Lessons Learned: Accountability, Transparency, and Hurricane Mitch 
Abigail Horn 
Consultant’s Evaluation 
December 2001 
Preface 
This document is not an assessment of USAID missions’ ability to integrate 
accountability and transparency into Mitch reconstruction projects. Rather, this is an 
attempt to illicit lessons learned from the participants (USAID employees, host 
government officials, contractors, and civil society representatives) and to draw broader 
recommendations for USAID missions to improve the accountability and transparency in 
situations with large inflows of donor funding. 
I traveled to Honduras and Nicaragua in November 2001 to conduct interviews. Both 
missions were in the midst of closing out most of their Mitch projects. I was unable to 
travel to El Salvador and Guatemala, the other Central American countries receiving 
large portions of the Mitch Supplemental funds, but spoke to USAID employees in both 
countries and received some written documentation of their efforts. I have included their 
experiences in my analysis. 
The overarching question behind my research was sparked by the mandate of the 
Stockholm Consultative Group meeting in May 1999. In Stockholm, donors and 
beneficiary countries agreed upon seven principles to guide reconstruction; these 
principles were to take the countries affected by Hurricane Mitch beyond reconstruction 
to the point of “transformation.” Transparency and accountability was one of these 
transforming principles. Three years after the devastating power of Hurricane Mitch 
decimated parts of Central America, I posed the question: To the extent that USAID 
focused on this principle during the reconstruction process, did it lead to sustainable, 
positive changes in the host countries’ approach to accountable and transparent 
governance? 
Before continuing, I want to emphasize a point raised by many USAID employees. An 
inherent tension exists between creating short-term results and long-term transformation. 
The Missions were under intense pressure from USAID/Washington and Congress to 
design and implement these projects quickly. Mitch projects not only had to be 
obligated, but completed by December 2001. With that short timeframe, Missions 
generally focused on straightforward emergency needs and reconstruction, avoiding as 
unrealistic any approaches that required institutional change (with often iffy political 
will). Unless they had a preexisting government counterpart that they trusted, most 
Missions turned to US contractors and PVOs to implement their Mitch activities. That 
said, the Missions found a variety of ways to emphasize the importance of accountable 
and transparent governance. If they did not work directly on causing transformations, 
they certainly created some changes at the margin and hopefully provided the impetus for 
greater change in the future. 
1
Introduction 
Hurricane Mitch affected Central America as September 11th affected the United States – 
it served to unite each country and was an impetus for major change. Life was never the 
same: citizens live with a heightened sense of vulnerability as well as a sense of hope that 
their country could be rebuilt better. 
The hurricane hit the Central American countries on October 26-27, 1998, producing 
massive flooding and destruction. More than 9,000 people were killed, 13,000 injured, 
and 3 million displaced. Estimates of damages to homes, schools, businesses, roads, and 
other infrastructure exceed $8.5 billion.1 The United States quickly provided 
approximately $300 million in humanitarian relief, followed by $621 million in 
reconstruction assistance in May 1999.2 Accounting for these funds was a major concern 
of Congress, USAID, and the recipient countries. Given the history of misuse of foreign 
assistance and public funds in Central America, those involved in reconstruction projects 
introduced multiple levels of controls. 
USAID Initiatives to Promote Transparency and Accountability 
Missions adopted a variety of approaches to promote transparency and accountability in 
the host countries. Some were targeted anti-corruption projects (i.e. Inspectoria de 
Proyectos) while others incorporated participatory oversight mechanisms into the design 
of reconstruction projects. The examples below illustrate the principle models employed. 
