Corruption: A Debilitating
Effect
by Naila Moseley
Corruption has a number of
meanings that cover a vast amount of human
actions. A general dictionary defines corruption as
debased by errors or alterations; synonymous with adulturation, contaminaton,
vitiated, polluted. Obviously all
negative images. In dealing with
corruption and its effect on a country's economy or political system the World
Bank defines the term as the abuse of public office for private gain ( World
Bank Report, September 1997). In recent
years global concerns for corruption have intensified. Public office is abused for private gain
whenever an official extorts, accepts, or solicits a bribe. It is also abused when private agents
actively offer bribes to go around public policies and processes for
competitive advantage and profit.
However, public office can also be violated for personal gain through
patronage and infidelity, theft of assets, or the diversion of state revenues. This paper will focus on corruption and its
presence in the public sector, how corruption is relevant to developing
countries (specifically Nigeria), and finally will look at some different
anti-corruption efforts.
Bribery in the public sector
can occur in a number of different ways.
Some of the places bribery is prevalent are in government benefits,
lower taxes, licenses, and legal outcomes.
Bribes can influence the government's choice of firms that supply goods,
services, and works. They can also
influence the allocation of government benefits, such as subsidies to
enterprises/individuals or access to pensions or unemployment insurance. Bribes vary in size, type, and how much the
government benefits. Grand corruption
refers to international business transactions, and involves bureaucratsx. and
politicians. On the other hand, petty
corruption occurs when individuals seek a license or a service from the
government. This too can ultimately
influence a nation as a whole because a pooled group can retain bribes in an
elaborate sharing arrangement. Parties
involved in grand corruption may make the media headlines, but often the total
cost of petty corruption - economical and political distortions - are of great
if not greater cost than grand corruption.
Corruption within the
government can take place at both the political and bureaucratic levels. They can either take place individually or
in conjunction with one another.
Election laws, campaign finance regulation, and conflict of interest
rules for parliamentarians all are involved at the bureaucratic level. At the political level corruption may be
intrinsic to the way power is exercised and can be impossible to reduce through
lawmaking alone. Theft of state assets by
officials is also corruption. An
extreme form of this is the large-scale privatization of state assets by
enterprise managers and other officials and in some transition economies. The perpetrators of petty theft are usually
middle- and- lower level officials include the theft of office equipment and
stationary, vehicles, and fuel often times as a means to compensate for
inadequate salaries. Government
financial resource is another form of corruption, When officials pocket tax
revenues or fees, steal cash from treasuries, extend advances to themselves
that are never repaid, draw pay for fictitious workers, or have a well
documented pattern in the reports of audit authorities it is considered as the
abuse of public office for private gain and thus deemed corruption.
In research it has been
shown that corruption is always rooted in a country's policies, bureaucratic
traditions, political development, and social history. Nevertheless, corruption seems to flourish
when institutions are weak. The
developing and transition setting characteristics are what make corruption
difficult to control. It is not odd to
have normal motivation of public sector employees to work productively may be
impaired by many factors, including promotion unconnected to performance, and
low and declining civil service salaries.
Dysfunctional government budgets, inadequate supplies and equipment,
delays in the release of budget funds (including pay), and a loss of
organizational purpose was also found to demoralize staff. If senior officials and political leaders
use public office for private gain or if those who resist corruption lack
protection the motivation to remain honest is furthered weakened. In some cases, public service may have long
been dominated by patronclient relationships, in which the sharing of bribes
and favors has become entrenched. In
some countries pay levels always have been low, with the informal understanding
that staff will find their own ways to supplement adequate pay (through petty
theft).
A defining characteristic of
the environment in which corruption occurs is a deviation between the formal
and the informal rules governing behavior in the public sector. The Bank is unaware of any country that does
not have rules against corruption, although not all countries have all rules
that may be necessary. Some examples of
the laws are a law making it a criminal offense to bribe a public official or
public service regulations dealing with the expected behavior of public
officials, conflicts of interest, the acceptance of gifts, and the duty to
report fraud. Even though these formal
rules remain in place, but are superseded by informal rules where corruption is
systemic. It may be a crime to bribe a
public official, but in practice the law is not enforced or is applied in a
partisan way, and informal rules prevail.
