CoR orrupti TiON PATTERNS CONSEQUENCES AND CAUSES
CORRUPTION CORRUPTION has been defined many times. To define is to limit. Examples may be better. But consider: corruption is understood as giving something to someone with power so that he will abuse his power and act favouring the giver The Hon Dato Seri Dr Mahathir Mohamad, Prime Minister of Malaysia in his book The Challenge, Kuala Lumpur, 1986 Training Module: UNDP PARAGON 2
BRIBES, EXTORTION 10 A BRIBE is a reward given to pervert the judgement or corrupt the conduct to get something done more quickly, or when it should not be done, or when it should be done, but a reward is required 10 EXTORTION is an unlawful demand for money or things of value extracting something by force intimidation, protection rackets Training Module: UNDP PARAGON 3
Corruption makes Society UNECONOMIC! CORRUPT ACTS 10 reduce revenues by more than the bribe 10 increase costs competition made ineffective 10 distort policies chosen for individual gain 10 undermine management wrong incentives - wrong criteria for appointment and promotion 10 discourage investment and aid; divert resources MANY PEOPLE SUFFER Training Module: UNDP PARAGON 4
Corruption makes Society UNFAIR! CORRUPTION 10 hurts ethnic and political minorities favouritism, avoiding rules for equity 10 denies the poor their share they cannot afford bribes 10 increases poverty even relief gets diverted to the rich THE POOR SUFFER MOST Training Module: UNDP PARAGON 5
CORRUPTION Corruption makes Society UNSAFE! 10 puts the environment at risk ineffective regulations, incompetent management 10 increases risks to individuals from unsafe food, medicals, workplaces 10 increases crime, drugs, guns, terrorism when police or judges take bribes CORRUPTION KILLS Training Module: UNDP PARAGON 6
A GLOBAL THREAT Money-laundering, drug-running, gun-smuggling for terrorists, incompetent management, damage to the environment, avoidance of regulations for safety, unmonitored genetic experiments in any one country are a threat to all. CORRUPTION ANYWHERE THREATENS EVERYBODY EVERYWHERE Training Module: UNDP PARAGON 7
PATTERNS OF BRIBERY OCCASIONAL 10 10 10 10 10 10 Individuals bribe to get unfair advantage Employees abuse position, take bribes People complacent Bribery a shameful act Guilty fear prosecution Little public concern SYSTEMIC 10 Everybody pays to get fair treatment 10 Employees need more: think pay unfair 10 Everybody complains 10 No shame 10 Fear of syndicates 10 Public despair, thinking Training Module: UNDP PARAGON nothing can be done 8
THE BENEFITS OF BRIBERY? BRIBES are said to 10 create a market 10 speed decisions 10 redistribute wealth 10 be part of local culture 10 help capital accumulate 10 help new contractors 10 humanise bureaucracy 10 promote political stability / patronage BUT 10 market distorted, unfair 10 and delays and mistakes 10 to the rich 10 an insult to local culture! 10 for investment abroad 10 including the incompetent 10 client focus better! 10 dangerous, and unsustainable long-term Training Module: UNDP PARAGON 9
PATTERNS AND WORDS DIFFERENT FORMS OF CORRUPTION 10 FRAUD Criminal deception, false representation for gain 10 EMBEZZLEMENT The diversion of goods to one s own use 10 NEPOTISM, CRONYISM Appointing or favouring friends or relatives 10 GRAFT Corrupt profits and the means for making them Training Module: UNDP PARAGON 10
WESTERN IDIOM OR SLANG 10 USA: 19.99 = THE CASH LIMIT for a free lunch that an official may receive 10 France: LES AFFAIRES = THE BUSINESS in English an affair is romance outside marriage 10 Italy: TAGENTOPOLI = BRIBES-TOWN Milan scandal, leading to Clean Hands operation 10 UK: SLEAZE = CORRUPT BEHAVIOUR word used earlier of poor cloth, inadequate cover Training Module: UNDP PARAGON 11
LOCAL PATTERNS AND WORDS ❹ In what activities do we find the greatest risks of corruption in our countries? ❹ What words do we use to describe them? ❹ What do we consider the main causes? Training Module: UNDP PARAGON 12