1. Donor Coordination and Promoting a Common Vision
Transparency and accountability were central policy issues from the first discussions on
international assistance between donors and Central American nations. Given historic
precedents, the Central American Presidents knew they would be under careful scrutiny
and many issued statements declaring their support of a transparent and accountable
reconstruction process. Leading up to the pledging consultative group in Stockholm,
USAID wrote a discussion paper for Stockholm on mechanisms to ensure transparency
and accountability in Hurricane Reconstruction and Transformation. The donors took
these issues extremely seriously and in the final Stockholm Declaration, they included
them as key principles:
• Reconstruct and transform Central America on the basis of an integrated approach 
of transparency and good governance; and 
• Consolidate democracy and good governance, reinforcing the process of 
decentralization of governmental functions and powers, with the active 
participation of civil society.3 
1
 United States Agency for International Development, “Hurricanes Mitch & Georges: From Relief to
Reconstruction. The United States’ Response” (Washington, 1999), 2. 2
 These funds, the Central American and Caribbean Emergency Disaster Recovery Fund (CACEDRF), also
included assistance to Caribbean countries hit by Hurricane Georges in September 1998. 3
 http://hurricane.info.usaid.gov/dcgroup.html
2
By issuing a strong, shared vision for reconstruction, donors and host governments lay an 
important foundation for further work on accountability and transparency. Everyone 
interviewed agreed that the image of the donors as a united front with a shared policy was 
decisive for the progress to come. Even the normally critical NGOs, Oxfam and WOLA, 
praised the efforts of the donors in a letter dated Jan 9, 2001 to Carl Leonard, Acting 
LAC Assistant Administrator: 
Since Mitch, the coordination between and among the G-6 donors has 
increased significantly and this has been very constructive. Donors have 
met each other regularly in both Nicaragua and Honduras, met with 
governments, and begun to meet with civil society groups. They have 
coordinated some reconstruction efforts and coordinated messages to 
governments about transparency and participation. 
Putting anti-corruption concerns front and central allowed the donors to press on this 
issue throughout the reconstruction process. It was an important diplomatic tool. 
Donor coordination, however, did not end with a joint policy statement. It was 
operationalized into regular meetings and follow-up plans. The best example of this 
coordination was in Honduras. The G5 (now the G15) was the central mechanism for 
coordination. After Stockholm, they decided to create working groups for each technical 
area, including Transparency. These “Sectorial Tables” took the lead in establishing 
progress indicators for each area. They created matrices with goals and clear timeframes. 
The donors then worked to incorporate civil society and the government into the tables, 
and by 2001, government representatives led them. 
What began as a donor coordination effort has become a development tool for the 
country. With HIPC pending and the need to create a Poverty Reduction Strategy Plan 
(PRSP), the tables were a natural arena to discuss the issues. They are now poised to do 
follow-up. The tables are often civil society’s only venue for discussing national issues 
with the government on an equal footing. 
The Transparency Table keeps all interested parties – government agencies, civil society, 
and donors -- involved and knowledgeable of what the various members are doing. 
Although it has an impressive and extensive matrix of goals, it is not particularly action 
oriented. This is mainly due to the large number of participants and the political nature 
of the goals. Its value, however, should not be underestimated. It provides an excellent 
opportunity for donors to push on issues at the technical level, for civil society to 
advocate for further reforms, and for the government to highlight the progress it has 
made. It has also set up an environment for different government ministries to learn from 
each other and perhaps compete. The current struggle is to keep the other donors 
involved. With limited staff, multiple meetings of different tables, and other duties, 
donors are finding it hard to stay active in every sector. USAID is the only active donor 
member of the Transparency Table. 
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2. Inspectoria de Proyectos (Project Inspection)
Almost immediately after Hurricane Mitch hit and it was clear a large amount of
international funds would be flowing into Central America, donors began discussing
mechanisms to monitor the use of these funds and the implementation of projects. Over
several months of discussions, particularly between USAID, the IDB and the World
Bank, a joint initiative eventually emerged. As part of a larger Procurement Reform loan
package the IDB was developing for Nicaragua and Honduras, they would include an
external oversight mechanism called the Inspectoria de Proyectos. USAID and several
other bilateral donors pledged support for a total of approximately $10-$11 million in
each country.
Described respectively as a “quality control entity” and an “ad-hoc parallel entity created 
to do international policing during an emergency” by two different IDB representatives, 
the Inspectoria was designed to put auditors and technicians from a Big Five firm into the 
implementing units of reconstruction projects. They would monitor the entire process 
from designing the procurement to physical completion. They would report to the donors 
who would make all audit reports public. Unlike other oversight mechanisms used by 
USAID, the Inspectoria would monitor national funds as well as international funds. 
Unfortunately, as of this writing, the Inspectoria in neither country is up and running. 
