Local Governance: Chipping Away at Corruption

Alongside national-level anticorruption initiatives, it is crucial to prevent, detect, and tackle corruption at the local level, especially as local governments take on greater financial and administrative responsibilities as a result of the decentralization process. Ordinary citizens encounter government primarily in their own cities and towns, where they access basic services. Lack of transparency and accountability, and associated cases or perceptions of corruption at the local level, can erode the legitimacy of the entire democratic state, thereby hampering and distorting development. Improving local governance provides opportunities to counter corruption through more transparent public procurement of local goods, better asset management, more efficient public financial management and control, open data, and citizen participation in local decision making.

Across a variety of sometimes challenging country contexts, DAI has worked with the U.S. Agency for International Development (USAID) and other donors to implement local governance development programs that mitigate risks and take advantage of opportunities to advance the anticorruption agenda.

Tackling Corruption in Kosovo by Strengthening National and Local Procurement

Citizens, civil society organizations, and private sector economic operators have documented that public procurement in Kosovo has historically been compromised by political patronage, nepotism, fraud, and other forms of corruption. This corruption strains public resources, undermines public confidence, and deters foreign investment. Addressing weaknesses or gaps in the system is critically important for Kosovo because 40 percent of the government’s budget is spent through public procurement, with 23 percent channeled through municipal procurement.

Through USAID’s Transparent, Effective, and Accountable Municipalities (TEAM) activity, DAI worked in Kosovo since 2017 to modernize public procurement and limit municipal vulnerability to corruption. When the USAID activity started, public procurement at the municipal level faced many challenges—TEAM identified 19 key risks across the 32 steps of the procurement process, including the use of manual systems that are vulnerable to bid-rigging, kickbacks, or selection processes based on patronage or nepotism.

The project was designed with the assumption that a comprehensive, centrally managed electronic procurement system—an integrity reform agreed between Kosovo government officials and the International Monetary Fund—was functioning, and the focus would be to further roll out the reforms and build capacity. However, as TEAM began initial stakeholder consultations, it became evident that the electronic procurement system was in fact on the verge of collapse due to a combination of technical problems, capacity issues, and a resulting loss of confidence in the system by government officials. The collapse of the system would mean local officials reverting to or continuing with a patchwork of non-transparent, manual systems susceptible to patronage and bid-rigging.

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Former USAID Administrator Mark Green in 2019 visited the upgraded municipal archive and an office for bid opening and evaluation, an investment co-financed by the Municipality of Pristina and TEAM. Photo: USAID TEAM.

TEAM supported a key agency—Kosovo’s Public Procurement Regulatory Commission—to fully adopt and execute the new electronic procurement system across levels of government. Through rapid technical support from the TEAM staff and local experts, the Commission fixed more than 200 glitches, improved internal capacities to manage the system, and expanded its functionalities to 13 modules, including for contract management and contractor performance evaluation.

At the local level, TEAM worked with municipalities and their procurement offices to properly implement processes through the e-system. All contracting authorities now manage all procurement procedures through the e-Procurement platform, and all bids are submitted online. By the end of 2021, the platform had facilitated 29,137 procurement activities, concluded 28,537 procedures with contracts, and processed more than Є2 billion of procurements.

Use of the system has major impacts on both efficiency and accountability. For example, electronic bidding saves the average private sector bidder Є100 per bid submission or Є3.2 million collectively in printing and submission costs alone each year. At the height of the COVID-19 pandemic, the platform also ensured transparent and efficient delivery of emergency health supplies to citizens, through remote utilization of the e-Procurement platform to procure urgent health products and services.

In addition, TEAM supported 28 municipalities to publish complete contracts on public websites. As of September 2021, 7,885 public contracts were voluntarily published. The project also supported the launch of the Open Procurement Transparency Portal, a civil society-led portal developed in 2018 that automatically pulls data from the e-Procurement platform and presents it in a user-friendly manner. The portal became the starting point for local investigations and business intelligence for civil society, investigative journalists, businesses, and even government officials. As of December 2021, 71,133 citizens had used the portal to find information about procurements in the country.

