MONROVIA—Drive through Liberia's capital today and one of the first things you notice are the clusters of new construction developments dotting the city, including some extravagant-looking concrete mansions. Just seven years ago, Monrovia's walls were riddled with bullets, parts of the town flattened in a rebel assault that forced out the country's infamous dictator, Charles Taylor. By the time he left office for exile in Nigeria, Liberia had seen 14 years of conflict, and an estimated quarter of a million people had been killed -- a significant cut of the country's population which is today just 3.8 million.

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But these days, Africa's oldest republic is a darling of the donor community. And many believe the country's president, Ellen Johnson Sirleaf, deserves most of the credit for the dramatic change. Sirleaf, the first female head of state ever elected in Africa, has won international adulation for stabilizing Liberia's political economy and admiration from, among others, U.S. Secretary of State Hillary Clinton. A former senior World Bank official, the Liberian president has persuaded the United Nations to drop sanctions on Liberia's lucrative diamond and timber sectors, won IMF support for canceling the last of the country's $4.9 billion external debt and increased the size of the national budget from $80 million in 2005 to $350 million today. Roads have been repaired in parts of the country and electricity restored to parts of Monrovia.

That's the good news -- and good it is, particularly given the starting point. But in recent months, Sirleaf's untouchable image as the "Iron Lady," a moniker she earned during her hard years in opposition, has begun to tarnish around the edges. Critics, including members of her own government, have accused her of doing too little to tackle the country's rampant corruption; Liberia's Truth and Reconciliation Commission recommended that she be barred from public office for 30 years due to her fleeting support for Taylor, now facing war crimes charges in The Hague; and she has decided to stand for a second term despite having vowed not to when she first took office. These are far from the worst accusations one can imagine in a post-conflict state, but they have weighed on her reputation nonetheless.

Sirleaf is the first to admit that her promise of a "zero tolerance" approach on corruption, arguably Liberia's biggest problem, was cut short by the political exigencies of winning support for her initial package of economic reforms. "The agenda before the legislature is so large that I needed to calculate where I put my weight. I have to cut my losses," she said in an interview with FP. She feared a legislative rebellion against her broader reform agenda if she tried to push through a number of anti-corruption laws too early on, she said. That's one reason the 71-year-old Sirleaf has said she will need a second term: so she can finish the job of cleaning up government.

Sirleaf is certainly fighting an uphill battle; corruption has deep historical roots in Liberia, tracing all the way back to the republic's founding. When the families of freed American slaves who returned to the continent to found Liberia in the 19th century failed to establish coherent governance, politics took its cues from other influences: the shady freemasonic lodges of the Americo-Liberian settlers and indigenous secret societies. Patronage and connections took precedence over procedure. And although those elite families saw their hegemony crumble when Samuel Doe seized power in 1980 in the wake of food riots, the old habits persisted and grew. Taylor's rebellion ousted Doe, and in so doing destroyed much of the remaining fabric of Liberia's government institutions. Then, Taylor's presidency became a case study in kleptocracy and warlordism. By political necessity, the transitional government that followed, preceeding Sirleaf's administration, was made up by many of those who made money during the Doe and Taylor years. Even some members of Sirleaf's government retains shady figures from the past.

The effect is evident. In recent months, Sirleaf has had to sack a number of ministers amid a wave of scandals. Her justice minister was fired for soft-pedaling an important corruption case; her information minister was suspended this year for pocketing the salaries of fictional employees; and her minister of the interior (who is also her brother) was also recently forced to stand down over the disappearance of county development funds. Five ministries, including finance and mines, have now been put under the spotlight by auditor general reports highlighting the disappearance of millions of dollars of public funds. Aside from the most visible offenders, diplomats also point out that a number of political untouchables have burrowed into the bureaucracy, many of them from Americo-Liberian elite families.

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