Corruption
Sep 28, 2020 in Research

Governmental corruption implies the act of public workers in terms of selling goods that belong to the government for their personal monetary gain. For instance, this happens when licensing officers receive a bribe to offer a work permit, or to support illegal passage of goods through the entry point of the country, or to bar the briber’s competitors from ferrying goods across the border. In such scenarios, officers personally sell the goods that the government is supposed to sell to the traders and thus the officials illegally acquire property rights for the government goods. The private agencies, therefore, give bribes to the governmental workers to be able to carry out their business operations. It is worth noting that the licensing officers may also give permits allowing the passage of contraband products. By engaging in bribery, the governmental officers abuse their respective offices by disregarding the procedures that govern the award of such permits and instead using discretion. The current essay seeks to examine the state of corruption across various countries over time, the economists’ approach to the vice, the causes of the problem, the costs associated with the issue, as well as the role of democracy and economic openness in addressing the problem.

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Corruption Status across Countries over Time

Corruption is a global problem that affects countries on different continents especially the less developed countries and the situation has remained unchanged for several decades. For instance, in Kenya and Zaire, the earnings obtained as a result of corrupt activities compose a large percentage of the Gross National Product. Corruption exists in all classes of governmental departments and agencies including the law enforcement and the defense. In countries such as the post-Communist Russia and Korea, one would be assured of getting the goods after paying the bribe and a single bribe would be enough for the whole process. In countries like the United States of America, an individual is capable of acquiring a service without giving the bribe while in some African States and the post-Communist Russia, a person in need of a government good may give bribes to different officers or even give them more than once to a single officer.

In 1997, Zaire is said to have lost $ 1 billion to the ousted president Mobutu Sese Seko while the Philippines and Indonesia respectively lost more than that to their presidents. Kenya is said to have lost $ 1 billion in the Golden Berg Scandal in the early 1990s while in Turkey, poor workmanship of contractors as well as the use of inferior materials increased the death toll after the 2004 earthquake. In India, bureaucrats took advantage of the Official Secrets Act of 1923 that they inherited from the colonial masters to conceal governmental information regarding the finances. In Peru, the Corruption Estimation Index decreased from 4.4 in 2002 to 3.5 in 2004. Korea and the Czech Republic are included in the same range of statistics. By 2006, India had been losing 45% of her electric power to illegal connections and dubious commercial deals. In the United States of America, bureaucratic corruption is rare while political corruption is more obvious, which is signified by such events as the lobbying and contribution of “soft money” to fund campaigns as well as facilitating of the enactment of laws in the Congress. Developing countries, on the other hand, experience corruption of both classes.

Corruption is based on two assumptions; that the trader needs a government good to facilitate their business and that the issuing officer has the monopoly over that particular good. The trader, therefore, must bribe the officer because there is no other option of gaining access to the good in question. At times, the government officials do not directly deal with the buyers of government goods but instead deal with organized cartels that act as agencies to obtain the good and sell it to the client. The agencies may be individual people or groups that operate in a standardized manner.

The Economists Approach to the Vice

While social scientists and various social institutions emphasize the importance of ethics and values, economists approach the problem from a different angle focusing on the importance of incentives and punishments. Economists perceive the vice as the inappropriate use of a public office for personal gains and blame indifference in regulations as its major cause. According to economic experts, corruption can be either political or bureaucratic but the two are closely related. Bureaucratic corruption occurs when civil servants are appointed due to their political affiliation as opposed to their abilities and this makes the nominees execute their duties in a manner that serves the interests of their political sponsors as opposed to the public or national interests and this happens because of the fear of consequences. Political corruption means lack of the distinction between the state and the ruling party. The linkage between the civil servants and the politicians inhibits the scrutiny of the public offices. It is difficult to deal with the political corruption compared to the bureaucratic corruption. A corrupt activity may be legal in a country but it might be undesirable due to the violation of morality that is upheld by citizens. On the contrary, the vice may also not be immoral; for instance, when one bribes a law enforcement officer for not infringing the rights of a suspect. 

Bureaucratic corruption implies that the governmental officials either get bribed to do what they should not do, or get the bribe to do what they should do for an additional fee that lands in their pockets. Economists also classify corruption as centralized, meaning that a buyer of a government good pays a bribe at one point for the whole process while decentralized corruption means that the person pays bribes at different stages of the process to different people.

Economists use the number of corrupt transactions as well as the value of money involved as the parameters for measuring corruption. The other measure is people's perception although it does not give a clear picture, for instance, the use of economic performance as a measure of the corruption intensity does not give a clear picture or any facts about corruption since a country may be corrupt even though its economy is on the rise. 

