World map of the
Corruption Perceptions Index by
Transparency International, which measures "the degree to which corruption is perceived to
exist among public officials and politicians". High numbers (blue) indicate relatively less corruption, whereas lower numbers
(red) indicate relatively more corruption.
In broad terms, political corruption is the misuse by government officials of their governmental powers for
illegitimate private gain. Misuse of government power for other purposes, like repression of political opponents and general
police brutality, is not considered political corruption. Illegal acts by private persons or corporations not directly involved
with the government is not considered political corruption either.
All forms of government are susceptible to political corruption. Forms of corruption vary,
but include bribery, extortion, cronyism, nepotism, patronage,
graft, and embezzlement. While corruption may
facilitate criminal enterprise such as drug trafficking, money laundering, and trafficking, it is not
restricted to these organized crime activities. In some nations corruption is so common
that it is expected when ordinary businesses or citizens interact with government officials. The end-point of political
corruption is a kleptocracy, literally "rule by thieves".
What constitutes illegal corruption differs depending on the country or jurisdiction. Certain political funding practices that
are legal in one place may be illegal in another. In some countries, government officials have broad or not well defined powers,
and the line between what is legal and illegal can be difficult to draw.
Effects
Effects on politics, administration, and institutions
Corruption poses a serious development challenge. In the political realm, it undermines democracy and good governance by
flouting or even subverting formal processes. Corruption in elections and in legislative bodies
reduces accountability and distorts representation in policymaking; corruption in the
judiciary compromises the rule of law; and corruption in public administration results in
the unfair provision of services. More generally, corruption erodes the institutional capacity of government as procedures are
disregarded, resources are siphoned off, and public offices are bought and sold. At the same time, corruption undermines the
legitimacy of government and such democratic values as trust and tolerance. See also: Good
governance
Economic effects
Corruption also undermines economic development by generating considerable distortions and inefficiency. 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.
Although some claim corruption reduces costs by cutting red tape, the availability of bribes
can also induce officials to contrive new rules and delays. Openly removing costly and lengthy regulations are better than
covertly allowing them to be bypassed by using bribes. Where corruption inflates the cost of business, it also distorts the
playing field, shielding firms with connections from competition and thereby sustaining inefficient firms.
Corruption also generates economic distortions in the public sector by diverting public
investment into capital projects where bribes and kickbacks are more plentiful. Officials may increase the technical complexity
of public sector projects to conceal or pave way for such dealings, thus further distorting investment. Corruption also lowers
compliance with construction, environmental, or other regulations, reduces the quality of government services and infrastructure,
and increases budgetary pressures on government.
Economists argue that one of the factors behind the differing economic
development in Africa and Asia is that in the former,
corruption has primarily taken the form of rent extraction with the resulting
financial capital moved overseas rather invested at home (hence the stereotypical, but
sadly often accurate, image of African dictators having Swiss bank accounts).
University of Massachusetts researchers estimated that from 1970 to 1996,
capital flight from 30 sub-Saharan countries
totaled $187bn, exceeding those nations' external debts. [3] (The results, expressed in retarded or suppressed development, have been modeled in
theory by economist Mancur Olson.) In the case of Africa, one of the factors for this
behavior was political instability, and the fact that new governments often confiscated previous government's corruptly-obtained
assets. This encouraged officials to stash their wealth abroad, out of reach of any future expropriation. In contrast, corrupt administrations in Asia like Suharto's have often taken a cut on everything (requiring bribes), but otherwise provided more of the conditions
for development, through infrastructure investment, law and order, etc.
Types of abuse
Bribery
Bribery requires two participants: one to give the bribe, and one to take it. In some
countries the culture of corruption extends to every aspect of public life, making it extremely difficult for individuals to stay
in business without resorting to bribes. Bribes may be demanded in order for an official to do something he is already paid to
do. They may also be demanded in order to bypass laws and regulations. In some developing nations up to half of the population
have paid bribes during the past 12 months. [1]
Graft
While bribery includes an intent to influence or be influenced by another for personal gain, which is often difficult to
prove, graft only requires that the official gains something of value, not part of his official pay, when doing his work. Large
"gifts" qualify as graft, and most countries have laws against it. (For example, any gift over $200 value made to the President
of the United States is considered to be a gift to the Office of the Presidency and not to the President himself. The outgoing
President must buy it if he wants to take it with him.) Another example of graft is a politician using his knowledge of
zoning to purchase land which he knows is planned for development, before this is publicly known,
and then selling it at a significant profit. This is comparable to insider trading in
business.
