How to Stop Corruption?
Corruption is one of the most disruptive problems faced by the world and it needs to stop without further damage to the humanity so as to have a better future for the coming generation.
Corruption is a disease, a cancer that eats into the cultural, political and economic fabric of society, and destroys the functioning of vital organs. In the words of Transparency International, “Corruption is one of the greatest challenges of the contemporary world. It undermines good government, fundamentally distorts public policy, leads to the misallocation of resources, harms the private sector and private sector development and particularly hurts the poor.”
Corruption is found almost everywhere, but it is stubbornly entrenched in the poor countries of Sub-Saharan Africa, it is widespread in Latin America, it is deep rooted in many of the newly industrialised countries, and it is reaching alarming proportions in several of the post- Communist countries. Corruption has been the subject of a substantial amount of theorising and empirical research over the last 30 years, and this has produced a bewildering array of alternative explanations, typologies and remedies. However, as an extensively applied notion in both politics and social sciences, corruption is being used rather haphazardly. Corruption is understood as everything from the paying of bribes to civil servants in return for some favour and the theft of public purses, to a wide range of dubious economic and political practices in which politicians and bureaucrats enrich themselves and any abusive use of public power to a personal end. Besides, corruption is in itself a many-faceted phenomenon and the concept of corruption contains too many connotations to be analytically functional without a closer definition. The forms of corruption are diverse in terms of who are the actors, initiators and profiteers, how it is done, and to what extent it is practised. Also the causes and the consequences of corruption are complex and diverse, and have been sought in both individual ethics and civic cultures, in history and tradition, in the economic system, in the institutional arrangements, and in the political system.
India is one of the countries which are suffering due to the existence of Corruption. Impact of corruption is very hard on public life. This is more of awkward and defaming condition than being problematic. But it appears that the corruption is ever rising and unstoppable. Further the people involved in corruption seem to be hiding themselves by blaming others. Even they are proud of themselves as they made more money in short time.
Politicians and black money go hand in hand. In north Indian states likes Uttar Pradesh, Madhya Pradesh, Rajasthan and Bihar, MLAs move around in a fleet of SUVs, with a host of lackeys in tow. Each minister is a parallel economy unto himself, his cronies entirely dependent on him for survival and more.
Who finances their politics? Most government contracts – for roads, bridges, liquor and so on – are cornered by cartels controlled by the legislators themselves. These contracts generate cash in abundance to keep the political cycle of an average legislator lubricated. Many ministers and MLAs are strongmen – extortion, protection money, supari and other kinds of crime proceeds add to their well of black money.
A large part of the black money thus generated goes to party funds. The deeper the war chest of a party, the more power and influence it has and greater are its chances of winning an election.
In addition, parties are funded by contractors and corporations. Bigger the party, bigger the corporations financing it. Departments like public works, urban development and irrigation make major contribution to party funds. Contracts are awarded in government departments, but decided in party headquarters.
To worsen the condition further, those involved in corruption are able to get better promotions and opportunities. Corruption is a symptom of deeper-seated factors. The causes are complex, and the means to control it are not fully understood. Corruption thrives when economic policies are poorly designed, education levels are low, civil society is underdeveloped, and the accountability of public institutions is weak—conditions that exist in many settings but are particularly prevalent in some developing countries. Corruption often has a political dimension and reflects the way power is exercised in a country. And it is constantly changing its form in response to changes in the global economy and technical innovation.
Then President Nelson Mandela emphasised this in his opening address to Parliament in 1999:
“Our hope for the future depends on our resolution as a nation in dealing with the scourge of Corruption. Success will require an acceptance that, in many respects, we are a sick society. It is perfectly correct to assert that all this was spawned by apartheid. No amount of self-induced Amnesia will change the reality of history. But it is also a reality of the present that among the new cadres in various levels of government you will find individuals who are as corrupt as – if not more than – those they found in government. When a leader in a provincial legislation siphons off resources meant to fund service by legislators to the people; when employees of a government institution set up to help empower those who were excluded by apartheid defraud it for their own enrichment, then we must admit that we have a sick society. This problem manifests itself in all areas of life”.
If we have to reduce corruption from society then we have to:
1. Stamp out corruption at all levels in society.
2. Develop a culture of zero tolerance of corruption.
3. Visibly support and subscribe to the national integrity strategy in order to combat corruption in all sectors of civil society and Government.
4. Educate all persons to work together towards a higher moral purpose. Corruption is a serious problem and social ethics has a significant impact on all societies. It is a phenomenon which is globally widespread and can be generally defined as the use of public power to benefit a private interest. It is a complex and multifaceted concept with several and heavy complications for the economy and environmental sustainability. Despite the existing theorizations and descriptions of the political economy concerning environment/society interactions and widespread evidence of bribery and illegal exchange in natural resources management, nowadays, fighting corruption goes on widely ineffective, with serious consequences for environmental quality.
The main focus of this study is the different forms of corruption and its consequences and costs to the
Environment, especially in resource-rich developing countries. It explores a few practical examples taken from these countries due to the linkages between corruption and weak environmental governance. The institutional set-up of the country such as the characteristics of the political and judicial system determines the extent of corruption. In such a context, transparency has been described as a cure for corruption. Good governance including a broad commitment to the rule of law is crucial for environmental sustainability and is a way to put a stop to the devastating impact corruption has had on the environment. The sustained reduction of systemic corruption requires committed leadership and support from citizens and civil society. Corruption is a universal problem. It is present in all societies, political systems and cultures. It is a cross-cultural reality and it is not
only detected in democratic systems which are by definition more open and therefore more exposed to the watchful eyes of pluralistic, interventionist media.
It is also a centuries-old phenomenon, and allusions to this type of improper behaviour can already be found in several holy texts and in the codes of ancient civilizations. However, it was not until the Modern state was established that corruption took the proportions we know today.
