Do donors promote corruption?: the case of Mozambique

Donors inveigh against corruption, yet give more aid to corrupt governments. Debate continues on the causes of developing country corruption, but with little consideration of the possibility that the behaviour of donors may unintentionally promote corruption. This article looks at the example of Mozambique, where corruption grew rapidly in the 1990s. It argues that the donor community is prepared to tolerate quite blatant corruption if the elite rapidly puts into place 'market friendly' policy changes. The article notes that the Mozambican elite is divided, but the group which challenged high level corruption also criticised World Bank adjustment polices; donors opted for the corrupt faction that told the donors what they wanted. Donors try to avoid the issue by concentrating on institutional reform, which the corrupt faction has so far been able to bypass. The issue is compounded by Mozambique's reputation as one of the World Bank's few success stories in Africa, and donors are reluctant to besmirch that image by publicly raising the corruption issue