Extortion and robbery
While bribes may be demanded in order to do something, payment may also be demanded by corrupt officials who otherwise
threaten to make illegitimate use of state force in order to inflict harm. This is similar to extortion by organized crime groups. Illegitimate use of state force
can also be used for outright armed robbery. This mostly occurs in unstable states which lack
proper control of the military and the police. Less open forms of corruption is preferred in more stable states.
Patronage
Patronage refers to favoring supporters, for example with government employment. This may
be legitimate, as when a newly elected government changes the top officials in the administration in order to effectively
implement its policy. It can be seen as corruption if this means that incompetent persons, as a payment for supporting the
regime, are selected before more able ones. In nondemocracies many government officials are often selected for loyalty rather
than ability. They may be almost exclusively selected from a particular group (for example, Sunni Arabs in Saddam Hussein's Iraq, the nomenklatura in the Soviet Union, or the Junkers in Imperial Germany) that support the regime in return for such
favors.
Nepotism and Cronyism
Favoring relatives (nepotism) or personal friends (cronyism). This may be combined with bribery, for example demanding that a business should employ a relative of
an official controlling regulations affecting the business. The most extreme example is when the entire state is inherited, as in
North Korea or Syria.
Embezzlement
Embezzlement is outright theft of entrusted funds. It is a misappropriation of
property.
Kickbacks
A kickback is an official's share of misappropriated funds allocated from his or her organization to an organization involved
in corrupt bidding. For example, suppose that a politician is in charge of choosing how to spend some public funds. He can give a
contract to a company that isn't the best bidder, or allocate more than they deserve.
In this case, the company benefits, and in exchange for betraying the public, the official receives a kickback payment, which is
a portion of the sum the company received. This sum itself may be all or a portion of the difference between the actual
(inflated) payment to the company and the (lower) market-based price that would have been paid had the bidding been competitive.
Kickbacks are not limited to government officials; any situation in which people are entrusted to spend funds that do not belong
to them is susceptible to this kind of corruption. Related: Bid rigging, Bidding, Anti-competitive practices
Conditions favorable for corruption
Some argue that the following conditions are favorable for corruption:
- Information deficits
- Lack of government transparency.
- Lacking freedom of information legislation. The Indian
Right to Information Act 2005 has "already
engendered mass movements in the country that is bringing the lethargic, often corrupt bureaucracy to its knees and changing
power equations completely." [4]
- Contempt for or negligence of exercising freedom of speech and freedom of the press.
- Weak accounting practices, including lack of timely financial management.
- Lack of measurement of corruption. For example, using regular surveys of households and businesses in order to quantify the
degree of perception of corruption in different parts of a nation or in different government institutions may increase awareness
of corruption and create pressure to combat it. This will also enable an evaluation of the officials who are fighting corruption
and the methods used.
- Tax havens which tax their own citizens and companies but not those from other nations and
refuse to disclose information necessary for foreign taxation. This enables large scale political corruption in the foreign
nations.[2]
- Lacking control over and accountability of the government.
- Democracy absent or dysfunctional. See illiberal democracy.
- Lacking civic society and non-governmental organizations which monitor the government.
- An individual voter may have a rational ignorance regarding politics, especially
in nationwide elections, since each vote has little weight.
- Weak rule of law.
- Weak legal profession.
- Weak judicial independence.
- Lacking protection of whistleblowers.
- Lack of benchmarking, that is continual detailed evaluation of procedures and
comparison to others who do similar things, in the same government or others, in particular comparison to those who do the best
work. The Peruvian organization Ciudadanos al Dia has started to measure and compare
transparency, costs, and efficiency in different government departments in Peru. It annually awards the best practices which has
received widespread media attention. This has created competition among government agencies in order to improve. [5]
- Opportunities and incentives
- Large, unsupervised public investments, combined with complex or arbitrary regulations and a lack of oversight.
- Sale of state-owned property and privatization.
- Poorly-paid government officials.
- Long-time work in the same position may create relationships inside and outside the government which encourage and help
conceal corruption and favoritism. Rotating government officials to different positions and geographic areas may help prevent
this.
