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Report to the Subcommittee on African Affairs, Committee on Foreign 
Relations, U.S. Senate: 

April 2004: 

FOREIGN ASSISTANCE: 

U.S. Anticorruption Programs in Sub-Saharan Africa Will Require Time 
and Commitment: 

GAO-04-506: 

GAO Highlights: 

Highlights of GAO-04-506, a report to the Chairman and Ranking Minority 
Member, Subcommittee on African Affairs, Committee on Foreign 
Relations, U.S. Senate 

Why GAO Did This Study: 

In October 2000, Congress passed the International Anticorruption and 
Good Governance Act (P.L. 106-309). The purpose of this legislation is 
to promote good governance by helping other countries combat corruption 
and improve government transparency and accountability. U.S. agencies 
spent about $33 million per year in fiscal years 20012002 providing 
anticorruption assistance to 22 sub-Saharan African countries. The U.S. 
Agency for International Development (USAID) provided the majority of 
this assistance, along with the Departments of the Treasury, Justice, 
Commerce, and State. 

To help Congress oversee management of anticorruption programs in sub-
Saharan Africa, GAO was asked to examine (1) what is known about the 
extent of corruption in the region, (2) the factors that give rise to 
corruption in this region, (3) the anticorruption assistance U.S. 
agencies have provided, and (4) the lessons about anticorruption 
assistance that U.S. agencies and other international organizations 
have learned.

USAID provided written comments on a draft of this report and the 
Departments of the Treasury, Justice, and State provided informal 
comments. These agencies generally agreed with our presentation of the 
issues and conclusions. 

What GAO Found: 

Indexes, surveys, and studies indicate that corruption in sub-Saharan 
Africa is pervasive, but assessing it is inherently difficult. Indexes 
published by the World Bank Institute and Transparency International 
have limitations; for example, both focus on perceptions of corruption, 
and both recognize their measures to be imprecise. Regional surveys 
indicate that many businesses are affected by corruption, although 
perceptions of corruption levels vary among countries (see figure). 
According to country-level surveys and other information, households 
view corruption as rooted in the police, judicial system, and health 
services, although perceptions of the most and least corrupt 
institutions vary by country.

Sub-Saharan African countries share some fundamental challenges that 
can give rise to corruption. According to studies and U.S. agency 
officials, these challenges include low civil service salaries, a lack 
of transparency and accountability in government operations, 
ineffective legal frameworks and law enforcement, weak judicial 
systems, and tolerant public attitudes.

U.S. anticorruption programs cover a range of issues. Funding for these 
programs represented about 2.4 percent of U.S. assistance to sub-
Saharan Africa in fiscal years 20012002. The programs have focused on 
supporting civil society; encouraging legal, judicial, and regulatory 
reform; privatizing government functions; enhancing government 
accountability; supporting elections; establishing anticorruption 
agencies; and providing law enforcement assistance. However, U.S. 
legislative restrictions on foreign law enforcement assistance limited 
agencies activities in this area. These programs are relatively new 
and early evaluations and our analysis suggest prospects for 
sustainability are unclear.

Lessons learned from anticorruption efforts include the importance of 
(1) political will from public and private leaders; (2) widespread 
public support; (3) programs tailored to country conditions; (4) 
multipronged efforts that incorporate prevention, education, and law 
enforcement; (5) access to government information; and (6) time and 
commitment to address the difficult nature of these problems.

www.gao.gov/cgi-bin/getrpt?GAO-04-506.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact David Gootnick at (202) 
512-3149 or gootnickd@gao.gov.

[End of section]

Contents: 

Letter: 

Results in Brief: 

Background: 

Corruption in Sub-Saharan Africa Is Pervasive but Difficult to Measure: 

Sub-Saharan African Countries Share Some Underlying Factors That Give 
Rise to Corruption: 

U.S. Anticorruption Programs in Sub-Saharan Africa Were Broadly 
Integrated and Received Limited Funding: 

Anticorruption Efforts Have Identified Some Lessons Learned: 

Conclusions: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Scope and Methodology: 

Appendix II: International Agreements Addressing Corruption in Sub-
Saharan Africa: 

Appendix III: Characteristics of WBI and TI Corruption Indexes: 

Appendix IV: Analysis of Corruption and Economic Development: 

Appendix V: World Business Environment Survey: 

Appendix VI: Comments from USAID: 

GAO Comments: 

Appendix VII: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Staff Acknowledgments: 

Bibliography: 

Tables: 

Table 1: Characteristics of the WBI and TI Corruption Indexes: 

Table 2: Correlation between 2002 WBI Index and Selected Development 
Indicators: 

Table 3: Summary of Regression Analysis Using 2002 WBI Index: 

Figures: 

Figure 1: 2002 WBI Corruption Index Rankings for 47 Sub-Saharan African 
Countries: 

Figure 2: 2003 TI Corruption Perception Index Rankings for 24 Sub-
Saharan African Countries: 

Figure 3: Firms in Selected Sub-Saharan African Countries Responding 
"Always, Usually, or Frequently" to WBES Statement "It Is Common for 
Firms in My Line of Business to Have to Pay Some Irregular 'Additional 
Payments' to Get Things Done": 

Figure 4: Annual Averages of U.S. Anticorruption Assistance to Sub-
Saharan Africa, Fiscal Years 2001-2002: 

Figure 5: Sub-Saharan African Countries or Programs Receiving U.S. 
Anticorruption Assistance in Excess of $1 Million, Fiscal Years 2001-
2002: 

Figure 6: U.S. Anticorruption Programs in Sub-Saharan Africa, Fiscal 
Years 2001-2002: 

Figure 7: Relation of WBI Index to Percentage of Population with Access 
to Improved Drinking Water Sources: 

Figure 8: Firms in Selected Sub-Saharan African Countries Responding 
"Moderate or Major Obstacle" to WBES Question "How Problematic Has 
Corruption Been for the Operation and Growth of Your Business?": 

Figure 9: Firms in Selected Sub-Saharan African Countries Responding 
"Always, Usually, or Frequently" to WBES Question "Do Firms Like Yours 
Typically Need to Make Extra, Unofficial Payments to Gain Government 
Contracts?": 

Figure 10: Firms in Selected Sub-Saharan African Countries Responding 
"Never, Seldom, or Sometimes" to WBES Question "How Often Do You 
Associate 'Honest/Uncorrupt' as Description of the Court System in 
Resolving Business Disputes?": 

Figure 11: Firms in Selected Sub-Saharan African Countries Responding 
"Minor, Moderate, or Major Obstacle" to WBES Question "To What Extent 
Has Corruption of Bank Officials Had an Impact on Your Business?": 

Abbreviations: 

AU: African Union: 

BPE: Bureau of Public Enterprises: 

FCPA: Foreign Corrupt Practices Act: 

FBI: Federal Bureau of Investigation: 

ICITAP: International Criminal Investigative Training Assistance 
Program: 

IDA: International Development Association: 

INL: Bureau for International Narcotics and Law Enforcement Affairs: 

MCA: Millennium Challenge Account: 

NGO: nongovernmental organization: 

NSC: National Security Council: 

OECD: Organization for Economic Cooperation and Development: 

OPDAT: Office of Overseas Prosecutorial Development Assistance and 
Training: 

SADC: Southern African Development Community: 

TI: Transparency International: 

UN: United Nations: 

USAID: U.S. Agency for International Development: 

WBES: World Business Environment Survey: 

WBI: World Bank Institute: 

Letter April 26, 2004: 

The Honorable Lamar Alexander: 
Chairman: 
The Honorable Russell D. Feingold: 
Ranking Minority Member: 
Subcommittee on African Affairs: 
Committee on Foreign Relations: 
United States Senate: 

In Africa, the world's poorest continent, high levels of corruption 
hinder economic and political development, diverting funds that could 
be used for education, investment, and public infrastructure. 
Corruption--the misuse of public office for private gain--is 
perpetrated by government officials engaging in embezzlement and 
nepotism; it can also take place between public officials and private 
citizens in the form of bribery, extortion, influence peddling, and 
fraud. Corruption varies in scale: grand corruption involves the loss 
of large amounts of money at high levels of government, while petty 
corruption involves the payment of small amounts of money for favors or 
preferences.

In October 2000, Congress passed the International Anticorruption and 
Good Governance Act.[Footnote 1] The purpose of this legislation is to 
ensure that U.S. anticorruption assistance programs promote good 
governance by helping other countries to combat corruption throughout 
society and to improve transparency and accountability at all levels of 
government and throughout the private sector. The legislation 
established anticorruption as one of five major U.S. foreign policy 
goals but did not provide new funding for anticorruption initiatives. 
The recently initiated Millennium Challenge Account (MCA) assistance 
program proposes to reward good governance and to use a measure of 
corruption as a key indicator of a country's eligibility for 
assistance. The MCA initiative, funded at $1 billion in fiscal year 
2004 with significant increases proposed by fiscal year 2006, has 
increased interest in country eligibility for these funds, the steps 
that sub-Saharan African governments have taken to address corruption, 
and U.S. efforts to assist these nations. In response to your request 
that we review U.S. anticorruption assistance to sub-Saharan Africa, 
this report examines (1) what is known about the extent of corruption 
in sub-Saharan African countries, (2) the factors that give rise to 
corruption in this region, (3) the anticorruption assistance that U.S. 
agencies have provided to these countries, and (4) the lessons about 
anticorruption assistance that U.S. agencies and other international 
organizations have learned.

To address these issues, we analyzed data on corruption compiled by the 
World Bank Institute (WBI) and the nongovernmental organization 
Transparency International (TI). We also analyzed country-level surveys 
and studies focused on corruption and governance in the region. We 
reviewed documents and interviewed key officials from the U.S. Agency 
for International Development (USAID) and the Departments of the 
Treasury, Justice, Commerce, and State, and we examined the results of 
a recent USAID survey of its anticorruption programs in fiscal years 
2001-2002. In addition, we analyzed program documents from the six 
countries in sub-Saharan Africa--Mozambique, Nigeria, South Africa, 
Uganda, Zambia, and Benin--in which the U.S. government undertakes the 
largest anticorruption programs, and we obtained more detailed 
information from the USAID missions in these countries. We obtained 
perspectives on multilateral efforts and country-level programs from 
officials of the World Bank and the UN Development Program. In 
addition, we visited Nigeria and Mozambique to meet with U.S. and host 
government officials, other donors, and representatives from civil 
society to review past and ongoing anticorruption efforts there. We 
conducted our review from March 2003 to March 2004 in accordance with 
generally accepted government auditing standards. (See app. I for 
additional information on our scope and methodology.): 

Results in Brief: 

Corruption in sub-Saharan Africa is widespread, but measuring its 
extent is inherently challenging. The WBI and TI indexes rank many sub-
Saharan African nations among the most corrupt worldwide; however, both 
indexes assess perceptions rather than actual incidences of corruption, 
and both institutions recognize that these indexes are imprecise. In 
addition, we found no statistically significant differences in 
corruption scores between countries that are closely ranked in the 
indexes. Regional surveys indicate that many businesses are affected by 
corruption, although perceptions of corruption levels vary among 
countries. According to country-level surveys and other information 
sources, households see corruption as rooted in police, the judicial 
system, and health services, although perceptions of the most and least 
corrupt institutions vary among countries.

Several factors in sub-Saharan Africa give rise to corruption. First, 
low civil service salaries often lead employees to solicit bribes or 
embezzle funds. In addition, a lack of transparency and accountability 
in government operations creates opportunities for corruption. Also, 
ineffective legal frameworks and weak enforcement of laws impede 
attempts to investigate and prosecute corruption. Further, most of the 
countries lack an effective judicial system to prosecute and sanction 
corrupt officials. Finally, public tolerance of corruption is common 
and, in some countries, corruption is expected.

The United States has taken a broad approach to addressing corruption 
in sub-Saharan Africa. Funding for U.S. anticorruption programs 
developed by USAID, as well as the Departments of the Treasury, 
Justice, Commerce and State, represented about 2.4 percent of U.S. 
assistance to the region in fiscal years 2001-2002. In general, these 
programs have addressed corruption directly or indirectly by working to 
create an environment not conducive to corruption. Although USAID lacks 
a strategic plan for its anticorruption efforts, it has coordinated its 
programs through an internal working group. Interagency coordination 
has been led by the National Security Council and the Department of 
State (State). U.S. anticorruption assistance has focused on developing 
civil society programs; encouraging legal, judicial, and regulatory 
reform; privatizing government functions; enhancing government 
accountability; supporting elections; establishing anticorruption 
agencies; and providing law enforcement assistance. However, law 
enforcement assistance has been limited by legislative restrictions on 
the use of foreign assistance funds for training and financial support 
of police or other foreign law enforcement entities. Finally, USAID has 
conducted a limited number of evaluations of anticorruption programs in 
the region and has found unclear results and objectives. These early 
evaluations and our work suggest that programs are relatively new and 
prospects for sustainability are unclear.

Anticorruption efforts have produced some lessons learned about the 
conditions and components necessary for programs to succeed. First, 
political will and commitment from a country's leadership are 
essential. Second, widespread public support is necessary. Third, the 
programs must be tailored to each country's unique historical and 
economic conditions. Fourth, programs should take a multipronged 
approach emphasizing prevention, education, and law enforcement. Fifth, 
transparency and public access to information are important to ensure 
adequate oversight of government. Finally, because corruption cannot be 
eradicated quickly and simply, anticorruption efforts require long-term 
commitment to gain public confidence.

USAID provided written comments on a draft of this report and the 
Departments of the Treasury, Justice, and State provided informal 
comments. These agencies generally agreed with our presentation of the 
issues and conclusions. We were also provided technical comments from 
the World Bank Institute that were discussed with officials and 
included in this report where appropriate.

Background: 

International donors believe that corruption is a challenge to 
political stability, hampers sustainable growth, distorts prices, 
undermines legal and judicial systems, and prevents public services 
from reaching those most in need. At its worst, poor governance and 
corruption also help create the economic and social conditions that can 
lead to disillusionment and nurture fanaticism, according to State.

