The basics of anti-corruption

say no to corruption

The first steps into anti-corruption can be daunting. Not only is corruption a complex problem, but it is also a topic full of jargon and one in which knowledge has evolved considerably. This page explains some of the basic concepts in the area.

Photo: Lars Plougmann

  1. What is corruption?
  2. Why does corruption matter for development?
  3. Types of corruption
  4. Conditions that facilitate corruption
  5. Addressing corruption
  6. Fighting corruption in aid delivery and aid as a driver of corruption
  7. Interested in reading more?

 

1. What is corruption?

Defining corruption can be a challenge. It takes many forms, and perpetrators are skilled in developing new ways to be corrupt and cover their tracks. Much thought has been devoted to developing different definitions of corruption but, despite its complex nature, most people can recognise a corrupt act when they see it.

Corruption may be defined as ‘the abuse of entrusted power for private gain’[1]. This definition captures three elements of corruption. One, corruption occurs in both the public and private sectors (and media and civil society actors are not exempt). Two, it involves abusing power held in a state institution or a private organisation. Three, the bribe-taker (or a third party or, for example, an organisation such as a political party) as well as the bribe-giver benefit, whether it be in terms of money or an undue advantage. Sometimes the ‘advantage’ gained by the bribe-giver may not be ‘undue’ or clear cut but is nonetheless an advantage. For example, in a corrupt society where the right to access public services such as health or education can be only secured by paying an unlawful bribe, those who can afford to pay have an advantage over those who cannot. In such circumstances the bribe-givers’ ‘benefit’ is merely that which is his or her rightful due and bribe-takers receive an advantage for carrying out functions that they are obliged anyway to perform.

Corruption is often described as either ‘grand’ or ‘petty’ (petty corruption is also described as ‘administrative’). Grand corruption typically takes place at the top levels of the public sphere and the senior management levels of business, where policies and rules are formulated and executive decisions are made. It also often involves large sums of money (political corruption is another common term that may be used to refer to grand corruption more generally or specifically to the negative influence of money in political campaigns and political parties).

Small scale, administrative or petty corruption is the everyday corruption that takes place at the implementation end of politics, where public officials meet the public. Petty corruption is most commonly found as bribery in connection with the implementation of existing laws, rules and regulations, or in abuse of power in daily situations (e.g., the traffic police who takes money every day from taxi drivers in return for not harassing them further). It usually involves modest sums of money in any given exchange. However, endemic petty corruption can result in great costs and can place serious stress on the functioning of state systems, in a way comparable to grand corruption.

It is important to note the nuances in trying to categorize different manifestations of corruption. There is not a clear division between where petty corruption ends and grand corruption begins: lowly officials who demand illegal payments from citizens may be doing so because they have to pay a cut of their salaries to their managers, who pay a cut to their superiors, stretching all the way up to the most senior state officials.

  

2. Why does corruption matter for development?

Corruption costs: Citizens are compelled to pay for services that should be free; state budgets are pillaged by corrupt politicians; public spending is distorted as decision-makers focus spending on activities likely to yield large bribes like major public works; foreign investment is stymied as businesses are reluctant to invest in uncertain environments; and economies suffer.

But corruption not only costs in terms of money. It costs in terms of public trust and citizens’ willingness to participate in their societies. Corruption often has links to organized crime and fosters, as well as thrives, in conflict and war. Indeed, high levels of corruption can increase the likelihood of a protracted conflict or a post-conflict society sliding back into war. Efforts to tackle climate change can also be undermined by corruption as bribes are paid to ignore environmental protection rules in the pursuit of quick profits. In these ways state security and the very values of democracy are undermined and the fulfilment of development goals is threatened.

  

3. Types of corruption

Many types of corrupt acts are proscribed in criminal and administrative law in different countries. The UN Convention against Corruption (explored further in section 5) sets out the types of corrupt criminal behaviour that signatory states are obliged or recommended to introduce into their legal systems. Acts can also be corrupt even if the law does not proscribe them, and this speaks to the often slippery and complex nature of corruption. Its manifestations constantly evolve and are not always captured by criminal or administrative law, hence (as discussed in section 5) prevention, rather than solely punishment, is emphasised by anti-corruption practitioners.

In this section some of the most common types of corrupt acts as set out in UNCAC are described.

Bribery takes place when a person with authority accepts or solicits a bribe to exercise a function in a particular way. A kickback is similar to a bribe but usually refers to a payment given in return for receiving a contract, which is ‘kicked back’ to someone involved in awarding the contract. Bribery of foreign officials by private sector actors is also a crime in many countries.[2] Even if a bribe does not take place in a company’s country of origin, it may still be punishable by the home country’s authorities. The fact that not all countries proscribe such behaviour illustrates the point above that not all corrupt acts are always illegal.

