Bribery and corruption in the public sector - Essay Example

Bribery and corruption in the public sector, is endemic and unavoidable in all societies Introduction Mbunwe (2005) observes that bribery and corruption as we see it in society today are never a new phenomena. This is because as far back as two thousand years ago, the prime minister of an Indian King known as Kautilya is said to have written a book about the concepts. Again, there is evidence of Dante regarding bribers as being placed in deepest parts of Hell, which is an indication of the existence of bribery as far back as that time (Keefer & Knack, 2005). The length of time with which bribery and corruption has existed with humankind confirms the fact that bribery and corruption indeed constitute an endemic. Surprisingly though, there seems not to be a singularly accepted definition for bribery and corruption regardless of how long it has been with us (Werlin, 2009). One of the simplest forms of definition of corruption as used by the International Monetary Fund (IMF) is the abuse of public power for private benefit (Lambsdorff, 1998). Bribery on the other hand has been explained to be the act of giving a gift or money to alter the behaviour, action or decision of a person (Kang, 2002). These two definitions show that all acts of bribery constitute corruption but not all acts of corruption are bribery. These two phenomena are problematic as they come with consequences that affect society and the national economy at large (World Bank, 2014). Conditions under which bribery and corruption are most likely to occur There are a number of conditions or factors that have been identified in literature as being responsible for the promotion of corruption. Basing on a theory of inference from IMF reports, Klitgaard (2008) categorised the condition and factors under which bribery and corruption are most likely to occur into two. These are direct factors and indirect factors. Under direct factors, three major examples of conditions can be identified. These are regulations and authorisations, taxation, and spending decisions (Ross, 2012). On the whole, Mauro (2012) explained that when these direct factors are in place, people simply try to forego them as a way of fulfilling their personal gains. By so doing, they are caught in the web of bribery and corruption. A typical example of this is some who engages in bribery or other corrupt means to get a passport, a shop opened or tax invaded. Examples of indirect factors include level of public sector wages and penalty systems. Explaining further, Pope (2000) postulated that in countries such as Sweden where pay levels are high, corrupt practices are hardly likely to happen. Tzong-Shiang and Xu (2001) also argued that passed on the classical model of crime prevention, corruption is most likely to occur when the penalty for bribery and corruption cannot be seen to be more deterring than what a person gets from indulging in the acts. Impact of supply-side and demand led corruption Like every other economic transaction, corruption is also said to have a supply side and a demand side (Rogow & Lasswell, 1963). The supply side of bribery and corruption generally refers to the favour seeker who is willing to buy money or a gift to change the normal course at which public activities and transactions must be performed (Moballeghi & Moghaddam, 2008). The supply side on the other hand refers to the public official who willingly takes bribe or engages in corrupt act as an abuse of power vested in him or her to offer contracts, issue license or allocate any form of scare resource (Trust Law, 2012). The discussion as to the impact that the supply side and demand side of bribery and corruption continues to go on in literature with both sides being said to exert relatively the same level of harm, impact or influence. This is because Stiftung (2008) noted that until those at the demand side are willing to stop demanding or to expose those at the supply side for attempting to give bribes, corruption can hardly be avoided. Todaro and Smith (2003) also highlighted on the impact of supply side corruption may saying that suppliers have often had the mentality that until they pay off bribes or engage in any form of corruption, they will not get the types of contractual favours they demand executed to them. The resulting consequence is that bribery and corruption becomes a cycle, involving a supplier who is ready to give and a demander who is ready to take. In the long term therefore, the fight against bribery and corruption only becomes a mirage because both sides are ready to make it happen. Holding a relatively different position, Nye (1967) noted that the real impediment against the fight on corruption is from the demand side rather than the supply side. This is because public officials have all the apparatus of criminal law backing them to expose suppliers. Moreover, once a demander request for bribe, the one at the supplier side is forced to see the payment of bribe as a competitive advantage with which a desired contract may be rendered. Extent of bribery and corruption Meagher (2006) posited that the extent and measure of bribery and corruption have only been based on qualitative perceptions and assumptions. This is because conceptually, an attempt to measure or quantify the extent of bribery and corruption will make it difficult to point to a single factor that is being measured. In the light of this, the