EU Aid and the Quality of Governance

Using a panel dataset on 103 developing countries, this paper empirically analyzes the impact of the European aid flows on quality of governance in aid recipient countries. The analysis employs aggregated Official Development Data as well as disaggregated project level data. The results show that while bilateral aid from the largest European donors does not show any impact, multilateral financial assistance from the EU Institutions leads to an improvement in governance indicators. These findings thus suggest that European development assistance can help to promote good governance if aid is allocated at the EU supranational level rather than at the national level of the member states.

Uncovering High-Level Corruption: Cross-National Corruption Proxies Using Government Contracting Data

Measuring high-level corruption and government favouritism has been the object of extensive scholarly and policy interest with relatively little progress in the last decade. In order to address the lack of reliable indicators, this article develops two objective proxy measures of high-level corruption in public procurement: single bidding in competitive markets and a composite score of tendering ‘red flags’. Using publicly available official electronic records of over 2.8 million government contracts in 27 EU member states plus Norway in 2009-2014, it directly operationalizes a common definition of corruption: unjustified restriction of access to public contracts to favour a certain bidder. Corruption indicators are calculated at the level of contracts, but produce aggregate indices consistent with well-established country-level corruption indicators. Due to the common EU regulatory framework, indicators are consistent over time and across countries, while WTO regulations underpin global generalisability. Indicator validity is supported by correlations with well-established perception-based corruption indicators, and novel micro-indicators such as prices and supplier registration in tax havens. The utility of the novel indicators is demonstrated by using them to explain the effect of deregulation on corruption risks at the country level. In order to facilitate wide use of the data and indicators by researchers, journalists, NGOs, and governments, they are made publicly available at digiwhist.eu.

Multi-Nationals and Corruption Systems: The Case of Siemens

Scholars tend to agree and evidence has shown that domestic businesses adapt to the local type of corruption, but little is known whether large multinational corporations also adapt to the local forms of corruption. Institutionalist theories of corruption and of international political economy would suggest that this would be the case, but the hypothesis has not, to our knowledge, been systematically tested. This paper, drawing on investigative materials about the activities of one such multinational, the German corporation Siemens AG, examines how it used corruption and bribery to advance its business around the world. We extrapolate from the logic of four “syndromes of corruption”, as Michael Johnston terms them, to develop specific hypotheses about the kind of behavior multinational corporations would be expected to exhibit when doing business in each of the four kinds of syndromes. We examine and compare Siemens’ activities in the United States, Italy, Russia and China. We find that Siemens did adapt to the local corruption form (or “syndrome”) and used, among others, different types of intermediaries to approach the local elites. The evidence from these case studies supports the institutionalist argument that multinationals distinguish between corrupt environments and further supports the argument that there exist different types, or syndromes, of corruption.

Between condemnation and resignation: Study on Attitudes Towards Corruption in Dar Es Salaam, Tanzania

Tanzania represents one of the well-documented cases of countries in Sub-Saharan Africa where corruption is endemic. This has remained the case in spite of manifold commitments on the part of the regime to fight this problem and of the fact that Tanzania has in place, what is in the opinion of international experts, a state of the art anti-corruption legislation.

This article presents evidence collected through ethnographic research about the attitudes towards corruption of citizens in urban low income areas of Dar es Salaam, the largest city in Tanzania, and explores some of the factors underpinning such attitudes. The research focused on experiences with corruption in the health sector, and on some of the coping strategies that citizens resort to in face of the difficulties encountered when seeking medical attention at public health facilities. With regard to the latter, it is well known that mutual help associations are playing an increasingly important role across Africa, which in turn suggests a relevant set of questions regarding the role that horizontal social networks found in these communities play in relation to prevailing corrupt practices but also regarding their potential role to develop more effective anti-corruption approaches. Regardless of the surge in the NGO “industry”, as denounced by some scholars, witnessed in Tanzania, we are interested in the role of these grassroots level associations as they are exactly of the kind that is expected to generate high levels of social capital, which – in the literature- is associated with favourable governance outcomes.

