# Sectoral Perspectives on Corruption

*November 2002*

# Corruption and the Education Sector

David Chapman, Ph.D.

The views and interpretations represented in this paper belong solely to
its author and should not be attributed to USAID or to MSI.

![](media/image1.png)

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## Abstract

This paper discusses reasons that national education systems are
particularly vulnerable to pervasive corruption, forms that corruption
takes within the education sector, and interventions that have been
suggested for reducing corruption. The central argument of the paper is
that, while there are ample examples of large-scale corruption within
central education ministries, the most serious consequences arise from
the pervasive, petty corruption that permeates the day-to-day
transactions at the classroom, school, and district levels. The real
damage to a society occurs when entire generations of youth are
mis-educated -- by example \-- to believe that personal success comes
not through merit and hard work, but through favoritism, bribery, and
fraud. Such lessons have the potential to undermine civil society well
into the future.

The paper discusses donor complicity in corruption, for example, when
donors overlook corruption in order to achieve larger strategic
political interests, provide funding at levels that exceeds absorptive
capacity, or penalize contractors for slow implementation caused by
their unwillingness to pay petty bribes to facilitate work flow on
projects they manage. Finally, the paper highlights the efforts in
several countries to reduce corruption through the introduction of more
objective measures for awarding education-related opportunities, greater
transparency, and effective use of community organizations.

## I Introduction

National education systems across the developing world are particularly
vulnerable to pervasive corruption, largely for three reasons. (1) As
one of the few governmental agencies with high visibility representation
all the way down to the community level, education is an attractive
structure for patronage and manipulation of local sentiment. (2)
Decisions perceived to have significant consequences for people's lives
are made by "gatekeepers" who control decisions at each of those levels
(e.g., district education officers, headmasters, teachers). (3) A
considerable amount of education funds are spent in small amounts,
across many scattered sites, most of which have weak accounting and
monitoring systems. While there are ample examples of large-scale
corruption within central education ministries, this paper argues that
the most serious consequences arise from the pervasive, petty corruption
that permeates the day-to-day transactions at the classroom, school, and
district levels. The real damage to a society occurs when entire
generations of youth are mis-educated -- by example \-- to believe that
personal success comes not through merit and hard work, but through
favoritism, bribery, and fraud. Widespread petty corruption breaks the
link between personal effort and anticipation of reward. This, in turn,
limits the economic and social development well beyond the immediate
corruption. Such lessons have the potential to undermine civil society
well into the future.

## II Vulnerabilities to Corruption in the Education Sector

## How is corruption manifested in the education sector?

One of the central problems in combating corruption is the difficulty in
clearly defining the behaviors that constitute it. Five behaviors may be
labeled, at different times, as corruption:

1\. ***Blatantly illegal acts of bribery or fraud***: There are ample
examples of blatant fraud and bribery, in which education officials at
all levels demand some form of payoff for themselves, family, or friends
in return for their help in shaping the outcome of contracts,
implementation efforts, distribution systems, etc. While mechanisms may
vary, there is wide agreement that these practices are corrupt.

2\. ***Actions taken to secure a modest income by people paid too little
or too late***: When teachers sell grades or require students to pay for
private tutoring in order to pass a course, most observers recognize it
as corruption. Often, however, such behavior is judged less harshly in
settings in which teachers' salaries are extremely low or salary
payments are delayed for months. It tends to be tolerated because
virtually all observers recognize that teachers have little choice if
they are to live. In some countries, such as Cambodia, these practices
are tacitly condoned by government, which recognizes that it could not
maintain a teaching force if teachers were unable to subsidize their
salaries, even if they use practices that compromise the quality of
education.

3\. ***Actions taken to get work done in difficult circumstances***: At
times, what appear as corruption may be better understood as ministry
and project personnel cutting corners, ignoring rules, and by-passing
procedures in order to move activities forward in ways important to the
success of a project or ministry initiative. (see Box A1). What appears
as corruption to some people may be viewed as pragmatic project
management by others. For instance, when project implementation requires
government staff to work harder or longer hours than is their custom, a
project manager may pay an unauthorized bonus as an incentive.
Similarly, a project manager may pay government personnel to provide
data that should be free. An unfortunate outgrowth of these practices is
that it often teaches local staff that they can extort money by
withholding services, and a pattern develops. Nonetheless, failure of
the project manager to take these actions could undercut project
success.

