Uses and Abuses of Per diems in Africa: A Political Economy of Travel Allowances Introduction For most African countries, public finances are heavily constrained by low savings, narrow export earnings and thin tax bases. At a time when donor funds are becoming scarcer and competition for official development assistance is increasing, the improvement of the efficiency and effectiveness of public spending features high on the political and development agendas. Governments of developing countries in general spend resources equivalent to a range between 15 and 30 percent of GDP3. Hence small changes in the efficiency with which those resources are used could have a major impact on GDP and on the attainment of development goals. Therefore, one of the key roles of the development community is to help African countries in making strategic decisions about their public expenditures: what should the government spend on, how much to spend, how to finance government spending? Etc. An increasingly considerable portion of public spending is allotted to allowances and per diems, usually in connection with seminars and workshops. This is especially the case as capacity building is a central concern of development efforts notably in Africa. It has been reported (Chêne M., 2009 ; Søreide et al., 2012) that, in the last decades, there has been a rapid increase in the amount of money which is allocated to these expenses in many African countries with the aim to enhance competence and efficiency in state administrations. While such expenses on per diems might be cost-effective in some settings, the increasingly large amount spent warrants more attention to the question of whether those who spend get “value for money” for these expenses. Anecdotal as well as systematic evidence from many countries and projects suggest that there are many ‘trickery’ of the system and opportunistic rent-seeking behavior around per diems. A recent study by Ridde (2010) reported that malfunction of the per diem systems (which he called ‘perdiemitis’) is one of the most prevalent illnesses in Africa and is contributing to the expected failure to achieve the MDGs in Africa. Unfortunately this topic has remained unexplored and little has been written on the subject. The serious lack of knowledge regarding the allowance and per diem issues severely hampers any attempt to understand and improve the system. This paper contributes to fill this gap in the literature. Although the pursuit of benefits derived from allowances is common globally, its gravity may be more pronounced in the context of constrained economies such as those of African countries (Søreide et al., 2012). This paper examines the political economy of per diems in the African context. The paper revisits the conception of per diems on the continent, scans the extent to which per diems are used and abused, and explores the probable consequences and possible solutions to the manipulation of per diem systems. The focus of the paper is on national per diem systems as observed across African countries. Some arguments in the paper might therefore not be relevant for international organizations operating on the continent. The rest of the paper is organized as follows. Section 2 provides an overview of the theoretical and etymological roots of the concept of per diem. Section 3 examines the importance of per diems in national budgets in Africa. Section 4 discusses the current practices of per diems across Africa. Section 5 describes different aspects of manipulation of per diems and section 6 presents a political economy model of per diems and allowances. Finally, section 7 concludes by exploring alternatives and solutions for a more efficient per diems system. Full paper (pdf) here - afdb.org/fileadmin/uploads/afdb/Documents/Publications/Working_Paper_196_-_Uses_and_Abuses_of_Per-diems_in_Africa-_A_Political_Economy_of_Travel_Allowances.pdf
Posted on: Thu, 13 Mar 2014 18:00:29 +0000
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