hat can be done to reduce it? Moralizing is of little use. If John Noonan’s prediction is to come true, we need more than preaching. Based on my own international experience, here are five ingredients for winning the battle against systemic corruption.
We need government reforms that emphasize structures, leadership, and incentives. Don’t target of corrupt individuals. Target corrupt structures.
Corruption can be understood through the following stylized formula:
Corruption = Monopoly + Discretion - Accountability.
Corruption flourishes where someone who is largely unaccountable has a monopoly over a good or service and has the discretion to decide how much of it citizens get. Successful anti-corruption efforts, therefore, reduce monopolies, limit and clarify discretion, and raise accountability.
Leadership is vital. Even when leaders are corrupt, it is possible to reduce opportunities for bribery and fraud. But Noonan’s prediction will not come true until we demand leaders who are brilliant in prevention, ruthless in prosecution, and exemplary in their morals.
Incentives lie at the heart of this fight. As the saying goes, “If you pay peanuts, you get monkeys.” Salaries of government executives should, as a rule, be at least 80 percent of those their counterparts in the corporate world earn. Once salaries are attractive, we need incentives for good performance and stiff penalties for corruption.
Cleaning up one agency or ministry may not work if the national environment remains corrupt. Malaysia’s anti-corruption agency, for example, files cases that are often simply ignored by public prosecutors. Creating a national corruption watchdog is useless if it cannot coordinate with the other ministries and agencies vital to prevent, prosecute, and punish corruption.
The fight against corruption must go beyond government. On public tenders of more than a certain sum, bidders should sign an “integrity pact,” promising not to pay bribes and not to cheat on costs and change orders. If any firm signing the integrity pact suspects the winning firm of bribery or of inflating costs, the accused company promises to throw open its books. Not least, integrity pacts give firms a way to resist extortion by the government.
Businesspeople, lawyers, and accountants also need to know how corrupt systems work. This kind of participatory diagnosis gives them a safe way to share their knowledge. Here is an illustration of how to achieve this, drawn from a rural road project:
About 15 companies involved in road tenders are interviewed confidentially. The object is not to identify individuals involved in bribery, they are assured, but rather to document how bribery affects procurement -- who is eligible to bid, the bid’s specifications, picking the winner, making post-award change orders, and paying the contractor. By the end of the interview process, a useful picture emerges of how corrupt tenders works. This description can then be shared with contractors and the government for suggesting improvements and to serve as a benchmark for future diagnoses.
If corruption is systemic, the remedies must go beyond prevention to what might be called subversion. The goal is to analyze how the corrupt systems work, identify their weaknesses, and attack. Techniques used to fight organized crime are useful here as well, such as stings, undercover agents, and efforts to “turn” insiders into witnesses. Often, a weak point in corrupt systems is how to hide the ill-gotten funds. Lifestyle checks can uncover officials living beyond their official means. In some countries, citizens have taken steps to document and share this sort of information, which has in some cases toppled corrupt politicians and systems.
Finally, let us return to Noonan’s emphasis on morality. Noonan is right that corruption is universally regarded as immoral. Even in places where corruption is said to be “a way of life,” citizens abhor it. Careful anthropological studies belie some earlier claims that peasants (and perhaps people in most developing countries) cannot distinguish between gifts and bribes.
Noonan concluded that our collective repulsion would eventually change practice and render corruption extinct. How that would happen Noonan left to the machinery of history.
But Noonan's prediction won’t come true without determined effort. To eliminate corruption, we need to weed out monopolies and increase accountability, create coordinated government approaches, enlist the cooperation of businesses and civil society, and empower the public to expose corrupt practices. And, yes, we can join Noonan in reminding ourselves and our leaders, through our voices and our choices, that corruption is wrong and we are not going to put up with it any longer.
Reagards to you all