Sub-Saharan Africa contains multiple examples of alleged corruption, 
particularly in nations with extractive industries such as oil, natural 
gas, and precious gems. For example, a Nigerian case of grand 
corruption involved a former military ruler, Sani Abacha, who, 
according to press accounts, is alleged to have transferred tens of 
billions of dollars out of the country during his 1993-1998 
rule.[Footnote 2] In Angola, government mismanagement of oil revenue 
was reported in the press to have resulted in the disappearance of $4.2 
billion between 1997 and 2002. In Benin, the Minister of Finance 
estimated in 2001 that $68 million is lost to corruption every 3 years. 
Petty or administrative corruption, involving lesser amounts of money, 
has also been shown to affect the poor adversely by increasing the 
price of, and restricting access to, public services. For example, the 
poor in Sierra Leone pay a disproportionately higher percentage of 
their incomes on bribes for health, education, and courts than do 
wealthier citizens, according to recent analysis by the government of 
Sierra Leone. A 2003 Nigerian government study described the "10 
percent syndrome," a 10 percent unofficial "tax" paid to public 
servants to ensure that they perform their official functions.[Footnote 
3]

Concern that corruption impedes development in Africa and other regions 
began to emerge among donor nations and multilateral organizations in 
the mid-1990s. Previously, government corruption in the region was 
often considered a taboo subject in U.S. bilateral and multilateral 
discussions, according to USAID officials. The creation of 
international nongovernmental organizations concerned with 
transparency increased awareness about the insidious impact of 
government corruption. International efforts to address corruption 
began in the mid-1990s. (App. II contains additional information on 
international and regional agreements addressing corruption.): 

U.S. anticorruption efforts in sub-Saharan Africa began with a few 
efforts between the 1960s and 1980s with USAID's government reform 
programs in Liberia, the Sahel Region, and Niger. During the mid-1990s, 
building on "windows of opportunity," USAID began incorporating 
anticorruption activities into new and existing programs and, since 
2000, USAID's programs promoting transparency have evolved to include 
surveys, media campaigns, anticorruption commissions, and support for 
host government legislatures. According to USAID officials, its 
assessment of political will is a critical element on which it bases 
country programming decisions. In addition, the Departments of the 
Treasury, Justice, Commerce, and State have provided specialized legal, 
law enforcement, and financial assistance that include anticorruption 
elements.

To assess corruption, researchers and policy analysts have developed 
broad indexes, conducted regional or sectoral surveys, and undertaken 
country-level surveys and studies. WBI and TI publish two well-known 
indexes that gauge perceived corruption. The WBI index is one of 16 
performance indicators that will be used to determine eligibility to 
apply for funds from the newly established MCA. To be eligible for MCA 
assistance in 2004, countries must rank above the median in relation to 
the pool of candidate countries[Footnote 4] on at least half of the 
indicators in each of the three policy categories--ruling justly, 
encouraging economic freedom, and investing in people--and be ranked in 
the top half of the WBI index. In addition, countries must have 
inflation rates under 20 percent. The MCA board may also consider data 
from the TI Corruption Perception Index and the Department of State's 
Human Rights Report in assessing just and democratic governance.

Corruption in Sub-Saharan Africa Is Pervasive but Difficult to Measure: 

Corruption in sub-Saharan Africa is perceived to be widespread, but 
measures are imprecise. The WBI and TI indexes measure perceptions of 
corruption rather than actual incidences. Regional business surveys 
also indicate that high levels of corruption affect business 
development, although perceptions of corruption's effect vary. Country-
level surveys and studies show that, while some perceptions of 
corruption are similar among countries, generalizing about its causes 
and incidence is difficult.

Broad Indexes Show Extensive Corruption but Have Weaknesses: 

The WBI and TI indexes show high levels of corruption in sub-Saharan 
Africa: in its 2002 index, the WBI index ranked 36 of the 47 sub-
Saharan African countries it surveyed below the worldwide median, and 
22 of these countries in the bottom 25th percentile (see fig. 1). The 
TI index ranked 20 of 24 sub-Saharan African countries it surveyed in 
the bottom half of its index (see fig. 2). However, both indexes gauge 
survey respondents' perceptions of corruption rather than directly 
measuring the incidence of corruption, and both recognize their 
measures of corruption to be imprecise (see app. III for further 
details). We identified the following additional limitations: 

* In the WBI and TI indexes, individual country measures of corruption 
are associated with a range of uncertainty or confidence interval 
(depicted by the vertical lines in figs. 1 and 2). No statistically 
significant differences in relative country corruption rankings may 
exist when vertical lines overlap, as is the case for many low-income 
sub-Saharan African countries, because country scores with overlapping 
measurement errors cannot be differentiated.[Footnote 5]

* Fifty percent (median) of the 195 countries ranked by the WBI index 
have corruption scores of -0.25 or higher. As figure 1 shows, 11 sub-
Saharan African countries' (23 percent) have corruption scores above 
the worldwide median, while 36 (77 percent) sub-Saharan African 
countries have scores below the worldwide median. However, when 
measurement error is taken into consideration, only 6 countries have 
corruption scores that are significantly above the median (at 90 
percent statistical confidence). Twenty-four countries have scores 
statistically below the median, and 17 countries have scores that do 
not differ statistically from the median. Therefore, the 6 sub-Saharan 
Africa countries that have scores statistically above the WBI median 
can clearly be differentiated from the 24 counties that have scores 
statistically below the median.

Figure 1: 2002 WBI Corruption Index Rankings for 47 Sub-Saharan African 
Countries: 

[See PDF for image] 

Note: For each country, the vertical line indicates a 90 percent 
confidence interval around its estimated corruption score. The index 
ranges from 2.5 (low corruption) to -2.5 (high corruption). Country 
corruption scores are not statistically different when confidence 
intervals overlap. The horizontal lines separate the 195 countries, 
ranked by WBI, into quartiles, each containing approximately 49 
countries.

[End of figure] 

Figure 2: 2003 TI Corruption Perception Index Rankings for 24 Sub-
Saharan African Countries: 

[See PDF for image] 

Note: For each country, the vertical line indicates a 90 percent 
confidence interval around its estimated corruption score. The index 
ranges from 10 (highly clean) to 0 (highly corrupt). Country corruption 
scores are not statistically different when confidence intervals 
overlap. The horizontal lines separate the 133 countries in the TI 
index into quartiles, each containing approximately 33 countries.

[End of figure] 

* In the WBI index, a statistically significant association exists 
between levels of corruption and selected development indicators when 
all countries are considered together.[Footnote 6] In general, higher 
levels of corruption are associated with lower development outcomes. 
However, when we analyzed the countries' data by income level (low, 
middle, and high, as defined by the World Bank), we found a 
statistically significant association for far fewer of the indicators 
than when we considered all of the countries together. (See app. IV for 
more details of our analysis.): 

In this context, a senior World Bank official working on corruption has 
observed that although the WBI and TI indexes are useful as a broad 
gauge of corruption, they are not intended to guide specific program or 
policy decisions.[Footnote 7]

Regional Business Surveys Show Negative Effects, Varying Perceptions of 
Corruption: 

Regional and sectoral survey instruments that measure governance, the 
business environment, and corruption are often used to gain insight 
into corruption in economic sectors and geographic regions. One of the 
more comprehensive surveys is the World Business Environment Survey 
(WBES) (see app. V for more information).[Footnote 8] WBES results 
indicate that high levels of corruption negatively affect business 
development in sub-Saharan Africa. However, the perceived effect of 
corruption varies among countries. In addition, the WBES report noted 
that the response rates for the African countries, and for questions on 
corruption, are relatively low. Because of the response rates and the 
numbers of respondents, differences between some countries may not be 
significant.

The WBES reported that about 64 percent of businesses it surveyed in 16 
sub-Saharan African countries considered corruption to be a serious 
constraint. This compares with 17 percent of businesses surveyed in 
OECD countries and approximately half of businesses worldwide. The 
survey also found that, on average, more than half of businesses 
operating in sub-Saharan Africa believe that irregular payments are 
essential to "get things done" (see fig. 3). Specifically, nearly 70 
percent or more of businesses in Nigeria, Tanzania, Madagascar, and 
Uganda reported this belief, compared with less than 25 percent in 
South Africa, Botswana, and Namibia. In addition, Madagascar, Senegal, 
Ivory Coast, and Nigeria had the highest percentage of businesses 
stating that unofficial payments are required to gain government 
contracts. (See app. V for additional analysis of WBES data.): 

Figure 3: Firms in Selected Sub-Saharan African Countries Responding 
"Always, Usually, or Frequently" to WBES Statement "It Is Common for 
Firms in My Line of Business to Have to Pay Some Irregular 'Additional 
Payments' to Get Things Done": 

[See PDF for image] 

Notes: Response options were "always," "usually," "frequently," 
"sometimes," "seldom," and "never.": 

Figures in parentheses are the number of firms that responded in each 
country.

[End of figure] 

Country-Level Surveys and Studies Show That Corruption Is Seen as 
Rooted in Public Institutions: 

Country-level public perception surveys and corruption studies play an 
important role in providing information about the nature, magnitude, 
and location of corruption within a country (see the bibliography for a 
list of the surveys and studies we reviewed). These sources suggest 
that households in most of the countries we reviewed see corruption as 
rooted in institutions that have the greatest contact with the public, 
namely the police, the judicial system, and health services.
[Footnote 9] For example, police corruption is considered to be a 
serious problem in Nigeria, South Africa, Zambia, Mozambique, and 
Uganda. However, the institutions considered least corrupt varied 
considerably. In Zambia, commercial banks and anticorruption 
commissions are considered to be least corrupt, whereas in Uganda, 
local councils and primary schools are considered least corrupt. In 
addition, for some countries, the data suggest a gap between personal 
experiences with corruption and perceptions of corruption. For example, 
a 2001 household survey in South Africa found that although 11 percent 
of those surveyed had direct experience with corruption, 41 percent of 
respondents perceived it to be one of the country's most important 
problems.

Sub-Saharan African Countries Share Some Underlying Factors That Give 
Rise to Corruption: 

Although it is difficult to generalize about corruption in sub-Saharan 
Africa, the six countries we reviewed share some factors that are 
perceived to give rise to corruption. These include (1) low civil 
service salaries, (2) a lack of transparency and accountability, (3) 
ineffective legal frameworks, (4) an ineffective judicial system, and 
(5) tolerant attitudes and lack of public awareness about the costs and 
consequences of corruption.

Low Civil Service Pay Contributes to Corruption: 

In the countries we examined, low and untimely payment of salaries was 
cited as a significant and leading root cause of corruption. To augment 
their incomes, civil servants may solicit bribes, embezzle funds, or 
engage in a second job or private business during government working 
hours. In a 2003 Ugandan survey, 51 percent of the respondents 
identified low civil service salaries as a main cause of corruption. 
The same study quoted one respondent asking rhetorically, "How can one 
refuse $257 to allow a prisoner to escape when one is earning only $97 
per month?" According to analysts in Uganda, corruption in the 
magistrate courts is attributed in part to low salaries for court 
clerks and registers who seek extra payments to expedite cases. A 2003 
Nigerian corruption and governance survey ranked the police as the most 
corrupt institution in the country. A U.S. official stated that one of 
the root causes of police corruption in Nigeria is that police often do 
not receive their full salaries or per diems for months at a time. In 
addition, a 2003 TI study states that in Zambia, the police live in 
very poor accommodations, lack basic facilities such as sanitation, 
water, and electricity, and earn $25 to $63 per month. While country-
level studies and surveys consistently cite low civil service wages as 
a major cause of corruption, USAID officials and studies by other 
donors state that increasing civil service pay does not necessarily 
reduce corruption. They suggest that wage increases must be accompanied 
with other reforms to be effective.

Lack of Transparency and Accountability Increases Corruption 
Opportunities: 

Surveys, studies, and donor documents all cited lack of transparency 
and accountability in government systems, including procurement and 
budget, as creating considerable opportunities for corruption in the 
countries we reviewed. According to the 2003 Nigerian corruption 
survey, the struggle to secure government contracts is intense, and 
public officers involved in the process are often tempted to interfere 
with the process to their own advantage. The same study reported that 
30 percent of firms pay between 6 and 10 percent of a contract's value 
to cover kickbacks for patrons in Nigeria. While the assessment affirms 
that public procurement in Nigeria has been considered a significant 
problem, according to a government official we interviewed in 2003, the 
government has made recent efforts to increase the credibility of the 
process by streamlining it to include widely advertised tenders and 
making timely and rational decisions.

Legal Frameworks Fail to Address Corruption Adequately: 

Weak legal frameworks also hinder attempts to investigate and prosecute 
corruption. Although anticorruption laws exist in all of the six 
countries that we reviewed, in many cases, these laws do not address 
important areas of concern or they have been weakened by legal 
challenges. According to USAID officials, in Mozambique, the government 
recently passed an anticorruption law that requires government 
decision-making officials to declare their assets, offers whistleblower 
protection, imposes sentences for government officials requesting 
bribes, and mandates fines for auditors who do not inform the 
anticorruption unit of corrupt practices they may uncover. While this 
law is a move toward international best legal practices for combating 
corruption, it does not allow undercover operations and procedures such 
as plea bargaining in corruption investigations; nor increase penalties 
for corrupt officials; or require that all civil servants publicly 
disclose assets.

According to U.N. documents, South Africa's 2002 Prevention of 
Corruption Bill establishes legal frameworks to address corruption that 
are modeled on international best practices. Prior to this legislation, 
however, it was very difficult to prosecute individuals, because South 
Africa's previous 1992 Corruption Act abolished the common law crime of 
bribery and made it difficult to fulfill the evidence requirements for 
prosecution of corruption. In Nigeria, the Independent Corrupt 
Practices and Other Related Offenses Act of 2000 is considered to be 
based on best practices; however, it has been weakened by numerous 
legal challenges from the courts and National Assembly, particularly 
regarding the anticorruption agency's mandate.

Ineffective Judicial Systems Hamper Prosecution of Corrupt Officials: 

Most of the countries that we reviewed also lack an effective system 
for publicly prosecuting or sanctioning corrupt officials. Corruption 
in the judiciary, combined with other weaknesses such as poor legal 
training, an insufficient number of prosecutors, limited resources, and 
weak enforcement of laws impedes attempts to investigate and prosecute 
corruption cases and results in considerable delays in prosecuting such 
cases. In Zambia, a 2003 survey suggested that, by not prosecuting and 
convicting public officials for corrupt practices, governments 
demonstrate a lack of political will to address corruption. For 
example, a 2003 South African study reports that long court delays and 
a high rate of withdrawal of cases have conveyed the message that 
corrupt officials can act with impunity.

According to a 2000 USAID governance study in Uganda, from 1996 to 
2001, only 10 of the 16,361 new corruption-related cases handled by the 
Inspector General of the Government from 1996 to 2001 resulted in 
convictions. In Mozambique, data provided by USAID indicate that during 
a 12-month period that ended in October 2003, the anticorruption unit 
based in the Attorney General's office investigated 116 cases and 
convicted three individuals. According to a USAID official, corruption 
charges in Mozambique have been particularly difficult to prosecute 
owing to resistance by the court.