Measures Proposed by Economists to Curb Corruption

Economists argue that incentives and punishments are effective tools of eliminating or lowering corruption in countries. The punishment should not be applied to the recipient of the bribes only but also to the provider of the bribes. The punishments will discourage people from engaging in corrupt practices thus reducing the incidences of corruption. Punishments may be executed in the form of firing of public officers, closure of corrupt businesses, as well as fines or imprisonment of both the payer and the recipient of the bribe. Incentives can also work well by rewarding honest public officials as well as providing waivers and discounts to the buyers of public goods. 

Experts also propose the establishment and promotion of competition in public offices as well as businesses to break the monopoly. When businesses compete, they have an urge to maintain profitability for the continuation of business and thus they may not be willing to pay bribes. The government also needs to establish competition in public offices to break the individual officers’ monopoly of power over governmental goods. This can be achieved through the establishment of a team of officers whose jurisdiction overlaps hence creating a tough environment for corruption in governmental offices. 

Economists also indicate the need for the separation of powers and introduction of checks and balances. When governmental agencies are given autonomy, it becomes hard for the politicians to interfere with their operations and thus, the officers in such agencies can freely work without worrying about the interests of political leaders. Decentralization of functions also helps to get rid of strong national corruption bases thus assisting in the struggle against corruption. It is also important to decentralize services to make sure that a single person does not have the control over a government good, which will reduce the possibility of corruption in the offices. 

Administrative reforms and the political accountability is another way that economists present as an approach to combating the evil of corruption. It is necessary to redefine the goals and missions of governmental offices as well as develop mechanisms to put to task the rogue political leaders who misuse their office or pressure the civil servants to engage in corruption. These efforts will contribute to the elimination of impunity in public offices and political positions.

The economists also cite the role of press, media and the Non-Government Organizations in advocating for the war against corruption through the publication of information about the government’s tendering and bills. The agencies can also play a role of pressurizing governments to take action against suspected masters of corruption as well as changing the mode of operation in governmental offices. The local social organizations such as churches can sanction the alleged corrupt officers in a bid to pressurize them to respond to the queries raised against them.

 
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Causes of Corruption

The market structure in the affected countries greatly contributes to the prevalence of corruption. Among the key features is the monopoly of the government goods that leads to the control of such items in a given locality or region by a single person or several people. It is a fact that a few officers have the monopoly over the governmental good, working under self-discretion and thus being able to decide whether to offer or not to offer the item in question to the buyer. The officers thus demand bribes or delay the issuance of the required item to compel the buyer to approach them with a bribe. In such a situation, the members of the public have no other option than to give bribes and thus perpetuate corruption. 

The lack of political good also greatly contributes to the occurrence of corrupt activities. When politicians hold their personal interests higher than those of the state or the members of the public, there is the likelihood of abuse of power to engage in corrupt deals or to pressure members of the civil service to execute duties in their favor. Selfish politicians also fail to enact laws to curb corruption and thus give the vice a better breeding environment. Politicians have powers to influence the judiciary in some countries and thus, they end up having impunity that facilitates their corrupt deals.

The combination of corruption and theft motivates the members of the public to engage in corrupt deals and this happens when they want to steal from the government. For instance, a businessperson may want to avoid taxation or illegally purchase governmental property. In such a situation, the person must collaborate with public officers to manipulate the records to facilitate the dubious deal. The businessperson thus parts with a bribe and the public officers involved help him/her to achieve his/her goal.

The indifference of laws in various countries also provides a suitable environment for corrupt activities. The laws may be weak as they might lack a strong provision for handling corruption in such aspects as investigations, prosecution, and punishment of culprits. Additionally, it is hard to prove the cases of corruption in the court of law and thus, many of the suspects go scot-free while most of the cases remain unattended. In such an environment, the leaders of corrupt activities take the advantage to pursue their crooked goals.

Bureaucracies and red tapes in governmental offices lead to lengthy processes and this also prompts the members of the public to engage in corrupt deals to speed up the process of acquiring what they wish. For instance, some governmental offices have lengthy processes of executing functions such as providing passports, licenses or identification cards. To avoid the delay, the members of the public often try to use short cuts by bribing officials in such offices to accelerate the process.

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The Costs of Corrupt Deals in the Affected Countries

Corruption inflates the cost of building infrastructures such as roads, houses, and other facilities. Corrupt deals are responsible for 5-20% of construction costs in various countries and this equals to $ 18 billion in the developing countries on a yearly basis. The vice leads to overcharging of the constructions hence inflating the costs. Corruption also leads to lack of scrutiny in the construction industry, and this leads to poor construction works resulting from poor quality materials and poor workmanship. For instance, the use of low-quality materials and shoddy work in the construction of houses in Turkey worsened the outcomes of the 2004 earthquake hence increasing the death toll.

