Aid does not cause corruption in Cambodia

Corruption in Cambodia existed long before aid was planned, but the influx of aid funds affects corruption and its effects. Short-sightedness and a lack of understanding of power relations make development a contributing factor. But for effective and situational assistance, it is possible to contribute to the fight against corruption, writes Karl-Anders Larsson, former embassy councilor in Cambodia.

Recently, the role of aid in the corruption of Cambodia has attracted media attention. On 5/6, for example, Svenska Dagbladet published an editorial with the headline "Sweden finances corruption”. The question is important, but no one seems interested in a serious discussion. This also applies to civil society actors. More studies and in-depth analysis are needed to understand the problems and (if possible) design situational assistance initiatives.

Corruption is not a new phenomenon in Cambodia, as little as in any other country. It existed long before the aid was intended. Corruption comes in many different forms and exists at different levels in society. Corruption is based on informal, unwritten rules and traditions, and seldom becomes a noticed problem until these rules come into conflict with society's formal rules and laws.

A large influx of development aid funds affects corruption and its effects in many ways. Cambodia is an interesting example because traditional aid to the country was almost non-existent before 1990; so there is a clear before and after.

Inefficiency and aid dependency

For 25 years, aid has now been an important source of income for the Cambodian state and for domestic institutions and civil society organizations. The aid has explicitly aimed to contribute to good governance, and during this time the Cambodian state administration has undergone some streamlining. Modern institutions, for example in financial management, auditing and trade, are now established. Aid has played a role in this development, but has not succeeded in helping established institutions to become open and democratic. This is mainly due to inefficiency in the design of development assistance and a lack of understanding of the power relations in Cambodian society, where personal relations play a major role in the distribution of power and resources.

The inefficiency of traditional development assistance is due, among other things, to a lack of adaptation to local needs and to the structure of society as a whole, and that incorrect incentives are created when work for foreign donors is more profitable than working for the state. Another important reason is that there is strong hesitation among donors to use the domestic systems for implementing development assistance. Since the risk of corruption (quite rightly) is perceived as great, donors instead build their own, parallel systems and therefore do not contribute to sustainable capacity development of the domestic systems. Another reason is the many different forms of reporting aid, outside the country's budget system, which contribute to a lack of transparency regarding the financing of the country's development. Development assistance is the least transparent and most unpredictable resource for development financing.

It is also important to understand that the long-term influx of aid funds in Cambodia has created a dependency on aid among both state and civilian actors. This dependency on development assistance in turn affects the incentives and behaviors of actors, as foreign funding has become an objective for many of them.

Invest in analysis!

The problems could be remedied if donors designed programs and initiatives in accordance with the so-called Paris Declaration on Aid Effectiveness, which was adopted in 2005, but which unfortunately seems to have been forgotten by most people today. On the contrary, the donors mainly look at their own short-term interests in being able to report how their particular contribution has benefited. The short-term nature means that not enough investment is made in analyzing the risks of corruption in recipient countries, and that development assistance can thus not be designed to avoid these either.

The aid does not cause corruption in Cambodia, but many claim that it is a contributing factor, mainly because the aid strengthens the power structure built around Prime Minister Hun Sen. This is what the book is about Hun Sen's Cambodia by Sebastian Strangio. Strangio believes that two economic systems have been established; one to show “results” for donors and another to maintain the power elite and the complex network of personal power relations found at all levels of society. Aid has contributed to some tangible results, especially in education and health care, but at the same time Hun Sen has been extremely skilled in using the aid-financed system to strengthen its own power.

"It is not enough to control the money"

Despite all the challenges, however, there are opportunities for aid to contribute to the fight against corruption in Cambodia. Some institutions, such as the Cambodian equivalents of the National Audit Office and Statistics Sweden, could, for example, be developed in a transparent and democratic direction independent of the rest of the system, as there is an internationally agreed standard in these areas. The decentralization reform has obviously led to a lot of good results and is an example of a reform initiated by development aid, but which has been integrated into and allowed to influence the domestic structure. It is also, according to many, the reform that has most successfully transformed Cambodia in a democratic direction. Reforms of, for example, tax systems and procurement procedures can be more controversial, but provided that the reforms are implemented with increased transparency as a primary objective, they should also be able to be supported by development assistance.

The conclusion is that aid must be more coordinated and effective, and that it must be adapted to the nature of corruption in each individual country and situation. It is not enough to control the money. It is more important to understand the power structure and how development assistance affects the incentives of various actors. There are no development assistance projects that can be implemented regardless of context or domestic structures, especially not in institutional development.

Karl-Anders Larsson

This is a debate article. The author is responsible for analysis and opinions in the text.

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