This does not just mean
    information related to possible illicit and illegal actions. As many
    informants indicated, basic information about government
    regulations, laws and legal procedures, sectoral plans and programs,
    and so on is difficult to find. Information of any type is tightly
    held; ministries are unwilling to divulge even the most harmless
    facts.

    In spite of the serious problems noted above, the independent press
    still maintains a degree of freedom with a number of individual
    journalists and newspapers taking risks by reporting on the more
    egregious acts of government corruption. Finally, it should be noted
    that journalists have received significant donor-funded training in
    a range of areas including investigative journalism, so we do not
    consider the human capital issue to be as important as the other
    problems noted in this section.

# VIII. RECOMMENDATIONS {#viii.-recommendations .unnumbered}

An ongoing dilemma in fighting systemic corruption is how to address
systemic issues with limited, pinpoint interventions. Corruption is at
base a governance issue; thus a range of governance enhancing efforts
can be effective against corruption even if fighting corruption is not
their explicit focus. To maximize the possibilities for results, it is
helpful to place options for individual interventions within a
democratic governance framework. In the following section we provide a
brief discussion of a democratic governance approach to fighting
corruption.

## A. A Democratic Governance Framework {#a.-a-democratic-governance-framework .unnumbered}

A governance approach to public sector reform, including anti-corruption
measures, looks at the way that a society has ordered itself politically
to make and implement public policies, allocate and manage public
resources, and prioritize and resolve public problems. There are many
types of governance (e.g., authoritarian, feudal, democratic) all of
which are determined by the nature of the political rules that define
the relationship between citizens and their government. Four sets of
political (power) relationships are examined in this regard:

-   Within and among the institutions of the central state (the
    executive, legislative and judicial branches of government);

-   Between the central state and local government;

-   Between the central state and civil society; and

-   Between the central state and the private sector.

Democratic governance implies that the central state, civil society,
autonomous local governments and market actors share in the tasks of
governance and that there exist among them checks and balances to ensure
that no single category of societal actor dominates another. In our
assessment of the state of democratic governance in Madagascar we note
the following:

1.  Within the institutions of the central state the executive dominates
    both the legislative and judicial branches. There is little
    independence of either the National Assembly or the judiciary; they
    are virtual extensions of the presidency and ruling party. They
    provide little effective input into the formulation of public policy
    or oversight of the use of public resources.

2.  Malagasy civil society[,]{.underline} including the independent
    media and the churches, has had little impact on the performance of
    state's management of public affairs. The most that can be said at
    this point is that civil society, and particularly the churches,
    have ensured that human rights abuses are kept to a minimum. The
    media have reported on corrupt practices but this reporting has not
    elicited any change in government practice. As a countervailing
    force or simply as a means for increasing citizen participation in
    governance, civil society's impact has been minimal.

3.  Independent and democratically elected local government is not yet
    institutionalized in Madagascar. At present, local governments are
    largely extensions of the Ministry of Interior whose primary
    interest is in maintaining order and the status quo. Local
    governments appear to be more responsive than central government to
    their constituents, particularly when they see it in their interest
    to do so. However, mayors and local council members are elected, and
    Projet Rary has shown that they are willing to incorporate citizen
    input into local decisionmaking, so the potential for
    institutionalization exists and can be nurtured.

4.  The private sector in Madagascar has played only a minor role in the
    formulation of public policy. Because the central state still
    maintains a dominant role in economic life, most businesses are
    unable to confront government over issues of poor policymaking and
    corrupt practices. Further, there are many private sector operators
    who are content to maintain their privileged connections to sources
    of contracts and favors, and thus are not interested in confronting
    government.

5.  The only actor that is able to counter the state's abuse of its
    monopoly on power is the international donor community, including
    international NGOs. In this regard, donors can be viewed as an
    "extra-constitutional" check on Malagasy state power.

6.  Madagascar's political system remains an unfinished project; neither
    all the political institutions nor processes that are called for
    under the constitution have been put into place (e.g., the upper
    house of the legislature, democratically elected local governments,
    administrative and financial courts under the Supreme Court).
    Without them improved governance practices are unlikely.

