Aid, Governance and Public Finance Fraud: Evidence from Zimbabwe

The purpose of this case study article is to explore the process of public finance fraud resulting in an unjust enrichment of local ruling elites in Zimbabwe, a resource-rich yet paradoxically fragile state characterised by decades of rule by Robert Mugabe. The article examines the phenomenon of political corruption occurring in Zimbabwe and translating into the mismanagement and misuse of public revenues from natural resources for the sake of private gain and power consolidation. Furthermore, the article looks at the link between corruption and illicit financial flows by examining complex organisational networks and mechanisms created for the sake of diverting public assets with the help of front companies. Finally, since political corruption is inherently connected to the quality of governance, the author explores the impact of governance on human development as well as the effectiveness of foreign aid channelled to Zimbabwe. The article was written on the basis of an analysis of secondary sources including a review of relevant literature and existing evidence. The findings of this research coincide with a general academic standpoint supporting the narrative that both natural resources and aid have negative consequences for governance, the rule of law, and, consequently, human development, especially in countries governed by unscrupulous leaders.