1 corruption: its character, its causes? many forms, all sizes, but two frequencies slides for a...

CORRUPTION: ITS CHARACTER,

ITS CAUSES?

MANY FORMS, ALL SIZES,BUT TWO FREQUENCIES

Slides for a seminar session and discussion © Denis Osborne, 2007

The Ethics of Good Governance

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CORRUPTION DEFINED? CORRUPTION has been defined as:

“giving something to someone with power

so that they will abuse their power and act

favouring the giver” The Hon Dato’ Seri Dr Mahathir Mohamad, Prime Minister of Malaysia (1986)

HERE corruption is defined by what is done

The definition requires collusion

and thus excludes fraud


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DEFINE BY CONSEQUENCES? “CORRUPT ACTS

cause people to be treated unfairly

by diverting resources from their intended use

and beneficiaries to benefit others.” Operational definition, looking at results or consequences,

which includes fraud – but it also includes theft

BUT BEWARE: to define is to limit…

and criminals are very inventive


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AS BRIBES, EXTORTION

BRIBES: rewards in cash or kind offered or given to ‘agents’ or employees to pervert judgement or corrupt conduct

EXTORTION: demanding or taking money or things of value unlawfully from other persons to provide a service or avoid a penalty

extraction by force leading to intimidation and protection rackets


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FRAUDFRAUD is criminal deception or false

representation to obtain an unfair advantage

Fraud is one form of corruption To speak of corruption often includes fraud Other types of corruption may require acts of fraud,

but in some countries different agencies

are responsible for the investigation

of fraud and corruption


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EMBEZZLEMENTEMBEZZLEMENT The wrongful diversion of goods

to one’s own use – Note the ‘wrongful’– Some benefits may be allowed– We may take something small …– The employer may let us use ‘official’

electricity to charge a mobile ‘phone! Fraudulent appropriation of property


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GRAFT, SLUSH FUNDS GRAFT

is the means of making illegal profit, or the dishonest gains themselves

SLUSH FUNDS

are secret resources at the disposal of an organisation or its representative(s) – to pay bribes or corrupt – usually disguised so as to appear

as honest expenditure (American slang, often used in local government politics)


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AND LOCALLY …Pet names in different countriesaim to make corruption sound less wicked?

in Britain SLEAZE = flimsy, inadequate cover, poor clothUsed to describe inappropriate behaviour of British MPs, and CRONYISM = favouring friends

Both terms now used world-wide


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The WestItaly: TAGENTOPOLI = BRIBES-TOWN

– scandal that started in Milanled to corruption charges against many,implicating 80 MPs and 2 (or 3?) Prime Ministers

France: LES AFFAIRES = THE BUSINESS– a hint of something illegal (in English an

“affair” is a romance outside marriage)

USA: $19.99 (now $25?) CASH LIMIT– for a free lunch officials may accept!


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AsiaChina

CHAR CHIEN = TEA MONEY, in Mandarin

KOPI LUI = COFFEE MONEY, in Hokkien

Malaysia TUMBUK RUSUK = RIB PUNCHING‘rasuah’ means corruption in Bahasa Malaysia

Papua New Guinea

WONTOKISM = ONE-TALK-ISM; favouring people of same language


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Africa Nigeria419: “Advance Fee Fraud”

– section forbidding these in Nigeria’s legal code

UgandaAIR SUPPLY: 100 % commission

– payments for nothing!

GeneralGHOST WORKERS – dead or retired but still on payroll


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TAKES MANY FORMS Bribes: I offer or pay a reward for unfair favour Extortion: I demand a reward for fair treatment Embezzlement: I divert resources to my benefit Nepotism: I favour relatives and friends ‘Insider’ deals: I know therefore I cheat Conflict of interest, by which I could get:

– unfair and unintended benefits ‘Legal Corruption’

for example if elected representativesvote themselves ‘unfair’ pay increases


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COMES IN ALL SIZESGrand Corruption making national leaders rich often linked with organized crime and with traffic in drugs, weapons, humans

Petty Corruption in education, health, police, justice hurting many especially the poor


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IN TWO FREQUENCIES!LOW FREQUENCY, ‘LF’

– The exception, but corrupt acts happen everywhere

HIGH FREQUENCY, ‘VHF’– The norm, ‘everybody does it’ in ONE activity

AND SELDOM MID-WAY, ‘medium frequency’

people learn corrupt acts that escape punishmentin one activity or organisation (or nation?) (eg false expense claims), tell friends…want others to do same to hide misdeeds

MANY TRAPPED like Hong Kong police!