Although USAID and IDB are hopeful in both cases that it will start soon – the host 
governments have agreed to the conditions of the initiative; the loans have been ratified; 
other donors’ funds are lined up; and the firms have been selected – it is clearly too late 
for USAID’s reconstruction efforts. When asked if he would recommend the Inspectoria 
model for similar situations with massive reconstruction projects, the IDB representative 
in Honduras replied, “Only if it could be up and running in three months.” Given the 
major hurdles of government intransigence and the slow IDB loan process, that 
timeframe is near impossible. 
Slow implementation aside, several people voiced their continued support for the 
Inspectoria. Its main selling point is its mandate to oversee nationally funded projects; it 
provides donors and citizens with the opportunity to monitor the government’s financial 
management and implementation. It also sets the precedent of providing access to 
information and could encourage citizen participation. Once it begins, it has funding for 
four years: four years of strict quality control, covering 80% of public investment 
(national and international). In theory, this means the houses, roads, and bridges built 
under its tutelage, will be “built back better.” 
Will the Inspectoria de Proyectos increase Hondurans’ and Nicaraguans’ capacity to 
provide financial oversight and quality control? This is debatable. Some believe it will 
serve as an impetus to create a stronger internal audit function within the government. It 
will be operating in tandem with the IDB’s procurement reform program that will provide 
technical assistance and training to government line ministries. The Inspectoria could 
push the ministries to internalize the training lessons as they will be under constant 
vigilance and will have to put their training to test. The flip side of this debate is that the 
Inspectoria will serve only as an external entity for international policing replacing the 
4
need of the host governments to do the job themselves. Once the funding leaves, so will 
the oversight. 
To tip the balance, USAID should work with other donors to incorporate an internal audit 
entity into the ministries. These government officials could be trained by working 
directly with the Inspectoria’s international firm and over the course of the four years, 
take over their role. The Inspectoria is an extremely expensive initiative to only provide 
four years of external oversight; the expertise involved should be harnessed to train a 
sustainable, indigenous cadre of internal auditors. 
3. Citizen Participation
In both countries visited for this report, the governments, at donor insistence, had created
official government-civil society bodies for consulting and collaborating with citizens
post-Stockholm4
. In both countries, civil society representatives recognized the
importance of these openings but were critical of these attempts as not going far enough.
The director of the Nicaraguan group Fundemos voiced by far the most optimistic view 
of the opportunity provided by these forum (called COMPES in Nicaragua): 
COMPES is a start. It took pressure from the international community 
just to form it. The government created it thinking it would never function 
but it has lots of potential and we should take advantage of it. Use it and 
strengthen it. Now more groups are interested in participating. The 
political parties all presented their electoral platforms to COMPES. They 
saw it as an important arena. 
At a World Bank Institute teleconference on instruments for citizen participation in 
government affairs,5
 a representative of the group Interforos (an association of Honduran 
NGOs) discussed how the “Commission for Civil Society Participation for National 
Reconstruction and Transformation” and other joint government-civil society initiatives 
have functioned in his country. He explained that while there has been formal 
consultation of civil society in which citizens and groups generated proposals, very few 
joint government-civil society recommendations were formulated and no joint decisions 
were ever made. Groups in Nicaragua had a similar analysis. Citizen participation in 
both countries was also limited by cynicism; some groups didn’t trust the government to 
listen to them so didn’t bother trying to participate in these official forums. 
In both cases, the official arenas created for citizen participation became the main 
mechanism for citizen consultation for the HIPC required PRSP. Most interviewees 
focused their comments on this more recent process. While Mitch brought expectations 
for reconstruction, the poverty reduction strategy promised the broader notion of 
4
 In Honduras they created the Comision de Participacion de la Sociedad Civil para la Reconstruccion y
Transformacion Nacional and in Nicaragua, the Consejo Nacional de Planificacion Economica y Social
(COMPES), an entity that existed by law for several years but had never been realized until after
Stockholm. 5
 “Instrumentos para la Participacion Ciudadana en Cuestiones de Gobernabilidad,” November 12-13,
2001.
5
transformation. Both Interforos (Honduras) and Coordinadora Civil (Nicaragua) 
characterized this process as a sham and publicly denounced it. The World Bank 
representative in Honduras pointed out that the government held 13 community meetings 
around the country with about 200 participants at each. He argued that citizens were 
given the opportunity to contribute and they did; however, in the end, the government – 
quite appropriately -- wrote the document. Not all views could be incorporated. In the 
future, he would consider including representatives of civil society on the drafting team 
and noting in the plan that national consensus was not reached on every point. 