Corruption has real political, economic and social costs. Its costs are often difficult to quantify, since corruption by its nature is difficult to measure. Yet corruption leaves people in worse condition and impedes development all over the world.
First, it is an obstacle to democracy and the rule of law.
Second, it distorts the allocation of resources, reduces the productivity of public expenditures, lowers investment, and slows down economic growth. Moreover, it constitutes a severe obstacle to entrepreneurship and innovation.
Third, perhaps most insidiously, corruption leads to frustration and apathy among the citizens of corrupt states.
Corruption is a complex phenomenon. Its root lie deep in bureaucratic and political institutions and its effect on development varies with country conditions. But while costs may vary and systemic corruption may coexist is bad for development. It leads governments to intervene where they need not, and it undermines their ability to enact and implement policies in areas in which government intervention is clearly needed—whether environmental regulation, health and safety regulation, social safety nets, macroeconomic stabilization, or contract enforcement.
The term corruption covers a broad range of human actions. To understand its effect on an economy or a political system, it helps to unbundle the term by identifying specific types of activities or transactions that might fall within it. We settled on a straightforward definition—the abuse of public office for private gain. Public office is abused for private gain when an official accepts, solicits, or extorts a bribe. It is also abused when private agents actively offer bribes to circumvent public policies and processes for competitive advantage and profit. Public office can also be abused for personal benefit even if no bribery occurs through patronage and nepotism, the theft of state assets, or the diversion of state revenues. This definition is both simple and sufficiently broad to cover most of the corruption that the we encounters, and it is widely used in the literature.
Bribery. Bribes are one of the main tools of corruption. They can be used by private parties to “buy” many things provided by central or local governments, or officials may seek bribes in supplying those things.
• Government contracts. Bribes can influence the government’s choice of firms to supply goods, services, and works, as well as the terms of their contracts. Firms may bribe to win a contract or to ensure that contractual breaches are tolerated.
• Government benefits. Bribes can influence the allocation of government benefits, whether monetary benefits (such as subsidies to enterprises or individuals or access to pensions or unemployment insurance) or in-kind benefits (such as access to certain schools, medical care, or stakes in enterprises being privatized).
• Lower taxes. Bribes can be used to reduce the amount of taxes or other fees collected by the government from private parties. Such bribes may be proposed by the tax collector or the taxpayer. In many countries the tax bill is negotiable.
• Licenses. Bribes may be demanded or offered for the issuance of a license that conveys an exclusive right, such as a land development concession or the exploitation of a natural resource. Sometimes politicians and bureaucrats deliberately put in place policies that create control rights which they profit from by selling.
• Time. Bribes may be offered to speed up the government’s granting of permission to carry out legal activities, such as company registration or construction permits. Bribes can also be extorted by the threat of inaction or delay.
• Legal outcomes. Bribes can change the outcome of the legal process as it applies to private parties, by inducing the government either to ignore illegal activities (such as drug dealing or pollution) or to favour one party over another in court cases or other legal proceedings.
The government benefits purchased with bribes vary by type and size. Contracts and other benefits can be enormous (grand or wholesale corruption) or very small (petty or retail corruption), and the impact of misinterpretation of laws can be dramatic or minor. Grand corruption is often associated with international business transactions and usually involves politicians as well as bureaucrats. The bribery transaction may take place entirely outside the country. Petty corruption may be pervasive throughout the public sector if firms and individuals regularly experience it when they seek a license or a service from government. The bribes may be retained by individual recipients or pooled in an elaborate sharing arrangement. The sums involved in grand corruption may make newspaper headlines around the world, but the aggregate costs of petty corruption, in terms of both money and economic distortions, may be as great if not greater.
Theft. Theft of state assets by officials charged with their stewardship is also corruption. An extreme form is the large-scale “spontaneous” privatization of state assets by enterprise managers and other officials in some transition economies. At the other end of the scale is petty theft of items such as office equipment and stationery, vehicles, and fuel. The perpetrators of petty theft are usually middle- and lower-level officials, compensating, in some cases, for inadequate salaries. Asset control systems are typically weak or non-existent, as is the institutional capacity to identify and punish wrongdoers. Theft of government financial resources is another form of corruption. Officials may pocket tax revenues or fees (often with the collusion of the payer, in effect combining theft with bribery), steal cash from treasuries, extend advances to themselves that are never repaid, or draw pay for fictitious “ghost” workers, a pattern well documented in the reports of audit authorities. In such cases financial control systems typically have broken down or are neglected by managers.
Political and bureaucratic corruption. Corruption within government can take place at both the political and the bureaucratic levels. The first may be independent of the second, or there may be collusion. At one level, controlling political corruption involves election laws, campaign finance regulations, and conflict of interest rules for parliamentarians. At another level corruption may be intrinsic to the way power is exercised and may be impossible to reduce through law-making alone. In the extreme case state institutions may be infiltrated by criminal elements and turned into instruments of individual enrichment.
Isolated and systemic corruption. Corruption in a society can be rare or widespread. If it is rare, consisting of a few individual acts, it is straightforward (though seldom easy) to detect and punish. In such cases noncorrupt behaviour is the norm, and institutions in both the public and private sectors support integrity in public life. Such institutions, both formal and informal, are sufficiently strong to return the system to a noncorrupt equilibrium. In contrast, corruption is systemic (pervasive or entrenched) where bribery, on a large or small scale, is routine in dealings between the public sector and firms or individuals. Where systemic corruption exists, formal and informal rules are at odds with one another; bribery may be illegal but is understood by everyone to be routine in transactions with the government. Another kind of equilibrium prevails, a systemic corruption “trap” in which the incentives are strong for firms, individuals, and officials to comply with and not fight the system. And there may be different degrees of coordination between those taking bribes, ranging from uncontrolled extortion by multiple officials to highly organized bribe collection and distribution systems. AntiBribery laws notwithstanding, there are many countries in which bribery characterizes the rules of the game in private-public interactions. Systemic corruption may occur uniformly across the public sector, or it may be confined to certain agencies—such as customs or tax authorities, public works or other ministries, or particular levels of government.
