Anti-corruption as a National Security Priority: Planning the Development Response

Introduction

In early June, the Biden-Harris administration issued a National Security Study Memorandum (NSSM) declaring anti-corruption a core national security priority. According to the World Economic Forum, $2 trillion is lost to corruption each year, with developing countries bearing the brunt of the costs. Yet, the uptick in discussion of corruption suggests there is an opening for new ways to take on the endemic challenge, including by placing development tools at the heart of the response. 

Prior to the NSSM, the U.S. Agency for International Development (USAID) only had one full-time career staff member with an anti-corruption portfolio, and the original USAID strategy on anti-corruption (2004) is considered to have reached “sunset,” meaning it is far past its five-year lifespan and has not been updated or renewed. There is also a programming guide on anti-corruption, created in 2015, to provide guidance for practitioners. The president’s fiscal year 2022 budget request of $50 million for rapid response efforts to take advantage of “crucial windows of opportunity” to fight corruption has the potential to be catalytic. The resources can empower USAID’s newly established anti-corruption task force to think creatively about a development response to corruption that aligns both political priorities and technical know-how.

Often, political initiatives at USAID succeed or fail based largely on their ability to galvanize the agency systems and staff. Simply put, success rests on the ability to get mission staff around the world to implement programming in direct support of the political effort. On this front, USAID is off to a good start with a new senior-level coordinator on anti-corruption, who created a high-level agency task force and staffed up quickly (and with experienced hires and internal staff details). Even more impressively, USAID’s administrator has begun to raise corruption as an issue of concern when meeting with foreign leaders. Therefore, while updating the 2004 anti-corruption strategy is important, USAID leadership should first focus on new tools and mechanisms to support that practical implementation. This will require development leaders to balance high-level political objectives with ensuring that staff have the policy guidance, tools, and resources to do the work. This commentary highlights a few actions the USAID team might consider as they do just that.

Recommendations

First, the USAID team has already identified the need to harness the lessons of the conflict, stabilization, and humanitarian assistance practitioners. Its knowledge and best practices in operating flexibly and adaptably in difficult and complex contexts are impressive. This analysis has identified three core areas to focus knowledge transfer. First, flexible mechanisms: the ability of the Office of Transition Initiatives (OTI) to create flexible procurement mechanisms is one example that the rapid response mechanism will need to harness to quickly deploy people and funds. Second, staff deployment: the Bureau for Humanitarian Assistance regularly deploys staff through Disaster Assistance Response Teams (DARTs), made up of standby technical staff who are able to deploy quickly after a disaster occurs. The agency deploys DARTs following its issuance of a disaster declaration. The task force may want to consider something similar: a corruption declaration to ensure clarity about the terms of deployment. Third, trust building as a precursor to action: USAID’s Conflict Violence and Prevention (CVP) teams are well recognized for their ability to build trust as a precursor to important peace and reconciliation work, and many of their methods will translate to anti-corruption efforts.  

The agency will also need to bring together both political objectives and operational imperatives. In 2017, the U.S. Stabilization Assistance Review (SAR) identified the need for the U.S. government to align behind a common political objective. It also organized different U.S. agencies around clear roles and responsibilities for stabilization. The SAR named USAID as the lead implementation agency for carrying out political objectives for the Department of State. The roles and responsibilities should be clearly articulated for the anti-corruption space as well, as there is most certainly a political objective. Both the State Department and the Department of the Treasury will be critical partners to bringing all the interagency tools to bear.

Second, the new Rapid Response Mechanism (RRM) should consider ways to place Covid-19 response management front and center. The Covid-19 crisis puts millions of development dollars at risk of corrupt forces. The speed and scale of this spending has created new opportunities for state-level corruption, ranging from fairly mundane examples like demanding bribes for medical services to more systemic forms of financial malfeasance, shady procurement practices, and opaque spending. Simply put, the stakes for just assistance have never been higher with the need for a just recovery never greater. Engaging allies and working through multilateral institutions, USAID should ensure appropriate checks on Covid-19 spending reflect good practices in donor assistance.

