Geographies of African corruption and embezzlement of funds

The purpose of this paper is to study the uneven geographies of corruption on the African continent. Corruption is an entrenched part of African political culture. However, the degree and impacts of corruption vary widely across the continent, ranging from failed states such as Somalia to the region’s bright spot Botswana. This paper first defines corruption and discusses its causes and effects. It then delves into the specifics of African corruption, including its causes and effects such as patrimonial political cultures, clientelism and the role of natural resource exports.

The study uses data from Transparency International to assess African corruption empirically and geographically, and links its levels of severity using correlations to gross domestic product per capita, literacy, income inequality and freedom of the media.

The major findings are that while the vast majority of the continent’s one billion people live under very corrupt regimes, the impacts of corruption on economic growth are questionable. Few geographic studies of corruption exit.

The paper’s novelty stems in part from being the first to explore African corruption from a spatial perspective, illustrating its widely varying contexts and consequences.

Corruption is a highly visible aspect of African politics, with a number of high-profile scandals standing out. For example, Mobutu Sese Seko, long-time tyrant of Zaire (now Democratic Republic of the Congo), amassed a fortune of US$5bn, equal to the country’s entire external debt, before he was ousted in 1997 (Thomas, 2001; Svensson, 2005). The widespread corruption overseen by Kenya’s Daniel arap Moi is seen in the millions of dollars lost in “massive cash subsidies for fictitious exports of gold and diamonds” in the Goldenberg scandal (Vasagar, 2006). Nigeria’s Sani Abacha (Pallister and Capella, 2000) and South Africa’s Jackie Selebi (Schwella, 2013) are also among public officials implicated in major corruption scandals. More recently, opposition to corruption in Africa was manifest in the events of the Arab Spring. Tunisia and Egypt were among the earliest and the most visible of these revolutions (Anderson, 2011), while Occupy Nigeria arose later to protest removal of an oil subsidy that undergirded an uneasy peace between parts of Nigerian society and the corrupt state (Agbedo, 2012). Kofele-Kale (2006, p. 697) summarizes the dismal state of African corruption succinctly:

Corruption is almost universal across the planet but varies widely in severity, type and consequences. Although corruption is not unique to Africa, African corruption remains pervasive and among the world’s most severe (Lawson, 2009). For example, data from Transparency International (about which more later) indicate that six African countries are rated as “extremely corrupt” (scores under 20) and another 35 are considered “very corrupt” (scores 20-39); only Botswana emerges as a member of the “slightly corrupt” group, and no African country is among the “least corrupt” group which includes most of the economically advanced world. Ninety per cent of Africa’s population – roughly one billion people of 1.2 billion – thus live under very or extremely corrupt governments, a rate that exceeds most of the rest of the world.

Corruption is one of the several factors that have hindered African economic development, a governance issue with a wide variety of deleterious social and political consequences. Unfortunately, geographical analyses of this phenomenon have been highly limited and have been mostly confined to a few case studies of India (Robbins, 2000; Corbridge and Kumar, 2002; Jeffrey, 2002), and a critique of anti-corruption campaigns (Brown and Cloke, 2004). Bracking (2009) offers a rare exception concerning Africa, noting that corruption in Zimbabwe is not an exception to neoliberal rule but an integral part of it. Yet, there are virtually no other works on the spatiality of corruption in Africa.

Although it is arguably the most corrupt continent on the planet, corruption in Africa has been largely neglected by geographers. This paper seeks to fill this void; its aim is to disclose the uneven geography of corruption there and the causes of differences in the level of severity found among its various countries, noting that causes, severity and effects vary across the continent. Its primary focus is on the roles of the “resource curse” and globalization as two predominant forces that have facilitated and constrained corruption, respectively. It opens with an overview of the definitions of corruption, its causes and its consequences. Next, it turns to the specifics of corruption on the African continent, noting the roles played by colonial borders, patrimonial politics, foreign aid and the “resource curse”. The third part briefly summarizes the data used in the empirical analysis; the fourth correlates corruption scores with gross domestic product (GDP) levels and growth, income inequality, literacy, export intensity, reliance on raw materials exports, media freedom and government effectiveness in combatting corruption. The conclusion emphasizes the uneven spatial nature of corruption, its cultural and institutional embeddedness and the uncertain role of anti-corruption campaigns.

In its broadest sense, corruption may be defined as the use of public office and funds for private gains (Bardhan, 1997, 2006). Within this umbrella fall a large number of illicit, illegal and immoral behaviors, including graft, bribes, extortion, embezzlement, inflated payrolls in which the designated payees do not receive funds (“ghost salaries”), over-invoicing, theft of foreign aid, a blind eye toward smuggling, the purchase and sale of legislative votes, nepotistic hiring practices and selling of government contracts, licenses and land concessions, to name but a few. Petty corruption may be practiced on a small scale by few individuals, such as police or customs officials, while grand corruption may be institutionalized as wholesale, well-organized kleptocracies designed to enrich a small elite at the expense of the public. Both types are found in Africa; whereas the former is essentially ubiquitous, the latter varies geographically, depending on several factors such as colonial legacies, the structure of exports and associated revenues and the degree to which international agencies [e.g. the International Monetary Fund (IMF), non-governmental organizations (NGOs)] have intervened in particular states.