agent-based computational dynamic general equilibrium model of corruption have always been used by various globally recognised agencies to measure the extent of corruption across geographic boundaries and according to the cost effects that come with bribery and corruption. Some of these agencies include Global Competitiveness Report, Political and Economic Risk Consultancy, Transparency International, and Political Risk Services. In the Opportunity International’s version, the corruption perception index is used to find the extent of corruption based on expert opinions of public sector corruption. A score of 0 is given to represent the most corrupt whiles a score of 100 represents the cleanest country. The table below exemplifies the extent of corruption across geographic reach and cost as given by the index score. Table 1: Most corrupt countries for 2014 Country Score Continent Somalia 8 Africa North Korea 8 Asia Sudan 11 Africa Afghanistan 12 Asia South Sudan 15 Africa Iraq 16 Asia Turkmenistan 17 Asia Uzbekistan 18 Asia Libya 18 Africa Eritrea 18 Africa Source: Transparent International, 2014 Table 2: Least corrupt countries for 2014 Country Score Continent Denmark 92 Europe New Zealand 91 Oceania Finland 89 Europe Sweden 87 Europe Norway 86 Europe Switzerland 86 Europe Singapore 84 Asia Netherlands 83 Europe Luxembourg 82 Europe Canada 81 North America Transparent International, 2014 From tables 1 and 2, it can be said that as far as geographic reach is concerned, Asia and Africa are the most corrupt areas of the world whiles Europe is relatively clean in terms of corruption. Regulations in place and their effectiveness in deterring bribery and corruption Individual countries have different approaches through which they seek to fight corruption. In most cases, it is common to see countries fight corruption through the use of laws and regulations (Aaronberg & Nichola, 2010). It is based on this that the UK has the Bribery Act 2010 which serves as a parliamentary act covering the criminal law relating to bribery. The US also uses the Foreign Corrupt Practice Act of 1977 (FCPA 1977) as one of its main federal laws on bribery and corruption. Anwar and Gavin (2010) saw the Bribery Act 2010 as being more detailed and in-depth as a regulation against bribery and corruption. This is because unlike the FCPA 1977 which is quite limited to accounting transparency and bribery of foreign officials, the Bribery Act 2010 caters for crimes of bribery, being bribed, bribery of foreign public officials, and failure to prevent bribery (Sheikh, 2011). Using coverage as a basis of argument therefore, it can be said that the Bribery Act 2010 is more deterring because its reach of definition includes several potential acts of bribery and corruption that may take place in society from both the supplier end and demand end. In terms of prosecution and penalties, the fact that the Bribery Act 2010 gives up to 10 years’ imprisonment and unlimited fine for indictment can be said to be deterrent enough. The 2008 Siemens AG case where the company was fined $450 million for violating the FCPA can be said to be a step in the right direction towards deterring bribery and corruption among other multinational organisation (Breslin, Ezickson & Kocoras, 2010). Conclusion The abuse discussions help in concluding that indeed bribery and corruption in the public sector is endemic and unavoidable in all societies. This however is not a pre-emption to stop the fight against bribery and corruption. Clearly if bribery and corruption could be avoided, they would have been avoided long ago since there have been evidence given to the effect that the phenomena have been there for ages. One particularly thing that makes bribery and corruption very serious to fight and unavoidable is the fact that they are often committed in secret and that any two persons involved are always forced to keep the practice that goes on between them secret. But if the available laws and regulations in the context of both the UK and the US will be adequately enforced, it will be expected that most forms of public acts of bribery and corruption that comes with the highest forms of consequences on society and the economy can be minimised. As much as possible, if the laws and regulations will be seen as deterrent enough, the fight against corruption could be taken a step ahead into becoming a means of avoiding bribery and corruption. This is because people will fear to get caught in the web and as much as people try to get themselves away from them, the talks on avoiding them can be taken a step ahead. References Aaronberg, D. & Nichola H. (2010). "The Bribery Act 2010: all bark and no bite...?". Archbold Review, 5, p. 87. Anwar, A. & Gavin D. (2010). "The Bribery Act 2010". Scots Law Times, 23, p. 59. Breslin, B., Ezickson D & Kocoras J. (2010). "The Bribery Act 2010: raising the bar above the US Foreign Corrupt Practices Act". Company Lawyer, Vol. 31 No. 11, pp. 34-67. Kang, D. (2002). “Bad Loans to Good Friends: Money Politics and the Developmental State in South Korea”, International Organization, Vol. 56 No.1, pp. 56-87 Keefer P. & Knack S. (2005). “Institutions and Economic Performance: Cross-Country tests using Alternative Institutional Measures”, Economics and Politics, Vol. 7 No.3, pp. 78-89 Klitgaard, R. (2008). Controlling Corruption, California: University of California Press. Lambsdorff, G. (1998). 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