The Development Response to Anti-corruption

Q1: Why is everyone suddenly talking about anti-corruption?

A1: In early June, the Biden-Harris administration issued a National Security Study Memorandum (NSSM) declaring corruption a core national security priority. The president's 2022 budget request included $50 million for rapid response efforts to take advantage of “crucial windows of opportunity” to fight corruption. The NSSM coincided with the U.S. high-level delegation to the historic UN General Assembly Special Session against Corruption (UNGASS), a collection of parties of the UN Convention against Corruption. The UNGASS resulted in a UNGASS political declaration which has been both lauded and critiqued by advocates. The declaration was followed in short order by a G7 statement calling for shared action on corruption through improved sharing of information on illicit finance. Later the same week, the United States and the European Union issued a summit statement that included a commitment to combating corruption across financial, economic, and political systems.

Of course, the challenge of corruption is not new or easy. According to the World Economic Forum, $2 trillion is lost to corruption a 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. The recent international commitments on anti-corruption will only be as strong as the ability of the respective development agencies—namely the U.S. Agency for International Development (USAID)—to coordinate more effectively within the U.S. government and with our allies and to take a long-term, systemic approach to combating the problem.

Q2: What role will development play in anti-corruption?

A2: USAID’s anti-corruption portfolio has ebbed and flowed in recent years. According to a USAID data set, between 2007 and 2013, the agency had some 300 projects on anti-corruption across 74 countries, valued at just over $6 billion, with Afghanistan and Iraq constituting the largest programs. Based largely on those experiences, USAID issued a programming guide on anti-corruption in 2015 to provide guidance for practitioners. Despite the investments during that period, these projects mostly remained siloed from other efforts and were not able to achieve broader impacts to such a complex problem. There is only 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.

In the last two months, USAID has made very exciting steps toward anti-tacklingcorruption, including the establishment of a task force and the announcement of an executive director to run it, reporting directly to the administrator. To be successful, this task force will need to ensure linkages between anti-corruption efforts and the many bureaus and operating units across the U.S. government and the globe. This critical organizational buy-in, as well as opportunities and mechanisms to reimagine the way projects are designed and managed with the input and participation of those on the front lines of the work in developing countries (through nimbler contract and grant-making vehicles), is the difference between a successful and unsuccessful task force within the USAID.

The task force will need to map existing anti-corruption programs and think through existing gaps and good practices. While a new rapid response mechanism opens up new space, the task force will need to think through larger institutional capacity, including the linkages to other key sectors and policy objectives. To do so, development experts should borrow from analogous policy areas, such as stabilization, that can support and then link local actions to broader national-level policy goals. The 2017 Stabilization Assistance Review highlighted the alignment of assistance behind a locally driven, globally legitimized objective as an important component of its success. The same is likely true for anti-corruption and a strong relationship between interagency partners will help ensure it.

Q3: What multilateral structures are necessary?

A3: Establishing USAID’s task force will be concurrent to a UN process (run out of the secretary general’s office) of developing a comprehensive framework “to support States in their efforts to measure corruption, its impact, and all relevant aspects of preventing and combating it.” This outcome from the UNGASS political declaration represents an opportunity for the U.S. government (USG) to be influential in how the UN system is thinking through corruption and to ensure widespread inclusion of development tools, including those run by the United Nations Development Program (UNDP). Civil society actors and activists also need to have a voice in both the UN processes and U.S. policy development.

As another outcome of UNGASS, the USG announced its intent to host a follow-up conference of states working on anti-corruption in 2023. This deadline, alongside the nearer-term Summit of Democracies, is an important milestone for those working on development responses to anti-corruption. Another important juncture is the High-level Political Forum this month, to account for member states’ progress on Sustainable Development Goal 16 on peace, justice, and security. The nexus between the objectives of SDG 16, a just recovery to the Covid-19 pandemic, countering authoritarian influence, and anti-corruption is clearer than ever.

Q4: What is the legislative agenda on anti-corruption?

A4: The impact of Covid-19 on corruption around the world has also prompted the U.S. Congress to get involved. There are several bills circulating focused on addressing corruption, illustrating a strong linkage between the executive and legislative branches. Many have their origins in the bipartisan Congressional Caucus against Foreign Corruption and Kleptocracy, created in June 2021, and the Helsinki Commission.

