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The African Commission Report has received considerable attention and praise for its encyclopaedic analysis of the problems confronting Africa today. Despite its warm welcome, some commentators have felt that its recommendations on dealing with corruption are incomplete.

Certainly the Report describes how Western companies should be more accountable and honest in their dealings with African governments, but the critics argue that there is very little in the Report which compels African rulers to avoid theft themselves.

No doubt such omissions are unsurprising in a document drafted in part by a social democratic British Government and several African heads of state. It is equally unsurprising that conservative critics of the report have placed an emphasis on reforming the ?supply-side? of corruption, rather than the ?demand-side?. Taking the war on corruption to its African source is the order of the day, in the same way as the US government took the war on drugs to South America and financed the spraying of coca growing land with herbicide.

Unfortunately, like the coca plant, corrupt African regimes can be difficult to eradicate and are easily restored in tropical countries. A serious attempt to rein in the problem of corruption must constrict the demand for corruption too, from the companies who pay bribes.

When a company pays a bribe to an African government, it is not usually expecting to get a contract at a fair price; African governments do not hold monopoly positions in global corruption and cannot charge what they want. Rather, it is expecting to receive, alongside the government, a share in the public booty.

A company may not be complicit in instigating the corruption, but the consequent market distortion nevertheless benefits it. Indeed, under current UK law, it is illegal for a company to bribe foreign officials. So for UK companies, their involvement in corruption may be hidden even from them. A Government official may offer contracts or access rights on set terms away from competitive tender, and then take a share of the access payment, for example. The company has its contract and the official has opacity.

To get a sense of the size of the problem, consider the UK petroleum market. The biggest two oil companies made around £2.5 billion in profit from African petroleum in 2004. It is difficult to say how much profit would be made if the African petroleum market was entirely transparent and competitive. Assuming corrupt practices increase profits by twenty five per cent seems conservative ? the West African oil producers are rated among the most corrupt countries in the world and a little corruption can have a major effect on the residually calculated profits. Twenty five per cent of £2.5 billion is a very respectable £0.6 billion, transferred every year from Africa to UK shareholders.

With a half-a-billion-pound-a-year annual gift courtesy of petroleum corruption, it is not hard to see why there is a demand for fraud and embezzlement in developing nations. Companies, politicians, and shareholders may not speak of it or encourage it, but it is a gnawing temptation. In tax terms, it is equivalent to a reduced tax rate of between one and two per cent on incomes over £100,000. Given a choice between attempting to stamp out African corruption or providing free early years schooling and 10,000 extra police in the UK ? roughly equivalent in fiscal terms ? a government is unlikely to want to solve what is, after all, all things considered, someone else?s problem.

Nation-state democracy is a phenomenal form of national government, but for non-citizens the outcomes can be pitiful. The people in developing countries who are short-changed by corruption would benefit from increased global governance in the form of accountability and anti-corruption laws. In the current and foreseeable international climate, such governance is likely to remain an unrealisable ideal. It is more realistic to aim for anti-bribery and corporate disclosure legislation to be incorporated in the legal codes of every OECD member, together with large non-members.

Such legislation could prohibit companies from offering bribes, as is already the case in some countries. It would also have to bring pressure on African governments to offer contracts and resources according to competitive processes, and to act in a transparent manner.

Various methods have been proposed for reaching this end, with some more contentious than others. One proposal has been to make international aid conditional on African countries taking anti-corruption measures. Politicians frequently revert to ideological type when discussing the merits of giving aid, if half is stolen by an administrative elite and half funds primary schooling.

The difficulty with similar methods undertaken by a developed country is that they place a great burden on its moral and legal capacity. It must decide on the ethical course of action, set up the framework for implementation, and ensure its continued operation. It must squeeze the supply of corruption, whilst knowing integrity may have considerable short-term financial costs. No wonder there exists a demand for African corruption.

The article "Aid, Poverty and Corruption" by Michael Hodd and James Waters will be published shortly and will be available from This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

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