Corruption and Social Change

Corruption is on the minds of many people in Seattle these days as headlines tell of a financial scandal involving a mid-level manager allegedly stealing $1.8 million from a small business program run under the auspices of Seattle Public Schools.  The Seattle Times called for the resignation of the Superintendent, and the Seattle School Board dismissed her last night.  This comes after a previous superintendent lost $35 million and subsequently resigned.

Corruption is also on the minds of large aid agencies.  The one agency that is frequently held up as the model for all international aid, the Global Fund to Fight AIDS, Tuberculosis, and Malaria, was recently in the news for large amounts of money going unaccounted for in Mauritania, Mali, Zambia, and Djibouti.  According to the Guardian, $34 million went lost out of the $13 billion given out since the Fund started in 2007.

When I started this blog, I didn’t set out to comment on large aid agencies because I know little about them.  I read about them, but I have never worked within one, and I imagine that they are about as idiosyncratic as small, grassroots organizations tend to be.  But a dear friend asked me to comment on a Slate article related to corruption, and the more I thought about the problem of corruption and the solution that they proposed in that article, the more I realized that applying a social change framework to the problem and solution might be helpful in thinking about ways to improve our world.

Corruption is a problem…

There is no doubt that corruption in all its forms stymies economic growth and social mobility.  Having said that, I find it hard to criticize impoverished countries for having corrupt systems when many of these systems were first put in place by colonial powers.  In his book, The Elusive Quest for Growth, William Easterly takes a global tour of corruption, starting with Denver Brewery owner Joseph Coors’ move to have Ronald Reagan appoint several members of his family to the EPA in order to lift restrictions on dumping toxic waste in Colorado.  Evidently, some European countries have decided to punish these African countries by cutting them off from funding, and this seems a blunt approach to a nuanced universal challenge.  Every large agency – from Seattle Public Schools to the Zambian government – can lose money in certain circumstances.

When Jimmy Carter visited Seattle in 1999, he was asked about corruption during a talk at Seattle’s Town Hall.  I remember his reply—that as long as it was limited, corruption was somewhat the cost of doing business in countries with weak government agencies, little public sense of ownership of institutions, and people earning so little that they need to find creative ways to increase their incomes.  We couldn’t stop our work strengthening local governments, inspiring a sense of local ownership, and supporting the growth of local economies because of it; if we did, we would be standing in the way of meeting the critical needs of vulnerable people.

I think of President Carter’s nuanced approach to corruption in this case: the Guardian points out that all of this kerfuffle is over a loss of 0.3% of the total funds allocated by Global Fund.  (By way of comparison, the amount lost to one person in Seattle Public Schools was about 3% of the total 2009-2010 budget.)  The rapid response by European and US politicians suggests that there might be political or other motives at play besides a long term commitment to eradicating these diseases.

But what is the solution?

Given the complex, intractable nature of corruption, why not, as suggested in this Slate article, use mobile technology to by-pass corrupt officials and go right to the source: impoverished people?  In other words, there is a big ugly troll under the bridge over which aid workers must pass.  Rather than pay him off with a few billy goats, why not allow aid workers to put on their little Jetson backpacks and zoom directly to the people they are there to serve?   Modern technology makes this possible.  By circumventing the problem, perhaps we will starve the beast – the troll, I mean—and move towards a world with less corruption.

This solution solves one problem, the “transactional” problem of getting money to poor people, but it doesn’t solve the “transformational” problem of creating a society in which corruption plays a decreasing role in daily life.  In fact, giving poor people in Mauritania an ATM card from which they can draw cash directly from a U.S. agency will do little to foster a sense of local ownership and equality across cultures.  Too much is lost in the cause for efficiency.

The issue of corruption brings up two important issues in social change.  First, how we define the problem will determine how we solve it.  Second, how we relate to money and our need for short or long-term return on investment relates directly to how comfortable we are spending money on transactional vs. transformational solutions to poverty.

Problem definition

By creating a work-around to corruption, we are deciding that the problem is access to poor people, and we are creating a solution that provides direct access around government or other agencies.  We intentionally decide to work around those elements in a society that limit its economic and social potential.  The challenge, however, is that avoiding the problem does not put in place the transformational structures needed to get rid of the problem permanently.  Because the article holds up Brazil’s Bolsa Familia and Bolsa Escola programs as examples of success, we can look at these programs to find reasons for skepticism.