Third, the RRM should be developed in partnership with multilateral agencies to enhance opportunities for burden sharing among allies and shared implementation on Covid-19 and beyond. The recent historic United Nations General Assembly Special Session (UNGASS) on anti-corruption resulted in a UNGASS political declaration, now serving as a the center point for the United Nations to organize around. The United Nations Development Program (UNDP) and the United Nations Office of Drugs and Crime (UNODC) have created a UN common position to increase effectiveness of anti-corruption programming. UNODC supports the preparation of country review reports, which use a peer review process. The reports provide an excellent foundation for analysis that might be useful as USAID works to restore its capacity to assess corruption trends locally.

The U.S. government’s rapid response programming should maximize engagement with UN operational bodies to ensure opportunities to align limited resources, working through joint implementation programs. UNODC has recently established regional hubs—including the first hub in Mexico City—to coordinate multidonor efforts to address various components of anti-corruption. Recent statements from the G7 call for shared action on corruption through improved sharing of illicit finance activities, the use of shell companies, and hidden illicit wealth. Similarly, an EU-U.S. Summit 2021 Statement includes a shared commitment to combating corruption across financial, economic, and political systems. Taken together, these statements suggest other member states are keen to collaborate on this effort.

The new G7 Build Back Better World (B3W) initiative also offers the opportunity to enhance coherence across efforts working at the nexus of corruption and infrastructure, specifically as member states work to ensure that national procurement systems are resilient to corruption. This might include building on the success of the United States Trade and Development Agency’s Global Procurement Initiative (GPI), which has been operating since 2013 in partnership with the George Washington University Law School and the Massachusetts Institute of Technology to train foreign procurement officials on best practices in infrastructure financing, such as considering lifecycle costs and looking beyond the lowest-cost bidder. The program currently supports 13 partner countries through engaging with academia, building in-country capacity, and organizing trips for foreign procurement officials to observe state-level procurement reform in the United States. The GPI is successful because it brings to light the lifecycle costs of a project, not just initial costs, and thereby elevates the inherent link between quality infrastructure and sound procurement practices.

Fourth, in addition to significant procurement reform, USAID will need to invest in high-risk sectors to better understand where corruption is prevalent. The two early and critical sectors are the green and digital sectors. As part of the B3W initiative, both sectors offer both quick wins and core challenges. On climate, policymakers need better visibility on the role of corruption in the extractives industry. This might be furthered by rejoining the Extractive Industries Transparency Initiative (EITI) which is leading efforts to ensure that new rare earth supply chains (necessary for the administration’s stated goals on green energy) operate free of corruption. The EITI is active in 51 countries, where it works to disclose revenue from the oil, gas, and mining sectors. The United States joined the initiative in 2014, only to leave in November 2017, under the Trump administration.

Using the Digital Development Principles, USAID can work to engage technology in improving the efficiency of development solutions that address corruption. Harnessing technology was a common priority across member states’ contributions to UNGASS deliberations. However, best practices and operational approaches remain disparate. USAID can lead this conversation by ensuring the task force includes technology-savvy staff who know how to harness innovative systems reform in support of transparency. For example, the World Bank’s programming in support of open contracting and stolen asset recovery have leaned heavily on employing new technologies, which might offer a starting point for USAID engagement.

Finally, across sectors, success will depend on monitoring and evaluating outcomes. At the global level, the United States should reinvest in the World Bank’s Doing Business indicators as one part of a robust monitoring framework on anti-corruption. The State Department and USAID are likely to begin reporting on a new standard indicator for missions to report on dollars spent and programs established. Setting up that indicator in alignment with the World Bank’s existing data set would go a long way to ensuring missions can begin to report early and often and show quick progress to Congress.

Kristen Cordell is a Council on Foreign Relations international affairs fellow with the Project on Prosperity and Development at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Her views are not representative of her home institution.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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