## B. Opportunities and Suggested Options for USAID/Madagascar

A democratic governance strategy looks at limiting corruption by:

1.  Improving the [supply]{.underline} of good governance by increasing
    the capacity of government to make sound policy and to implement it
    effectively and honestly.

2.  Increasing the [demand]{.underline} for good governance by
    strengthening the capacity of civil society and the private sector
    to demand corruption-free and accountable governance from the state.

Given the dominant role of the central state, and particularly the
executive branch, in the making and implementation of public policy, it
is not surprising that there is little accountability in its use of
public resources, transparency in the way decisions are made and
implemented, or responsiveness to the needs and problems of its
citizens. The state's monopoly of power in social, economic as well as
political life is the principal cause of poor governance in Madagascar,
of which corruption is a principal manifestation. While it is possible
to formulate targeted anti-corruption interventions, it must be
recognized that until these systemic political relationships are brought
into balance and the state's power disciplined, there is little
likelihood that corruption will be rooted out and that good governance
will emerge.

### **1. Governance Reforms Aimed at Limiting Corruption**

In the short term, a supply-side strategy under the current situation in
Madagascar is not likely to lead to the desired outcomes. On the other
hand, a demand-side strategy carries inherent risks, not the least of
which is the danger it poses to those individuals and organizations in
civil society and the private sector who take on a more activist role in
directly confronting corruption. In terms of the broader dictates of a
governance strategy we would suggest the following. Several of these
recommendations are confirmation and encouragement for activities the
Mission is already supporting, such as Projet Rary and local-level
natural resources management (e.g., GELOSE):

-   Measures to increase information availability regarding government
    services and fees, regulations and procedures, and so on can be
    valuable.

-   Similarly, efforts that increase transparency and allow for
    intelligent and informed citizen input into governmental affairs at
    all levels can have an important impact.

-   Moving beyond transparency, other governance-enhancing interventions
    include the elimination of unnecessary procedures and the reduction
    in regulatory "red-tape." These types of reforms also have an impact
    on the private sector, since excessive regulation and lack of
    transparency negatively affect private investment and economic
    activity.

-   Continue efforts aimed at privatizing the economy as they offer the
    most successful means of decreasing corruption by removing
    government control over those functions that permit the
    discretionary use of power.

-   Ensure that decentralization and local elections take place as
    scheduled under the constitution. Decentralization is a major
    governance reform that devolves power -- and hence decreases
    monopoly \-- and diffuses it to many more centers (local
    governments) of authority. Democratic local governance implies an
    empowering the institutions of local governance while limiting the
    ambit of the central state.

-   In the social and environmental spheres consider a combination of
    privatizing through private sectors enterprises or voluntarizing
    through civil society organizations (e.g., NGOs and community-based
    organizations) a range of public services such as health care,
    sanitation and waste removal, and natural resources management. This
    is another way of decreasing the state's monopoly over the provision
    of public services and thus its potential for rent seeking. In both
    cases, the principals of cost recovery and community participation
    need to be incorporated into the strategy.

-   As regards the above recommendation, we recommend that the Mission
    look at ways to integrate democracy and governance,
    health/population activities, and environmental/natural resource
    interventions in the same way that it has integrated economic growth
    and democracy/governance activities. Attacking corruption in
    development sectors holds more promise of being successful than
    tackling it head-on through interventions designed to reform
    political institutions (a long-term supply-side strategy).

-   Of all the political reforms that need to be addressed, electoral
    reform that includes addressing political party financing is
    critical. The legitimacy of the entire political system is
    undermined by the perception if not the reality of electoral fraud.

### **2. Anti-Corruption Measures Within the Central State**

Despite the caveats about the problems of addressing systemic corruption
through pinpoint interventions, some interventions are worth
considering. Our first two recommendations encourage continuation of
existing Mission-funded activities that relate to dealing with the
structural features of corruption, that is, reinforcing transparency and
accountability.

