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260 Diagnosing Corruption in Ethiopia
services unrelated to their work. But so long as such a marked discrepancy
in incomes persists, the widespread perception will remain that
some public officials believe they have little choice but to engage in
corrupt activities.
• Discretionary powers and barriers to market entry. A company wishing to
operate in Ethiopia’s construction sector must overcome many barriers.
To have the confidence to enter a new market, any business must be
able to anticipate its likely future costs, its access to market opportunities,
its access to capital and equipment, the margins to be made in
those markets, and the related cash flows. In Ethiopia none of these can
readily be predicted, and all are affected by discretionary powers
assigned to government officials. Even if none of these powers are
abused, many companies, when faced with so many risks over which
they cannot with integrity exercise control, are likely either to increase
their prices, withdraw from the market, or try to control those risks by
engaging in corrupt activities.
Perceptions of What Constitutes Corruption
The following findings emerged from one of the workshop exercises
conducted in the course of the study:
• No respondent considered it to be “very corrupt” for a procuring entity
deliberately to benefit favored bidders by providing advance notice of
opportunities.
• No respondent considered it to be “very corrupt” for a contractor
intending to bid to be contacted by another bidder and dissuaded from
doing so.
• Views were polarized about collusion between staff from the consultant,
the client, and the contractor to overdesign, build to standard,
then share the savings. Some respondents considered this to be only
“slightly” corrupt, while an equal number considered it to be “very”
corrupt.
• There was a similar polarization of views over cases where a member
of the client’s staff instructs the contractor to include additional works
without prior consultation with consultant.
• All respondents considered it to be only “somewhat” corrupt for a contractor
to engage a member of the consultant’s staff as a subcontractor
or provider of equipment.