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67 CHAPTER 5 Elite Corruption and the Impact on African Economic Growth and Human Well-being Trevor Budhram INTRODUCTION Corruption is an insidious plague that has a wide range of corrosive effects on societies. It undermines democracy and the rule of law, leads to violations of human rights, distorts markets, erodes the quality of life and allows organised crime, terrorism and other threats to human security to flourish.1 What makes corruption of serious concern is the fact that it is also practised by the elite. The elite hold a country’s destiny in its hands because they control all factors of political control and economic production. Description of offenders categorised as elite reflect elements of status and respectability. Although it is difficult to define the concept elite persons precisely, it could be assumed to include offenders in the highest socio-economic status group such as owners of large firms, senior executives, high status civil servants or government ministers.2 In Africa such persons have been labelled the Comprador class. The comprador bourgeoisie arose in the era of the formation of the imperialist colonial system. It was made up predominantly of the part of the native exploiting groups and classes that unconditionally submitted to foreign capital in both political and economic relations.3 Corruption takes many forms. The forms of corruption vary, but include bribery, extortion, cronyism, nepotism, patronage, graft and embezzlement. While corruption may facilitate criminal enterprise such as drug trafficking, money laundering and human trafficking, it is not restricted to these activities.4 As argued by Mbaku, corruption in Africa is a consequence of poorly developed and inappropriate institutional arrangements.5 Most members of the public understand the word corruption much more broadly to include the abuse of resources, maladministration, theft and fraud. While corruption is a feature of all societies to varying degrees, it is a particular concern for African countries because it undermines economic growth, discourages foreign investment and reduces the resources available 68 CHAPTER 5 for infrastructure, human well-being, public services and anti-poverty programmes .6 Corruption has become an issue of major political and economic significance in recent years. The perception in an African context that democratisation and economic liberalisation offer potential routes in dealing with the scourge presents many challenges in that the secrecy of the crime allows for the elite, including government, to maintain monopolies, prevent entry and discourage innovation if expanding the ranks of the elite would expose existing corruption practices. Such distortions from corruption can discourage useful investments and growth.7 While economic liberalisation can help to reduce corruption by elites, there is a need for careful monitoring and regulation of the reforms to ensure that the benefits which accrue from this process, such as privatisation, are not appropriated by these same elites.8 This paper seeks to explore the impact of elite corruption on development, growth and human wellbeing in Africa and is based on a review of national and international literature. THE CAUSES AND RESPONSES TO CORRUPTION Mbaku9 states that the United States Agency for International Development’s (USAID) anti corruption measures is grouped into institutional and societal reforms . The main objective of institutional reforms is to make government more efficient and relevant to the needs of the society it serves. Societal reforms include measures to change people’s attitudes towards formal political processes and to mobilise the political will that is needed to launch and sustain an anti-corruption programme. The table below highlights the institutional and societal causes of corruption and how it should be addressed (USAID 1999).10 Institutional Causes Institutional Responses Wide authority Limit authority: Example: privatisation, liberalisation, competitive procurement, competition in public service. Minimal accountability Improve accountability through: 1. Transparency (e.g., freedom of information legislation, financial disclosure, open budget process, financial management systems). 2. Oversight (e.g., audit offices, inspectors general: ombudsman/ anti-corruption agencies and whistle blower protection). 3. Sanctions (e.g., electoral, criminal and administrative sanctions, judicial reform). Perverse incentives Realign incentives (e.g., living wage, performance based incentives, professionalisation, ethics codes, eliminating redundant and ghost workers). 69 ELITE CORRUPTION AND THE IMPACT ON AFRICAN ECONOMIC GROWTH AND HUMAN WELL-BEING Societal Causes Societal Responses Anti-system attitudes Raise awareness about the cost of corruption and mobilise political will for reforms (e.g., through surveys, public relations campaigns, investigative journalism, civic advocacy organisations, workshops and international pressure). African countries are not the only countries that are grappling with strategies to combat...


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