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Is there a place for corruption?

Wednesday, 18 January 2017 10:34am

Image of Philip Nel 2016
The department of politics at the University of Otago turns 50 in 2017. This is the first of a monthly series of celebratory reflections in the Otago Daily Times on politics during the past 50 years. This month Professor Philip Nel asks, can corruption be beneficial?

We New Zealanders pride ourselves on being relatively corruption-free, and we often shake our heads in bewilderment when we hear about the huge levels of graft and bribery in other states.

We share the assumption that corruption is wasteful and retards development, and that inculcating good governance is the answer. Ever since the World Bank's rediscovery in the late 1990s of state effectiveness as a sine qua non for economic development, many international organisations have turned good governance into the prime development goal.

The OECD in 1997 adopted a Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and the UN General Assembly approved a UN Convention against Corruption in 2003.

The current moralistic condemnation of corruption contrasts starkly with academic studies of the 1960s, in which a more nuanced and historically sensitive understanding of corruption can be found.

Authors such as Samuel Huntington, James Scott, Colin Leys, David Bayley and Nataniel Leff will today remind us that they then already warned against getting the historical sequence wrong, treating all forms of corruption as if they were the same ''disease'', ignoring the positive in some forms of corruption, and being moralistic.

We live in an era in which we expect developing countries overnight to develop the modern institutions and democratic practices that took Europe and North America centuries to establish.

Effective institutions and norms against corruption emerged only late in these developed parts of the world. In early modern England, while state capacity was still underdeveloped, nepotism, royal favours and the granting of monopolies contributed to turning the weak emerging state into the modern powerful and centralised institution that we know today.

The era of US commercial expansion in the late 1800s and early 20th century was equally notorious for corruption, on all levels of governance. Even in the paragon of the modern rational bureaucracy, Germany, an early state builder such as Bismarck made extensive use of a slush fund (called ''the reptile fund'') to discredit his opponents and promote his hold on power.

The moral of these tales: historically, clean government is not a prerequisite for development, but emerges only late in the development trajectory. Successful late developers such as South Korea and China, for instance, are all but ''clean''.

The literature of the 1960s also pointed out that not all forms of corruption are the same. Graft, or looting of state resources, is clearly bad. Stationary bandits such as Mohammed Suharto, Ferdinand Marcos and Mobutu Sese Seko appropriated up to $US50 billion from the impoverished people of Indonesia, the Philippines and Zaire respectively, and set development back for decades.

In contrast, habitual bribe-paying and bribe-taking involving the day-to-day administration of regulations and service delivery and tax collection serve a variety of social functions.

While a culture of bribery often implies that it is the bribee (bribe taker) - the violator of duty - who demands and extracts the bribe, one should not lose sight of the agency and goals of the inducers/bribers. In Chinua Achebe's great novel on bribery, No Longer at Ease, it is the upright, English-educated official who is induced by bribe payers to break the rules.

In many societies where service delivery is poor and the rule of law largely absent, the bribe is often the only reliable way of gaining access to public goods such as healthcare, and avoiding harassment by public officials.

In economies with a large informal sector, paying a bribe is the least troublesome or sometimes the only means of securing the right to operate a business, and to secure the means of doing so reasonably successfully.

Corruption is used by entrepreneurs as a strategy to develop their commercial enterprises not only in rich societies, but also in poor ones. The only difference is that in the former, entrepreneurs have more choices.

Bribing officials and politicians is used by individuals and groups to gain influence over the actions of the bureaucracy, and it gives political access to the politically weak and allows them to invest, produce, barter and trade, under conditions of bureaucratic incompetence and/or policy failures.

The fact that gift-giving and ''showing your gratitude'' is deeply embedded in the moral economy of many cultures, and that the distinction between private gain and civic responsibility is of recent origin and weakly observed, contribute to the normalisation of behaviour that outsiders find perplexing and morally suspect.

Of course, corruption is always a second-best option, operating where property rights and market institutions are weak. But we should avoid using idealised benchmarks of economic efficiency against which to compare the presumed inefficiencies induced by corruption. Under certain circumstances, corruption - by getting things done - may compensate for official failings.

If we want to contribute to reducing corruption, a moralistic attitude is of little help. Rather, our focus should be on helping those societies to get things done working with the grain, and not against it. And we should remember our own histories.


Reproduced with permission from the Otago Daily Times. Read the original article here.

View Professor Philip Nel's staff profile