Partnerships
Or Dependencies?
International donor organizations and host-country
professionals alike are increasingly relying on the public-private
partnership experience as a major tool in the fight against
corruption in transition countries. USAID recently authored a draft
anti-corruption strategy, for example, where the importance of
'watchdog' and monitoring organizations is clearly underscored. Yet
much of that emphasis relies on two fairly untested assumptions:
first, that the positive experience of comparatively few
organizations, such as Bulgaria's Coalition 2000, can be
easily duplicated in other transition states; second, that such
partnerships can maintain their professional integrity over time,
despite some very critical challenges. Perhaps it is worth
exploring the validity of those two assumptions more at this
conference.
Before
answering this question, it is useful to take a step back and
examine the experience of other public-private partnerships across
several different sectors and regions. USAID's Implementing Policy
Change project, a wide-ranging program undertaken by the Global
Bureau's Center for Democracy and Governance over several years,
and implemented by Management Systems International, has compiled a
recent summary of those activities. It is relatively broad list,
and uncovering institutional similarities across partnerships that
could help current anti-corruption practitioners in transition
states is difficult.
By definition,
public-private partnerships are consensual, rather than adversarial
bodies. They function most effectively on a level playing field
within a relatively non-confrontational environment. Mutual trust-
a rare element in the development history of most countries, the
West included- is perhaps the most important element defining their
existence. The USAID study notes that public-private partnerships
may help foster such conditions, but without some kind of
environment where all three elements were already present
beforehand, it probably could not become established in the first
place. It also notes that there is much less publicly available
data on the policy and regulatory effectiveness of such networks
and partnerships than on their operational activities.
Of the approximately ten
partnerships listed in the study, three focused on corruption
specifically. They include (a) Bulgaria's Coalition 2000;
(b) Ukraine's municipal-level 'integrity' partnerships in Donetsk,
Kyiv and L'viv; and (c) new policies regarding livestock use in the
African Sahel. The other projects touched on broader economic
issues: transport and communications policy in southern Africa (a
huge project involving regional treaties among 11 countries across
7 sectors); private enterprise development in Guinea/Bissau;
consultative mechanisms used in Mexico, Ghana and Malaysia to
foster national consensus on economic reform; similar national
economic fora in Uganda, Ghana and South Africa; and finally
negotiated rule-making procedures to promote acceptance of business
regulatory reform widely used in the United States, Japan and
western Europe.
Looking
at this extensive and varied list, it is difficult to make
generalizations about traits common to all. In the sole western
example cited- rule-making partnerships- the private sector plays
an inordinately important role, far more than has been the case
with the three anti-corruption partnerships mentioned. Indeed, most
of the emerging anti-corruption partnerships in former communist
countries have been initiated by NGOs with varying degrees of
municipal or national-level public sector involvement, but fairly
low levels of private sector involvement. This is in keeping with
political and social traditions in Eastern Europe, where agents for
change historically came from the intelligentsia and a weakly
developed civil society (sometimes with or without the support of
established political elites) but rarely, if ever, from the private
sector. The playing field for transition partnerships thus looks
very different from that in the "West. Private sector weakness,
together with the need for political elites, regardless of
ideology, to finance new power bases and expand patronage networks,
creates powerful temptations to co-opt, rather than collaborate
with, the NGO community. The danger that governments will then seek
to use such partnerships for their own political purposes is thus
very real.
This
raises an important question for these new partnerships, one that
the Western experience may not be able to answer sufficiently. What
price does a newly emergent NGO pay, in terms of its own integrity,
to get a seat at the table of power? This is not a theoretical
question alone. As Coalition 2000 has noted, even within Bulgaria,
probably one of the less corrupt Balkan states, longer-term
political tendencies have not emphasized public-private
co-operation in favor of integrity, but a more sinister
public-private convergence in ways deeply reminiscent of the
communist-era party-state fusion that finally did not prove either
politically or economically viable. Without a doubt, similar
tendencies are at work in other countries throughout the region,
from Romania to Russia.
This
challenge may well become the most important one facing new
anti-corruption public-private partnerships as they search for ways
to maintain their integrity. It underscores the importance of
developing real codes of ethical and professional conduct, not just
for government, but for the entities ostensibly fighting
corruption. Across the region, there is no lack of public anger at
corruption, or even in the willingness of fledgling NGOs to tackle
the issue, but equal degrees of professionalism and established
standards of conduct for corruption-fighters has been lagging. This
is very much in keeping with a development history that has only
just begun to define conflict of interest, whether legally or in
practice. But it may become one of the most important variables in
determining whether such partnerships can maintain their
independence and integrity in the face of increasing political and
economic pressures in the years to come.
Part of
integrity, of course, is not simply about avoiding the appearance
of impropriety, but about locating genuine comparative advantage.
The only thing which might damage the reputation of a fledgling
partnership more than co-optation is involvement in a sector it
lacks either credibility or expertise in. Coalition 2000's
ability to foster dialogue on the activities of Bulgaria's customs
and police agencies is possible only because of the reputation it
has built for itself over several years in promoting integrity in
other, less controversial sectors. For a newer coalition, jumping
into law enforcement issues, to cite one example, may not only be
constitute a poor use of scarce monitoring and intellectual
resources, but might actually damage its reputation if it lacks
sufficient public credibility to begin with. Other areas, such as
procurement and budget reform, where clearly defined private and
'third' sector roles exist, are far more appropriate starting
points for fostering public oversight mechanisms.
Beyond this lies a larger
question seldom raised, at least by donor organizations
contemplating funding of such activities across the region. Can the
experience of one country, such as Bulgaria, be successfully
replicated in diverse places such as Macedonia, Albania, or even
Kazakhstan? Are there really such things as trans-border examples,
or do all partnerships, in some sense, have to re-create their own
conditions each time from scratch? Speaking as a donor
organization, I would like to believe that the answer is yes.