> [Recommendation]{.underline}: Focus on local government and concrete
> problem-solving. Extend and consider expansion of Projet Rary, whose
> efforts at increasing transparency and fostering local
> government-citizen interaction are exemplary of interventions that can
> promote changes in the governance environment that hold promise for
> reducing opportunities for corruption. What Projet Rary shows us is
> that when public officials such as mayors see that it is in their
> political interest (i.e., getting re-elected) to ensure good
> government, then they will do so.
>
> [Recommendation]{.underline}: Provide follow-up to and support the
> implementation of the action plan that emerged from the March
> roundtable on reducing administrative barriers to private investment.
>
> [Recommendation]{.underline}: Encourage the creation and use of fora
> that can bring government, the private sector, and civil society
> together. This includes ongoing support to the CRC, and perhaps the
> establishment of something in the health and/or education sectors
> along the lines of the CNE in the natural resource sector, which
> brings together the executive and legislative branches of government
> with the private sector, civil society, and the regions.

The MOJ and related GOM institutions are potentially key actors in the
fight against corruption. They have received significant donor
assistance through the World Bank's PAIGEP, complemented by USAID's LRJ
program. Much of USAID's assistance has been in the form of
capacity-building, mainly to help reform the legal framework for
commerce and investment, which includes addressing the constraints posed
by corruption. These capacity-building efforts include: training, study
tours, participation in conferences and workshops. These efforts can be
helpful, particularly to the individuals who participate, but the
immediate impacts tend to be small, absent significant structural and
procedural changes.

> [Recommendation]{.underline}: Continue capacity-building activities
> that keep the Mission engaged with the principal interlocutors in
> government. Recognize, however, that given the current situation, not
> a great deal can be achieved through a "supply-side" strategy in terms
> of immediate impacts on levels of corruption.

One of the issues raised in the team's analysis is the sincerity and
depth of the government's political will to address corruption.
Political will and ownership for reform efforts are issues that affect
reforms in any sector, but are particularly important for
anti-corruption. Most donors use a combination of conditionalities and
policy "jawboning" to seek to obtain assurances of commitment to
reforms. This dialogue between government and donors is important, but
insufficient. As countries democratize, dialogue between government and
citizens becomes critical as well. Donors can help to promote this
dialogue as another means of supporting the strengthening of political
will.

> [Recommendation]{.underline}: Encourage senior government officials,
> such as the Minister of Justice, to make public statements regarding
> anti-corruption efforts and the promotion of governance reforms.
> Although in Madagascar the prospects for immediate change appear dim,
> over time as civil society and the media become stronger, such
> statements can begin to provide a basis on which accountability can be
> increased. Another intervention in this regard is to promote
> constituencies for reform within government as a component in training
> about how policy change and reform can be achieved.
>
> [Recommendation:]{.underline} In line with the suggestion for building
> constituencies for reform, identify pro-reformist individuals within
> government (e.g., a judge with integrity, a committed technical
> specialist, an honest Secretary General) and promote their coming
> together around specific issues. This may lead to some positive
> results, building on the notion that integrity breeds integrity. We
> strongly caution however, that the Mission not put all its "eggs in
> one basket" in terms of supporting a single individual or group,
> whether in government or civil society. The situation is simply too
> uncertain for foreigners to identify sound "investments" with a high
> degree of confidence.

### **3. Anti-Corruption Measures with Civil Society**

Civil society is not a magic bullet in the fight to alleviate or
eradicate corruption in Madagascar. It is weak, atomized and has little
capacity let alone willingness to confront a state that has shown a
tendency towards retaliation and intimidation. The Mission needs to be
cognizant of the risks it may be asking CSOs to take when confronting
government over issues of corruption.

> [Recommendation]{.underline}: Pursue a civil society strategy that has
> a sectoral rather than macro-political focus. Consistent with our
> recommendation that the Mission should focus on targeting corruption
> in its sectoral programs we suggest that those NGOs/CSOs that are
> already involved in these areas be strengthened to participate in
> policy dialogue and to take on a greater role in the delivery of
> public services. To the extent that the Mission wants to target the
> democracy and good governance CSOs, we suggest that they be supported
> in carrying out educational and informational campaigns designed to
> increase citizen understand of their rights as well as government
> regulations.

As noted above, Malagasy civil society remains weak and fragmented. Many
individuals involved in CSOs wear multiple hats: NGO member, private
sector operator, and/or political party member. It can be difficult to
discern which set of interests an individual is pursuing at a given
time. Rather than trying to identify the winners in advance, it will be
more fruitful to provide resources for "selective seeding" of several
CSOs with interests in combating corruption and promoting democratic
governance. Continuation of support would be dependent upon the
achievement of some demonstrable results.

