Thursday, June 23, 2011

Corruption: its causes, effects and remedies

Corruption: its causes, effects and remedies
Corruption is talked about openly in most countries these days and few countries deny they suffer from it. Which is a good thing since it provides politicians, business and labour leaders, journalists and civil society with a rare opportunity that of agreeing on the urgency of stamping it out. But, agreeing on what exactly is meant by corruption is another matter. In simple sense, corruption is the abuse of public office for private gain. In a wider sense, exploitation of any kind is corruption like shirking work, waste of time, energy and money, deceiving or betraying, mismanaging of public or private funds, undue use of authority, force and power etc. 

Corruption is one of the social evils that involve betrayal of normative value of society and dishonest/preferential use of power or position which has the result of one person or organization being advantaged over another. Corruption respects no borders, knows no economic distinctions and infects all the form of government. The commissioner of taxation channels public monies into his personal bank account, thereby corrupting the public financial system. Also, a political party secures a majority vote by arranging for ballot boxes to be stuffed with false voting papers, thereby corrupting the electoral process. Corruption in developing countries is more devastating than in developed countries. According to Transparency International, nine out of 10 developing countries urgently need practical support to dig out of this mess of corruption. Only 15% of anti-poverty money actually gets to the poor in South Asian nations. Huntington said, “Corruption in a modernizing society is in part not so much the result of deviance of behaviour from the accepted norms as it is the deviance of norms form the established pattern of behaviour”. Thus, Edmund Burke (British Political Writer) said, “Among a people generally corrupt, liberty cannot long exist”.

Transparency International Corruption Perception Index 2004 estimates that the amount lost due to bribery in government procurement is at least US $400 billion per year worldwide. According to this index, a total of 106 out of 146 countries score less than 5 against a clean score of 10. 60 countries score less than 3 out of 10 indicating rampant corruption. Corruption is perceived to be more acute in Bangladesh, Haiti, Nigeria, Chad, Myanmar, Azerbaijan and Paraguay, all of which has a score of less than 2. 

So, there are numerous cases of corruption we can see in the world. For its existence, there are different reasons and conditions. Firstly, “the get-rich quick” motivation inspire the people to become corrupt at both the top and bottom level of the society. For the customs official, accepting the bribe (rent-seeking) may be necessary because his wage is too low to feed his family. Thus, Tanzi (1998) term this as “Corruption due to need”. Secondly, liberal economists argue that the amount of intervention by the state in the form of regulations and restriction compel the businesses/traders to give grants to the public officials for increasing their profits like high tax rate. The conditions favourable for such corruption are lack of accountability and government transparency in decision making, large amount of public capital involved in a project, weak rule of law, weak legal profession, poorly-paid government officials and so on. Thirdly, in some culture, public officials do not perform their duties without some extra payments. Thus, Georges Bernanos said in his book “Why Freedom?”, “The first sign of corruption in a society that is still alive that the end justifies the means” meaning to perform every activities (end), we need to give some bribes (means). Fourthly, corruption is influenced by the discretionary powers granted to officials. Such powers are particularly strong if the government regulations are vague, non-transparent, cumbersome and large in number. Also, the lesser customs officials are held accountable for their actions, the better opportunities for demanding bribes are. The level of corruption will rise with discretion and decrease with accountability. Finally, there are varieties of attractions that motivate corruption apart from economic gain. These are status, power, drug addiction, gambling, sexual gratification etc.
Once the corruption exists in the society, it will have a devastating effect on investment, growth and development. It poses a serious development challenge. In politics, it undermines democracy by subverting formal processes. Corruption in elections and in legislative bodies reduces accountability and representation in policy-making; corruption in the judiciary suspends the rule of law and corruption in public administration results in the unequal provision of services. In general, corruption erodes the institutional capacity of government and public confidence in political institutions as procedures are disregarded, resources are siphoned off and officials are hired or promoted without regarded to performance. 

Secretary General Kofi Annan said, “Corruption is an insidious plague that has a wide range of effects on societies; it undermines democracy and the rule of law, leads to violations of human rights, distorts markets, erodes the quality of life and allows organized crime, terrorism and other threats to human security to flourish”. He further added that “it is in the developing world that its effects are most destructive”. Thus, Ignacio Pichardo Pagaza said, “The phenomenon of corruption is just like the garbage, it has to be removed daily”.

Corruption distorts the allocation of resources and undermines competition in the market place. It also undermines economic development in both public and private sector. In public sector, the officials may increase the technical complexity of public sector projects to conceal such dealings, thus distorting investment. Such corruption reduces the quality of government services and infrastructure and increases budgetary pressures on government. In the private sector, corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials and the risk of breached agreements or detection. But, the degree of corruption varies greatly from minor uses of influences to institutionalized bribery. The end-point of corruption is kleptocracy, literally rule by thieves, where even the external pretence of honesty is abandoned. That means, corruption facilitates criminal activities such as drug trafficking, money laundering and prostitution. These are the consequences arose from the corruption which need to be resolved for efficient functioning of the system. 

Corruption can’t be stopped altogether but can be minimized. To solve this problem, at first, there should be transparency and accountability in public institution. The government officials should be held liable and accountable for the job he/she performed. Administrative delays should be reduced to the minimum by prescribing the time limits for dealing with receipts and which should be strictly enforced. Citizens should be educated in respect to their rights, responsibilities and the procedures of the government. Improvement must be made to increase the salary of the employees besides making necessary provisions for housing, medical facilities for the government employees. Companies and businessmen should be obliged to keep detailed accounts of expenditure. Also, officers for the administrative posts should be selected with great care. And then, there should be a complete ban against government servants accepting private commercial or industrial employment for two years after retirement. Also, the corporate funding of corporate company to political parties must be banned because in such a way, the private company may get the political power and make law in favour of them. Cornelius Tacitus said, “The more corrupt the state, the more numerous the laws”. Thus, the taxation laws must be modified; licenses and permit system must be thoroughly reviewed. The law enforcing authorities must see that the laws are rigorously enforced without any fear or favour. Also, the media must encourage honesty and discourage corruption. The salaries of government officials must be raised with the rate of inflation. Finally, the corruption practices performed by the individuals must be given the widest possible publicity. 

Thus, the causes and effects of corruption and how to combat corruption are issues that are increasingly on the national and international agendas of politicians and other policy makers. To meet the economic development, corruption must be reduced.

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