“The Public Procurement Regulatory Commission [now] has amongst the best procurement datasets in the world,” said Karolis Granickas, Senior Program Manager of the Open Contracting Partnership. “This shows that small countries like Kosovo can set a global transparency example and we are excited to see how the Government translates it into better public service delivery for all Kosovar citizens.”

Enhancing Legitimate Local Systems in Kyrgyzstan

In Kyrgyzstan, lack of transparency and accountability at the local level (both urban and rural municipalities) had eroded public trust and inhibited the successful movement toward decentralization of government services. The situation challenged the legitimacy of the Kyrgyzstan government and the consolidation of its decade-long democratization process.

When the USAID Community and Municipal Governance Initiative (CAMI) began in 2016, the DAI team commissioned a local research firm to assess the scale of corruption at the local level. A citizen survey showed that people perceived a lack of transparency in the information provided by government officials, and revealed a general lack of trust that local governments were ensuring openness, fair competition, and non-partisanship when procuring goods and services for municipal needs.


CAMI honored 'Successful Municipality' recipients. Photo: USAID CAMI.

Along with administrative and service delivery capacity building, CAMI introduced and encouraged various internal controls designed to reduce corruption and improve operational and financial management. For example, the project helped develop and promote a Municipal Code of Ethics for elected local council members, municipal servants, and heads of town administrations. CAMI also guided the creation of municipal development codes for transparent service delivery standards.

CAMI drafted the Handbook on Public Procurement at the Local Level, a manual advising local governments how to understand and implement the Public Procurement Law. Offering brief, clear descriptions of all public procurement procedures reflecting all legislative changes and amendments, it serves as a guide for procuring entities, potential bidders, and civil society organizations. CAMI also helped develop the Regulation on Asset Management, which establishes the procedures for management, inventory, and maintenance of municipal property. These manuals are a first step in helping officials—and citizens—understand two areas under local management highly vunerable to corruption.

CAMI also trained town officials and staff to develop citizen communications and outreach strategies and introduced citizen service monitoring and complaint mechanisms via SMS and WhatsApp. “I believe that WhatsApp mechanism and communications should become an integral part of municipal communication with citizens. We live in a world where information technologies are developing rapidly. We believe this mechanism will help improve our interaction with citizens,” said Temirbolot Abykeev, Head of Kosh-Dobo municipality.

Through these and other efforts, CAMI succeeded in reducing the citizen trust deficit (measured through a scoring methodology as the gap between local government technical capacity and citizen’s perceptions of performance and accountability) from 97 points in 2016 to 55 points in 2021—a significant improvement.

Building the Integrity of Local Public Finances in Malawi

In Malawi, institutional tensions and confusion over responsibilities between government units hindered the government’s attempts at decentralization, despite having in place a reasonable governance framework that includes local elections. Continued low capacity, lack of accountability, or outright misuse of already meagre public resources—compounded by patronage issues and inadequate intergovernmental systems—have threatened the most basic service delivery for citizens, particularly in the vast rural areas.

The USAID and U.K. Foreign, Commonwealth & Development Office (FCDO)-funded Local Government Accountability and Performance (LGAP) project was designed to work at the district level and with critical central government actors to facilitate the full implementation of decentralization and enhance district-level services. The project tackled policy design and implementation issues, intergovernmental coordination, and capacity building of elected councils and local staff. In addition, the project identified a key vulnerability in the weakness of public financial management (PFM) systems as service delivery, salary payments, and procurement were being gradually devolved to local authorities.


The LGAP team held multiple community meetings to engage citizens in the process. Photo: LGAP.

