Corruption: A Deep-Rooted Challenge

Corruption represents a significant threat to the integrity of societies, damaging public trust and impeding the effectiveness of governmental institutions in meeting the needs of their citizens. Consider how a parent might offer a toy to encourage a child to eat; this basic act of using incentives to influence behavior, while harmless in this context, illustrates our fundamental understanding of how rewards may influence behavior. While these everyday examples may appear minor, they reveal a pattern of behavior that has persisted throughout human history and emerged in more serious ways across civilizations.

History

Corruption derives from the Latin term corruptus. The word is the past participle of corrumpere, which means "mar, bribe, and destroy." The Oxford Dictionary defines it as “dishonest or fraudulent conduct by those in power, typically involving bribery."

 

Corruption has been a chronic problem since the time of the Egyptians, and it is now prevalent in almost every country. It has existed throughout human history. The First Dynasty of ancient Egypt, which lasted from 3100 to 2700 BC, experienced issues of corruption within its judicial system.

 

The practice was also present in ancient China. In Chinese mythology, each household has a Kitchen God who monitors its members' actions. A week before Chinese New Year, the Kitchen God ascends to heaven to deliver his annual report to Heaven's Ruler, the Jade Emperor. This report determines whether the family members will be rewarded or punished. To ensure a favorable report, families often coat the Kitchen God's picture with sugar and honey before burning it. This tradition comes from Chinese mythology that the Kitchen God will ascend to heaven to meet the Jade Emperor.

Where are we with corruption?

While these historical examples demonstrate corruption's deep roots in human society, modern measures allow us to measure and analyze its prevalence in a more systematic manner. Analyzing the data reveals some troubling patterns and I believe we are doing worse now than we did in the past.

 

I took the 2012 (left) and 2023 (right) Corruption Perceptions Index (CPI) from the transparency website to demonstrate that corruption has only increased in the majority of countries over the last 11 years. A large number of countries' scores range from 20 to 50, indicating high and systemic corruption that is deeply embedded in a state's underlying historical, political and social structure.

 

According to World Bank data corruption costs the globe more than $2.6 trillion, or 5% of global GDP each year.

 

The UNODC estimates that the yearly cost associated with bribery ranges from USD 1.2 trillion to USD 1.5 trillion, which is roughly 2 percent of the global GDP. Other global institutional studies show similar patterns in most countries.

How corruption affects society.

Corruption has serious impacts on every part of society, ranging from lower-level government workers taking bribes to top officials embezzling huge sums of money. Let's look at some of the problems that corruption causes for countries. In the figure below, I tried to highlight most of the concerns associated with a country's high CPI.

For example:

• Corruption affects government revenue, limiting the government's capacity to spend in core areas. There is strong empirical evidence that the higher a country's level of corruption, the greater the proportion of its economic activity that goes underground, out of reach of tax authorities. It is increasingly evident that it is a complex problem that seriously disrupts progress in many ways.
  

• Research has indicated that corruption adversely affects foreign direct investment. In a 1995 analysis using corruption and institutional efficiency indices, IMF economist Paulo Mauro demonstrated that corruption reduces investment, resulting in economic growth.
  
• Results in the inefficient use of human resources: Business surveys indicate that in countries with higher levels of corruption, management spends more time making sure regulations are followed, avoiding fines, and handling the bribery issues that come with them. This takes away from their focus and resources that could be used for other important tasks.
  

• Unequal distribution of income and wealth: Corruption causes disparities, inequalities, and widens the rich-poor gap. It also distorts the tax system since the wealthy and influential can use their connections to ensure that the system favors them.

• Ripple effects: Corruption feeds corruption, which leads to other types of criminal activity. The formation of organized criminal groups that use their financial resources to infiltrate lawful firms, intimidate employees, and establish protection rackets and an environment of fear and uncertainty. It has far-reaching repercussions that extend beyond monetary losses. It undermines good governance, impedes economic sustainability, and increase social inequity, poverty, division, and fuel conflict and crisis.
  

• Distorted future: Long-term prospects are poor for countries with persistently high levels of corruption. The majority of the issues (highlighted above) make it difficult for a country to fund infrastructure, bring new innovations, develop skills for fresh graduates, reduce unemployment, or provide new companies with ease of doing business. The following graph shows that the ease of doing business is directly related to the CPI. Countries with high CPI, such as Denmark, are a good place to do business, whereas Algeria, with a CPI of 35, ranks 157th.

2019 data taken from Transparency and the UN

Methods for combating corruption with both efficacy and efficiency

• Legal framework for corruption: It's true that laws can limit our freedom, but they are crucial when people abuse their freedom and cause harm to others. Every country should have laws to fight against corruption because it's a disease that will not go away; it can only be diminished. Many countries have laws in place to stop illegal activities, so let's check out a few examples.
  