Strengthening institutions to control corruption is about shifting the
emphasis back to the formal rules. A
strong legal framework to control corruption requires more than having the
right legal rules in place. It means
addressing the sources of informality, first by understanding why the informal
rules and then by tackling the causes of deviation. The frameworks in which the World Bank can approach corruption
consist of activities at four levels, which include 1) Preventing fraud and
corruption within Bank-financed projects. 2) Helping countries that request
Bank support in their efforts to reduce corruption.3) Taking corruption more
explicitly into account in country assistance strategies, country lending
considerations, the policy dialogue, analytical work, and the choice and design
of projects. 4) Adding voice and support to international efforts to reduce
corruption. Each level is linked with
the other. The Bank has integrated an
awareness of corruption risks and costs into the economic and social analysis
it undertakes in order to help countries design and implement anticorruption
strategies. In addition, the Bank's
active participation in international efforts helps individual developing
countries deal with the issue of corruption.
Preventing fraud and
corruption within Bank-financed projects has been a concern of the Bank for a
long time. Loan disbursement policies
and procurement has been refined to ensure the efficient use of Bank
resources. Further initiatives are
under way to streamline procurement and disbursement and to promote borrower
accountability. The second level,
helping countries that request Bank support in their efforts to reduce corruption,
is novel in its involvement in explicit anticorruption strategies. A small but growing number of countries have
approached the Bank for assistance, adding to the larger number of countries in
which the Bank is already supporting policy and institutional reform that,
among other things, contributes to the fight against corruption. Taking corruption more explicitly into
account in country assistance strategies, country lending considerations, the
policy dialogue, analytical work, and the choice and design of projects is more
difficult territory. But for the Bank
to confront corruption squarely as a development issue and provide relevant
advice to borrowers, it is unavoidable.
The newest area of the Bank would be adding voice and support to
international efforts to reduce corruption.
The Bank's approach to corruption improves with the acknowledgement that
it is a global problem that exists in all countries to varying degrees. In many of the countries that borrow from
the Bank and in some industrial countries it is systemic. Furthermore, corruption has significant
transnational dimensions that the Bank must consider. Social and economic costs of corruption are high and fall
disproportionately on the poor.
Corruption also encumbers the private sector, deters foreign investors,
and harms the environment. It
diminishes the effectiveness of public policy and undermines trust in the
government. It is quite obvious that
correcting the corruption problem is neither quick nor easy. The causes of corruption are proven to be
complex, and the means to control it are not fully understood. However, corruption always thrives when
economic policies are poorly designed, education levels are low, civil society
is underdeveloped, and the accountability of public institutions is
weak-conditions that exist in many settings but are particularly prevalent in
some developing countries. The power
that is exercised in a country is often reflected through the political
dimension of corruption, and it is constantly changing its form according to
the global economy and technical innovation.
Taking
a Closer Look: Case in Point - Nigeria
by Folake Oguntebi
According to the Corruption
Perception Index published by Transnational Organization, an NGO dedicated to
curbing corruption, Nigeria is the most corrupt nation in the world. This statement is certainly debatable, for
there are several other countries such as Mexico, India, Rawanda, and Guatemala
which have extremely corrupt governments as well. As corruption is a quite subjective topic, it is difficult to
truly assess which country is more corrupt than another. However, this topic can be saved for
discussion under a different medium.
Here we will look at how corruption is exemplified in Nigeria which
undoubtedly has one of the most corrupt political systems in the world.
A Nigerian political
scientist said of his country: "In Nigeria, corruption isn't part of
government, its the object of government (Rupert 2)." What is it, we ask,
that is so serious that someone would say that of his own country? The last ruler of Nigeria, General Sani
Abacha, is said to have been one of the most corrupt individuals ever to have
influenced the world. Some of the vices
he committed include siphoning billions of dollars out of the oil industry
which accounts for 80% of government revenue, sharing the country's money with
his close associates, and turning his head when western oil companies moved
into the Nigerian Delta with scant concern for the terrible toll the were
exacting on the Ogoni peoples. The Financial
Timeshas newspaper reported that revenue from 200,000 barrels per day was
diverted into accounts controlled by the military under his control. Between 1990 and 1994, $12.2 billion of
earnings disappeared. Details on these
funds were unsurprisingly suppressed by this same military. Upon the dictator's death, Ismaila Gwarzo,
Abacha's National Security Advisor, returned $250 million in cash which had
been siphoned from government in coffers to the Central bank and General Useni,
former minister of the Capital Territory returned $5 million. These are only a few examples of the evils
committed during Abacha's regime.