The first bill, the Countering Russian and Other Overseas Kleptocracy (CROOK) Act, was introduced by Senator Ben Cardin (D-MD) and Senator Roger Wicker (R-MS). The act supports programs that combat corruption and strengthen the rule of law, including through the creation of a rapid-response Anti-Corruption Action Fund. This fund would be supported by penalties on Foreign Corrupt Practices Act violations over $50 million, with the expectation that this would generate around $15–30 million a year, thus allowing the action fund to be budget neutral. Unlike its 2019 predecessor, the 2021 CROOK Act has broad support. It also calls for an interagency task force to coordinate across the USG (beyond the USAID taskforce, but likely connected to it).

The Justice for Victims of Kleptocracy Act of 2021, introduced by Senator Richard Blumenthal (D-CT) and Senator Marco Rubio (R-FL), would mandate a published list of money stolen by kleptocracies and recovered by U.S. law enforcement. Representatives John Curtis (R-UT) and Tom Malinowski (D-NJ) introduced the Foreign Corruption Accountability Act, which closes a preexisting loophole and finally allows the Unites States to block visas of foreign private citizens who engage in corruption. Senators Ben Cardin (D-MD) and Senator Roger Wicker (R-MS) introduced the Global Magnitsky Human Rights Accountability Act, a reauthorization of a 2012 law, which, in addition to blocking visas, allows the United States to block property under U.S. jurisdiction and restrict Americans from engaging in business with those found to have engaged in human rights abuses or corruption. Finally, Representatives Adam Kinzinger (R-IL) and Tom Malinowski (D-NJ) introduced the Golden Visa Accountability Act, which creates a database of global visa denials to prevent corrupt officials from purchasing visas.

Q5: What should development practitioners be thinking about as this moves forward?

A5: Secretary of State Blinken called countering corruption “absolutely essential” to U.S. foreign policy. To get it right, a more systemic approach to development programming will be a core tool of this objective. USAID should begin the process of a new anti-corruption strategy, building on the following five priority areas:

1. Enhance Capacity: The 2019 CSIS report Fighting Corruption for U.S. Economic and National Security Interests called corruption the major obstacle for the international development objectives and highlighted the need for strategic approaches backed by technocratic and niche programming. Issues around procurement reform, illicit financing, tax conventions, and financial integrity should serve as the foundation for international collaborative action. While the National Security Council has started the necessary strategy and policy processes, practitioners should begin reviewing current USG institutional capacity to not only provide technical support to developing country governments, but also design new procurement and contracting mechanisms to meet their varied and complex needs.
2. Apply Innovative Methods: A strategic development approach to corruption will require innovative approaches and methods that take on the complex and fluid system of addressing governance norms. This will require mainstreaming throughout all development sectors, as well as training for technical staff focal points in systems thinking and adaptive management. Research shows that national-level institutional reforms and legalistic enforcement approaches should be coupled with programs and approaches that address social norms, which are an important driver of meaningful behavior change needed for reforms to be successful. New methodologies like the University of Sussex mapping method and corruption functionality framework should be deployed collectively with other development agencies in-country and with local partners to jointly identify the key players in corruption or influence networks and reveal their roles and interconnections in an increasingly fluid framework.
3. Utilize Technology: The anti-corruption strategy should include robust engagement with digital development practitioners who are thinking through new technological tools. The World Economic Forum's Technology for Integrity platform and the UNDP effort to harness technology in support of the Agenda 2030 framework serve as early best practices.
4. Align with National Security: USAID should carefully understand the intersection between corruption and other ongoing national security priorities, specifically countering malign actors and the emerging relationship with China. In the latter case, development professionals urgently need better visibility on the corrosive practices and increasing levels of corruption associated with China's Belt and Road Initiative. For example, in Malaysia, Chinese officials inflated infrastructure costs in a shadowy attempt to bail out the national development fund. Policymakers should understand the impact of corruption alongside large-scale infrastructure projects and their larger impact on local networks and transparency, as well as U.S. national security interests.
5. Localize Support: Development is well suited for anti-corruption because it is bottom-up in nature. It is poised to address long-standing divides that exist between elites and their grassroots counterparts. USAID’s deep networks are ready for the task but will require a commitment to supporting regional and transnational networks of anti-corruption movement leaders to share tactics, resources, and moral support. This might include direct support to anti-corruption advocates and investigative journalists who have increasingly become targeted for government harassment and abuse. The U.S. government should signal to local actors that they will be supported politically and financially to continue to influence the in-country deliverables presented by heads of states in various international forums. This will require iterative and ongoing partnerships with groups like the Open Government Partnership, whose work goes beyond the summits and behind the scenes to build, maintain, and sustain progress over time in the fight against corruption.

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.

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