• The Bank Secrecy Act of 1970 (BSA), also known as the Currency and Foreign Transactions Reporting Act, is the United States law that requires financial institutions to help federal authorities identify and prevent money laundering.
  

• The Foreign Corrupt Practices Act of 1977 (FCPA) is a United States federal law that forbids US citizens and businesses from bribing foreign government officials to promote their economic interests. Crimes covered by the law include bribery, being bribed, bribing foreign public officials, and a commercial organization's inability to stop bribery on its behalf.
  

• The Sapin Act of 1993 served as the basis for the new French legislative framework known as the Sapin II Law, which was created to combat corruption. Sapin II is guided by three principles: modernize the economy, promote transparency, and continue to build up the anti-corruption drive.

• The Prevention of Corruption Act, 1988 is a law passed by the Indian Parliament that aims to fight corruption in Indian government bodies and public sector companies.
  

• Robust implementation of the anti-corruption laws: However, even the most comprehensive laws are ineffective without proper enforcement, adequate resources, and people support, which is why many countries fail to implement policies. The proper implementation plan may include:
• Direction from leadership is a crucial first step; without the leaders' proper approval and involvement, the plan may not succeed. Showing a visible and active commitment is vital, as is communicating clearly with those taking action.
  

• Successful implementation depends on having the right policies, procedures, guidelines, and awareness training.
  

• Empowering anti-corruption regulators: Ensuring that regulators have the appropriate authority and accountability is as important as implementing policies. To successfully enforce and maintain laws, regulators must be able to act fast and with little or no involvement; investigating corruption charges against both government officials and politicians should be part of their responsibilities.
  

• Create transparency and openness in government: Maximum openness, transparency, and responsiveness in public contracting is the approach to engage the general public. Open-government initiatives encourage and engage citizens, resulting in positive feedback loop, who may then contribute to promote smart and responsive policy making. Transparency enables elected officials to perform their duties more effectively, establishes an important public record of how they and other officials worked to address public needs, and boosts public trust in government.
  

• International collaboration: While domestic transparency is crucial, corruption in today's globalized world requires a broader approach because it is no longer limited to a particular jurisdiction. As a result, collaboration between countries and global institutions is more important than ever. A classic example is the Egmont Group, which aims to prevent money laundering, terrorism funding, and related crimes by enhancing information sharing among its members.
  

• Introduce integrity and monitoring mechanisms: The United Nations Convention Against Corruption demands countries to improve integrity and prevent opportunities for illicit activities among government officials. Developing a code of conduct/ethics, a whistleblower system for all stakeholders, and reporting channels for reporting abuses/violations would improve the effectiveness of the compliance program.

Singapore story

The question arises whether the solutions to corruption exist solely in literature or can we find real-world approaches to address this issue? A closer look at Singapore's successful anti-corruption efforts may provide some valuable insights and encourage other countries to do the same.

Corruption was a severe problem in Singapore during the British colonial period, and the Singapore Anti-Corruption Bureau (ACB) was ineffective in tackling it for three reasons: a small police force, insufficient capacity to act, and the prevalence of wrongdoing within the ACB.

 

The real fight began in 1959, when Lee Kuan Yew, Singapore's founding Prime Minister, won the election with the People's Action Party (PAP). The first thing he did was reject all gifts and offerings from well-wishers, setting the tone among party members.

 

The party established transparent institutions and zero-tolerance measures for corruption, resulting in rapid development and attracting foreign investors. They demonstrated how good governance and anti-corruption measures may lead to economic prosperity.

• In June 1960, the "Prevention of Corruption Act (PCA)" (replacing the British Prevention of Corruption Ordinance (POCO)) and the Corruption, Drug Trafficking, and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) was enacted to ensure "a more effective prevention of corruption by addressing various flaws and defects."

• Established new implementing agency, Corrupt Practices Investigation Bureau (CPIB) to enact PCA. Government empowered the CPIB investigators, criminalized corruption, and established punishments and penalties for violations. Increased the budget of the CPIB each year and it grew by 16 times, from a small team of five officers in 1952 to 81 officers in 2005.

• Presumed Corruption in the Public Sector, the fundamental concern was that officials were corrupt, and a new law empowered the CPIB to investigate and prosecute government or public bodies for illicit activities; the prosecution only needed to demonstrate that the individual received or paid a bribe.

• Setting high standards, guided by a code of conduct and leadership.
  

Prime Minister Lee Hsien Loong stated, "Corruption is a scourge that cannot be tolerated. It is a cancer in the society." Singapore's accomplishments in reducing corruption can be attributed to its twofold strategy of reducing both the opportunities and incentives for illicit activities.

