House of Commons - International Development

Select Committee on International Development Fourth Report

SECTION 2: CAUSES OF CORRUPTION

14. It is possible to identify a number of incentives to corruption. The Corner House stated that it was "...the 'benefits' of corruption that fuel its growth and sustain its practice".[32] They said unless the multilateral development banks, bilateral agencies and the private sector ensured that the institutional costs of indulging in corruption outweighed the benefits, there was little prospect for change. In this Section we examine what role weak institutions, failures of the criminal justice system, the nature of the state, and low pay in the public sector have in causing corruption before exploring whether there is a cultural dimension to corruption.

Weak Institutions and Poor Governance

15. It is clear from the evidence given to the Committee that poor governance and weak institutions are seen as the primary causes of corruption. The UNDP, in its booklet 'Fighting Corruption to Improve Governance', said "Corruption is principally a governance issue - a failure of institutions".[33] Corruption is symptomatic of weak and failing institutions and much of the current work by donors focuses on building and sustaining better systems of government. Clare Short said "It becomes more and more difficult to disentangle corruption work from creating a modern state that looks after its money properly and bears down on corruption".[34] We believe that building and strengthening institutions and improving governance are vital if corruption is to be eliminated.

Criminal Justice and the Rule of Law

16. Two of the factors that contribute to the development of a society with endemic corruption are the lack of appropriate restraint on power, and the lack of an unfettered and independent ability to prosecute. Criminal justice and the rule of law are a vital part of tackling extortion and bribery. Their absence provides a fertile breeding ground for corruption. Clare Short said, "We have criminal justice systems across the developing world that are very corrupt, and it is the poor old poor who cannot pay their way out of them".[35] Corruption in the judiciary can take many forms with payments to obtain access to courts, favourable judgements (where there can be a bidding process between the parties), or to prevent matters coming to court. There is often a perception that it is a judge who is being paid, while it might in fact be a court clerk.[36] Delays are common, increasing the opportunities to extort and obtain bribes. Corruption in the judiciary was an issue that was raised during our recent visit to Cambodia. Transparency International noted that proceedings are unlikely to be brought in a state where corruption involves a ruling elite, as is the case in Kenya. They pointed out that the situation might change when an elite loses power, as was the case in Indonesia and Pakistan, but difficulties often remain, including previously granted immunities from prosecution.[37] David Phillips, Crown Agents, said "...it is not so much that there is a culture of corruption, but there is a power beyond prosecution in many of the countries in which we operate in the developing world where the chances of a particular case reaching prosecution and appropriate deterrent action or sanctions being taken is relatively limited".[38] It may also be the case that where political rulers are insulated from prosecution there may be little to restrain their corrupt demands.[39]

17. It is clear that building better institutions, particularly in relation to criminal justice and the rule of law, must be a priority for any donor seeking to tackle corruption effectively. Donors must not underestimate the difficulties associated with bringing about change in an environment where there is likely to be resistance from vested interests, who will often be extremely powerful.

The Nature of the State

18. Mark Malloch Brown, UNDP, said recent changes in world politics meant issues like corruption were now being debated and addressed in what had previously been closed, stateowned, authoritarian political systems.[40] Anglo American stated endemic and systemic corruption were most likely to thrive where state involvement was pervasive, where there was excessive regulation and where officials had a significant amount of discretion. They noted that the absence of parliamentary accountability, skilled law enforcement, an independent judiciary and scrutiny by the media and civil society made corrupt practice more likely.[41] Clare Short also recognised this when she noted that "Old, very statist systems create lots of opportunities for corruption. China has this problem. Everything is regulated and you have to get a licence or permission for everything. At every single point in the chain there is the possibility of somebody giving someone a bung and [such systems] tend to maximise that kind of corruption".[42] This was certainly a contributing factor to the kind of corruption we heard about during our visit to Vietnam. There is a clear relationship between levels of corruption and the level of bureaucracy in a country.[43]

Low Pay in the Public Sector

19. Richard Manning, DFID, said "It is certainly the case where you have extremes of wealth and poverty that the pressures for corruption are greater".[44] Political patronage has often led to promises of jobs which in turn has led to large unaffordable public sectors, low wages and, ultimately, weak systems.[45] Laurence Cockcroft, Transparency International (UK), said "It is clear that very many civil servants in many poor countries are grossly underpaid, to the extent that it is unreasonable to expect them to survive on their salary".[46] Clare Short recognised civil service pay was an important issue and gave this as one of the reasons DFID were engaged in civil service reform in a number of countries.[47]

