Implementing the UN Convention against Corruption: Challenges and Perspectives from Asian Countries

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1 Implementing the UN Convention against Corruption: Challenges and Perspectives from Asian Countries Pan Suk Kim Associate Dean & Professor of Public Administration Yonsei University, South Korea or

2 Contents Corruption and Innovations II. Major International Organizations Recommendations III. Asian Experience and Perspective IV. Lessons Learned from Asian Countries

3 I. Corruption and Innovations

4 The Basic Ingredients and the Cost of the Corruption CORRUPTION flourishes when agents have MONOPOLY power over clients, when agents have great DISCRETION, and when ACCOUNTSBILITY of agents to the principal is weak (Corruption = Monopoly + Discretion - Accountability) Efficiency Distribution Incentives Politics The Costs of Corruption Waste resources, create public bads, and distorts policy Reallocates resources to the rich & powerful, those with military or police power, or those with monopoly power Distorts energies of officials & citizens toward the socially unproductive seeking of corrupt rents; and create risks, induce unproductive preventive measures, distorts investments away form areas with high corruption Breeds popular alienation and cynicism, and creates regime instability Source: Klitgaard, Robert Controlling Corruption. Berkeley, CA: University of California Press, p. 75.

5 Caution: NPM and Corruption The NPM style of government involves using a wide range of tools like grants, loans, contracts, vouchers, and other alternatives to direct government provision. Many of these rely on third party actors to play an active role is delivering government services or to act in the public good. Service delivery, proponents of NPM argue, is best left to entrepreneurial governments based on principles like competition between service providers, outcome based performance standards, decentralized authority, market mechanisms and other qualities not traditionally found in government bureaucracy. What is distinctive about many of the newer tools of public actions is that they involve the sharing with third-party actors of a far more basic governmental function: the exercise of discretion over the use of public authority and the spending of public funds (Salamon, 2002). New Public Management has two major implications for corruption: (1) NPM creates the potential for corruption in a wide range of actors and that the flexibility of these networks makes it more difficult to maintain accountability and oversight; and (2) the line between the government and private actors becomes increasingly blurred in NPM. Source: Andre Gratto, Bryan Preston and Thor Snilsberg Mitigating Corruption in New Public Management, unpublished monograph.

6 II. Major International Organizations Recommendations - United Nations (UN) - World Bank - Transparency International (TI) - OECD

7 UN Convention against Corruption (2003) The objectives: Calls upon governments to: Adopt preventive anti-corruption To promote and strengthen policies and practices measures to prevent and combat corruption more efficiently and Establish and operate preventive effectively anti-corruption body or bodies Establish and enforce codes of conduct for public officials To promote, facilitate and support international cooperation and Establish and operate appropriate technical assistance in the systems of public procurement and prevention of and fight against management of public finances corruption, including in asset based on transparency, competition recovery and objective criteria Establish public reporting mechanisms To promote integrity, accountability, and proper Promote active participation of management of public affairs and society in the prevention of and fight property against corruption. Source: UN/DESA Aide Memoire for the Ad Hoc Expert Group Meeting on Ethics, Integrity, and Accountability in the Public Sector: Re-building Trust in Government Through Implementation of the United Nations Convention against Corruption in St. Petersburg, Russia on September 2006.

8 World Bank s Eight Pillars of the National Integrity System The National Integrity System (NIS) consists of the key institutions, laws and practices that contribute to integrity, transparency and accountability in a society. The World Bank (1997) introduced a National Integrity System consisting the following 8 pillars: 1. Watchdog agencies (anti-corruption or supreme audit institutions ) 2. Public participation in democratic process 3. Public awareness of the role of civil society 4. Accountability of the judicial process 5. The media 6. Public sector anti-corruption strategies 7. The private sector and international business 8. International cooperation Source: Petter Langseth, Rick Stapenhurst and Jeremy Pope The Role of a National Integrity System in Fighting Corruption. Washington, DC: World Bank, p. 10.

