The election is over, the promises are history. Now is the time for action against corruption. But what is corruption, and what on earth can be done in a context where it is widespread, even mournfully accepted as a way of life?
Corruption is the misuse of a trusted position for illicit private ends. Corruption ranges across phenomena including bribery, extortion, fraud, nepotism and outright theft. Corruption is difficult to measure, of course. In perceptions of people around the world, corruption is closely related to administrative efficiency, rule of law and ethics in the private sector. We can spend days or even academic lifetimes debating definitions and the deeper causes of corruption and weak governance. Let’s focus instead on a separable, practical question: What can be done to reduce corruption?
Here there is good news. Even in very corrupt settings, corruption can be reduced, leading to greater investment and public satisfaction. And the success stories exhibit some common principles, regardless of cultural setting.
“Success” means significant improvement in governance measures, followed by increases in investment and improvements in public services. The success stories range from classic cases such as Singapore and Hong Kong to more recent ones such as the Republic of Georgia, Qatar, Colombia and the Philippines. Some people would also include Indonesia, which rose under President Susilo Yudhoyono from the very bottom in terms of quality of government.
Successful strategies share the following principles. Corruption is an economic crime, not a crime of passion. Givers and takers of bribes respond to economic incentives and punishments; corruption follows a formula: C = M + D – A. Corruption equals monopoly plus discretion minus accountability. To reduce corruption, limit monopoly and enhance competition. Circumscribe official discretion and clarify the rules of the game. Enhance accountability about processes and results in many ways, including citizen- and business-driven scorecards for government agencies and programs.
Lessons can also be discerned about the politics of anti-corruption. Fry big fish. Diagnose and subvert corrupt systems. Do a few things that can show results in six months, to build momentum. Don’t try to do everything at once.
Lessons do not mean one-size-fits-all. They suggest principles, which must be tuned and applied by locals to their inevitably unique situations.
Here are two more lessons for reformers. Don’t think of corruption primarily as a legal or moral issue. In very corrupt countries, new laws, codes of conduct and better training for public officials will, alas, make little difference.
Second, think of collaboration across the public-private-nonprofit divide. Business and civil society can play key roles. They are part of corrupt systems, stuck in a corrupt equilibrium. To get out, they have to be given ways to expose corruption without taking personal risks. Ipaidabribe.com in India is a promising example. Successful partnerships, such as Ciudadanos al Dia in Peru and the Bangalore Agenda Task Force in India, exploit credible information supplied by NGOs and the pressure, resources and technical expertise of the business community.
Forces for change
Some people, tired of corruption and endless chatter about it, may rightly wonder if change is even possible. Why would politicians ever want to reform corrupt institutions or systems? Politicians are ready to move when several forces converge. Expanding opportunities for international trade, investment, financing and emerging industries that depend on fast-moving knowledge and innovative styles breed young entrepreneurs with little tolerance for corrupt practices. Finally, a growing popular dismay for corruption: Anti-corruption is a major force behind popular unrest in Honduras, India, Lebanon, Sri Lanka, Thailand, Turkey and Ukraine. And, yes, in Greece.
As in Greece, elections around the world are being fought with corruption as a key issue. In Mexico’s regional elections and in Nigeria; also in Sri Lanka, where an emphasis on corruption led to the surprise ousting of the ruling party.
Many new presidents, governors, ministers and mayors are eager to reduce corruption. They know that corruption is constraining development. What government leaders need is help that recognizes that corruption is a system that needs a hard-headed, politically tuned strategy. Politicians must see that fighting corruption can help them win elections as well as advance their economies.
In Greece, one might begin with perennial challenges: taxes and procurement. Both have allegedly become corrupt systems, which means that the abuses are not occasional or haphazard. Businesspeople understand how these corrupt systems work. But no one wants to come forward publicly for fear of retribution.
A solution that has worked elsewhere is based on confidential one-on-one interviews with businesses which are part of corrupt systems. Perhaps unwillingly, perhaps willingly: For the purposes of diagnosis, it doesn’t matter.
Have them identify the structural challenges. Then invite them and the government to come up with strategies to move forward. Greece’s international friends and debtors should be willing to help, with resources and good practices from around the world.
And so I am optimistic about making government more effective and efficient, with the help of business and civil society. Someone even more optimistic is John T. Noonan, author of “Bribes,” the best book ever written on corruption.
In 1985, Noonan predicted that systemic corruption would eventually go the way of systemic slavery. Both, he noted, were once widespread, even ways of life, in most parts of the world. Nowadays, slavery seems almost incomprehensible. Noonan says that in the not too distant future, we will feel the same way about the corrupt systems that characterize some of the poorest places on the planet.
Moral outrage will be part of the solution, he says. So will learning from practical ways to reduce corruption, even in very corrupt settings. Progress will be made with an approach that combines economics and shrewd politics. And business and civil society, which are part of the problem, will be indispensable parts of the solution.
* Robert Klitgaard is a professor at Claremont Graduate University. Formerly a professor at Harvard and Yale and dean at the RAND Corporation, he is the author of nine books, including “Controlling Corruption” and “Tropical Gangsters.”