COMBATING CORRUPTION: THE VALUE OF ECONOMIC ANALYSIS
"Corruption hurts the poor disproportionately by diverting funds intended for development, undermining a government's ability to provide basic services, feeding inequality and injustice, and discouraging foreign investment and aid".
It is an act in which the power of public office is used for personal gain in a manner that contravenes the rules, is a persistent feature of societies around the world and throughout history.
"Corruption hurts the poor disproportionately by diverting funds intended for development, undermining a government's ability to provide basic services, feeding inequality and injustice, and discouraging foreign investment and aid".
It is an act in which the power of public office is used for personal gain in a manner that contravenes the rules, is a persistent feature of societies around the world and throughout history.
A CULTURE OF CORRUPTION
Some people argue that corruption should be accepted as the normal way of doing business in many non-Western cultures. Transparency International study found that “no culture or society sanctions the abuse of power for personal gain or the siphoning off of public resources into private pockets.”
Some people argue that corruption should be accepted as the normal way of doing business in many non-Western cultures. Transparency International study found that “no culture or society sanctions the abuse of power for personal gain or the siphoning off of public resources into private pockets.”
When it arises? It arises if a combination of circumstances is present
First- the relevant public official (a bureaucrat, politician or judge) must possess the authority to design regulations or to administer them in a discretionary manner.
Second- the discretionary power must allow extraction of ‘rents’ or creations of rents that can be extracted.
Third- the incentive system embodied in political, administrative and legal procedures and institutions must be such that officials are left with an incentive to exploit their discretionary power to extract or create rents.
The Other Most important reasons are
The sale of parliamentary seats in ‘rotten boroughs’,
Poorly paid and inadequately supervised to the civil servants and other officials.
While sociologists and anthropologists often focus on culture as a key determinant of corruption,
Economists emphasis incentives and view corruption as the outcome of a rational calculation.
Thus, “incentives” are crucial both for understanding why corruption arises in the first place and for what can be done to reduce it? Proper incentives can be created by effective monitoring, by rewarding public officials with salaries above market alternatives and by penalising corruption when it is discovered.
The sale of parliamentary seats in ‘rotten boroughs’,
Poorly paid and inadequately supervised to the civil servants and other officials.
While sociologists and anthropologists often focus on culture as a key determinant of corruption,
Economists emphasis incentives and view corruption as the outcome of a rational calculation.
Thus, “incentives” are crucial both for understanding why corruption arises in the first place and for what can be done to reduce it? Proper incentives can be created by effective monitoring, by rewarding public officials with salaries above market alternatives and by penalising corruption when it is discovered.
In short, corruption feeds on super-normal profits that are created by the introduction of inefficient policy measures. The inefficient policy is the real cost of corruption and which is so detrimental to economic development. Once it takes root, corruption can be very persistent. This is because incentives to accept bribes are very different in societies with high and low levels of corruption. One reason is that reporting of corruption is less likely to happen in an environment in which almost all individuals take bribes and so, it pays for each individual to accept bribes because the risk is smaller. This makes it extremely difficult to combat corruption in societies with high levels of corruption, and sustained, large-scale reforms of the incentive structures are the only way to move a society away from a high corruption ‘equilibrium’ to one with low corruption.
Kofi Annan, United Nations Secretary-General
Addressing Corruption through Democratic Government
Corruption, simply put, is the misuse of power for private gain. Corruption is an issue in both developing and developed countries. Incentives and opportunities for corruption differ depending on a society’s economic and political institutions. Corruption has a distinct and direct impact on the development prospects of a nation.
Corruption, simply put, is the misuse of power for private gain. Corruption is an issue in both developing and developed countries. Incentives and opportunities for corruption differ depending on a society’s economic and political institutions. Corruption has a distinct and direct impact on the development prospects of a nation.
Economically, corruption can lead to poor public choices and the allocation of scarce public resources to uneconomic high profile projects. But the cost of corruption extends well beyond the economic. It touches upon both political and social factors.
Politically, corruption fosters an anti-democratic environment characterized by uncertainty, unpredictability and declining moral values and disrespect for constitutional institutions and the law.
Socially, the impact of corruption can tear apart the fabric of society. Increased mistrust in the leadership and the regime can lead to instability. Corruption reflects a deficit of democracy, human rights and governance that undermines efforts to achieve the Millennium Development Goals (MDGs) and negatively impacts social and political stability.
TRUE FACTS
The downward spiral begins when people start tolerating, for example, demands for small payments in return for official services such as the issuing of certificates and licenses. While they may initially not approve of this behaviour they perceive it as the most workable way of obtaining things they want or need and the conduct continues until one day such behaviour is not even perceived as wrong behaviour any longer. Such a culture of corruption is extremely difficult to address, as we are then not only talking about what is legally acceptable, but also what is morally acceptable. And that requires not only changing the laws, institutions and procedures, but also people’s minds, which is the most difficult part.
The downward spiral begins when people start tolerating, for example, demands for small payments in return for official services such as the issuing of certificates and licenses. While they may initially not approve of this behaviour they perceive it as the most workable way of obtaining things they want or need and the conduct continues until one day such behaviour is not even perceived as wrong behaviour any longer. Such a culture of corruption is extremely difficult to address, as we are then not only talking about what is legally acceptable, but also what is morally acceptable. And that requires not only changing the laws, institutions and procedures, but also people’s minds, which is the most difficult part.
