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OF ECONOMICS AND GOVERNMENT Richard MulganSatish ChandPeter Larmour ANU COLLEGE OF ASIA & THE PACIFIC Corruption and Anti-Corruption Richard Mulgan, Satish Chand & Peter Larmour Crawford School of Economics and Government ContentsDemocracy and political corruption:idealism versus realismRichard Mulgan Are free trips and payments topoliticians bribes?Satish Chand Diagnosing the disease of corruption:what different disciplines suggestabout curing corruptionPeter Larmour About the Policy Briefs This year the Crawford School of Economics andGovernment established an exciting series of PolicyBriefs that provide three opinion pieces by researcherson a particular theme or topic. These briefs aredesigned to provide introductions into key publicpolicy areas that are of importance to Australia andits neighbours in the Asia and Pacific. The aim is tostimulate discussion and expand the perspectivesavailable to the policy community.
Our first Policy Brief was on fishing futures. This brief is on the theme of corruption and anti-corruption—a timely topic given the recent headlinesover the AWB payments in Iraq. It provides threeperspectives: a diagnosis of the causes and cures forcorruption, an economic analysis of corruption andthe links between democracy and corruption.
R. Quentin GraftonResearch Director Richard Mulgan, Satish Chand & Peter Larmour 2006 Corruption and Anti-Corruption Democracy and political corruption: idealism versus realism If corruption is the disease, is democracy part of the as Janus-faced: in part cynical and realist, grounded cure or a further contributing factor?1 On the one in the need to control the natural self-interest of human hand, many Western governments and their advisers beings (‘the worst form of government, except for all look on democracy as an antidote to corruption.
the others'); in part optimistic and idealist, pointing a Democracy is linked regularly with ‘freedom' as the way towards more collectively responsible and basis of good government and as the political means autonomous communities. The concept of political of delivering security and prosperity to ordinary corruption has a similarly double-sided nature: both citizens. The ‘good governance' agendas advocated realist and idealist.
by organisations such as the World Bank and theAustralian government's aid agency, AusAID, include public participation and accountable government, a All conceptions of corruption agree that it involves stance supported by the international NGO the improper or illegitimate pursuit of self-interest or community.2 The strong sunlight of democratic debate sectional advantage.4 The key issue is what makes the and dialogue is seen as the surest means of reducing pursuit of self-interest improper and therefore corrupt.
At what point does concern for the interests of oneself On the other hand, evidence from recently or one's own group illegitimately impinge on the established, transitional democracies suggests that the public interest? The more realistic perspective assumes move to more openly contested political systems, that all politics is fundamentally motivated by particularly when associated with rapid economic personal ambition or sectional advantage. Indeed, the liberalisation, might encourage an upsurge rather than pursuit of self-interest and sectional advantage, within a decrease in political corruption. Without robust limits, is beneficial and contributes to the greater good mechanisms of legal accountability, which have had of society. Vote-seeking politicians, through a process little chance to develop under authoritarian regimes of political competition and negotiation, broker an and other illegitimate inducements, elected leaders outcome that aggregates a range of various social and and their governments are naturally prone to economic interests. Realist theorists of democracy5 accepting bribes. The introduction of electoral explicitly compared the competition for votes with competition merely adds one more motive—the need market competition for the consumer's dollar. As in to finance successful electoral campaigns—to the a market exchange, provided the market is properly venality of those who control the levers of power. Not regulated, an invisible hand can translate the self- surprisingly, some of the harder-headed international interested actions of individuals and organisations donors, such as the International Monetary Fund, into an outcome that benefits the community as a emphasise the importance of strong legal institutions for good governance and downplay the role of From this perspective, political corruption specifically democratic elements such as elections. The involves self-interested actions that breach the rules international corporate sector displays the same of political competition. The gerrymandering of priorities, consistently listing the undemocratic city- electoral boundaries, the bribing of officials to secure state of Singapore among the least corrupt countries a contract, the covert donation of campaign in which to do business.3 contributions in return for tariff protection—all are The debate about democracy and corruption cases that are branded as corrupt and illegal because involves fundamental issues of the nature of they lead to unfair political competition. Deciding corruption and, indeed, the nature of democracy itself.