4\. ***Differences in cultural perspective (e.g., gift giving*)**: In
some cultures it is customary and expected that gifts are given even in
return for small favors. While token gifts of little monetary value
often satisfy the cultural expectation, the practice has sometimes
mushroomed into widespread, petty extortion. The practice of gift giving
has often been exploited to mask a corrupt practice in the disguise of a
cultural expectation. This is illustrated by the Chinese student who,
needing the signature of a local official in order to secure a passport
to study abroad, took a new television set to the official to thank him
for his signature. In Russia, it is commonplace to provide small gifts
\-- a box of candy, flowers (or a bottle of vodka) \-- to authorities as
a token of respect, if not a request for special assistance.

5\. ***Behavior resulting from incompetence***: What appears as
corruption is sometimes merely the incompetence of key actors or the
inadequacies of the infrastructure in which they work. When record
keeping systems are weak or nonexistent, key personnel assign little
importance to maintaining records. It is then often difficult to know
whether education officials' inability to account for money or supplies
reflects deception or poor management practices. For example, despite
the expenditure of several million dollars of donor funds on textbook
production and distribution in Laos and government receipts indicating
the books had been delivered to the district education offices,
international teams were unable to locate very many of the new books
during site visits to the schools. It was never completely clear whether
this was a case of poor record keeping or diversion of textbook
funds.[^1]

The essential point is that thoughtful, reasonable people can disagree
over what constitutes corruption. Even when observers agree that certain
actions constitute corruption, they may differ in their tolerance of the
offense (e.g., when the sales of grades is tolerated because teachers
are underpaid). Moreover, those forms most widely condemned (e.g.,
contract kickbacks) tend to be the least visible; those forms that tend
to be the most visible (forced private tutoring) tend to be the most
widely tolerated.

Disagreement over what constitutes corruption has serious consequences
for

efforts to combat it. While each country has a different legal
definition of corruption, the often broader conception of corruption as
the misuse of public office for private gain yields a much larger
context in which citizens can detect official misconduct. Forceful
actions to reduce corruption could lead to great trouble for individuals
who were merely cutting corners in their effort to do a good job or who
were unclear about the lines between gifts and bribes. If, in response
to anti-corruption efforts, educators, government officials, and project
staff started strictly complying with the myriad of government and donor
rules, especially those involving international aid, education projects
could bog down and stall. On the other hand, if a looser definition of
corruption was used, intentionally corrupt behavior could hide behind
expressions of good intention or confusion about meanings. Effective
efforts to combat corruption require clear, but sensible, definitions of
what is acceptable behavior and what is not.

## The costs and consequences of corruption

The most direct, and in some ways the most inconsequential, cost of
corruption is the waste of the financial resources that get misdirected.
The more serious costs are incurred when (a) children unable to afford
bribes are denied access to schooling, (b) talent is misallocated due to
promotion being awarded on the basis of bribery rather than merit, and
(c) a generation of children come to believe that personal effort and
merit do not count and that success comes through manipulation,
favoritism and bribery. When corruption is so pervasive that it comes to
be viewed as a basic mechanism of social and economic interaction, it
instills a value that is highly destructive to social and economic
development of a country.

## How prevalent is corruption in the education sector?

Several organizations have developed corruption perception indices that
purport to rank countries in terms of the extent of corruption (i.e.,
The Internet Center for Corruption Research,
<http://www.gwdg.de/~uwvw/icr.htm>). However, objective estimates of the
prevalence of corruption specific to the education sector are hard to
determine. Anecdotal evidence suggests that, while corruption is present
in the education system of many countries, it is widespread in some
countries of South and Southeast Asia and endemic in many countries of
the Former Soviet Union and Africa. Table 1 provides some insight into
the pervasiveness of corruption. Across 17 countries in the survey, the
percent of citizens who believe corruption is widespread ranged from 1%
to 53%, with about half the countries in the 20-40% range. The highest
percentages of educators who report being asked for a bribe were in
Southeast Asia (e.g., Bangladesh, Cambodia, Indonesia).

## What forms does corruption take in the education sector?

Corruption can occur at any point in a system where decisions are made
that have meaningful consequences for individuals. In the education
sector, that means it can happen at virtually every level, from the
central ministry down to the school and classroom. It can happen any
time educators operate as gatekeepers to real or assumed