> [Recommendation]{.underline}: Continue support to the TI core group;
> consider providing some support to APIM and to FJKM. As part of this
> support, encourage information-sharing and interaction among groups
> addressing corruption. The planned integrity workshop could be a
> mechanism for this interchange and coordination.

The press and the media are critical partners in any anti-corruption
strategy. In Madagascar, journalists have received some training in
investigative techniques, reporting on economic issues, etc. As our
interviewees noted, it is difficult to report on corruption in any
detail because of the difficulty in obtaining any facts, and of the
dangers of legal action for defamation or of pressure from government to
suppress stories. One area where the media could assist without
necessarily confronting these problems is in reporting more on the
linkages among economic liberalization, good governance, and
globalization. The 1995 Projet MADIO survey revealed that many
respondents did not understand these linkages, for example, indicating
their support for liberalization while at the same time wanting more
government intervention in the economy. Malagasy citizens need to be
better informed about these topics, and to understand the connections
between a new role for the state and reducing corruption. For example,
activities such as those that Projet Rary is undertaking should be
reported on as governance and anti-corruption measures.

> [Recommendation]{.underline}: Provide media training on economic
> liberalization, good governance, and globalization. Reporting on
> sector-specific activities, for example, in the health or environment
> sectors could complement this training.
>
> [Recommendation]{.underline}: Consider facilitating the formation of
> networks and joint fora to share information and to develop a common
> strategy for combating corruption in sectoral areas. One focus of this
> sharing could be on information regarding citizens' rights and the
> requirements for basic services, e.g., what does a citizen need to
> obtain a birth certificate or get a document notarized?

# 

**Annex 1: Organizations and Individuals Interviewed**

**UNITED STATES DEPARTMENT OF STATE**

Hon. Shirley E. Barnes, American Ambassador to Madagascar

Ms. June Carter-Perry, Deputy Chief of Mission

Mr. Richard Bell, Political Officer

Mr. Charles Zimmer, Economic Officer

Mr. Hervy, USIS Information Officer

**UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT**

Mr. Leon (Skip) Waskin, Assistant Director

Ms. Mary Norris, Program Economist/Special Program Objective Chief (SPO)

Mr. Francois Vezina, Legal, Regulatory and Judicial Reform Project
Coordinator (SPO)

Mr. Robert Dean, Microfinance and Financial Policy Advisor (SPO)

Mr. Fidle Rabemananjara, Economist (SPO)

Ms. Corinne Rafaell, LRJ Reform Project Specialist (SPO) Ms. Helen
Gunter, Senior Natural Resource Officer/SO 3 Office Chief Ms. Lisa
Gaylord, Environment Program Manager/RP1 Team Leader (SO3) Mr. James
Allman, TAACS/Population Advisor, RP 4 Manager (SO2)

Mr. Benjamin Andriamitantsoa, Child Survival Specialist, RP 2 Manager
(SO2)

Ms. Camille Rajonhson, Chief Accountant (Controller's Office)

**INTERNATIONAL NON-GOVERNMENTAL ORGANIZATIONS**

Mr. Leon Rajaobelina, Director General

Conservation International/Madagascar

(Former Minister of Finance, former Governor of the National Bank,
Former Ambassador to US)

Mr. Jean-Paul Paddack, Country Director

Worldwide Fund for Nature (WWF)/Madagascar

Mr. Randal Robinson, Assistant Director

CARE/Madagascar

Mr. Patrick Brenny, Country Director

PACT/Madagascar

Mr. Vincent Carbonneau,RARY Project Director

PACT/Madagascar

Mr. Miguel Schloss, Executive Director

Transparency International-Berlin

**WORLD BANK-MADAGASCAR**

Mr. Dieudonne Randriamananampisoa, Operations Chief

Mr. Andrew Kek, Coordinator, Multi-donor Secretariat, Program for the
Environment -- Phase 2

**GOVERNMENT OF THE REPUBLIC OF MADAGASCAR**

**Ministre de la Justice** (Ministry of Justice)

Honorable Anaclet Imbiki, Minister of Justice

Mme. Lala Ratsiharovala, Directeur, Rformes Lgislatives; and
Coordinateur, Volet Rforme Juridique du PAIGEP