what actions are to count as corrupt involves drawing The democratic tradition has long been recognised a line within the range of selfish political activities CRAWFORD SCHOOL OF ECONOMICS AND GOVERNMENT Corruption and Anti-Corruption between those that will count as legitimate instances The public-interest demands of democratic of fair political competition and those that overstep discourse do force some constraints on the more the mark and need to be outlawed. To use a sporting blatant cases of political self-interest, which cannot analogy, corruption, in the realist conception, is like be plausibly dressed up in terms of the common good foul or dirty play in a rough contact sport, such as or public interest. But, for the most part, the reality of boxing or rugby. Opponents try to dominate each democratic politics falls well short. The basic political other physically within the rules of fair play set by contest is best understood in realist, pluralist terms, the sport's ruling body. Violence itself is not as a competition between conflicting sectional interests illegitimate, only violence that is against the rules.
and personally ambitious politicians. At the same The realist conception is shared by many active time, this political reality dare not speak its name.
participants in democratic politics, not only Politicians are forced to deny what everyone knows politicians, party activists and lobbyists, who are to be true: that much of their behaviour is dictated by professionally engaged in competing for political personal ambition and sectional advantage, rather advantage, but by many public officials who work than by concern for the public interest. To the vice of closely with politicians and by political commentators selfishness is added that of hypocrisy, fuelling public who report on politics for the wider public.
distrust of the democratic process and a general sensethat the process is corrupt.
Realism, however, is not the only theoretical lens through which democratic politics can be viewed. An The contrast between the realist and idealist alternative, idealist approach assumes that politics conceptions helps to explain some of the impasse over should be focused on the common good or public defining corruption. The acts which all agree to be interest, which is altogether separate from, and often corrupt, such as outright bribery and in conflict with, personal or sectional interests. From misappropriation, are clearly corrupt in both an idealist perspective, political actors are expected to conceptions. Beyond this hard-core corruption, transcend their own personal and local concerns and however, opinions often diverge, in part because the concentrate on what is best for everyone. Motives of different conceptions produce different answers. Thus, individual ambition and advancement are not excluded whether business contributions for campaign funds but are always to be harnessed to the public interest or are to be considered corrupt depends on which common good. Politicians may seek renown and power, conception is adopted. A realist perspective will see but only through supporting policies that articulate a it as a normal part of democratic politics in a liberal collective vision that resonates with the public.
capitalist society, whereas, from an idealist point of From the idealist perspective, if politicians place view, all such donations, however transparent, appear electoral advantage ahead of the long-term welfare morally reprehensible and corrupt.
of the country, then politics is no longer sound and Because the realist conception of democracy healthy and has, to that extent, become corrupted.
provides a more accurate picture of political practice Such a high-minded view of corruption, though in modern democracies, it offers a more reliable guide clearly at odds with the perspective held by hard- to the standards of political corruption that should headed observers of everyday politics, is none the less prevail. Corruption needs to be seen as the excessive widely held. It is implicit among economists who pursuit of private interest, not the pursuit of private condemn democratic politics as rent-seeking against interest per se. In a properly functioning democracy, the public interest.6 It is also supported by advocates the definition of what counts as excessive and of ‘deliberative democracy',7 who stress the dynamic therefore corrupt will be defined in the laws and effects of public dialogue in helping people to move professional codes of conduct. Beyond complying beyond self-interest. Moreover, the idealist conception with established laws and standards, however, there is deeply entrenched in democratic political culture is no obligation on political actors to refrain from and public opinion. In all democratic societies, seeking advantage over one another.
political actors, whatever their real motives, are Even within a realist framework, some elements obliged to express their policy preferences in terms of of government need to be held to higher, more concepts such as the common good or the public idealistic standards. The legal system, including courts interest. Any open espousal of a selfish or sectional and police, as well as quasi-judicial bodies such as motive will be seen as being outside the legitimate auditors, ombudsmen and inspectors, are all expected range of political argument.