Corruption in the private sector. Fraud and bribery can and do take place in the private sector, often with costly results. Unregulated financial systems permeated with fraud can undermine savings and deter foreign investment. They also make a country vulnerable to financial crises and macroeconomic instability. Entire banks or savings and loan institutions may be taken over by criminals for the purpose of wholesale fraud. Popular support for privatization or the deepening of financial markets can be eroded if poor regulation leads to small shareholders or savers withdrawing when confronted by insider dealings and the enrichment of managers. And a strong corporate focus on profitability may not prevent individual employees soliciting bribes from suppliers. Furthermore, when corruption is systemic in the public sector, firms that do business with government agencies can seldom escape participating in bribery.
While noting the existence of fraud and corruption in the private sector and the importance of controlling it, this report is concerned with corruption in the public sector. Public sector corruption is arguably a more serious problem in developing countries, and controlling it may be a prerequisite for controlling private sector corruption. Still, Bank activities can also promote the control of bribery and fraud in the private sector by helping countries strengthen the legal framework to support a market economy and by encouraging the growth of professional bodies that set standards in areas like accounting and auditing. In the long run, controlling corruption in the private sector may require improvements in business culture and ethics.
People also have developed an opinion that it is the only way to get their work done. If not, the work will be pending for long or even might not be done. Corruption—an important problem imposing political, economic, and environmental costs to societies around the world. Corruption is a phenomenon involving many different aspects, and it is therefore hard to give a precise and comprehensive definition. However, at the core of most definitions of corruption is the idea that a corrupt act implies the abuse of entrusted power for private gain. Classic examples Include bribery, clientelism, and embezzlement. Other, often more subtle and sometimes even legal examples of corruption includes lobbying and patronage. While long-run data on corruption is very limited, historical examples suggest that corruption has been a persistent feature of human societies over time and space. Two such examples are the sale of parliamentary seats in ‘rotten boroughs’ in England before the Reform Act of 1832, and ‘machine politics’ in the US at the turn of the 19th century (Aidt 2003).
The unethical and often illegal nature of corruption makes measurement particularly complicated. Corruption data usually comes from either direct observation (e.g. law enforcement records and audit reports), or perception surveys (e.g. public opinion surveys, or expert assessments). In this entry we discuss data from both sources, and discuss their underlying limitations. As we show, although precise corruption measurement is difficult, there is a clear correlation between perception and behaviour; so available corruption data does provide valuable information that, when interpreted carefully, can both tell us something important about our world as well as contribute to the development of effective policies.
For example, the data from perception surveys suggests that corruption correlates with human development, and a number of studies exploiting rich data from law enforcement records have shown that education is an important element explaining this relationship. Specifically, the data provides support for the idea that voters with more education tend to be more willing and able to monitor public employees and to take action when these employees violate the law.
Corruption is sometimes hard to tackle precisely because it is common, so people perceive it to be a natural economic transaction: it is easier to act corruptly if there are many other individuals who think it is fine to be corrupt. This is the rationale behind 'big-push' policies that aim to shift norms and perceptions.
For those without money and connections, paying even small bribes to access basic public services such as public health or police can have important consequences. In fact, petty corruption in the form of bribes often acts as a regressive tax, since the burden typically falls disproportionately on the poor. Corruption is not something that only affects low income countries—and in fact, many high income countries have become increasingly aware of this in recent years.
There are many factors that simultaneously drive corruption and development. Education is an important case in point. A strong positive relationship: countries where people are more educated tend to have better scores in the Corruption Perception Index.
One of the most widely accepted mechanisms of controlling corruption is to ensure that those entrusted with power are held responsible for reporting their activities. This is the idea behind so-called 'accountability' measures against corruption. As we can see, people are less likely to pay bribes in countries where there are stronger institutions to support accountability.
A common policy prescription to fight corruption is to increase monitoring and punishments. The logic supporting such policies is straightforward: better monitoring and harsher punishments increase the expected cost of acting corruptly, so people rationally choose not to break the rules.
To test the extent to which monitoring and punishments effectively reduce corruption, economists often rely on 'policy experiments', where they administer these policies to 'treatment groups'. Olken (2007) follows this approach, increasing the probability of central government audits from 4 percent to 100 percent (the 'policy treatment'), in the context of Indonesian village road projects.
Olken (2007) compares the outcomes for villages that received this intervention with those that did not, and finds that audits significantly reduced missing expenditures, as measured by discrepancies between official project costs and an independent engineers’ estimates. The following visualization summarizes these results. The height of the bars shows the percent of expenditures that engineers found to be missing.
As we can see, missing expenditures were much lower in villages where audits were certain.
Olken (2007) provides further evidence of the extent to which officials in charge of road projects responded to private incentives: he finds that (i) audits were most effective when officials faced elections soon, and (ii) village elites shifted to nepotism (the practice of hiring family members), which is a form of corruption that was harder for audits to detect.
Corruption affects us all
Corruption affects us all. It threatens sustainable economic development, ethical values and justice; it destabilises our society and endangers the rule of law. It undermines the institutions and values of our democracy. But because public policies and public resources are largely beneficial to poor people, it is they who suffer the harmful effects of corruption most grievously.
To be dependent on the government for housing, healthcare, education, security and welfare, makes the poor most vulnerable to corruption since it stalls service delivery. Delays in infrastructure development, poor building quality and layers of additional costs are all consequences of corruption.
Many acts of corruption deprive our citizens of their constitutional and their human rights.
Corruption and international perceptions of corruption in South Africa has been damaging to the country’s reputation and has created obstacles to local and foreign direct investment, flows to the stock market, global competitiveness, economic growth and has ultimately distorted the development and upliftment of our people.