M. Roman Ramanandriabe, Directeur Gnral des Etudes, des Rformes, et des
Relations Extrieur

M. Andre Roger, Magistrat and Conseiller Technique, Coopration Franaise

**Ministre du Finance, Budget, et Dveloppement des Provinces Autonomes**

(Ministry of Finance, Budget, and Provincial Development)

M. Jocelyn V. Rafidinarivo, Secretary General

(and President, Conseil Nationale de l'Environnement -- National Council
for the Environment)

**Direction Gnrale de l'Inspection D'Etat** (Inspector General's Office)

M. Jules Manaanjara,Directeur Gnral

M. Gilbert Randrianasolo,Inspecteur Gnral

M. Roger Fidle Ramanitrera, Inspecteur Gnral

**Chambre Des Comptes** (Chamber of Accounts)

M. Bonary Raveloarojonary, President

**Mdiature De La Rpublique** (Ombudsman's Office)

M. Victor Miadana, Mdiateur/Defenseur du Peuple

**Ecole Nationale de la Magistrature et des Greffes** (School for
Magistrates and Court Clerks)

Mme. Bakolalao Ramanandraibe Ranaivoharivony, Directeur (and Magistrat)

**Office Nationale de l'Environnement** (National Office of the
Environment)

M. Jean Chrysostome Rakotoary, Directeur Adjoint

**Comit De Rflexion sur la Comptitivit** (Committee for Reflection on
Competitiveness)

M. Jaona Alain Ranrianarisoa, Coordinateur Gnral

M. Georges Odon Raveloson, Membre

(and Advisor, Conseil National Economique et Social \[CONECS, business
association\]; Advisor, Union Nationale des Associations Civiles de
Madagascar; Managing Director, Socit Assistance-Promotion-Conseils
\[private business\])

**Assemble Nationale** (National Assembly)

Pr. Ange Christophe Flix Andriananrisoa, President

**MALAGASY CIVIL SOCIETY**

**Comit Dinika sy Rindra ho an'ny Vehivavy** (DRV)

Comit de Concertation et de Coordination des Associations et ONG/Femmes
de Madagascar -- F3CM

Mme. Lalao Randriamampionona, National President

(and Advisor to the Prime Minister; Member, Academie Malagasy)

**Transparency International, Madagascar Chapter-in-Formation**

Mme. Yveline Rakotondramboa, Head, Core Exploratory Group

M. Mboara Andrianarimanana, Member, Core Exploratory Group

(and Directeur de Publication, Jureco \[monthly journal\])

M. Jean Marc Rakotolahy, Member, Core Exploratory Group

**Comit National d\'Observation des Elections et d'Education des
Citoyens** (CNOE)

Madelaine Ramaholimihaso, President

Mlle. Joelle Rajaonarison, Consultant

Mme. Domohna Lalao Rabe, Consultant

**Union Nationale des Associations Civiles de Madagascar** (UNA-Civiles)

M. Gilbert Ravelojanoa, Executive Director

M. Georges Odon Raveloson, Advisor

**FJKM -- Fiangonan'i Jesoa Kristy Eto Madagaskara**

(The Church of Jesus Christ in Madagascar)

Pastor Yvette Rabemila, Vice President

Pastor Charles Rakotonirina, Secretary, Finance Department

M. Emile Ramarosaona, Member, Conseil National de la FJKM; President,
Comit de Lutte Contre la Corruption, (and Ancien Ministre de la Premi?e
Rpublique)

M. David Andriamaparison, President, Commission des Affaires Nationales;
and Member, Comit de Lutte Contre la Corruption

Pastor Maxime Rafransoa, Member, Comit de Lutte Contre la Corruption

Professor Randrianantenaina, Member, Comit de Lutte Contre la Corruption

M. Pierre Bernard Faraniaina, Consultant to FJKM

(Member, Jeune Patronat de Madagascar \[Young Employers Association\])

**Association Des Anciens Participants Malgaches de l'IDLI** (APIM)

Mme Vololona Razanazafiarivelo, Member (and Commercial Para-Legal)

