Little progress has been made in anti-corruption in the last 10 years, including in high income countries, and there has even been significant backsliding.
Many well-meaning anti-corruption efforts have failed, and some have even become corrupt. Research, including by SOAS, has found national anti-corruption agencies have become instruments for going after opposition leaders, or anti-corruption laws are implemented only selectively.
The reason: many policies fail to address ‘who will implement the rules?’, and — more importantly — ‘do they have sufficient interest or power to do so?’ Essentially, enforcement is too often ignored.
One secret to successfully fighting corruption is to use people from within an affected sector (government or industry) to self-police. The corrupt have different motives so a ‘one size fits all’ approach risks failure. Incentives to do the right thing also help.
Climate adaptation projects are big business in Bangladesh. But, according to Transparency International Bangladesh, as much as 30 percent of project funds are misappropriated. However, of the nearly 5,000km of embankments and around 2,500 cyclone shelters, many of them built by the same government agencies and subject to the same formal regulations, some had much lower corruption.
Research found that projects where local citizens closely monitored the construction process and took an interest in the results were less prone to corruption than others. These locals were peers of the contractors, so were better able to assess the quality of materials used and exert effective formal and informal pressure to ensure the process was not tainted. Involving the community in projects can help reduce corruption.
A rethink to combatting corruption would see anti-corruption made part of the policy design for any specific sector (building, health, electricity generation, education) and not just run in parallel. What’s required are effective horizontal checks within relationships between principals and agents (where principals engage agents to deliver goods or projects).
Support for investigative journalism or better compliance procedures can also help ensure transparency and accountability.
Still, transparency and accountability are not enough to overcome cases where principals have no interest in checking agents, or collude with them. Principals and agents are embedded in a complex network of relationships with others and it is the nature of these relationships and associated transactions that explain whether they follow rules or not.
Having a third party monitor the principal-agent relationship can encourage them to act with integrity. A broad base of competitive organisations within an industry can also encourage a balance of power that allows firms to restrict and monitor each other.
If there are numerous productive organisations there should be a general interest in following the rules.
But in many middle to low-income countries, organisations are not always productive, and organisations that are powerful frequently owe this to political connections, whether they are productive or not. Corruption flourishes. It is structural as a result of the underlying incentives in society, the function of an evolving economy, and depends on the way power, capabilities and interests relate. It’s not as simple as explaining entrenched corruption as having ‘cultural roots’.
There are three anti-corruption strategies: enhancing effective checks; creating effective checks; and mitigation and transformation.
Enhancing effective horizontal checks: When one party follows the rules in one set of activities and violates rules in another within the same regulatory structure, the next step is to investigate if this behaviour can be extended with policy changes. Formal policies and transparency and accountability are already working as the rules are being followed.
Creating effective checks: In a situation where no one feels obliged to tackle corruption or follow the rules, the strategy is to identify any ‘reasonable corruption’, address why it’s happening then adjust procedures to encourage violators to follow the rules. If successful, this can create more pressure on the corrupt and reduce crimes more.
Absenteeism is a form of ‘reasonable corruption’. In Bangladesh doctors at local health care centres often found rural facilities to be dangerous and difficult to work in and were frequently absent. Nigeria had similar problems with healthcare workers. But addressing their legitimate concerns makes sense for the good of the communities which need doctors. A policy addressing this group’s concerns would increase the number of doctors who would follow the rules and thus put pressure on any who continued to flout them.
There are situations where corruption is so embedded into the fabric of a community that no horizontal checks exist nor can be created. The longer-term solution has to involve a transformation of local employment and income opportunities as well as minimise damage that corruption causes.
In Nigeria, there is a thriving illicit, and ‘inclusive’ local economy based around the theft of crude oil, usually from pipelines. It does severe harm to people and the environment. Yet most attempts to enforce rules through punishments and even military raids have failed. The corruption extends from top to bottom — politicians, security agencies and communities are in collusion. These approaches not only fail, but threaten to further damage vulnerable communities as crackdowns frequently result in violent conflict.
This underground economy is integrated into the wider economy in multiple ways. It directly provides much needed employment to local youth, and even indirectly to community members who supply services to sites, and severe power supply issues have created a demand for oil products for power generators, so there is little incentive to stop the practice.
This is when mitigation and transformation is required. The first step would be to address the harmful effects of oil pollution. And instead of police raids, finding alternative sources of fuel — such as solar power — for communities could help.
Identifying the causes and effects of corruption and providing that information and analysis to politicians, law enforcement and the public has so far not stopped corruption when there is little or no enforcement. Only by ensuring there is sufficient pressure from various self-interested parties to limit poor behaviour and to support formal accountability processes, are anti-corruption efforts likely to succeed.
Pallavi Roy is a Reader (Associate Professor) in International Economics at SOAS. She brings multi-sector experience to issues of rent-seeking, economic development and political economy research. She jointly led an international research project on multilateralism and the UN with Professor Thomas G Weiss of the University of New York and oversaw 11 research projects. She is Research Director of SOAS Anti Corruption Evidence (ACE).
Twitter account: @roypallavi2
Mushtaq Khan is a Professor at the Department of Economics, SOAS, University of London, and a leading thinker on anti-corruption, governance, economic development, industrial policy and political settlements. He is the Executive Director of SOAS Anti Corruption Evidence (ACE)
Twitter account: @mushtaqkhan100
Anti Corruption Evidence is funded by UK Aid
Originally published under Creative Commons by 360info™.