to remain fully focused on the public interest and to CRAWFORD SCHOOL OF ECONOMICS AND GOVERNMENT Corruption and Anti-Corruption exhibit zero tolerance towards any hint of preferring their own interests to those of the community as awhole. Government bureaucracies, being obliged to The main authorities on this issue are collected administer the law impartially, are similarly required in Heidenheimer, A.J. and Johnston, M. (eds), to avoid any hint of favouritism. Not surprisingly, Political Corruption. Concepts and Contexts, third professional ethics and codes of conduct designed edition, Transaction Publishers, New Brunswick for public servants and legal officials emphasise the public-interest features of their roles and adopt views Marquette, H., 2001. ‘Corruption, democracy of corruption that are idealist in temper.
and the World Bank', Crime, Law and Social Thus, different actors in a functioning democratic polity need to display different attitudes towards the pursuit of personal and sectional interests in politics See Transparency International, 2005.
and therefore different attitudes towards the nature Transparency International Corruption Perceptions of corruption. For those directly engaged in the Index, Berlin. Available from http:// political contest over policy, for instance organisations of civil society, political parties and politicians, private See Philp, M., 1997. ‘Defining corruption', interests are often uppermost and corruption is therefore a matter of overstepping the line between For example, Schumpeter, J.A., 1947. Capitalism, the legitimate and illegitimate pursuit of these Socialism and Democracy, Harper, New York.
interests. For officials who regulate and administer For example, Tullock, G., 1989. The Economics of the policy process in ways that should prevent Special Privilege and Rent-Seeking, Kluwer, corruption, the pursuit of private interests is always illegitimate. In the democratic game, the players may be realists but the umpires must be idealists.
For example, Dryzek, J., 2000. Deliberative The tension between the realist and idealist Democracy and Beyond, Oxford University Press, perspectives helps to explain the ambiguous effects of democracy in combating corruption, especiallywithin societies that lack an effective legal system andaccountability institutions. Democratic politics entailsopen conflict over the spoils of office and can unleashthe selfish motives that encourage corruption. Theelectoral incentive to create a winning coalitionthrough appealing to some sections of society but notothers, as well as the need to raise funds forcampaigning, explicitly encourages the granting offavours and the rewarding of supporters. Withouteffective institutions dedicated to policing corruption,a shift to electoral politics cannot be a recipe forreducing corruption. Guaranteeing free and fairelections at periodic intervals will do little to preventcorruption, unless elected governments arethemselves constrained to act within the law. Therule of law is fundamental, both for stable democracyand for curing corruption.
CRAWFORD SCHOOL OF ECONOMICS AND GOVERNMENT Corruption and Anti-Corruption Are free trips and payments to politicians bribes? ‘Are free trips and payments bribes?' asks the Marshall investigations show cases of abuse of private office Islands Journal of 21 July 2006. The question arose after for personal gain. Monopolies use their market power an earlier report of a group of Marshallese senators to maximise private gain, but this is never construed (that is, parliamentarians) and their spouses having as corruption. Corruption might entail private gain paid an official visit to the People's Republic of China with at least some complicity of public officials. A (PRC) early in 2006. Official visits are not unusual: monopoly that abuses its market power in complicity Pacific island politicians are known to trot about the with the authorities responsible for guarding against globe at the invitation of their hosts to discuss aid, anti-competitive behaviour, for example, would whaling and tuna fisheries. What attracted the constitute corruption. Corruption entails a transaction attention of the local media, however, were reports between the corruptor (the person who demands this from ‘unnamed sources' that the trip was fully funded ‘service') and the corruptee (the person who supplies by the PRC. The visiting couples, moreover, were the ‘service') that is in contravention of the law. This reported as having each received between US$7,000 conceptualisation of corruption is far from complete, and US$12,000 from their hosts. It so happens that but will suffice for this paper. Somewhat analogous the Republic of the Marshall Islands is only one of a to the notion of beauty, most people will claim to be handful of nations that gives diplomatic recognition able to recognise corruption when they see it! to the Republic of China (that is, Taiwan), something Quantifying corruption is, however, a lot trickier. Back that the PRC has always strongly opposed. One of to our Marshall Islands case highlighted at the the senators named in the report has threatened to beginning: did the free trip and the allowances sue the newspaper for libel, claiming that they constitute corruption? received only US$1,000, and as per diem. But whendoes a ‘gift' constitute a bribe? Is there anyone who has never faced a situation that could, even vaguely, be construed as being at themargins of corruption? The incident in Marshall Corruption exists because there is a supply of and Islands allows us to explore a number of issues demand for this service; the Marshall Islands case to relevant to this slippery notion of corruption. What the extent that it constitutes corruption is not an is corruption? Why the current focus on corruption? exception in this regard. Corruption, therefore, lends What are the consequences of corruption? How can itself readily to supply–demand analysis. Factors corruption be combated? Sure, you have a view on impinging on the supply of corruption would include each of these questions; here, I will put on my the lack of income and alternative employment economist cap to address the questions raised above.