Indeed, the negotiated rule-making procedures mentioned earlier
were first pioneered in the U.S. but later widely exported to
France, Netherlands, Japan and Germany, and today form an integral
part of all modern economies. But whether such practices can be
successfully exported from one transition country to another is
still open to question and research. We should not simply assert,
Alice in Wonderland-like, that when a pawn reaches the eighth
square, it automatically becomes a Queen. There are simply too many
examples to the contrary from all over the world. Societies
frequently adhere to their own path, however disastrous, rather
than learn lessons from their neighbors.
None of
this should be interpreted as saying that because the experience of
public-private partnerships as successful agents for policy change
has been limited, or is made more difficult because of private
sector weakness in the transition states, we shouldn't support
them. And it would be unrealistic and unfair in the extreme to
demand that these partnerships look exactly like their western
counterparts. But it does require us to acknowledge- in a
straightforward manner- some of the real threats anti-corruption
partnerships in transition states now face. Of all of these, I
believe the danger that they will all too easily become co-opted by
and dependent on political elites, and increasingly accommodate,
rather than challenge, bad or corrupt economic policies, is perhaps
the greatest. We can see this playing out today, not in Bulgaria,
but in Japan. There, the government and the private sector-
particularly the banking sector- are engaged in a kind of collusive
public-private partnership that encourages banks to continue
issuing bad credit to companies without fear of reprisal. Designed
to foster business, this sort of anti-integrity 'partnership'
paradoxically ends up fostering both public sector corruption and
private sector mismanagement, and transition states would do well
to heed its negative example.
I seem
to be saying two contradictory things, I realize. First, a level
playing field and high degrees of institutional (and perhaps
interpersonal) trust seem to be necessary for public-private
partnerships to succeed. But on the other, trust can very easily
turn into collusion, especially without standards of professional
conduct and strategic direction. Personally, I believe the danger
of the latter for transition states is greater than the former.
Because of that, it seems that some kind of adversarial
relationship between anti-corruption coalitions and government is
absolutely essential for policy change. Otherwise the incentive for
governments to depart from corrupt practices simply does not
exist.
Aside
from elaborating specific problems facing public-private
partnerships, as a donor representative I am often asked how
western societies manage to "solve" their corruption problems.
Sometimes the question is more subtle: how did the West manage to
pass through its 'robber baron' phase of capitalism and keep its
political institutions intact? The inherent assumption is that the
West faces far fewer developmental challenges in this
area.
First, I
want to make it clear that I do not believe that western societies
are any more moral than their eastern counterparts; in fact, they
may be less so, as paradoxical as that may sound. But the West
undoubtedly faces fewer developmental challenges in this area. The
main difference is that in the West is that the price of corruption
is much higher and its marginal utility to the corrupted person
much lower than in the East. As the former mayor of La Paz, Bolivia
once remarked, corruption is not a crime of passion, but of
calculation. If you systematically raise the price and decrease the
benefit, people will simply behave differently. That is a highly
economistic view of corruption, but I believe it is well-merited. I
want to assure my transition state colleagues that if the price of
corruption were as low in the West as in the East, we would see
just as many scoundrels. All people everywhere will probably behave
immorally if given half a chance. If this is true, and I believe it
is, then the trick is to give them less and less of a chance over
time. This is not to disparage the role of ethics training; indeed,
I believe it is a critical component of economic measures, but to
acknowledge the importance of getting the right incentives in
place.
Second,
even with some very strong institutional safeguards, many
westerners, not just Americans, increasingly believe that their own
public institutions today are largely bought and paid for by
special interest groups. Thus, campaign finance reform for
political leaders and parties is an issue being debated today, not
only in the United States Senate, but across all of Europe, which
is no less plagued by its own type of scandals involving illicit
political party financing. Without saying this belief is true or
false, it certainly exists, and should be a caution to those who
look too closely to the West to replicate models of behavior. I
believe there is much western societies can help transition states
with, but the entire question of political financing is an issue
clearly western societies have not solved very well, and Western
guidance there may not be of much assistance.
Third,
what seems to have played one of the strongest roles in fostering
integrity over time has been the presence of a strong, viable,
professional political opposition. Municipal corruption in places
like Chicago and New York was only chipped away over time because
the political machines that ran these cities eventually lost their
power, or found it gradually taken from them through the ballot
box. So although it is not saying anything new, democracy is still
critical to integrity, especially at the local level.
Fourth,
economic growth really matters. With a growing economic pie,
corrupt elites are more open to policies which regularize economic
processes, or subject them to greater scrutiny and transparency.
Elites always have incentives to pursue order, but they can afford
to do so under positive economic conditions, without damaging their
own patronage networks. But under conditions of zero or negative
growth, I fear the incentive to engage in transparency is simply
absent; in fact, the reverse might be true. For countries most of
southeast Europe, that is clearly bad news. Nonetheless,
public-private partnerships organized around corruption must
remember that their goal must not only be about increasing
transparency, but about increasing real economic performance- a
difficult passage between Scylla and Charybdis.
In
summary, the accumulated experience of public-private partnerships
across sectors and regions is a mixed one, without strongly
identifiable conclusions. "While transition states should be
receptive to western experience, and donors should make stronger
efforts to put forward their best practices, many of the issues
corruption partnerships face are new ones, or ones where western
experience has either been far from uniform, or unable to solve.
Chief among these challenges, perhaps, is the need for new
partnerships to maintain their integrity and independence in the
face of new economic and political challenges. How they do this
will determine, in large measure, whether our assumptions about
their effectiveness are indeed warranted.