The Economics of Petty Corruption in West African Trucking
In the busy port town of Tema, Ghana, the driver of a tanker truck of gasoline bound for Mali loads a few dozen pineapples onto the top of his rig and sets out for the capital city of Bamako. His six-day drive will take him through 60 checkpoints, where he will pay about $200 in small bribes to police, customs and other officials, offering gifts of pineapples to speed his way through these delays.
In Madaoua, Niger, a trucker bringing onions to the market in Accra, Ghana, will pay $580 in bribes along his 2,000 kilometer route and be delayed an additional five and a half hours, adding $1165 to his total transport costs. He is among the thousands of drivers for whom these bribes are simply the cost of doing business in West Africa.
"Bribe-taking at highway checkpoints is widespread. Because it appears that the profits are shared all the way up the chain of command it’s immune to quick policy fixes."
AAE Professors Jeremy Foltz
and Dan Bromley
are using a unique data set compiled by USAID teams to quantify the obstacles to regional trade brought about by this type of petty corruption. They speculate that in landlocked countries like Mali, where this “highway robbery” is on the rise and routes to markets are lengthy, increased transport costs may threaten sustainability of food production and thwart development. What’s more, the unpredictable nature of petty corruption impedes foreign investment so important to these developing economies.
Trucks leaving a checkpoint in Mali. Photos by Jeremy Foltz.
At stake, the researchers say, are farm-gate prices paid to farmers growing products for export to distant markets. With increased transport costs eating into profits, farmers gradually abandon certain crops, such as cashew trees that grow well on marginal lands and prevent soil erosion. “Farmers are then induced to modify enterprise strategies away from tradables and concentrate instead on those products that are less exposed to the incoherencies in the commodity chain. The issue here is that net returns suffer, agricultural investments are necessarily delayed, yields fall, and soon attentive management is not worth the trouble. Fields and specific crops are left unattended. Tree crops are ignored or ripped out. Economic malaise sets in. Sustainability suffers,” they write.
From surveys conducted between 2006 and 2009 of over 1,500 truckers driving long-haul routes in Mali, Burkina Faso and Ghana, USAID West Africa Trade Hub researchers gathered detailed data on amounts and collectors of bribes and many other variables. Bromley and Foltz estimate from these data that corruption costs (losses from time delays and bribes paid) add 15 to 30 percent to the cost of transporting food and other products to and from markets in the region.
“Bribe-taking at highway checkpoints is widespread. Because it appears that the profits are shared all the way up the chain of command it’s immune to quick policy fixes,” explained Foltz. He got interested in the topic when his own car was stopped by bribe-seeking police during his Fulbright fellowship in Mali two years ago. “It’s clear from the sheer amount of money being raised this way that envelopes of cash are expected from superiors, which makes law enforcement very difficult,” he added.
A policeman at a Bamako checkpoint.
Ghana is attempting to end police corruption, aided occasionally by a courageous journalist who films such practices and broadcasts them on television. But bribery is growing in Mali. “Petty corruption of the type we are studying has a more deleterious effect on private investment than larger-scale government corruption,” said Foltz, citing the work of earlier researchers on the subject. “African countries have some of the lowest levels of foreign investment in the world and can ill afford to perpetuate a system that hampers growth even more than taxation.”
Future work will center on understanding the structures, incentives and constraints to corruption, with the goal of informing policy makers working to eliminate this important roadblock (literally speaking) to development. “We need to determine whether reducing transport costs will result in higher prices paid to farmers operating far from markets, which would support sustainability and food security. Because the trucking sector is highly competitive, with many individual operators, we believe that transport savings would be passed on to producers,” said Foltz. The project is funded in part from a competitive grant from the university’s center on World Affairs and the Global Economy.
Map of checkpoints and average bribes paid per hundred kilometers. Data for July 1 – September 30, 2009. Source: IRTG, 9th Report, November 10, 2009.