In 2015, Nepal was struck by a 7.8 magnitude earthquake followed by a 7.3 magnitude aftershock, resulting in over 9,000 casualties and almost 22,000 injured people (BBC, 2015). Entire villages were decimated, 2.8 million people were displaced, and 4.2 million people were in urgent need of medical assistance (WHO, 2015).
The international community responded immediately by sending in rescue teams, necessary materials, and various forms of humanitarian and financial aid (MSF, 2015). Although this aid helped the Nepali community tremendously, not all resources reached the intended target groups. Why?
Primarily because of corruption.
Corruption – the ‘abuse of public office for private gain’ (Schleifer & Vishny, 2003) – is a notorious problem in development aid and affects resource allocation greatly. According to Ban Ki-Moon, the former Secretary General of the United Nations, corruption absorbs a baffling 30% of all development assistance that never makes it to its final destination (UN News, 2012), and there is increasing evidence of a strong statistical correlation between corruption and a loss of life in earthquakes (Messick, 2015).
In Nepal, corruption hampered post-earthquake aid allocation in a number of ways, which are important to examine to avoid the further loss of resources. First, corruption diverted aid away from target groups into private pockets. This is a principal-agent problem, as is exemplified by volunteer staff who reported that Nepali government officials required bribes and a share of the resources to allow the inflow of earthquake resources from India (Francis, 2015) . In addition, the Nepali government tried to “wrest control of relief” by demanding that all aid allocation should flow through the Prime Minister’s Disaster Relief Fund, which centralized aid funds and made it easier for bribes to be extracted (Francis, 2015).
Second, the presence of corruption disincentivized international donors from providing humanitarian or financial aid in future crises (Francis, 2015). For example, Britain’s International Development Committee announced large budget cuts to their development program to combat corruption in Nepal and in other earthquake-stricken countries to penalize the governments for it (Griffin, 2021). Consequently, it not only hampers short-term allocation of aid, but long-term trust in the government to allocate the aid.
Although the international community knows that corruption takes place and that it hinders development aid from reaching those in need, it still has long ways to go in identifying where and how it inhibits aid allocation. This is a strong reason to conduct case studies of corruption in post-crisis management, such as in Nepal.
Bottom Line: Corruption disrupts development aid from reaching those in need. To avoid a further loss of resources, the international community needs a better understanding of the origins and mechanisms of corruption.
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