This study was commissioned by the Ministry for Foreign Affairs of Finland (MFA) in order to summarise the most important theoretical and practical lessons learnt on corruption in two of Finland’s long-term development partner countries, Nicaragua and Tanzania. In addition to providing an overview on corruption issues, the study also analyses the linkages between corruption and poverty, and summarizes the relevant debate on gender and corruption. It is based on the literature and relevant public documents, supplemented with interviews and first-hand observations in both urban and rural areas in Nicaragua and Tanzania.

The study supports the hypothesis that corruption and non-delivery of services in key sectors such as health have gender-specific poverty consequences. Corruption drains public resources and diverts them from the development of crucial infrastructure and social services. As such, corruption supports, stabilises and deepens inequality within societies. Corruption can, therefore, be seen as a mechanism that produces and perpetuates social and economic inequality; it constitutes a regressive redistribution of resources from the poor to the non-poor.

In the case of basic public services such as healthcare and primary education, the impact of corruption is felt disproportionately by women and the poor, who are most dependent on public services, and have no alternative even when facing corrupt practises in a life threatening situation, such as complicated birth delivery. This concern was expressed in the interviews with both public servants and civil society representatives in Nicaragua and Tanzania, who emphasised the need to strengthen sectoral oversight mechanisms and transparency. The latter is crucial for making civil servants better accountable to service users.

The socio-political and historical contexts of Nicaragua and Tanzania differ substantially from each other. In Nicaragua, political corruption is manifested in the clientelistic political culture, which is reinforced by a culture of spoils in which political power is understood as a legitimate source of personal enrichment. Corruption in Nicaragua – as perceived by citizens – is not characterised by everyday corruption, but more by corruption at the level of the political system. In Tanzania, the current situation in terms of incidence of corruption is subject to debate. While everyday corruption in Tanzania seems to have declined since the worst years of economic crisis, it continues to be the form of corruption felt directly by the majority of Tanzanians, even if high level political corruption is receiving more attention in the media. The perceived high prevalence of corruption on all levels in many developing countries is linked to what is known as the ‘state crisis’. This crisis affected the state-led development model of the 1980s, and was manifested in the massive employment of unproductive civil servants and subsequent bankruptcy of the employer-state. It has contributed to the exposure of corruption in high places, and the incapacity of the state to control everyday corruption at lower levels. The expansion of corruption has produced a kind of ‘corruption culture’ with a tendency to permanence. Development aid has often failed to address the problems corruption is causing in partner countries, and has in some cases even strengthened it by inducing an inflow of assistantship and clientelism favourable to corruption.

In both Nicaragua and Tanzania, the main focus of donor support to anticorruption work has been on the executive, while democratic oversight institutions on both the national and local levels have been left with a marginal role. There are various examples of vociferous, but often hollow, rhetorical anti-corruption campaigns by the executive, which seem to have been set up merely to appease the donor community or to discredit and eliminate political opponents. Anticorruption strategies very often stem from a presumption that all citizens have equal access to anticorruption bodies. This not the case in most of the developing countries. It is worth mentioning here that the new aid modalities, especially budget support, provide a real opportunity to strengthen the role of oversight institutions and to focus on the poverty reduction aspects of anticorruption activities.

The donor community has also had problems in finding a common response to the occurrence of corruption, especially in politically difficult environments. Recent initiatives, for example the EU’s Governance Assessments, World Bank anti-corruption strategies, and Nepad’s African Peer Mechanism, are a very welcomed effort to harmonise the approach of the donor community towards good governance. They also provide an excellent platform for a constructive dialogue to discuss the challenges corruption is causing to the partner countries and their citizens. Such initiatives are also bringing the donor community to realise that accountability in development is not only the accountability of the partner countries to the donor countries, but also the accountability of the partner countries to their own citizens.

Effective anticorruption work cannot rely on ephemeral ‘champions’ or the transient political rhetoric of the day, but must be anchored in permanent, democratically elected, institutions such as the parliament and local councils. Democratic governance includes, among other things: the involvement of citizens in choosing and overseeing those who govern them, respect for the rule of law and access to an independent justice system, effective institutions, and access to information. While good governance means more than tackling corruption, corruption is a serious symptom of bad governance and the lack of a closed network of social capital on the national level. The problem of the formation of negative, bonding social capital in the practice of corruption is an important element that has so far been neglected in anticorruption strategies.

Studies of corruption and gender have mainly focused on the relation between the number of women in public office and the level of corruption, while less attention has been paid to the differential impact of corruption on the well-being of men and women, and how the gender differences are addressed in anticorruption strategies. While bringing more women into politics and public office is important for advancing gender and social equity concerns, what matters is not the simple access of women to power, but the means of their access and the nature of the institutions in which they function. Merely increasing the numerical presence of women in decision making bodies, for example through quotas as in Tanzania, does not necessarily have a tangible impact on policy making and implementation if the structures of accountability are lacking or flawed.