Political Financing in Developing Countries

A Case from Ghana

Joseph Luna

• Publisher: Routledge
• Year: 2019
• Print ISBN: 9780367429560
• eBook ISBN: 9781000754421
• Topic: Politics & International Relations
• Subtopic: African Politics
• Index: Politics & International Relations

This book argues that to fully grasp the decision-making of politicians and political actors in developing countries, we must first understand how politicians finance their campaigns for office—and to whom they are indebted and expected to repay.

Political Financing in Developing Countries focuses on Ghana in depth, a country often held up as an example of a successful, two-party democracy with regular party changes in government. However, it is unlikely that candidates and political parties are wealthy enough to finance the increasing costs of campaigns and constituent demands, and successful democratic outcomes could be masking a system that actually hinders development progress. Drawing on nearly 200 interviews and extensive fieldwork, this book posits that political funds are extracted by an iron square of politicians, bureaucrats, construction contractors, and political-party chairs which rigs the procurement of local-development projects to generate kickbacks. The iron square remains robust across party changes in government due to reciprocity obligations that minimize contractors' income risks. Ultimately, this web of kickbacks diminishes the quality of development by reducing the funds available for projects and distorting incentives to monitor projects. To break this iron square, the book recommends replacing sealed-bid procurement—a "best practice" that ignores on-the-ground realities—with a system that accounts for income stabilization and social obligations.

Overall, the book argues that scholars of development should advance research on political finance to identify and then alleviate the games that decision makers must play to survive in the political sphere. Political Financing in Developing Countries will be an important and timely resource for scholars across development studies, politics, economics, and African Studies.

1 Politicians, bureaucrats, contractors, and chairs

Political ecosystems are complex and interdependent. There can be many players in that ecosystem, including politicians, bureaucrats, traditional leaders, civil society, the private sector, and so forth. In a given society, many forces cut across the ecosystem, shaping dependencies and behavioral patterns. Though “modern” democratic constitutions shape the electoral practices of many countries, there are still underlying forces that shape political actions and outcomes—ethnicity, religion, history, colonialism, to name a few. This book argues that such histories and practices can even stabilize underlying corrupt behavior, despite visible changes in political leadership. To understand such an ecosystem, it is crucial to examine a case deeply.

Political ambitions, bureaucrats’ social obligations, and party organizations must all be financed. I posit that each of the players discussed in this chapter is essential to the functioning of Ghanaian politics. Development outcomes are suboptimal, and to understand Ghana’s challenges in providing quality public goods, one must understand political financing. I describe below a representative District Chief Executive (DCE), senior bureaucrat, construction contractor, and regional party chair. All names have been changed to protect respondents’ privacy. In addition, I supplement the DCE, bureaucrat, and contractor descriptions with quantitative data drawn from archives as well as surveys and interviews that I administered to a broader sample of DCEs, bureaucrats, and contractors.

The players

The politician

Appointed in 2012, Olivia Amadu is DCE of a district in the coastal zone of the country, well populated and located around Ghana’s forest belt. Agriculture and forestry are this district’s main sources of income, and its topography is varied, with numerous rivers, valleys, and rocky hills. Approximately half of the land in the district is dedicated to cocoa, Ghana’s major export crop. Plantains, cassava, cocoyam, livestock, and fish-farming are other important agricultural sectors. Like many of its surrounding districts, Amadu’s district has problems with illegal—or galamsey—miners who mine gold and other valuable resources, inflicting serious harm to the district’s ecology. Similar to its surrounding districts, Amadu’s district is predominantly Akan in ethnicity, and the most widely practiced religion is Pentecostalism.

Amadu’s district favors the NPP (New Patriotic Party, the national opposition), though it is more politically competitive than surrounding districts. An NDC member, Amadu contested the NDC parliamentary primary against the local party chairman in 2012, but did not win; instead, she was appointed DCE after the general election. A native of this area, Amadu explains that her family has always been involved in politics. Family political involvement is a common theme for DCEs; typically, a father or an uncle had been involved with a political organization many years before. For Amadu, two brothers have been involved in politics, with one holding political office and the other being a leader within the NDC. In addition to political office, family members of Amadu have been traditional chiefs and queen mothers. She greatly admired her brothers, and her family is drawn to the social-democratic nature of the NDC, a party that she claims treats all people as equals. For Amadu, her experiences as a woman further motivated her decision to enter politics; after seeing the women of her mother’s village suffer, Amadu decided to help them. Initially, she lobbied NGOs to assist these women, but later decided a political career would be more effective. Amadu is well educated. Still young, she attained her first degree from a prominent Ghanaian university in the early 2000s. Amadu later received her executive MBA. In her relatively short professional life, she has held several private and public positions.