## Table 1

Perceptions of pervasiveness of corruption, selected countries

+---------+---------+---------+-------+---+---------+--------+---------+
|         | **% who |         |       | * |         |        |         |
|         | p       |         |       | * |         |        |         |
|         | erceive |         |       | % |         |        |         |
|         | cor     |         |       | w |         |        |         |
|         | ruption |         |       | h |         |        |         |
|         | is      |         |       | o |         |        |         |
|         | wid     |         |       | h |         |        |         |
|         | espread |         |       | a |         |        |         |
|         | among** |         |       | v |         |        |         |
|         |         |         |       | e |         |        |         |
|         |         |         |       | b |         |        |         |
|         |         |         |       | e |         |        |         |
|         |         |         |       | e |         |        |         |
|         |         |         |       | n |         |        |         |
|         |         |         |       | a |         |        |         |
|         |         |         |       | s |         |        |         |
|         |         |         |       | k |         |        |         |
|         |         |         |       | e |         |        |         |
|         |         |         |       | d |         |        |         |
|         |         |         |       | f |         |        |         |
|         |         |         |       | o |         |        |         |
|         |         |         |       | r |         |        |         |
|         |         |         |       | b |         |        |         |
|         |         |         |       | r |         |        |         |
|         |         |         |       | i |         |        |         |
|         |         |         |       | b |         |        |         |
|         |         |         |       | e |         |        |         |
|         |         |         |       | b |         |        |         |
|         |         |         |       | y |         |        |         |
|         |         |         |       | * |         |        |         |
|         |         |         |       | * |         |        |         |
+---------+---------+---------+-------+---+---------+--------+---------+
| **Co    | **Uni   | ## T    | **W   |   | **Uni   | **Teac | **Ed    |
| untry** | versity | eachers | ithin |   | versity | hers** | ucation |
|         | Profe   |         | the   |   | Prof    |        | profes  |
|         | ssors** |         | educ  |   | essor** |        | sionals |
|         |         |         | ation |   |         |        | in      |
|         |         |         | s     |   |         |        | ge      |
|         |         |         | ector |   |         |        | neral** |
|         |         |         | in    |   |         |        |         |
|         |         |         | gene  |   |         |        |         |
|         |         |         | ral** |   |         |        |         |
+---------+---------+---------+-------+---+---------+--------+---------+
| Albania | 32      | 10      |       |   | 28      | 11     |         |
+---------+---------+---------+-------+---+---------+--------+---------+
| Ban     |         |         |       |   |         |        | 74      |
| gladesh |         |         |       |   |         |        |         |
+---------+---------+---------+-------+---+---------+--------+---------+
| Bosnia  | 38      | 22      | 38    |   | 11      | 5      |         |
+---------+---------+---------+-------+---+---------+--------+---------+
| B       | 28      | 10      |       |   | 14      | 4      |         |
| ulgaria |         |         |       |   |         |        |         |
+---------+---------+---------+-------+---+---------+--------+---------+
| C       |         |         |       |   |         |        | 41      |
| ambodia |         |         |       |   |         |        |         |
+---------+---------+---------+-------+---+---------+--------+---------+
| Croatia | 31      | 16      |       |   | 5       | 2      |         |
+---------+---------+---------+-------+---+---------+--------+---------+
| Ghana   |         |         |       |   |         |        | 24      |
+---------+---------+---------+-------+---+---------+--------+---------+
| H       |         |         | 2     |   |         |        |         |
| onduras |         |         |       |   |         |        |         |
+---------+---------+---------+-------+---+---------+--------+---------+
| In      |         |         | 53    |   |         |        | 24      |
| donesia |         |         |       |   |         |        |         |
+---------+---------+---------+-------+---+---------+--------+---------+
| Latvia  |         |         | 1     |   |         |        |         |
+---------+---------+---------+-------+---+---------+--------+---------+
| Ma      | 43      | 23      |       |   | 14      | 9      |         |
| cedonia |         |         |       |   |         |        |         |
+---------+---------+---------+-------+---+---------+--------+---------+
| Mon     | 32      | 21      |       |   | 10      | 6      |         |
| tenegro |         |         |       |   |         |        |         |
+---------+---------+---------+-------+---+---------+--------+---------+
| Peru    | 18      |         |       |   |         |        | 7       |
+---------+---------+---------+-------+---+---------+--------+---------+
| Romania | 22      | 18      |       |   | 13      | 15     |         |
+---------+---------+---------+-------+---+---------+--------+---------+
| Russia  |         |         | 20    |   | 16      | 6      |         |
+---------+---------+---------+-------+---+---------+--------+---------+
| Serbia  | 42      | 33      |       |   | 27      | 20     |         |
+---------+---------+---------+-------+---+---------+--------+---------+
| S       |         |         | 38    |   |         |        |         |
| lovakia |         |         |       |   |         |        |         |
+---------+---------+---------+-------+---+---------+--------+---------+

benefits. As education is widely viewed as access to life opportunity,
higher lifetime earnings, and greater social mobility, even seemingly
small decisions are often awarded great value.