PROTECTION
Corruption is a complex and multi-sectoral phenomenon. It requires more than just a good legal framework, as necessary as that may be. Corruption can only be defeated when institutional arrangements and ethical value systems governed by principles of accountability, transparency and participation are firmly in place.
Corruption is a complex and multi-sectoral phenomenon. It requires more than just a good legal framework, as necessary as that may be. Corruption can only be defeated when institutional arrangements and ethical value systems governed by principles of accountability, transparency and participation are firmly in place.
Accountability is about responsibility, but it is more than that. It prevails when individuals and organizations are liable to explain and take responsibility for their performance measured as objectively as possible. One way to strengthen accountability in the public sector is through a transparent and merit-based system of selecting, promoting, rewarding and disciplining civil servants.
Transparency involves facilitating citizens’ access to information and their understanding of decision-making mechanisms. It covers the duty of public servants to act visibly, predictably and understandably. In principle all information about the state and the undertakings of the state, except for state secrets, should be available to any citizen for scrutiny. One challenge that law and policy-makers face is how to balance the principle of transparency with the right to privacy. There is no easy solution, but one should not be used as an excuse to evade the other.
Participation- Information is of little value unless people can use their knowledge to influence government behaviour. In order to do so citizens must be able to participate, directly or through representation, in processes of decision-making, implementation and oversight in the areas of public resource allocation and investment; in development and delivery of public services; and in development of public institutions. Respecting and promoting the freedom of association and free media are an important element in promoting active participation of citizens in the fight against corruption.
Another vital aspect is the protection of people reporting corruption – “whistleblowers”. In countries where corruption is systemic and where there is no or little protection, whistleblowers risk being disciplined by corrupt superiors and may even end up being accused of corruption themselves. Protection and reward systems for whistleblowers in the public as well as the private sector strengthen people’s incentive to report.
THE RULE OF LAW
Rule of law ensures that individuals are subject to the law and are treated equally by the law (this rule should be strictly followed by the rulers and against the rulers without any privilege because privilege is the guard of crime like social, civil, economic, political etc), and that no one is subject to arbitrary treatment by state authorities or by any other citizen.
Rule of law ensures that individuals are subject to the law and are treated equally by the law (this rule should be strictly followed by the rulers and against the rulers without any privilege because privilege is the guard of crime like social, civil, economic, political etc), and that no one is subject to arbitrary treatment by state authorities or by any other citizen.
The important prerequisites for rule of law include good laws combined with an efficient enforcement system. Many highly corrupt countries have exemplary formal statutes, but the statutes have no real meaning because they are seldom enforced. Thus a country that is serious about anti-corruption must have effective investigation and prosecution bodies and a well-functioning judicial system that is not itself corrupt. Therefore, on the basis of above discussion we understand that transparency, accountability and participation as part of an anti-corruption strategy should not be underestimated. However, this should also be balanced with this important principle, namely rule of law.
It is clear that addressing the root causes of corruption and minimising the opportunities for corruption requires a comprehensive approach including the public and the private sector. It has to involve the legislature, the executive as well as the judicial branches of the state-apparatus, minimising the opportunity for corruption within these branches and strengthening their capacity to contribute to the overall fight against corruption. It should also ensure active participation and due protection of citizens, civil society and media. Pursuing such an approach requires willingness to reform and resources to fund such reform. We know that it is difficult, but necessary for the society and nation.
Transparency International
Peter Eigen, Founder, Director, and chairman of Transparency International (TI)., a lawyer by training who worked in world bank for economic development and other several Institutions, Government bodies in the world. He was Adjunct Lecturer at the John F. Kennedy School of Government at Harvard University and also a member of the Advisory Council of the Center for International Development at the John F. Kennedy School of Government. He is a Trustee of Crown Agents Foundation as well as a member of the Advisory Commission on the UN, the Global Compact and the Commission on Globalization of the State of the the world forum. He received the Reader’s Digest Award ‘European of the Year 2004’ and became an Honorary Professor of Political Science of the Freie University, Berlin.What is Transparency International? It is only an international nongovernmental organisation devoted to combating corruption, brings civil society, business, and governments together in a powerful global coalition. TI, through its International Secretariat and more than 85 independent national chapters around the world, works at both the national and international level to curb both the supply and demand of corruption. In the international arena, TI raises awareness about the damaging effects of corruption, advocates policy reform, works towards the implementation of multilateral conventions and subsequently monitors compliance by governments, corporations and banks. At the national level, chapters work to increase levels of accountability and transparency, monitoring the performance of key institutions and pressing for necessary reforms in a non-party political manner. In an effort to make long-term gains against orruption, TI focuses on prevention and reforming systems. A principal tool in the fight against corruption is access to information. It is in this spirit that we offer to everybody with an interest in the fight against corruption.
Recommendation- Some of the most anti-corruption pleadings should be formulated with the help of public opinions and making ethical laws to fight against it. There should be an Independent Commission Against Corruption (ICAC). It should be independent, reporting only to the Governor, and functioning independently of the police, which have a reputation for being highly corrupt. It has the power to investigate and prosecute corruption cases and to engage in a campaign of public education. Finally, officials of the ICAC should be paid more than those in other government agencies and should not be transferred to other departments. Dear friends I request you please take this issue with confidence and discuss more also comments and write to N Singh and Direct mail at my personal mailing address nsinghad@gmail.com,algnsinghad@yahoo.co.in. Thanks!