LGAP’s primary means of improving financial accountability and reducing corruption was to revive, enhance, and then fully implement the country’s essentially defunct Integrated Financial Management Information System (IFMIS), while strengthening of other PFM oversight functions. E-systems like the IFMIS have electronic checks, balances, and “fingerprints” that are much more robust and resistant to corruption than paper accounting. The LGAP team provided capacity building, mentoring, and on-site technical assistance to financial officers and oversight officials in 28 districts. As a result, virtually all target districts started using critical IFMIS modules for payments, revenue management, procurement, and so forth. For example, usage of the IFMIS module to manage procurement—a key area of vulnerability for corruption—increased from an average of use 40 percent of the time, to 80 percent use following project support.

In a context where resources to prevent and detect malfeasance are limited, disciplined use the IFMIS yielded tangible results. For example, in one partner district, three accounts personnel colluded to conceal requisitions and checks such that the details would not appear in the cashbook and funds could be diverted for personal gain. However, an examination of the bank statements and paid cheque images raised red flags. The District Council was able to use the IFMIS trail and other evidence to identify what exactly went wrong and investigate the responsible personnel, which led to their arrest and conviction—and ultimately helped recoup the stolen funds.

Coupled with PFM controls, the LGAP team trained district human resource planning and development officers to conduct monthly payroll surveillance. As a result, districts can now track the deletion and addition of officers on payrolls as they leave or join the councils, ensuring that the council properly records all staff numbers, thereby reducing the incidence of “ghost workers.”

“Those of us who have been here before LGAP and during LGAP can explain the significance of its contribution to decentralization at the policy level, but more importantly to transforming the practice of local government in the District Councils,” said Bwana Charles Kalemba of the Ministry of Local Government. “[Before LGAP] the IFMIS was in name only as all transactions were done outside the system. Inefficiencies were rife, seriously compromising service delivery. [LGAP] identified a problem in the system, brought it squarely to the institution that must fix the problem and persisted until a solution was found.”

Opening up Local Government to Citizen Oversight in the DRC

In the Democratic Republic of the Congo, both grand and petty corruption is endemic and perceived as both a symptom and result of an accountability system in disarray. Internal government checks and balances—such as legislative oversight, public audit institutions, and judicial review—are weak, and civil society lacks the power and organization to demand better. The situation harms service delivery particularly at provincial and community levels where citizens access fundamental health, education, and economic and agriculture services. Local political accountability is particularly challenging, given the absence of local elections.

USAID launched the Integrated Governance Activity (IGA) in 2017 to address governance and service delivery challenges at the national policy level, and to directly support seven provinces and their local governments. IGA has gone a long way to making appointed leaders of the local decentralized territorial entities (ETDs), and the staff of health centers and schools, more accountable to citizens.

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IGA provides skills training for officials and civil society in subnational financial management. Photo: IGA.

To combat and reduce corruption at the local level, IGA focuses on galvanizing community participation and social accountability. IGA supports the formation of citizen oversight committees through the election of community leaders who monitor local government plans and budgets. To complement the committees’ work, IGA supports the development and execution of community-based service score cards, school audits, intergovernmental and government-citizen information sharing, and skills training for officials and civil society in subnational financial management. The community engagement model puts the work of public officials under scrutiny and calls out mismanagement or malfeasance. Besides limiting the opportunities for corruption, community engagement also ensures that expenditure priorities are better aligned with the needs of residents.

IGA has invited provincial staff to visit localities and observe and monitor progress at ETDs, health zones, health centers, schools, educational sub-divisions, and community platforms. Reports from these study visits have described greater citizen participation and transparency in budget planning and execution, and greater official attention to citizen priorities. The links to direct reduction in corruption are not yet quantifiable but are under study.

Corruption affects the performance of local governments, distorts the allocation of local resources, reduces efficiency, and erodes public trust in institutions and decentralization processes. Working with local governments to address corruption requires a context-specific approach to identify key areas of “leakage” and build support for anti-corruption through community participation. The examples presented here illustrate some of the ways to tailor international good practices in anti-corruption to the local systems in each country and build effective, accountable, and transparent systems that are able to efficiently deliver services. Most importantly, these approaches were able to improve the legitimacy of local governments and build trust in the democratic process.

Robert Bodo was Chief of Party of the CAMI project and Carmen Conley is a governance specialist at DAI.