M. George Rhaganakoto,President (Supreme Court Judge)

Mme. Bakoly Razaiarisolo, Member (Attorney)

Hortense Ranjohanison,Member (Supreme Court Judge)

Mme. Yvonne Raharison, Member (Magistrat -- Direction des Etudes,
Ministre de la Justice)

Mme Lisy Ralitera, Member (Appeals Court Judge, Tananarives)

**Conseil Malgache des Organismes Nongovernmentaux pour le Dveloppement
et l'Environnement** (COMODE - Malagasy Council of NGOs for Development
and the Environment)

M. William Ramaharinasi, Secretaire Gnral

**MALAGASY MEDIA**

M. Christian Chadefaux, Editor in Chief

L'Express de Madagascar (daily newspaper)

M. James Ramarosaona, President

Ordre des Journalistes de Madagascar

(and Journalist, Tribune \[daily newspaper\])

M. Andry Tsileferintsoa, President

Association Intermedias

(and Journalist, l'Express de Madagascar)

M. Rahaga Ramaholimihaso, Directeur de Publication

Tribune (Daily Newspaper)

**MALAGASY PRIVATE SECTOR**

Mme. Florette Andriamiarisatrana, President

Femmes Entrepreneurs de Madagascar

(and President, Comit de Rflexion sur la Comptitivit)

M. Georges Rheal, Secrtaire Gnral

Chambre de Commerce

**MALAGASY POLITICAL PARTIES**

M. Norbert Lala Ratsirahonana, President

AVI (opposition political party) and Deputy, National Assembly

(and former Prime Minister/Chef de l'Etat et du Gouvernement)

M. Hirizo Razafimahaleo, President

Leader -- Fanilo (opposition political party) & Deputy, National
Assembly

(and President, MBA Association)

Annex 2: Documents Consulted

Brinkerhoff, Derick W. 1998. "Democratic Governance and Sectoral Policy
Reform: Linkages, Complementarities, and Synergies." Washington, DC:
U.S. Agency for International Development, Center for Democracy and
Governance, Implementing Policy Change Project, IPC Monograph No. 5,
February.

Brinkerhoff, Derick W. with assistance from Nicholas Kulibaba. 1999.
"Identifying and Assessing Political Will for Anti-Corruption Efforts."
Washington, DC: U.S. Agency for International Development, Center for
Democracy and Governance, Implementing Policy Change Project, IPC
Working Paper No. 13, January.

CARE. 1999. "Illegal Logging on the Masoala Peninsular." Antananarivo:
CARE, Masoala Project, Technical Memorandum.

Clavier, Howard. 1999. "Sondage de Base: Revue de la Situation Actuelle
des SRRC au Madagascar -- Composante 2: Solutions de Rechange des
Resolutions des Conflits." Antananarivo: Associates in Rural Development
and Checchi and Company. Report prepared for USAID/Madagascar.

Dininio, Phyllis with Sahr John Kpundeh and Robert Leiken. 1998. *USAID
Handbook for Fighting Corruption.* Washington, DC: U.S. Agency for
International Development, Center for Democracy and Governance Technical
Publication Series, October.

Foreign Investment Advisory Service. 1998. "Madagascar -- Le Parcours de
l'Investisseur: Les Demarches Administratives." Washington, DC: FIAS for
the World Bank and USAID, Antananarivo.

Forneris, Xavier, 1999. "Activit de Formation sur la Lutte
Anti-Corruption pour Madagascar: Rapport de la Mission de Diagnostic."
Rome: International Law and Development Institute. Reported prepared for
USAID/Madagascar and the Ministry of Justice.

Fox, Leslie and Maureen Covell. 1994. "An Assessment of Politics and
Governance in Madagascar." Antananarivo: Associates in Rural
Development. Reported prepared for USAID/Madagascar.

Government of the Republic of Madagascar. 1998. "Justice selon les
justiciables: une enqute auprs des usagers du systme judiciaire."
Antananarivo: Prime Minister's Office, Comit Technique de la Rforme du
Service Public.

Hobgood, Harlan and Charles Rabenarivo. 1991. "Governance and Democracy
in Madagascar: An Institutional Analysis and Strategic Assessment"
Antananarivo: Associates in Rural Development. Report prepared for
USAID/Madagascar.

