“Improving people’s lives”

Why does the transparency of state action matter?

It is a key constituent of good governance. A country’s citizens need to know how public funds are used to implement the political priorities defined by elected parliaments. That applies in Germany as much as in any developing country.

Is it harder to achieve transparency when state agencies from more than one country are involved, as is the case in development cooperation?

No, I would not say so. To start with, more participants mean more dialogue, so principles such as transparency can be agreed and monitored. International development programmes have been around for 60 years, but transparency has only become prominent on the agenda in this millennium. However, it has always been an important element of good governance of course. Today, digital technology offers new oppor­tunities for networking and sharing information. Accordingly, people expect to be better informed about government action, including the action of government agencies. In our view, transparency is a building block for successful development.

Did it matter that democratisation only started in many developing countries after the fall of the Berlin Wall?

There is a natural link between democracy and transparency. A dictatorship does not want its dealings to be discussed and examined in public. So yes, democratisation does create opportunities for civic participation – and it does so in two ways. Formally, it promotes participation through elections at local, regional and national levels, so the citizens decide who shapes policy at each level. Moreover, democracies offer space for civil-society engagement, with citizens forming groups and initiatives, and seeking dialogue with state institutions. Both aspects are important.

Do you sense that the press in Africa has grown stronger? It is now free in most countries, circulation figures have risen and more people are able to read.

Yes, that is correct. But I see a broader development. The media as a whole have grown stronger. Mobile phones are far more widespread than news­papers. The relevance of the Internet and social media has increased dramatically. The full scale of that potential became evident during the Arab spring. At the same time, however, the new technologies can also make a difference at the local level. In Togo, for example, we are supporting local governments that invite civic moni­toring by text messages. You are right, of course, to point out that literacy is also important. Education empowers people to demand more from their government in general.

How does KfW Development Bank promote transparency?

We are active at two levels. We have set up a website that reports on our own activities. At the same time, we work with partners to support the demo­cratic process in the countries concerned. There is a broad range of such cooperation. At the highest state level, to create and support the office of the auditor general is key since these institutions check and document the flow of public funds in order to inform policymakers and the public. And at local level support for civic monitoring and dialogue forums is useful. When we design our projects, we ensure that such oppor­tunities are grasped.

In what way would you say KfW is a model for others?

I think it is particularly important that we link input with output. We report not only on projects we implement but also on the impacts they have. We evaluate our work because we want to know why something succeeds or why it fails. And we publish our findings.

Budget support – with donor institutions directly financing national budgets in developing countries – is a controversial issue in Germany. On the one hand, it is hailed as a state-building tool; on the other, it is said to invite corruption. Is transparency probably a key issue in this context?

Yes, absolutely, but let me say that I do not think that this policy tool should not be a topic of ideological controversy at all. A tool as such is never good or bad, it is either appropriate or inappropriate in a given situation. There are certainly contexts in which budget support is not an option because the con­ditions are not right.

Please explain that in more detail. What conditions do you have in mind?

Well, there has to be a commitment to the democratic process in the recipient country. There also needs to be a proper budget preparation – a task generally performed for the government by the administration – and a due parliamentary process. An audit general’s office is required to monitor government spending and to keep the parlamentarians and the public informed. Actually, budget support can contribute to creating and strength­ening such processes and institutions. That is possible when donor institutions reach an agreement on these matters with the partner country’s government. Budget-support agreements can equally help to upgrade tax legislation and national revenue services, thus allowing government to collect more funds domestically. In this way, budget support can help to reduce poverty and promote long-term democratic development.

Some governments achieve impressive results in fighting poverty but leave little space for civil society.

Yes, and in those cases we need to consider what kind of development cooperation makes sense and is feasible. In Germany, the Federal Ministry for Economic Cooperation and Development takes those decisions. It is a fact, however, that one cannot possibly achieve everything everywhere at the same time. Even if a government is harsh in its handling of civil-society protests, it may still be right to help that same government to establish an audit office, because that institution will improve transparency in the long run, which serves citizens’ interests. Transparency is not an end in itself; it is one of a whole set of objectives with the ultimate goal of improving people’s lives. //

Questions by Hans Dembowski.

Doris Köhn is a member of the Management Committee at KfW Development Bank.

The KfW Development Bank transparency portal

In December 2012, KfW Development Bank launched a transparency portal on the Internet. It discloses facts and figures about its activities broken down by country and sector. In November 2013, more information went online about more than 130 projects on the website’s German pages. The portal is designed to cater to users’ needs. Visitors can access information about how public and KfW funds are used and what their deployment achieves.

KfW developed the portal concept together with the Open Knowledge Foundation. This non-governmental organisation has been campaigning for more transparency in German development cooperation in recent years.

 http://transparenz.kfw-entwicklungsbank.de/en