How to introduce more productive citizen participation is problematic. While efforts at 
the local level do seem to be effective – public budget oversight and other initiatives do 
seem to be transforming the relationship between communities and their municipalities – 
national level initiatives are weak. It is unclear how to determine who represents civil 
society and it is difficult to reach consensual decisions with such a plethora of inputs. In 
the case of the PRSP, which inputs to include was complicated further because the final 
document had to be approved by the international financial institutions backing HIPC, 
with definite notions of how to address poverty. 
No one doubts that the Mitch experience did open spaces for civil society. They now 
have greater access to the President and Congress. The formal initiatives, although 
flawed, are a beginning and did allow for greater citizen input into a long term strategy. 
Some believe the governments only listen because of international pressure. That may be 
true. The biggest hurdle, however, is how to turn this fledgling participation into 
accountability. While donors can require participation in projects, they cannot demand 
accountability. 
4. Targeted Anti-Corruption Projects
Honduras was the only mission that opted to use Mitch funds for a targeted anti￾corruption initiative beyond the Inspectoria. The two main components are (1) a public
awareness and advocacy campaign run by a local NGO and (2) technical assistance to the
Comptroller General Office to strengthen a special audit unit for internationally funded
projects. Both are long-term initiatives by nature as their respective goals include
cultural change and institutional development. They only make sense in the context of
reconstruction funding if you are promoting “transformation” as part of the mandate
AND you have reason to believe funding will be available beyond the reconstruction
period to sustain these efforts.
CIPRODEH, a well-established human rights organization, is running the anti-corruption 
awareness campaign. They have worked with a media company to develop public 
service announcements (PSAs) that will run on TV and radio. They are publishing a 
newsletter, Trasluz, have created a website with informative information and valuable 
links, and will offer a variety of workshops on how citizens can participate in government 
oversight. During two major televised soccer games, they ran a PSA across the bottom of 
the screen promoting their website and advocating for greater government transparency. 
This is a nice example of an anti-corruption advocacy and public awareness project. It 
could be an impetus for longer-term change. However, it will take time to show any 
6
results and its source of funding is short-term. Unless a strategy for continued funding is 
developed from the beginning, the effectiveness of a general advocacy campaign will be 
limited. 
The second major component is technical assistance to the Comptroller General’s Office 
(CG). USAID funded the creation of a special unit (UAPOI) within the CG that could 
provide quality audits of all international donor-assisted projects. This idea has some 
merit. By creating this specially trained unit, the overall capacity of the CG increases. 
The ownership of audits of internationally funded projects lies with the host government 
so they have easier access to information and use of the justice system to prosecute 
criminal findings, and moreover, they are under increased outside pressure to do so. 
Instead of using a private firm, donors could theoretically rely upon on this unit to 
complete audits, thus making them part of public record. 
The extent to which this occurs depends upon how internalized UAPOI becomes within 
the CG. The government currently pays the salary of all the employees except for one 
USAID-funded technical consultant. These auditors were hired from outside, tested and 
selected by USAID but are considered full fledge CG employees. Although USAID has 
made use of UAPOI to oversee about half of its reconstruction funds, the other donors 
have been slower to warm to the idea. If a critical mass of donors don’t use UAPOI for 
audit oversight in the future, it will not be worthwhile for the CG to maintain it. 
The USAID project provided some additional technical assistance to the CG that could 
provide benefits beyond the walls of UAPOI. The technical consultant providing 
guidance to UAPOI developed a training course on auditing international entities that 
private firms now look to the CG to provide. UAPOI will soon (already?) be publishing 
their audits on-line, an important step in the struggle to improve access to public 
information. Additionally, the same consultant has developed a computerized system of 
audit findings follow-up that is currently woefully lacking in the CG. The Comptroller 
approved the system for the entire agency and all 77 internal audit entities in the line 
ministries. As of this writing, actual implementation of the tracking system is pending. 
The biggest concern that interviewees raised about assisting the Comptroller General’s 
Office was whether or not the CG has any political will to improve its effectiveness. It 
currently has very little credibility as an independent agency. Several people questioned 
whether creating a special unit for donor-funded audits changed that perception at all. 
They also doubted it would continue without USAID funding. 