Trading in influence or influence peddling is a form of bribery. For example, a person promises to exert an improper influence over the decision-making process of a public official or private sector actor in return for an undue advantage. Typically this form of corruption can be perpetrated by those in prominent positions or with political power or connections. Such persons’ connection to power, that is to say their ‘influence’, is traded for money or an undue advantage. Not all countries criminalise this form of corruption, despite the fact that international conventions on corruption, including UNCAC, recommend its criminalisation.

Illicit enrichment refers to a situation in which officials cannot explain their wealth in relation to the income they lawfully earn. The wealth that is not explicable may be the proceeds of a bribe or a form of stealing such as embezzlement, misappropriation, concealment of property, money laundering or false accounting. All these corrupt behaviours could also occur in the private sector.

  

4. Conditions that facilitate corruption

Corruption can grow in a variety of political and economic environments, though it particularly thrives where accountable governance structures and processes are weak. It is important to keep in mind, however, that weak governance does not necessarily lead to corrupt acts – indeed there may be many honest people acting honestly or behaviors that result from incompetence or mismanagement rather than corruption.

While the importance of different factors can vary from place to place and from time to time, it seems that, for corruption to flourish, certain key pre-conditions are necessary. This section describes four pre-conditions that facilitate corruption:

One, corruption is facilitated if there exists a set of imperatives and incentives that encourage someone to engage in corrupt transactions. These may include, for example, low and irregular salaries for officials with large dependent families. Such officials may feel compelled to become corrupt. Social norms can also create incentives to participate in corruption. For example, norms that encourage giving favorable treatment to particular people (such as family members or those affiliated with your political group). Political pressure can also persuade people into acting corruptly, for example when a political candidate favours an individual or a group, in detriment of the public good, in return for votes.

Two, the availability of multiple opportunities for personal enrichment increases the temptation of corruption. Some economic environments are much more conducive to corruption, in particular mineral and oil rich environments are more fertile territories than those relying on subsistence agriculture. The size and growth of public resources will help define the possibilities for corruption, and extensive discretion over the allocation of those resources provides opportunities for corrupt behaviour.

Three, access to and control over the means of corruption. Incentive and opportunity create the possibility, but there have to be ways of actually engaging in corruption. These might include control over an administrative process such as tendering or having access to offshore accounts and the techniques of money laundering.

Four, limited risks of exposure and punishment. Corruption will thrive where there are inadequate and ineffective controls. A lack of policing, detection and prosecution encourages corruption Weak internal controls such as financial management, auditing, and personnel systems are also facilitating conditions. Where the media and civil society are controlled and censored, corrupt politicians and officials have less to fear.

  

5. Addressing corruption

Anti-corruption work is not just about punishing the corrupt, although prosecution of corrupt individuals is important to demonstrate that corruption is not tolerated and no one, neither the highest government official nor the wealthiest businessperson, is immune from prosecution. Criminalisation of corrupt acts is discussed in section 3. However, a holistic approach to addressing corruption goes further than criminalisation and prosecution: it involves preventing it, by building transparent, accountable systems of governance and strengthening the capacity of civil society and the media as well as improving public integrity, strengthening the personal ethics of public and private officials, and perhaps even challenging social norms that encourage corruption.

Measurement tools to assess the need for anti-corruption interventions and evaluate their success are a key part of reform efforts. Corruption indices have proliferated in the past decades and are a useful tool to draw media attention to the problem. However, given the many types of corruption indices and indicators, produced by civil society, international organisations and governments for different purposes, it is important to know what they can offer and their limitations, before relying on them to inform policy or design anti-corruption programmes.

Though there is no one-size-fits-all model, the next sections offer an approach to anti-corruption reform based on the one outlined in the United Nations Convention Against Corruption. UNCAC sets out a thorough, but not exhaustive, approach to tackling corruption systematically. It provides approaches to corruption prevention in the public and private sectors, asset recovery, and international cooperation. The following sections select and explain some such prevention approaches that are described in UNCAC. (UNCAC also has sections on criminalization, some of which are explored in Section 3.) Ultimately however any approach to fighting corruption depends primarily on real political will within the country itself to drive reforms.

Prevention

UNCAC includes and elaborates on the prevention practices developed over recent years by many countries. These countries have, with varying levels of success, typically approached corruption by developing ‘National Anti-Corruption Strategies’, listing the risks of corruption across government and sectors and pinpointing necessary reforms. A common starting point has been to establish an ‘Anti-Corruption Commission’ which in some cases has an investigative and prosecutorial function, in other cases has an awareness-raising and public education function, and in still others has a monitoring function or indeed comprises all these features. However, a separate body to deal with anti-corruption work may not be necessary, and a country may decide to rely on its existing institutions, which can share the responsibility. A further step might be taken by mainstreaming anti-corruption measures through policy sectors.

Beyond the establishment of specific anti-corruption bodies or tailored anti-corruption laws and tools, states can tackle corruption through a range of other preventive measures. These often fall under the rubric of good governance and public integrity. Some such measures are explained here.

