Complete Book PDF (4.12MB) - World Bank eLibrary

84 Diagnosing Corruption in Ethiopia
itself undermine accountability mechanisms by weakening the links
between plans and budgets.
Bribery to influence allocation of resources at central, regional, and local
levels—risk: low. Survey responses received during this study showed that
a strong majority of public officials perceived budget administration
processes to be transparent and open to public scrutiny, and not to be
influenced by illegal payments. A smaller majority considered the criteria
used to allocate funds to be clearly defined. There were broadly spread
views about the extent of external auditing and the degree to which
allocations were subject to unforeseen reductions. A significant minority
considered budget allocations to be influenced by regional ties, political
affiliations, and influential connections. Overall, there was a strong perception
that budget procedures are sounder in theory than in practice.
Documentary evidence indicates that budget allocations to the
regions are based on the fiscal transfer formulae described above, which
reflects current policies. The regional allocations, announced annually as
a part of the budget cycle, are available on the Ministry of Finance and
Economic Development (MOFED) website. 10 In such a system, it would
in practice be difficult to bribe or extort bribes to increase allocations in
what is a well-defined fiscal (national-to-regional) transfer system. It is
at the regional level where discretion in the allocation of resources to
woredas enters the system—and where transparency and accountability
weaken.
At the woreda level, more than 50 percent of the total block grants
received are typically allocated to education, but the allocation can
change markedly from year to year within a given woreda, and the
amount allocated per student might change depending on the woreda
and region. The fact that there is no standard, or guide, per capita amount
allocated to education across woredas and regions makes external monitoring
difficult and greatly complicates any attempt to track funds down
the vertical chain from the central ministries (MOFED and MOE) to
specific schools. This difficulty in accessing relevant information does not
itself suggest corruption but does give rise to risks at this level.
Woreda-level education budget allocations are reflected in “performance
agreements” entered into between the WOFED and the regional
Bureau of Finance and Economic Development (BOFED). Woreda representatives
and council members do not have much discretion, given
that their budgets are in practice generally based on the amounts disbursed
in the previous year and there is little flexibility in the percentage