Maximizing Development Dividends: Transparency, Accountability and Anti-corruption
By Anga Timilsina,
UNDP Democratic Governance Group.
As the ‘last push’ to propel the Millennium Development Goals (MDGs) across the 2015 finish line continues, the world is gearing up for the next set of global development goals through intergovernmental processes, global and national consultations, and discussions on the High Level Panel report on the Post-2015 Development Agenda (1).
The lessons learned from MDGs will thus significantly help to inform and enrich the discussion on the successors to the MDGs. Over the past decade, the MDGs have galvanized support for a global anti-poverty push; bringing together various stakeholders (including governments, civil society, foundations and the private sector), and mobilizing domestic and international finance (including targeted investments) to attain parity between boys and girls in primary education, reduce child and maternal mortality; and fight malaria, HIV/AIDS and tuberculosis. Despite the success of MDGs, including in many Least Developed Countries (LDCs), progress has been uneven between and within regions and countries.
An analysis on what we have learned from the implementation of activities to achieve the MDGs during the last 13 years reveals useful lessons, particularly from a “transparency and accountability” perspective. These lessons not only help explain the uneven and slow progress on the MDGs, but why there is a need for a “fundamental shift” in thinking to include governance as a central part of development (2). We explore below some of these lessons and how they could play a key role in the Post 2015 development agenda.
Lessons Learned from the MDGs
Lesson #1: Governance, transparency, and accountability are key for development.
At the June 2011 Tokyo MDG follow-up meeting, UNDP highlighted the importance of not only building health clinics, but also putting systems and incentives in place to ensure the timely pay of health workers; ensuring that quality standards are met, and that supplies get to where they are needed (3). In order to sustain the impact of any development initiative, people should have the right to and access to information regarding public services; service providers (whether public or private) should be accountable to the public for their services; and these should be ensured by putting effective mechanisms in place.
The Secretary General’s report highlights that governance serves as both “key outcome and enablers of development”. Despite the recognition that development and governance goals go hand in hand, the MDGs missed the opportunity to include governance, transparency and accountability because of both political and non-political reasons. The world cannot afford to lose that opportunity twice and thus, the Post-2015 development agenda should place institutions, transparency and accountability at center stage.
Lesson #2: Resource leakages must be prevented to ensure the greater impact of post-2015 development agenda.
Until recently, the focus of the development community has been a persistent call to upscale resources to accelerate the progress towards the MDGs. Preventing resource leakages resulting from corruption and illicit financial flows has not received adequate attention from policy-makers in global development policy debates.
The quality and predictable official development assistance (ODA), as well as sound private investment and innovative international financing for development has helped to achieve the MDGs; however, domestic resource mobilization is a critical part of the equation. In many cases (particularly the cases of resource rich countries), the problem is on how resources are generated and allocated and whether they are channeled back to development. For example, a 2011 UNDP study found that illicit financial flows from LDCs increased from US$9.7 billion in 1990 to US$26.3 billion in 2008(4). According to Global Financial Integrity, the developing world annually loses as much as US$1 trillion in illicit financial outflows. This is 10 times higher than the ODA that is received. Globally, total estimates of offshore funds held by individuals stand at about US$11.5 trillion (5). This results in an annual loss of tax revenue on income from these assets of about US$250 billion, more than enough to pay for most global development needs. For example, US$30 billion is required annually to meet Education for All targets; US$25 billion to fight HIV/AIDs; US$30 billion to eradicate hunger; US$18 billion to improve water and sanitation, and; an estimated US$55 billion for infrastructure investment (6).
According to Revenue Watch, 58 countries produce 85 percent of the world’s petroleum, 90 percent of diamonds and 80 percent of copper. Out of 58 countries, almost 50 countries are from the developing world. Profits from their extractive sector totaled more than US$2.6 trillion in 2010. In 2011, oil revenues for Nigeria alone were 60 percent higher than total international aid to all of sub-Saharan Africa (7). Another paradox is that more than 12 countries supply the oil production to the world and fulfill the world demand for energy, while almost 50% of the population is without electricity in these countries (8). This evidence clearly shows that in order to have the post-2015 development agenda be more effective than the MDGs, there should be more focus on preventing leakages so that resources meant for development should be invested into services and infrastructure. In order to do, the post-2015 development agenda has to include a framework to ensure transparent and accountable management, particularly in those countries endowed with natural resources.
Lesson #3: Enhanced transparency, accountability, and anti-corruption do have a ‘MDG payoff’.
Existing data and empirical evidence illustrate that enhanced transparency, accountability and anti-corruption lead to positive development outcomes. This includes improved delivery of public services like health, education and water, gender equality, and protection of forests and the environment. A recent working paper from Transparency International found that there is a development dividend when countries have strong levels of openness, mechanisms to hold government actors to account, and effective and well-functioning judiciaries and law enforcement bodies.
