What’s wrong with corruption?

What’s wrong with corruption?

Loud noises were heard about corruption in the government over the last few weeks during campaigning for local government elections in some constituencies in which they had not been held before due to well known reasons. The overwhelmingly pro-government final result shows that the voters have other things to worry about more than the problem of corruption (such as the continuation of the development work already underway, and the need to protect the country from foreign interference), and that they seem to think (not without reason) that shouting against corruption in our country is, by tradition, only a ploy to win votes at elections. Fortunately for us, the result they have delivered has reconfirmed the still firm popular trust in the president who saved the country from terrorism, despite failings among some in his ranks. This, of course, is incidental to my main theme here, which is that corruption is a national problem, and that it should be tackled as such in a meaningful way by all politicians with the participation of the citizenry, but not by engaging in mud-slinging matches with opponents.

Kautilya (350-283 BCE), also known as Chanakya, the pragmatic visionary and royal adviser who was associated with the founding of the ancient Maurya Empire of India under Chandragupta Maurya in 322 BCE, in his monumental treatise on statecraft Arthashastra, articulated a vital principle of modern democratic governance, although he was doing so within the context of a feudal monarchical system some 2400 years ago: “… governance, polity, politics and progress have to be linked to the welfare of the people”. He provides an elaborate description of “the duties, responsibilities and role of the king, prince(s), ministers, and other state officials”, with a detailed commentary on how the state’s political administration should be undertaken. Of course, he was writing and serving in a caste-based, (from a modern point of view) non-egalitarian society which obliged him to enunciate largely repressive and discriminatory laws for women and low castes, though not without a degree of humaneness informing them. This, rather than detract from his greatness as a political thinker, enhances it by creating a foil to set off the clarity and freshness of his thinking.

The title of the book, Arthashastra, is literally ‘the science of material gain’; artha means ‘property, economic, and material success’. The classic work demonstrates Kautilya’s sensitivity to the adverse effect that corruption has on economic growth, and hence on public welfare.

He took cognizance of the problem of corruption among state officials. The fact that Kautilya lists about forty ways of embezzling government funds shows his familiarity with the matter. He adopts a very practical view of the problem, and entertains no illusions about the challenge of ascertaining the probity or otherwise of the officers in this regard. He writes “… it is as difficult to discover the honesty or otherwise of an officer as it is to find out whether or not it was the fish that drank the water”. (Summary of Kautilya’s Arthashastra: Its Contemporary Relevance published by the Indian Merchants’ Chamber, 2004.)

In ancient India corruption among state officials responsible for the supervision and protection of cross border trade didn’t go undetected. Its elimination or at least control was considered to be of paramount importance. The officers were required to “make good what is lost”. On the other hand, Kautilya was too acute an observer not to notice that the potential victims, the traders, were also capable of thievery.

Elsewhere in the Arthashastra we read that corrupt government functionaries were sentenced to fines, prison terms, or even to death. Those were authoritarian times, and harsh punishments were probably the order of the day. However, while I was writing this I heard in the TV news that death sentences were passed on two deputy mayors in China who were found guilty of soliciting and accepting bribes in awarding contracts. The inherent intractability of the offence of abusing public office for private benefit makes it hard to stop. A severe punitive response seems to be an unavoidable option in overcoming corruption even in the twenty first century.

That corruption among public office-bearers was just as pervasive and entrenched in India more than two thousand years ago as it is in many countries today goes without saying. However, the king was firmly committed to the rooting out of corruption. He managed the wealth of the country on behalf of the people as a steward, not as the master. (This principle was repeated to King Devanampiya Tissa of Lanka by Mahinda Thera, the Buddhist missionary who formally introduced Buddhism to the island in 250 BCE, on his first encounter with the former; the Thera was the son of Mauryan emperor Ashoka.)

It was the ruler’s unavoidable duty to ensure that the economic activities went on unhindered by the very state officials he had appointed to guarantee their free functioning and safety. Given the corruptibility of human nature (which was no less ingrained in public servants and others then than it is now), maintaining the economic wellbeing and ‘progress’ of the people was no easy task for the king. The losses inflicted were bound to have a deleterious effect on the common people’s welfare. And the king had in place mechanisms to fight corruption among his officials.