Academic Dishonesty or Corrupt Values: the Case of Russia

Academic corruption in Russia is extensively spread; it is not an isolated phenomenon. Rather, academic corruption is tightly embedded into the general corruption in society: in politics, business, and in everyday life. This paper illustrates some common types of cheating and corruption as well as the motives of the involved actors for applying, accepting, ignoring and/or pretending to ignore these activities.

Why is corruption in higher education so prevalent? The improper dependences of all the involved actors might it possible. Compared to people without a university education, graduates have better chances on the job market. Some university lecturers might expect bribes in order to return the investments they have made into their own studies. Other university lecturers might water down their requirements and try to be more tolerant, especially to students who are looking for a formal certificate rather than for an education, or who might need to have more time for other activities. If university administrators would receive the same budget from the state, the reduction of staff and lecturers would be not necessary.

Why are studies on corruption in education so important? Younger generations are expected to make changes rather than continuing the old systems. During their studies, young people complete their socialization by acquiring, among other things, more techniques of corrupt behavior and a tolerance for corruption. In Russia more than 80% of all young people go on to university and almost all of them finish it. Over the next decades, the spread of corruption in the country might be forecast. This might be very destructive, both on the short-term and the long-term perspectives. The consequences for academia, business and society might be dire.

Old habits die hard: Challenges to participatory governance in post authoritarian Mexico.

This his article provides ethnographic evidence about the factors that shape the attitudes of citizens towards the state among communities in the Mexican state of Chiapas. Because we are interested in studying whether political democratization can offer real opportunities for the empowerment of previously oppressed or disadvantaged groups, the communities studied were low income, rural and mostly populated by indigenous groups. Furthermore, these communities are also geographically remote, which means that ensuring good governance and accountability of state officials poses special challenges to regional authorities in these areas. For the same reasons, the population in these communities is especially vulnerable to the impacts of corruption. Specifically, the study focuses on the interactions of community members with health service providers, where corruption can have specially deleterious consequences.

Corruption at the business-politics intersection in the city of Monza, Italy

In 2012 a new law in the matter of transparency and anti-corruption was approved in Italy. The law has set within new frames the understanding of corruption mechanisms, as well as the definition of core concepts of the anti-corruption discourse, such as ‘prevention’ and ‘transparency’. Moreover it has also re-defined the roles and tasks of actors and employees of the public sector. In December 2013 the city of Monza, Northern Italy, was hit by the biggest corruption scandal of its history. Investigations evidenced the existence of a well run system of corruptive practices between the public sector and the City Council, which were aimed at favouring certain companies for public works and calls for tenders.

The recent events that occurred in Monza acquired even more relevance in light of the principles contained in the new legislation, particularly its stress on anti-corruption discourses (and rhetoric), as well as on the practical and performative role of virtues and ethical values in the public office.

This paper looks at how employees of Monza City Council perceived and (re)signified corruption as a whole consequent to the 2013 scandal and to the introduction of the new law, not only considering their impact at a local level, but also in a wider perspective in relation to corruption perception and practices at a national level.

Culture, organizational change and bounded morality in the Hungarian public administration

This paper deals with the analysis of ethnographic data on public administration cases in Hungary. The main focus is on the perception that public administrators have of integrity challenges, how far these influence their daily tasks, the most relevant changes introduced at the government and policy level, as well as the socio-cultural explanations that are most commonly given in relation with the issue of corruption in the country. I have chosen to deal with the public administration in general because of three reasons. First, understanding the everyday work of public administration in a country is a complex task which, departing from the study of the organisational structure and its dynamics and expanding to the changes introduced at the policy level, it needs a nuanced and interdisciplinary approach. Nonetheless, I believe that through the innovative lens of the anthropological approach, it is possible to investigate some of these features through a bottom- up perspective that looks at ways how administrators perceive the main challenges, strengths and their changes in the field of integrity. Second, since corruption is a phenomenon that affects longitudinally all levels of the public service in a country (although to different extents), I consider that information gathered from different sectors in the public administration and analysed comparatively may provide a multifaceted and dynamic picture of the phenomenon. Finally, and due to the overarching nature of corruption that covers any field in which the public sphere meets the private, it can be useful to understand what are the common risks and the diverse challenges that any of the sectors under investigation are determined by, in the exercise of the public office.

