Combating corruption in the developing world - Essay Example

COMBATING CORRUPTION IN THE DEVELOPING WORLD of The Effectiveness of Specific Policies in Combating Corruption in Developing Countries It is nearly incontestable that one of the major challenges facing the developing countries is corruption. Corruption is cited as one of the major reasons why developing countries are unable to achieve faster economic growth and development in addition to failure to improve the general wellbeing of its people. According to Banerjee, Hanna, and Mullainathan (2009), corruption generally means deviation from the ideal principles, or engaging in acts of moral or spiritual impurity (2). They further argue that corruption takes two major dimensions namely economic and political. Economic corruption involves payment for materials or services which in law; the recipient is not due, and often takes the form of kickback or bribery. Political corruption entails the abuse of resources, office or public power by elected officials of government for their personal gain such as through offering or soliciting bribes (4). The other types of corruption include nepotism, electoral fraud, and price fixing among others. Numerous studies have shown that corruption is deep- rooted in most of the developing countries. Most developing countries have mechanisms that encourage the spread of corruption thus making it normal practice in these countries to an extent that those opposed to it are punished (Hors 2011, 1). In spite of this complacency, the developing countries have witnessed the impacts of corruption and are fully aware of t its negative effects in the long- run economic progress of a country. As a result, they have taken several measures to reduce or possibly eliminate corruption in their countries. More developing countries have expressed their resolve to combat corruption especially in response to international pressure and initiatives. However, despites notable efforts made there have been minimal real progress recorded in most of developing countries (Spector, 2005, p. 6). It is against this background that it is important to discuss the effectiveness of specific policies in combating corruption in developing countries. In order to fight corruption, developing countries have formulated a variety of policies; but the big question is, how effective are these policies in combating corruption? Most developing countries adopted the liberalization and privatization policy as a means to combat corruption. According to Khan (2006), these countries took this measure with an intention to reduce the public officials’ discretion (13). Liberalization and privatization, essentially, aims at minimizing importance of public sector while increasing importance of private sector in the social or economic spheres. Previous studies had indicated that the public sector environment was very conducive for corruption since public officials enjoyed nearly unlimited discretion on important issues. As a result, they were better placed to offer or solicit bribes in order for their own gain rather than public’s. Besides, public administration was considered to be in most cases inefficient and bureaucratic thus impeding service delivery (ADB/OECD, 2006, P. 8). The large, complex, and restrictive nature of the public sector coupled with insufficient controls provided fertile grounds upon which corruption thrived in developing countries. The study by OECD in Philippines, Morocco, Bolivia, and Benin showed that corruption was linked closely to this nature of public sector; complex, and restrictive with inadequate controls (Khan, 2006, 16). The adoption of liberalization and privatization policy by most of developing countries was aimed at reducing the complex and restrictive nature of public sector as well as instilling of adequate controls in the provision of goods and services thereby reducing corruption (ADB/OECD, 2006, 17). In addition, since the link between political power and public sector was very direct, liberalization and privatization provided suitable avenue to diminish the link thus reducing corruption (Rose-Ackerman, 1999, p. 15). The liberalization and privatization policy has been effective to a considerable extent especially on improved service delivery to the people of developing countries. However, it has not been effective enough in reducing or eliminating corruption. Collier (2000) identifies the following reasons for this scenario; most decisions on resources are still vested in politicians and senior government bureaucrats, weak legal frameworks against corruption, and the need to survive that eventually drags the private firms into corruption web (26- 7). The second policy adopted by the developing countries in order to combat corruption is the improvement of the rule of law to ensure that corrupt individuals are prosecuted and punished. These countries have endeavoured to improve rule of law with an ultimate aim of deterring people’s desire to engage in corruption activities in addition to punishing those implicated in the vice (Khan, 2006, 13). It occurred to them that weak rule of law and inadequate laws regarding corruption was to blame for the widespread corruption. Tanzi (1998) notes, in recent years, after developing countries had realized the detrimental impacts that corruption was having on them, they created a legal framework for combating the vice (561). At the centre of the framework was the formation of anti- corruption agencies and commissions that were mandated with the responsibility of investigating corruption cases while some, not all had prosecutorial powers. In some instances, the formation of anti-corruption agencies and commissions has achieved success. However, in most instances, this policy has proved ineffective as corruption thrives as if laws do not exist; impunity is usually at all- time