07 January 2010

Corruption in Context

I took some time to read through Transparency International's 2008 Global Corruption Report because it had a focus on water and corruption, two topics dear to my heart.

To understand why water provision is especially vulnerable to corruption, consider this "equation":

Corruption = monopoly + discretion - accountability.

Thus, you see why I spend so much time on this blog discussing the troubles with monopolies, asymmetric information (water managers know more than us) and community oversight of water agencies.

And here are more details on water's vulnerability to corruption (quoting from the report):
  • Water governance spills across agencies. Water often defies legal and institutional classification, creating a regulatory lacuna and leaving governance dispersed across countries and different agencies with many loopholes to exploit.

  • Water management is viewed as a largely technical issue in most countries. Managing water is still predominantly approached as an engineering challenge. Consideration for the political and social dimensions of water, including corruption issues and their costs, is limited.

  • Water involves large flows of public money.Water is more than twice as capital-intensive as other utilities. Large water management, irrigation and dam projects are complex and difficult to standardise, making procurement lucrative and manipulation difficult to detect.

  • Private investment in water is growing in countries already known to have high risks of corruption. Nine of the ten major growth markets for private sector participation in water and sanitation are in countries with high risks of corruption, posing particular challenges for international investors.

  • Informal providers, often vulnerable to corruption, continue to play a key role in delivering water to the poor. Informal water providers provide important bridging functions in many developing countries to bring water to the poor. They often operate in a legal grey zone, however, making their operations vulnerable to extortion and bribery.

  • Corruption in water most affects those with the weakest voice. Corruption in water often affects marginalised communities, the poor or . in the case of its impact on the environment -- future generations. These are all stakeholders with a weak voice and limited ability to demand more accountability.

  • Water is scarce, and becoming more so. Climate change, population growth, changing dietary habits and economic development all exacerbate local water scarcities. The less water there is available, the higher the corruption risks that emerge in control over the water supply.
I thought that these examples were also useful as illustrations of how corruption affects water management:
  • In Mexico, the largest 20 per cent of farmers reap more than 70 per cent of irrigation subsidies. Moreover, corruption in irrigation exacerbates food insecurity and poverty.
  • In China, corruption is reported to thwart the enforcement of environmental regulations and has contributed to a situation in which aquifers in 90 per cent of Chinese cities are polluted and more than 75 per cent of river water flowing through urban areas is considered unsuitable for drinking or fishing.
  • In developing countries, corruption is estimated to raise the price for connecting a household to a water network by 10-30 per cent.
Although these examples come from the developing world, I am sure that you can supply your own examples of similar problems in the developed world. In fact, I'd say that many of us live in "developing" countries when it comes to water management.

I leave you with this bottom line from Wangari Maathai (2004 Nobel Laureate for Peace):
Water is the driving force of all nature. It is essential for the workings of our ecological systems. It is essential for our health and the health of our communities. It features prominently in our spiritual life. It binds us together through shared waterways and shared water sources. It shapes our relationship with nature, politics and economies.
Managing water wisely is as paramount to our common future as it is difficult to achieve. Different visions, values and interests compete for shaping water governance. But one fact is clear: the global water crisis that destroys sources of water and waterways, and leaves a large portion of the world without access to safe drinking water, that destroys lives and livelihoods all over the world and that continues to create ecological disasters at an epic and escalating scale is a crisis of our own doing.
It is a crisis of governance: man-made, with ignorance, greed and corruption at its core. But the worst of them all is corruption.
Corruption means power unbound. It gives the powerful the means to work against and around rules that communities set themselves. This makes corruption in water particularly pernicious. It allows the powerful to break the rules that preserve habitats and ecosystems, plunder and pollute the water sources that entire world regions depend upon and to steal the money that is meant to get water to the poor. Corruption shuts smallholders out of irrigation systems, displaces communities with impunity during dam construction, disrespects carefully crafted arrangements for water-sharing across borders, and permits the poor and ignorant to carry out activities that undermine the environment and their livelihoods, all with grave consequences for environmental sustainability, social cohesion and political stability. Perhaps most destructive of all, the force of corruption threatens to create a situation in which the rules continue to be gamed in favour of the powerful and efforts for reform are thwarted.
Tackling corruption in water is therefore a prerequisite for tackling the global water crisis.


Eric Perramond said...

This is a more substantial post David. I've read through most of the report, too, and one aspect that is problematic is the nature (or 'humanity' if you prefer) of corruption: not only is it entrenched, but it's incremental.

I've come to this not-so-new discovery after reading through archival documents on the history of New Mexico's water management cases, its own bureaucracy, and how much of the early efforts were clearly corrupt. And my interest started after looking at Mexico in the 1990s when it was attempting to re-structure water to full-cost. Which meant that small farmers and irrigators could no longer afford to produce in the agricultural sector; guess where many of them went? ;P

SO, while it is easy for these reports and agencies to point out the international (=Third World) cases of corruption, they rarely do a serviceable job for the industrialized countries that have cleverly hidden their own histories of water violence in sometimes more subtle ways... good post.

WaterSource/WaterBank said...


Amazing ... It took me a few years, but I actually had to read and computerize all water rights in CO dating from the 1880's in parts or all of three major drainage basins of 20,000 plus water rights each. Honestly, I found NO CORRUPTION ! CO's system of prior appropriation after proper notice and full opportunity to be heard in the Courts proved wildly successful since the 1880's in 7 water divisions (originally 5). The corruption that occurred was caused by the lack of enforcement of River Compacts after 1949 and intervention into the process by the legislature and refusal to administer according to the Court decrees/Compacts by the State Engineer. Exempt wells, miniumum stream flow rights, and grandfathering of gravel pit evaporation all in violation of the CO State Constitution all occurred after 1979.

The adjudication of wells after 1965 was virtually unadministered until quite recently due to the loss in 3 out of 3 cases by CO before the US Supreme Court.

In the late 1970's, I took extreme pleasure in perfecting a procedure with existing reservoirs to halt the over delivery of water in the Rio Grande River to New Mexico !

David Zetland said...

@Eric -- agreed!

@Ray -- Good point. I'd say that the lack of corruption (whether 100% or not) was due to transparency in rights management.

Tim in Albion said...

Very happy to see you pointing out the fact that corruption is not a "developing world" phenomenon. The developed world - US especially - has simply gotten better at hiding corruption and cloaking it in many disguises. It's now more popularly known as "gaming the system" among other euphemisms.

Corruption is rampant in California, especially among water agencies of all stripes. Many people are aware of this, but your 80/20 rule seems to apply, so it's BAU.