While Bolsa Escola began in 1995 in recognition of education’s critical role in bringing impoverished children out of poverty, the program evolved over time differently in different cities based on political use of the program.  (A full history of both programs and the challenges implementing them can be found here.)  In brief, the Brazilian government gave a monthly stipend to poor families, first to keep their kids in school, and after 2003 simply to alleviate the worst symptoms of poverty.  The result was some decrease in inequality overall in Brazil.  Classrooms were filled with kids that attended because their parents wanted the monthly cash.  Certainly these programs allowed a few more people to move away from the edge of the precipice upon which they lived their daily lives.

What didn’t happen was a transformational shift in the education system.  Most recently, the program was managed outside the Ministry of Education, which maintained no records about school attendance related to the program.  The government did not address the quality of education and teaching methods fundamental to educating Brazil’s diverse population, to ill effect.  In the decade leading up to 2010, Brazilian students languished behind other Latin American children, with among the lowest test scores in basic skills like reading and math.  Children were in school, but they were not necessarily learning.  Within higher education, affirmation action programs began in universities in 2002 in order to increase the number of minorities able to get a university education, important given how under-represented these people were in public and private universities.  (In 2003, only 3-percent of higher education students identified themselves as black or mixed race, and only 18-percent had attended public schools.)  Today, these affirmative action programs remain controversial, a sign that social transformation is still a work in progress.

If the problem is defined to be how to get basic welfare funds to the poor, ATM cards are a worthy solution.  On the other hands, if the problem is defined to be weak government institutions that lead to corruption, more effective solutions can be found in capacity building and de-incentivizing corruption.  The first solution will solve today’s problem.  The second solution will better solve it into the future.

Financial concerns

President Obama appointed Rajiv Shah to oversee the U.S. Agency for International Development, and Dr. Shah is widely quoted as saying, “This agency is no longer satisfied with writing big checks to big contractors and calling it development.”  He  immediately set about transforming USAID into a “modern development enterprise,” an efficient and effective tool to addressing development needs around the world.

The challenge in development, however, is that too much emphasis is placed on cost effectiveness and reduced administration.  As stated in the Slate article by a French official, development is judged more on the basis of expenses than on results, and this has a long term implication for social change.  Fundamentally changing a society affected by the legacy of racism, corruption, etc. is not cost effective.  Collaborative social change—social change involving partners working across cultures—is costly and time consuming as both sides build capacity, expand their communities, and advocate for new laws, policies, or approaches.  The Global Fund, by all accounts that I have heard, is a strong program that deserves space to adapt to the challenges that come from working in countries facing complex social issues.

Besides large scale development efforts, this issue of cost effectiveness and efficiency has an effect on smaller organizations trying to make an impact.  Saundra Schimmelpfennig has written extensively on her excellent blog, Good Intentions Are Not Enough, about how misleading and sometimes damaging too much focus on administrative overhead can be.  Having worked with several small internationally-focused non-profits, I know firsthand how arbitrary “overhead” vs. “program costs” can be when you are making calculations that include collaborative learning across cultures.  If I spend several weeks working with colleagues in Mexico on a budget—thereby increasing their capacity to track their expenses—is that overhead or program?  Money certainly matters, but its tracking must be balanced with holistic outcome-based data that demonstrates long term benefits within local communities.

Effective poverty alleviation requires us to keep one hand on short-term humanitarian support to make sure that people can live healthy and hopeful lives and the other hand on long term transformation that will change the circumstances causing poverty in the first place.  Corruption is a reality in the lives of too many people living around the world, and decreasing its impact should be a critical goal in building societies that are transparent and predictable for those who live within them.  In the short term, creative efforts try to work around corruption’s web of influence.  In the long term, corruption can only be solved through localized efforts that change the societies in which it flourishes.

What do you think?

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3 responses to “Corruption and Social Change

  1. Very impressive weaving together of organizational challenges and human behavior. The type of change in the mission of an organization (transactional versus transformational) is all fundamentally tied to issues of equality, and inequality fuels corruption in a drive for reparations and entitlement. Transformational change speaks to the kind of personal responsibility that is the cornerstone of any ethical system.

  2. Great analysis! Aid being focused on short-term needs & development implying long term transformation are two sides of the same coin. Unfortunately the aid sector (relief + development) not always considers the key dynamics linking both sides & ends up throwing the coin into the air, going for the “lucky” side that got political will in certain time by certain players.

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