In Bulgaria, for example, lower levels of reported bribery are linked with higher youth literacy rates. Maternal health, one of the MDGs that will not be met globally, is positively and significantly correlated with lower levels of bribery, as seen in countries like Colombia (9). Improving transparency and accountability by strengthening women’s empowerment and equality can also address bottlenecks in service delivery and enhance gender equality. UNDP’s 2011 publication “Seeing Beyond the State: Grassroots women’s perspectives on corruption,” highlights that women – particularly of care giving age – experience corruption when accessing or applying for public documentation (identity cards, licenses, etc.). Networks and groups of grassroots women have been very effective in community organization and mobilization, advocacy and demanding accountability from public institutions by raising awareness about public service entitlements and anti-corruption laws and practices (10).
Lesson #4: Accountability in monitoring and the localization of internationally agreed goals is vital.
We have learned from the MDGs that civil society’s role in strengthening participation in planning, implementing and monitoring the MDGs, especially at the country level, was not emphasized. This is why many civil society organizations produced shadow MDG reports. One of the major findings of various national and thematic consultations on the Post-2015 development agenda is the need for strong participatory monitoring mechanisms by non-state actors (e.g., communities, youth and women’s networks, civil society networks, etc.). Thus, making the post-2015 development agenda open, transparent and accountable is not a choice, but a necessity.
Access to information combined with open data systems on budgets, expenditures and procurement can help deliver results by holding international community, governments and non-government actors accountable for the resources they spend.
The Global Context on Transparency, Accountability and Anti-corruption
A strong consensus is emerging that transparency, accountability and anti-corruption need to be embedded into the Post-2015 development agenda. For example, the existence of access to information laws and their enforcement have been recognized as cornerstones for inclusive political and economic institutions to make their governments more open, accountable, and responsive to citizens, and contributing significantly in improving service delivery.
Mounting evidence of the adverse impacts of corruption on development has given prominence to the need to tackle the issue. For example, evidence from a recent study from Transparency International showed that in countries where more than 60 per cent of the population pays bribes to access public services, more women die in childbirth, fewer people have access to clean water, and illiteracy rates among young people are higher (13).
Acknowledging the importance of transparency, accountability and anti-corruption, the recent report by the UN Secretary General’s High Level Panel on the Post-2015 Development Agenda highlights the need to have a ‘transparency revolution’, so citizens can see exactly where and how taxes, aid and revenues from extractive industries are spent. The High Level Panel on Post-2015 suggested a target of “Guaranteeing the public’s right to information and access to government data”. It is widely recognized that open access to information on the use of natural resources, development assistance by donors, and revenues generated by companies operating in multiple jurisdictions creates an enabling environment for accountability from the respective stakeholders (14).
Significant progress has been made to address challenges of measurability regarding transparency, accountability and anti-corruption. For example, the Open Budget Survey provides a comprehensive data set on whether governments give the public access to budget information and opportunities to participate in the budget process at the national level. The Survey also assesses the capacity and independence of formal oversight institutions (15).
More importantly, member states have already voluntarily entered into various agreements to strengthen transparency, accountability and fight corruption. One such agreement is the UN Convention Against Corruption (UNCAC). Ratified by 168 member states (as of 5 December 2013), many demonstrating their genuine commitment to comply with its mandatory and non-mandatory provisions, UNCAC provides an opportunity to address the issue of mutual accountability. Both developed and developing countries are held accountable for fighting corruption, including the reduction of bribery and corruption, preventing illicit financial flows and recovering stolen assets. Other examples include the Open Government Partnership (with over 60 participating countries), the Extractive Industries Transparency Initiative (EITI), the African Peer Review Mechanism (APRM), the G7+’s Peace and State-building goals in the New Deal, the Istanbul Plan of Action for the LDCs, and the Universal Periodic Review (UPR) to promote accountability through human rights.
Placing Transparency, Accountability and Anti-corruption at the Centre of Post-2015 Development Agenda
What we have learned from the MDGs is that it was not so much about getting the commitment of member states on governance and anti-corruption, but building a consensus in translating commitments into concrete development goals and results. Now is the time to make transparency, accountability and anti-corruption an integral part of global commitments on development and successful strategies to bring transparency, accountability and anti-corruption at the center of the Post-2015 development agenda would include:
- Ensuring transparency, accountability and anti-corruption are part of a ‘Governance Goal’: As envisioned in the new Strategic plan of UNDP, governance and the quality of institutions are just intrinsic values themselves, but also important enablers for development in improving service delivery. Within this context, a governance goal can comprise a set of targets including public sector capacity, rule of law, access/rights to information, fiscal transparency and open budget, participation of citizens and other actors in monitoring services, etc.
- Having a stand-alone goal on transparency, accountability and anti-corruption: Ensuring, at minimum, that the target for access to information and open data (such as budgets, expenditures and procurements) and civil society/community participation for monitoring the progress on the new goals will improve the implementation deficits encountered to accelerate the progress on the MDGs. This will help to establish effective and impartial monitoring systems that provide frequent, timely, publicly accessible and relevant information on progress.
