Fighting corruption in the developing countries

Development Centre

The fight against corruption is not the monopoly of the industrialised countries. Nor can recipes that have worked in OECD countries necessarily be applied to developing ones.

Of the 134 countries that attended the 9 th International Anti-Corruption Conference organised by Transparency International in Durban last October, over a hundred were developing countries. More and more of these countries are expressing their resolve to combat corruption, echoing international initiatives, such as the OECD Convention.

Despite the real efforts made, there has been little concrete progress to date. In most developing countries today, corruption is widespread and part of everyday life. Society has learned to live with it, even considering it, fatalistically, as an integral part of their culture. Not only are public or official decisions – for instance, on the award of government contracts or the amount of tax due – bought and sold, but very often access to a public service or the exercise of a right, such as obtaining civil documents, also has to be paid for.

Several mechanisms help to spread corruption and make it normal practice in these countries. Civil servants who refuse to toe the line are removed from office; similarly, businessmen who oppose it are penalised vis-ŕ-vis their competitors. Furthermore, an image of the state has grown up over the years according to which the civil service, far from being a body that exists to implement the rights of citizens – rights that mirror their duties – is first and foremost perceived as the least risky way of getting rich quickly. All of which helps to make corruption seem normal.

In practice, it is the environment in which public servants and private actors operate that causes corruption. Public administration in developing countries is often bureaucratic and inefficient. And a large number of complex, restrictive regulations coupled with inadequate controls are characteristic of developing countries that corruption helps to get around.

But to understand corruption, institutional analysis is not enough. A political and economic analysis is important too. Whether it be in Benin, Bolivia, Morocco, Pakistan or the Philippines – five countries examined in a study by the OECD Development Centre and the UN Development Programme – corruption is closely linked to the type of government involved.

The link between political and economic power can be direct. There is patrimonialism, as in Morocco, where access to political power ensures access to economic privileges. The link can be indirect too, as in the Philippines, where political power, such as a privileged position in a patronage-based system, can be bought and sold. In short, the process of allocating political and administrative posts – particularly those with powers of decision over the export of natural resources or import licences – is influenced by the gains that can be made from them. And the political foundations are cemented as these exchanges of privileges are reciprocated by political support or loyalty.

Feeding underdevelopment

Another feature common to the countries studied is their underdevelopment, which is conducive to corruption. In fact, underdevelopment encourages corruption. How is this? First of all, low wages in the civil service encourage petty corruption, and the imbalance between the supply of, and demand for, public services likewise creates opportunities for corruption. Also, individuals tend to invest in a career in the public service, given the shortage of opportunities in the private sector, thus increasing the likelihood of their involvement in corrupt practices. Another reason is that the low level of education found in underdeveloped countries maintains citizens in a state of ignorance of their rights, barring them from participating in political life.

Institutional analysis of corruption indicates where the remedies lie. Greater transparency, accountability and merit-based human resource management in public administration are principles which, if implemented, make it possible to curb corruption. Simplification of state intervention in economic activity also helps. A study of the customs administration in Senegal found, using econometric tests, that a reduction in import taxes, simplification of their structure, implementation of reforms reducing the discretionary powers of customs officials and computerisation of procedures helped to reduce the level of fraud by 85% between 1990 and 1995.

But identifying the direction that reforms should take is only part of the task. The main difficulty lies in implementing them. This requires a strategy that really is operational. Two kinds of obstacles are usually encountered. The first is economic. While underdevelopment does not inevitably generate corruption, underdeveloped countries do not have the same means as more advanced ones to escape it. It is difficult to replicate the strategy adopted in Hong Kong, for instance, which involved the creation of an investigative agency with a large staff and plentiful funds (see box). The fight against corruption must therefore be based on the development process itself.

The second kind of obstacle is political. Many politicians owe their careers and status to corruption and few of them, if any, will take a stand against it, either for fear of upsetting their own careers or the political status quo generally.

Civil society and the media can help by denouncing corruption and putting pressure on the government. But the real impediments to the fight against corruption are as much the interests of the politico-administrative apparatus as the fatalism and ignorance of the victims, maintained by a culture of fear nurtured by those who benefit from corruption. But before one can act, it is necessary to be informed. That is why research into the incidence of corruption and its effects is so important. Only on that basis can action by civil society and aid agencies be guided.

The private sector can also make an important contribution to the fight against corruption, by policing its own codes of conduct and sticking to high standards of governance. International and regional organisations can also help, as can bilateral aid agencies, via programmes to strengthen institutional capacity, and of course by ensuring the transparency of the projects they support.

One thing is sure: the problem of corruption in the developing countries cannot be solved simply by applying anti-corruption structures that work in OECD countries. The experience the latter countries have acquired in terms of legislation, public procurement codes and control procedures, for example, is valuable, but it is just a technical element in a much more complex process of change. A reduction in corruption depends on economic development. It is thus for each country concerned to draw up its own strategy, by which it can then lead to a virtuous circle of development and good governance.

Bibliography

ŹStasavage, David and Daubrée, “Determinants of Customs Fraud and Corruption: Evidence from Two African Countries”, Technical Paper No 138, OECD Development Centre, August 1998.

ŹHors, Irčne, Fighting Corruption in Developing Countries and Emerging Economies: the Role of the Private Sector, study by the OECD Development Centre, to be published.

©OECD Observer No 220, April 2000




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