ASIA-PACIFIC IDIOM 10 In Mandarin: CHAR CHIEN = TEA MONEY 10 In Hokkien: KOPI LUI = COFFEE MONEY 10 In Bahasa Malaysia TUMBUK RUSUK = RIB PUNCHING rasuah means corruption, sounds like rusuk 10 In Papua New Guinea WONTOKISM = ONE-TALK-ISM favouring people who speak same language Training Module: UNDP PARAGON 13
WHY CORRUPTION? 10 GREED abuse of power and money in the private sector abuse of position and trust in the public sector 10 OPPORTUNITY corruption increases if corrupt not punished 10 NEED leads people to pay extortion money and may drive poorly paid officials to demand it 10 MORE GREED corruption addictive, destructive, unsustainable Training Module: UNDP PARAGON 14
POVERTY, POWERLESSNESS Ignorance 10 the poorly educated may pay bribes when they think they are paying a fee 10 even when they think they are cheated they do not know how to complain Violence 10 people pay bribes for security, safety 10 People take bribes as part of a syndicate (who threaten those who do not join) Training Module: UNDP PARAGON 15
RELATIONSHIPS 10 AN ECONOMY OF AFFECTION loyalty to one s family or clan 10 A SOCIOLOGY OF DISAFFECTION anger with management, or government 10 WORKPLACE LOYALTIES protectionism in organisations eg the Cabinet, the police 10 WORKPLACE SYNDICATES and threats from colleagues or superiors Training Module: UNDP PARAGON 16
OPPORTUNITY 10 Lack of accountability 10 Lack of transparency especially with high tech and defence contracts to protect commercial and military secrets 10 Failure to punish offenders or win convictions? 10 Large expenditures 10 Change - no clear patterns, restraints Training Module: UNDP PARAGON 17
ORGANISED CRIME A Criminal Nexus of 10 politicians 10 businesspeople 10 bureaucrats linked with drugs, terrorism, sex-trade Entrapment 10 of the innocent - with small bribes - and threats of disclosure Training Module: UNDP PARAGON 18
EXCESS BUREAUCRACY 10 Governments saying what citizens may do rather than what they may not do 10 Rules for Civil Servants that encourage poor use of resources allow too little discretion 10 Budgets based on inputs rather than results 10 DELAYS giving opportunity for taking bribes or providing an indication that there is haggling over the price! Training Module: UNDP PARAGON 19
EQUATION FOR A BRIBE SOMEONE WILL PAY A BRIBE if a - the net advantage from paying the bribe Is greater than b - the cash value of the expected benefit less the cost, - expressed as cash equivalents, of any disadvantages or risks Training Module: UNDP PARAGON 20
THE COSTS INCLUDE, the Cost of the bribe, c The risk and cost of DISCOVERY the probability of discovery, p, multiplied by the loss of reputation or Social Cost, s The risk and cost of PUNISHMENT the probability of punitive action, q, times the fine, lost income, prison, f, and the value of virtue or conscience, v Training Module: UNDP PARAGON 21
THEN a = b - c - p(s + qf) - v We may not make a conscious calculation, any more than those who play soccer (or tennis) calculate the trajectory of a ball, but these values will shape our decisions. Beware conscience may be negative for someone who is angry with the government. Training Module: UNDP PARAGON 22
CORRUPT PEOPLE? 10 Some writers argue that the problem lies with corrupt systems, not corrupt people 10 But where corruption is systemic, people get corrupted 10 And where corruption is not systemic, people corrupt the system 10 In many places corrupt or corrupted people cannot be replaced 10 We need to motivate and change people Training Module: UNDP PARAGON 23
OURSELVES 10 As parts of elites we benefit from corruption and exploitation 10 If we lived in a systemically corrupt society, would we pay bribes? 10 Many have behaved corruptly - with expenses, customs declarations, non-payment of fares, tax returns 10 Its not us helping them 10 We need to fight corruption together Training Module: UNDP PARAGON 24