## 

##  Gatekeepers at different levels of the education system introduce corruption around the particular opportunities and benefits they control. Their motivation is often economic -- to supplement their income \-- but may also be an effort to extend their status or power, create future career opportunities, or conform to expectations of those whose patronage they seek. Figure 1 illustrates the types of corruption that can occur at different levels of the education system. At the central ministry levels, much of the corruption involves the diversion of funds associated with procurement, construction, and of the funds intended for allocation to lower levels of the system. At intermediate levels of the education bureaucracy, the corruption tends to center on procurement, diversion of money and supplies on their way to the schools, and bribes from educators lower in the system seeking to secure opportunity or avoid punishment. At the school level, corruption tends to center on bribes from parents to ensure student access, good grades, grade progression, and graduation. However, it also takes the form of teacher absenteeism---teachers collect salaries but the intended instruction does not occur.

Educators at the school level also can divert funds, school supplies,
and sometimes food that the schools received from community or
government sources. Headmasters and teachers are also in a position to
assess unauthorized fees for real or imaginary services (e.g., paper
fees in order to take a exam), create the need for private tutoring, or
take salaries for work not actually done.

**III Responses to corruption in the education sector**

Corruption is not inevitable and corruption is not a life sentence for a
country or government. A key factor in the differing corruption levels
across countries and within the same country over time is the ***quality
of top leadership***. Leaders who respect the

**Figure 1**

**Illustration of common forms of corruption in the education sector,**

**by level of the education system**

  ------------------- --------------------------------------------------------
  **Level of          **Type of Behavior**
  Activity**          

  Central Ministry    Kickback on construction and supply contracts

                      Favoritism in hiring, appointments, and promotions
                      decisions

                      Diversion of funds from government accounts

                      Diversion of funds from international assistance funds

                      Ghost teachers and employees

                      Requiring payment for services that should be provided
                      free

                      Withholding needed approvals and signatures to extort
                      bribes (e.g., gifts, favors, outright payments)

                      Directing the location of construction and services to
                      locations that offer opportunities for gain by oneself,
                      family, or friends

                      Requiring the use of materials as a way of creating a
                      market for items on which oneself, family or friends
                      hold an import or production monopoly

  Region/district     Overlooking school violations on inspector visits in
                      return for bribes or favors

                      Diversion of school supplies to private market

                      Sales of recommendations for higher education entrance

                      Favoritism in personnel appointments (e.g., headmasters,
                      teachers)

  School level        Ghost teachers

                      Diversion of school fees

                      Inflation of school enrollment data (in countries in
                      which central ministry funds are allocated to school on
                      basis of enrollment)

                      Imposition of unauthorized fees

                      Diversion of central MOE funds allocated to schools

                      Diversion of monies in revolving textbook fund

                      Diversion of community contributions

  Classroom/teacher   Siphoning of school supplies and textbooks to local
  level               market

                      Selling test scores and course grades

                      Selling change of grade

                      Selling grade-to-grade promotion

                      Selling admissions (especially to higher education)

                      Creating the necessity for private tutoring

                      Teachers' persistent absenteeism to accommodate other
                      income producing work

  International       Payment of bribes
  agencies            

                      Payment of excessive or unnecessary fees to obtain
                      services

                      Skimming from project funds

                      Allocating (or acquiescing in the allocation of) project
                      related opportunities on the basis of candidates
                      connections rather than on merit
  ------------------- --------------------------------------------------------

Source: original

rule of law, emphasize transparency in the operation of the offices they
oversee, take action against subordinates found violating rules, and
exhibit integrity in their own

transactions can make a difference. Honest leaders can be a powerful
force in reducing corruption. Conversely, when top leadership is
corrupt, they lack the moral platform to demand honesty in others.

Implementing honest practices can be tricky, possibly dangerous, even
for highly committed leaders. In some cultures, it is widely understood
that one of the benefits of public office is the opportunity to accrue
personal wealth through manipulation of the system. Appointments to
senior government positions are granted as rewards, a recognition that
the appointee has earned a turn to loot. Just as incentives, when
commonplace, loose their incentive value, corrupt practices, when
pervasive, become the norm. Those not participating may be considered
naïve, odd, or stupid, even by those who suffer the negative
consequences. Consequently, effective leadership to reduce corruption
often requires considerable personal courage. Leaders have to withstand
criticism, often overt opposition, from colleagues who see their own
self-interest threatened by the introduction of more transparent and
honesty practices.

In some cases, senior officials fear retaliation by colleagues intent on
protecting their income and influence. At lower levels of management,
some fear they will lose their jobs if they do not participate in, or at
least cover-up, the corrupt practices that may be going on around them.
They confront a lead-or-bullets dilemma: They can participate and enjoy
the fruits of their illicit gain or they can resist and risk
professional and even personal injury. Nonetheless, the commitment of
top leadership to honest operation) of the education system (e.g.,
greater transparency, introduction of a code of conduct) remains a
central component in minimizing corrupt practices.