Amadu harbors progressive (in Schlesinger’s 1966 formulation) political ambitions, and many of the DCEs in my sample share this stance. Talking about elections, I find her overly boastful, implying a security of position that is actually lacking. She is a stalwart NDC politician, and is highly critical of the opposition NPP, which is not a common sentiment amongst other DCEs in my sample, most of whom respect the opposition party. She is not willing to cooperate with the NPP. For her, it is clear that the NDC is the party of the people,

My party, we don’t talk much. We help people, ensure roads are good. We are the party for women and children—we don’t go on air just to talk. […] At election time, people vote on performance, and others will be disappointed.

Of the DCEs in my sample, Amadu is one of several who can talk of actual physical accomplishments in their districts rather than just big ideas. Throughout our interview, she emphasizes her accomplishments in great detail, as if ready to campaign at a moment’s notice.

Since I have come, we have built 25 boreholes. And I have been here less than one year!

In terms of campaigning, she is confident of the NDC’s fortunes in this district,

In 2008, our candidate for Parliament had only 5,000 votes, but the NPP candidate won with 17,000. In 2012, the NPP had 15,000, while the NDC had 13,000. In 2016, we will take the seat.

Despite losing the 2012 parliamentary primary to a party chairman, Amadu remained confident in her abilities and the NDC’s fortunes. Similar to many Ghanaian citizens, she places great faith in God’s plan,

You know, I contested at that time against [a then-executive of the party]. We went around, and I visited all the villages twice before I had a medical issue. I believe in God, and I am not surprised that I lost. I did all possible to win. My contender knew I was going to win.

With the chairman, I came here, this young lady with an attractive CV. People saw me as a threat. Some people were calling others, namely the men, not to vote for me. The way this lady (me) is, she may go far.

Even though she campaigned against a party executive, Amadu was still selected as DCE. As Schlesinger (1966) notes, politicians’ incentives can be framed by the higher offices available to them. For a DCE, the next higher office is that of Member of Parliament (MP). Being an MP confers numerous advantages over being a DCE. A DCE can be removed from office at any time by the President, and this removal is especially likely if the DCE loses favor with her local party executives. An MP, on the other hand, serves a fixed four-year term. If a politician is motivated by profit, then being elected as MP would allow them to network with large corporations and donors in Accra. According to my calculations, in the 2012 parliamentary election, 52 sitting DCEs (of then-170 total) contested for parliament, at either the primary- or general-election stage. Thirteen DCEs ultimately prevailed. The attractiveness of parliamentary office can poison relations between a district’s DCE and its MP(s), regardless of their party affiliations.

Amadu faces a hostile party executive board in the district, which, as many DCEs reported to me, could make one’s life difficult with demands for money; there are various coping strategies DCEs take to mitigate those challenges. Amadu’s tense relationship with party executives mirrors the experiences described by many other DCEs I interviewed. Party executives can hamper a DCE’s agenda through their influence on the procurement process or by cultivating opposition. Party executives can also try to bend a DCE’s agenda to their will. For this DCE, she avoids some of these challenges by turning to the outside to ensure that her district’s development needs are well served,

I have been lobbying [international organizations] since I came here. I go out, and I market my district! I got two six-room classroom blocks! I lobby.

Lobby is a favorite euphemism of this DCE. When I ask DCEs about pressures they face when awarding contracts, most concede significant pressure and moral dilemma. Most DCEs highlight the need to get contractors to perform well, but I found no DCEs who were able to ensure quality work. While Amadu acknowledges such challenges, she embraces the pressure that party contractors place on her,

Pressure from contractors? Oh, that is called lobbying! I condemn contractors who can’t perform. If we know people who perform, we can give it to them. But it is hard to know who can perform.

Other DCEs find pressure from contractors and community members more frustrating, however,

When there are demands from communities, you have to explain it. There is a process—don’t just have money in my purse. There is a procurement law—but people don’t want to hear it. Let people understand the limits of your power.

DCE, District G

It is about the MONEY! The people keep coming to you. ‘I am bereaved, I have to pay school fees, my wife is admitted (to hospital).’ And so forth. They expect money from you. It is especially bad with party people! They think that because you are DCE that you can just open up the district budget to them. But that is not the case!

DCE, District F

Regarding her relationship with bureaucrats, Amadu is a commander. She emphasizes her superiority over the bureaucrats and that she wants to implement policies quickly.

I always tell them, ‘I am a politician with short time.’ They are relaxed. At times, I push them. We don’t have time; we must perform now. If we want to go to tender, you must prepare the documents.

