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Corruption in the Water Sector

Causes, Consequences and Potential Reform

Fall 2006

By Patrik Stålgren

Swedish Water House Policy Brief Number 4. Stockholm International Water Institute, 2006.

Conservative estimates hold that the lack of access to clean water causes the death of five million people worldwide every year. To grasp the magnitude of this figure, think of 34 jumbo jets, each carrying 400 passengers, crashing every day of the year—that adds up to some 12,500 planes annually.

Beyond these catastrophes, on a global scale there is an increase in competition for water resources as well as escalating water pollution. The resulting soil degradation, destruction of ecosystems, and loss of productive land seriously impacts sustainable socio-economic development and political stability.

The main reason behind all this is not the lack of a natural supply of water, nor is it primarily an engineering problem, i.e. stemming from the lack of technical solutions. Instead, this global water crisis is primarily a crisis of governance. As a group of experts working under the UN Millennium Project put it, the problem is "the lack of appropriate institutions at all levels, and the chronic dysfunction of existing institutional arrangements".

Corruption is at the core of the governance crisis in the water sector. Whereas the scope of corruption varies substantially across the sector and between different countries and governance systems, estimates by the World Bank suggest that 20% to 40% of water sector finances are being lost to dishonest and corrupt practices. The magnitude of this figure is distressing, especially if one considers current efforts to aggregate the USD 6.7 billion needed annually to meet the Millennium Development Goals (MDGs) for water and sanitation in Sub-Saharan Africa. An average level of corruption of represents a leakage of USD 20 billion over the next decade. While there is a need to scale up financial commitments within the sector, current levels of corruption necessitate reform to increase the effective use of existing financial resources.

Ecosystems suffer because of this corruption. Bribes are paid to cover up the discharge of wastewater and toxins in water resources, and to allow for excessive abstraction from rivers and groundwater reservoirs. Where there is a lack of functioning public institutions (typically engendered by corruption) and a vibrant civil society, the environment is often stuck bearing the burden.

Furthermore, corruption increases transaction costs and discourages investments in infrastructure, e.g. hydropower production. In fact, the biggest constraint on business development in emerging and transitional economies is corruption, second only to access to financial resources.

At the level of household economies, its cost is felt in deficient water service delivery and practices, contributing to the 40 billion working hours lost annually at a global scale due to inefficiency in the water sector. It thereby keeps many children out of school, as they are instead occupied by the time-consuming burden of collecting household water—a burden that traditionally falls largely on females.

Whereas much effort has been made during recent decades to widen stakeholder participation in water resources management and delivery, corruption jeopardises the democratic principles of equal access in decision making by reducing public agencies to instruments of private benefit. Furthermore, it undermines the rule of law, thereby depriving water users from their right to a just legal system and impartial law enforcement.

Water scarcity is often cited as a potential source of conflict. According to the UN Global Programme Against Corruption, corruption adds to this threat by undermining government security institutions (rule by law), increasing the gap between rich and poor and fostering a culture of crime and illicit behaviour which upsets social and political stability and sparks violence.

In short, corruption affects the governance of water by affecting who gets what water when, where and how. It also determines how costs are distributed among individuals, society and the environment. Corruption worsens the world water crisis and evidence suggests that the costs are disproportionately borne by the poor and by the environment.

External Link: Corruption in the Water Sector

Read More: Environment, Governance, Health, Poverty, Sweden, Global

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