A second factor in minimizing corruption is that educators and
government officials need a ***clear code of conduct***. This may
originate in a country's administrative or criminal code or be
introduced by professional associations or unions. For example, in the
United States, every state has a teachers' code of conduct. Teachers who
violate it can lose their teaching license. At the same time,
professional organizations have codes of conduct that apply to the
specific activities promoted by those organizations. For instance, the
American Educational Research Association has formulated a code of
conduct for educational researchers; the American Evaluation Association
has published a code of ethics for conducting education evaluations.

Educators need to know what behaviors might be constituted as corrupt
practices, especially when proper professional conduct might run counter
to social norms widely accepted outside of the education workplace. A
code of conduct would, for example, clarify the propriety of and sets
limits on accepting gifts in return for professional actions, even
though gift giving may be considered appropriate in other social
settings. However, codes of conduct alone do little to reduce corruption
unless there are effective means of communication, clear sanctions for
violating the codes, consistent enforcement, and top level support.

A third factor in minimizing corruption is the ***creation or
modification of organizational structures*** and administrative
procedures aimed at breaking the grip of entrenched practices.[^2] A key
element in this is a ***clear, workable accountability system.*** To be
effective, an accountability system must clearly state the rules and
procedures associated with managing the education system, provide a
mechanism for monitoring compliance, specify the consequences for
non-compliance, and be consistent in enforcement. Box A illustrates how
the creation of a new organizational structure helped reduce corruption
in higher education in Azerbaijan.

Ironically, some accountability systems intended to reduce corruption
sometimes fuel more corruption. Efforts to legislate corruption out of
existence can backfire and inadvertently contribute problems worse than
those initially being addressed. This occurs when a government's
response to corruption is to add rules aimed at eliminating particular
undesirable practices or behaviors in a piecemeal manner. As the number
of rules grow and multiply, the rules can interact in unanticipated
ways, operate at cross-purposes, and ultimately stifle legitimate
reform.

+-----------------------------------------------------------------------+
| #                                                                     |
|                                                                       |
| # Box A: Successful practices in reducing corruption: Azerbaijan      |
|                                                                       |
| Faced with rampant corruption in admissions to higher education, the  |
| Government of Azerbaijan took admissions authority away from          |
| universities and vested it with a newly created State Student         |
| Admissions Committee.[^3] This Committee now oversees the development |
| and administration of a national university entrance examination and  |
| subsequent selection of candidates for places in all public           |
| universities. While broadly opposed by the universities, this         |
| Committee is widely credited with significantly reducing corruption   |
| in university admissions.                                             |
+-----------------------------------------------------------------------+

This was illustrated in pre-civil war Liberia. Given the complexity and
corruption in the process of getting replacement teachers hired to
replace teachers who died or left teaching (new teachers needed 29
official signatures to get on the payroll), headmasters were allowed to
appoint temporary substitutes and let them cash the paychecks of the
teachers they replaced. Principals quickly realized that they could cash
these paychecks and keep the money, without bothering to appoint a
replacement teacher. This eventually led to a high incidence of "ghost
teachers."[^4] When district and central officials realized what was
happening, instead of trying to eliminate the practice, they demanded a
cut of the proceeds. Moreover, when the World Bank introduced a new
education management information system (EMIS) in an effort to help
strengthen management capacity, education leaders feared that improved
school level data would expose the fraud. Though initially successful,
the EMIS died within two years as headmasters refused to provide
accurate school level data in annual school surveys.[^5] An example in
which government successfully implemented an auditing system in the
education sector is provided in Box B. An example in which NGOs worked
with schools to create greater transparency in the use of parental
contributions to the schools is presented in Box C.

+-----------------------------------------------------------------------+
| ### Box B: Successful practices in reducing corruption: Uganda [^6]   |
|                                                                       |
| With World Bank support, the Uganda government conducted an audit of  |
| actual enrollments and funding flows in schools. Funds actually       |
| received by the schools were compared to the amounts dispersed by     |
| central government plus the amounts collected from fees assessed at   |
| the local level. The audit discovered major leakages of money. For    |
| example, only 13% of funds allocated for non-salary items like        |
| textbooks and supplies reached the schools. To promote transparency   |
| and fix the problem, all fund transfers to district education offices |
| were published in the newspapers and broadcast on radio. Each primary |
| school was required to post a public notice of all inflows of funds   |
| to the schools. Results were impressive. Within three years, 90% of   |
| non-salary funds provided by the central government were reaching the |
| schools.                                                              |
+-----------------------------------------------------------------------+

