Governance, Corruption, And Conflict

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A study guide series on peace and conflictFor Independent Learners and Classroom InstructorsGovernance,corruption, and conflictUnited States Institute of PeaceWashington, D.C.

Table of on, Society, and Governance9Corruption, Conflict, and Peacebuilding16Conclusion22Glossary23Discussion and Investigation Activities27Discussion I: Introduction to Governance and Corruption27Discussion II: Identifying Corruption and the Role of Governance in Conflict28Activity I: Analyzing Recommendations29Activity II: Simulation31Resources44Notes50Study Guide Series on Peace and Conflict1Governance, Corruption, and Conflict

“I Miss Mao” by Xiao Chi AnPreface"I have good news," Fan Xiaoli told herbrother, Fan Dayi, on the phone one day inAugust 2008 (the family's names have beenchanged). "I've finally found someone whocan help us to send Yuanyuan to the school."ThesystemhasTheyinternationalwere talking abouthow togetwitnessed dramatic changes in the recent past. QuestionsYuanyuan,Xiaoli'sdaughter,into a citizens can stand against oppression, injustice, andrelatingtoFanhowand whenordinaryprestigiousjuniorresortinghigh schooltoinviolenceGuangzhou,abusewithoutchallenge all of us to rethink our understanding ofChina. When testresultsandwereconflict.released Asin midinternationalpeaceacademicians, educators, practitioners, privateJuly, Yuanyuandid not do wellcitizens,and students,whatenoughis ourtorole in this increasingly complex global picture? Whatmeet the school's entrance requirements.canwe do to nurture and preserve international security and world peace?Xiaoli was as disappointed as her daughter.She thendecided,as manyChineseOnethingis certain.Wemust peoplemake insure our learners and educators have access to thethe samesituationinformationdo, to try to findsomeonebestavailableaboutthe issues surrounding peace, justice, freedom, andwhocouldhelp.Throughacolleague,shegot upon their interest in and understanding of thesesecurity. Our country’s future dependstoknowaMr.Yang,whoclaimedtoknowcomplicated topics. In the belief that knowledge of these issues is vital to civic education,"some decision-maker in government" andwe have developed this study guide to expand our readers’ perspectives and knowledgesaid he could help get the girl admitted to theofsomeaspectsinternationalschoolif Xiaolipaidofhim70,000 yuan peace and conflict.(US 10,257). "I know it is corruption," Xiaolisaid, "butit worksandGuideeverybody is willing toAbouttheStudydo it if they can afford the money." She paidthe money and by mid-August, Yuanyuan gotThis study guide is designed to servean offer from the school.independent learners who want to find out"It is notso bada deal for my conflictsister becausemoreaboutinternationaland itsshewantsherdaughtertogototheschoolandpossible resolution, as well as educatorsshe can afford the money," Fan Dayi said, "butwho seek to introduce these topics into theirit is sad for the people in this country. There iscurricula.The main text of each guide brieflytoo much corruption. Nominally, we have alldiscussesthemost importantissueskinds of laws,regulationsand responsibleconcerningthesubjectathand,officials, but in reality, only money andespeciallythoseare relatedto theworkcriticalguangxithat(nepotismor relations)whentask ofmanagingconflictsandbuildinginternationalpeople want something done in this society."peace.The Corruption Notebooks, 2008This guide is a briefsummary of the key issuessurrounding the issue ofgovernance and corruption.Please do not use the guideas a reference in your essayor as a bibliographic citation.We encourage you toconsult the references listedin the resource section andin the notes. Theseresources may be includedas references in yourbibliography.GlobalIntegrityOther features of each studyguideinclude: A glossary to help the reader buildvocabulary essential to thediscussions about the topic.Discussion questions and activitiesto encourage critical thinking andactive learning.A list of readings and multimediaresources for additional investigationand learning opportunities.It is our hope that citizens around the world will find the contents of the study guideuseful as they strive to deepen their understanding of international peace and conflict. 2010 by the Endowment of the United States Institute of Peace. All rights reserved.Study Guide Series on Peace and Conflict2Governance, Corruption, and Conflict