opportunities, the absence and/or poor state of In doing so, I will steer clear of the moral issues detection and punishment mechanisms and the entrusting of significant discretionary powers to thecorruptees. On the demand side, the presence of largeproceeds for corruption (rents), such as those from What is corruption? lumpy government contracts, might raise the demandfor corruption. Considering corruption as a Defining corruption is the least of our challenges.
homogeneous form for tractability, the quantity of Corruption often entails the ‘use of public office for corruption and the price paid for the service is private gain' (Bardhan 2003:1). But this cannot be all.
determined by the above-mentioned factors.
The Enron saga in the United States and the A non-zero level of corruption is supplied at some continuing Australian Wheat Board (AWB) price (bribe), pE. The varying levels of corruption CRAWFORD SCHOOL OF ECONOMICS AND GOVERNMENT Corruption and Anti-Corruption across time and space can be attributed to changes in patient who is short-changed in the process.
demand for and supply of corruption. One would, Furthermore, the speed money can lead to perverse for example, expect that a large windfall from mineral effects such as providers holding up critical services receipts would raise the demand for corruption, thus only to induce payments of bribes.
shifting the DD-schedule to the right. The price Corruption, however, is not always and paid—this being the level of the bribe—would be high unambiguously bad. In the presence of excessive red in situations where the supply of corruption is tape, for example, speed money might provide the constrained. This could be for several reasons, only avenue for getting things done. When removing including high ethical standards, effective community the weight of bureaucracy is impossible, as is the case sanctions, effective formal-sector detection and in the short to immediate term, bribes might be the punishment strategies and little discretionary only option available to get timely responses from authority. Having a feel for the quantity of corruption those in positions of authority. The punitive effects and the level of bribes across space and time provides on growth of a highly centralised and inflexible a good indication of whether it is the demand-side bureaucracy, for example, can be ameliorated with or supply-side factors that influence changes in the ‘palm-grease'. When corruption becomes part of the level of corruption over time. Knowing the causes of costs of doing business, the costs of corruption to corruption is crucial for the design of strategies to society are via two distinct channels: i) through lack of information on how to effect such transactionsgiven the illegal nature of corruption; and ii) the lackof competition for the supply of this service as the What are the consequences of corruption? corruptee has a monopoly on supply.
Importantly, however, high and persistent There are a number of studies showing that corruption creates a trap from which it might be very corruption raises poverty; this in the main takes place difficult to break out. It is difficult to reduce corruption through two distinct channels. First, corruption acts when everyone else is corrupt. The clients in such a as a tax on production and thus is responsible for situation might as well assume that everyone is lowering the rate of growth of income. The poor, corrupt even if this is not the case. In such a situation, being at the end of the income queue, are therefore the urge to ‘join them if you can't fight them' could the first to suffer the consequences of an economic be irresistible. The incentives to pay tax when no one decline. There is robust empirical evidence at the else does so, for example, are absent. What follows cross-country level showing that corruption lowers as a consequence is the under-provision of public the rate of economic growth. There are now some goods, including minimal efforts at combating micro-level studies that corroborate the findings at corruption. The consequent lock-in makes corruption the economy-wide level. Fisman and Svensson (2000), endemic. Corruption now becomes part of the system for example, show, using firm-level data from and getting out of this hole is close to impossible. The Uganda, that a one percentage point increase in the moral of this story is that combating corruption bribery rate is associated with a reduction in the rate requires an early start with heavy treatment. This is of growth of firm-level output by three percentage easier said than done, particularly after having woken points; this effect, moreover, is found to be three times up to the problem too late.
larger than that of taxation of a similar magnitude.