+-----------------------------------------------------------------------+
| ## Box C: Successful practices in reducing corruption: Russia         |
|                                                                       |
| In Russia, schools typically request money from parents each year     |
| allegedly to enhance educational programs, repair/maintain school     |
| buildings, and obtain equipment and supplies, etc. Technically, such  |
| requests are not legal. Parents typically comply fearing retribution  |
| toward their students. There is little or no feedback to parents on   |
| how these out-of-budget funds are actually used or managed on a       |
| school-by-school basis. Under small grants to NGOs in Samara and      |
| Tomsk, Russia in 2002, an activity was initiated to assess parental   |
| attitudes and to work with particular school districts to make the    |
| planning and expenditure of these budgets more transparent and        |
| generate more parent participation in the budgeting process. As a     |
| result of extensive lobbying with school administrations, the out-of  |
| budget funds in several schools are now open and transparent, and     |
| parents are getting involved in how the monies should be spent        |
| (Management Systems International, 2002).                             |
+-----------------------------------------------------------------------+

Accountability systems can only operate in the context of ***laws
promoting transparency.*** These laws provide the broader legal and
social frameworks that allow the flow of information needed for
accountability systems to work. These laws have an impact on reducing
corruption only when two other conditions are met. The first is the
operation of a ***free press*** that can utilize these laws to help
expose questionable practices. Only as evidence of inappropriate
practices is widely available can a critical

mass of public concern be mobilized. The second condition is the
engagement of citizens willing to push for honesty in the operation of
the education system. Within the education system, citizen involvement
is often in the form of parent-teacher associations organized around
specific schools or community advisory groups

organized by local non-governmental organizations (NGOs). Box D presents
an example of the impact of increased transparency on teacher
deployment.

+-----------------------------------------------------------------------+
| ##                                                                    |
|                                                                       |
| ## Box D: Successful practices in reducing corruption: Gambia [^7]    |
|                                                                       |
| The introduction of an education management information system in     |
| Gambia helped reduce the role of favoritism in teacher assignments.   |
| The EMIS provided an objective means of tracking and ranking teachers |
| by seniority, language abilities, subject specialization, and other   |
| factors that were supposed to be used in assigning teachers to        |
| schools. The availability of this information constrained the         |
| assignment of teachers on the basis of such factors as family         |
| connections, personal friendships, or other forms of personal         |
| influence.                                                            |
+-----------------------------------------------------------------------+

While ***community engagement*** and collective community action can
play an important role in fighting corruption, such action can be
difficult to foster. Success depends on the perceived benefits of
reducing corruption as opposed to the costs community members may incur
for their efforts. However, for community engagement to be effective, it
often needs to be supported ***by community level training***. Citizens
frequently lack experience in how to hold their local schools
accountable for effective financial and personnel management. For
example, a recent study of parent perceptions of effective schools in
Ghana found that many parents considered a school to be effective if
strict student discipline was maintained and no one complained about the
school.[^8] Community members had little framework for knowing other
dimensions on which they might judge their local school. Such training
should be aimed at helping community members understand (a) the
characteristics of an effective school, (b) what headmaster and teacher
behaviors they should look for in assessing the effectiveness of those
educators, (c) their own legal rights as parents and community members
to information about school budgets, expenditures, procedures, and
operational decisions, and (d) the sanctions they as community members
can bring to bear on under-performing schools. An example of where
citizens have been able to work effectively in monitoring school
practices is presented in Box E.

In some countries, the operation of ***non-governmental organizations***
(NGOs) has been effective in helping to minimize corruption.[^9]
However, in some countries, a number of development-oriented NGOs sprang
into existence solely as a means of

+-----------------------------------------------------------------------+
| # Box E: Successful practices in reducing corruption: Indonesia [^10] |
|                                                                       |
| In some countries, the handling of community generated funds for the  |
| local schools is highly susceptible to corruption. In Indonesia,      |
| however, these funds are often allocated with minimum corruption, due |
| to the involvement of the parent association in deciding how these    |
| funds are to be used and in monitoring to ensure that the funds reach |
| their intended destination. At the beginning of the school year,      |
| representatives of the parent association meet with school officials  |
| to establish a plan for how community generated funds will be used.   |
| School officials provide detailed accounting of expenditures to the   |
| parent association during the year. The system works because (a) the  |
| use of these funds is highly structure, (b) expenditures are highly   |
| transparent, and (c) the community attaches considerable importance   |
| and pride to the success of this scheme.                              |
+-----------------------------------------------------------------------+

capturing these development funds, sometimes led by individuals more
interested in the money than in development. As more funds have been
routed through NGOs, there is growing evidence in some countries that
NGOs can be just as corrupt as governments.

