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Overview 9
analysis, Goldie-Scot generated a map of corruption risk at each stage
of the value chain, based on both perceptions and reported nonspecific
examples.
The resulting picture is complex but plausible. Ethiopia’s construction
sector exhibits most of the classic warning signs of corruption risk,
including instances of poor-quality construction, inflated costs, and
delays in implementation. In some cases, these instances may have
resulted from corruption driven by unequal contractual relationships,
poor enforcement of professional standards, low public sector pay,
wide-ranging discretionary powers exercised by government, a lack of
transparency, and a widespread perception of hidden barriers to market
entry. These factors notwithstanding, corrupt practices at the operational
level appear to be largely opportunistic, relatively minor, and
capable of being controlled through professionally managed systems
and procedures.
The impression of favoritism and controls on market entry appears
to be fueled by (a) the perceived hidden influence of the ruling party
on the sector; (b) a tendency toward top-down development planning;
and (c) the government’s dominant role as client, regulator, and
upholder of professional standards. A small case study of unit costs of
federal roads tentatively supports the view that limited competition
may be playing a role in driving up unit output costs.
The study concludes that, without corrective action, both the perception
and the reality of corruption in the sector are likely to increase.
Ethiopia’s recent bold decision to join the international Construction
Sector Transparency will not in itself suffice to address the growing risk
of corruption as spending levels continue to outstrip management
capacity.
At the strategic level, Goldie-Scot recommends the following:
• Strengthen accountability by increasing performance audits and allowing
independent bodies to set, monitor, and enforce professional
standards.
• Strengthen client capacity, not only through civil service reform but also
through the extended use of proven management systems and procedures
and related training.
• Restore trust through specific confidence-building measures, including
a fairer allocation of risk in contracts and more openness about
the practical application of rules limiting the commercial interests of
officials involved within the sector.