Smaller, leaner government is good anti-corruption policy

Friday March 25 2016

By KWAME OWINO
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The only certainty one finds from the figures in government documents presented in advance of the budget estimates is this; that both the Legislature and the Executive will agree to a reduction in overall spending for the next financial year.

Overall public spending has increased by upwards of Sh900 billion per annum in the last three years alone, so this is laudable policy

Even allowing for inflation, this suggests that Kenya’s public sector is spending an additional Sh1.6 billion per calendar day in 2015, as compared to 2012.

In this environment, amid a spending race, it is hardly surprising that bureaucrats are developing bad ideas, such as laptops and a fund for every policy problem.

This experiment in record spending growth ramps up debt, leads to many unsuitable projects being implemented, and inevitably, to corruption.

Though professional tender hunters and givers have been hard at work, distributing public money to companies that they own by proxy, it is clear that increased public spending does not always improve the public interest.

This situation should lead to as close a consensus as possible that spending, on the back of taxation, debt and complicated Eurobond processes, is getting out of hand.

Few Kenyans today believe that the Ethics and Ant-Corruption Commission (EACC) in any configuration would affect corruption levels.

BAIT-AND-SWITCH

This supply-side response to reducing corruption through the unending circus of revolving-door appointments and interminable investigations is at best ineffective, and at worst counterproductive.

The way to reduce corruption, therefore, is to ensure that the money in the public sector which is available for distribution through white elephants, PowerPoint wielding consultants and roadside declarations of allocations is constrained.

That’s a demand-side approach to anticorruption policy. It’s difficult because it would mandate both the Legislature and the Executive with pre-emptive work and render the EACC and its predecessors largely symbolic, as it has been for a while now.

It would require that Kenyans not applaud every time a politician, usually from the county or national government executive, declares that stadiums will be built for the youth.

Rather these declarations should be seen through the proper lenses of bait-and-switch and giving “tenderpreneurs” another chance to receive payments in the name of deceased people.

Why, for instance, should Kenyans believe that a new injection of Sh30 billion today in both Kenya Airways and sugar companies will yield better results than before? 

Citizens should adopt the posture of cynics, knowing that any proposals for new spending should be justified through cuts in expenditure elsewhere.

This simple rule would save a lot of public money because this administration seems to be in the firm addiction to buying anything that has the word "digital" in it.

ILLEGAL HORSE-TRADING

While all arms of government have been on a spending spree, the Executive arm controls over 80 per cent of all spending, while managing to convince the country that most of the waste occurs at the counties.

Now, thanks to revelations about the National Youth Service (NYS), the Youth Enterprise Development Fund (YEDF) and the many state corporations under government control, this myth has finally been proven to be false. 

I don’t expect the Cabinet Secretary for the Treasury to say reducing proposed spending would also reduce the risk of corruption, but it should be clear to the regular taxpayer

The rate of growth in public debt is equally important. The justifications provided for it are that revenue collection has not kept pace and capital investments have taken longer than anticipated to mature.

Parliament, also, is not without blame for the large amounts of fraud and wastage. It has engaged in illegal horse-trading with the Executive, in addition to other unethical conduct.

For example, the Legislature curiously treated the last edition of the Auditor General’s report as a contest between coalitions, and thereby lost an opportunity to assume the moral high ground as an oversight institution and as the defender of the integrity of the office of the Auditor General.  

Instead, it allowed the passage of a law that purports to curtail the constitutional authority of this office without seeing this as the Executive’s quest to exert greater control on the budget.

That bureaucrats propose public initiatives to reward business associates is an undeniable fact, and the legislature must propose that such initiatives be terminated as a tax saving measure. That’s demand side anti-corruption policy, which saves taxes and reduces debt

Kwame Owino is the chief executive officer of the Institute of Economic Affairs (IEA-Kenya), a public policy think tank based in Nairobi. Twitter: @IEAKwame