Where corruption is a symptom of a structural or operational flaw in the
education system, governments and international agencies are unlikely to
suppress it with more laws, at least until they have ***addressed the
underlying problems*** that fuel the behavior. This may require efforts
to ***change the incentive systems*** that fuel corruption. It is likely
that corruption motivated by insatiable greed, arrogance, and blind
self-interest may be influenced by some convergence of the strategies
discussed above. However, it is also likely that the most insidious
types of corruption in the education system -- the petty corruption that
shapes the day-to-day experience of students and their families \-- are
driven by more complicated dynamics.

For example, as previously pointed out, corrupt practices are sometimes
perpetrated by teachers who are severely underpaid or whose salaries
have not been paid for months. Their corruption may be interpreted by
some as a reasonable adaptive response to a difficult situation. At one
level, it is easy to be sympathetic. However, it is this very type of
petty corruption \-- and what it teaches students \-- that poses the
greatest risk to the long-term fabric of a society. Regardless of one's
sympathies for teachers' motivation in turning to corrupt practices,
once started, these practices are difficult to eliminate. While low
salaries motivate teacher corruption, raising salaries does not
necessarily reduce that corruption (Di Tella and Schargrodsky, 2002).
Raising salaries is a necessary but not a sufficient intervention to
reduce corruption, once entrenched.

## Donor complicity in corruption

Those international agencies providing development assistance funds are
not without culpability in the corruption evident in some education
systems. Three forms of complicity are of particular concern:

1.  Donors have overlooked corruption in education when there were
    larger strategic political interests at stake. For example, when the
    U.S. is cultivating a country's assistance in a fight against
    terrorism or drugs, their participation in a coalition to support a
    regional peace plan, the rights to a house a military base in the
    country, or the country's vote in an upcoming issue in front of the
    United Nations, senior diplomats often do not want their efforts
    derailed by attention to corruption in what they may consider a
    marginal area of concern. Examples abound. American support was
    given to Barre in Somalia, Marcos in the Philippines, and Dow in
    Liberia even though U.S. officials were aware of corrupt practices
    in the use of American development assistance funds. Few, if any
    diplomats questioned the prevalence of corruption at senior levels
    in those countries, but other, more strategic, consideration
    prevailed. Much can be done to reduce corruption in the use of U.S.
    development assistance in the developing world, but only if the U.S.
    is willing to risk relationships and arrangements that may be
    crucial to other aspects of its agenda in these countries.

2.  Money flow that exceeds absorptive capacity creates conditions that
    fuel corruption. When large amounts of money are infused into an
    education system that lacks sufficient numbers of trained personnel,
    clear procedures for handling the funds, or workable financial
    monitoring systems, both intentional and unintentional misallocation
    of funds is easy. What may start as unintentional misallocation may
    quickly shift to intentional misallocation when those in charge
    realize there are no sanctions for their actions. One way to reduce
    corruption is to better align the flow of development assistance
    with capacity to effectively manage those funds and the project
    activities those funds buy.

3.  International contractors seeking to minimize corruption in the
    projects they manage are caught in a conflict of interests. There
    are few incentives for USAID contractors to fight corruption and
    there can be very real costs if they try. Contractors who refuse to
    overlook or condone petty corruption of counterpart staff often
    encounter resistance and delays in implementation that reflect badly
    on their companies and on them personally. If these delays impede
    progress toward project objectives, home companies may incur
    financial penalties within USAID's performance based payment
    systems. At a personal level, they may be seen as ineffective in
    managing their projects, a problem that can cost project managers
    their jobs. In short, those responsible for project implementation
    have few incentives and clear disincentives for resisting petty
    corruption.

As donor groups come to view corruption as a major impediment to
sustainable progress in education development, they need to reconsider
their own practices that overlook or tacitly condone it. They need to be
willing to pay the price of enforcing rules aimed at minimizing
corruption, even if this means withdrawing from important programs,
risking important relationships, and jeopardizing the flow of assistance
to innocent beneficiaries. Until international agencies are willing to
incur these costs, they will continue to give confused message that is
easy for aid recipients to ignore.

