Despite Tenacity of Corruption, Policy Interventions Have Made Significant Inroads

Despite Tenacity of Corruption, Policy Interventions Have Made Significant Inroads
Photo: Rally in support of Anna Hazare’s anti-corruption campaign, Dehli, India, Aug. 24, 2011 (photo by Flickr user India Kangaroo, licensed under the Creative Commons Attribution-NoDerivs 2.0 Generic license).
Corruption in the public sphere is typically defined as the use of public office for private gain, and in addition to undermining public faith in governmental legitimacy, it also carries a significant economic cost in terms of growth and development. Using data from 2001-2002, the World Bank Institute estimated that $1 trillion in bribes is paid every year and that addressing corruption would quadruple income per capita in the long term. Beginning in the 1990s, increased attention was paid to addressing corruption, with the lead primarily taken by governments, including the U.S., and international organizations, including the World Bank and Transparency International. Since then, several anti-corruption policy approaches have been implemented by multiple stakeholders over the past decades, with varying results. Until the mid-1990s, anti-corruption policies largely adopted a top-down approach promoting transparency and accountability in government and limiting government intervention in the economy. With the support of international financial institutions (IFIs), states established external government accountability mechanisms such as supreme audit institutions and anti-corruption units. Policies were implemented to enhance transparency in public expenditure management, and regulations were reduced and simplified. Supplementing these anti-corruption policies were civil service, customs and judiciary reforms. The top-down approach to addressing corruption met with limited success. A lack of political will, corrupt legal institutions and the capture of anti-corruption institutions by corrupt officials contributed to its ineffectiveness. A few exceptions stand out, however. Singapore’s Corrupt Practices Investigation Bureau and Hong Kong’s Independent Commission Against Corruption have been credited with significantly reducing corruption in those city-states. Today, Singapore and Hong Kong are perceived as among the least corrupt countries in the world. Beginning in the mid-1990s and gaining in popularity in the 2000s, the next wave of anti-corruption measures was characterized by a bottom-up approach employing tools such as social audits and report cards to empower and engage civil society in government accountability. A social audit entails nongovernmental or citizen stakeholder involvement in auditing public programs or projects, through a range of mechanisms, from allocating, tracking and monitoring public resource use and service delivery, to holding public officials accountable for malfeasance. Social audits have proliferated following their relative success in addressing corruption in welfare schemes in Andhra Pradesh, India. Countries such as Afghanistan, El Salvador and Indonesia have implemented social audits with varying effectiveness. Report cards generate public feedback on state agencies and, coupled with media exposure and a name-and-shame strategy, appear to have incentivized some public agencies in Bangalore, India, to become more efficient and responsive to the public. Report cards have been adopted in several other countries, including Bangladesh, Nepal and the Philippines, to solicit citizen feedback on public services and evaluate the extent of corruption. Another social accountability initiative is increased transparency of relevant information. Claudio Ferraz and Frederico Finan concluded in a 2008 paper that the public release of municipal expenditure audits via radio enhanced electoral accountability in Brazil. Voters punished politicians revealed to be more corrupt and rewarded politicians found to be less corrupt than initially perceived. Ritva Reinikka and Jakob Svensson found in a 2005 paper that dissemination of information on school entitlements via newspapers in Uganda led to a dramatic reduction in the diversion of education grant funds and a significant increase in entitlements reaching recipient schools. In recent years, “liberation technologies”—namely, the Internet and mobile technology—have risen in popularity as corruption-fighting tools. The Program on Liberation Technology at Stanford University is piloting a program in India to inform citizens via text message of entitlements such as pensions and local road projects. The Budget Tracking Tool provides online national budgetary data to assist Kenyans in monitoring funds allocated for development projects. National Election Watch provides financial, education and criminal background information on Indian politicians. Such technology interventions are a cost-efficient means to empower citizens with information they can use to hold public officials accountable, including through elections. Several websites have also emerged to mobilize citizen feedback on public service delivery. The Indian website solicits citizens’ experiences with corruption, including on how to avoid paying a bribe, and has spawned sister sites in Kenya, Azerbaijan, Morocco, Ukraine and Greece. Data garnered from such citizen feedback has aided NGOs and some state agencies in their fight against corruption. Technology interventions have also fostered collective awareness of the costs of corruption and enabled a civil society that is more active in fighting against it. While the tenacity of corruption can be disheartening, anti-corruption policy interventions can and have made significant inroads. More needs to be accomplished, particularly with top-down approaches that necessitate political will. This is an area where IFIs can and should commit to credible involvement. IFIs need to better utilize their leverage with governments to support political will where it exists and generate political will where it is lacking. This would imply greater engagement of IFIs with the state in the facilitation and oversight of top-down anti-corruption measures, and encouragement of civil society initiatives as oversight when the IFIs disengage. The bottom-up approach has met with relative success in addressing corruption in the “last mile.” Going forward, three key aspects are essential to ensuring maximum impact. First, incentives matter. In a randomized experiment by Benjamin Olken, Indonesian villagers were enlisted to monitor village heads’ handling of publicly funded road projects. Villagers were ineffective at holding village heads accountable for misappropriated funds allocated for road materials, but were successful at reducing malfeasance in the payment of wages to village workers. Villagers were motivated by their private interest—that is, wages—rather than the public good of a quality road. Therefore, to mobilize citizens against corruption, vested interests need to be targeted. Second, there should be transparent, accessible and credible mechanisms for reporting and holding corrupt officials accountable and for redressing citizen grievances. Third, there needs to be credible oversight of social accountability initiatives to prevent capture by corrupt officials. Combating corruption requires a multipronged strategy involving many stakeholders. IFIs, NGOs, concerned citizens, the media, private firms and governments all have a part to play in this global fight. Chonira Aturupane is a lecturer in the Ford Dorsey Master Program in international policy studies at Stanford University. She teaches courses in international finance, international trade and the economics of corruption. Prior to coming to Stanford in 2004, she was an economist at the International Monetary Fund in Washington, D.C. The views expressed in this article are the author’s alone. Photo: Rally in support of Anna Hazares anti-corruption campaign, Dehli, India, Aug. 24, 2011 (photo by Flickr user India Kangaroo, licensed under the Creative Commons Attribution-NoDerivs 2.0 Generic license).

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