Anti-Corruption Revolutions: When Civil Society Steps In

This working paper explores the question of whether an empowered civil society with access to public information, can make a difference in the fight against corruption, using India and the recent rise of an anti-corruption party as a case study. Through a mixed methodology that combines quantitative and qualitative research tools, the authors find evidence that the availability of channels for accessing information has a positive effect on control of corruption, provided that civil society is engaged and able to actively participate in matters of public concern. In addition, this paper seeks to understand if and how collective action problems are overcome by civil society and determine whether the so-called anti-corruption revolutions are manifestations of this process.

The quantitative model builds upon previous work that has found separate effects for both factors (access to information and civil society) on control of corruption, and introduces an interaction term between the two of them. Additionally, the quantitative analysis explores the effects of perceived levels of corruption in a given period in subsequently controlling corruption.

The qualitative model, in turn, inquires more deeply into the interaction of these two variables using India as case study. Here, access to information legislation has been in place for almost a decade and civil society has shown itself outstandingly active. This case is particularly interesting given that the mobilization against corruption initiated in 2011 managed to achieve the introduction of a federal law creating an ombudsman. Altogether, this paper aims to shed light on the factors and processes shaping a sustained demand for accountability.

Institutional performance and social values in Russia

This report focuses on corruption practices in Russia and presents the results of a survey that was conducted between July and November 2013.

The questionnaire was translated into Russian and was adapted slightly after the first five interviews. The interview was time consuming (from 1 to 3 hours) and many respondents became tired very quickly; hence, some coffee/tea breaks were integrated whenever it was possible. The interviews were conducted in such places as homes, workplaces, at a café, and sometimes in a car during a long drive. Some of the questions were not interesting from the viewpoint of respondents, such as the questions about social norms and values (more comments in the text). Some respondents had difficulties in attributing scores to the work of public institutions and the government, especially less educated and/or retired respondents.

The results of the survey conducted in the second half of 2013 provided some information on trust and experiences with local institutions, as well as serious problems in the community, the quality of services provided by institutions and access to these services, and social norms and values.

Institutional performance and social values: Mexico case study report

The contribution of The Basel Institute on Governance to ANTICORRP WP4, (the ethnographic study of corruption practices) involves field research in two countries: Mexico and Tanzania. This report describes the activities and findings form the research conducted in Mexico.

The report summarizes the results from the application in the Mexican context of the ethnographic survey on institutional performance and social values that all ANTICORRP partners working in WP4 have agreed upon and will apply in their respective case study countries. Additionally, the information on the survey is supplemented with additional insights that were obtained through semi-structured interviews with key informants as well as focus group discussions.

The field research in Mexico contributes to the ongoing work in WP4 in several ways.

First, by applying the standardized survey on institutional performance and social values to a Latin American context, it enriches the sample covered by the work of WP4. This is specially meaningful given the fact that the approach of this work package is that of ethnography. Therefore, inclusion of the Mexican case adds to the increase the breadth of cultural, demographic and geographical variation that the WP4 work will cover, contributing to the goal of bringing together a comprehensive view of how local contexts shape different understandings and perceptions of corruption.

Second, the field research in Mexico targets low-income, minority groups living in remote rural areas of the country. These groups, because they have been historically disempowered, and because their characteristics (rural, poor ethnic minorities) can make them especially hard to mobilize, are typically amongst the most vulnerable to corrupt practices. Therefore, developing a better understanding of the manner in which groups like these view their relationship with the institutions of the state and understand corruption is a necessary step to develop better approaches that can protect the most vulnerable from abuse of power.

Third, while the research in Mexico includes application of a shared research tool (the survey on institutional performance and social values) it also takes a unique perspective by placing the focus of the analysis on studying participatory initiatives to prevent corruption in the health sector. This angle will contribute to the overall WP4 effort by adding insights form the health sectors to the work in other sectors (e.g. education, business, electoral systems) that partners in WP4 are undertaking.