+-----------------------------------------------------------------------+
| **Annex 1: Corruption in education: What does it look like? How does  |
| it work?**                                                            |
|                                                                       |
| **Examples from the field:**                                          |
|                                                                       |
| -   An underpaid teacher, to make ends meet, charges students a       |
|     "paper fee" in order for them to take the end of year national    |
|     examination for their grade. Students must pass this test in      |
|     order to progress to the next grade.                              |
|                                                                       |
| ```{=html}                                                            |
| <!-- -->                                                              |
| ```                                                                   |
| -   The Director General of Secondary Education insists that          |
|     transportation is a necessary condition for a donor sponsored     |
|     secondary education project to succeed. Once purchased, the Jeep  |
|     was assigned by the Ministry to the personal use of the Director  |
|     General.                                                          |
|                                                                       |
| ```{=html}                                                            |
| <!-- -->                                                              |
| ```                                                                   |
| -   A teacher training college was purchasing far more food than      |
|     seemed necessary for the number of students enrolled. Staff were  |
|     siphoning supplies for their personal use, justifying it because  |
|     they had not been paid for four months.                           |
|                                                                       |
| ```{=html}                                                            |
| <!-- -->                                                              |
| ```                                                                   |
| -   To be officially hired as a teacher, a person needed to secure    |
|     signatures from 17 different offices across four different        |
|     ministries. The people whose signatures were needed each expected |
|     a gift in return for their signature.                             |
|                                                                       |
| ```{=html}                                                            |
| <!-- -->                                                              |
| ```                                                                   |
| -   The Director General for Vocational Education insists that the    |
|     new technical training center be located in particular town of    |
|     his choice. Within that town, the local elders insist that the    |
|     center be built in specific location, even though the land was    |
|     very expensive and not particularly convenient for the children.  |
|     Later it becomes clear that the location was owned by the         |
|     director general\'s brother-in-law.                               |
|                                                                       |
| ```{=html}                                                            |
| <!-- -->                                                              |
| ```                                                                   |
| -   A district school inspector, while visiting a rural district,     |
|     found the school seriously out of compliance with several         |
|     Ministry regulations. The headmaster was concerned that the       |
|     inspector\'s report could seriously damage his career. That       |
|     evening the headmaster brought a goat to the inspector's          |
|     guesthouse. After discussing the issue and exchanging the goat,   |
|     the inspector decided that no report was necessary.               |
|                                                                       |
| ```{=html}                                                            |
| <!-- -->                                                              |
| ```                                                                   |
| -   An international adviser "borrows\" money in a dollar-denominated |
|     project bank account, converts the money to local currency on the |
|     black market, then converts the money back to dollars using the   |
|     official exchange rate. He returns to dollars to the project      |
|     account and pockets the difference.                               |
|                                                                       |
| ```{=html}                                                            |
| <!-- -->                                                              |
| ```                                                                   |
| -   The staff in the Statistics Office of the Ministry insists that   |
|     international consultants pay a fee for the enrollment and school |
|     data they need, even though the data is for a project sponsored   |
|     by a different office in the same Ministry. The consultant        |
|     complains to the Deputy Minister. The Deputy Minister tells the   |
|     Statistics Office to provide the data. The consultant receives    |
|     the data, but it is incomplete and full of errors, even though    |
|     the consultant knows the correct data are available.              |
+-----------------------------------------------------------------------+

# Annex 2: People contacted in preparation of this paper

Tracy Atwood, Resident Representative, USAID, Almaty, Kazakhstan
(Personal conversation)

Kimberly Bolyard, Office of Education, Bureau for Economic Growth,
Agriculture and Trade, USAID (Email)

Marc Cohen, Senior Education Specialist, Asian Development Bank, Manila,
Philippines (Personal conversation)

Patrick Collins, USAID/W (Phone conversation, Email)

Todd Drummon Country Director, American Councils for International
Education, Bishkek, Kyrgyz Republic (Personal conversation)

Ann Dykstra, WID Office, USAID/W (Phone conversation, Email)

Jon Gore, Deputy Director, British Council, Almaty, Kazakhstan (Personal
conversation)

David Heesen, USAID (Email)

Jane Hutton, Deputy Director, Education Support Program, Open Society
Institute, Budapest, Hungary (Personal conversation)

Jessica Leonard, Education Specialist, USAID, Almaty, Kazakhstan
(Personal conversation)

Malcolm Mercer, Education Consultant, Wales, UK (Personal conversation)

Michael Mertaugh, Lead Education Economist, Europe and Central Asia
Region, World Bank. (Personal conversation)

Yolande Miller-Gradvaux, Education Advisor, USAID/Africa Bureau/SD/ED,
AED/SARA (Email)

Madelene O'Donnell, USAID/W (Personal conversation)

Donald Siller, USAID/W (Email)

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[^2]: Decentralization is often advocated as a strategy for reducing
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    However, this is a point of considerable controversy. Some argue
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    > corruption and only serves to push it to lower levels of the
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[^7]: Department of State For Education (2001). Education Management
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[^10]: Personal communication with M. Mertaugh, World Bank and World
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    Study in Indonesia, Washington D.C.