9 Transparency International s (TI s) Major Pillars of the National Integrity System The main pillars of the NIS are considered to be the following: Executive Legislature Political Parties Electoral Commissions Supreme Audit Institution Judiciary Public Sector Police and Prosecutors Public Procurement Ombudsman Anti-corruption agencies Media Civil Society Private Sector Regional & Local Government International Institutions Source: Transparency International (TI) s National Integrity System Approach at

10 OECD: New Actions Implemented in OECD Countries Enhancing/establishing penalties Increased transparency & public exposure Introduction/establishment of powers of specialized bodies Increased guidance or training for public officials including codes of conduct Organizational effectiveness & improved performance Review of regulations Review of the interaction of domestic & international law Review of high-risk areas vulnerable to corruption Regulation of whistle-blowing Restating public sector values Simplifying administrative systems Integrating ethical values into management Source: OECD Public Sector Corruption: An International Survey of Prevention Measures. Paris: OECD, p. 24.

11 Suggested Measures for Tackling Corruption 1. Country strategies and policies: government anti-corruption strategies; access to information; and anti-corruption education 2. Oversight and control bodies: supreme audit institutions; and/or independent anti-corruption agencies 3. The legal system: anti-corruption conventions & legislations 4. The public sector: public sector codes of conduct 5. The political system: party political and campaign financing reform 6. Non-governmental actors: media; private sector; and corporate governance Source: Transparency International (TI) s Anti-Corruption Handbook (ACH) at

12 Suggested Anti-Corruption Toolkit Assessment of corruption and of institutional capabilities against corruption Institutional building: specialized anti-corruption agencies, ombudsman, auditors (audit institutions), strengthen judicial institutions, civil service reform, codes of conduct, national anti-corruption commission, national integrity and action planning meetings, anti-corruption action plans, legislatures and their efforts against corruption, and strengthen local government Situational prevention Social prevention & public empowerment Enforcement Anti-corruption legislation Monitoring and evaluation International judicial cooperation Repatriation of illegal funds Source: United Nations Office on Drugs and Crime (UNODC) Anti-Corruption Toolkit. 2nd ed. New York: UN Office on Drugs and Crime.

13 Questions Internationally available resources (best practices and recommendations) are abundant from UN, OECD, World Bank, TI, etc Anti-corruption conventions Anti-corruption toolbox Best practices (anti-corruption) Ideas and Tools are available Question: Are these applicable to the country specific? What to apply? How to carry out? Willingness to do? Capacity to do?

14 III. Asian Experience and Perspective

15 Major Causes of Corruption in Asia The expansive role of governments in national development (It increases opportunities for administrative discretion & potential corruption) The low risk of detection and punishment (a lowrisk, high-reward activity) The low salaries of civil servants A lack of political will Gift-giving culture Source: Jon Quah Curbing Asian Corruption: An Impossible Dream? Current History 105 (690), pp

16 Capacity Deficiencies The developing countries are constrained by capacity weaknesses. The public sector might be short of qualified & adequately motivated personnel this is over and above the serious institutional capacity deficiencies. Even the institutional arrangements do exist, the capacities that would make them effective are either lacking or inadequate. Institutional & human capacity building becomes a critical issue in the implementation & in rebuilding trust in government. Question: What are the specific measures that need to be taken to strengthen the capacity of the institutions?

17 Different Features of Corruption Control in Asia Key Feature Anti-corruption laws with a specialized independent agency Country (year) Singapore (1952) Malaysia (1967) Hong Kong (1974) Thailand (1999) South Korea (2002) Indonesia (2003) Anti-corruption laws with various agencies Anti-corruption laws without special agency China India Philippines Japan Mongolia

18 Anti-Corruption Agencies in Asia Country Anti-Corruption Agency Year Formed Homepage Singapore Corrupt Practices Investigation Bureau (CPIB) Malaysia Anti-Corruption Agency (ACA) Hong Kong Independent Commission Against Corruption (ICAC) Thailand National Counter Corruption Commission (NCCC) South Korea Korea Independent Commission Against Corruption (KICAC) Indonesia Corruption Eradication Commission (CEC)