Ethnography of corruption: the case of Kosovo

This report includes the findings obtained through a survey, interviews with citizens, NGO and think-tank workers, representatives of public institutions, as well as observations at public workshops and roundtable discussions. In many ways it may reproduce the very techniques of knowledge productions it suggests must be viewed more critically. However, conducting and participating in similar survey projects is an important entry for an anthropologist. The limited ethnographic study conducted here has served to develop a background report, attached to this research report, which makes a particular argument: the need to account for activism and civil engagement against corruption and understand the terms based on which such mobilization occurs. For this purpose a desk review was conducted, one focus group was held with anti- corruption activists, and participant-observation was carried out in a citizens group that organized around claims of corruption in the public Kosovo Electric Company. As was noted in the ANTICORRP project document “a striking tendency of the literature on corruption has been the neglecting of anti-corruption movements”.  Our proposal is that we must take advantage of some very interesting and important ways in which public space and activist networks are linked together in Kosovo in protesting corruption. Current ethnographic research confirms that this approach will give us insight that is often lacking in other analyses, and give an important entry-point to discern for changes in social order and values, particularly definitions of morality and legality within the space of politics and economy.

Institutional performance and social values in Italy

The following report is based on data collected during ethnographic fieldwork, as a part of the ANTICORRP project, Work Package 4 – The Ethnography of Corruption. In particular, it deals with the results of a survey conducted in Italy on a small sample, divided in two groups: inhabitants of the cities of Monza (Northern Italy) and Lecce (Southern Italy). The results will be presented as a whole, although we are aware of the fact that neither of the two cities can be considered as representative of the very regionally diverse Italian reality. As a consequence of that, differences at a macroscopic level will be pointed out, in an attempt to take into account relevant issues that have arisen.

The aim of the survey is to collect information on how different areas of the public and private life are perceived by the respondents, and in particular: public institutions, local development, local customs, and values. The main focus of the questions is to investigate how people deal with the problem of corruption (if perceived at all), its effects, practices, social and cultural norms, as well as with the anti-corruption discourse, both at a local and national level. It is important to stress that the word “corruption” itself is not directly used in the survey, with one exception in section D, where it is used to address one of a series of hypothetical scenarios. Avoiding direct references to corruption as a phenomenon was a choice based on the awareness that corruption itself is hard to define and to frame, since it consists of multiple practices not always perceived as fraudulent or illegal, which are not necessarily fitting the social understanding of object corruption. Using a word that has such strong moral and social implications in the public discourse would have possibly influenced the results of the survey, and make the respondent feel at unease or bias their responses when dealing with such matters.

The survey target has been the ordinary residents in the above mentioned cities, in an attempt to give a bottom-up perspective of the relationship between the citizen and the institutions at multiple levels (from local to nations and supranational), as well as to underline how the citizens relate to such institutions in matter of social trust and ability to interact with them.

The survey is aimed at providing comparable data among the countries it has been conducted in, in the scope of the WP4 research. Therefore it serves a double purpose: attempting a comparison within two different areas in Italy, as well as providing information which could be used in a wider, comparative framework.

Survey: Institutional performance and social values in Hungary

The following report is based on data collected during ethnographic fieldwork, as a part of the ANTICORRP project, Work Package 4 – The Ethnography of Corruption. In particular, it deals with the results of a survey conducted in Hungary on a small sample of 103 inhabitants of the city of Budapest.

The aim of the survey is to collect information on how different areas of the public and private life are perceived by the respondents, and in particular: public institutions, local development, local customs, and values. The main focus of the questions is to investigate how people deal with the problem of corruption (if perceived at all), its effects, practices, social and cultural norms, as well as with the anti-corruption discourse, both at a local and national level. It is important to stress that the word “corruption” itself is not directly used in the survey, with one exception in section D, where it is used to address one of a series of hypothetical scenarios. Avoiding direct references to corruption as a phenomenon was a choice based on the awareness that corruption itself is hard to define and to frame, since it consists of multiple practices not always perceived as fraudulent or illegal, which are not necessarily fitting the social understanding of object corruption. Using a word that has such strong moral and social implications in the public discourse would have possibly influenced the results of the survey, and make the respondent feel at unease or bias their responses when dealing with such matters.