The Comptroller General’s Office is certainly in need of major reforms. A World Bank 
“Modernization of the State” loan will soon come on line in Honduras that will hopefully 
help address some of these changes. But was it a mistake to try and work with the CG to 
the extent possible during the Mitch Reconstruction process? Although the UAPOI may 
not prove sustainable, the technical assistance provided by USAID did lay the 
groundwork for the type of reforms needed: higher quality audits, the trust of the 
international community, a tracking system for findings and follow-up, and public access 
to audit reports. USAID could not tackle larger institutional flaws within the context of 
7
Mitch reconstruction, however, if these elements that promote transparency and 
accountability take hold, the project will have been a success. Unfortunately, that may be 
a large IF. 
The Mission also supported some noteworthy “stand alone” projects that when viewed 
together work to improve accountability in the country. They were completed in a short￾term timeframe and yet could provide an impetus for change without sustainable funding. 
The newly created National Anti-Corruption Council received technical assistance to 
assess the effectiveness of its structure and to develop recommendations to strengthen its 
role in the struggle against corruption. Cardinal Rodriguez who provides unprecedented 
legitimacy to the organization leads the Council. USAID’s small investment could go far 
under the leadership of this universally lauded “anti-corruption champion.” The Mission 
also supported a public opinion survey on corruption by Mitch Seligson. The results 
have proven useful for generating discussions at all levels of government and society. 
And finally, the Mission, through personnel time alone, is fostering closer collaboration 
between a diverse group of organizations (the Comptroller General’s Office, several 
NGOs, and the Ombudsman’s Office) all involved in “social audit” initiatives. USAID, 
recognizing the plethora of projects and the threat of duplication, brings the participants 
together to discuss coordination and the development of a common methodology. Social 
audit as a means of citizen oversight of government actions is not a new idea in Honduras 
but has become increasingly popular since Hurricane Mitch and is a very promising 
direction for citizen participation in good governance. 
5. The Role of Local Government and Accountability
Several Missions offer excellent examples of promoting transparency and accountability
at the local level through projects that have “brick and mortar” reconstruction as their
primary goal. Their project designs included elements of accountability that not only
made their project goals more successful but also improved the relationships between
citizens and their local governments. The Roads Program in Nicaragua is one such
model.
The Nicaragua project was designed for both road construction and income generation. 
Community members worked with their municipalities to define road priorities and then 
they were hired to construct the roads. The project, implemented by CARE, reached 17 
municipalities, reaching 14,000 families. Of the project’s $8 million, about half went to 
the community members in cash payments for work. Before beginning the work, CARE 
signed “agreements” with each collaborator in which roles and responsibilities were 
defined and agreed upon. For example, one responsibility of the community was to guard 
the donated tools and materials. If anything was missing, they had to pay for it. 
(Materials rarely went missing.) Likewise, CARE was responsible for providing those 
resources in a timely manner and the community held them accountable to this. The 
municipality was in charge of managing the payroll of workers. CARE worked with the 
town government to create a good financial system to track the cash payments. Providing 
accurate and reliable payments to community workers, improved the municipality’s 
credibility with its citizens. Establishing understanding of each collaborator’s 
8
responsibilities created a system in which all participants were held accountable to each 
other. 
Was this experience transformational? Only time will tell but it seems promising. 
Municipalities have learned to turn to their communities for input and assistance and the 
communities are demanding more from their municipalities. Both better understand their 
rights and responsibilities, and the concept of mutual accountability has shown proven 
results. 
Protecting USG funds 
This paper would not be complete without mentioning USAID’s major achievement in 
monitoring and ensuring the proper use of USG funds in environments that are rife with 
corruption: Central America in general, and large scale construction specifically. 
The Office of Inspector General (OIG) played an important role in this oversight. The 
CACEDRF appropriation included $1.5 million for additional OIG operating expenses. 
They did a risk assessment of each planned activity and devised varied audit schedules 
accordingly. High-risk activities underwent concurrent audits. The OIG also provided 
fraud awareness training in Spanish to all USAID contractors and grantees. Overall the 
OIG found only low-level problems, associated with mismanagement not maleficence.6 
USAID mission employees described a textured layering of control mechanisms. All 
projects were subject to normal USAID oversight. This includes voucher review by the 
CTO, hands-on assistance by a USAID financial analyst to help create strong financial 
management and to correct findings as they occur, and annual audits generally done by 
local branches of a Big-5 accounting firm. In addition for Mitch funded projects, the 
Regional Inspector General (RIG) required quarterly (i.e. concurrent) audits contracted 
through DCAA, and the GAO made frequent audit visits. 