Corruption also increases theft in a country. For instance, public officers steal public funds as well as illegally dispose public assets such as land and vehicles to private buyers. Theft also occurs in social services whereby members of the public and companies steal units of water and electricity in collaboration with the employees of the relevant authorities. India is an example of such countries as in 2006, 45% of electric power was lost through illegal connections.  

Corruption leads to low tax revenue collection in the affected countries. Traders collaborate with the customs officers to illegally pass goods through the entry points without paying taxes or paying less than required. Traders also cooperate with revenue authority officers to evade taxes by paying less Value Added Tax than required as well as paying smaller amount of income tax. The revenue officers skew the records to support tax evasion while the respective traders part with bribes in return. The law enforcement officers also cooperate with law breakers whereby the latter pay bribes to avoid prosecution that would lead to payment of fines that are further directed to the government. These corrupt deals narrow the government tax base hence shrinking the public coffers that are used to fund projects in the affected countries. 

Corruption leads to the increased cost of business since traders spend a lot of money on bribery. Merchants may not easily get licenses to conduct business unless they part with bribes. They also may not import goods without bribing the customs officials. Because the merchants have to recover the money they spend in their business activities, the burden is passed on to the consumers through increased prices of goods and services thus making the cost of living to skyrocket. The small traders who may not have the ability to pay bribes are pushed out of business as they have no means to establish themselves in the business community. 

Corruption postpones the development in the affected countries due to the diversion of government's program funds into the pockets of the public officers. The loss of revenue through tax evasion reduces the governmental funds and thus makes the state unable to properly fund development projects to benefit the people. Corruption also builds a bad image in the eyes of the potential foreign investors thus discouraging them from settling in the affected countries for business. Another obstacle to the development is the pilfering of governmental funds. For instance, in Zaire, the state lost $ 5 billion in 1997 to the then president Mobutu Sese Seko and the sum was equivalent to foreign debts. Kenya also lost $ 1 billion in the 1990s when the Golden Berg Scam took place. The Philippines and Indonesia also lost a lot of funds to their respective presidents in the same period and this was a setback to the respective countries’ development. 

Corruption also leads to the insecurity of workers as well as environmental problems. Rogue firms pay bribes to have an ability to disregard the occupational safety and health regulations through avoidance of scrutiny and this helps them to minimize the costs that would have been incurred in such measures. The companies also bribe governmental officials to continue exploiting resources in a careless manner as well as release dangerous waste and gas emissions into the environment. Such firms pose a threat to the working population as well as the general public through environmental pollution and the illegal exploitation of resources.

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The Role of Openness and Democracy in the Fight against Corruption

Openness reduces regulation of entry of products and companies into the market. If there are many companies in the market, competition increases and the motivation to gain profit discourages the companies from spending on bribes. Openness in the public service helps to publish information about the status of the services as well as listening to complaints from the public. The government is, therefore, able to keep the members of the public informed about the developments in the public offices. The introduction of multiple teams with overlapping jurisdictions breaks the monopoly over governmental goods and thus limits individual's ability to propagate corrupt practices. Openness also enables the media to expose information about the government procurement and tendering and thus makes it hard for people to hide their corrupt deals.

Democracy is very useful in the fight against corruption for various reasons. Democracy enables the representatives of the press to question or reveal the evils in the governmental offices and allows the civil societies and the members of the public to hold demonstrations against corruption or launch a legal battle against individuals accused of engaging in the malpractice. In a democratic state, it is possible to sack corrupt leaders without political interference. Citizens of a democratic country have the power to sack their political leaders through the ballot and thus the leaders do not have the courage to engage in corrupt activities. In a democratic state, it is possible to privatize governmental services, such as cargo clearance, and this reduces the corruption level in the governmental offices. The private contractors can also execute duties with minimum political interference and it is also possible to put the contractors to task if they are alleged of malpractices. Democracy also promotes the independence of governmental agencies and thus makes them free from political interference. The agencies can, therefore, execute their duties smoothly. For example, the judiciary cannot be intimidated by politicians when handling corruption cases.

Conclusion

Corruption generally implies the abuse of public offices for personal gain. It, therefore, entails misappropriation of resources or bribery. It is a global problem because that affects many countries across the globe with emphasis on the developing countries. Economists emphasize the importance of incentives and punishment as a way of responding to the problem. Corruption results from bureaucracies and monopoly of power among others. Some of the effects of corruption are theft of public resources and underdevelopment among others. Openness is important in the fight against graft as it facilitates revelation of information and competition. Democracy is also crucial as it facilitates complaint of the public, legal battle against graft and freedom from political interference in the provision of services and fight against corruption.

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