The survey target has been the ordinary residents in the above mentioned cities, in an attempt to give a bottom-up perspective of the relationship between the citizen and the institutions at multiple levels (from local to nations and supranational), as well as to underline how the citizens relate to such institutions in matter of social trust and ability to interact with them.

The survey is aimed at providing comparable data among the countries it has been conducted in, in the scope of the WP4 research. Therefore it serves the purpose of providing information which could be used in a wider, comparative framework.

Comparative country reports on institutional performance Countries: Bosnia, Kosovo, Hungary, Italy, Mexico, Russia, Tanzania, Turkey.

The report draws on ethnographic research undertaken in 8 countries object of investigation by the WP partners, namely: Italy, Hungary, Bosnia, Russia, Turkey, Kosovo, Tanzania and Mexico. In addition, an additional chapter (Annex 2) will render the case of Japan which will serve as a contrast case on which to assess ideas and practices of governance and institutional performance through an anthropological perspective. The report includes data gathered through a questionnaire survey undertaken, with minor differences, in all the eight countries included in WP4. The data analyzed comparatively refer to three main fields: perceived and experienced performance of local institutions, local problem and resolution ideas, socio- cultural norms and values. We have identified, following the anthropological literature, a number of cultural issues that are in relation with corruption, or with local citizens’ experiences of the functioning of public institutions in their countries. This first deliverable constitutes an attempt to draw some preliminary conclusions on the interaction between socio- cultural features and governance (both as experienced and perceived) which will be further and ethnographically explored in the final deliverable of this Working Package.

Institutional performance and social values in Bosnia and Herzegovina

This country report presents result of a survey about performance of local instiutions and social values” carried out in Bosnia and Herzegovina (hereinafter BiH). It is a part of a wider research about corruption practices in this countryes approached with an innovative ethnographic metodology and “bottom-up persepctive”. Results of the survey will be here treated not as mere statistical data but analyzed and commented with data deriving from interviews and participant observation.

Institutional Performance and Social Values in Turkey

As part of agreed-upon research issues and methodologies developed within WP4, a survey has been conducted with a small sample in Ankara in 2012. It was meant as a supplement to the main ethnographic fieldwork. The current report is prepared to inform the reader about the data obtained and observations made through the survey.

The field research in its entirety aimed to gather data on the interactions between public institutions and citizens, definitions of corruption and its perception, types of corruption, effects of corruption, practices of anti-corruption, cultural and social norms in this field, national and local media, and local policies. In addition to the survey, participant observation and interviews have been main research methods in the ethnographic fieldwork. Interviews have been made with local government officers, politicians, entrepreneurs, anti-corruption activists, political civic organizations and citizens’ groups… Participant observation has been made possible through involvement in various relevant meetings, workshops, and conferences. It must be noted, however, that only the findings and observations gathered through the survey will be reported in the current report.

Again, this survey study has been carried out as a supplement to the briefly explained ethnographic fieldwork. With this survey, it has been aimed to reach the views and perspectives of ordinary citizens. The main reason of including local people in such a survey is to provide a bottom-up perspective by focusing on the social and cultural values and norms underlying state-citizen interactions, including corruption. In this way, survey has been used as an additional mean to main ethnographic work conducted within the framework of WP4. This survey has focused on social- cultural norms (such as common behavioral patterns), social values, and performances of institutions as forms of expressions of socio-cultural practices.

Natural Resource Revenues, Corruption and Expropriation

This paper develops a formal model that looks at the mutually endogenous determination of foreign direct investments in natural resource-rich countries, the decision of host governments to expropriate these investments, and the level of corruption. Higher resource production makes expropriation more attractive from the perspective of national governments. A low expropriation risk is in turn an important determinant of international investments and is therefore associated with high levels of production. Moreover, resource production leads to high levels of corruption. Theoretical results are confirmed by estimations of a simultaneous equation model for 50 resource-rich countries in which the authors endogenize expropriation risk, corruption, and resource production.

