Lack of legitimacy: The international community never recognized the interim government and the President, members of Parliament, and mayors were not elected and held accountable for their decisions. Large-scale development projects have in the past been “white elephants in the service of grand corruption.” 3 The political parties are often used to distribute favors and less as a tool for political participation and the provision of public goods ( Box 1).
Political culture: Madagascar’s political system has been challenged by corruption for a long time. Why this deterioration in governance? An interaction of several factors created fertile ground for growing corruption:
This paper summarizes the current situation, surveys the economic costs of corruption, and provides a few ideas on how to advance anti-corruption reforms. More emphasis is needed on effective implementation and raising sufficient resources to fight corruption. After the return of constitutional order in 2014, the government has started to address corruption, mainly through the introduction of new laws so far. More generally, corruption is associated with less macroeconomic and political stability, potentially creating a vicious circle. It is likely that this deterioration in governance is currently reducing Madagascar’s economic growth by about ½ percent a year (or possibly more) and the tax revenue-to-GDP ratio by 3 percent or more. Governance indicators that generally were on par with middle-income countries in Sub-Saharan Africa (SSA) ten years ago have regressed and converged to the average of fragile SSA countries. Madagascar’s governance indicators weakened significantly during the transition period 2009–13.