Many bureaucrats across my sample reported being rushed by their DCEs to prepare tendering documents. DCEs, in turn, face pressure from constituents regarding the award of contracts.

Amadu is a young politician with progressive ambitions for higher office (Schlesinger 1966). She is energetic, with a willingness to cater to party contractors and gain exposure. Her time as DCE builds both her credentials and her funding base. She hails from a competitive area, one that the NDC desires to ensure national victory. Further, attitudes towards women in Ghanaian politics, at least at the highest levels, are changing, meaning that she could be well placed to reach the top. When I asked Amadu where she envisioned herself in five years’ time she confidently assured me,

Oh, my party will still be in power. And I will be a deputy minister, at least.

The most difficult challenge Amadu faces is governing with a hostile party-executive board in her district. While it is possible that she can obtain higher office without their support, she would be more likely to win primaries with their favor. Many DCEs in Ghana have been ousted from their position by jealous party executives, so Amadu must find a way to satisfy their needs.

The bureaucrat

Yusuf Massoud is the District Coordinating Director (DCD) of a rural district located near a city in the coastal zone of Ghana. Despite its proximity to a city, this district lacks many modern amenities that were found in rural districts further north. Massoud’s district features coastal savannah and is flat in topography. Economically, this district is involved in livestock production, but also grows traditional crops.

Politically, Massoud’s district is located in a very competitive region, similar to DCE Amadu’s district, though in previous elections, it has tended to support the NDC for both president and parliament. Like several other districts, Massoud’s was subdivided within the past five years, with a portion becoming an entirely new district. With each census, new districts are created to ensure population balance.

My first full day in the district, I met the DCE. Unlike the other DCEs in my sample, this one was not initially welcoming towards me. He did not understand why I would need to visit a district in every region of the country,

Oh, it is the same everywhere! You have the same structures and policies!

To him, I was wasting my time. The DCD, Massoud, however, was very different in attitude from the DCE. Entering Massoud’s office, just across the hall, the environment was relaxed, and I greeted several senior bureaucrats while chatting with him. I explained that I wished to study the relationship between politicians and bureaucrats in Ghana’s local government.

That is a very thorny issue you raise there. It depends very much on the personality of the politician in charge. Anyways, you will need some candid responses.

As each senior bureaucrat heard my topic, they chuckled in a knowing fashion. Compared to other districts in my sample, the bureaucrats of this district were the most unified in their assessment of political ambitions and its negative effect on bureaucratic decision-making. While Massoud is my focus, I will include the perspectives of other bureaucrats in this section.

Massoud is a native of a northern region of Ghana and is well educated, holding an MBA. Like many DCDs, he has completed coursework at the prestigious Ghana Institute of Management and Public Administration. He has been a member of the public service for over 20 years. Joining the public service so that he could “contribute to the development of rural areas”, he has worked in numerous districts and several regions. This notion of contributing to development is a common theme amongst DCDs and other bureaucrats, and the civil service is a respected profession in Ghana.¹ In my sample, most DCDs will stay in one region, but work in several districts of that region; while Massoud has primarily worked within one region, he also has experience outside it. As to why he had served in so many districts, some for very short periods of time,

That’s a part of the system. Whenever there is a change in government, the DCD is moved around. This causes friction.

Many other Ghanaians serving as local-government bureaucrats have had similar experiences to Massoud. To sharpen my insights into the challenges faced by Ghana’s local-government bureaucrats, I interviewed 83 other senior bureaucrats across all 10 regions of Ghana. These bureaucrats held such positions as district engineer, finance officer, planner, and so forth. The bureaucrats in my sample worked in both urban and rural districts. Each interview lasted from one to almost four hours.

Table 1.1 presents demographics and levels of experience of the 83 bureaucrats that I interviewed and who collectively provided insights to this study. On average, these senior bureaucrats were, at the time of this study, in their mid-40s. Since Ghana’s retirement age for civil servants is set at 60, these bureaucrats hold their senior positions for approximately 15–20 years. On average, senior bureaucrats have 16 years of experience in the civil service. They have typically worked in their district (at the time of interview) for 4.5 years, ranging from 1.4 years in Upper West Region to 6.9 years in Upper East Region. On average, almost half of the bureaucrats in my sample are working in the regions in w...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Table of Contents
• List of illustrations
• Acknowledgments
• List of abbreviations
• Introduction: two puzzles in politics
• 1 Politicians, bureaucrats, contractors, and chairs
• 2 The iron square of political finance
• 3 Diversification, kinship, and failed public goods
• Conclusion: towards antiheroes and Machine-Guided Development
• Index