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Construction Sector Corruption in Ethiopia 249
Table 6.1 Corruption Risks in Policy Making and Regulation of the Construction
Sector in Ethiopia
Value chain stages
Corruption risks at each stage
of the construction value chain
1. Policy making and regulation
2. Planning and budgeting
3. Management and performance
monitoring
4. Tendering and procurement
5. Construction and operations
6. Payment and settlement of
certificates
Perceived corruption risk at this stage
of the value chain
Now (international
comparison)
Likely trend (without
corrective measures)
High High High High
Med
Med
Low
Low
Perceived possibility of abuse of dominant role
of government in controlling the construction
sector
Typical risks as experienced internationally
The regulatory and policy environment in which the construction sector operates has a
major effect on sector governance and on the associated risk of corruption further down
the value chain. Policies and regulations that encourage, or help hide, corrupt practices
in the sector are not necessarily themselves indicators of deliberate state capture or the
result of more specific, ad hoc corrupt intentions. But a failure to amend such policies when
their damaging effect has become evident may be the result of pressure from groups or
individuals who stand to benefit from such corruption. Typical examples where regulations
or policies, or the lack of them, can feed corruption or the perception of corruption include
• nonexistent, unclear, or inconsistently applied procurement regulations;
• lack of transparency in the application of procurement regulations;
• nonexistent, unclear, or inconsistently applied performance audit functions;
• unclear or overlapping responsibilities for application or enforcement of procurement
regulations;
• large discretionary funding for development or maintenance of infrastructure;
• political capture of leadership of infrastructure or anticorruption agencies;
• lack of an independent judiciary; and
• lack of protection of civil society’s role in holding government and industry to account.
Indicators of such risks as perceived in Ethiopia
Specific
General
• Government control of price of construction materials,
access to finance, and access to equipment
• Government control of professional and
company registrations in the sector
• High-level, bilateral infrastructure deals
planned with China
• Lack of independent performance audits
• Concerns over quality
• Increasing unit costs
• Weak enforcement of professional
standards
• Lack of transparency
Examples reported by stakeholders as having recently occurred in Ethiopia a
• Construction sector professional considers himself (and his company) to be a victim of
improper practices but dares not complain for fear of being victimized, believing there is
no truly independent body to which he can appeal.
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