Public Tolerance of Corruption Is Common: 

According to government officials, corruption assessments, and donor 
documents, public acceptance or tolerance of corruption is common in 
many of the countries that we reviewed. While the public generally 
perceives corruption to have a negative impact on society, in some 
countries, people have become accustomed to it. For example, although 
both the WBI and TI indexes rank South Africa's corruption level as 
relatively low, a 2003 study by the UN Office on Drugs and Crime found 
that corruption in that country has become a part of the "national 
psyche." In addition, other documents state that corruption is often 
tolerated in certain forms, such as nepotism: in many African 
countries, it is expected that those in a position to help family or 
tribal members and other associates will do so by providing jobs, 
contracts, or other opportunities. In Zambia, a 2003 TI study states 
that the widespread public acceptance of corruption is one of its main 
causes.

A 2000 USAID assessment of democracy and governance in Uganda states 
that the public commonly expects that people in power will take 
advantage of their positions. Another recent study in Uganda reported 
that 39 percent of the respondents agreed with the following statement: 
"It is acceptable to bend the law as long as one does not break it." In 
addition, the head of Nigeria's anticorruption commission told us that 
the level of corruption in the country had led to a change in the 
nation's moral fabric, so that it is considered acceptable to use one's 
position to increase his or her income.

U.S. Anticorruption Programs in Sub-Saharan Africa Were Broadly 
Integrated and Received Limited Funding: 

The United States has taken a broad approach to addressing corruption 
in sub-Saharan Africa. Funding for U.S. anticorruption programs 
represented about 2.4 percent of U.S. assistance to the region in 
fiscal years 2001-2002. In general, these programs have addressed 
corruption both directly and indirectly by working to create an 
environment not conducive to corruption. U.S. agencies' anticorruption 
assistance has been coordinated formally and informally and has 
included a wide range of programs. However, U.S. law enforcement 
assistance programs have been limited by legislative restrictions. Few 
U.S. anticorruption programs have been evaluated, often only as 
components of larger programs.

U.S. Programs in Sub-Saharan Africa Received Limited Funding: 

In fiscal years 2001-2002, U.S. funding for anticorruption assistance 
to sub-Saharan Africa averaged about $33 million per year,[Footnote 10] 
a small portion of the more than $1.4 billion in average annual U.S. 
assistance to the region. Programs were implemented by USAID and the 
Departments of the Treasury, Justice, Commerce, and State, with USAID's 
programs accounting for about 84 percent of the funding (see fig. 4). 
U.S. programs operated in 22 countries, with budgets ranging from 
$50,000 to $7.6 million. The largest programs were in Nigeria and South 
Africa, with reported annual funding of $7.6 million and $3.9 million, 
respectively. Ten countries, plus regional programs, each were reported 
to have received more than $1 million in anticorruption assistance (see 
fig. 5).[Footnote 11] USAID's civil society programs constituted the 
largest number of the agency's anticorruption programs, with average 
annual funding of nearly $6.7 million in fiscal years 2001-2002. As 
shown in figure 6, there are a wide range of anticorruption programs in 
the region, many of which receive relatively small amounts of funding. 
Decisions about programming are made by the U.S. personnel working in 
the region.

Figure 4: Annual Averages of U.S. Anticorruption Assistance to Sub-
Saharan Africa, Fiscal Years 2001-2002: 

[See PDF for image] 

[End of figure] 

Figure 5: Sub-Saharan African Countries or Programs Receiving U.S. 
Anticorruption Assistance in Excess of $1 Million, Fiscal Years 2001-
2002: 

[See PDF for image] 

[End of figure] 

In June 2003, USAID's Africa Bureau established a $7.5 million annual 
anticorruption initiative to fund new anticorruption programs proposed 
by USAID missions that were reviewed and selected by Washington 
headquarters staff. USAID anticipates that this initiative will allow 
it to pilot innovative approaches that will contribute to an emerging 
set of best practices for improving transparency and accountability in 
Africa. USAID also expects this initiative to capitalize on what the 
agency considers its comparative advantage within the development 
community--having staff in countries to work on developing civil 
society organizations to advocate for, monitor, and help sustain 
anticorruption efforts. According to a USAID official, nine countries 
received funding from this initiative in 2003.[Footnote 12]

U.S. Agencies Addressed Corruption Directly and Indirectly: 

The United States pursues a mix of programmatic and diplomatic efforts 
to address anticorruption goals. U.S. anticorruption programs developed 
in sub-Saharan Africa were intended to address corruption both directly 
and indirectly. According to USAID anticorruption specialists, USAID 
programs directly addressed corruption through work with civil society 
to promote advocacy, legislative initiatives to promote transparency 
and accountability, support for supreme audit agencies, and work with 
anticorruption commissions. The agency indirectly addressed corruption 
by supporting elections and privatization. (The direct and indirect 
approaches sometimes overlap, however, and certain programs such as the 
drafting of legislation may fall into either category depending on the 
program's focus.): 

The Department of State has promoted efforts considered to directly 
address corruption by negotiating international agreements to establish 
legal frameworks to combat corruption[Footnote 13] and supporting the 
participation of African representatives in developing such agreements. 
In addition, State has addressed corruption indirectly through its 
public diplomacy programs in the region, which included presentations 
and conferences to local officials on corruption and related issues 
such as privatization and investigative reporting.

The Department of Justice, with funding from State and USAID, has 
indirectly addressed corruption by providing law enforcement assistance 
through the International Criminal Investigative Training Assistance 
Program (ICITAP) and the Office of Overseas Prosecutorial Development 
Assistance and Training (OPDAT). ICITAP provides technical advice, 
training, mentoring, equipment donations, and internships with model 
criminal justice organizations to enhance the capabilities of police 
organizations in emerging democracies. OPDAT develops and implements 
criminal law assistance programs to enhance the ability of selected 
foreign countries to investigate and prosecute criminal offenses 
effectively and cooperate with the United States more fully in 
combating transnational crime.

Other U.S. efforts to address corruption indirectly have included the 
Department of the Treasury's provision of advisers from the Office of 
Technical Assistance to assist with debt and financial management, 
budget transparency, tax systems, and financial crimes. In addition, 
the Department of Commerce provided training and consultation to local 
lawmakers and lawyers to evaluate, revise, and implement laws related 
to investment and trade, focused on Nigeria and Angola as well as West 
Africa and Southern Africa regional programs.

U.S. Programs Lack a Comprehensive Anticorruption Strategy: 

USAID has conducted its anticorruption activities in sub-Saharan Africa 
to date without the benefit of a comprehensive strategy and has relied 
on mission program strategies that have sometimes included 
anticorruption objectives. USAID anticorruption programs are generally 
developed at its missions. In 2003, the Africa Bureau prepared an 
Africa Anti-Corruption Initiative for anticorruption programs that are 
proposed by the missions and selected by Washington headquarters staff. 
USAID said it would develop performance monitoring plans to evaluate 
performance, record results, and formulate lessons learned for the 
programs that will be funded under this initiative.

USAID's Inspector General, reporting on the agency's worldwide 
anticorruption efforts in 1998, found that its anticorruption 
activities in Africa were less developed than in other geographic 
regions.[Footnote 14] The report recommended that USAID set program 
priorities and performance measures in order to develop a strategy for 
implementing its anticorruption programs. Since 1998, USAID has issued 
a number of resource documents, a handbook, and an analysis of its 
worldwide anticorruption work that identified how the agency has 
approached anticorruption activities. However, 5 years after the 
Inspector General's report, USAID still lacks a comprehensive strategy 
for all anticorruption assistance, although we were told in March 2004 
that a draft strategy was prepared and being reviewed. USAID officials 
stated that the agency has nearly completed its review of the draft 
strategy, which will then be provided to other U.S. agencies and 
implementing partners for comment. USAID officials said they expected 
the strategy to be issued later this year.

Coordination of U.S. Anticorruption Assistance Has Been Both Formal and 
Informal: 

Coordination of U.S. anticorruption assistance has been both formal and 
informal and has been conducted in various forums that included 
coordination (1) in USAID headquarters, (2) between U.S. agencies in 
Washington, (3) between U.S. agencies at the missions, and (4) between 
U.S. agencies and other donors in the field.

Since 1998, USAID has convened an informal headquarters working group 
on corruption issues that is open to all of its bureaus. 
Representatives of State's Bureau for International Narcotics and Law 
Enforcement Affairs (INL) and USAID's Office of the Inspector General 
have participated in these meetings.

Since 2002, interagency coordination in Washington has been conducted 
by the National Security Council (NSC) and the Department of State 
through ad hoc interagency meetings, according to Department of State 
and USAID officials. Prior to September 2001, interagency 
anticorruption coordination was linked to democracy development and 
counterterrorism. According to State officials, in 2002, the NSC 
directed INL to survey how foreign governments and assistance programs 
were addressing corruption. However, this effort was never completed. 
In 2003, State coordinated interagency support for a U.S. 
anticorruption initiative focused on budget transparency that was 
adopted by the Group of Eight (G8) at its June 2003 meeting.[Footnote 
15] This initiative was intended to mobilize G8 countries' efforts to 
fight corruption and mismanagement of public resources.

According to USAID, interagency coordination at missions has involved 
interagency committees to coordinate policy concerning anticorruption 
or related programs. However, since anticorruption programs in sub-
Saharan Africa are limited, and the majority are implemented by USAID, 
the need for interagency coordination is also limited. USAID officials 
reported generally good coordination between the embassies and USAID 
missions on anticorruption programs and objectives and that Ambassadors 
often paid close attention to anticorruption programs. Further, USAID's 
programs are subject to a formal State approval as part of the 
embassy's Mission Policy Plan.

In the countries we visited, we observed that U.S. agencies use various 
means, as follows, to coordinate their anticorruption activities among 
themselves and with other donors.

* In Nigeria, USAID and the UN Development Program cochair donor 
governance activities, which are the chief coordinating mechanisms for 
international anticorruption assistance. USAID and other donors closely 
coordinated their activities during the 2003 elections by jointly 
funding an election results management center and a public Web site to 
promote transparency of election results. USAID and other donors also 
participated in a cooperative review of the 2003 elections. However, in 
the area of court administration, USAID's contractor told us that he 
did not know how the United Kingdom was planning to carry out its 
program and that he had not been informed for at least 2 months about a 
breakdown in the electronic court reporting system in Lagos (where 
donors had some court administration activities).

* In Mozambique, USAID, State, and Department of Justice officials have 
worked together to coordinate their assistance to the anticorruption 
unit in particular and to the judicial and law enforcement sectors in 
general. USAID and donor representatives told us that overall 
coordination among donors was good, particularly in the area of 
democracy and governance, which includes anticorruption activities. 
Donors, whose contributions totaled about $800 million in 2003, play an 
influential role in the country, because they finance more than 50 
percent of the national budget. At least six donor working groups were 
used to coordinate government reforms addressing corruption issues, but 
there were no formal mechanisms for coordinating anticorruption 
programs.

U.S. Anticorruption Assistance Covers a Wide Range of Programs: 

U.S. anticorruption programs generally fall into one or more of the 
following categories: (1) strengthening civil society; (2) promoting 
legal, judicial, and regulatory reform; (3) privatizing government 
functions; (4) enhancing government accountability; (5) providing 
election assistance; (6) supporting anticorruption agencies; and (7) 
assisting law enforcement (see fig. 6).

Figure 6: U.S. Anticorruption Programs in Sub-Saharan Africa, Fiscal 
Years 2001-2002: 

[See PDF for image] 

[End of figure] 

Strengthening Civil Society: 

The most widespread U.S. anticorruption initiatives in sub-Saharan 
Africa are civil society programs that work to increase public 
awareness and knowledge about the impact of corruption, decrease public 
acceptance of corrupt behaviors, and encourage the citizens to become 
involved in government oversight. USAID has included civil society 
programs in 15 of the 22 countries in sub-Saharan Africa where the 
United States has implemented anticorruption programs (see fig. 6). 
USAID has also supported the start-up and strengthening of 
nongovernmental organizations (NGO) to build advocacy, administrative, 
and research skills. Examples of USAID's programs include the 
following: 

* In Mozambique, a local NGO called Etica issued a 2001 report on an 
anticorruption survey followed by a public awareness campaign. 
According to U.S., donor, and Mozambican officials, the survey raised 
public awareness of corruption but this did not result in support from 
the Government of Mozambique.

* In Ghana, USAID implemented a program called Government 
Accountability Improves Trust to increase the capacity of civil society 
organizations to advocate for the interests of their members to local 
government and improve governance, transparency, and accountability at 
the local level. According to USAID, public budget meetings were held 
in 10 of the 110 administrative districts of Ghana, affording citizens 
the opportunity for the first time to view their district's budget and 
pose questions to their representatives. In four districts, 692 people 
participated in meetings where citizens queried the electricity, water, 
and telephone companies about corruption, inadequate services, and 
rates. USAID said that district assembly officials were subsequently 
more open to considering the concerns raised by civil society.

* In Uganda, USAID reported that it provided training in advocacy and 
effective lobbying in Parliament to 32 civil society organizations to 
increase their oversight of national government programs. USAID also 
trained an additional 80 NGOs at the district level to provide 
oversight for local governments.

* In Madagascar, USAID provided training and the administrative and 
logistical costs associated with its start-up to individuals who 
established a national TI chapter.

Supporting Legal, Judicial, and Regulatory Reforms: 

U.S. anticorruption assistance has supported a broad range of programs 
to help reform legislatures, judicial and court administration, 
financial sectors, commercial law, international anticorruption 
agreements, and customs, as well as to help decentralize government 
services. U.S. assistance included the following programs: 

* In several African countries, USAID worked with the World Bank to 
analyze obstacles to private sector investment and reduce red tape. In 
Tanzania, the Investor Roadmap study decreased the number of clearances 
required for work permits and reduced the number of months before a 
company could start business operations. In Mozambique, USAID support 
for a business association and its 2001 study of government efforts to 
reduce red tape contributed to the passage of new laws and revised 
regulations that simplified the business registration process and 
import and export controls. As a result, opportunities for corrupt 
officials to solicit bribes were reduced and, according to the business 
association, the time required to register a business dropped from 
about 18 months to 6 months.

* In Mozambique, USAID supported the country's Legal and Judicial 
Training Center to provide short-and long-term training to the staff of 
the Attorney General's Anti-Corruption Unit and other government 
personnel. This support covered expenses for course participants and 
trainers, equipment, and curriculum development. However, the center's 
financial sustainability was not ensured. The center has been supported 
by donors since it opened in 2000, and the director was uncertain 
whether it would be able to continue operations if donor funding 
decreased. However, USAID officials believed that without donor 
assistance, the center could still maintain basic operations because it 
receives partial government funding.