About the United States Institute of PeaceThe United States Institute of Peace is an independent, nonpartisan institutionestablished and funded by Congress. Its goals are to help prevent and resolve violentconflicts, promote post-conflict peacebuilding, and increase conflict management tools,capacity, and intellectual capital worldwide. The Institute does this by empowering otherswith knowledge, skills, and resources, as well as by its direct involvement in conflictzones around the globe.Board of Directors J. Robinson West (Chair), Chairman, PFC Energy, Washington, D.C.George E. Moose (Vice Chair), Adjunct Professor of Practice, The GeorgeWashington University, Washington, D.C.Anne H. Cahn, Former Scholar in Residence, American University,Washington, D.C.Chester A. Crocker, James R. Schlesinger Professor of Strategic Studies,School of Foreign Service, Georgetown University, Washington, D.C.Kerry Kennedy, Human Rights ActivistIkram U. Khan, President, Quality Care Consultants, LLC., Las Vegas, Nev.Stephen D. Krasner, Graham H. Stuart Professor of International Relations atStanford UniversityJeremy A. Rabkin, Professor of Law, George Mason University, Arlington, Va.Judy Van Rest, Executive Vice President, International Republican Institute,Washington, D.C.Nancy Zirkin, Executive Vice President, Leadership Conference on Civil Rights,Washington, D.C.Members Ex Officio James N. Miller, Principal Deputy Under Secretary of Defense for Policy Michael H. Posner, Assistant Secretary of State for the Bureau of Democracy,Human Rights and Labor Ann E. Rondeau, Vice Admiral, U.S. Navy; President, National DefenseUniversity Richard H. Solomon, President, United States Institute of Peace (nonvoting)ContactUnited States Institute of PeaceEducation and Training Center/ Domestic Programs1200 17th Street NWWashington, DC 20036www.usip.orgeducation@usip.orgStudy Guide Series on Peace and Conflict3Governance, Corruption, and Conflict

1.IntroductionNote to students who are planning to enter the National Peace Essay Contest:The international community has been paying increasing attention to corruption and howto control it. For one thing, international institutions, governments, donors, aid workers,and peacebuilders all realize that corruption has very high costs for society, butparticularly in states emerging from conflict. Not only can corruption keep states incycles of violence by funding armed groups and criminal networks, but it can alsoprevent the development of effective institutions of governance. When money andresources available to government are diverted by corrupt officials instead of beingchanneled for the benefit of citizens, the clock turns back on social and economicdevelopment. This, in turn, can create further instability. In these ways, corruption,governance, and conflict are all linked. But, corruption exists everywhere in some formand can be pervasive in some societies. Rooting it out is more difficult than it wouldseem.Alexis Sinduhije, candidate for president in Burundi's 2010 elections, talked of thelink between corruption and human rights:Corruption“Crime and corruption are deeply rooted in many countries, including Burundi .In suchcountries, corruption sustains crime, while criminal acts protect the corrupt. In Burundi, the2.state commits crimes against humanity, despite the fact that we are now supposedly ademocracy at peace. Each day, at least 20 people are assassinated for political reasons-—more deathsthan during our 12 years of civil war. And most such deaths today are fueledWhatIs Corruption?by corruption. Crime and corruption reign in poor countries, where there is littleinternationalinterestin eradicatingit. In mycountry,global communityprefersto andAlmosteveryonewhostudies it wouldagreethatthecorruptionis difficultto theviolentabuseofbasichumannearly impossible to measure. When a high-level government official steals millions ofrights. In other corrupt, crime-ridden states, rich natural resources and strategic locationsdollarsfor his/her own personal gain, it’s relatively easy to identify that as corruption.serve as a protection from scrutiny or action. Global cartels also support crime andBut, what if your neighbor gave preferential treatment to a friend or relative in hercorruption--working to protect their own kind even when it is not in the best interests of thebusinessdealings?if a parenta donationa school inbroad population.OneIsofthatthe corruption?most striking Whatexamplesof this ismadehow theleaders atifyouliveinaconflict-ravagedcountrybordering Zimbabwe protect President Robert Mugabe from the accusations of “colonialwherefood supplylimitedand youthe officials a little bit of money under the tablepowers”—feedingtheiscycleof crimeandpaycorruption.”to get extra rations to feed your hungry family? Corruption exists at many different levels.And, someAswouldarguethatBiga Question:definition Howfor corruptionis impossiblebecauseit isandaquotedin “TheCan NationsBreak the Cycleof Crimeconcept that is culturally determinedand variessocietyto (Marchanother.Corruption?”in fromWorldonePolicyJournal22,For2010).example, gift-giving to officials may be expected in one country and prohibited by law inanother. For the purpose of this guide, corruption involves the misuse of power by thosewho hold it—people who, in their official position, exploit the power with which they areentrusted by seeking private gain.The private gain obtained by corrupt public officials, who have been entrusted withguiding and implementing public policy and service, is at the expense of both thecommon good and of those who don’t “cheat the system.” In this sense, corruption iswidely viewed as an immoral practice and is increasingly condemned around the world.Even those compelled to participate in corrupt systems in order to survive are frequentlyfed up with the role that corruption may play in their daily lives. Corruption creates asystem whereby money and connection determines who has access to public servicesand who receives favorable treatment. Kofi Annan, former Secretary General of theStudy Guide Series on Peace and Conflict4Governance, Corruption, and Conflict