Public money is for government services and projects. Taxes collected, bonds issued, income from government investments and other means of financing government expenditure are meant for social grants, education, hospitals, roads, and the supply of power and water and to ensure the personal security of our citizens.
Corruption and bad management practices eat into the nation’s wealth, channelling money away from such projects and the very people most dependent on government for support.
Countless studies around the world show how corruption can interrupt investment, restrict trade, reduce economic growth and distort the facts and figures associated with government expenditure. But the most alarming studies are the ones directly linking corruption in certain countries to increasing levels of poverty and income inequality.
Because corruption creates fiscal distortions and redirects money allocated to income grants, eligibility for housing or pensions and weakens service delivery, it is usually the poor who suffer most. Income inequality has increased in most countries experiencing high levels of corruption.
The need for good governance
Adherence to good governance creates an environment where corruption struggles to flourish. Failure to adhere to the practices of good governance means stakeholders increasingly demand accountability. Mass action and strikes are organised in protest as citizens begin to lose faith in the ability or willingness of their elected officials. Political instability increases. Investment declines. The sale of shares by investors decreases the value and rating of companies. Their regulators can deny them licences, a stock exchange listing or the ability to sell products and services. Other organisations refuse to do business with them. And donors or economic organisations grant fewer loans or aid to nations whose governance is murky.
Key principles of good governance include:
Honesty – Organisations are the sum of their parts. Employees and managers who operate in good faith, with integrity and no conflicts of interest, will underpin the governance cornerstone of honesty and elicit trust from stakeholders.
Transparency – Decisions made, action taken and how it is reported to stakeholders must be communicated clearly and made easily available for those affected by the organisation.
Responsiveness – Listening to stakeholders, taking action or reporting transparently should be done within a reasonable time of a request, complaint or concern.
Management independent of governing bodies – There must be a separation of powers and chain of accountability. Friends and family members, or suspected conflicts of interests cannot overlap between layers of management and directors, boards or senior politicians. Independence ensures better judgement, assessment of risk and optimum performance.
Rule of law – Institutions must comply with the laws, codes, guidelines and regulations of the nations in which they operate.
Effectiveness and efficiency – Good governance is also delivering to mandates, meeting the needs of stakeholders, curtailing expenditure, streamlining decision-making and action, and making the best use of available resources.
Fairness – Good governance entrenches the principle of fairness, and treating stakeholders equally.
Just – Justice and governance concerns the moral responsibility and integrity of individuals within an organisation and the behaviour of the organisation itself.
Accountability – Ensuring that public and private institutions, corporations and individuals entrusted with public resources and civil society are held to account, means they are answerable to their stakeholders.
Life is full of ripples; our actions affect each other, whether for good or ill. When one person acts selfishly, there is always a ripple effect. It gets paid forward. The ripple effect of government corruption can be far reaching. A government officer stealing millions of dollars affects countless individuals, budgets, programs, and more. Corruption’s far-reaching consequences are significant. For decades, it has caused severe poverty, with millions of citizens fleeing the nations to pursue the hope of a better tomorrow in other countries.
Nine Reasons why Corruption is a Destroyer of Human Prosperity
We noted that the presence of dysfunctional and onerous regulations and poorly formulated policies, often created incentives for individuals and businesses to short-circuit them through the paying of bribes. We now turn to the consequences of corruption, to better understand why it is a destroyer of human prosperity.
First, corruption undermines government revenue and, therefore, limits the ability of the government to invest in productivity-enhancing areas. Where corruption is endemic, individuals will view paying taxes as a questionable business proposition. There is a delicate tension between the government in its role as tax collector and the business community and individuals as tax payers. The system works reasonably well when those who pay taxes feel that there is a good chance that they will see a future payoff, such as improvements in the country’s infrastructure, better schools and a better-trained and healthier workforce. Corruption sabotages this implicit contract. When corruption is allowed to flourish taxpayers will feel justified in finding creative ways to avoid paying taxes or, worse, become bribers themselves.
To the extent that corruption undermines revenue, it adversely affects government efforts to reduce poverty. Money that leaks out of the budget because of corruption will not be available to lighten the burden of the poor. Of course, corruption also undermines the case of those who argue that foreign aid can be an important element of the fight against global poverty—why should taxpayers in the richer countries be asked to support the lavish lifestyles of the kleptocrats in corrupt states?
Second, corruption distorts the decision-making connected with public investment projects (Tanzi and Davoodi, 1997). Large capital projects provide tempting opportunities for corruption. Governments will often undertake projects of a larger scope or complexity than warranted by the needs of the country. Public investment will thus be higher—the world is littered with the skeletons of white elephants, often built with external credits, and representing a heavy burden on meagre budgets. In the context of scarce resources, governments will find it necessary to cut spending elsewhere, sometimes in socially vital areas, or in operations and maintenance. Tanzi (1998) plausibly argues that corruption will also reduce expenditure on health and education because these are areas where it may be more difficult to collect bribes, though some have argued that provider absenteeism, a serious problem in the educational and health sectors of many countries, is itself a form of “quiet/silent corruption.”
Third, there is solid empirical evidence that the higher the level of corruption in a country, the larger the share of its economic activity that will go underground, beyond the reach of the tax authorities. Not surprisingly, studies have shown that corruption also undermines foreign direct investment since it acts in ways that are indistinguishable from a tax; other things being equal, investors will always prefer to establish themselves in less corrupt countries. Wei (2000) reviewed FDI data from 14 source countries to 45 host countries, and concluded that: “an increase in the corruption level from that of Singapore to that of Mexico is equivalent to raising the tax rate by 21-24 percentage points.”