Dr Daniel Kaufmann (a Chilean economist who once served as a director of the World Bank) contrasts the ancient Kautilyan conception of corruption with a more recent revisionist view that corruption may not be so bad after all, and that it could even foster development. (My own reference to Kautilya is thanks to Dr Kaufmann.) To illustrate this, he refers to Nathaniel Leff of Columbia University who argued in the late 1970’s that “corruption may introduce an element of competition into what is otherwise a comfortably monopolistic industry….[and] payment of the highest bribes [becomes] one of the principal criteria for allocation….Hence, a tendency toward efficiency is introduced into the system.” Dr Kaufmann says that though this rather crude version of the revisionist view is less frequently proposed today, there still are more subtle interpretations which wrap up corruption in ambiguity. One such version is that in some cultures corruption is differently viewed from the way it is in the West. For example, it was claimed that some Asian tigers recorded phenomenal growth amidst rampant corruption. Doubts are also expressed about the commitment of the ruling elites in some countries to eliminate corruption. These ‘corruption is positive’ views seem to ignore the ultimate victims of corruption, the general public, at whose expense what is lost must perforce be made good. Though opinions about the ultimate effects of corruption on a country’s economy may be divided, it is universally condemned as unethical. The popular Sinhalese slang term for bribes among ordinary people is jaraawa (lit. dirt, sewage) which implicitly compares bribe takers to pigs, the dirtiest of domestic animals. In our culture, what’s wrong with corruption is that nothing is right with it.

Among government officers corruption sometimes involves ‘rent seeking’ activities. Economic rent, economists tell us, is simply the amount of money that an individual with a special or unique feature such as exceptional beauty, great singing or dancing skill, a personal relationship with a powerful person, or a high position, can earn using that particular possession, over and above what they could normally earn were they without the benefit of such an unusual asset. Government officials and others in similar positions can abuse their office for earning economic rent.

Corruption is of two types. One type involves only a single individual: fraud, embezzlement, theft, misappropriation of funds etc are of this type. The other type involves two parties: a bribe giver and a bribe taker. Bribery, nepotism, cronyism, etc. exemplify this type. Both the bribe taker and giver are offenders; the invisible victims of their actions are the people of the country. A number of situations involving interaction between entrepreneurs and government agencies provide opportunities for the second type of corruption to take place. To randomly mention a couple of such circumstances: Issuing of licenses, permits, etc. as part of a government regulatory process in respect of some business or industry may afford a chance for the officials concerned to engage in corruption; in that situation, bribes might be expected or offered voluntarily in order to save time by speeding up the granting of permits for starting completely normal, legal activities; sometimes responsible authorities may take bribes to connive at illegal activities by criminal elements such as illicit felling of trees in forest reserves, or sand mining where it causes environmental damage. Another situation that is conducive for corruption to flourish is where government contracts are awarded. Bribes can influence the decisions of a bureaucrat who handles contracts.

In any organized economy the successful running of business, industrial, and other economic activities entails the observance of rules and regulations with transparency and consistency. The principle of consistency requires these rules and regulations to be applied to all players fairly and squarely. For them to be transparent they must first be spelt out clearly to all stakeholders in order that they are well understood, accepted, and duly obeyed by them.

Now, it’s difficult or rather impossible to design rules and regulations that are absolutely immune to tampering or are adequate to suit all conceivable situations which call for their implementation for the purpose of regulating economic activity. This makes it necessary for the administrators to be given some discretionary powers in interpreting and implementing government regulations in specific circumstances. However, the bureaucrats whose duty it is to implement rules and regulations must take responsibility for their actions. Accountability is essential for the proper implementation of rules and regulations. Where accountability is lacking the discretionary powers can sometimes be used for rent seeking activities.

In economics it is held that the more opportunities there are in a country for earning economic rent, the more corruption there will be; similarly, situations that favour the grant of discretionary powers encourage corruption. On the other hand, corruption decreases to the extent that officials are held accountable; that is, the more accountability there is, the less corruption there will be. This situation reflects the three critical conditions which are likely to favour the emergence of a thoroughly corrupt system in a country: i) a plethora of rules, regulations, laws, and administrative orders designed to limit business and economic activities resulting in many opportunities for creating economic rent, ii) a situation where the authorities are given liberal discretionary powers, and iii) lack of institutional arrangements or other mechanisms to enforce accountability among administrators.