Second, corruption entails a redistribution of income that is poverty increasing, though the How can corruption be combatted? evidence in support of this proposition is far fromconclusive. The poor are least able to purchase Economists start with the premise that corruption corruption simply because they have neither the exists only because the incentives are consistent with funds nor the information (networks) to access this its prevalence. Reducing corruption, therefore, is all service. Corruption, being a transfer of wealth from about changing the structure of incentives. The one group to another, benefits the rich at the expense demand and supply-side causes are identified and of the poor. A customs officer who is paid to look the addressed in any strategy aimed at abating other way for dutiable imports short-changes the corruption. One would expect that petty corruption, treasury by the difference in the payment received as an example, due to high unemployment and low and that due under the law. When a nurse, in contrast, wages would fall as the economy grows. While not accepts a bribe (‘speed money') to treat one patient suggesting that this form of corruption be ignored ahead of (or better than) another, it is the poorer altogether, greater efforts at addressing the CRAWFORD SCHOOL OF ECONOMICS AND GOVERNMENT Corruption and Anti-Corruption impediments to growth of employment are likely toreduce supply-side corruption. The aboveaccompanied with reductions in the complexity ofregulations, lesser discretionary powers for decisionmakers, better monitoring and disciplining ofdefrauders, and better paid workers are likely toreduce supply-driven corruption. On the demandside, reducing rents might seem appropriate butindividuals and nations have little control over themagnitude and timing of these windfall gains. Thus,creating institutions that distribute rents when and ifthey materialise in a transparent and predeterminedmanner is likely to reduce rent-seeking activity. HongKong and Singapore are cases where corruptionreduction efforts have had considerable success.
With all this knowledge, were free trips by the Marshallese politicians funded by their Chinesecounterparts bribes? If so, how can we avoid a repeat? Helpful comments on an earlier draft of thisnote from Quentin Grafton, Ben Graham, CarlHacker and Steve Pollard are acknowledged,though the views expressed and any errors arethose of the author alone.
Bardhan, P.B., 2003. The economist's approach to the problem of corruption, University ofCalifornia–Los Angeles (unpublished).
Fisman, R. and Svensson, J., 2000. Are corruption and taxation really harmful to growth?, WorldBank, Washington, DC (unpublished).
CRAWFORD SCHOOL OF ECONOMICS AND GOVERNMENT Corruption and Anti-Corruption Diagnosing the disease of corruption: what different disciplines say about curing corruption Corruption is often talked about as a disease. That political concerns with corruption began much earlier.
metaphor suggests the possibility of a treatment, even The exemplary model of the Independent Commission cure. It also raises the question of diagnosis, or Against Corruption (ICAC) was devised in the 1970s misdiagnosis. What kind of a disease is it: a cancer, and India's Vigilance Commission dates back to the perhaps, or a virus, or merely indigestion? If it's the 1940s. Modern civil service systems partly reflect first, the cure might be surgery. If it's the last, the cure nineteenth-century reforms designed to reduce might be an aspirin—or patience until it cures itself.
corruption in appointments and promotion. The It's clearly important to get the diagnosis right, before checks and balances in modern constitutions date back a cure is prescribed.
to eighteenth-century concerns about the dangers of There are many diagnoses of the causes of self-interested ‘factionalism'. Concern about corruption in popular opinion, newspaper editorials, corruption is in many ways a foundational one for in churches, mosques or temples and in professional political science, or at least constitutional democracy: doctrines. Some of these diagnoses are fatalistic.
how can we design things to stop leaders abusing their Nothing much can be done about it. Or we must wait for long-term social changes to reduce it. And some of There is now also a small but growing body of the remedies are quite utopian: zero tolerance, a research that is sceptical of the effects of anti- revolution or a change of heart. Many diagnoses are corruption campaigns. Frank Anechiarico found that paired with practical cures or treatments that follow the new layers of supervision that followed each logically from them. Equally, the diagnosis provides a corruption scandal in New York were severely limiting rationale for the cure. That cure might also serve other the efficiency and effectiveness of the civil service. Ivan purposes. Anti-corruption campaigns might serve as Krastev and other scholars in Eastern Europe have a form of social control, or a way to discredit political found donor-sponsored anti-corruption campaigns opponents. It might even be—as in the history of inducing popular cynicism and populist styles of medicine—that the cure is worse than the disease.
politics in which candidates trade accusations of Here I want to identify a number of pairs of corruption rather than debate policy.
