“The fight against corruption is the other modernization, whose necessity makes itself felt at the hour of going forth to compete in the world, of attracting foreign investment. The rest of its liberalizing efforts probably depend on its success.” (El Negro Mapa de la Corrupcion)
Martinussen, Ch. 24
Mainstream thinking: preference for existing bureaucratic organizations, public or private
Very few theories: emphasize the role of individual citizens as independent actors.
Class theories: do focus on people
People-Managed Development: Development starts with and controlled by civil society (Martinussen, p.332).
Guy Gran is a central theorist of this paradigm. He critiques bureaucratic governance and current development strategies because they are based on neoliberal principles (i.e., favoring free-market capitalism). He believes a) much of the world’s misery can be traced to the interests of the economic and political elites, and b) no government will engage in sustained mass development unless the poor are sufficiently powerful to force such policy.
Development via people happens when a) The poor are aware of their situation (this is conscientisation à la Paolo Freire), b) barriers that prevent the poor from having influence on decision-making and participation are eliminated, and c) people are organized into small “base communities” to ensure horizontal decision-making and ensure consensus (similar to Jean-Jacque Rosseau, 1712-1778)
Decentralization is key because is requires that decision-making powers are transferred to the local citizens. The rationale is that participation + decentralization = the release of dormant resources that will sustain a process whereby basic human needs are satisfied.
External Catalysts for people centered development are required to a) facilitate the processes and b) provide technical training to chosen members of the local ‘target’ groups. Gran prefers NGOs (rather than gov’t) because NGOs are less bureaucratic, better at grass roots work, and more flexible.
Chambers claims that people from the rich industrialized countries are generally unable to play decisive/catalyst roles.
Opposing view: Both researchers and practitioners with first-hand experience from development co-operation reject Gran’s positive assessment of what external development agent can achieve.
Critique of People-Managed Development: Small community projects and other small-scale efforts are not rejected, but are increasingly seen as only one type of intervention among several others, and there is increasing awareness of the need to integrate these into much more comprehensive macro-economic and macro-political strategies (Drabekk, 1987; Korten, 1990).
“Bad governance in a small country” -Collier
The maximum rate of economic growth possible is 10%, but decline can occur rapidly. Some countries get away with having poor systems because governance and policies interact with external factors, creating different opportunities. For example, coastal Bangladeshi exporters “simply need an environment of moderate taxation, macroeconomic stability, and a few transport facilities” to thrive, in contrast to Chad, which relies on money from oil and outside aid, and so depends on proper governance of these resources.
Why is bad governance so persistent?
- Leaders gain from it, so they keep citizens uneducated and ill informed.
- Those who are knowledgeable often leave, and reformers are suppressed or put in jail.
- Also, the IMF coerced governments to adhere to certain conditions when giving loans, so there is a stigma to reform.
What helps generate a turnaround of a failed state? Three things: large population, higher proportion of people with secondary education, and recently emerged from civil war. After civil war, politics are changing anyway. Democracy does not seem to help policy turnaround, but impetus for change comes from within society and takes a critical mass of educated people. The average length of time to get out of being a failed state is 59 years.
To sustain a turnaround, there are six characteristics that matter:
Good—higher country income, larger population, greater proportion of educated population
Bad—leader in power longer, country experienced favorable shift in terms of trade, recently emerged from civil war
The economic cost of being a failed state builds each year and negatively impacts growth of neighbor states. The estimated cost of a single failing state to itself and its neighbors is around $100 billion, which equals what its turnaround is worth. External support/intervention raises chance of turnaround, but it costs money.
“Making government institutions work better” -Klitgaard
Free-market reforms limit the role of the state, but it is still active in regulating certain industries characterized by economies of scale in nonrenewable resources, as well as transportation and infrastructure, education, public health, and dealing with poverty.
The reasons governments fail and corruption emerges:
- Objectives are multiple and vague
- Measures of performance are incomplete and inaccurate
- Technologies for providing public services are ineffectual, and tasks to be performed are not well defined
- Motivation and coordination are lacking because of fixed civil service rules, inability to hire and fire, and weak incentives linking pay to performance, corruption, and waste
- Authority is unclear and fractionated with many levels of bureaucracies and politicians
Corruption is the misuse of public office for private ends. It can be large or small scale, licit or illicit, systemic or sporadic. It can be initiated by a public servant or the interested citizen and includes promises or threats. Sometimes it is helpful, but almost always it is harmful; it stunts economic growth, undermines political legitimacy, and demoralizes officials and citizens.
Klitgaard approaches corruption not as the moral failures of individuals but as structural failures of information and incentives. People ascribe corruption to many things, but pragmatically, government officials have a motive for corruption when they cannot live on what they are paid, when the payoffs for being corrupt are large, and when the chances of being caught and punished are small. They have a monopoly in relation to the public without accountability.
Each public official (agent) must weigh the “moral cost” of being corrupt, as well as the risk of being caught and punished. He will accept the bribe if:
BRIBE – MORAL COST – (RISK x PENALTY) > PAY + SATISFACTION OF UNCORRUPTION
Each aspect of the calculation can be altered through government policy. Bonuses can be offered for discovering corruption to help augment pay, organizations can change their “culture” and institute a code of ethics to alter moral costs and satisfaction, size of bribe can be lowered by reducing monopoly power and discretion of individual officials, governments can amp up enforcement of catching corrupt officials to increase risk, and introducing stiffer penalties reduces corruption.
The prevention, discovery, and prosecution of corruption is costly. Justice Plana of the Philippines employed a three part strategy to reduce corruption in his Bureau of Internal Revenue: establish a new performance evaluation system and link incentives to it, collect information about corrupt activities, and punish the highest level violators (“big fish”) to set an example.
The best way to gather information:
- Find “heroes” in the organization who are clean and have them examine offices for evidence of corruption and inefficiency
- Convene inquiry commissions
- Use undercover agents
- Devise indirect measures of corruption
- Involve the public through various measures (like hot lines, civic committees, and citizen oversight boards).
Citizens are a valuable source of information, provide outside trustworthiness and competence, and are a sustainable constituency against corruption.
Bad governance and the bottom billion: Paul Collier talking about bad governance and development in many developing countries, mainly those in Africa. He invites us all to be “ambassadors:”
President Barack Obama talking to Nigerian students about the consequence of bad governance on the issue of terrorism and Boko-haram-Islamists in Nigeria:
This is an interesting map of corruption around the world:
An article from the Department for International Development in the UK about what they are doing to help other countries be better run and more accountable:
Helping Countries Combat Corruption: The Role of the World Bank:
- What makes someone a good catalyst? Who should people look to in organizing the poor and marginalized into a cohesive bloc?
- Should wealthy countries invest in turning around failed states? Why or why not?
- Corruption is a central issue in popular uprisings. The UN said “the larger the public sector, the greater the scope for corruption.” Free markets, free press, democracy, and separation of powers help curb corruption, but “the greatest enemy of corruption is the people.” How have we seen this evident in recent news? What are other ways besides protesting that individuals can fight against corruption?
- Do you think corruption is generally caused because of greed and immorality of individuals, or is it caused by the system?
- If you were living in a country where bribery was expected and considered acceptable, would you use bribes to get through the system? If there were no way around it, would you feel guilty?