- Costly political campaigns, with expenses exceeding normal sources of political
funding.
- Less interaction with officials reduces the opportunities for corruption. For example, using the Internet for sending in
required information, like applications and tax forms, and then processing this with automated computer systems. This may also
speed up the processing and reduce unintentional human errors. See e-Government.
- A windfall from exporting abundant natural resources may encourage corruption. See the resource curse. [6]
- Social conditions
- Self-interested closed cliques and "old boy networks".
- Family-, and clan-centered social structure, with a tradition of nepotism being
acceptable.
- A gift economy, such as the Chinese guanxi or the
Soviet blat} system, emerges in a Communist centrally
planned economy.
- In societies where personal integrity is rated as less important than other characteristics (by contrast, in societies such
as 18th and 19th Century England, 20th Century Japan and post-war
western Germany, where society showed almost obsessive regard for "honor" and personal
integrity, corruption was less frequently seen)[citation needed]
- Lacking literacy and education among the
population.
Size of public sector
It is a controversial issue whether the size of the public sector per se results in corruption. Extensive and diverse
public spending is, in itself, inherently at risk of cronyism, kickbacks and embezzlement. Complicated regulations and arbitrary,
unsupervised official conduct exacerbate the problem. This is one argument for privatization and deregulation. Opponents of privatization see the
argument as ideological. The argument that corruption necessarily follows from the opportunity is weakened by the existence of
countries with low to non-existent corruption but large public sectors, like the Nordic
countries. However, these countries score high on the Ease of Doing
Business Index, due to good and often simple regulations, and have rule of law firmly
established. Therefore, due to their lack of corruption in the first place, they can run large public sectors without inducing
political corruption.
Privatization, as in the sale of government-owned property, is particularly at the risk of cronyism. Privatizations in Russia
and Latin America were accompanied by large scale corruption during the sale of the state owned companies. Those with political
connections unfairly gained large wealth, which has discredited privatization in these regions. While media have reported widely
the grand corruption that accompanied the sales, studies have argued that in addition to increased operating efficiency, daily
petty corruption is, or would be, larger without privatization, and that corruption is more prevalent in non-privatized sectors.
Furthermore, there is evidence to suggest that extralegal and unofficial activities are more prevalent in countries that
privatized less.[3]
Governmental corruption
If the highest echelons of the governments also take advantage from corruption or embezzlement from the state's treasury, it
is sometimes referred with the neologism "Kleptocracy". Members of the government can take
advantage of the natural resources (e.g. diamonds and oil in a few prominent cases) or
state-owned productive industries. A number of corrupt governments have enriched themselves via foreign aid, which is often spent
on showy buildings and armaments.
A corrupt dictatorship typically results in many years of general hardship and suffering
for the vast majority of citizens as civil society and the rule of law disintegrate. In addition, corrupt dictators routinely ignore economic and social problems in their quest to amass ever more wealth and power.
The classic case of a corrupt, exploitive dictator often given is the regime of Marshal
Mobutu Sese Seko, who ruled the Democratic Republic of the Congo
(which he renamed Zaire) from 1965 to 1997. It is said that usage of the term kleptocracy gained
popularity largely in response to a need to accurately describe Mobutu's regime. Another classic case is Nigeria, espeicially under the rule of General Sani Abacha who was
de facto president of Nigeria from 1993 until his death in 1998. he is reputed to have
stolen some US$3-4 billion. He and his relatives are often mentioned in
Nigerian 419 letter scams claiming to offer vast fortunes for 'help' in laundering his
stolen 'fortunes', which in reality turn out not to exist.[4]
More recently, articles in various financial periodicals, most notably Forbes magazine,
have pointed to Fidel Castro, ruler of the Republic of Cuba
since 1959, of amassing a personal fortune worth US$900 million. [7] Opponents of his regime claim that he has used money amassed through weapons
sales, narcotics, international loans and confiscation of private property to enrich himself and his political cronies who hold
his dictatorship together, and that the $900 million published by Forbes is merely a portion
of his assets, although that needs to be proven. [8]
Campaign contributions
In the political arena, it is difficult to prove corruption, but impossible to prove its absence. For this reason, there are
often unproved rumors about many politicians, sometimes part of a smear campaign.