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AS SLOWLY RECOGNISED…

1. Hong Kong Commission of Enquiry 1975 Evidence of police corruption, recruits, ‘bus’, trapped

2. Corruption in Africa described, de Sardan ‘99With contrasting patterns made clear

3. Nara Srinivasan, ADB-OECD Tokyo 2001Corruption and other criminal activities as ‘learned’

Thus, because we learn from each other corrupt acts that escape punishment,

and want others to help hide our acts ‘everybody does it’, and many get trapped


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LF CORRUPTION VHF A few people bribe to

get unfair advantage Few employees abuse

position, take bribes Seldom discussed People

complacent Bribery a shameful act Guilty fear trouble! if not, corruption vhf

‘Everybody’ has to pay to get fair treatment

Employees learn, justify as pay ‘unfair’, demand

Constant topic People despair,

complain, pay No shame Fear ‘group’ Trapped (HK)


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BUT BEWARE … Nowhere is corruption zero, nowhere 100% Perception may not reflect reality

Perceptions and experience differed when surveyed

in South Africa, Malaysia, Nigeria and elsewhere… But in some countries measures were similar

But perception is important, for … trust, despair, encouraging the corrupt

And many stakeholders gain when corruption exaggerated (think who!)


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WHY? CAUSES? PEOPLE ACT

Corruptly whenever opportunity, motivated by GREED: for money, power, status NEED: to buy drugs, pay debts, maintain pay LOVE: ‘an economy of affection’, FAMILIES? HATE: a sociology of disaffection

for governments, managers FEAR: threats of violence

by colleagues, syndicates, criminal… BIG QUESTION: what causes integrity?


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IN BAD SITUATIONS

SCARCITY of goods and services Corrupt suppliers create shortages to get bribes

CHANGE and weakened constraints Make it easy to act corruptly

SECURITY also encourages corruption Politicians in Italy felt secure, acted corruptly Elsewhere feel insecure, act corruptly

POVERTY? New evidence shows rich and ‘middle classes’ more corrupt


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WITH BAD SYSTEMS BAD LAWS, with a need for ‘brightline rules’ MONOPOLIES and CARTELS TOO MUCH bureaucracy

Too many regulations, much secrecy TOO LITTLE pay

But false comparisons made with Singapore Singapore cleaned up corruption, then

raised public service pay; elsewhere – raising low pay has not solved problem

unless linked with other measures


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DOUBTFUL CHALLENGES?‘Corruption is not primarily a problem of bad people but of bad systems. And these systems can be fixed.’ Klitgaard and Baser, 1997

‘Reforms are not aimed at people, but at the systems within which they work’. Pope, 2000, TI Sourcebook, page 12

Where corruption is the norm, surely the aim should be to help people change behaviour and change systems to help them change AND TO ASK WHAT CAUSES INTEGRITY!


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A FOCUS ON PEOPLE People act corruptly

The problem is with people as well as systems BUT it is not for ‘us’ to blame ‘them’

Many get trapped by colleagues, others or habit People justify their corrupt acts to themselves

We all benefit from corruption As members of rich educated elites

Probably we have acted corruptly In ways to which we may be blind (UK)

We, all need to act against corruption


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DISEASE, FAULT? Corruption as a disease, the medical analogy

LF: where exception need prophylaxis, inoculation May be hidden, dangerous if not detected VHF: where the norm we need cures, pain relief Cancer grows in society, but infection people catch

Corruption as a fault, as in engineering Where a bridge unsafe; repair, strengthen Where it has collapsed; rebuild


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ENEMY, VICTIM? The military analogy, corruption as an enemy Where the exception, LF, defend … Where the norm, VHF, attack … BUT Where corrupt acts the norm, many are trapped

(by colleagues, criminal gangs or habit) In effect, they are in prison Hence, where VHF, rescue; but how? Choose, aim, objectives and strategies

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