Fourth, corruption discourages private-sector development and innovation and encourages inefficiency. Budding entrepreneurs with bright ideas will be intimidated by the bureaucratic obstacles, financial costs and psychological burdens of starting new business ventures and will either opt for taking their ideas to some other less corrupt country or, more likely, desist altogether. In either case, economic growth is adversely affected. The high incidence of corruption will mean an additional financial burden on businesses, undermining their international competitiveness. Unlike a tax, which is known and predictable and can be built into the cost structure of the enterprise in an orderly fashion, bribes are unpredictable and will complicate cost control, reduce profits and undermine the efficiency of those who must pay them to stay in business. Mauro (1995) used some indices of corruption and institutional efficiency to show that corruption lowers investment and, hence, economic growth.
Fifth, corruption contributes to a misallocation of human resources. To sustain a system of corruption, officials and those who pay them will have to invest time and effort in the development of certain skills, nurture certain relationships, and build up a range of supporting institutions and opaque systems, such as off-the-books transactions, secret bank accounts, and the like. Surveys have shown that the greater the incidence of corruption in the country, the greater the share of time that management has to allocate to dealing with ensuring compliance with regulations, avoiding penalties, and dealing with the bribery system that underpins them, activities that draw attention and resources away from production, strategic planning, and so on.
Sixth, corruption has disturbing distributional implications. Empirical work shows that corruption actually contributes to worsening income distribution. Gupta, Davoodi and Alonso-Terme (1998) have shown that corruption, by lowering economic growth, perceptibly pushes up income inequality. It also distorts the tax system because the wealthy and powerful are able to use their connections to make sure that the tax system works in their favour. It leads to inefficient targeting of social programs, many of which will acquire regressive features, with benefits disproportionately allocated to the higher income brackets; e.g., gasoline subsidies to the car-owning middle classes in India.
Seventh, corruption creates uncertainty. There are no enforceable property rights emanating from a transaction involving bribery. The firm that obtains a concession from a bureaucrat as a result of bribery cannot know with certainty how long the benefit will last. The terms of the “contract” may have to be constantly renegotiated to extend the life of the benefit or to prevent its collapse. Indeed, the briber, having flouted the law, may fall prey to extortion from which it may prove difficult to extricate himself. In an uncertain environment with insecure property rights, the firm will be less willing to invest and to plan for the longer-term. A short-term focus to maximize short-term profits will be the optimal strategy, even if this leads to deforestation, say, or the rapid exhaustion of non-renewable resources.
This uncertainty is partly responsible for a perversion in the sorts of incentives that prompt individuals to want to seek public office. Where corruption is rife, politicians will want to remain in office as long as possible, not because they are even remotely serving the public good, but merely because they will not want to yield to others the pecuniary benefits of high office. Where long stays in office are no longer an option, then the new government will want to steal as much as possible as quickly as possible, given a relatively short window of opportunity.
Eighth, because corruption is a betrayal of trust, it diminishes the legitimacy of the state and moral stature of the bureaucracy in the eyes of the population. While efforts will be made to shroud such corrupt transactions in secrecy, particularly when the opportunities for bribery are linked to some government-inspired initiative, the relevant details will leak out and will tarnish the reputation of the government, thereby damaging its credibility and limiting its ability to become a constructive agent of change. Corrupt governments will have a tougher time being credible enforcers of contracts and protectors of property rights.
Ninth, bribery and corruption lead to other forms of crime. Because corruption breeds corruption, it tends soon enough to lead to the creation of mafias and organized criminal groups who use their financial power to infiltrate legal businesses, to intimidate, to create protection rackets and a climate of fear and uncertainty. In states with weak institutions, the police may be overwhelmed, reducing the probability that criminals will be caught. This, in turn, encourages more people to become corrupt, further impairing the efficiency of law enforcement, a vicious cycle that will affect the investment climate in noxious ways, further undermining economic growth. In many countries, as corruption gives rise to mafias and organized crime, the police and other organs of the state may themselves become criminalized. By then, businesses will not only have to deal with corruption-ridden bureaucracies, but they will also be vulnerable to attacks from competitors who will pay the police or tax inspectors to harass and intimidate.
There is really no limit to the extent to which corruption, once it is unleashed, can undermine the stability of the state and organized society. Tax inspectors will extort businesses; the police will kidnap innocents and demand ransom; the prime minister will demand payoffs to make himself available for meetings; aid money will disappear into the private offshore bank accounts of senior officials; the head of state will demand that particular taxes be credited directly to his personal account. Investment will come to a standstill, or, worse, capital flight will lead to disinvestment. In countries where corruption becomes intertwined with domestic politics, separate centres of power will emerge to rival the power of the state. At that point, the chances that the government will actually be able to do anything to control corruption will disappear and the state will mutate into a kleptocracy, the eighth circle of hell in Dante’s Divine Comedy.
Alternatively, the state, to preserve its power, may opt for warfare, engulfing the country in a cycle of violence. In any case, corrupt failed, or failing, states become a security threat for the whole international community, “because they are incubators of terrorism, the narcotics trade, money laundering, human trafficking, and other global crime—raising issues far beyond corruption itself” (Heineman and Heimann 2006).
Corruption will not do any good to anyone in the long term basis, either to the giver or the receiver of the corrupted money. Corruption harms everybody because it is based on injustice!
EVIL EFFECTS OF CORRUPTION
Merited but Poor People are Denied:
Merited & qualified people who are poor & honest, not wanting to bribe, will remain unemployed thus depriving the expertise & knowledge of the good individuals to effective applications for the advancement of the individuals & society.
Bad Consequences of Selecting Unfit People:
Demerited & disqualified people when given in-charge of the posts they don't deserve; they will start malfunctioning resulting in unwanted outputs. If in administration, it will be mismanaged; if in engineering, structures won't last long; if in medical line, people will die of wrong prescriptions or wrong surgery; if in manufacturing, only substandard products will come out; if in education, substandard students will be the products; if in politics, faulty policies & mismanagement of public funds will happen...