Corruption occurs when the expected benefits exceed the costs, and it is thus a form of rent-seeking behavior (Klitgaard, 1988). Benefits are not limited to monetary gains but include acquiring political office, power and prestige. The likelihood of corruption must be measured against the probability of being caught or exposed and the associated penalties. In large part, these reflect the transparency of government actions and the degree of administrative oversight and accountability involved.

Several factors either exacerbate or inhibit corruption. Poor countries tend to have the highest levels (Warf, 2016), and the poor, who rely the most heavily on public services, often face demands for bribes to obtain them. Corruption flourishes in secretive environments in which deals and decisions are made out of view of the public (Jain, 2001). Democratic societies tend to have lower levels of corruption because they create mechanisms for accountability and the enforcement of laws (Moreno, 2002). Indeed, many of the most notoriously corrupt governments at present are profoundly anti-democratic (Treisman, 2000; Billger and Goel, 2009); examples include North Korea, China, Iran and Eritrea. Low literacy rates also contribute: uninformed populations cannot be made easily aware of the extent of government malfeasance. Unsurprisingly, corruption is the most severe in countries without an effective independent media, which serves as a watchdog and a whistle blower (Brunetti and Weder, 2003). Low salaries of public employees are a common cause (van Rijckeghent and Weder, 2001).

Globalization may have several effects on corruption, although the relations between the two are contingent and complex. Foreign investors, for example, may prefer relatively non-corruption environments in which the costs of doing business are low. Lalountas et al. (2011), using cross-section data for 127 countries, found that globalization [in the forms of foreign direct investment (FDI) and import penetration] mitigated corruption in relatively developed countries but had little impact in poorer ones. Corrupt practices such as smuggling or black market money exchanges flourish when government policies are overly restrictive, unduly complicated, irrational, rigid or unrealistic (such as setting official exchange rates too high). Corrupt countries tend to have porous borders through which drugs, weapons or slaves may be moved easily.

Finally, corruption is often associated with the “resource curse”. Economists have noted the “paradox of plenty”, in which resource-dependent economies often perform worse than those lacking in such wealth (Bulte et al., 2005; Humphreys et al., 2007). Raw materials usually command low prices on the world market, and their revenue streams may be easily diverted by well-connected elites. Resource-rich countries may be also more inhospitable to democratic institutions (Jensen and Wantchekon, 2004), particularly when potential public revenues from the exports of oil, copper or diamonds are minimized by poorly enforced taxation policies.

Corruption also reflects cultural norms, which vary widely among societies. Where it is widespread and endemic, it is often accepted simply as another part of doing business. Bribery may be viewed simply as a means to get the bureaucratic machinery to move forward, and enriching oneself at public expense may not be seen as particularly loathsome. As Bardhan (1997, p. 1330) puts it, “What is regarded in one culture as corrupt may be considered a part of routine transaction in another”. Masculinist cultures tend to exhibit more corruption than do societies in which women hold larger shares of public office (Goetz, 2000; Swamy et al., 2001). Parboteeah et al. (2014) suggest that varying ethical climates, including the teaching of ethics in corporate and public sector human resources departments, help to explain the geography of African corruption.

Corruption has numerous corrosive effects on an economy and society. In societies in which it is deeply entrenched, it lowers public morale and creates cynicism and distrust of the state. In Mali, for example, the overthrow of President Moussa Traoré in 1991 led to the burning of customs and tax offices, traditional centers of high-level corruption and embezzlement (Harsh, 1993). Corruption also inhibits the efficiency and effectiveness of government policies, including the appropriate delivery of public monies to their intended ends. Corrupt construction contractors may erect buildings that are shoddy and unsafe, or use public funds to build luxury homes for wealthy politicians. In South Africa, corrupt elites captured the public utilities, awarding themselves with subsidized water, while the poor pay higher prices charged by private firms (Auriol and Blanc, 2009). Nepotistic hiring short-circuits meritocratic hiring systems and fills public offices with unqualified, underqualified or incompetent staff. Corruption can also undermine the quality of education and retard progress in eliminating illiteracy (Reinikka and Svensson, 2005).

Numerous economists have studied corruption’s influences on markets (Mauro, 1995; Bardhan, 1997; Aidt, 2003; Rose-Ackerman, 2006). High levels of corruption are associated with reduced FDI (Wei, 2000; Habib and Zurawicki, 2002). By raising transactions costs, it increases the cost of doing business, notably production and transportation costs, and reduces profits. Corruption raises the barriers to entry for non-privileged groups, notably those lacking in political connections (Fisman, 2001) and funds for bribes and kickbacks. Corruption also increases inequality (Gupta et al., 2002), typically imposing its greatest costs on the poor.

Corruption in africa is a tragedy.