In some cases, the Missions added further controls. In Honduras where more projects 
were implemented through the government, USAID hired firms like Price Waterhouse 
Cooper (PWC) to provide additional financial administrative support. This often 
included designing a system for financial management within the government agency 
implementing the project. For example, PWC developed an administrative and internal 
controls manual for COPECO (Disaster Mitigation) that covers areas such as accounting, 
personnel, and an organizational chart. In four projects, USAID included Concurrent 
Audit Teams (CATS) into the design of the project. The teams were hired by the GOH as 
independent auditors to work within the implementation unit but they were paid and 
reported to USAID. 
Many people expressed the belief that this control system was useful and necessary. If it 
did not discover major findings, it is because it acted as a preventative measure: everyone 
was forced to take these controls seriously and they knew they were under near constant 
6
 “Statement of Everett L. Mosley, Inspector General, and Timothy Cox, Regional Inspector General, 
before the House Committee on Appropriations Subcommittee on Foreign Operations,” March 21, 2001. 
9
supervision. One U.S. contractor did feel they were more vigilant than usual because of 
the frequent visits by auditors. In those cases where host government agencies had some 
participation in the implementation, they arguably learned from the experience of 
imposed stringent internal and independent, external controls. 
Many others, however, felt the control system was overkill. They questioned how much 
more development USAID could have done if so much money weren’t spent on oversight 
mechanisms. The concurrent audits by the DCAA were most often criticized as 
duplicative. One USAID employee argued that, “After the first year without many 
findings, we should have reassessed the need for this constant vigilance. The cost-benefit 
analysis shows it wasn’t worth it.” For example, in Nicaragua with $100 million in 
projects, only two cases of fraud emerged, each for $10,000. In both cases, the US 
contractor caught the problem and resolved it before the external auditors stepped in. 
Historically, USAID has done an excellent job controlling its resources with its normal 
control mechanisms. They appear to be sufficient. The corruption problem USAID must 
tackle is not the proper use of USG resources but rather the host country’s ability to 
manage its own. Money is fungible. Until USAID is confident that for every dollar it 
carefully provides to a country, it is not freeing a host government dollar to be 
mismanaged or stolen, we will continue to see stunted development. 
USAID would be well served to examine more closely the usefulness of these internal 
and external controls and to try to pare down those that proved purely duplicative. From a 
development perspective, those efforts that led to institutional learning and capacity 
building in country should be emphasized. Many people mentioned the increased 
capacity of local CPA firms after USAID trained them in USG auditing standards and 
provided quality control of their reports. These firms now have the knowledge and skills 
to produce high quality audits. Likewise, local NGOs with sub-grants benefited from 
fraud awareness training and improved financial management. Other efforts, like the 
CATS and the financial management assistance within government entities, can only be 
transformational to the extent that the counterparts internalized these procedures. It is 
unclear if these approaches introduced any sustainable changes to the institutions or if 
they simply served as parallel control units that substituted the need for the government 
entity to develop its own internal controls. 
Recommendations 
Every country that USAID works with faces different challenges. They have different 
histories, political leadership, institutional strengthens and weaknesses, cultural 
idiosyncrasies shaping the interactions between citizens and their government, and 
relationships with the United States and other donors. All of these factors affect the level 
of concern USAID puts on accountability and transparency when providing a large 
amount of assistance as well as how it addresses this concern. 
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The Central American countries ravaged by Hurricane Mitch had a reputation for weak 
control institutions and a high level of corruption. Many of the models described above 
were shaped by that environment and will not seem appropriate to the specifics of other 
countries and regions posed to receive a large inflow of donor funds. However, they do 
provide an excellent foundation for thinking about how to improve the accountability and 
transparency within a country while implementing a larger reconstruction strategy. 
The recommendations presented below are an attempt to cull out the lessons learned from 
the experiences of USAID and some of their counterparts in Central America and to 
establish them as fundamental building blocks for promoting accountability and 
transparency. 