19 Anti-Corruption Strategies in Selected Asian Countries Measure Will Strong Political Will Weak Political Will Effective Strategy: Singapore Hong Kong Limited Strategy: Malaysia Thailand Adequate Anti-Corruption Measures Inadequate Anti-Corruption Measures Limited Strategy: South Korea (KICAC s lack of investigative powers) Ineffective Strategy: China, India, Indonesia, Mongolia Philippines Source: Modified by the author from Jon Quah Curbing Asian Corruption: An Impossible Dream? Current History 105 (690), pp

20 Transparency International s 2005 Corruption Perceptions Index (CPI) for Selected Asian Countries (Number of Countries =159) Singapore Hong Kong Japan Taiwan Malaysia South Korea Thailand China Mongolia India Vietnam Nepal Philippines Indonesia Pakistan Myanmar Bangladesh Country Rank 5th 15th 21st 32nd 39th 40th 59th 78th 85th 88th 107th 117th 117th 137th 144th 155th 158th CPI Score (0-10 points) Source: Transparency International s homepage at

21 Sectors & Institutions Most Affected by Corruption: Wet Agencies? Click to add text Wet Vulnerable Agencies Source: Transparency International (TI) TI 2005 Global Corruption Barometer. Berlin: Transparency International (

22 Seoul: On-line Procedures Enhancement (OPEN) for Civil Applications System Seoul had the problem of corruption that accompanies rapid economic growth and Seoul adopted a systematic approach (ICT application) to corruption. Seoul Metropolitan Government (SMG) has developed a web-based system that allows citizens to monitor corruption-prone applications for permits and approvals. The Online Procedures ENhancement for civil applications (OPEN) system makes it easier to raise questions in the event that any irregularities are detected.

23 Homepage: (in Korean)

24 IV. Lessons Learned from Asian Countries

25 Lessons for Curbing Corruption Reduce opportunities for corruption in wet public agencies (vulnerable agencies) Don t rely on the police to curb corruption Implement comprehensive anti-corruption legislation Provide the anti-corruption agency with adequate staff & funding (ensure the incorruptability of the anti-corruption agency) and build up the capacity Need to cut red tape to minimize opportunities for corruption Must punish severely (Punish the guilty to make corruption a high-risk, low-reward activity) Pay political leaders & civil servants adequate salaries to Source: Modified reduce by the author their from Jon temptation Quah Singapore s to be Anti-Corruption corrupt Strategy, Korean Corruption Studies Review 4: ; and Jon Quah Best Practices for Curbing Corruption in Asia, The Governance Brief (Issue 11). Philippines: Asian Development Bank (ADB).

26 Dynamics of Key Stakeholders in Establishing the Anti-Corruption Agency Problem: Major stakeholders are usually NOT supportive for establishing the anti-corruption agency political will is crucial Police Prosecutor s Office and Courts Establishment of the Anti-Corruption Agency MPs (Lawyers) in the Parliament Legal Policy Community

27 Indicators of Political Will Political Will = Demonstrated credible intent of political actors such as elected/appointed leaders, civil watchdogs and other stakeholders The degree of analytical rigor that has been utilized to understand the context & causes of corruption Process (Has the regime adopted a strategy incorporating & mobilizing the interests of stakeholders?) The prevalence of incentives and sanctions The creation of an objective process that monitors the impact of reform The level of structured political competition in both the economic and political spheres Source: UNDP Corruption and Integrity Improvement initiatives in Developing Countries. New York: UNDP, pp

28 Summary Political & managerial will is critical to promote anti-corruption reforms Reduce opportunities for corruption in wet public agencies and do not rely solely on the police to curb corruption. If necessary, establish the independent anti-corruption agency with comprehensive anti-corruption legislations. Strategies should combine 3 components for action: law enforcement, prevention through institutional reforms, and mobilization of the population Enhancing professionalism, ensuring independence, and honing technical skills should strengthen capacity in key initiatives (law, accounting/auditing, and investigative journalism) Democratization is a necessary but not a sufficient condition for the reduction of corruption Although economic liberalization is not a panacea for public sector corruption, reducing the size of the state reduces the size of the potential corrupt that enables the public sector to improve its efficiency There is no single recipe for fighting corruption.

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