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“Highway Robbery” Has Far-Reaching Costs

In the busy port town of Tema, Ghana, the driver of a tanker truck of gasoline northbound for Bamako, Mali, loads a few dozen pineapples onto his rig and sets out for the distant capital city. 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 southbound trucker bringing onions to the market in Accra, Ghana, will pay $580 in bribes along his 2,000-kilometer route and be delayed nearly six hours, adding $1,165 to his total transport costs.

Such stories are commonplace among thousands of drivers in West Africa for whom bribes are simply the cost of doing business. But taken as a whole, this form of petty corruption does a lot of damage to the region’s economy.

Professor and UW-Extension specialist Jeremy Foltz and professor Dan Bromley, both from the CALS Department of Agricultural and Applied Economics, used a unique data set compiled by USAID teams to put some numbers on it.

Analyzing detailed surveys of more than 1,500 long-haul truckers in Mali, Burkina Faso and Ghana, including data on amounts and collectors of bribes, Bromley and Foltz estimate that corruption costs—focusing on 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.

Foltz became interested in the topic when his own car was stopped by bribe-seeking police during his Fulbright fellowship in Mali a few years ago. “Bribe-taking at highway checkpoints is widespread,” Foltz says. “Because it appears that the profits are shared all the way up the chain of command, it’s immune to quick policy fixes.”

Such corruption hurts the economy in far-reaching ways. At stake, Foltz and Bromley say, are 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.

“The issue here is that net returns suffer, agricultural investments are necessarily delayed, yields fall, and soon attentive management is not worth the trouble,” they wrote in an article for Natural Resources Forum. “Fields and specific crops are left unattended. Tree crops are ignored or ripped out. Economic malaise sets in. Sustainability suffers.”

But the damage doesn’t end there. “Petty corruption of the type we are studying has a more deleterious effect on private investment than larger-scale government corruption,” says Foltz. “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.”

Foltz and Bromley are now focusing on understanding the structures, incentives and constraints to corruption, with the goal of providing information to policy makers and others seeking to eliminate this important barrier to development.

The outbreak of violent warfare in the region has not made their work any easier—or less needed.

“We’re studying the impact of new anti-corruption policies in Ghana and also how civil conflicts affect corruption,” says Foltz. “For example, in the recent conflict in Ivory Coast, rebel militias funded their operations in part by extorting bribes that were three or four times higher than normal. In Mali, rebels have used kidnapping and drug smuggling to raise money.”