diagnoses and recommended cures. In practical terms,my aim is to show that there are precedents andplausible alternatives to the diagnoses and cures Classical diagnoses currently on offer, and that older approaches are stillrelevant today. Behind these practical concerns is an The phrase ‘who guards the guards' is attributed to interest in the links between theory and practice Juvenal, a poet of ancient Rome. Richard Mulgan (this (appropriate to a public policy school like the one in issue) points out that the earlier Greek philosophers which I work) and the two-way street that runs Plato and Aristotle had a dualistic world-view that between them. The relationship between diagnosis contrasted an ideal world truth and goodness with the and cure is not direct and one-way. Cures might come real world of change and decay. The ideal world was before diagnosis, doctors have got medicine wrong used as a standard against which to judge the real. All in the past and anti-corruption campaigns might have existing regimes were thus to some extent corrupt.
unintended side effects.
The Greeks also expected their leaders to be There has been a sharp increase in international wholly committed to the common interest. They were attention to corruption since the 1990s and, for expected to have no legitimate private interests example, anti-corruption activity has become a plank (whereas we now tolerate some kinds of private in the Australian government's aid policy. Domestic interests among leaders, as long as they declare them).
CRAWFORD SCHOOL OF ECONOMICS AND GOVERNMENT Corruption and Anti-Corruption The Greek remedy for the inevitable corruption According to Hong Kong's ICAC, officials with of the real world was second best: the rule of law.
gambling debts will, for example, be more disposed Any law, even if it favoured one group over another, than others to corruption. Selection procedures can was better than no law, as it limited the scope for ask about an individual's ethical history, and training arbitrary ad hoc decisions. They also argued that the programs can try to change predispositions. More strongest source of political stability was a law- generally, the talk of ‘moral individuals' points to the abiding middle class, preoccupied with making role of religious morality in predisposing officials money, rather than aristocrats or the unemployed with against corruption (and the question of alternative time on their hands to cause mischief.
sources of authority for anti-corruption campaigns inmore secular societies, such as New South Wales).
Classical non-Western diagnoses Public administration diagnoses and cures The Greek philosophers provided the foundations formodern Western thought. They also influenced Nineteenth-century municipal reformers in the United Islamic thinkers. Syed Alatas cites the Muslim States were worried about political involvement in historian Ibn Kaldun (AD 1332–1406) diagnosing appointments to the civil service and in the openings corruption as caused by ‘loose living among the élite'.
it provided for incompetence. They saw the remedy There was a quite separate tradition of Chinese in an autonomous, professional civil service, drawing thinking about corruption, turning on the distinction a clear line between ‘politics' and ‘administration'.
between ‘laws' and ‘men'. The Chinese philosopher The image of an autonomous, hierarchical civil service, Wang an Shih (AD 1021–86) brought both sides of the providing a career for officials motivated by an ethos long-running Chinese debates together in the of public service, animated civil service reforms at argument that corruption was caused by bad systems least until the 1980s, when it was shouldered aside by and bad individuals. Both of these diagnoses have advocates of the New Public Management. The latter clear practical implications.
took a more sceptical view of official motivations and The prohibition against ‘loose living' reminds me a more benign view of the market.
of the booklet produced to explain Papua New Nevertheless, the image of an autonomous Guinea's leadership code to incoming Members of professional civil service continues to be attractive to Parliament. It showed cartoons of politicians receiving civil servants (and to the officials in donor institutions cash in brown envelopes, but also dancing with girls who promote good governance abroad). Current who didn't look like their wives. It points to the ‘capacity building' tends to follow an old ideal of an executive car-park and the way ostentatious lifestyles effective, impartial civil service, free from political can provide clues to unofficial sources of income.
