Saturday, 7 February 2009

Governance – Essay by Bogdan Craciun


About Bogdan Craciun

Corruption and Ethics

In this paper I discuss which anti-corruption strategies (deep or visible) should countries prioritize. On the first part of the paper I identify the domains where the deep and visible corruption activates. On the second part are found the results of the corruption literature research that aimed to reveal the strategies proposed by specialists for each type of anti-corruption strategy. In the third and final part it can be found my answer to the topic question of the assignment.

There is a great concern regarding corruption for every country. The wording “every country” is not at all exaggerated, because “corruption increasingly appears a problem common to most if not all democracies.” (Della Porta, Vannucci, 1999, p. 5)

Such a widespread phenomenon requires a better understanding of its causes and consequences.

Part one

Talking about anti-corruption strategy implies the assumption that corruption is systemic.

We cannot talk about strategy against corruption where is involved only an individual and only by hazard.

In order to understand the systemic corruption we need to identify the factors that determine its spreading.

“Corruption is the abuse of public office for private gain” (World Bank, 2002, cited in Haller and Shore, 2005, p. 2).

This World Bank’s definition for corruption gives us an equation with three factors: it tells us the action (abuse), the environment where the action takes place (public office) and the result of the action (private gain).

If in literature there is no unitary definition regarding the deep and visible corruption, I try to define the concepts using as guide the second factor from equation: public office. The hierarchy inside the public office identifies two levels: the executive level of public office and the decision making level.

The executive level of public office can be involved into what is called “petty corruption” or low-level corruption. This type of corruption represents the one experienced by ordinary citizens in their daily contacts with public institutions.

The decision-making level is involved in “grand corruption”. Moody-Stewart (1997, cited in Rose-Ackerman, 1999, p. 27) define “grand corruption” the phenomenon that “occurs at the highest level of government and involves major government projects and programs”. I consider that grand corruption does not involve only the members of the government. We can identify it better by referring to the actions implied (and not by position of public servants’ involved): the procurement, concessions, privatizations, licenses and subsidies awarding. I consider that we should focus our attention on activities as, for instance, the local authorities, that do not respond hierarchically to government, but are subject to many corruption allegations when contracts of procurement and concessions occur.

In this paper I assume that the executive low and middle management level could be the environment where the deep anti-corruption strategies may operate. The top management level of public office (regardless of government membership) could be the environment where visible anti-corruption strategies may operate.

Part two

The anti-corruption strategies should look on all three factors in order to be efficient: to avoid the abuse, there must be stated clear limits where the civil servants operate; to avoid deep and visible corruption, there must be engaged anti-corruption strategies to deal with them; to avoid illicit private gain, there must be a transparent assets declaration for civil servants and there must be some consequences for illicit gains.

Klitgaard (2000) reveals the factors that should be taken into account when designing the anti-corruption strategies:

“C = M + D – A where Corruption (C) equals monopoly power (M) plus discretion by officials (D) minus accountability (A)”. (Klitgaard, 2000, p. 27)

In a pure mathematical interpretation, the smaller the monopoly and the discretion are, along with increasing accountability, the smaller corruption is. Actions that could have as results reducing the monopoly and enhancing the accountability of the officials involved are basic strategies for anti-corruption.

Forms of low-level corruption are much diversified. The most spread type is that called by Della Porta, Vannucci (1999) “misadministration”. Misadministration it happens when the civil servants deliberately present to the citizens the public administration as functioning without efficiency. The bribes that are offered buy “the good will” of the civil servant to give special attention to citizen’s problem and solve it as soon as possible, with the best possible results. As Miller, Koshechkina and Grodeland (1997) note on their research, for ordinary citizens this type of corruption “makes the most immediate and the most visible difference in their lives”. (Miller et al, 1997, p. 208).

In order to establish how deep anti-corruption strategies should look like, we should check the reasons that encourage low-level corruption.

According to Rose-Ackerman (1999), “if the public officials are underpaid and under motivated, the incentives to pay bribes are high, with great benefits” (Rose-Ackerman, 1999, p. 25). The bigger is the wage discrepancy for equivalent jobs between public and private sector, the bigger is the corruption possibility. The bribes are a source of alternative income, usually motivated by the classical argument of “supporting the family” and after that – when the corrupt starts to enjoy the “taste of easy-made money” – by the incentive of making a small fortune.

