Linking structural challenges with best practice in water governance: Understanding

cultural norms in institutionalized corruption

Diana Suhardiman

Senior Researcher and Sub-Theme Leader Governance and Political Economy

International Water Management Institute

Stockholm, 28 September-2 September 2016

Principle 9: Mainstream integrity and transparency practices across water policies, institutions and governance frameworks for greater accountability and trust in decision making through:• Encouraging norms, codes of conduct or charters on integrity and

transparency in national or local contexts and monitoring their implementation• Establishing clear accountability and control mechanisms for

transparent water policy making and implementation

• Our ability to mainstream integrity and transparency across water policies, institutions and governance frameworks will also depend on how we can tackle the problem of systemic institutionalized corruption • Understanding the different elements and rationales behind

institutionalized corruption is crucial to find potential entry point for change

• The importance of institutions, organizational culture, and social relations embedded in patronage networks in the overall shaping of corruption rules and practices• How corruption practices can be justified as the prevailing social

norms• The need for structural change to eradicate corruption

What is the Indonesian system of institutionalized corruption?• The Indonesian system of institutionalized corruption is practiced by

strategically blurring ‘bribe’ with ‘token of appreciation’, mimicking a centuries old political system of gift giving called the upeti system

• Upeti literally means: ‘tribute to the king from his followers’

• In modern day Indonesia government officials focus their career advancement through upeti delivery to higher officials in return for desirable bureaucratic positions

Key elements of the upeti system• Institutionalized corruption is practiced as part of project

management activities• Officials have to deliver money, luxury goods, and additional services

to their supervisors, to ensure bureaucratic promotion and/or to get a project head position• High officials within the agency select their candidate for the project

head position primarily based on their interest to use the position as their service point for upeti delivery• Project heads focus on manipulating the management of project

funds

Key elements of the upeti system• The budgetary fund is an officially registered project fund that is

supposed to be used to conduct project activities

• The non budgetary fund is part of the project fund that is informally used by the agency to cover its bureaucratic expenses without these expenses being officially registered

The characteristics of the upeti system• The upeti system relies on the collective culture within the

government agency• The project head plays an important role in negotiating with the

different parties involved• The project head establishes a wide if not all inclusive corruption

network

“The agency covers health, education, and social expenses of its staff (such as when some officials are severely ill, need support to finance their children’s higher education, or extra cash to celebrate a wedding ceremony) relying primarily on the reserved funds”

interview with official from the agency, 2004

Key analysis• The upeti system prevails over public and legal anti corruption

discourses because it is politically grounded and culturally embedded

• Unlike the public and legal anti corruption discourses, which are external to the everyday practices of administrative and political corruption, upetism operates within and structures that domain

“One’s involvement in corruption practices is linked to one’s social relationships and political networks, and less on one’s choice and how one perceives corruption practices in the first place” interview with official from the agency, 2004

“Government officials involved in corruption practices do not view this involvement as a stigma, but merely an opportunity to extend their career and income” interview with officials from the agency, 2004

Key analysis • The notion of norms, codes of conducts, or charters on integrity and

transparency could lost its meaning when corrupt actors are convinced that they are doing the ‘right’ thing• The upeti system sets the prevailing norms that need to be followed

by officials of the agency, that is to deliver bribes to high officials in return for a good bureaucratic position through mismanagement of project funds• The way project funds are managed through regular financial

reporting becomes the codes of conducts in institutionalized corruption.

Implications for anti-corruption strategies• Policy reform to eradicate institutionalized corruption can only be

effective if it is able to counter argue the prevailing cultural/organizational norms that support institutionalized corruption• Institutionalized corruption is also reproduced in myriad everyday

practices• Change can also start from reconfiguring some of these everyday

practices• In the irrigation sector, such change can start from a shift from

infrastructure oriented development to field level interventions to improve water service provision towards more equal water delivery

Thank you for your attention

d.suhardiman@cgiar.org