- Embedding transparency, accountability and anti-corruption across all sector-specific goals such as education, health, water, energy and environment: The inclusion of transparency, accountability and anti-corruption indicators in each sector specific goal will help the monitoring and evaluation of future development goals, including tracking the progress and impact of aid programmes and progress in real time. Moreover, inclusion of indicators on transparency and accountability across all sectors will also help to prevent corruption in resource utilization.
- Making transparency, accountability and anti-corruption part of a development financing goal: Financing for development is as much about securing resources as it is about holding both developed and developing countries accountable to their commitments on resource generation, allocation and utilization. Thus, there should be a few indicators to hold the developed world accountable for their commitments on official development assistance, while the developing world should have an indicator for improving their mechanisms and systems to address corruption. There should also be an accountability indicator to address illicit financial flows, and a transparent and accountable management of natural resources, including holding multi-national companies accountable for their operations and contractual processes.
To conclude, there is a brighter prospect of placing transparency, accountability and anti-corruption at the center stage of the post-2015 development agenda. More than 1 million people, who voted in the global My World Survey, have consistently ranked honest and responsive government as among their top three priorities. Transparency, accountability and anti-corruption are among the most highlighted issues in all global and national consultations on the post-2015 development agenda. People have already spoken, and now is the time for member states to respect people’s aspirations. Transparency, accountability and anti-corruption can be part of a stand-alone governance goal (goal 10 proposed by the Report of the High Level Panel), but these core values of democratic governance should also be integral to each sectoral goal such as health, education and water. Borrowing the words of the Nobel laureate Amartya Sen: governance is central to development – “both as the primary end and as the principal means”.
(1) A New Global Partnership: Eradicate Poverty And Transform Economies Through Sustainable Development”: The Report of the High-Level Panel of Eminent Persons on the Post-2015 Development Agenda; United Nations 2013
(2) UN 2013 A life of dignity for all: accelerating progress towards the Millennium Development Goals and advancing the United Nations development agenda beyond 2015 – Report of the Secretary-General (http://www.un.org/ga/search/view_doc.asp?symbol=A/68/202)
(3) Helen Clark, Opening Remarks on the occasion of the Follow-up Meeting on the Millennium Development Goals in Tokyo, Japan.
(4) Discussion Paper:Illicit Financial Flows from the Least Developed Countries 1990-2008 – UNDP 2011
(5) Illicit Financial Flows and the Problem of Net Resource Transfers from Africa: 1980-2009 – Global Financial Integrity and African Development Bank 2013.
(6) Shantayanan Devarajan, Margaret J. Miller, and Eric V. Swanson, “Working Paper: Goals for Development: History, Prospects and Costs” World Bank Policy Research 2002.
(7) 2013 Revenue Governance Index. A Measure of Transparency and Accountability in the Oil, Gas and Mining Sector – Revenue Watch 2013
(8) Nancy Birdsall, Any “Global” Strategy Against Poverty Will Be Misguided and Incomplete – Center for Global Development, 2006.
(9) Working Paper: 2015 and Beyond: The Governance Solution for Development – Transparency International 01/2013
(10) UNDP, ‘Seeing Beyond the State: Grassroots women’s perspectives on corruption’, 2011.
(11) UN System Task Team on the Post-2015 UN Development Agenda, March 2012.
(12) UN Millennium Project – UN Millennium Project, Accessed 11/12/2013.
(13) Transparency International, “2015 and beyond: the governance solution for development”, Working paper, 01 / 2013.
(14) A New Global Partnership: Eradicate Poverty And Transform Economies Through Sustainable Development, the Report Of The High-Level Panel Of Eminent Persons On The Post-2015 Development Agenda, 2013.
(15) Open Budget Survey, Data Explorer. http://survey.internationalbudget.org/#map.
About the Author
Anga Timilsina is currently the Programme Manager of UNDP’s Global Thematic Programme on Anti-Corruption for Development Effectiveness (PACDE). Anga provides policy and advisory support to UNDP Country Offices and programming countries on strengthening anti-corruption policies, institutions, and frameworks, including support to both government and non-government actors. Through PACDE, Anga also coordinates UNDP’s participation and representation at various global governmental and non-governmental processes on anti-corruption and is also responsible for developing UNDP’s position on anti-corruption and coordinating UNDP’s work from various regions and Country Offices. Prior to joining UNDP, Anga was with RAND Corporation, a U.S.-based non-profit institution that helps improve policy and decision making through research and analysis. He also brings his experiences working for various non-governmental agencies in Nepal. Please contact Anga via email at email@example.com.
The views expressed herein are the author’s own and do not necessarily represent any organisation or government.
This article was initially posted on the UNDP DG Insights.
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