How does the corruption spread? The diffusion of corruption is a double way process: from top down on hierarchical stream command or from down up by complicity. “Toleration of corruption encourages more and more people to engage in corruption over time”. (Rose-Ackerman, 1999, p. 25)

Della Porta, Vannucci (1999) conclude that “Where the corruption is widespread the risk of being accused is extremely low” (Della Porta, Vannucci, 1999, p. 255). These opinions show that corruption is self-feeding and self-maintaining as the mythical Hydra creature whose head grows back as soon as it is cut.

The deep anti-corruption strategies should begin with the reform of civil service.

As Klitgaard (2000) advises, the fight against corruption “should not begin or end with fulmination about ethics or the need for a new set of attitudes” (Klitgaard, 2000, p. 27). He recommends to begin with actions that influence the three factors from his (now) famous formula of corruption: “… look for ways to reduce monopoly power, limit and clarify discretion, and increase transparency, all the while taking account of the costs, both direct and indirect, of these ways” (Klitgaard, 2000, p. 27).

One of the strategies could include the separation of the technocrats – career officials – from the influence of politics. If this is not the case in a country, every time when through elections the ruling party changes, the decision makers from public service could be changed just on political command, without any relation to their professional skills. On long term this procedure is extremely poisoning for public service management. Della Porta, Vannucci (1999) consider as well that “a more rigorous separation between political functions and administrative functions” is needed. (Della Porta, Vannucci, 1999, p.270)

Another issue of the reform, equally important to the first one, is the payment of adequate salaries to civil servants. “If public sector pay is very low, corruption is a survival strategy”. (Rose-Ackerman, 1999, p.72).

If in any public service there are people who accept jobs low paid, which require high skills, this could be a signal that people will try to demand bribes in order to cover the needed amount of money on top of the salary, according to Kitchen (1994, cited in Rose-Ackerman, 1999, p. 73). It is the case of low paid customs’ officers from Eastern Europe that legally are entitled to about 200€ monthly wages and by bribes they complete these wages up to an average of 1500€. (source, ANV report, 2006). Usually the officers pay huge amounts of money in advance to secure this type of job (rumors talk about 10000€ for a simple custom officer position). In their activity they will have a strong incentive to retrieve the money paid in advance and to top up the low salary.

Better salaries could attract not only better professionals for public service, but people of a better moral quality as well. In the end better salaries might increase “their social status and in the same time the cost of illegal activity. The risks of being implicated in judicial proceedings would then include the loss of a greater income and more prestigious social position” (Della Porta, Vannucci, 1999, p. 270). Klitgaard (2000) agrees that “people will tend to engage in corruption when the risks are low, the penalties mild, and the rewards great” (Klitgaard, 2000, p.27).

The payment should be directly connected to what Rose-Ackerman (1999) calls “merit recruitment, market wage rates and retraining (as in modern China)”. (Rose-Ackerman, 1999, p. 70)

Rose-Ackerman (1999) considers that reform should not head only for apolitical and well paid officials. There is needed as well a restriction regarding the conflict of interests. The law should enforce sanctions that define and demarcate clearly the private economic gain for public officials. Rose-Ackerman (1999) finds that code of ethics and statutory requirements are needed “to prevent government service from becoming a cynical route to easy wealth, all countries need a basic conflict-of-interest program that stresses ethical conduct” (1999, p.77).

The legal framework is important from the point of view of Della Porta, Vannucci (1999): “Individual decisions to participate in corrupt exchanges depend upon the probability of being discovered and punished, the severity of the potential punishment and the expected rewards compared with the available alternatives”. (Della Porta, Vannucci, 1999, p. 19)

Deep anti-corruption strategies ask for a strong public system framework, with clear rules stated in laws. With a reformed civil service and a rationalized bureaucratic system, with transparency and accountability the deep anti-corruption strategies could assure the smooth functioning of the system.

Forms of high level corruption

The high level corruption occurs where contracts for procurement, privatization auctions and the tax collection operate. As “grand corruption” occurs in every country, not only in developing countries, it is necessary to understand its symptoms.