The Struggle for Effective Change: An Assessment of the APRM’s Achievements

In July 2002 the New Economic Partnership for Africa’s Development (NEPAD) was established. This collective action taken by African Heads of State and Governments demonstrated the willingness to strengthen governance and achieve sustainable economic and political development. The African Peer Review Mechanism (APRM) was set up to monitor the commitment to the NEPAD and thereby increase responsibility and accountability. It was also designed to enable mutual assistance based on the concept of Peer Review, therefore seen as an effective and self-driven tool for enhancing change and strengthening governance throughout Africa. Over the last decade, 34 countries acceded to the APRM. This number demonstrates the want for self-improvement and transformation but cannot be regarded as a measure of performance for the APRM. Indeed only 17 countries have completed the first cycle of the APRM process. Even though the statistical and qualitative analyses performed in this thesis show marginal improvement in favour of the APRM, they do not show that governance has improved. The negligible progress recorded by the evaluation of governance performance from 2003-2012 as a function of the APRM demonstrate the APRM’s ineffectiveness. The results reveal the issues encountered by the APRM’s member states to profit from the APRM. The structure and process are found to be too complex to be adopted adequately by countries, consequently deferring beneficial outcomes. Member states lack commitment and compliance to the process as they do not encounter immediate benefits. To fully exploit the certainly existing potential of the APRM, the author recommends following actions to be taken. Based on (1) a common understanding of the mechanism and (2) its limitations, the APRM process can be simplified by (3) ensuring an efficient and comprehensible monitoring, and (4) incorporating SMART standards for recommendations. (5) Strengthening the existing capacities of the APR Secretariat, (6) conducting independent evaluations of the APRM and (7) clarifying the role of the African Union (AU) will further improve the capabilities and appeal of the APRM. As an efficient and effective tool the APRM is predestined to become the instrument to facilitate sustainable change in Africa.

Anatomy of grand corruption: A composite corruption risk index based on objective data

Although both the academic and policy communities have attached great importance to measuring corruption, most of the currently available measures are biased and too broad totest theory or guide policy. This article proposes a new composite indicator of grand corruption based on a wide range of elementary indicators. These indicators are derivedfrom a rich qualitative evidence on public procurement corruption and a statistical analysis of a public procurement data in Hungary. The composite indicator is constructed by linkingpublic procurement process ‘red flags’ to restrictions of market access. This method utilizes administrative data that is available in practically every developed country and avoids thepitfalls both of perception based indicators and previous ‘objective’ measures of corruption. It creates an estimation of institutionalised grand corruption that is consistent over time and across countries. The composite indicator is validated using company profitability and political connections data.

Corruption manual for beginners: “Corruption techniques” in public procurement with examples from Hungary

This paper develops 30 novel quantitative indicators of grand corruption that operationalize 20 distinct techniques of corruption in the context of public procurement. Each indicator rests on a thorough qualitative understanding of rent extraction from public contracts by corrupt networks as evidenced by academic literature, interviews and media content analysis. Feasibility and usefulness of the proposed indicators are demonstrated using micro-level public procurement data from Hungary in 2009-2012. While the prime value of this broad set of indicators is the possibility of combining them into a robust composite indicator of high-level corruption, the high degree of detail also reveals that many regulatory interventions have succeeded in changing the form of corruption, but not its overall incidence.

Bulgarian Anti-Corruption Reforms: A Lost Decade?

The Worldwide Governance Indicators show that Bulgaria has made significant progress in the area of “control of corruption” since 1996. This finding contrasts with the general opinion of the Bulgarian population who perceive Bulgarian institutions as corrupt, and contradicts the decision of the European Commission to continue monitoring Bulgaria’s progress in fighting corruption and organised crime. Hence, there is a need for careful consideration and analysis to understand how much progress Bulgaria has really made in the fight against corruption. Can Bulgaria be considered an anti-corruption success story?

In this paper, the authors seek to answer the above questions by providing a background analysis on Bulgaria’s governance regime. According to research, Bulgaria has made some progress in its transition from patrimonialism to open access order but the main features of its governance regime remain these of competitive particularism. In legal terms Bulgaria displays some open access order features but they do not translate into practical implementation.

