Poverty, aid and corruption

For aid to be effective it must, in its first instance, be delivered to its intended recipients. Combating corruption, therefore, should be the first action of any aid transaction - in order to ensure development can be effected.

This paper considers the pertinent issues in the aid and corruption debate whilst specifically focusing on abuses that can arise in development assistance targeted at poverty reduction. The authors highlight:

• the connection between aid and corruption - corruption by public administrations entrusted with development resources is particularly damaging to poverty reduction
  
• accountability - upward accountability by recipient countries to donors has demonstrated its serious limitations in terms of relevance as well as in its ability to detect corruption
  
• how aid can be delivered to prevent corruption - partnerships based on general budget and sector support face serious challenges in practice. Donors need to ensure that their support is negotiated within a larger framework of domestic government efforts to strengthen integrity mechanisms and address corruption.
  

The authors also offer a number of key recommendations to combat corruption, including:

• donors and partner countries should use comprehensive integrity assessment as an integral part of poverty reduction programmes to seek systemic entry points that allow aid to strengthen integrity and prevent corruption
  
• budget transparency should be supported as an essential aspect of all forms of aid and used to assist recipient countries in fulfilling their global anti-corruption commitments
  
• donors should respond with urgency to requests by recipient countries to support key governance institutions, including the independence and resource base of oversight institutions. In particular, aid should be sought for making the justice system accessible to the poor
  
• donors and recipient government administrations should reform incentives to reward public accountability and anti-corruption measures and develop sanctions to address their neglect.