According to Rose-Ackerman (1999), contracts for procurement could involve corrupt payments if there is any interest for the private corrupter to “be included in the list of pre-qualified bidders and to restrict the length of the list”; if it needs some “inside information”; if it wants to “induce the officials to structure the bidding specifications so the corrupt firm is the only qualified supplier” and if wants “to be selected as winning contractor”. “After winning may pay to get inflated prices or skimp on quality”. (Rose-Ackerman, 1999, p. 27)

Interesting is that not only large scale projects could involve corruption but even the “goods used in consumption” which “are prime candidates for payoffs because it may be difficult ex post to discover whether or not they actually were delivered.” (Rose-Ackerman, 1999, p. 29)

Privatization is a process with first aim the reducing of the corruption and of the unwise spending of public money for sustaining different enterprises. But especially on the former socialist countries the process of transferring the assets from state into private ownership is subject for corrupt interventions. Without proper legal frameworks and with a huge lack of transparency, the privatization was a modern form of theft that resulted into a faction of over-night wealthy people, to the detriment of the now impoverished state.

Rose-Ackerman (1999) proposes a set of grand anti-corruption strategies underlining the corruption dynamics into what I would call “first law of corruption process”: “sometimes removing one set of corrupt incentives may create new opportunities elsewhere (...) Deregulating in one area may increase corruption elsewhere” (Rose-Ackerman, 1999, p. 39). The strategies proposed include “program elimination (eliminate licenses exports, subsidies, price control)”, “credible privatization process” that should be “transparent and well publicized”, “revenue collection” with “tax reduction and of nominal rates of tariffs”. Procurement anti-corruption strategies imply mainly using of benchmarking prices in order not to pay more than the market for the same products. There is a strong recommendation of using non-customized products that usually justify a bigger price.

For Della Porta, Vannucci (1999) the anti-corruption for public procurement should assure “maximum visibility, transparency, easier access to information, decision making centers to have precisely defined powers, under a legal framework with reduced contracting procedures”. (Della Porta, Vannucci, 1999, p. 272)

Part three

Which corruption strategy should be prioritized?

As I emphasized earlier on this paper, the tolerance of corruption breeds corruption.

Miller et all (1997) propose a “zero-tolerance policy” towards corruption, using the example of Britain’s and America’s “zero-tolerance policy” towards crime: “a permissive attitude to low level crime not only degrades the living environment and lifestyle of ordinary citizens, but also encourages low level criminal to graduate higher level crime” (Miller et all, 1997, p. 209)

The literature recommends a mix of anti-corruption strategies. As Rose-Ackerman (1999) recommends “to change public attitudes and to convince ordinary people that the government is serious about tackling corruption, is suggested emphasis on reducing corruption where is most obvious to citizens. It should begin with services that people are entitled to obtain for free. If the service is not a basic necessity, people may accept the introduction of a user fee to substitute for bribes. A next step is the reform for corrupt systems that permit people to avoid taxes or to violate laws with impunity. In those cases credible reform must start at the top. A crackdown should reach the rich and powerful. If large taxpayers are required to pay their taxes, others may be more willing to go along. Focusing only on ordinary citizens generates resentment that can undermine the entire effort”. (Rose-Ackerman, 1999, p. 88).

The twine between the two types of anti-corruption strategies is backed up as well by Klitgaard (2000): “to generate support, we may wish first to attack the kinds of corruption that are most obvious to citizens or most hated by them, or that seem to them the most urgent. For political reasons, it is good to begin an anti-corruption campaign where citizens perceive it to be most evident and most annoying, or where the political leadership has given a field particular salience, or where it is believed that corruption is undercutting economic reform” (Klitgaard, 2000, p. 76)

For governments involved in anti-corruption strategies is essential to prove to the public that things are really happening. “Frying the big fish” as Klitgaard (2000) calls the uncovering of big corrupts is extremely important for a public opinion which considers (usually in an environment where the corruption is systemic) that “money buy everything” and that “one hand washes the other” and “ravens do not scratch one another’s eyes out”.