1. Develop Guiding Principles
Bring the host government, civil society, and donors together to develop a common set of
principles to govern the reconstruction process. They should be discussed in detail to
ensure a common language and shared expectations. By including transparency and
accountability within these guiding principles, they become legitimate goals to fund,
monitor, and expect results. Establishing these upfront is a useful tool – both as a stick
and carrot.
Guiding principles should not simply be a formal written document. Donors, 
governments, and civil society need to act on them to take them beyond rhetoric. 
Creating some sort of mechanism, like a working group for each principle, will bring all 
the actors together on a regular basis to share information and monitor progress. They 
can set goals with identified responsible parties and a timetable. This process will 
facilitate donor coordination, avoiding duplication of efforts and clarifying where holes 
exist in a strategy. It can help a government identify the resources available as well as 
put pressure on the government to fulfill its promises. It also provides civil society with 
an equal place at the table to advocate for further action and to act as a full partner. 
2. Provide Access to Information 
Access to information is the core of a transparent reconstruction process in which all 
interested parties can be held accountable for their contribution7
. Providing easy access 
to information, however, often runs counter to the cultural practices of developing 
countries and many donors. Donors should begin with leading by example. Disseminate 
detailed information about what projects are being funded, who is implementing them, 
the budget, and the expected timeframe. Provide the information directly to the 
communities affected. Update this information as the projects progress including changes 
in budget and audit reports. Donors should pressure the government to do likewise. If 
transparency and accountability are guiding principles for reconstruction, agreeing to 
provide timely information on all public investment could be an official condition for 
receiving aid.8 
7
 Access to information was the issue most often identified by interviewees as missing during Hurricane
Mitch reconstruction, hindering transparency. 8
 The HIPC agreements set a precedent for requiring certain good governance conditions (with floating
completion points) to be met before receiving assistance (in this case, debt forgiveness). In Honduras, one
11
Instead of spending millions of dollars on an overarching external control mechanism, 
donors should consider jointly funding a mechanism through the host government to 
collect and disseminate information on projects on a regular basis, from the community 
level on up. In some cases, this will require greatly improving the country’s data 
collection and analysis systems and should be considered a long-term endeavor. The 
Internet is one tool for posting project information and subsequent reports. Government 
entities contributing information, the international community, and the media would all 
have easy access.9 However, other mechanisms of dissemination -- such as radio, 
newspaper, town hall meetings, church events, community campaigns -- would also be 
needed to reach a broader audience of citizens. 
Mobilizing citizen involvement in oversight is a critical aspect of accountability but will 
only be effective if reconstruction efforts enjoy a high level of local visibility and 
sufficient information is available. In addition to communicating reconstruction plans in 
a readily understood way to the average citizen, donors should also work with civil 
society to encourage active and effective oversight of the reconstruction projects. 
3. Stress Mutual Accountability
It is extremely difficult to effect transformational changes toward accountability and
transparency in a country without working with the government. Likewise, the
government must learn to work with its citizens and organized civil society. Donors, host
government, and civil society must be equally invested. The most fundamental step they
can take to improve long-term accountability is to establish an environment in which
everyone is held accountable to each other in the short-term. As the Nicaraguan roads
project did at the local level, define each participant’s role from the beginning. Support
projects that rely upon coordinated efforts; transparency and mutual accountability will
be necessary to complete them and future collaboration will be more likely.
Mutual accountability applies to donors as well. They should be held accountable to their 
financial pledges and should be ready to answer questions about their procurement 
practices. They should consider using local companies and resources rather than bringing 
in international contractors for reconstruction projects. The quality of work is rarely 
different, more resources enter the local economy, and more development work can be 
completed because less is spent on overhead. If donors don’t treat the government as an 
condition is the preparation and implementation of a participatory and comprehensive anti-corruption 
strategy. In Nicaragua, conditions include satisfactory progress in strengthening the Comptroller General 
and introducing a satisfactory system of management and inspection of public sector procurement. These 
are rather broad and do not specify what will be considered “satisfactory” but they send an important 
message. Donors are serious about anti-corruption and will not put their money on the line without certain 
assurances. 9
 For an excellent example of such a website, see the Honduran FHIS web page (www.FHIS.hn ). 
Although this came on line in November 2001 a bit too late for Hurricane Mitch oversight, it is an 
impressive initiative, created without donor assistance. It contains a database of 10,000 FHIS projects by 
location, date, cost to date, total budget, donor assistance, and sector of work. It is still in development and 
unclear if the new administration beginning in 2002 will continue to support it. 
