Poverty-focused Development Assistance and Corruption
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Some people worry that development assistance intended to fight poverty will instead be lost in the hands of corrupt governments. Although not a fundamental cause of hunger, corruption inhibits progress against hunger and poverty. During the Cold War, many Western governments --including the United States-- looked the other way when money sent to corrupt dictators for development projects disappeared or was misspent. Today, that attitude has changed. Most donor organizations and governments recognize that the effectiveness of foreign assistance depends on good governance, and transparent and accountable budgeting.
The existence of corruption and poor governance in some developing countries should not stand in the way of extending a hand up to poor people. It is important to acknowledge that the effects of corruption are felt disproportionately by the poorest in society. Illiteracy, poor understanding of legal rights and protections, and physical remoteness often deters poor people from reporting corruption or seeking justice and adds to their sense of vulnerability and intimidation. In countries that are still struggling with corruption and inefficient government, the United States addresses the problem by providing development assistance to poor people through non-governmental organizations. Aid is used to help governments put in place the institutions and structures needed to fight corruption and improve accountability and transparency.
The United States Agency for International Development (USAID) has devoted increasing attention to the problem of corruption. USAID develops goals and strategies to fit the specific circumstances of a given country, while refraining from channeling money through governments that tolerate corruption. Since the mid 1990s, the World Bank and International Monetary Fund have taken considerable steps to help countries combat corruption. Both have instituted specific initiatives providing education and support to governments. The Poverty Reduction Strategy Paper (PRSP) process has made the biggest strides as it has increased the participation of citizens of developing nations in their own countries' priority setting processes. Drafting a PRSP has helped many countries to strengthen the participation of ordinary citizens and increase the opportunity for accountability in its implementation.
The Millennium Challenge Account builds upon the work of other organizations to implement anti-corruption programs. In March of 2002, Bush stated: "The Millennium Challenge Account will reward nations that root out corruption, respect human rights, and adhere to the rule of law." The specific purpose of the Millennium Challenge Account is to support poor countries that have demonstrated a commitment to good governance, the welfare of their people and sound economic policies. Because sound policies create an environment more conducive to measurable poverty reduction and economic growth, the MCA relies on 16 selection indicators, including six that pertain specifically to ruling justly, to identify eligible countries. Channeling development assistance to governments that have stronger governmental institutions is a strong incentive for good governance. Recent government and economic policy shifts have created substantial growth for Ghana, allowing it to maintain one of the best educational systems in the whole of Africa.