Such an outstanding record
of corrupt abuses cannot be ignored and analysis of the situation requires
examination of the history behind the present state of government. Nigeria gained her independence in 1960 from
British colonization. It is important
to note that a significant portion of post-independence political, social, and
economic developments in Nigeria (like other colonized nations) are a direct
consequence of processes that were begun during colonial rule (Osaghae 1). This means that the piecemeal and combined
process of trade monopoly, military superiority, 'divide and rule' and conquest
methods of creating Nigeria have had long-lasting impacts on Nigerian society. Today, it is no surprise that the society is
socially fragmented with over 250 ethnicities represented in the country, that
there exist two or three historically entrenched regional divisions, and that
the governments since independence have been extremely unstable.
Case in point: at one period
there were three civilian and seven military rulers in Nigeria. The post-colonial state is characterized by
a lack of autonomy as state infrastructures are not well developed or insulated
from private capture. Finally, there is
a negative attitude on behalf of the citizens toward government based upon
their experience with government in colonialism. In fact, a popular saying that emerged during colonialism and
remains today is: "Governments business is no man's business,"
indicating that politics and government is dirty and conceding that nothing is
really wrong with stealing funds (Osaghae 21).
Since the growth of the oil
industry in the 1970s, military rulers have controlled the lucrative
trade. Gradually oil climbed to become
the country's principle revenue earner so the military's control over the trade
was critical to the country's economic development. Perhaps if a regular civil government had maintained control at
this critical time, the country's development would have taken a much different
turn from what actually occurred. But
during a period of such political instability and chaos throughout the nation,
military rule was the last thing needed to ensure a properly functioning
system. It was not difficult for the
military rulers to use force in order to achieve their aims and hence began a
tradition of monopolizing the country's production benefits for private gain.
How does all of this
influence civil society?
It is clear that corruption
has far reaching effects upon society at large. First, corruption effects utter
destruction of the economy. This is not
a difficult equation to discern: with Abacha's regime, for instance, it is no
surprise that the Nigerian economy is ruined when individual members are
stealing such large portions of funds from an economy that already is not
producing sufficiently. Related to the
economic influence is the fact that corruption generally prevents countries
from addressing their most serious development challenges because rather than
focusing attention upon critical issues such as education and health, leaders,
professionals, and academicians are forced to spend valuable time analyzing and
dealing with the corruption issue.
Corruption effects a considerable disruption of the standard of life in
several different ways: collapse of the fuel distribution system, telephone
network decaying, electrical grid failing, and high unemployment can all be
attributed to the hands of a corrupt government. Corruption undermines confidence in public institutions, public
support in donor countries for development assistance, and it undermines a
country's integrity. Corruption has the worst effect on the poor who are hardest
hit by the economic decline that comes as a result of the inefficient system,
most reliant upon public services, and least capable of bearing the additional
costs of living associated with bribery and fraud.
What can be done?
Clearly, corruption is a
problem that cannot be ignored if we are to see the progress of developing
nations continue into the next millennium.
Thus, the final and perhaps most important question to address here is:
What can be done to rectify this problem?
Several organizations have been created to deal with the problems of
developing countries and most of these organizations who do so take
specifically "Anti-Corruption" measures. Moreover, there are organizations specifically created in order
to combat corruption such as Transparency International.
The World Bank's
Anti-Corruption Thematic group focuses upon activities that address the four
levels on which to help countries combat corruption. These levels are: (1) Preventing Corruption in Bank Projects, (2)
Responding to client governments that request help, (3) Creating a mainstream
concern for corruption on an ongoing basis, (4) Supporting International
Initiatives to control corruption.
Transparency International is an organization dedicated to the dual
purpose of increasing government accountability and curbing both international
and national corruption. Its concerns
are humanitarian, democratic, ethical, and practical - all features which have
special meaning. Corporate Watch
operates on the other side of the issue combating those corporations that
support the corrupt officials in these third world countries. They aim to encourage democratic control
over corporations and assure respect of human rights and environmental justice
in developing countries.
Corruption is a complicated
process that has far reaching effects in all societies which it impacts. We cannot ignore the impacts of corruption -
especially in developing countries where the process takes such a high
toll. Consequently efforts must
continue to go forward in attempting to change this state of the world.
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