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264 Diagnosing Corruption in Ethiopia
sector. Central planning, control, and influence are evident in many
aspects of the sector:
• Access to some construction materials at preferential prices
• Allocation of some specially imported equipment
• Access to finance and to land
• Registration and professional certification.
Such controls can readily be understood in the context both of
Ethiopia’s political history and of the scale of the development challenges
it faces. But however well intentioned, the controls also bring
with them the possibility of abuse. Whether or not such abuse occurs,
government control and influence can generate a perception of
unfairness or corruption. Such perceptions are reinforced by a lack of
appreciation in some quarters that any market gives rise to losers as
well as winners. Whether justified or not, this attitude can result in
strong perceptions of corruption, which in turn may deter some potential
bidders from competing. Such restrictions can have the effect of
driving up prices.
The detailed workings of such a process vary within the road sector.
With federal roads, the government is known to have made considerable
efforts to persuade non-Chinese contractors to reenter the market now
that prices have reached attractive levels. The reluctance of some such
contractors to do so may reflect a lingering perception that there is not a
level playing field.
With regional rural roads, a significant factor appears to be the
unfair allocation of contractual risk, which has contributed to high unit
costs. Several cases were reported of contractors being required to sign
contracts that did, at face value, share risk fairly while being warned
that in practice all risk lay with them. Other factors include weak
institutional capacity, limited experience of competitive bidding, and
untested procedures. All of these concerns are currently being addressed
with the assistance of a European Union–funded capacity-building
program.
Government Efforts to Address Corruption Risks
Ethiopian roads authority. As a leading, high-spending agency in the
construction sector, ERA has a reputation for relatively strong professionalism
in its approach to project planning, procurement, and management.
In response to the perceived risk of possible collusion between