More generally, it reminds us of the way successful The public administration diagnosis tends to be leaders often cultivate personal modesty, and the of weak and ineffective institutions, a lack of corruption of nomenclatura behind the sober exteriors separation between public and private matters and of communist leadership. It also points to the populist politicians ruling outside the law. Its characteristic anger at elite immorality that sometimes lies behind remedies include various kinds of insulating and campaigns against corruption.
strengthening institutions. Personnel, auditing and Modern anti-corruption practice tends to contracting functions need to be insulated from emphasise good systems over good individuals, external interference. Outdated and contradictory partly out of prudence. Members of non- legislation needs to be modernised and courts and governmental organisations (NGOs) taking on anti-corruption agencies need to be strengthened.
powerful individuals are likely to face litigation, orworse. Transparency International's doctrinespecifically eschews the pursuit of bad individuals in Political diagnoses and cures favour of systemic and preventive approaches. Theseare contrasted with older approaches that targeted Civil service reforms seek to reduce corruption by individual rotten apples as a way of avoiding systemic keeping politicians out of administration. They can be extended to include lower-level elected officials, Yet clearly individual predispositions will treating them as if they were civil servants, meant to determine how individuals respond to the account properly for their travel and avoiding conflicts opportunities an organisation presents them with.
of interest. But they do not speak directly to corruption CRAWFORD SCHOOL OF ECONOMICS AND GOVERNMENT Corruption and Anti-Corruption as a crime of the powerful, of those who can evade privatisation and deregulation of telephone services the laws because they ultimately make them. Or they is a good example of the effects of ending monopolies.
might engage in what is sometimes called ‘policy When only the government can install phones, there corruption' or state capture, when laws are changed are typically delays and opportunities for officials to to suit particular powerful interests and individuals extract bribes to install connections. When several (as sometimes seems to happen with ‘mogul-friendly' companies provide the service, none can extract a media legislation in Australia).
bribe as ‘rent'. You tend not to hear of corruption in A political diagnosis of corruption points to lack the sale of mobile phones (though there might be of accountability, authoritarian styles of leadership plenty of new corruption in the allocation of mobile and abuse of power. Its remedies typically include phone licences to companies).
democratisation, a strong media, legislative oversight The other elements of Klitgaard's formula are of the Executive, codes of conduct governing the more familiar. Discretion provides opportunities to behaviour of politicians, campaign finance legislation grant or withhold a service, or apply or exempt from and a mobilised civil society ready to bring politicians a charge, which provides officials with an opportunity to account. Papua New Guinea's constitution is to extort a bribe (again, it is the official rather than influenced strongly by the political diagnosis.
the client who tends to get the blame—a reversal ofthe old civil service model). The third term,accountability, has become a panacea for all sorts of Economic diagnoses and cures ills of governance.
The remedies simply reverse the formula: end The most influential new approaches to corruption monopolies, reduce official discretion and increase have come from economists and have been accountability. These fit easily with programs of public promulgated particularly by international sector reform and good governance that international organisations, including the NGO Transparency institutions were promoting in the 1990s.
International, founded in 1993 to combat corruption Liberalisation in some countries, however, seems in international business transactions. Economists to have increased the amount of corruption (for used to be criticised for taking a non-judgmental example, in India). And, looking back to the political approach to corruption. Some argued that—in an arguments for democracy, democratisation in some over-regulated system—some corruption that countries seems to have made no difference or has ‘greased the wheels' might be no bad thing. The made things worse (for example, Russia and economist most influential in shifting professional Thailand). Gordon White coined the phrase ‘new judgments was Susan Rose-Ackerman (1999). Robert corruption' to describe these unwelcome and Klitgaard's work, particularly his 1998 Controlling unexpected consequences of reform. The remedies Corruption, challenged the assumption that nothing were seen to lie in strengthened regulatory regimes much could be done about it. Johan Lambsdorff and property rights.
devised an index that provided the kind of data thateconomists needed (Lambsdorff 2006). Econometricwork by Daniel Kaufmann, in particular, has shown Criminological diagnoses and remedies the deleterious effects of corruption on development(World Bank 2006).
Economic and public administration approaches are Klitgaard summarises his own approach in a dominant in international organisations, but the doctrines of domestic anti-corruption agencies tendto be located in older concerns with policing and Monopoly + Discretion – Accountability = Corruption criminal justice. The original ICACs were set up inresponse to police corruption, in Hong Kong and then The new term in this diagnosis is ‘monopoly'— NSW. NSW's ICAC is typically headed by a judge the opposite of competition. It offers another way of and the investigative side is staffed by former police.
thinking of the power of which corruption is an abuse.