* In Nigeria, the Department of Commerce's Commercial Law Development 
Program provided technical assistance and training to the government on 
intellectual property, public procurement, ethics, project finance, and 
regulatory reform through workshops in Nigeria and the United States.

* In South Africa, the U.S. Department of Justice's antitrust division 
and the Federal Trade Commission provided technical assistance and 
training to the South African Competition Commission to limit 
anticompetitive behavior. The USAID mission reported that pricing 
collusion had been uncovered and prosecuted successfully.

Privatizing Government Functions: 

U.S. assistance has helped support privatization processes to allow for 
greater transparency and to build trust that the process was fair. 
According to USAID, privatizing government-owned assets in addition to 
supporting economic growth is a recognized method of limiting 
officials' opportunities to seek bribes and promote special interests. 
Following are examples of U.S. assistance programs: 

* In Nigeria, USAID advised, trained, and subsidized the salaries of 
private sector experts in the Bureau of Public Enterprises (BPE) and 
provided a computer database to support privatizing state-owned 
enterprises. The Nigerian government adopted a three-phase program and 
a review process for enterprises that were to be privatized. According 
to USAID, BPE's goal was to privatize 44 enterprises in 2001 and 2002, 
but only 15 enterprises were privatized during those years. BPE has 
become an established government agency and received World Bank support 
to continue the privatization process.

* In South Africa, USAID provided assistance for restructuring and 
privatizing state-owned telecommunications, ports, ecotourism 
projects, and mining companies by keeping the public informed of the 
projects' progress and developing policies for employee stock 
ownership. Another initiative helped create public-private 
partnerships in hospitals, schools, and transportation to deliver cost-
effective services.

* In Uganda, the U.S. Department of the Treasury, Office of Technical 
Assistance, placed an adviser within the Central Bank to assist with 
privatizing the Uganda Commercial Bank. This also resulted in a system 
for asset management.

Enhancing Government Accountability: 

U.S. agencies have supported reforms and provided technical training 
and advice to enable governments to better account for public funds and 
establish standards for public servants. Following are examples of U.S. 
assistance programs: 

* In Chad, the U.S. Department of the Treasury's Office of Technical 
Assistance provided an adviser to assist the Chad-Cameroon Pipeline 
Committee, an oversight body formed in 2001, responsible for overseeing 
distribution of revenue from Chad's newly discovered oil 
reserves.[Footnote 16] The Treasury adviser provided the committee 
logistical and technical assistance that included developing a manual 
on reviewing public expenditure. Treasury officials told us that the 
committee is operational, and that the agency will consider sending 
another adviser to Chad to assist with its operations.

* In Nigeria, USAID's objective was to train Budget Office of the 
Federation staff in planning and budget classifications. Initially, the 
project had few results, because contractor staff failed to keep their 
commitment to work with high-level Nigerian government officials. 
Support within the government has also been mixed, because vested 
interests oppose changes that could improve government transparency and 
accountability. However, according to USAID, despite initial 
difficulties, this project has begun to realize improvements in budget 
formulation and management.

* In Mozambique, USAID has collaborated with other donors and the 
government since 1999 in developing a common set of agriculture 
policies and programs to restructure the Ministry of Agriculture and 
Rural Development. The objective of these programs is to link budget 
and planning information, the release of donor funds, and financial 
reports. According to USAID's agriculture adviser in Mozambique, it 
took 3 years to install the new financial management system, indicating 
that the Ministry's systems had been weaker than anticipated. As a 
result of the program, financial transparency in the Ministry was 
improved. This program served as a pilot for similar multidonor, 
sectorwide programs that are being developed in Mozambique's health and 
education sectors. It was also a model for a donor-funded, 
governmentwide financial management system.

* In Benin, USAID provided training, computers, and equipment to the 
Chamber of Accounts of the Supreme Court and the Ministry of Economics 
and Finance's Office of the Inspector General of Finance. The 
assistance helped these institutions create an audit manual and 
initiate new audits including a review of electoral campaign expenses. 
USAID reported that these agencies exceeded the number of audits they 
had planned, and that their findings have resulted in prosecutions.

* In South Africa, USAID worked with the Parliament's Public Accounts 
Committee to help members understand auditor-general reports, conduct 
investigations, and handle public testimony to determine whether public 
officials should be cited. USAID reported that hearings and trials of 
corrupt officials resulted, and that similar training was later 
provided by professional associations to legislators in nine provinces.

Providing Election Assistance: 

The U.S. government provided assistance in a few instances to 
strengthen the national elections and the role of NGOs during 
elections. Examples of U.S. assistance include the following: 

* In Nigeria, USAID election assistance over the past 5 years has 
supported preparing manuals, providing materials to safeguard ballots, 
developing strategic logistic plans, training officials, and helping 
draft a new election law. For the 2003 national and state elections, 
USAID provided about $625,000 to lease communications equipment for the 
rapid transmittal of results from some of Nigeria's polling stations 
and $1.3 million for materials designed to reduce ballot fraud. 
However, U.S.-provided training did not reach some of the wards, and on 
election day, nontrained workers were substituted for trained workers, 
according to an NGO official. Also, materials to secure ballot boxes 
and tamper-proof envelopes were not distributed by the Electoral 
Commission in time to be used, and 70 percent of these materials 
remained in warehouses in the capital during the election. Election 
observers noted numerous violations, could not determine the validity 
of the election, and could not attest to the impact of the violations 
on the final election results.[Footnote 17] An Electoral Commission 
official told us that, as of September 2003, 917 of the approximately 
1,600 elections conducted in 2003 had been disputed and taken to the 
Electoral Tribunal for resolution.

* In Benin, as part of its civil society development programs, USAID 
supported civil society organizations that trained poll watchers and 
political party representatives in election procedures.

* In Uganda, USAID provided training to the NGO Election Monitoring 
Group that enabled it to monitor and report on local trends and issues 
in the local elections held in February 2002.

Supporting Anticorruption Agencies: 

USAID has concluded that supporting anticorruption agencies is 
warranted if the agencies have a mandate for reform and involve the 
public in monitoring and reporting on the agency activities. Although a 
number of African governments[Footnote 18] have established 
anticorruption agencies, many of these agencies have not been able to 
fulfill their mandates. Some anticorruption agencies have encountered 
legal challenges when they began to prosecute government officials.
[Footnote 19] In addition, some commissions have operated under the 
executive branch of government, calling into question their political 
independence and authority.[Footnote 20] Further, some commissions 
lacked resources and were too understaffed and underfunded to be 
effective.[Footnote 21] U.S. assistance included the following 
programs: 

* In Mozambique, USAID and OPDAT have provided technical assistance and 
training to help the Attorney General's office create an Anticorruption 
Unit staffed by four principal prosecutors and an assistant prosecutor. 
U.S. support also included purchasing office equipment and furniture, 
providing funds to rent office space, training prosecutors, and 
supporting study tours abroad to meet with foreign officials running 
similar programs. OPDAT also provided a series of training programs on 
techniques to investigate allegations of public corruption. According 
to a U.S. official, from November 2002 to October 2003, the 
Anticorruption Unit received 116 crime reports--which the official 
interpreted as a sign of public confidence in the unit--11 of which 
resulted in formal charges and three sentences. In November 2003, the 
unit also sponsored a public exercise to discuss its work to date, a 
step toward transparency typically not seen in the Mozambican justice 
sector. The head of the unit works at great personal risk, having 
survived an attempt on her life.

* In Nigeria, Justice's OPDAT provided prosecutorial and investigative 
training to the anticorruption commission. However, the National 
Assembly challenged the commission's authority in 2003, thereby 
delaying further U.S. assistance. By September 2003, commission 
officials stated they had conducted 56 prosecutions, resulting in no 
convictions. The commission's administrators said that they had 
received only 25 percent of the budget they requested. According to 
OPDAT officials, additional factors that hinder the commission's 
effectiveness are that certain high-level officials are immune from 
prosecution for public corruption while holding office and that it is 
not permitted to initiate investigations.

* In Namibia, USAID helped the Office of the Ombudsman, which USAID 
regards as an anticorruption unit, collaborate with civil society 
organizations in a national integrity promotion campaign.

Strengthening Law Enforcement: 

To strengthen law enforcement agencies, the United States, primarily 
through the Department of Justice, has performed needs assessments and 
provided technical training in the investigation and prosecution of 
corruption-related crimes. An integral part of the training has 
involved building respect for human rights.

* In Nigeria, ICITAP's in-country representative stated that assistance 
has indirectly addressed corruption and included training on community 
policing techniques for more than 450 constables.[Footnote 22] In 
addition, ICITAP provided election security training and equipped and 
trained police squads, primarily from the states of Kaduna, Kanu, and 
Lagos, in civil disorder management. Both U.S. officials and the 
Nigerian police told us that these squads deterred violence during the 
2003 elections.

* In South Africa, with USAID funding, OPDAT worked with the National 
Prosecuting Authority and its subsidiary, the Directorate of Special 
Operations, an agency that investigates and prosecutes serious 
corruption. OPDAT funded an organizational workshop, helped develop 
guidelines to prosecute organized crime cases, trained prosecutors to 
investigate complex financial fraud, and provided expertise on applying 
a new organized crime statute. As a result of this training, the 
Directorate of Special Operations developed a national screening and 
approval process for prosecuting organized crime cases.

* In Uganda, Treasury's Office of Technical Assistance provided 
training and assistance on money laundering and worked with the Ugandan 
Office of the Inspector General.

Restrictions on Law Enforcement Assistance and Funding Flow Affect 
Program Development: 

U.S. government anticorruption law enforcement programs are limited by 
a restriction on law enforcement assistance imposed by section 660 of 
the Foreign Assistance Act of 1961.[Footnote 23] This provision 
prohibits the use of foreign assistance funds, including funds 
transferred by USAID to the Department of Justice, to finance ICITAP 
and OPDAT activities for training and financial support of police or 
other law enforcement forces of foreign governments.

USAID can develop assistance programs for law enforcement agencies only 
if such programs qualify for funding under one of several exceptions to 
the section 660 prohibition[Footnote 24] or if Congress specifically 
exempts them from section 660. For example, in 1999, USAID began to 
operate in Nigeria under an exception (22 U.S.C. 2420(b)(6)) that 
allows for certain types of police assistance to countries emerging 
from conflicts. Later, after USAID determined that the exception no 
longer applied because Nigeria could no longer be classified as 
emerging from instability, USAID redesigned its anticorruption program 
and did not implement a planned community policing program in that 
country.

The USAID mission in South Africa reported that the restrictions on 
foreign law enforcement assistance limited its ability to support South 
African government agencies involved in fighting corruption. In 
addition, some U.S. agencies evidenced confusion about the type of 
assistance that could be provided. For example, USAID's General Counsel 
determined that the South African Special Investigating Unit was a law 
enforcement agency and that consequently USAID was restricted from 
working with it; meanwhile, the Federal Bureau of Investigation (FBI) 
home office determined that the unit was not a law enforcement agency 
and therefore did not qualify for FBI funding. In Zambia, USAID was 
unable to work with the anticorruption unit. The USAID Administrator 
initially offered the agency's assistance to help support 
investigations by a Task Force on Corruption. However, while the 
program was getting under way, USAID determined that it would not fund 
this work because the Task Force and the Anticorruption Commission had 
police powers and thus were ineligible for the agency's assistance. 
According to USAID, the mission was able to use the Administrator's 
grant to fund work with the Director of Public Prosecutions, whereas 
assistance to the Task Force on Corruption was provided by Treasury's 
Office of Technical Assistance.

The Department of Justice's ICITAP also said that the slow transfer of 
funds it received from State for its law enforcement work hindered its 
efforts to develop integrated police training programs and, as a 
result, its assistance ended up being piecemeal.[Footnote 25] According 
to Department of Justice officials, uncertainty about the amount of 
funding ICITAP would receive made it difficult for them to plan the 
bureau's work in sub-Saharan Africa. For example, in Nigeria, ICITAP 
had to wait 1 year for funds to begin a program with the Police Service 
Commission. State officials were unable to provide data on the 
department's funding of justice programs in sub-Saharan Africa. USAID 
officials stated that certain budgetary accounts are funded only once a 
fiscal year, creating delays in program implementation.

Few Evaluations of Anticorruption Programs Have Been Conducted; Program 
Results Unclear: 

USAID provided eight program evaluations of its anticorruption 
activities in sub-Saharan Africa and these evaluations showed limited 
and unclear results.[Footnote 26] For example, an evaluation of a USAID 
government accountability program in Ghana showed that the program had 
increased the level of trust between civil society and the district 
government but that the program's final goals and sustainability were 
not clear. An evaluation of democracy and governance assistance to 
Benin showed that an NGO supported by USAID had been successful in 
raising public awareness of corruption. However, an evaluation of an 
economic rehabilitation program in Sudan, which included an objective 
to increase good governance and institute accountability and 
transparency measures into government practices, found no evidence that 
government officials implemented any of the measures. According to 
USAID officials, their work in Sudan was impeded by a lack of a viable 
civil administration.

Further, in several cases, the evaluations provided incomplete 
information. In reviewing the evaluations, we found it difficult to 
identify the programs' anticorruption objectives, the degree to which 
the objectives were met, and the degree to which the programs were 
sustainable.

Anticorruption Efforts Have Identified Some Lessons Learned: 

Anticorruption efforts in sub-Saharan Africa and elsewhere have shown 
that success in such efforts depends on (1) political will, (2) 
widespread public support, (3) country-specific programs, (4) 
multipronged strategies, (5) transparency and access to information, 
and (6) time and commitment.

Political Will Is Key to Fighting Corruption: 

Donors and international groups generally agree that political will and 
commitment from a country's leadership are instrumental to implement 
and sustain anticorruption reform efforts. However, maintaining 
political will may be difficult for elected officials, because their 
ability to stay in office may be challenged by those with vested 
interests in the current system. While political will can be uneven 
across government, working with leaders who are committed to sustaining 
and advancing reform is crucial.

Widespread Support Is Key to Advancing Reform: 

In addition to clear and unambiguous commitments from key political 
figures, widespread support for change is necessary to advance 
comprehensive anticorruption reforms, according to Transparency 
International. According to USAID, public-private partnerships that 
include government, the private sector, civil society, and the media 
have proven to be successful in identifying governance problems, 
agreeing on solutions, and implementing reforms. In addition, campaigns 
by civil society groups to raise awareness of corruption problems or 
mobilize the public to support specific reform agendas have been the 
starting point for developing political will in many countries.