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equal partner in reconstruction to whom they are accountable and whose best interests 
they serve, governments are less likely to be accountable to donors. 
Conclusion 
Before embarking on the field work for this paper, I outlined a series of questions I 
wanted to address: 
o Did the work on accountability and transparency lead to Transformation? 
o Did the government gain capacity to control corruption? Or did we “untransform” 
the government by setting up systems that answered to donors rather than the 
government? 
o Did civil society gain capacity to control corruption? Has their relationship to 
government changed? 
o What opportunities were missed that should be considered in the future? 
Unfortunately, the answer to the first three bullets is Yes and No. Mitch-funded projects, 
donor coordination, and the multiple systems of external oversight all contributed to more 
accountable and transparent development in Central America. Reconstruction was well 
done overall; donors pressured governments into more accountable actions; new 
relationships between civil society and government began; and people learned about 
proper internal and external controls by example as well in some cases through training 
and technical assistance. 
But it would be difficult to argue that the government or civil society gained any 
sustainable capacity to control corruption quite yet. Mitch provided the impetus for lots 
of good beginnings but it is unclear if they will take hold. We could have done more to 
train the government about control systems while implementing our own; but it may have 
slowed down the reconstruction process. We helped create a space for citizen 
participation in national forums, but transforming participation into accountability will be 
a long process requiring cultural change on behalf of the government and civil society. 
With designated short-term funds and reconstruction as the central mandate, expecting 
transformations may be overly optimistic. But seeds can be planted. We can create 
systems that ensure the proper use of our funds while increasing the local capacity to do 
the same through training, joint audit teams, and encouraging arrangements that require 
mutual accountability. We can sustain accountability and transparency as core policy 
issues and involve government and civil society in discussions of long-term goals. And 
we can provide detailed information to citizens about all donor-assisted reconstruction 
while supporting (demanding) the government to do the same. If through reconstruction 
efforts, we can establish the precedent and systems to provide easy access to public 
investment information and facilitate citizen oversight of this information, then we would 
be taking a giant step toward creating a more transparent society with a government held 
accountable to its citizens. 
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Interviews 
Honduras (November 12 – 16): 
Lorena Aguilar, Anti-corruption CTO, USAID
Richard Layton, USAID Controller
Joe Lombardo, Deputy Director, USAID
Timothy Mahoney, Mission Director, USAID
Todd Sloan, Democracy Team Leader, USAID
Sergio Diaz-Briquests, Casals and Associates
Mauricio Diaz-Burdett, Interforos
Selma Estrada, Administrative Probity
Miguel Manzi, IDB
Joe Owen, World Bank
Ricardo Puerta and Marlin Oscar Avila, consultants to National Anti-Corruption Council
Cardinal Rodriguez, National Anti-Corruption Council
Moises Starkman, Minister of FHIS
Sally Taylor, Casals and Associates
Leo Valladares, Human Rights Ombudsman
Staff of CIPRODEH
Unit for Audits of International Organization Programs of the Comptroller General
Representatives of Comptroller General “Contraloria Social” program
Members of the Transparency Table (government, civil society, and donors)
Nicaragua (November 17-21):
Karen Anderson, Democracy Team Leader, USAID
Ray Baum, Agriculture Team Leader, USAID
Rodger Garner, Deputy Director, USAID
Tomas Membreno, Mitch Reconstruction Coordinator, USAID
Cynthia Pruett, USAID Controller
Tanya Urquieta, Democracy NEP, USAID
Sergio Watson, Financial Analyst, USAID
Minoru Arimoto, JICA
Mauricio Gomez Lacayo, Ministry of Foreign Relations
Geronimo Giusto Robelo and Jose Lainez Tercero, National System for the Prevention,
Mitigation, and Attention to Disasters
Violeta Granera de Sandino, FUNDEMOS
Mayumi Hashimoto and Naohito Watanabe, Japanese Embassy
Felix Jimenez, CARE
Karin Metell Cueva, Swedish Embassy
Alfredo Oliveros, IDB
Ana Quiroz, Coordinadora Civil
Anastasio Somarriba, COSEP (Consejo Superior Empresa Privada de Nicaragua)
Luis Urbina and colleagues, Anti-corruption Commission, National Assembly
Members of the Comptroller General
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