No Hope for Educated Poor
Poor people who managed hard to get higher education when they completed their studies; they are given the popular 'Unemployed!' title to cap on all their certificates/diplomas/degrees/masters/PhDs and to start any self-employed venture also needs capital and to get loan for it again they need money to bribe here & there! Those who are poor or educated poor and want to live honest but progressive life without bribery/corruption see no hope for development in life in the corrupted society. So, it is of no surprise that some/many of these unemployed youths are turning to insurgency as the alternative way of life.
Corruption Widening the Rich-Poor Gap:
People in power who have the advantage of accumulating bribed money will become richer & richer and the poor people who try to pay huge amounts as bribes will remain in debt thus creating a huge rift between the rich & the poor. The consequence of this extreme inequality in the society will brew disunity, envy, hatred & enmity between the people of the haves and the have-nots.
Corrupted People Degrades Self & Society:
People who became materially rich through corruption will degrade morally and start misusing the ill-accumulated money in higher criminal activities like maintaining criminal gangs to support his nefarious activities; himself or his children may become drug addicts or alcoholics or gambling or in prostitutes etc. thus further tearing down the moral fabrics individually and socially.
When Poor People are looked down by Rich:
Poor people, who are constantly looked down upon by those rich counterparts in the society; having no means of decent living will turn to armed gangs to extort money from those rich & corrupted people thus sprouting up of pseudo insurgent groups.
When Honest People are not respected by Society:
In the corrupted society, honest & hardworking people will not be respected but will be considered as fools and so even those who were sincere & hard working before will start joining the corrupted rat race of the fallen society thus the evils of corruption will spread all over with no future hope & aspiration to live for.
Where the Corrupted Money go:
Huge amounts of corrupted public funds becoming black money will either divert away clandestinely to the foreign banks or the huge amounts remain as black money hiding doing nothing good for himself or the society.
Society where Corruption prevails:
Where corruption prevails, in that society, people will become more & more material minded, thinking that money is everything and thus start losing the spiritual qualities like the fellow feeling of love, sincerity, empathy, equity, unity, justice etc. and thus trying to accumulate money by hook or crook; people will become materially mad and start living restless & meaningless life in greed.
Corruption is Fundamental Crime:
Crimes & killings will be the direct consequences of a society drowned in corruption; this simply being the law of karma that crime begets crime because corruption is a fundamental crime against humanity that causes multi-dimensional social problems.
No true Happiness in Corrupted Society:
In the corrupted society, nobody will be truly happy; fear, insecurity and unhappiness will spread all over and there will be no far sighted visions for future prospects or prosperity and people will become more selfish and narrow minded.
Final Result of Corrupted Society:
Final result of a society drown in corruption is the total degradation of the whole people in the society.
Effects of corruption on people:-
Lack of quality in services:
In a system with corruption there is no quality of service. To demand quality one might need to pay for it. This is seen in many areas like municipality, electricity, distribution of relief funds etc. If a person has to purchase a like medicine, due to corruption in education then the candidate after completion of his course will not like to provide quality health service if there is not enough remuneration for his service. Further candidates who do not have the ability can also get into the same seat by purchasing it. So though he becomes a medical practitioner, he may not be competent enough.
Lack of proper justice: Corruption in judiciary system, leads to improper justice. And the victims of offense might suffer. A crime may be proved as benefit of doubt due to lack of evidence or even the evidence erased. Due to corruption in the police system, the investigation process goes on for decades. This lets the culprits roam free and even perform more crimes. There are even chances that criminals due to old age due to delayed investigation. So it lead to “Justice delayed is justice denied.”
Chances of Unemployment: This we can see with an example. The private education and training institutes are given permits to start providing education. This permit is given based on the infrastructure and sufficient recruitment of eligible staff. Here there are good chances of corruption. The institute or college managements try to bribe the quality inspectors so as to get permits. Though there are no sufficient eligible staff these institutes get permission by the inspectors leading to unemployment. Instead of 10 faculty a college is run by 5. So, even if well qualified persons wish to get job there, they will not be offered. If there was no corruption by inspectors, then there would be chance for more employment.
Poor Health and hygiene: In countries with more corruption one can notice more health problems among people. There will be no fresh drinking water, proper roads, quality food grains supply, milk adulteration, etc. These low quality services are all done to save money by the contractors and the officials who are involved. Even the medicine provided in hospitals for the hospitals are of sub-standard quality. So all these can contribute to ill health of common man.
Pollution: Pollution is mostly emitted in the form of water pollution, air pollution and land pollution. This pollution is from vehicles and factories. The governments have a monitor on this pollution by regular check of vehicle emissions and also industrial exhausts. Corruption in the government department lets the industry people opt to release of untreated and harmful waste into rivers and air. If there is no corruption, there can be fair probes. Then the industry personnel will treat the waste such that it is less toxic and harmless to environment and people in it. So we can mean that corruption is also the main cause of pollution.
Accidents: Sanction of driving license without proper check of driving skills in the driver leads to accidents and death. Due to corruption, there are countries where one can driving license without any tests.
Failure of genuine research: Research by individuals needs government funding. Some of the funding agencies have corrupt officers. These people sanction the funds for research to those investigators who are ready to bribe them. In doing so, they do not sanction the funds to genuine and hardworking investigators. Thus the research and development will be lagging. This seems to be not a problem to the common public. But if we notice the resistance of microbes to drugs, we can know that there were no new compounds discovered in the past few decades for efficient treatment of resistant microbes.
Effects of corruption on Society:
Disregard for officials: People start disregarding the official involved in corruption by talking negatively about him. But when they have work with him or her, they again approach them by a thought that the work is done if some monetary benefits are provided. Disregard towards officials will also build distrust. Even lower grade officer will be disrespectful to higher grade officer. So even he may not obey his orders. There were even incidents where a lower grade police officer kidnapped higher grade officer for not offering him leave when asked.
Lack of respect for rulers: Rulers of the nation like president or prime ministers lose respect among the public. Respect is main criteria in social life. People go for voting during election not only with the desire to improve their living standards by the election winner but also with respect for the leader. If the politicians involve in corruption, people knowing this will lose respect for them and will not like to cast their vote for such politicians.