Anticorruption Programs Must Be Tailored to Local Conditions: 

For anticorruption programs to be effective, they must be tailored to 
each country's unique historical and economic conditions, including the 
legacy of colonial and socialist governments in some sub-Saharan 
African countries. According to the World Bank and USAID, a baseline 
assessment of the nature, extent, and root causes of corruption in a 
country is a critical first step to planning and implementing 
anticorruption activities. Based on this information, both government 
and donors can develop reform strategies and priorities. In addition, 
the results of anticorruption assessments should be widely disseminated 
to clarify the nature and extent of the problems, mobilize support, and 
develop action plans.

Multipronged Strategy Is Key to Anticorruption Efforts: 

Prevention, education, and law enforcement are considered to be equally 
important components of a multipronged strategy to comprehensively 
address corruption, according to the UN, the World Bank, and national 
anticorruption institutions.

* Prevention measures include increasing transparency and oversight of 
government functions; eliminating opportunities for corruption; 
improving incentives for good performance in public office; and 
simplifying procedures for basic services such as granting permits, 
licenses, bank loans, and passports.

* Education measures include informing citizens about how corruption 
lowers their standard of living and about their role in monitoring 
government performance and reporting abuses. Without such information, 
citizens may not understand their role in addressing corruption.

* Law enforcement activities include prosecuting, fining, or 
imprisoning corrupt officials. (Law enforcement, while key to this 
approach, is most effective when combined with prevention and 
education, according to the World Bank.): 

Transparency and Access to Information Is Important: 

Transparency and access to information are also indispensable tools for 
enabling the public to identify and report corruption. According to 
USAID, without public access to information about government decision-
making processes, anticorruption efforts will fail. Information about 
government policy, programs, budgets, fees for services, and 
performance should be available, permitting citizens to oversee 
government, hold it accountable, and ensure that their rights are 
respected: 

Controlling Corruption Requires Time and Commitment: 

Because addressing corruption is a complex political endeavor requiring 
governmentwide reform, corruption cannot be controlled quickly. As a 
result, long-term commitments are required to gain public confidence in 
efforts to prevent and control corruption. TI states that countries and 
donors should be wary of any single action billed as a "quick fix," 
even if it is a sensible step in itself, such as increasing public 
sector wages, enacting anticorruption laws, prosecuting many corrupt 
officials, or relying on civil society organizations to drive change.

Conclusions: 

In sub-Saharan Africa, corruption is a daunting problem associated with 
underdevelopment, lack of government accountability, and limited 
capacity of public institutions; it has also become widely tolerated by 
the public of that region. U.S. government anticorruption programs in 
sub-Saharan Africa are relatively new, have received limited funding, 
and are broadly targeted across a number of areas. While few 
anticorruption programs in the region have been evaluated 
systematically, such analysis could be used in developing future 
programs and strategic plans. Evaluations could also help officials 
refine anticorruption objectives and performance measures. Although 
U.S. programs have made some progress in addressing and highlighting 
corruption problems facing the region, major challenges remain that 
appear to exceed the scope of what donors alone can achieve. 
Ultimately, U.S. anticorruption efforts, along with the efforts of 
other donors, will succeed only with long-term commitment and political 
and financial support from host governments, the private sector, and 
the public.

Because it is difficult to measure corruption directly, the World Bank 
Institute and TI indexes capture perceptions of corruption. In the 
context of the new Millennium Challenge Account, it is important to 
recognize that these indexes, although useful in showing broad 
differences across the globe, should be used with caution, particularly 
when attempting to differentiate among closely ranked countries.

Agency Comments and Our Evaluation: 

GAO received written comments on a draft of this report from USAID, 
which are reprinted in appendix VI. This appendix also contains GAO 
responses to the comments. In its formal comments, USAID highlighted 
additional information on its efforts to coordinate anticorruption 
assistance, lessons learned, and the sustainability and impact of this 
assistance, some of which we incorporated into the report as 
appropriate. The Departments of the Treasury, Justice, and State 
provided informal comments that we incorporated into the report as 
appropriate. The agencies generally agreed with our presentation of the 
issues and conclusions. We were also provided technical comments from 
the World Bank Institute that were discussed with officials and 
included in this report where appropriate.

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to interested congressional committees as well as the Attorney General, 
the Secretary of the Treasury, the Secretary of State, the Secretary of 
Commerce, and the USAID Administrator. We also will make copies 
available to others upon request. In addition, the report will be 
available at no charge on the GAO Web site at [Hyperlink, http://
www.gao.gov].

If you or your staff have any questions about this report, please 
contact me at (202) 512-3149 or at [Hyperlink, gootnickd@gao.gov]. 
Other contacts and staff acknowledgments are listed in appendix VII.

Signed by: 

David Gootnick, 
Director, International Affairs and Trade: 

[End of section]

Appendixes: 

Appendix I: Scope and Methodology: 

To assess what is known about the nature and extent of corruption in 
sub-Saharan Africa, we analyzed the indexes compiled by the World Bank 
Institute (WBI) and Transparency International (TI). We examined the 
data sources and methodologies used to construct each index and the 
statistical limitations inherent in each approach. To assess the 
reliability of the WBI and TI corruption indexes, we (1) interviewed 
WBI officials, (2) reviewed the methodology used to compile both 
indexes, (3) reviewed professional literature on measuring corruption, 
(4) compared the indexes against each other, and (5) performed some 
advanced statistical tests. In our report, we note the difficulties of 
measuring corruption and the limitations of both indexes. We determined 
that the data were sufficiently reliable to provide a broad gauge of 
corruption in sub-Saharan Africa and demonstrate that levels of 
corruption vary among sub-Saharan African countries. (See app. III for 
additional details of our analysis of the WBI and TI indexes.) In 
addition, we reviewed the World Business Environment Survey (WBES) and 
analyzed data for companies from sub-Saharan Africa that participated 
in the survey. To assess the reliability of the WBES survey, we 
reviewed the documentation provided by, and analyzed the data we 
obtained from, the World Bank Web site. The World Bank reported a 
number of quality control procedures, such as pretesting of 
instruments. However, the World Bank also noted that the response rates 
for African countries and for questions on corruption are relatively 
low. In addition, only 16 African countries were included in the 
survey. The survey questions we used had between 40 and 120 respondents 
per country. Because of the response rates and the numbers of 
respondents, differences between countries may not be significant. We 
determined that the WBES data were sufficiently reliable to report that 
corruption was perceived to be a problem for many of the African 
businesses responding to the survey and that perceptions of corruption 
varied by country.

To identify the factors that give rise to corruption in this region, we 
reviewed country surveys and studies funded by TI, the U.S. Agency for 
International Development (USAID), WBI, the United Nations (UN), and 
others since 2000. Our analysis of these documents focused on 
identifying broad themes and challenges facing sub-Saharan African 
nations. (See the bibliography for a list of documents used in this 
review.): 

To determine the types of U.S. government programs providing 
anticorruption assistance in sub-Saharan Africa, we reviewed documents 
and interviewed key officials from USAID and the Departments of the 
Treasury, Justice, Commerce, and State in Washington, D.C. We also 
obtained the results of a 2003 USAID global survey that asked missions 
about their anticorruption programs from 2001 and 2002 and the funding 
allocated to these efforts. To assess the reliability of USAID's data 
on its anticorruption programs, we (1) interviewed USAID officials 
about their data collection procedures, (2) reviewed their data 
collection instrument, and (3) examined the data collected using the 
instrument.[Footnote 27] Our assessment showed that the data were 
sufficiently reliable for the purposes of identifying which agencies 
provide funding on anticorruption programs, identifying the countries 
that receive the most anticorruption funding, and establishing that 
anticorruption programs in sub-Saharan Africa receive limited funding.

In addition, we analyzed program documents and assessments from six 
countries in sub-Saharan Africa in which the U.S. government has 
undertaken anticorruption programs (Benin, Mozambique, Nigeria, South 
Africa, Uganda, and Zambia). We obtained more detailed information from 
the USAID missions in these countries. We also interviewed World Bank 
and UN Development Program officials to obtain their views on 
multilateral efforts in the region. Further, in September 2003, we 
spent a week in both Nigeria and Mozambique where we met with key U.S. 
and host government officials and with representatives from civil 
society and other donors to review past and ongoing anticorruption 
efforts. We also obtained funding data for programs implemented by the 
Departments of the Treasury, Justice, Commerce, and State.[Footnote 28] 
The information on foreign law in this report does not reflect our 
independent legal analysis, but it is based on interviews and secondary 
sources.

To identify lessons learned regarding implementing anticorruption 
programs, we reviewed a wide range of documents and materials. These 
included USAID's policy guidance for its African programs as well as 
toolkits, handbooks, and other materials prepared by the World Bank, 
TI, the Organization for Economic Cooperation and Development's 
Development Assistance Committee, and the UN Office on Drugs and Crime. 
We also interviewed USAID and other donor officials working in the 
countries we visited and in Washington, D.C.

[End of section]

Appendix II: International Agreements Addressing Corruption in Sub-
Saharan Africa: 

Multilateral organizations have adopted agreements that prohibit the 
payment of bribes to government officials (the "supply" of corruption) 
and the solicitation of bribes or diversion of public funds by 
government officials (the "demand" for corruption). The Organization 
for Economic Cooperation and Development (OECD) has addressed the 
supply of corruption by adopting an agreement governing the conduct of 
the convention's 35 industrialized signatories. Two African 
multilateral organizations, the Southern African Development Community 
(SADC) and the African Union (AU), have adopted agreements addressing 
supply and demand, but neither regime has entered into force. In 2003, 
the United Nations (UN) General Assembly adopted a convention that also 
addresses supply and demand. The Department of State expects that this 
convention will be the first anticorruption treaty applied on a global 
level.

OECD Convention: 

The OECD adopted its Convention on Combating Bribery of Foreign Public 
Officials in International Transactions in 1997. The convention 
requires its 35 signatories to adopt common rules to punish companies 
and individuals who offer or promise a bribe to foreign officials to 
obtain or retain business or other improper advantage in international 
business deals. Unlike the Foreign Corrupt Practices Act (FCPA), which 
the United States enacted in 1977,[Footnote 29] the convention does not 
apply to payments to campaigns or political parties. According to 
government officials with whom we spoke, this omission can be 
problematic when applied to parliamentary systems in which political 
parties exert significant control over government appointments and 
actions. Also, the laws that the convention requires member states to 
enact are not easily applied to legally distinct foreign subsidiaries 
of a corporation unless their actions can be imputed to their parent.

According to U.S. government officials and experts, the key element of 
the OECD convention is a peer-review mechanism, organized by the OECD 
Secretariat but implemented through teams drafted from signatory 
countries. The reviews, which are intended to continue indefinitely on 
a 5-to 8-year cycle, are conducted in two phases. The first phase is 
intended to ensure that OECD members have enacted laws satisfying the 
requirements of the antibribery convention. The second phase examines 
the extent to which OECD members are enforcing their antibribery laws 
and examines both the efficiency of the procedures employed by the 
member and the member's commitment to enforce its antibribery law. The 
initial round of first-phase reviews is complete when all signatories 
have attained the OECD standard. OECD members are currently engaged in 
second-phase reviews, having issued five second-phase reports as of 
December 13, 2003, including a review of the United States' application 
of antibribery legislation issued in October 2002.[Footnote 30]

African Regional Initiatives: 

SADC and AU[Footnote 31] have adopted anticorruption regimes in an 
effort to harmonize the laws of their member states. However, neither 
regime has entered into force, so neither legally binds its 
signatories.[Footnote 32] These regimes are intended to criminalize, 
among other things, the solicitation of bribes and diversion of public 
funds by government officials. Both the SADC Protocol Against 
Corruption, agreed to in 2001, and the AU Convention on Preventing and 
Combating Corruption, agreed to in 2003, can be seen as expressions of 
their signatories' political will. To enter into force, the SADC 
protocol requires the deposit of 10 instruments of ratification; as of 
January 9, 2003, eight states had ratified the agreement. Three states 
had ratified the AU convention, with 15 ratifications required for 
entry into force.

UN Convention Against Corruption: 

In October 2003, the UN General Assembly adopted[Footnote 33] the UN 
Convention Against Corruption. The convention addresses prevention, 
criminalization, and asset recovery, as follows: 

* Prevention. The convention contains provisions designed to prevent 
corruption, including a requirement that signatories establish public 
procurement systems "based on transparency, competition, and objective 
criteria in decision making." It also contains public finance measures 
with procedures for the adoption of a national budget; timely reporting 
on revenue and expenditure; and accounting systems, auditing standards, 
risk management, and internal controls.

* Criminalization. The convention requires its signatories to 
criminalize a wide range of acts of corruption, including payment and 
receipt of bribes; diversion of public funds by public officials; 
concealment, or "laundering," of proceeds of corrupt acts; and 
obstruction of justice.

* Asset recovery. The convention's provisions on asset recovery were of 
particular interest to foreign government officials with whom we spoke. 
Public funds that are embezzled would be returned to the state 
requesting their return. Proceeds from any other offense covered by the 
convention would be returned to the requesting state once the state 
reasonably establishes its prior ownership of the property or when the 
requested state recognizes damage to the requesting state as a basis 
for returning the confiscated property.

The convention has been open for signature since December 9, 2003 and, 
as of February 19, 2004, 100 countries, including the United States and 
23 sub-Saharan African countries, had signed it.[Footnote 34] The 
convention requires 30 ratifications to take effect. As of February 19, 
2004, only Kenya had ratified the convention. Although the UN 
convention contains provisions establishing a Conference of States 
Parties to facilitate implementation of the convention, it is not clear 
whether such a conference will include the vigorous reviews associated 
with the OECD convention. According to U.S. government officials, 
extrapolating the OECD peer-review model to the relatively large number 
of UN convention signatories would require a significant financial and 
organizational commitment.

[End of section]

Appendix III: Characteristics of WBI and TI Corruption Indexes: 

The World Bank Institute (WBI) and Transparency International (TI) 
publish indexes that attempt to measure perceptions of corruption 
across a large number of countries. WBI produced its first corruption 
index in 1996 and updates it every 2 years; TI first published its 
Corruption Perception Index in 1995 and updates it annually. The two 
indexes share fundamental characteristics but also have significant 
differences.

TI and WBI Indexes Have Important Similarities: 

The WBI and TI indexes have much in common (see table 1 for a summary 
of the indexes' characteristics). Both are based on the results of 
surveys of business people and citizens and analysis by country 
experts. In addition, both indexes rank countries by the degree of 
corruption perceived to exist in countries rather than by actual 
corruption, which is difficult to directly measure. Further, each index 
is constructed of a number of different sources, about half of which 
come from the same institutions.[Footnote 35] (We reviewed and analyzed 
the methodologies used to generate the WBI and TI indexes, conducted 
analyses to check internal consistency, and determined their general 
reliability.) Each index also uses surveys and assessments that rank a 
number of countries. These sources generally assess several areas, 
including the quality of governance, overall business environment, 
democratic institutions, and levels of corruption. Both indexes 
incorporate responses to specific questions considered to provide 
insight into a country's perceived corruption; frequently the indexes 
include responses to the same questions.