United Nations, put the cost of corruption succinctly in his Foreword to the 2004 UnitedNations Convention Against Corruption. Calling corruption an “insidious plague that hasa wide range of corrosive effects on societies,” he added that it diverts funds intended fordevelopment, undermines the ability of governments to provide basic services, feedsinequalities and injustice, and discourages foreign aid investment.”1These practices have particular repercussions in countries emerging from conflictbecause monies that are needed for development of, for example, roads, utilities,education, health care, and transportation, are diverted by greed and desire to surviveand get ahead in a broken system.Corruption can reach many levelsand aspects of governance andspan a range in its scale.Corruption that involves the publicinteracting directly with low- ormid-level bureaucrats whoimplement policies is known as“petty corruption.” A healthinspector taking money from arestaurant owner to give apassing inspection is an exampleof petty corruption. “Grandcorruption,” in contrast, involveshigh-ranking public officials orpoliticians who influence policiesand rules. They can influencepolicy to give businessesunfettered access to naturalresources, or help pass laws orregulations that are in the interestof those who are willing to pay. Inunstable countries, another formof grand corruption occurs whenpoliticians buy votes in order toget elected and, once in office,engage in corrupt practices tocement their rule. And, even instable democracies, it is notuncommon for legislators to usetheir positions of power to rewardtheir financial supporters withfavors, the awarding of contracts,or the drafting of new laws. Poorregulation over “the flow of privatemoney into election campaignsand political party coffers” is the“number one governancechallenge around the world,”notes the watchdog group GlobalIntegrity in its 2008 report.2“I Miss Mao” by Xiao Chi An"I have good news," Fan Xiaoli told herbrother, Fan Dayi, on the phone one day inAugust 2008 (the family's names have beenchanged). "I've finally found someone whocan help us to send Yuanyuan to the school."They were talking about how to getYuanyuan, Fan Xiaoli's daughter, into aprestigious junior high school in Guangzhou,China. When test results were released in midJuly, Yuanyuan did not do well enough tomeet the school's entrance requirements.Xiaoli was as disappointed as her daughter.She then decided, as many Chinese people inthe same situation do, to try to find someonewho could help. Through a colleague, she gotto know a Mr. Yang, who claimed to know"some decision-maker in government" andsaid he could help get the girl admitted to theschool if Xiaoli paid him 70,000 yuan(US 10,257). "I know it is corruption," Xiaolisaid, "but it works and everybody is willing todo it if they can afford the money." She paidthe money and by mid-August, Yuanyuan gotan offer from the school."It is not so bad a deal for my sister becauseshe wants her daughter to go to the school andshe can afford the money," Fan Dayi said, "butit is sad for the people in this country. There istoo much corruption. Nominally, we have allkinds of laws, regulations and responsibleofficials, but in reality, only money andguangxi (nepotism or relations) work whenpeople want something done in this society."The Corruption Notebooks, 2008Global IntegrityStudy Guide Series on Peace and Conflict5Governance, Corruption, and Conflict