It seems that these three anomalous conditions prevail to varying degrees in our country. Isn’t there a way out? U Myint, a former economics adviser to ESCAP (Economic and Social Commission for Asia and the Pacific) and a professor at the Rangoon Institute of Economics in Myanmar, now in retirement, believes that the fight against corruption should not be given up on the grounds of poor results; the struggles against poverty, disease, and injustice have continued without much gain either, he points out. In an article entitled “Corruption – Causes, Consequences and Cures” in the Asia-Pacific Development Journal, December 2000 (which I used as a source while writing this essay) U Myint includes six remedial measures necessary for fighting corruption. Listed below are these with a few comments of my own on each relating it to Sri Lanka (according to my lights as an average citizen who is not an economist):

In Asian cultures, it’s customary for people to look up to leaders and those in authority; this means that they need to obligate themselves to set an example. The popular view of our leaders, especially politicians, is negative in this respect. But I still believe that the majority of them are good, law abiding, civic minded citizens. A few are black sheep of course, and unfortunately it is these shady characters who are always in the media limelight. The honest majority both in the government and the opposition need to make themselves more prominent; they must stop raising allegations of corruption against each other merely as a part of politicking with no serious intention of proving or punishing the crime, as they have been doing for many decades. However, it is very necessary to clear their name before the public if the allegations raised against them are false. Silence could be the best answer when the accusers are known to be crooks themselves, and lack credibility; but that strategy won’t be effective in the long run. Because corruption clearly is a national issue (with international ramifications, of course), it cannot be dealt with by one faction alone; all leaders, irrespective of party politics, must address it together, if they are genuinely interested in a solution.

Government’s credibility in respect of fighting corruption is of the essence. Both the bribe takers and givers must be convinced that the government is serious about its intentions, and that they have no escape from punishment. This is lacking in our country to say the least. The loudest noises ever have been made or are still being made these days against corruption prompted by what look like provable instances of corruption. There’s been little attempt, as far as I know, to nail these canards, if they are mere canards.

Another important strategy in fighting corruption is involving people in the fight by creating public awareness. This is being done both by the government and social groups, with mixed results though. For example, periodic warnings by the Central Bank to the public to beware of bogus financial institutions fail to be heeded by some people, and we often hear them being swindled out of millions in savings. It may be that either the authorities or the public or both parties are not very serious about getting actively involved in stopping corruption.

The participation of a responsible press (and other mass media) is necessary to gather, analyse, organise, present, and disseminate information about the problem; this is vital for creating public awareness. It is an encouraging sign that an increasing number of young idealistic journalists, particularly those working for electronic media, are making a commendable effort to expose corruption and other antisocial activities. However, we hear less frequently about whether culprits are ever apprehended and brought to book. The young people’s work should be properly complemented.

Oversight or watchdog bodies are another factor. We have a number of these. However, some of them seem to have agendas of their own that are not in the best interests of the country. There are also some that represent a genuine concern about issues of transparency, rights, accountability etc. the absence of which values is a necessary condition for corruption to thrive. An organization that is reported to be doing an excellent job in this area is the CIMOGG (Citizens’ Movement for Good Governance) headed by Dr Vishvalingam. But their work will be futile unless the powers that be heed their call for reform.

The last is the need to improve institutions. U Myint himself mentions four institutions in this connection, and I think these are relevant to our country, too: reforms in the justice administering system with a view to introducing less time-consuming, less burdensome procedures for conducting business in the law courts; improvements in the police department; strengthening the auditor general’s office; and the appointment of an inspector general with authority to investigate and prosecute corruption (probably equivalent to our bribery commission). I think Sri Lanka is already moving in this direction.

Corruption then is not a new disease of the modern era like aids; it was already a serious problem even in ancient India 2400 years ago when Kautilya treated it as worth dealing with in his monumental treatise. Neither is it confined to one country or one region; it’s a global phenomenon; often single countries, especially those with weak economies, are no match for transnational corporations which resort to corrupt practices to push their businesses. But still a country can do much to control corruption, for it is not actually a disease, instead it is, as U Myint describes it, only a symptom of deep-seated economic, political, and institutional shortcomings in a country. Reforms will not eliminate corruption overnight, but they will definitely bring it under control. That’s what the practical minded Kautilya also aimed at.

The Island: Features: by Rohana R. Wasala

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