Lack of faith and trust on the governments: People vote to a ruler based on their faith in him/ her. But if found to be involved in corruption people lose faith in them and may not vote next time.
Aversion for joining the posts linked to corruption: Sincere, honest and hardworking people develop aversion to apply for the post though they like to as they believe that they also need to be involved in corruption if they get into post.
Effects of corruption on Economy:-
Decrease in foreign investment: There are many incidents where in foreign investments which were willing to come to India have gone back owing to heavy corruption in the government bodies.
Delay in growth: Due to desire to mint money and other unlawful benefits, the official who need to pass the clearances for projects or industries delay the process. A work which can be done in few day may be done in months’ time. This leads to delay in investments, starting of industries and also growth. Even if started, company growth hinders as every work linked to officials get delayed due to need to provide bribes or other benefits
Lack of development: Many new industries willing to get started in particular region change their plans if the region is unsuitable. If there are no proper roads, water and electricity, the companies do not wish to start up there. This hinders the economic progress of that region.
Differences in trade ratio’s: Some countries have inefficient standard control institutes. Or in other word these standard control institutes are corrupt that they can approve low quality products for sale in their country. Hence you can see countries manufacturing cheap products dump them in big markets. These countries can manufacture cheap quality products but cannot dump in countries with strict standard control institutes. They can do so only in countries with chances of corrupt officials in standard control. One best example is China products which can’t be just dumped into Europe and US markets. But can be done in Indian and African markets. So there arises trade deficit that these countries cannot manufacture their own products at cheaper price than those exporting to them. So if corruption is minimized than these countries will have less trade deficits in-terms of exports and imports with other countries and their economies can prosper.
If you see the history of the Telephone Department there was a lot of corruption in the department when it was the government department. One has to wait for years to get a BSNL connection. Even after getting the connection employees were demanding money for giving the connection. Also there were cases the employees taking bribes and the bills were reduced for the customers by stopping their meters. After the entry of private operators and the conversion of telephone department to public limited company everything has changed without any punishment to any employee. Now the corruption has almost nil in the BSNL. If you see the corruption in a department 80% of the employees will be taking the bribes. But the anti-corruption department will be catching only 1% of the corrupted people. So this was it is very difficult to stop corruption.
Many people think that the corruption will reduce if the punishment is given to those who are doing corruption .The corruption is caused due to both giver and taker. The corruption will be reduced when the competitiveness by converting government departments to public limited or privatized. Every department which linked to the public money should be privatized and the competitiveness should be brought in the departments just like BSNL. Then the corruption will be automatically come down of course a lot of other things also need to be done along with this which is getting discussed later in this article.
The corruption elimination should become motive for each and everybody of us. All of us should take it as an oath to eradicate it. Because many time we only offer bribes to finish our jobs early. If any competition exists people used to get advantage out of it by buying some of the officers involved. We should take it as a crime for shortcuts of the processes. If people stop giving bribes then automatically corruption will be eliminated.
Factors are many for this scourge which has seeped into everyday life of this country. However, we should not despair easily and much less, link it with our fate. Yes, India is a great nation, with its seemingly peculiar incongruent layers of materialistic forces and vagaries of emotional dimensions. Yes, as with human nature, we are also driven by greed and inhibited by panic. Tangible factors such as inequality of resources with people, and advantage one has over the other due to disparity of wealth and power, have rendered the common man to adopt any method to narrow the gap. They do not actually care much for adhering to ethics while pushing to bridge the gap. The tangible reasons are numerous, among these poverty reigns over almost all others. A person ravaged by the cruelty of it will come to believe that ‘money is everything’, because he sees money that might deliver him from the clutches of perpetual poverty to a comfortable life.
Once he attains a life of comfort, he wishes for more. He sees the other rich people and their lifestyle; he desires to get to their level of opulence. How he gets there does not matter. It is the end that will justify the means. What faster medium than to become a party to corruption? Well if we think deeply, it’s the attitude of the individual that should count much to calibrate corruption. Not every poor is corrupt. Not every rich is corrupt.
What could be the cause having the most weightage? I believe it’s called ‘scarcity mentality’ versus ‘abundant mentality’. ‘Scarcity mentality’ is not necessarily attributed to the have-nots. On the other hand, ‘abundant mentality’ is not always the guiding force of the rich. Once we understand these and change our thought processes on these lines, I believe we may have an insight into corruption. And we might just begin to develop that ‘abundant mentality’. Corruption can only be stopped when each person thinks bad about corruption because it is not something that we can stop others from involving in corruption. They themselves have to realize the ill effects of corruption.
Another good method is the fear factor. When people are threatened with great threat people tend to submit. This fact can be applied carefully to stop corruption.
Don’t encourage corruption. Report whenever you find any corruption in your day to day life. Don’t take bribe as well as don’t give bribe. Teach good moral values to your children. By educating the illiterate. By implementing special agency to catch bribers. By having separate courts for this issue to punish immediately. Corruption must be eliminated first from ourselves then we should talk about the whole society.
1. Transparency International in its study on index of corrupt countries in 2012 placed India at 94th rank out of 176 countries while Somalia tops the list. Corruption in all walks of life in India is making it weak and has adverse impact on its growth. As per an estimate 80% of the public servants in India are corrupt because of which the wheel of growth is being pulled down.
2. The Constitution of India describes the country as “Sovereign Socialist Democratic Republic” leading to socialist-inspired policies for an entire generation from the 1950s until the late 1980s. Extensive protectionism in Industry, license Raj had contemporary policies vulnerable to pervasive corruption and slow economic growth, Rajagopalachari"Chakravarthi Rajagopalachari always stated that the system of License Raj would remain at the core of corruption and would pull back the economic growth in the country.