Table 1: Characteristics of the WBI and TI Corruption Indexes: 

Characteristics: Number of countries covered; 
WBI index, 2002: 195; 
TI index, 2003: 133. 

Characteristics: High income; Number of countries covered: 
WBI index, 2002: 48; 
TI index, 2003: 34; 

Characteristics: Middle income; Number of countries covered: 
WBI index, 2002: 83; 
TI index, 2003: 63.

Characteristics: Low income; Number of countries covered: 
WBI index, 2002: 64; 
TI index, 2003: 36. 

Characteristics: Sub-Saharan Africa: 
WBI index, 2002: 47; 
TI index, 2003: 24.

Characteristics: Number of source institutions; 
WBI index, 2002: 13; 
TI index, 2003: 13.

Characteristics: Minimum number of sources per country; 
WBI index, 2002: 1; 
TI index, 2003: 3.

Characteristics: Maximum number of sources per country; 
WBI index, 2002: 12; 
TI index, 2003: 16.

Characteristics: Range (higher value implies less corruption); 
WBI index, 2002: -2.5 to 2.5; 
TI index, 2003: 0 to 10.

Characteristics: Methodology; 
WBI index, 2002: Uses an unobserved components model to compute a 
country score and unbiased measure of precision even when only one 
source is available; 
TI index, 2003: Computes an average score and a measure of precision 
for each country. The index includes a country only when three or more 
sources are available. 

Sources: GAO analysis of WBI and TI data.

Note: The WBI index uses the latest information for 14 sources, 
including 2 from Business Environment Risk Intelligence. The TI index 
uses 17 sources, including surveys for 2001, 2002, and 2003 from both 
the World Economic Forum and the Institute for Management 
Development.The unobserved component is a statistical technique that 
makes it possible to infer the distribution of corruption conditional 
on the observed data for a country.

[End of table]

An index using several sources (1) spans a larger set of countries than 
any individual source; (2) reduces the impact of outlier observations 
by providing a more reliable measure of corruption than any individual 
source; and (3) provides a more reliable point estimate and measure of 
precision, or standard deviation, of its estimate. The smaller the 
standard deviation, the more precise the estimate.

Because of the similarity in data sources used to measure perceived 
corruption, there is a high correlation between the TI and WBI indexes 
across the 133 countries included in both (0.97, with 1.00 indicating 
perfect linear correlation).

WBI and TI Indexes Differ Significantly in Methodologies Used: 

Differences in the methodologies used to construct each index result in 
divergent country coverage and rankings. WBI uses an unobserved-
components methodology that enables it to compute a score and measure 
of precision (standard deviation) for each country even with only one 
source for the country. This methodology enables the WBI index to 
include a larger number of countries for which it has few sources of 
information. For an individual country, the standard deviation is 
smaller the more sources are used and the more that information from 
each source corresponds with information from other sources. For some 
countries, the imprecision is quite large relative to the point 
estimate score.

In constructing its composite corruption index, TI uses a methodology 
different from WBI's that also generates for each country a point 
estimate for corruption and a measure of precision. TI includes a 
country in its index only if it has three or more sources of 
information for that country. Requiring three or more sources ensures 
greater reliability of the estimate. However, it also limits the number 
of countries that are included in the index.[Footnote 36] The TI index 
for 2003 includes 133 countries, compared with 195 countries for the 
WBI index (see table 1).

The difference between country coverage in the two indexes is more 
pronounced for low-income and sub-Saharan African countries. The WBI 
index covers almost twice as many sub-Saharan African countries as the 
TI index, 47 versus 24. Similarly, WBI covers 64 low-income countries, 
whereas the TI covers 36.[Footnote 37] Because the WBI index covers 
more countries, we chose to use it in assessing the relationship 
between corruption and the Millennium Development Goals and other 
development indicators.

[End of section]

Appendix IV: Analysis of Corruption and Economic Development: 

To analyze the effect of corruption on development, we obtained 
corruption perception data from the World Bank Institute (WBI) for 195 
countries in 2002 (the latest available). We also collected data, 
representing averages for 1997-2001, from the United Nations (UN) on 
development indicators collectively known as the Millennium Development 
Goals, which are commonly used to gauge countries' development 
progress.[Footnote 38] We selected 11 representative indicators for our 
analysis. We also chose 6 indicators representing countries' broad 
economic achievements from the World Bank's World Development 
Indicators database.[Footnote 39] (See tables 2 and 3 for the selected 
goals and economic indicators.) We performed a series of correlation 
and regression analyses to identify statistically significant 
associations between the WBI corruption index and the selected 
indicators.[Footnote 40] The relationship between corruption and 
development indicators is complex, and the results presented here are 
an initial step toward understanding this complexity. Further insight 
into the evolving complexity of corruption and development indicators 
may be obtained through a more comprehensive analysis that, among other 
things, addresses interrelationships among development indicators, the 
possible influence of measurement errors on estimated parameters, and 
the accuracy of the corruption measurements, which are based on 
perceptions.

Table 2: Correlation between 2002 WBI Index and Selected Development 
Indicators: 

Millennium Development Goals; 
Development indicators: Proportion of population below $1 a day; 
Correlation coefficient[A]: -0.31; 
Correlation coefficient[A]: *; 
Proportion of variation[B] explained by corruption: 10%; 
N: 88.

Millennium Development Goals; 
Development indicators: Income share held by lowest 20%; 
Correlation coefficient[A]: 0.05; 
Correlation coefficient[A]: [Empty]; 
Proportion of variation[B] explained by corruption: 0; 
N: 70.

Millennium Development Goals; 
Development indicators: Poverty gap at $1 a day; 
Correlation coefficient[A]: -0.27; 
Correlation coefficient[A]: *; 
Proportion of variation[B] explained by corruption: 7; 
N: 88.

Millennium Development Goals; 
Development indicators: Education enrollment ratio, net, primary level; 
Correlation coefficient[A]: 0.37; 
Correlation coefficient[A]: *; 
Proportion of variation[B] explained by corruption: 14; 
N: 141.

Millennium Development Goals; 
Development indicators: Literacy rates, aged 15-24; 
Correlation coefficient[A]: 0.34; 
Correlation coefficient[A]: *; 
Proportion of variation[B] explained by corruption: 11; 
N: 119.

Millennium Development Goals; 
Development indicators: Girls-to-boys ratio, primary level enrollment; 
Correlation coefficient[A]: 0.29; 
Correlation coefficient[A]: *; 
Proportion of variation[B] explained by corruption: 9; 
N: 155.

Millennium Development Goals; 
Development indicators: Infant mortality rate (0-1 year) per 1,000 live 
births; 
Correlation coefficient[A]: -0.64; 
Correlation coefficient[A]: *; 
Proportion of variation[B] explained by corruption: 40; 
N: 166.

Millennium Development Goals; 
Development indicators: Children under five mortality rate per 1,000 
live births; 
Correlation coefficient[A]: -0.6; 
Correlation coefficient[A]: *; 
Proportion of variation[B] explained by corruption: 36; 
N: 166.

Millennium Development Goals; 
coefficient[A]: -0.51; 
Correlation coefficient[A]: *; 
Proportion of variation[B] explained by corruption: 26; 
N: 154.

Millennium Development Goals; 
Development indicators: Percentage of rural population with access to 
improved drinking water sources; 
Correlation coefficient[A]: 0.49; 
Correlation coefficient[A]: *; 
Proportion of variation[B] explained by corruption: 24; 
N: 128.

Millennium Development Goals; 
Development indicators: Debt service as percentage of exports of goods 
and services; 
Correlation coefficient[A]: -0.13; 
Correlation coefficient[A]: [Empty]; 
Proportion of variation[B] explained by corruption: 2; 
N: 96.

Broad indicators; 
Development indicators: Trade (% of GDP); 
Correlation coefficient[A]: 0.19; 
Correlation coefficient[A]: *; 
Proportion of variation[B] explained by corruption: 4; 
N: 154.

Broad indicators; 
Development indicators: Life expectancy at birth, total (years); 
Correlation coefficient[A]: 0.63; 
Correlation coefficient[A]: *; 
Proportion of variation[B] explained by corruption: 40; 
N: 164.

Broad indicators; 
Development indicators: Real GDP growth rate; 
Correlation coefficient[A]: -0.09; 
Correlation coefficient[A]: [Empty]; 
Proportion of variation[B] explained by corruption: 1; 
N: 155.

Broad indicators; 
Development indicators: Public spending on education, total (% of GDP); 
Correlation coefficient[A]: 0.36; 
Correlation coefficient[A]: *; 
Proportion of variation[B] explained by corruption: 13; 
N: 145.

Broad indicators; 
Development indicators: Foreign direct investment, net inflows (% of 
GDP); 
Correlation coefficient[A]: 0.15; 
Correlation coefficient[A]: [Empty]; 
Proportion of variation[B] explained by corruption: 2; 
N: 147.

Broad indicators; 
Development indicators: Gross capital formation (% of GDP); 
Correlation coefficient[A]: 0.05; 
Correlation coefficient[A]: [Empty]; 
Proportion of variation[B] explained by corruption: 0; 
N: 152. 

Legend: 

* Indicates statistical significance of at least 90 percent confidence: 

N= number of countries for which data were available: 

GDP=gross domestic product: 

Sources: GAO analysis using UN data and World Bank data for 1997-2001.

[A] The correlation coefficient measures the linear relationship 
between the corruption index and each indicator. It ranges between -1 
and +1, where -1 indicates a perfect inverse relationship, 0 indicates 
no relationship, and +1 indicates a perfect direct relationship.

[B] Across countries.

[End of table]

Our correlation analysis showed that, for all 195 countries in the WBI 
index, a statistically significant association exists between 
corruption and the selected development indicators. As table 2 shows, 
the indicators show significant statistical association, at a 90 
percent confidence level, with the WBI index for all but five 
variables. We found that lower levels of corruption are associated with 
higher primary education enrollment ratios, literacy rates, girls-to-
boys ratios in primary school enrollment, percentages of population 
with access to improved drinking water sources, trade, life expectancy 
at birth, and total public spending on education. Furthermore, lower 
corruption is statistically associated with decreased proportions of 
population living on less than $1 a day, depth of poverty (poverty gap 
at $1 a day), infant mortality rate, mortality rate of children younger 
than 5 years, and maternal mortality ratio.

Our correlation and regression analysis also showed that the proportion 
of variation across countries that is associated with corruption 
fluctuates depending on the indicators chosen. For example, as table 2 
shows, corruption "explains" approximately 40 percent of the variance 
of infant mortality among countries but only 1 percent of the variance 
in real GDP growth rate.[Footnote 41]

We also performed a regression analysis for subgroups of countries 
classified according to per capita income--high, middle, and low, as 
seen in table 3. To highlight the effect of corruption in sub-Saharan 
African countries, we created an additional variable to represent low-
income sub-Saharan African countries. In table 3, "all countries" 
refers to the regression analysis for all 195 countries in the WBI 
index and assumes that corruption has the same effect on each country. 
In contrast, the regression analysis of countries grouped by income 
allows for the possibility that the effect of corruption may vary for 
countries in different income groups.[Footnote 42]

Table 3: Summary of Regression Analysis Using 2002 WBI Index: 

Millennium Development Goals; 
Development indicators: Proportion of population living on less than $1
a day; 
All countries: Statistically significant at 99 percent of confidence 
(negative); 
High income: Statistically insignificant; 
Middle income: Statistically insignificant; 
Low income; 
All: Statistically significant at 90 percent of confidence 
(positive); 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Millennium Development Goals; 
Development indicators: Income share held by lowest 20%; 
All countries: Statistically insignificant; 
High income: Statistically insignificant; 
Middle income: Statistically insignificant; 
Low income; 
All: Statistically insignificant; 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Millennium Development Goals; 
Development indicators: Poverty gap at $1 a day; 
All countries: Statistically significant at 95 percent of confidence 
(negative); 
High income: Statistically insignificant; 
Middle income: Statistically insignificant; 
Low income; 
All: Statistically insignificant; 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Millennium Development Goals; 
Development indicators: Education enrollment ratio, net, primary level; 
All countries: Statistically significant at 99 percent of confidence 
(positive); 
High income: Statistically insignificant; 
Middle income: Statistically insignificant; 
Low income; 
All: Statistically significant at 99 percent of confidence 
(negative); 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Millennium Development Goals; 
Development indicators: Literacy rates, aged 15-24; 
All countries: Statistically significant at 99 percent of confidence 
(positive); 
High income: Statistically insignificant; 
Middle income: Statistically insignificant; 
Low income; 
All: Statistically insignificant; 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Millennium Development Goals; 
Development indicators: Girls-to-boys ratio, primary-level enrollment; 
All countries: Statistically significant at 99 percent of confidence 
(positive); 
High income: Statistically insignificant; 
Middle income: Statistically insignificant; 
Low income; 
All: Statistically insignificant; 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Millennium Development Goals; 
Development indicators: Infant mortality rate (0-1 year) per 1,000 live 
births; 
All countries: Statistically significant at 99 percent of confidence 
(negative); 
High income: Statistically significant at 90 percent of confidence 
(negative); 
Middle income: Statistically significant at 95 percent of confidence 
(negative); 
Low income; 
All: Statistically insignificant; 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Millennium Development Goals; 
Development indicators: Mortality rate for children under five per 
1,000 live births; 
All countries: Statistically significant at 99 percent of confidence 
(negative); 
High income: Statistically insignificant; 
Middle income: Statistically significant at 95 percent of confidence 
(negative); 
Low income; 
All: Statistically insignificant; 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Millennium Development Goals; 
Development indicators: Maternal mortality ratio per 100,000 live 
births; 
All countries: Statistically significant at 99 percent of confidence 
(negative); 
High income: Statistically insignificant; 
Middle income: Statistically significant at 90 percent of confidence 
(negative); 
Low income; 
All: Statistically insignificant; 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Millennium Development Goals; 
Development indicators: Percentage of rural population with access to 
improved drinking water sources; 
All countries: Statistically significant at 99 percent of confidence 
(positive); 
High income: Statistically insignificant; 
Middle income: Statistically insignificant; 
Low income; 
All: Statistically insignificant; 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Millennium Development Goals; 
Development indicators: Debt service as percentage of exports of goods 
and services; 
All countries: Statistically insignificant; 
High income: Statistically insignificant; 
Middle income: Statistically insignificant; 
Low income; 
All: Statistically insignificant; 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Broad indicators; 
Development indicators: Trade (% of GDP); 
All countries: Statistically significant at 95 percent of confidence 
(positive); 
High income: Statistically insignificant; 
Middle income: Statistically significant at 95 percent of confidence 
(positive); 
Low income; 
All: Statistically insignificant; 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Broad indicators; 
Development indicators: Life expectancy at birth, total (years); 
All countries: Statistically significant at 99 percent of confidence 
(positive); 
High income: Statistically insignificant; 
Middle income: Statistically significant at 95 percent of confidence 
(positive); 
Low income; 
All: Statistically insignificant; 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Broad indicators; 
Development indicators: Real GDP growth rate; 
All countries: Statistically insignificant; 
High income: Statistically insignificant; 
Middle income: Statistically insignificant; 
Low income; 
All: Statistically insignificant; 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Broad indicators; 
Development indicators: Public spending on education, total (% of GDP); 
All countries: Statistically significant at 99 percent of confidence 
(positive); 
High income: Statistically insignificant; 
Middle income: Statistically significant at 95 percent of confidence 
(positive); 
Low income; 
All: Statistically significant at 95 percent of confidence 
(positive); 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Broad indicators; 
Development indicators: Foreign direct investment, net inflows (% of 
GDP); 
All countries: Statistically significant at 90 percent of confidence 
(positive); 
High income: Statistically significant at 95 percent of confidence 
(positive); 
Middle income: Statistically significant at 90 percent of confidence 
(positive); 
Low income; 
All: Statistically insignificant; 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Broad indicators; 
Development indicators: Gross capital formation (% of GDP); 
All countries: Statistically insignificant; 
High income: Statistically insignificant; 
Middle income: Statistically insignificant; 
Low income; 
All: Statistically insignificant; 
Low income; 
Sub-Saharan Africa: Statistically insignificant. 