In my opinion uncovering the “big sharks” is where the anti-corruption fight has its start, the “zero point”. The systemic corruption implies close and solid relationships. In these relations it lays the power and the weakness of systemic corruption: it is enough to cut the head in order to destroy the connected “body of corruption”. Some would argue that “the body and its head” will recover soon. I would say that the recovery needs time. For anti-corruption fighters this time is very precious for implementing the deep-anticorruption strategies. Because besides the “big fish” discloser and punishment, there is needed a plan for everyday fight with deep corruption. The results of this cyclic process – never ending, in my opinion – (visible alternated with deep anti-corruption strategies) will prove its efficiency only in time.

These discourses reveal that anti-corruption involves citizens and their perception is important in designing the mix of anti-corruption strategies. This is the reason why there are no general “recipes” for anti-corruption fight, and the strategies should be designed taking into consideration the local specific. For this a multi-disciplinary team of specialists is required to understand the phenomenon. In the team that designs the anti-corruption strategies for a country should join not only lawyers or managers, but psychologists as well. Is important to understand human psychology (with causes and motivations) and use this understanding to tackle the causes of corruption, not only the effects of it. This team should “keep in touch” with all the changes that occur in the way the corruption manifests. Without this connection to the dynamics of corrupted practices, I consider that no mix of anti-corruption strategies could be effective in this fight on long term.

As example for my point of view I use the evolution of anti-corruption strategies in Romania after 1990.

At the beginning was the post-socialist anti-corruption style, when the strategies were aiming the low level corruption. The actions undertaken at this stage responded mainly to denunciations from desperate citizens, or from the partners looking for revenge or even from fellow workers unhappy that they cannot manage as well as the denounced corrupt. A great part of the cases ended without any punishment or very low punishments (as dismissals, transfer to other departments or adjourned sentence). The reason for such solutions: the corrupt acted not only for own interest but for “big sharks” interests as well, who, by political pressures or networks, succeeded to make their protégé escape scot-free.

The new anti-corruption strategy, powerfully backed-up by country’s now president, promotes the visible strategy. It aims at convicting all big corrupts. Some voices assert this new direction is requested by EU as main condition for joining. But should be taken into consideration the intense popular enthusiasm the first results of the new strategy received. There was a widespread support from ordinary citizens. Small and big corrupts began to worry. The small corrupt that were protected by the big ones – now under scrutiny, put an end to many corrupt practices.

The war between the President of Romania and the Minister of Justice, on one hand, and the “big sharks”, on the other hand, is still a harsh one. Some big corrupts were taken off the judicial prosecution on the basis of procedural mistakes. The legal punishment was not applied. This makes all the efforts useless and causes population disappointment. That is why a few weeks ago the President of Romania declared that the prosecutors intentionally make mistakes in order to let the ‘big sharks’ escape.

That proves that the “healing” process needs also political will, perseverance and a deep understanding of the phenomenon. I believe this strategy will have the desired results and in future all those that think to choose corruption as source for wealth and power, will think twice before engaging in it.


ANV (Romanian National Customs Agency - in Romanian). 2006. “Every import/export company pays annually over 10.000€ to the customs officers” [WWW]. 2006. (18th January 2007)

Della Porta, D., and Vannucci A., (1999), Corrupt exchanges: actors, resources, and mechanisms of political corruption, New York, Aldine de Gruyter

Haller, D., and Shore, C., (2005), “Introduction – Sharp Practice: Anthropology and the Study of Corruption”, in Haller and Shore (Eds), Corruption – Anthropological Perspectives, London, Pluto Press

Klitgaard, R., MacLean-Abaroa R. and H. Lindsey Parris, (2000), Corrupt cities - A practical guide to cure and prevention, Oakland, Institute for Contemporary Studies Press

Miller, L.W., Koshechkina T., and Grodeland A., (1997) How citizens cope with Postcommunist Officials: Evidence from Focus Group Discussions in Ukraine and the Czech Republic. In P. Heywood (Eds) Political Corruption. Oxford, Blackwell Publishers

Rose-Ackerman, S., (1999), Corruption and government: causes, consequences, and reform, Cambridge, Cambridge University Press

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Governance de Bogdan Craciun este licenţiat printr-o Licenţă Creative Commons Atribuire-Necomercial-Fără Opere Derivate 3.0 România.

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