high. According to Hanna et al. (2011), weak enforcement of laws and lack of legislation regarding some aspects of corruption has greatly hampered the fight against corruption (30). While there are numerous programmes that aim at improving rule of law in developing countries, there is little or no evidence at all that they have had any notable effect. This raises critical questions concerning the degree to which promotion of rule of law in these countries has helped in reducing corruption (Carothers 2003, 18). The developing countries have made efforts to improve salaries of public servants in an attempt to address their low standards of living while at the same time raising corruption’s opportunity cost since public officials will stand to lose their positions if implicated (Khan 2006, 13). Low wages in public service increases the possibility of corruption because individuals are trying to add their incomes in order to meet their basic needs. Besley and McLaren (1993) argue that higher wages and other rewards cannot necessarily reduce corruption if they are not backed up with high probability of corruption- implicated officials losing their positions in addition to deep legal and political structures changes. Empirical evidences in developing countries have shown that there is little relationship between the increase in public officials pay and corruption- reduction, if the aforementioned back- ups are lacking. According to ADB/OECD (2006), policies geared towards greater transparency of decision- making in governments through entrenchment of decentralization, democratization, and creation and encouraging of civil society as watchdogs have played critical role in the fight against corruption (33). These policies can effectively help in denouncing corruption. However, it has proved ineffective since politico- administrative apparatus have attempted to subvert real entrenchment and implementation of these policies. The culture of corruption is deeply entrenched and keeps being nurtured and it will take more than simply taking these measures. However, these policies are still considered the best in combating corruption (Spector 2005, 56). Why is it so difficult to fully combat corruption in developing countries despite these formulation and implementation of the above- mentioned policies? Hanna et al. (2006) lists the following reasons: one, policy implications where there are long procedures to be followed on a given policy. Two, predation and expropriation; public officials use military or political power to expropriate from citizens. Three, corruption is associated by necessary state interventions making it difficult to effectively fight corruption. Four, there are weak property rights and non- market asset transfers are prevalent. Lastly, corruption is difficult to deal with in developing countries because of fiscal constraints and the existence of favourable structural drivers of political corruption. In conclusion, from the above discussion, it is evidently clear that corruption is a major challenge in developing countries which brings with it adverse effects to the citizens of those countries. It can also be noted that the need to fight corruption is very high and those countries have expressed commitment towards combating this vice. Pressure from citizens and from international actors such as developed nations and institutions such as World Bank have resulted to developing countries to put in place policies in fight against corruption. In some countries, these policies have achieved commendable results. However, in most of developing countries, no concrete progress has been noted. The policies have been ineffective largely due to structural rigidity and weak legal framework regarding fight against corruption among other noted factors. Therefore, in order to facilitate the effectiveness of these policies, proper and appropriate political, legal, and social reforms need to be undertaken. Bibliography ADB/OECD 2006, Anti-Corruption Policies in Asia and the Pacific: Progress in Legal and Institutional Reform in 25 Countries. Retrieved November 24, 2011 from http://www.oecd.org/dataoecd/32/31/36832820.pdf Banerjee A, Hanna, R & Mullainathan, S 2009, "Corruption". Handbook of Organizational Economics. Besley, T, and McLaren J 1993, Taxes and Bribery: The Role of Wage Incentives. The Economic Journal, 103: 119–141. Carothers, T 2003, Promoting the Rule of Law Abroad: The Problem of Knowledge. Carnegie Endowment Working Papers, Rule of Law Series, 34. Washington, DC, Carnegie Endowment for International Peace (CEIP). Collier, P 2000, How to Reduce Corruption. African Development Review, 12(2). Hanna, R, et al 2011, The Effectiveness of Anti-corruption Policy: What has Worked, What hasnt, and what we dont know–a Systematic Review Protocol: Technical Report. London: EPPI-Centre, Social Science Research Unit, Institute of Education, University of London. Retrieved November 24, 2011 from http://www.dfid.gov.uk/r4d/PDF/Outputs/SystematicReviews/Anti_corruption_2011Hanna.pdf Hors, I 2011, Fighting Corruption in the Developing Countries, Retrieved November 24, 2011 from www.oecdobserver.org/news/fullstory.php/aid/291/Fighting_corruption_in_the_developing_countries.html Khan, M 2006, Governance and Anti-Corruption Reforms in Developing Countries. G-24 Discussion Paper Series, UNCTAD. Retrieved November 24, 2011 from http://www.unctad.org/en/docs/gdsmdpbg2420064_en.pdf Rose-Ackerman, S 1999, Corruption and Government: Causes, Consequences, and Reform. Cambridge: Cambridge University Press. Spector, B, 2005, Fighting Corruption in Developing Countries; Strategies and Analysis. Sterling, Virginia: Kumarian Press. Tanzi, V 1998, Corruption around the World: Causes, Consequences, Scope and Cures. International Monetary Fund Staff Paper 45(4): 559–594. Washington, DC: International Monetary Fund. Read More