UNCAC describes a series of actions that states can implement to improve the ethics and performance of public officials.[3] Systems for hiring and promoting civil servants and other non-elected public officials can be strengthened to ensure that they are based on transparency and merit. Public officials’ quality of work and ethical standards can be improved by access to education and training programmes to enable them to meet the requirements for the correct and honourable performance of their public functions. Public officials can also design tailored codes of conduct that respond and refer to their particular work and senior public officials could strengthen their integrity by agreeing to declare assets and conflicts of interests.

UNCAC also sets out measures to prevent corruption in the private sector. These include codes of conduct for professions and the promotion of good commercial practices among businesses, such as the use of fair contract terms. States are also tasked with promoting transparency in the private sector, such as measures to make clear the identity of the real people behind corporate entities. Transparency is also served, and corruption may be prevented, if states develop and implement clear procedures regulating private entities, for example regulations regarding subsidies and licences granted by public authorities for commercial activities. In the interest of preventing conflicts of interests, UNCAC recommends imposing restrictions on the private sector activities of former public officials where those activities relate directly to the public functions they previously held. Clear and sufficient internal auditing controls to prevent and detect acts of corruption are also prioritised.

The active inclusion of citizens in the business of government is also emphasised in UNCAC. One approach to achieve this is strengthening access to information and encouraging the participation of citizens in decision-making. Access to information is achievable when there are secure and reliable information storage systems in government to preserve documents particularly those relating to public expenditure. Civil society groups can be encouraged to have a meaningful role in policy formation and holding political actors to account.

These, and many more preventive measures, are concerned with building transparent, accountable systems of governance and thus limiting risks and opportunities for corruption.

International cooperation

UNCAC sets out how states should cooperate with each other in investigations and proceedings relating to corruption. For example, it sets out the technicalities of extradition of persons between states for corruption offences. It also strongly advocates mutual legal assistance between states which means actions such as taking evidence of persons at the request of another state, serving documents, freezing assets, examining objects or sites, providing documents – government, bank, financial, corporate or business records amongst others – all to the purpose of ensuring states can prosecute cases of corruption involving people who may live or operate in other states.

Asset recovery

UNCAC details how states should cooperate to ensure that assets that are the proceeds of corruption crimes are returned to their legitimate owners. Financial institutions should be obliged to scrutinize deposits in high value accounts made by prominent public officials for the purpose of detecting and reporting to the appropriate authorities any suspicious transactions. Public officials with interests in financial accounts in foreign countries should be obliged to report that relationship to appropriate authorities and to maintain appropriate records related to those accounts.

  

6. Fighting corruption in aid delivery and aid as a driver of corruption

Two corruption issues concern donor aid. First, donor aid delivery modalities are often vulnerable to corruption. Second, increasing the flow of aid may contribute to increased levels of corruption in a recipient country.

In recent years research has examined which aid delivery modalities are less vulnerable to corruption. In fact there is little evidence that aid delivered through budget support is more or less prone to corruption than project support. However, it has been shown that in countries which receive high levels of aid and in which there are high levels of corruption, there are compelling arguments to not deliver aid through budget support.

Donor aid can also drive corruption in a recipient country, providing new resources to plunder. However, the effectiveness of aid depends largely on the quality of policymaking and governance both within a donor aid agency and within the governance structures of the recipient country. Without good governance, aid effectiveness declines because of increased 'leakage' of funds from development projects or national budgets, often due to corruption. Corruption can take place at all stages of aid disbursement, from programme design to the bidding process, the implementation phase and even the way the project is audited. Corruption can result in the award of contracts to inefficient and incompetent companies at excessive cost and in the implementation of inappropriate and uncompleted aid projects.

The danger of corruption in development assistance is clear: aid is diverted away from its original aims by corrupt politicians and officials and spent on projects that provide the greatest opportunities for personal enrichment. The poor, the vulnerable and the disenfranchised suffer.

  

7. Interested in reading more?

In case you want to read more about anti-corruption in general, the following publications provide a good overview of the topic:

Cremer, G (2008): Corruption and Development Aid: Confronting the Challenge, Lynne Rienner Publishers.

Bracking, S. (ed.) (2007): Corruption and development: the anti-corruption campaigns, New York: Palgrave.

Campos, E. and Pradhan, S. (2007): The many faces of corruption: tracking vulnerabilities at the sector level, Washington, D.C.: World Bank.

Johnston M., Syndromes of Corruption (2005): Wealth, Power, and Democracy, Cambridge University Press.

Bull, J. and Newell, J.L. (2003): Corruption in contemporary politics, Basingstoke: Palgrave Macmillan.

Rose-Ackermann, S (1999): Corruption and Government: Causes, Consequences, and Reform, Cambridge University Press.

 


[1] This is the definition used by Transparency International.

[2] The Organisation for Economic Co-operation and Development prohibits the bribery of foreign public officials by international businesses. “OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions”. 1997. http://www.u4.no/document/treaties.cfm#OECDconvention
[3] In UNCAC, ‘public officials’ include not only civil servants but also any person holding a legislative, executive, administrative or judicial office, whether elected or un-elected, whether paid or unpaid.

 



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