In the 2023 Corruption Perceptions Index released by Transparency International, Singapore achieved a score of 83 out of 100. From 1995 to 2023, the average score for Singapore was 88.90, with its highest score being 94 in 2003 and its lowest being 83 in 2022.

Can India fight corruption?

While Singapore's success shows that corruption may be effectively managed with appropriate measures, not many countries have had equal success. India, although being one of Asia's largest countries, provides a contrasting case study in the ongoing fight against corruption.

 

In 2023 CPI, India ranks 93 out of 183 with a score of 39. The graph below shows that India's CPI score has not improved; in fact, it has gone down. In 1995, it was 27.8, and after 28 years, it is just 39. The current situation appears worrying for India, and I believe that a fast response is required to address the issue.

I've highlighted some issues that contribute to corruption.

• Bureaucracy:

• Bureaucracy/bureaucrats are India's primary issue; they are responsible for major scandals, scams, and fraud. If leaders are corrupt, they will encourage others to do the same. Other  consequences includes a reduction in the legitimacy of the state and the moral standing of the bureaucracy in the eyes of the public.
  

• According to transparency, in 2023, 46% of people used personal connections for services including police, courts, utilities, and hospitals over the last 12 months. They paid facilitation payment or bribe because those in positions of power requested them to.
  

• In 2001, economists Caroline Van Rijckeghem and Beatrice Weder from the IMF discovered that in developing countries, lower salaries in the public sector tend to lead to more corruption, while higher wages can help reduce it. Some bribes are given as extra payments to officials, and they can take many forms. One common type is "speed money," which is frequently seen around the globe and is often used to speed up a process or skip ahead in line.

 

 

 

Transparency International's Global Corruption Barometer (GCB) Asia 2020 findings revealed corruption at all levels of the Indian administration. It is not surprising at all that the highest degree of corruption is found among local government officers, government officials, police, and members of Parliament. We are not only talking about bribery; corrupt activities in India can take many forms, including petty theft, nepotism, patronage, etc.

 

The World Bank's Worldwide Governance (WGI) Indicators (2020) indicate that people's trust in officials is declining, and accountability has taken a hit over the years.

In countries where corruption is more prevalent, public officials are often not held accountable and sanctioned for breaking the rules or neglecting their duties. The low likelihood of facing sanctions can encourage and incentivize officials to engage in corruption. And it all makes sense when you look at the Indian bureaucracy: there is no accountability, no focused department to oversee public officials, the investigation process is slow, and there is no dedicated disciplinary process for corrupt officials.

 

 

• Education: India has a good and open education system, but it fails to cater to the masses. People with a formal education have more sensibility, which leads to other elements that support honesty, such as generalized trust and a sense of belonging to the country as a whole rather than to a particular group. Higher levels of education lead to increased prosperity and equality, both of which are associated with lower levels of corruption.

• Lack of openness and sluggishness in the public sector: 
• One of the reasons India is experiencing widespread corruption in the public sector is a lack of transparency and openness in government.
  

• Example of lack of technology and sluggishness, the government's employee provident fund (EPF) website is one of the worst platforms; it rarely works and, when it does, your requests take forever to be reviewed by officials or are denied for reasons that are not in your control. Rejection of PF claims has increased from 13% to 28% in five years, with no clear explanation, and people are raising concerns and seeking full public disclosure of the process. Such things cause discomfort, and individuals seek alternatives, which sometimes involve unethical practices.

• Ethical values: Lack of honesty, immoral beliefs, and turning a blind eye are all common. A prime example is land pollution; many people I see on a regular basis do not care where they throw their waste; after they are finished eating, they simply throw it anywhere. With such an attitude, it's difficult to motivate and educate people about corruption. The ability to resist corrupt practices begins within, with the willingness to do the right thing, even if it feels alienating. Maintaining personal integrity and refusing to participate in unethical agreements can set a strong example while disrupting corrupt systems. Before we can discuss larger concerns, India needs to learn about ethical values.

Over the years, I've noticed that many politicians seem ignorant or refuse to acknowledge the extent of corruption. The first step in battling is to recognize and acknowledge the issue. I believe India is a long way from tackling corruption since many individuals are either uneducated or choose to ignore the issue.

Conclusion

Gandhi utilized the phrase: "The world has enough for everyone's needs, but not enough for everyone's greed." This profound observation highlights the source of many social evils, including corruption. While corruption may appear to be firmly rooted in human behavior, it is not an unavoidable outcome. By strengthening legal frameworks, promoting transparency, and promoting active citizenship, we can actively fight corruption and build a more open and fair society. While eradicating corruption completely may be a long-term goal, significant progress can be made through collaborative efforts and a commitment to ethical conduct at all levels.