Inspection Gnrale de l'Etat. 1999. "Prsentation de l'Inspection Gnrale
de l'Etat," Antananarivo: Government of the Republic of Madagascar,
Office of the Presidency.

International Development Law Institute (IDLI). 1999. "Proposition de
Projet pour un Programme de Formation Madagascar sur le Thme: Prvention
Juridique et Traitement Judiciaire de la Corruption." Rome:
International Development Law Institute. Proposal submitted to
USAID/Madagascar.

IDLI. 1999. *Table Ronde sur "Des Strategies de Lutte Contre la
Corruption."* Antananarivo: IDLI. Participant's Notebook prepared for
the Ministry of Justice and USAID/Madagascar.

IDLI. 1999. *Sminaire de Formation sur le Contrle Judiciare de la
Corruption*. Antananarivo: IDLI, with the Ecole Nationale de la
Magistrature et de Greffes. Participant's Notebook prepared for the
Ministry of Justice and USAID/Madagascar.

Klitgaard, Robert and Heather Baser. 1997. "Working Together to Fight
Corruption: State, Society, and the Private Sector in Partnership." In
Suzanne Taschereau and Jose Edgardo Campos (eds.). *Governance
Innovations: Lessons from Experience, Building
Government---Citizen---Business Partnerships*. Ottawa: Institute On
Governance, pp. 59-81.

Massicotte, Louis. 1993. "Towards an Independent and Accountable
Judiciary: Report on Judicial Reform in Madagascar." College Park:
University of Maryland, Center for Institutional Reform and the Informal
Sector. Report prepared for USAID/Madagascar.

Mauro, Paulo. 1997. *Why Worry About Corruption?* Washington, DC:
International Monetary Fund, Economic Issue Number 6.

PACT. 1999. "Participation and Poverty- RARY." Washington, DC: PACT.
Semiannual Report, October 1- February 28, submitted to
USAID/Madagascar.

Raharijaona, Henri and Vincent Rakotoson. 1999. "Audit Organisationnel
du Ministre de la Justice: Diagnostic et Proposition de Scnario, Rapport
Provisoire." Antananarivo: Prime Minister's Office, Comit Technique de
la Rforme du Service Public.

Randrenjatovo, Harvel et. al. 1996. "Etude sur la Gouvernance: Rapport
d'Etude." Antananarivo: Cabinet d'Audit Fivoarana. Report prepared for
the Ministry of Economy and Plan and UNDP.

Razafindrakoto, Mireille and. Francois Roubaud. 1995. "Sait-on au moins
ce qu'ils en pensent? Le point de vue des Tananariviens sur les grandes
options conomiques pour le dveloppement de Madagascar." Antananarivo:
Projet MADIO.

Salas, Denis and Bruno Cathala. 1998. "Rapport sur l'thique et la
dontologie des magistrats Madagascar." Antananarivo: Ministry of
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Stapenhurst, Rick and Sahr J. Kpundeh (eds.). 1999. *Curbing Corruption:
Toward a Model for Building National Integrity*. Washington, DC: World
Bank, Economic Development Institute, EDI Development Series.

United Nations Development Programme. 1999. *Fighting Corruption to
Improve Governance*. New York: UNDP, Management Development and
Governance Division, February.

United Nations Development Programme. 1999. "Diagnostic de la Pauvret
Madagascar." Antananarivo: UNDP, Roundtable on the Fight Against Poverty
in Madagascar, April.

U.S. Agency for International Development. 1996. "First Amendment to the
Project Grant Agreement Between the Government of the Republic of
Madagascar and the United States of America Acting Through the U.S.
Agency for International Development for the Participation and Poverty
Project." Antananarivo: USAID, Project No. 687-0125, Grant No.
687-0125-G-SS-5001-00, September 12.

World Bank. 1996. *Technical Annex to the Memorandum and Recommendation
(Report No. P 6774-MAG) on a Proposed Credit in the Amount Equivalent to
SDR 9.6 Million to the Republic of Madagascar for Public Management
Capacity Building Project*. Washington DC: World Bank. Report No.
T-6774-MAG, August 1.