SECTION 1: THE NATURE OF CORRUPTION
7. His Excellency Prince Ajibola, the High Commissioner
for Nigeria, told the Committee "Corruption is a canker that,
when it gets deep into the fabric of any society, invariably and
ultimately destroys that society".
Transparency International define corruption as "the misuse
of public power for private gain".
Corruption takes many forms and examples include bribes paid by:
- people qualified to receive a benefit but who
are prevented from doing so by an official demanding a payment;
- people who have no right to a benefit in order
to secure it;
- firms and individuals to avoid delays and to
8. It is clear, however, from the evidence we have
taken, that the definition of corruption goes beyond simple bribery
and extortion and includes "absenteeism, diversion of resources,
as well as influence peddling, fraud, payment of 'speed money'
However, it seems that to date much of the thinking and discussion
has been limited to the more tangible financial forms of corruption.
DFID should seek to ensure that wider forms of corruption,
and not simply bribery and extortion, are considered in designing
measures to combat corruption in its projects and programmes.
9. Although there are varying degrees of corruption,
it is useful, for the purposes of discussion, to divide it into
two categories: petty corruption and grand corruption. Transparency
International used the term petty corruption to describe "facilitation
or grease payments sought and obtained by junior officials who
are actually or ostensibly rendering a service to the public".
They explained in their memorandum that such payments were usually
made for a service that was meant to be free, related to fictitious
services or that stemmed from imaginary offences (such as at a
police road block). This kind of petty corruption is very often
driven by the low wages of public officials. Grand corruption
refers to corruption in the course of large-scale deals involving
leaders, senior officials and companies trading or investing on
an international basis.
10. Petty corruption can be a largely transparent
operation. Payments are sometimes openly solicited and received,
and occasionally there is a widely accepted tariff of payments.
But corrupt payments are often accompanied by uncertainty: uncertainty
over when a payment might be requested, how much to pay, how often
to pay and how many people need a payment, before the service
is provided or the desired outcome achieved. Anne Cockcroft, CIET,
gave the example of the provision of drugs in hospitals, saying
"...the drug round is taking place in the middle of the night,
the last drug round of the day, and suddenly the people coming
round with the drugs say, 'Well, unless you pay us this amount
now, that's it, you don't get the drugs'".
11. There are often complex links between petty and
grand corruption with junior officials passing on part of their
takings to more senior officials.
Anne Cockcroft said it was petty corruption that ordinary people
were overwhelmingly aware of. People had an interest in the grand
corruption scandals but such scandals had little direct impact
on people compared with the impact of pervasive petty corruption.
CIET argued that petty corruption has historically been considered
less important than grand corruption, which involves much larger
sums of money in each corrupt transaction. As a result, most efforts
to combat corruption have been topdown and centralised,
focusing on grand rather than petty corruption, with little, if
any, involvement of ordinary citizens.
CIET said "it is pervasive petty corruption that has a disproportionately
severe impact on the poorest members of society".
We agree with CIET that tackling petty corruption could be the
single most important way of reducing poverty.
We believe that tackling petty corruption is vital if other
efforts to reduce poverty are not to be undermined. Successfully
tackling petty corruption in a country could provide the right
context for successfully tackling grand corruption. DFID should
ensure that there is a coherent and comprehensive strategy for
tackling petty corruption running through all of its country strategies.
Opportunities for petty corruption should be designed out of all
projects and programmes.
12. General Mohammed, National Security Adviser to
President Obasanjo of Nigeria, described a number of forms of
grand corruption from the blatantly obvious - taking funds directly
from the central bank as cash, to the more subtle - part of the
payment on a contract with an inflated price is shared with a
corrupt official or government minister as a kickback, or the
extortion of money from creditors to ensure settlement of accounts.
Prince Ajibola said where kickbacks involved European firms, the
money sometimes never left Europe but was simply moved from one
account to another. He saw scrutiny of company accounts and reporting
of suspicious transactions as the key to stopping this kind of
activity but seemed surprised that so little of this corrupt activity
was actually spotted.
The fact that corruptly acquired money may simply be moving around
within a financial market, rather than moving between jurisdictions,
has implications for those seeking to prevent the laundering of
corruptly acquired funds.
13. CIET said that grand corruption "... has
long been recognised as an issue in development at the macro level,
with large amounts of money being stolen by corrupt senior officials
and political leaders in developing countries, and large bribes
being paid by international concerns in order to secure business
Transparency International said grand corruption was driven by
the greed of those involved. Grand corruption perpetuates poverty
by undermining development and economic progress,
damaging the economic status of countries and discouraging investment.
Clare Short said grand corruption led to a horrendous waste of
She explained that much of the debt problem in highly indebted
poor countries could be related to grand corruption through failed
projects and wasted money. She noted that grand corruption was
difficult to tackle as it was often high profile politicians who
were involved. She also noted that there were good people in every
country with whom it was possible to work.
DFID should work with developing countries to establish an
environment for eliminating grand corruption. We would ask DFID
to examine what needs to be done to help developing countries
control the behaviour of ministers and senior officials with discretionary
powers. A useful starting point would be the provision of technical
assistance for the development of systems, such as publicly available
registers of interest, ministerial and civil service codes, and
oversight and scrutiny bodies such as Auditors-General and Parliamentary
Commissioners to investigate allegations of corruption. We believe
effective parliamentary scrutiny over all financial matters including
development assistance is essential.
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and Good Governance, Discussion Paper 3, UNDP, July 1997, p.7-13 Back
Corruption to Improve Governance, UNDP, February 1999, p.7 Back
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(Community Information Empowerment and Transparency) is an international
group of epidemiologists and social scientists who bring scientific
research methods to local government and community levels. CIET
has looked at the impact of corruption in a number of developing
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