Corruption is, after all, a crime in most According to Klitgaard, it is the monopoly power of jurisdictions (or at least some types of corruption, such government that gives its officials the power to extort as bribery, are criminalised). Angela Gorta, the ICAC's bribes from their clients. Without that monopoly, research director, reviewed the criminology literature clients could go elsewhere, shopping around, until for the light it might shed on corruption control they get what they want without paying a bribe. The (Independent Commission Against Corruption 2001).
CRAWFORD SCHOOL OF ECONOMICS AND GOVERNMENT Corruption and Anti-Corruption First, crime depends on situation, not the fixed of corruption need to be treated differently (it also personality of the offender. There are no criminal suggests a multi-disciplinary approach in ICACs types. Second, people choose to commit crimes. They against professional biases to work with one's own).
are often a matter of calculation rather than impulse.
Second, it suggests some scepticism about Third, there are different types of crime: crimes against professional and disciplinary doctrine that has been property, crimes against the person, and so on. Fourth, wrong in the past. Anti-corruption campaigners need offenders try to justify and neutralise what they do, to ask for systematic empirical evidence for the to themselves and their accusers: ‘I did it for my effectiveness of the remedies offered by particular family', ‘pressure of work' and so on. Fifth, professions or disciplines, rather than anecdotal organisational factors affect whether crime takes evidence for preconceptions. Unfortunately, there is place: the presence or absence of opportunities, the little systematic empirical evidence available on the examples set by others, peer pressure and so on.
success or failure of anti-corruption policies and more These findings from criminology have is badly needed.
implications for a particular crime, or type of crime:corruption. The first suggests that everyone is capableof acting corruptly, in the right circumstances, so anti- corruption campaigns must view all officials aspotentially corrupt (including those at the top, who Alatas, S., 1990. Corruption: its nature causes and traditionally commissioned anti-corruption functions, Avebury, Aldershot.
campaigns without making themselves subject to Anechiarico, F. and Jacobs, J., 1996. The Pursuit of them). Second, if they decide to act corruptly it is absolute Integrity: how corruption control makes worth trying to understand why they did it (exercising government ineffective, University of Chicago suitable scepticism about the self-justifications they Press, Chicago and London.
might offer). The third principle suggests we need to Independent Commission Against Corruption, 2001.
take different approaches to different types of Unravelling Corruption II—Exploring Changes in corruption. Lumping all types together might obscure the Public Sector Perspective 1993–1999, Research important differences in incidence, seriousness and Report, Independent Commission Against remedies. Bribery of officials needs to be dealt with Corruption, Sydney.
differently from political campaign financing, for Klitgaard, R., 1988. Controlling Corruption, example. The fourth principle suggests investigators University of California Press, Berkeley and Los must be ready to challenge the self-justifying and neutralising explanations that corrupt officials offer Krastev, I., 2004. Shifting Obsessions: Three Essays on to explain their behaviour (low pay might be one of the Politics of Anti Corruption, Central European those). Finally, the organisational factor that the NSW University Press, Budapest.
ICAC has taken most seriously is organisational Lambsdorff, J., 2006. ‘Measuring corruption—the culture: the expectations set by peers, particularly in validity and precision of subjective indicators induction routines, and the examples set by leaders.
(CPI)', in C. Sampford, A. Shacklock, C. Connors New recruits to the police force, for example, were and F. Galtung (eds), Measuring Corruption, typically told to forget what they had learned at police college and join in corrupt activity, apparently Rose-Ackerman, S., 1999. Corruption and Government: condoned by those at the top.
Causes Consequences and Reform, CambridgeUniversity Press, Cambridge.
White, G., 1996. ‘Corruption and market reform in China', IDS Bulletin 27(2).
It is possible and instructive to identify other pairs of World Bank, 2006. ‘A decade of measuring the diagnoses and cures. Readers will be able to suggest quality of governance: governance matters 2006: others, from anthropology or psychology, perhaps, or Worldwide Governance Indicators', World Bank, different theological perspectives, or indigenous Washington, DC.
traditions. But how does this approach help usunderstand corruption, and what can be done about it? First, it suggests that there is no single right approach. It offers a repertoire and the criminologicalapproach, in particular, suggests that different types CRAWFORD SCHOOL OF ECONOMICS AND GOVERNMENT

Source: http://forum.mn/pdf/feature/Corruption.pdf