What Are the Costs of Corruption?There are many economic and social costs associated with corruption, not to mentionlinks to criminal operations and violence. On the financial front, the World Bank hasattempted to attach a monetary figure to the extent of bribery (which does not include theembezzlement of public funds or the theft of public assets). Based on worldwideeconomic data compiled in 2001-2002, the World Bank estimated that the amount ofmoney paid in bribes globally was some 1 trillion.3In part because of how it affects access to public services, corruption particularlyimpacts the poor. “Corruption is costing the developing world billions of dollars everyyear,” indicates the UN Development Program. “It siphons off scarce resources anddiminishes a country’s prospects for development. In a country where corruption isendemic, the consequences are disproportionately borne by the poor who have noresources to compete with those able and willing to pay bribes. In the end, corruptiontightens the shackles of poverty on countries that can least afford it, on societies thatneed every dollar to pay for important social and economic programs.”4 Economicdevelopment is difficult in countries where corruption undermines the development of fairmarket structures and distortscompetition. And, corruptionoften leads to the diversion ofAspects of Corruptionscarce public resources touneconomic high-profileThere are many terms that are used inprojects, such as big officediscussing corruption. Bribery, fraud,complexes and shoppingembezzlement, nepotism, and favoritism arecenters, to the exclusion ofsome commonly used terms. Bribery, annecessary infrastructure projectsoffering of something of value for some actionsuch as schools, hospitals,in return, is one example of corruption. Otherwater treatment plants, andterms associated with corruption include fraudroads. Ultimately, corruption(using a trusted position to deceive for profit),benefits the “haves” at theembezzlement (the theft of governmentexpense of the “have-nots,”resources by those in authority), andwhich can lead to growingnepotism (favoritism shown to friends ofeconomic and socialrelatives by those in power). While corruptioninequalities.can include all of these terms, it is not justAnother societal cost is thatcorruption is linked to thedevelopment of organized crime,including the involvement ofcriminal syndicates in moneylaundering and trafficking inpeople and drugs. In Colombia,for example, narcotics traffickingis the source of much of thecountry’s corruption at highlevels. Alliances exist betweenpoliticians and the illegal armedgroups that make money off of alucrative trade in cocaine, andStudy Guide Series on Peace and Conflictfinancial gain; there can also be political andlegal gains that often include exclusive accessto decisionmakers and political and legalauthorities. Favoritism is practiced widely, butwhen there is no exchange of money, it is notlegally considered bribery. A favor is simplyexpected in return at some later stage. It maybe a favor granted in return for politicalsupport or an appointment to a position. Suchpreferential treatments given to friends,relatives, or business partners are verycommon in some cultures, but some arguethat such practices undermine the concept offair play.6Governance, Corruption, and Conflict

want to see their business continue. A booming cocaine trade is also breeding corruptionin West Africa, particularly in places like Guinea-Bissau which, notes the UN, “is saddledwith high-level corruption and a near-total absence of the rule of law, allowing cocainegangs to operate with impunity.”5 In other words, criminals involved in drug traffickingare bribing public authorities so that they can operate without interference.Finally, corruption has links to conflict. Although corruption is not likely to be the onlyfactor responsible for the destabilization of a country, it can have a major impact onundermining the government—and public confidence in governing institutions—which, inturn, can become a driver of conflict. The links between corruption, governance, andconflict are complex and interrelated, and they are a reality in many countries. Forexample, in the Caucasus, corruption and conflict are intertwined in the states andbreakaway regions. Corrupt rulers, powerful and contending clans, and networks ofelites who have a shared stake in corruption in states such as Georgia, Armenia, andAzerbaijan have used “state power to intrude into the economy with impunity” andcreated “violence and protection” markets.6 As a result, governing institutions are weakand there is a pervasive insecurity. While nationalism and ethnic loyalties have alsoplayed a part in conflicts in the Caucasus, links to corruption are intertwined with theseand have contributed to the region’s instability. Charges of widespread corruption wereat the heart of the public demonstrations that led to the overthrow of Kyrgyzstan’sPresident Kurmanbek Bakiyev in March 2010.Where Is Corruption Most Prevalent?Corruption is very widespread and, because of its diverse forms, it is extremely difficult,if not impossible, to measure. Nathanial Heller, Managing Director at Global Integrity,compares measuring corruption to “trying to measure a black hole. You can’t measure itbecause you can’t see it,” he adds.7 Global Integrity, therefore, does not measurecorruption, but rather assesses its opposite. That is, it examines the anti-corruption andgood governance institutions, mechanisms, and practices that are in place. On thisbasis, the countries it identified in 2008 as not having these elements and, thus, being at“serious risk for high-level corruption” included Angola, Belarus, Cambodia, China,Georgia, Iraq, Montenegro, Morocco, Nicaragua, Serbia,

A study guide series on peAce And conflict for independent leArners And clAssroom instructors Governance, corruption, and conflict Un i t e d St a t e S in S t i t U t e o f Pe a c e Washington, D.C.

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