Sources: GAO analysis of 1997-2001 UN and World Bank data and 2002 WBI 
Corruption Index.

Notes: Results for "low-income " were obtained from a separate analysis 
that grouped low-income, middle-income, and high-income countries. The 
results shown have been corrected for possible heteroscedasticity, when 
necessary. Heteroscedasticity refers to a statistical problem, which, 
if not corrected, may lead to an association appearing to be 
statistically significant or insignificant when it may actually be. For 
low-income countries, the estimates for proportion of population living 
on less than $1 a day and for the poverty gap at $1 a day were found to 
be heteroscedastic, but corrections could not be made due to data 
limitations.

According to the World Bank, in 2002, per capita income for high-income 
countries was greater than $9,075; for middle-income countries, between 
$735 and $9,075; and for low-income countries, $735 or less.

[End of table]

In general, when all countries are pooled together our analysis of the 
effect of corruption shows that most conclusions regarding the adverse 
effects of corruption on development are supported, that is, lower 
levels of corruption are associated with better development outcomes. 
However, these conclusions depend on the assumption that corruption has 
the same effect across all countries.

For most of the development indicators, we tested and rejected, with at 
least 90 percent statistical confidence, the assumption that corruption 
has the same effect for all countries. We found instead that the effect 
of corruption varies by countries' income levels.[Footnote 43] Using 
regressions that allowed for such variation, we analyzed the 
relationship of corruption to development indicators for income groups 
and found corruption to be statistically significant for far fewer 
indicators than when all countries are pooled together (see table 3).

For high-income countries, lower levels of corruption are associated 
with lower infant mortality rates and higher net inflows of foreign 
direct investment. Variations in corruption do not appear to be 
associated with any other development indicators for high-income 
countries. For middle-income countries, lower levels of corruption are 
associated with lower maternal, infant, and children under 5 years 
mortality rates. They are also associated with higher trade, life 
expectancy at birth, public spending in education, and net inflows of 
foreign direct investment.

For low-income countries, some of corruption's statistical associations 
with development indicators were as we expected. For instance, lower 
levels of corruption are associated with higher public spending on 
education. On the other hand, corruption is associated with some 
development indicators in unexpected ways. For example, for all low-
income countries, less corruption is associated with a higher poverty 
rate and lower educational enrollment. For low-income sub-Saharan 
African countries, variation in corruption across countries appears not 
to be associated with any of the development indicators. There are a 
number of possible explanations for some of these counterintuitive 
results. For example, the small size of the subgroups makes statistical 
significance hard to achieve. Also, as explained previously, relatively 
large amounts of imprecision and measurement error exist in the point 
estimates of corruption for each country. The development indicators 
themselves may, in addition, be imprecisely measured. It is also 
possible for the causal direction to be from corruption to income than 
vice versa, such that higher corruption leads to lower income.

As table 3 shows, the regression results for all countries may be 
misleading if not corroborated by the results for the income subgroups. 
This is particularly true when the regression for all countries shows 
the effect of corruption on a development indicator while the subgroup 
regressions do not. For example, when we analyzed all countries 
together, we found that less corruption is associated (at a 99 percent 
confidence level) with an increase in the percentage of population with 
access to improved drinking water sources when all countries are pooled 
together. However, when we analyzed the countries by income level, we 
did not find this effect (see fig. 7). This result suggests that the 
apparent association of less corruption with improved development 
indicators may be simply the effect of higher income.

Figure 7 shows the results of our regression analysis for rural access 
to improved drinking water countries by income group and for all 
countries. The horizontal line indicates corruption's lack of 
statistical significance at a minimum of 90 percent confidence. In 
high-income countries, an average of 97 percent of the population has 
access to improved water, unrelated to country levels of corruption. 
Similarly, in middle-and low-income countries and in low-income sub-
Saharan African countries, an average of 77 percent, 62 percent, and 49 
percent, respectively, have access to improved water, unrelated to 
country levels of corruption in each group. The slope of the line 
representing the analysis for all countries appears to be a result of 
moving along successive higher income levels.[Footnote 44]

Figure 7: Relation of WBI Index to Percentage of Population with Access 
to Improved Drinking Water Sources: 

[See PDF for image] 

[End of figure] 

[End of section]

Appendix V: World Business Environment Survey: 

This appendix highlights data from the World Business Environment 
Survey (WBES), focusing on results for sub-Saharan Africa.[Footnote 45] 
The survey covered 10,032 businesses in 80 countries, including 1,629 
businesses in 16 countries in sub-Saharan Africa (Botswana, Cameroon, 
Ivory Coast, Ethiopia, Ghana, Kenya, Madagascar, Malawi, Namibia, 
Nigeria, Senegal, South Africa, Tanzania, Uganda, Zambia, and 
Zimbabwe). The purpose of the survey was to better understand 
constraints that hinder private business development throughout the 
world.

The survey covered quality and integrity of public services, rules and 
regulations, bureaucratic practices, and corruption (our analysis 
focused on questions related to corruption). Sectors in sub-Saharan 
Africa represented included manufacturing, services, agriculture, and 
construction. Businesses responding were grouped into three categories: 
small (50 or fewer employees), medium (51 to 500 employees), and large 
(501 or more employees). The firms responding included sole 
proprietorships, partnerships, cooperatives, privately held 
corporations, corporations listed on stock exchanges, and others not 
specified; about 27 percent of these firms operated in other countries 
as well. The World Bank noted that the response rate for Africa was 
"among the lowest" of the nine regions surveyed.

More than 60 percent of businesses that responded to the survey from 
the region stated that corruption is a major constraint to their 
business. Figure 9 shows the responses of businesses from individual 
African countries (for comparative purposes, we also included the 
average for the region and for the 80 countries in which the survey was 
conducted). As figure 8 shows, Namibia and Botswana had the lowest 
number of complaints, while Cameroon, Ivory Coast, Kenya, Madagascar, 
and Nigeria had the highest proportion of businesses claiming 
corruption was problematic.

Figure 8: Firms in Selected Sub-Saharan African Countries Responding 
"Moderate or Major Obstacle" to WBES Question "How Problematic Has 
Corruption Been for the Operation and Growth of Your Business?": 

[See PDF for image] 

Notes: Response options were "no obstacle," "minor obstacle," "moderate 
obstacle," and "major obstacle." Because of the response rates and the 
numbers of respondents, differences between some countries may not be 
significant.

Figures in parentheses are the number of firms that responded in each 
country.

[End of figure] 

Further, the extent to which corruption influences government 
transactions may be inferred from a question that asked businesses if 
they typically needed to make extra, unofficial payments to gain 
government contracts. On average, about 26 percent of sub-Saharan 
African businesses surveyed responded affirmatively. Businesses in 
Madagascar, Senegal, Ivory Coast, Cameroon, and Nigeria had the highest 
rate of responses indicating that illegal payments are required to gain 
government contracts (see fig. 9).

Figure 9: Firms in Selected Sub-Saharan African Countries Responding 
"Always, Usually, or Frequently" to WBES Question "Do Firms Like Yours 
Typically Need to Make Extra, Unofficial Payments to Gain Government 
Contracts?": 

[See PDF for image] 

Notes: Response options were "always," "usually," "frequently," 
"sometimes," "seldom," and "never." Because of the response rates and 
the numbers of respondents, differences between some countries may not 
be significant.

Figures in parentheses are the number of firms that responded in each 
country.

[End of figure]

Another consequence of corruption is the erosion of trust among 
businesses, courts, and banks. More businesses stated that courts are 
dishonest and corrupt in the Ivory Coast, Madagascar, Nigeria, Senegal, 
Kenya, Tanzania, and Uganda (see fig. 10). Relatively large proportions 
of businesses in Cameroon, Ivory Coast, Ghana, Madagascar, Nigeria, 
Tanzania, and Uganda stated corruption of bank officials is an obstacle 
to their businesses (see fig. 11).

Figure 10: Firms in Selected Sub-Saharan African Countries Responding 
"Never, Seldom, or Sometimes" to WBES Question "How Often Do You 
Associate 'Honest/Uncorrupt' as Description of the Court System in 
Resolving Business Disputes?": 

[See PDF for image] 

Notes: Response options were "always," "usually," "frequently," 
"sometimes," "seldom," and "never." Because of the response rates and 
the numbers of respondents, differences between some countries may not 
be significant.

Figures in parentheses are the number of firms that responded in each 
country.

[End of figure] 

Figure 11: Firms in Selected Sub-Saharan African Countries Responding 
"Minor, Moderate, or Major Obstacle" to WBES Question "To What Extent 
Has Corruption of Bank Officials Had an Impact on Your Business?": 

[See PDF for image] 

Notes: Response options were "no obstacle," "minor obstacle," "moderate 
obstacle," and "major obstacle." Because of the response rates and the 
numbers of respondents, differences between some countries may not be 
significant.

Figures in parentheses are the number of firms that responded in each 
country.

[End of figure] 

[End of section]

Appendix VI: Comments from USAID: 

USAID:

US AGENCY FOR INTERNATIONAL DEVELOPMENT:

David Gootnick 
Director 
International Affairs and Trade 
U.S. General Accounting Office 
441 G Street, N.W. 
Washington, D.C. 20548:

April 2, 2004:

Dear Mr. Gootnick:

I am pleased to provide the U.S. Agency for International Development's 
(USAID's) formal response to the draft GAO report, U.S. Anticorruption 
Programs in Sub-Saharan Africa Will Require Time and Commitment. (April 
2004).

USAID is strongly committed to supporting the battle against corruption 
in all of its work, and many of the report's findings support our own 
concerns. We are especially pleased to see the emphasis on the need for 
a serious commitment and a long-term perspective for successes in 
fighting corruption. USAID has invested considerable effort in meeting 
these challenges, much of which is accurately documented in the report. 
In some cases, we believe our efforts exceed those described. We also 
believe that, while many of the lessons learned in the fight against 
corruption are well described, additional lessons from USAID's 
experience should be added to the analysis. I refer you to the attached 
comments for a fuller discussion of these issues.

Thank you for the opportunity to respond to the GAO draft report and 
for the courtesies extended by your staff in the conduct of this 
review.

Sincerely,

Signed by: 

John Marshall: 
Assistant Administrator Bureau for Management:

Attachment: a/s:

USAID Response to GAO Report on Anticorruption Programs in sub-Saharan 
Africa:

We were pleased to receive your draft report entitled US Anticorruption 
Programs in Sub-Saharan Africa Will Require Time and Commitment. The 
report describes clearly and accurately the challenges of 
anticorruption work, a topic that is by its nature extremely difficult 
to discuss in precise and concrete terms:

We would like to highlight some of the findings and commentary in the 
report with which we strongly agree:

* The report's title points to the key requirements for success in this 
work and is consistent with USAID's and the current Administration's 
commitment to anticorruption.

* We concur in your analysis of the difficulties of measuring or 
defining the problem and of the challenges inherent in designing and 
implementing anticorruption programming.

* We agree with your analyses and critiques of the various corruption 
indices and their methodologies, and particularly with the caution 
against using them for specific policy prescriptions.

* We share your view of the importance of the Millennium Challenge 
Account (MCA) as a force for positioning corruption as central to 
development policy.

* We support your conclusions about the impact of Section 660 of the 
Foreign Assistance Act and its constraints on USAID efforts to address 
corruption in the law enforcement arena.

Within this context of overall agreement, we would like to raise a few 
substantive issues that we believe more fully capture USAID's 
perspectives on our anticorruption efforts.

USAID Response to GAO Report on Anticorruption Programs in sub-Saharan 
Africa:

Coordination:

The Report correctly observes that coordination takes place both at the 
mission level and in Washington, and can be either formal or informal.

The line between formal meetings and informal contact may be difficult 
to identify, since formal meetings are often a forum to make public 
commitments, to reaffirm plans and to launch activities and coordinated 
efforts that are arranged through frequent informal contact. Highly 
formalized coordination in the form of shared projects and joint 
funding may be the exception rather than the rule, due to differing 
donor mandates and widely varying funding, implementation and reporting 
timelines. In countries with small programs, informal coordination may 
be the more appropriate and effective approach.

Lessons Learned:

While we agree with the lessons highlighted in the report, we would 
like to add three additional items for your information.

Long-term investments and short-term achievements: We fully agree with 
the observation that addressing corruption is a long-tern project, but 
we would also point out that in some cases, visible, early "wins" (such 
as successful prosecution of a high-level official) may be critical for 
building credibility and generating sustained pressure for reform. 
USAID's approach emphasizes long-term institutional change, and while 
it eschews the notion of "quick fixes," it recognizes the potentially 
important role of quick achievements.

