Friday, October 30, 2015

Will Magufuli undo the Economy of Corruption?

When Hazel Gray published her article on 'The political economy of grand corruption in Tanzania', following a detailed PhD study on the subject, Mathew Bukhi presented a critical summary below. With the elections of John Magufuli as the President-Elect, following the seemingly 'cancelling out' of the Network (Mtandao), one wonders whether this is the indeed beginning of the end of grand corruption (Ufisadi). What remains to be seen is whether the remnant of the grand masters of Ufisadi in the Tanzanian Grand Old Party will stick to their guns, lay low or give way to the hailed Bulldozer (Tingatinga).

Download the article in the link below, it was just published yesterday.

Here is its abstract:


This article examines the political economy of grand corruption in Tanzania in the era of rapid growth and global integration. Grand corruption in Tanzania is linked to intra-elite conflicts within the ruling CCM party. However, the underlying dynamics of these struggles and how such elite politics interacts with the wider process of socio-economic transformation unfolding in Tanzania are not well understood. This article draws on the political settlements approach in building an analytical framework to examine four major grand corruption scandals that occurred within public finance from 2000 until 2014. In particular, it sets out the key actors and patterns in the factional struggles over corruption in order to demonstrate how the elite within the ruling CCM party is not centralized but composed instead of internal factions that have equal weight. The article explains how the enduring control of this elite, despite its internal divisions, can be explained by examining the balance of power in society beyond the institutions of the ruling party or the state itself. The article then establishes the mechanisms through which grand corruption shapes paths of accumulation within the domestic economy in Tanzania. In concluding, it argues that the fragmented distribution of power within the ruling party means that policy responses of the donor community, in particular the halting of aid disbursements, have been ineffective and are likely to continue to be ineffective in stopping grand corruption in Tanzania.

This article is published at an interesting of Tanzania's political history. It presents four cases of grand corruption: (a) the BAE 'civil aviation radar system' case, (b) the Richmond and IPTL case, (c) the IPTL 'Escrow' case, and (d) the EPA case

Here are some of the interesting messages that I take from the article:

1. "The article argues that this distribution of power within the elite means that it is difficult for the president, or any group within the ruling party, to stop grand corruption." (p. 4). "....the central leadership is often unable to clamp down on corruption within the ruling party and, as in Tanzania, the ruling party does not exhibit the capacity for centralized control of corruption" (p. 20).

2. "Even under the threat of donor withdrawal of aid, the ability of the ruling CCM party to constrain corruption effectively is undermined by the fragmented distribution of power within the ruling party." (p. 5). "....different factions within the ruling party hold equal weight and neither the president nor any particular faction is able to dominate within these elite struggles" (p. 20).

3. In Tanzania, most of "off-budget" expenditures - the known-unknowns of public finance - include "funds to the State House and to the army........" "While not officially part of the public expenditures of the state, the high degree of political influence over these institutions meant that such expenditure can, in effect, be considered a form of state expenditure."(p. 6)

4. The structural and procedural reforms in public financial management in the 2000s did little to reduce the grand corruption, contrary to how the reforms effectively addressed petty corruption.

5. The grand corruption has increasingly been exposed due to: rising influence of more plural and vocal media; and, openness and critical discussions through the Parliament, with active engagement of CHADEMA and from within CCM's own ranks.

6. The growing inequality and socio-economic differentiation as a result of neoliberal economic philosophies, is likely to shake the currently 'stable' political dynamics that sustain CCM.

7. The egalitarian economic structures during Ujamaa era made Tanzanian Asian business community economically powerful as they dominate larger proportion of economic activities. The economic power of the Asian business community made it easier for the community to access the formal political power. This manifests in the involvement of the Asian business community in the 2000s grand corruption cases.

8. Building on Marx's thesis on 'primitive accumulation', the author argues that grand corruption can influence the overall pace and character of economic development, if the money generated is used to fund local investments. However, it isn't the case in Tanzania as "corrupt forms of accumulation associated with these scandals mainly resulted in capital flight" (p. 19).

9. The author concludes that:

(a) the donor community's policy responses (e.g. the recent cessation of aid disbursements) to grand grand corruption are likely to continue being ineffective in addressing the problem, as such responses don't take into the account ongoing political-economic complexities within the Tanzania's political sphere, and in particular the ruling party.

(b) new socio-political forces that challenge the existing 'status quo' [distribution of power] are emerging and manifesting through protests over: "land rights, religious grievances, payments of public sector workers, and student loans" (p. 22). These forces and resulting power redistribution may "constrain grand corruption, at least in the short term" (Ibid).


Shahaya Shao October 30, 2015 at 7:06 AM  

Perfect study and it really depicts whats ailing our economy. We have a long way to go in combating grand graft cases. I wish the parliament can adopt such studies and use them in enacting new laws to address the problem.

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