20. Richard Manning, DFID, indicated that there were a number of countries where wages had fallen in real terms to the point that they no longer represented a living wage.[48] However, he was able to point to Uganda, Tanzania and Ghana as countries who were serious about addressing this issue.[49] DFID said that where pay was below a living wage, people were bound to seek other ways of maintaining their families, and bribes were less likely to be resisted.[50] It reported mixed success on public service reform programmes but said that where there was real political commitment such programmes had made progress: in Tanzania, average public service salaries were up by 70 per cent in real terms, and in Uganda wages had increased by a factor of ten since 1991. In these countries, improved levels of pay, coupled with better management systems, had reduced incentives and opportunities for corruption.[51] Low wages in the public sector was a topic that repeatedly came up during our visit to Vietnam and Cambodia. In Cambodia we found that a school headmaster might earn much less than a machinist or driver. Clare Short said "We should just have the humility to think, if we were an extremely lowly paid civil servant in a developing country, where your salary will not feed your family, you would take payments, you would have to. You cannot go home and say, 'Sorry, children, I'm a very moral person, there's no food tonight'".[52]

21. Many civil servants cannot themselves be categorised as poor but they often support poor relatives in rural areas. This needs to be taken into account in any public sector reform as the support these civil servants provide is probably an important source of funds for poor family members.[53] Bribes collected by civil servants can be said to perform a redistributive function, albeit an inefficient and inequitable one with poor families who have a relative in government benefiting more than those who do not.[54] It is not the very poor who tend to be the most corrupt but managers and professionals who have greater opportunities. It is the combination of both better management systems and adequate pay that will reduce corruption - they cannot be tackled in isolation.[55] Richard Manning, DFID, said "You cannot expect to root out corruption if you do not pay your public service appropriately".[56] Low wages in the public sector and weak management systems provide both the motive and opportunity for corruption. We believe it is vital that public service reform should address levels of pay, but this will only successfully reduce corruption when it is combined with improvements in management controls and systems.

A Cultural Issue?

22. Corruption is not something that only affects developing countries. As Philip Allott, University of Cambridge, said "History shows that the threat of governmental corruption is a natural condition of society, an endemic disease of the body politic. All public power is always and everywhere corruptible".[57] Our own history confirms this; Clare Short said "None of us should pretend there is some culture of corruption in developing countries - we had our own culture of corruption too".[58] However, it is still sometimes suggested that there is a 'cultural dimension' to corruption or that corruption is more ingrained in some societies. CIET told the Committee that ordinary people from many different parts of the world were clear about what constituted corruption and were unhappy about the effect it had on their lives.[59] Mark Malloch Brown said "I ... think there are some cultural dimensions but, broadly, I think the cultural argument is a mischiefmaking argument in that I do not know countries which genuinely think that corruption maintains a sense of hierarchy and admirable tradition".[60] The Corner House also challenged the idea that there was a "Third World culture of corruption" and argued that much of the bribery by Western companies was underpinned by the incorrectly held view that "bribery is the way one does business in the South".[61] The UNDP booklet 'Fighting Corruption to Improve Governance' said that traditions of gift giving do not translate into widespread acceptance of corrupt practice.[62]

23. We support Clare Short when she said "The difference between developing countries and us is not that they have less moral people than we have - because of course we have little outbreaks of corruption in voluntary organisations, in local government, politics and business as we know - but we have powerful systems that check and catch it. The difference between developing countries and countries like us is not the morality of the people but the systems".[63] We have seen no evidence to suggest corruption is a cultural phenomenon.

32 Evidence, p.301 Back

33 Fighting Corruption to Improve Governance, UNDP, Feb 1999, p.10 Back

34 Q.761 Back

35 Q.762 Back

36 Q.477 Back

37 Evidence, p.62 Back

38 Q.336 Back

39 Corruption and Good Governance, Discussion Paper 3, UNDP, July 1997, p.26 Back

40 Q.311 Back

41 Evidence, p.329 Back

42 Q.781 Back

43 Evidence, p.59 Back