Political will: We agree with the importance of political will for 
successful anticorruption programs and have not funded proposals for 
the USAID/AFR Anti-Corruption Initiative in three countries where 
political will was evaluated as insufficient. Experience also indicates 
that there are times when it is important to respond to the emergence 
of promising reforners in government, even in cases when broad 
political commitment is fledgling or shaky. Failure to do so could 
undermine the legitimacy of the USG as champions for anticorruption 
reforms and forsake some of our most important allies in these efforts. 
Judiciousness in the commitment of public resources is clearly called 
for in these cases, but so is concern for policy 
consistency and the credibility of our partners. In many such cases, 
programs address this dilemma by combining targeted assistance to 
government reform efforts with support for civil society advocacy and 
public awareness to increase incentives for broader political 
leadership to exhibit strong political will.

Anticorruption commissions: The report states that USAID has concluded 
that there are two conditions for supporting such agencies. USAID's 
conclusions here are broader. Having a clear mandate and public 
monitoring are among the necessary conditions for success of an 
anticorruption commission, but others include (i) political 
independence, (ii) sufficient funding and human resource capacity, 
(iii) political will of leadership, and (iv) an adequate legal 
framework. In addition, successful anticorruption commissions also 
require effective partners, such as law enforcement, an independent and 
competent judiciary, and free and effective media, to name a few. Our 
most recent analysis suggests that an anticorruption commission is an 
appropriate strategy only in a country that already enjoys relatively 
competent governance overall and thus is not an appropriate choice in 
many of the countries where it has been attempted.

Sustainability & Impact:

The report states that, based on the limited number of evaluations as 
yet carried out, prospects for sustainability are unclear. While 
evaluation must continue and increase as anticorruption activities grow 
in number, age and significance, any generalization regarding 
sustainability is not possible, and specific sustainable changes can be 
identified.

We agree both that there have been too few evaluations, and that those 
conducted indicate uneven or ambiguous results. We disagree, however, 
that a general inference about sustainability should be extrapolated 
from these few evaluations when the majority of programs have not been 
evaluated. The overall deduction of the report seems to be that no 
significant, measurable or sustainable results have been achieved by 
anticorruption programs.

While programs like anticorruption commissions have produced some 
ambiguous or disappointing results, many specific efforts have resulted 
in sustainable changes that will undoubtedly have a positive and 
lasting impact.

USAID Response to GAO Report on Anticorruption Programs in sub-Saharan 
Africa:

The following programs have accomplished specific, documented and 
sustainable achievements that have restricted opportunities for 
corruption, increased transparency, strengthened institutions or 
resulted in improved legal and regulatory frameworks.

* Investor road maps in Tanzania have resulted in a decrease in the 
number of steps and the time necessary for registering a business. This 
is both concrete and sustainable.

* In Uganda, the privatization of the Uganda Commercial Bank resulted 
both in the privatization of the institution and in the establishment 
of a system for asset management. The open market will be a force for 
sustaining improvements in bank systems, while privatization results in 
reducing the corrupt influence of the state on these assets by putting 
them permanently in the hands of the private sector. Once achieved, the 
outcome is not subject to reversal or slippage.

* In the Benin example, the audit manual, the increased capacity and 
greater number of audits have combined to produce findings that led to 
prosecutions. This points to a stronger institution, and there is no 
evidence of a lack of sustainability of these advances.

* Improved legal frameworks, once enacted, can only be removed by 
legislative action. While the new laws may not be implemented due to 
lack of political will, the effort will have resulted in an improved 
framework within which to work if and when political will is more 
evident. The existence of a good legal framework also provides a more 
facilitative environment for civil society advocacy and judicial 
challenges. While the ultimate goal of the effort may not have been 
met, important, sustainable steps forward were taken.

Conclusion:

We agree with the conclusion of the report that anticorruption efforts 
will succeed only with long-term commitment and political and financial 
support from host governments, the private sector and the public. 
However, the experience of USAID clearly suggests that these factors 
alone will not suffice. Coordinated policy dialogue and high-level 
diplomatic efforts are emerging as a necessary component of USG 
strategy which should serve to catalyze host country action and 
leverage technical assistance and other donor initiatives. Recent high-
level policy initiatives such as MCA and the G-8 Corruption and 
Transparency Initiative are expected to enhance the 
likelihood of greater host country commitment and attention to reforms 
that will address the corruption problem. While analysis of diplomatic 
efforts is beyond the scope of the report, we feel it is an important 
"lesson learned" with significant implications for USG efforts in 
anticorruption.

The following are GAO's comments on USAID's letter dated April 2, 2004.

GAO Comments: 

1.Based on informal comments from USAID, we added information on 
formal and informal coordination of U.S. anticorruption assistance on 
pp. 20-21.

2.We agree with USAID that political will is important. See our 
discussion on p. 3 in the results in brief and on p. 5 in background, 
and in the lessons learned section on p. 32 of the report.

3.We appreciate USAID's further elaboration on conditions required to 
make anticorruption agencies effective. We did not modify the text, 
since we believe we adequately addressed these conditions on pp. 27-28 
of the report.

4.USAID cites examples already included in this report. We encourage 
USAID to increase the regularity and focus of evaluation of its 
anticorruption efforts to provide meaningful and quantifiable 
assessment of the programs' performance and results.

5.We agree with USAID that high level diplomatic and coordinated 
policy dialog are key to anticorruption efforts. For that reason, we 
discussed the MCA initiative on pp.1 and 5 and the G-8 initiative on 
p.20, and provided a summary of key ongoing diplomatic efforts to 
establish international agreements addressing corruption in sub-
Saharan Africa in appendix II.

[End of section]

Appendix VII: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Phillip Herr (202) 512-8509: 

Staff Acknowledgments: 

In addition to the individual listed above, Nima Patel Edwards, Maria 
Oliver, Bruce Kutnick, Gezahegne Bekele, Ann Baker, Mark Dowling, 
Martin de Alteriis, and Reid Lowe made key contributions to this 
report.

[End of section]

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FOOTNOTES

[1] P.L. 106-309, Title II.

[2] Nambibian.com (July 7, 2000).

[3] Government of Nigeria, Governance and Corruption Diagnostic Study 
(Abuja, Nigeria: 2003).

[4] For fiscal year 2004, the candidate pool of countries must be (1) 
eligible for assistance from the International Development Association 
(IDA), (2) have a per capital income equal to or less than $1,415, and 
(3) not be subject to legal provisions that prohibit them from 
receiving U.S. economic assistance under the Foreign Assistance Act. 
These criteria are expected to change in future years.

[5] WBI staff and others also identified this limitation.

[6] These indicators include 12 Millennium Development indicators, as 
well as five key performance indicators. 

[7] D. Kaufmann, A. Kraay, and M. Mastruzzi, Governance Matters III: 
Governance Indicators for 1996-2002 (Washington, D.C.: World Bank 
Institute, 2003).

[8] The WBES queried 10,032 businesses in 81 countries, including 1,629 
in 16 African countries in 1999 and 2000. 

[9] In five of the countries that we reviewed--Mozambique, Nigeria, 
South Africa, Uganda, and Zambia--some level of survey or assessment 
was conducted in the past 5 years. No assessment or survey was 
conducted in the sixth country, Benin, despite the presence of ongoing 
U.S. anticorruption programs.

[10] A 2003 USAID inventory of its fiscal years 2001-2002 global 
anticorruption programs requested missions to estimate the portion of 
programs that were related to anticorruption activities. The Department 
of State provided funding data for anticorruption projects and 
diplomacy for fiscal years 2001-2002. The program funding data we 
obtained for the Departments of the Treasury, Justice, and Commerce did 
not indicate which parts of the agencies' programs were tied to 
anticorruption objectives. 

[11] In the following 12 countries, the average annual amount of annual 
anticorruption assistance was less than $1 million: Mali, Angola, 
Namibia, Democratic Republic of Congo, Malawi, Rwanda, Kenya, Zambia, 
Tanzania, Chad, Guinea, and Botswana. 

[12] These countries include Benin, Kenya, Madagascar, Mozambique, 
Rwanda, South Africa, Tanzania, Zambia, and Nigeria. 

[13] See appendix II for a description of key international 
anticorruption agreements that relate to sub-Saharan Africa.

[14] U.S. Agency for International Development, Office of the Inspector 
General, Audit of the Status of USAID's Anti-Corruption Efforts in 
Assisted Countries, 9-000-98-002-P (Washington, D.C.: 1998).

[15] Group of Eight, Fighting Corruption and Improving Transparency: A 
G8 Action Plan, http://www.g8.fr/evian/english/navigation/
2003_g8_summit/summit_documents/
fighting_corruption_and_improving_transparency_-
_a_g8_declaration.html.

[16] The Chad-Cameroon Pipeline Committee represents one of the first 
efforts in Africa to ensure that extractive industry revenue is spent 
on development projects and not misappropriated for corrupt purposes. 
It is estimated that oil revenues could provide Chad and Cameroon with 
$2 billion and $500 million, respectively, over the next 25 years. 

[17] Peter Lewis, "Nigeria: Elections in a Fragile Regime," Journal of 
Democracy 14 (July 2003): 131.

[18] A 2002 Department of State survey found that 14 of 29 sub-Saharan 
African countries that responded had established some form of 
anticorruption agency, such as a special court or commission, that may 
have multiple mandates including law enforcement, prevention, and 
education.

[19] In 2000, the Kenyan Anti-Corruption Authority was ruled 
unconstitutional and dissolved by the High Court and a police antigraft 
unit formed to undertake some of the authority's anticorruption 
activities accomplished very little. The Kibaki administration, elected 
in December 2002, created a new Kenyan Anti-Corruption Commission.

[20] In Benin, the anticorruption commission has low credibility and a 
poor record of anticorruption investigations and operates under the 
jurisdication of the executive branch, according to USAID. 

[21] In Uganda, an Anticorruption Commission was created in the mid 
1990s but lacked sufficient funding to undertake its work, according to 
a 2000 USAID assessment.

[22] We were unable to obtain reliable information on the number of 
Nigerian national police. However, according to the Department of 
Justice, the police force is currently estimated to number 300,000.

[23] P.L. 93-559, sec. 30(a); 22 U.S.C. 2420.

[24] Exemptions include (1) assistance to countries emerging from 
instability, (2) spending related to international narcotics control, 
(3) programs to enhance professional capabilities to carry out 
investigative and forensic functions conducted under judicial or 
prosecutorial control (22 U.S.C. 2346c), (4) programs to assist in 
developing academic instruction and curricula for training law 
enforcement personnel (22 U.S.C. 2346c), and (5) assistance to customs 
authorities for customs law enforcement and improving customs laws, 
systems, and procedures.

[25] GAO has previously reported on problems coordinating U.S. rule-of-
law assistance. For example, see U.S. General Accounting Office, 
Foreign Assistance: Status of Rule of Law Program Coordination, GAO/
NSIAD-00-8R (Washington, D.C.: Oct. 13, 1999).

[26] These evaluations were conducted between February 1991 and 
December 2003; 6 of the 8 evaluations were completed since 2000. The 
Departments of the Treasury, Justice, and Commerce told us that they 
monitor their anticorruption activities with periodic and end-of-
program reports but have not evaluated their programs. 

[27] USAID's data derive from a self-reported survey. USAID 
headquarters officials reviewed the survey responses to ensure that 
these meet their criteria for anticorruption; the officials accept that 
the data may somewhat overstate the amount of funding directed to 
anticorruption activities. 

[28] Because the information provided by the agencies did not isolate 
the components tied to anticorruption objectives, the data may 
overstate anticorruption funding.

[29] 15 U.S.C. 78 dd-1, et seq.

[30] For OECD reports see: http://www.oecd.org.

[31] SADC represents 14 nations in southern Africa; its objective is to 
harmonize its members' laws and policies in an effort to promote 
economic development in the region. The AU is the successor 
organization to the Organization of African Unity.

[32] Parties to an international treaty generally adopt the form and 
content of an agreement by signing it. It is common practice to sign 
the agreement subject to ratification, the international act by which a 
state indicates its consent to be bound to a treaty. 

[33] UN Doc. A/Res/58/4.

[34] The UN convention sub-Saharan Africa signatories include Angola, 
Benin, Burkina Faso, Cameroon, Cape Verde, Central African Republic, 
Comoros, Ethiopia, Gabon, Ivory Coast, Kenya, Madagascar, Mali, 
Mauritius, Namibia, Nigeria, Senegal, Sierra Leone, South Africa, 
Tanzania, Togo, Uganda, and Zambia.

[35] For information on the sources used, see the World Bank 
Institute's Web site at http://www.worldbank.org/wbi/governance/
govdata2002 and Transparency International's Web site at http://
www.transparency.org.

[36] TI also computes corruption scores for 62 additional countries. 
Because there were less than three sources available, these 62 
countries are measured less reliably and not included in the index. 

[37] The correlations of the corruption scores between the two indexes 
are 0.90 and 0.69 for all sub-Saharan African countries and low-income 
sub-Saharan African countries, respectively.

[38] The Millennium Development Goals commit the international 
community to the promotion of human development as the key to 
sustaining social and economic progress in all countries by creating a 
global partnership for development. 

[39] The database, generated by the World Bank, the International 
Monetary Fund, and various UN agencies, is routinely and widely used in 
economic analysis of development issues. For this reason, we did not 
assess the data's reliability.

[40] A regression analysis is a statistical method of measuring the 
extent to which variations in one variable are associated with 
variations in other variables. 

[41] Our analysis highlights an association between corruption and the 
development indicators. It does not imply a cause-effect relationship.

[42] Our regression analysis for all countries used Yi= a + b * WBI, 
where Yi is a development indicator, a is the intercept, b is the 
effect of the corruption index, and WBI is the 2001 WBI corruption 
index. Our regression analysis by income group used Yi= a + (b1* WBI ) 
+ (b2* low-income Africa indicator) + (b3* middle-income country 
indicator) + (b4* high-income country indicator) + (b5 * low-income 
Africa countries' WBI scores) + (b6 * middle-income countries' WBI 
scores) + (b7 * high-income countries' WBI scores), where Yi is a 
development indicator; a is the intercept; bi = 1,.,7 indicates the 
effects of variables in the model; and WBI is the 2001 WBI corruption 
index.

[43] We rejected this assumption with at least 90 percent confidence 
for all development indicators except debt service as percentage of 
exports of goods and services, real GDP growth rate, and net inflows of 
foreign direct investment.

[44] The horizontal line is drawn at the level of the average value of 
the development indicator for that subgroup.

[45] The survey was a collaborative effort of the World Bank Group, the 
European Bank for Reconstruction and Development, the International 
Development Bank, and Harvard University. Because of the response rates 
and the numbers of respondents, differences between some countries may 
not be significant.

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