Politicians are placed in apparently compromising positions because of their need to solicit financial contributions for their
campaign finance. If they then appear to be acting in the interests of those parties
that funded them, this gives rise to talk of political corruption. Supporters may argue that this is coincidental. Cynics wonder
why these organizations fund politicians at all, if they get nothing for their money.
Laws regulating campaign finance in the United States require
that all contributions and their use should be publicly disclosed. Many companies, especially larger ones, fund both the
Democratic and Republican parties. Certain countries, such as France, ban altogether the
corporate funding of political parties. Because of the possible circumvention of this ban with respect to the funding of
political campaigns, France also imposes maximum spending caps on campaigning; candidates that have exceeded those limits, or
that have handed misleading accounting reports, risk having their candidacy ruled invalid, or even be prevented from running in
future elections. In addition, the government funds political parties according to their successes in elections. In some
countries, political parties are run solely off subscriptions (membership
fees).
Even legal measures such as these have been argued to be legalized corruption, in that they often favor the political status
quo. Minor parties and independents often argue that efforts to rein in the influence of contributions do little more than
protect the major parties with guaranteed public funding while constraining the possibility of private funding by outsiders. In
these instances, officials are legally taking money from the public coffers for their election campaigns to guarantee that they
will continue to hold their influential and often well-paid positions.
Measuring corruption
Measuring corruption - in the statistical sense - is naturally not a straight-forward
matter, since the participants are generally not forthcoming about it. Transparency
International, a leading anti-corruption NGO, provides three
measures, updated annually: a Corruption Perceptions Index (based on
experts' opinions of how corrupt different countries are); a Global Corruption Barometer (based on a survey of general public
attitudes toward and experience of corruption); and a Bribe Payers Survey, looking at the willingness of foreign firms to pay
bribes. The World Bank collects a
range of data on corruption, including a set of Governance Indicators.
The ten countries perceived to be least corrupt, according to the 2006 Corruption Perceptions Index, are Finland,
Iceland, New Zealand, Denmark, Singapore, Sweden, Switzerland, Norway, Australia, and
The Netherlands.
According to the same survey, the nine countries perceived to be most corrupt are Haiti,
Indonesia, Myanmar, Iraq,
Guinea, Sudan, DR Congo, Chad, and Bangladesh.
In the US, based on public corruption convictions, Mississippi, North Dakota and Louisiana were the three most corrupt states.
Nebraska, New Hampshire, Oregon, and Iowa had the least amount of corruption. The most populous
states, California and Texas, are ranked in
the middle, California ranking 25th and Texas in 29th. [9]
See also
Wikiquote has a collection of quotations related to:
Forms or aspects of corruption
Good governance
Theoretical aspects
Anti-corruption authorities and measures
Examples of corruption
Corruption in fiction
References
- ^ How common is bribe-paying?. “...a relatively high proportion of families in a group of Central Eastern
European, African, and Latin American countries paid a bribe in the previous twelve months.”
- ^ Western bankers and lawyers 'rob Africa of $150bn every year
- ^ Privatization in Competitive Sectors: The Record to Date. Sunita Kikeri and
John Nellis. World Bank Policy Research Working Paper 2860, June 2002. [1]
Privatization and Corruption. David Martimort and Stéphane Straub. [2]
- ^ Who wants to be a millionaire? - An online collection of Nigerian scam
mails
Further reading
- Alexandra Wrage (2007) Bribery and
Extortion: Undermining Business, Governments and Security
- Axel Dreher, Christos Kotsogiannis, Steve McCorriston (2004), Corruption Around the World:
Evidence from a Structural Model.
- Kimberly Ann Elliott, ed, Corruption and the Global Economy (1997)
- Edward L. Glaeser and Claudia Goldin, eds, Corruption and Reform: Lessons from America's Economic History U. of
Chicago Press, 2006. 386 pp. ISBN 0-226-29957-0.
- Arnold J. Heidenheimer, Michael Johnston and Victor T. LeVine (eds), Political Corruption: A Handbook (1989) 1017
pages.
- Michael Johnston. Syndromes of Corruption: Wealth, Power, and Democracy (2005)
- Johann Graf Lambsdorff (2007), The Institutional Economics of Corruption and Reform: Theory, Evidence and Policy
Cambridge University Press
External links
News
International organizations and research
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Regional and national organisations and research
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