SISTEMIC CORRUPTION

We use the term “systemic corruption” to distinguish two situations. One is where some people are corrupt. Another is where many people are corrupt—where the system itself has grown sick. A distinguishing characteristic of systemic corruption is that the many parts of the government that are supposed to prevent corruption have themselves become corrupted—budgeting, auditing, inspection, monitoring, evaluation, and enforcement. This makes the anti-corruption task much more difficult.
“Institutional culture” refers to a set of norms and expectations within an institution (such as a tax bureau or a city government, or indeed a national government). When corruption is systemic, the institutional culture itself has grown sick. The norm is corruption; expectations are that corruption will continue. Cynicism and despair are widespread. Change seems impossible.
And yet there are cases where leaders have made substantial progress in changing the institutional culture. Not completely and not forever, but enough to enable systemic corruption to be reduced. What did the leaders do?
In all cases the leaders begin by sending a strong signal of change to their institutions and to citizens. They publicize their intent to attack corruption. But in corrupt societies, words count for little. People have heard plenty of rhetoric about corruption and now don’t believe it. The culture of corruption contains the idea that big fish will swim free, that the powerful enjoy impunity. Successful leaders change this idea through impressive action, not just words. One step is to fry a big fish (or two).
When corruption has become systemic, it resembles organized crime. It has its own parallel system of recruitment and hierarchy, of rewards and punishments, of contracts and enforcement. This parallel system has some inherent weaknesses. For example, in no country of the world are bribery and extortion legal. Therefore, they must be kept (somewhat) secret. The money gained must be hidden. One cannot openly recruit new members. The mechanisms for enforcement are illicit. Obviously we cannot count on members of organized crime to clean themselves.
(Leadership under Systemic Corruption, Robert Klitgaard at cgu.edu)
Systemic corruption is characterized by extensive corrupt activities such as bribery, extortion, and embezzlement, ranging from petty to grand corruption. Corruption becomes the rule rather than the exception. Moreover, systemic corruption is characterized by the presence of rules and norms (institutions) that are commonly known and adhered to by most officials and citizens most of the time. These institutions are informal insofar as they are neither explicitly codified nor externally enforced. Nevertheless, they powerfully shape the interests and strategies of public officials and citizens. In short, systemic corruption is characterized both by the magnitude of corrupt activities and by the presence of rules and norms that inform these activities.
Conventional anti-corruption campaigns attempt to change the individual payoff
matrices. Namely, anti-corruption measures aim at increasing the costs of being corrupt and the benefits of being honest. As Susan Rose-Ackerman elaborates, “Government policy can reduce corruption by increasing the benefits of being honest, increasing the probability of detection and punishment, and increasing the penalties levied on those caught.” The problem is that once corruption has become systemic, this policy is unlikely to be very successful for two main reasons.
First, corrupt networks make corrupt officials and citizens relatively invulnerable to prosecution, decreasing the “probability of detection and punishment.” Second, under conditions of systemic corruption, benefits are primarily given to corrupt officials that share their illicit gains with their superiors, providing additional incentives to be corrupt. As long as the distribution of benefits is not based on merit and is not administered by a neutral agency, benefits are going to the wrong people, encouraging the wrong behavior.
An anti-corruption strategy that targets individual interests and motives starts from the assumption that corrupt exchanges are isolated incidences that are not informed by certain rules and norms, involving only a small number of individuals. This strategy thereby underestimates the resiliency and extent of systemic corruption. Under conditions of systemic corruption, corrupt exchanges are embedded in complex networks and are guided by specific rules and norms that are more powerful than the formal and relatively new institutions of democracy and a market economy. Therefore, the crucial task is to transform systemic corruption into less institutionalized forms of corrupt exchanges.
(Measuring, Conceptualizing, and Fighting Systemic Corruption by Christoph H. Stefes at perspectivesonglobalissues.com)
Corruption takes many forms. These forms are: acceptance of money and other rewards for awarding contracts, violation of procedures to advance personal interests, kickbacks from developmental programmes or multi-national corporations, pay-offs for legislative support, diversion of public resources for private use, overlooking illegal activities, intervening in the justice process, nepotism, common theft, overpricing, establishing non-existing projects and tax collection and tax assessment frauds (UN, 1990).
These many varieties of corruption can be categorized further in terms of their nature. Corruption can be foreign-sponsored, institutionalized, outcome of political scandal and administrative malfeasance (Caiden, 1988). In foreign-sponsored corruption the main actors are public officials, politicians, representatives of donor and recipient countries. Bureaucratic elites, politicians, businessmen and middlemen are responsible for political scandal. Corruption becomes institutionalized as a result of the support provided by bureaucratic elites, politicians, businessmen and white-collar workers. In administrative malfeasance petty officials and interested individuals play major role.
Corruption has been differentiated into three types – collusive, coercive and non- conjunctive (Arora, 1993). In collusive corruption the corruptees themselves are willing and active participants in the process and use of corruption as an instrument for inducing wrong action or inaction on the part of authorities, deriving benefit greater than the costs of corruption on their part. Corruption is forced upon the corruptee by those in the position of power and authority in coercive corruption. In non-conjunctive corruption benefits are obtained at someone else’s cost and victims are unaware of their victimization. Five major strategies – mystification, distancing, folklore, colonization and pacification – have been used by the beneficiaries to protect, promote and sustain corruption in diverse contexts (Arora, 1993).
Differences of opinion still exist as to the meaning of the term corruption. This is primarily because individuals look at corruption from their own vantage points influenced by surrounding environment. But what is heartening is that in recent years corruption is viewed from a much broader perspective rather than looking at it from moral and functional angles only.
The causes of corruption are as varied as the phenomenon itself. Corruption results from the presence of a number of factors. Typologies have been offered to make a sense out of so many contributory factors.
To understand the dynamics of so many types of corruption attempts have been made to classify different forms of corruption into broad categories. What transpires from such a categorization is that corruption can be sponsored by outsiders, resultant of political scandal, institutionalized and administrative malfeasance.
The cost of corruption has been enormous in terms of a country’s socio-political and economic advancement. What has been conclusively demonstrated is that corruption has negative consequences on economic growth, administrative efficiency and political development. Corruption in the public service is extensive and all-pervasive. Corruption in the political arena has emboldened public servants to become unabashedly corrupt and not bother about it at all.
(POLITICAL AND ADMINISTRATIVE CORRUPTION: CONCEPTS, COMPARATIVE EXPERIENCES AND BANGLADESH CASE, by Mohammad Mohabbat Khan, Professor, Department of Public Administration, University of Dhaka at ti-bangladesh.org)
In situations where corruption has grown extensive, people no longer believe even the finest promises from politicians and chief executives. When a culture of impunity exists, the only way to break it is for a number of major corrupt figures to be convicted and punished. Often there are many cases “pending” which have been set aside for reasons ranging from political sensitivity to corrupted justice officials. These cases should be pushed forward, or the Government should quickly attempt to identify a few big tax evaders, a few big bribe givers and a few high-level government bribe takers. Since a campaign against corruption can too often become a campaign against the opposition, the first big fish that are fried should be from the party in power.
(Combating corruption – includes related article on anti-corruption strategy by Robert Klitgaard at findarticles.com)

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