Following the country’s EU accession in 2007 progress has been uneven, and has mostly been driven by civil society demands for change, which culminated in mass street protests in 2013. Progress in the political corruption domain has been limited. Power distribution in Bulgaria has opened up to competition but is still concentrated in few political party leaders and powerful business conglomerates, interlinked in a complex web of dependencies with former secret service and communist party elites, which still have privileged access to state resources. Convictions, in particular of high-ranking politicians and administrators are non-existent or rare, a sign that the rule of law and accountability have not yet taken hold in the country.

Tax Simplification and Informal Economy in developing and transitioning countries

Informal economy is present in all countries; however it is in low and middle income countries that it has its deepest roots with some measurements estimating it to average at above 40% of national GDP. This represents a large part of the economy and poses serious problems for economic development and the relationship between state and society. It also means a significant loss in tax revenue, that poor countries need for the provision of public goods, resulting in the undermining of state capacity (Fukuyama, 2004). This leads to a vicious cycle, since without the efficient provision of public goods the incentive for tax compliance further decreases.

As tax structure and bureaucratic burden haven been identified as primary causes for informal economy, in the following we want to analyze whether lower costs of compliance actually lead to lower levels of informal economy.  Given that in recent years some countries have implemented flat tax as tool for tax simplification, the authors explore the question of whether flat taxes have actually lived up to their promise and increased tax revenue or lowered levels of informal economy.

Pedro Obando and  Johannes Wahner are both Master’s of Public Policy candidates at the Hertie School of Governance in Berlin.

The State of State Capacity: a review of concepts, evidence and measures

What is state capacity and how does it affect development? The concept of state capacity acquired centrality during the late seventies and eighties, sponsored by a rather compact set of scholarly works. It later permeated through several disciplines and has now earned a place within the many governance dimensions affecting economic performance. The present article aims to provide a historical account of the evolution and usage of the state capacity concept, along with its various operationalizations. It examines in particular: a) the growing distance in the usage of the concept by different disciplinary and thematic fields; b) the process of `branching out’ of the concept from restricted to more multidimensional definitions; c) the problems with construct validity and concept stretching, and d) the generalized lack of clarity that exists regarding the institutional sources of state capacity.

Corruption in Qatar? The Link between the Governance Regime and Anti-Corruption Indicators

Qatar is judged by international anti-corruption indexes to be among the highest performing countries in the Middle East and North Africa. The Qatari government has streamlined its regulations regarding business practices and engaged in reforms from above that have liberalized the Qatari economy and increased its strength and viability. However, Qatar is a neo-patrimonial absolute monarchy in which the state is not immune from private interests, and where the ruling family can bypass the rule of law. The complete control by the monarch of state institutions and policies leaves no space for bottom-up calls for reform, or for independent assessment of the performance of the state and the actions of the ruling family by civil society and the media. The permeation of informal networks (mainly in the form of tribal relations) within state institutions and civil society, the lack of interest in and avenues for political participation among Qatari citizens, and the clientelistic relationship between citizens and the state support the continuation of this status quo. Author Lina Khatib analyzes the structures and mechanisms of Qatar’s governance regime that reveal the contradictions inherent within the categories covered by anti-corruption indexes. In doing so, she suggests a number of shortcomings in the methodologies and scope of those indexes as they specifically apply to Qatar, and poses a number of questions regarding the kind of information that is difficult to find but which is crucial to address in order to form a clearer picture of corruption and anti-corruption practices in Qatar. The author concludes that the absence of this information in the first place casts a shadow of doubt over the performance of Qatar in anti-corruption indexes. Additionally, the indexes’ focus on measuring the scope of state functions while overlooking measuring the strength of state institutions is a key reason behind the discrepancy between Qatar’s anti-corruption ranking and the mechanisms and structure of its governance regime. Instead, Khatib proposes specific indicators related to the governance regime that allow for a more comprehensive look at corruption and anti-corruption practices in Qatar.