3. How does the growth is adversely affected due to rampant corruption - the former Indian Union Home Secretary, N.N. Vohra, in October 1993, submitted a report on corruption in politics and its criminalization. Politicians have the nexus with criminals. This criminal network is running a parallel government and satisfying the selfish ends of vested interests. More than 100 Members of Parliament are facing charges of corruption or related criminal charges. Public money which has otherwise been utilized for the growth of economy and for welfare of the public was misused to satisfy the greed of such networks.
4. The people have to pay bribe to get a job done in a public office. Taxes and bribes are common between state borders. As per an estimate more than Rs. 24,000 crores is paid in bribes. Government regulators and police share in bribe money, Transporters have to pay bribes to cross the state borders within the country and this phenomenon can be witnessed at any state border including the capital. These stoppages including those at checkpoints and entry-points take up to 10-12 hours in a day. This is despite the fact that many of the sates have done away with many taxes or the same have been made centralized. About 60 percent of these (forced) stoppages on road by concerned authorities such as government regulators, police, forest, sales and excise, octroi, weighing and measuring department are for extorting money. The loss in productivity due to these stoppages is an important national concern. The number of truck trips could increase by 30 to 40%, if forced delays are avoided. According to a World Bank report, the travel time for a Delhi-Mumbai trip can be reduced by about 2 days per trip if the corruption and associated regulatory stoppages to extract bribes was eliminated.
5. Various government officials, politicians in connivance with Criminals tend to grab the public property illegally. This land and property is meant for infrastructural or community development. These activities hamper the growth of economy.
6. Corrupt construction contractors in association with corrupt politicians and Public Works Department officers get the contracts and deliver poorly constructed roads, buildings, bridges. News of building, bridge collapse, is very common.
7. Corruption caused problems in government funded projects are rampant almost in all the states. Only 40% of grain handed out for the poor reaches its intended target. The World Bank study finds that the public distribution programs and social spending contracts have proven to be a waste due to corruption. MGNREGA, (Mahatma Gandhi National Rural Employment Guarantee Act), NRHM (National Rural Health Mission), and other such programmes have become controversial as poor quality of infrastructure is built, Poor is still poor to the same level, Funds assigned for rural health care and Medicines are misappropriated. Corruption, waste and fraud-related losses from this government program has been alleged to be around Rs.10,000 crores.
8. Mineral resources are the back bone to the prosperity of the country. The corrupt Ministers and government officials of such states go for awarding illegal mining of such rich resources. They illegally help transport the minerals like coal, iron ore, bauxite, copper, etc. to other places for their personal benefits. The economic growth is severely affected by such corrupt activities.
9. According to a report corrupt officials in India may be making the country poorer by more than Rs.90, 000 crores every year, (More than 1% of the GDP, through corruption) These politicians, corrupt officials and business associates have black money in Swiss banks to the tune of Rs. 10,000 crores or more depriving the Indian Economy of its path on sustained growth.
10. Such corruption leads to further bureaucratic delay and inefficiency. Corrupt politicians and bureaucrats may introduce ways and means to extract more money affecting institutional efficiency. This would affect growth indirectly. Corruption also results in lower economic growth for a given level of income. With the reduction in Corruption level in India the growth rate of GDP might increase by 5 to 7%. As per an estimate the rampant corruption in India causes loss of growth in terms of investment and employment by Rs.25000 crores.
The history of corruption in India is not new. Even during the regime of East India Company in 17th Century it was a serious issue. The economy has been running infected since then. To make India corruption free it is important to explore the root causes of corruption in India which includes excessive regulations, complicated taxes and licensing systems, numerous government departments infested with bureaucracy and discretionary powers, monopoly by government controlled institutions. These features cater to the corruption on one hand and the lack of transparent laws and processes put the public at the receiving end. However, corruption varies from state to state and place to place, from man to man. Those who have the knowledge of rules and regulations find it easier to keep the corrupt away from indulging in corruption while for others it is difficult.
India has wide spread illiteracy. To weed out the corruption and to put the wheel of growth on right track, Education is the basic requirement. Suitable law requires to be passed to make it a fundamental right as well as fundamental duty of the state to impart education to each and every person in the state.
Make a positive approach to conclude – P S Bawa, Chair of Transparency International India, stated “Corruption is a hydra-headed monster and governments have to make efforts to tackle it from all sides. This can only happen if all stakeholders work together," the efforts being taken by the watchdog to create awareness about corruption among people and steps being implemented to curb the menace have to be intensified to achieve a higher growth rate and improve the image of the country creating a better environment for investment and employment. India requires a transparent and effective policy implementation with more employment and business opportunities to curb corruption and move fast on the path of growth.
Main Causes of Corruption:-
The causes of corruption are always contextual, rooted in a country’s policies, bureaucratic traditions, political development, and social history. Still, corruption tends to flourish when institutions are weak and government policies generate economic rents. Some characteristics of developing and transition settings make corruption particularly difficult to control. The normal motivation of public sector employees to work productively may be undermined by many factors, including low and declining civil service salaries and promotion unconnected to performance. Dysfunctional government budgets, inadequate supplies and equipment, delays in the release of budget funds (including pay), and a loss of organizational purpose also may demoralize staff. The motivation to remain honest may be further weakened if senior officials and political leaders use public office for private gain or if those who resist corruption lack protection. Or the public service may have long been dominated by patron-client relationships, in which the sharing of bribes and favours has become entrenched. In some countries pay levels may always have been low, with the informal understanding that staff will find their own ways to supplement inadequate pay. Sometimes these conditions are exacerbated by closed political systems dominated by narrow vested interests and by international sources of corruption associated with major projects or equipment purchases.
The dynamics of corruption in the public sector can be depicted in a simple model. The opportunity for corruption is a function of the size of the rents under a public official’s control, the discretion that official has in allocating those rents, and the accountability that official faces for his or her decisions. Monopoly rents can be large in highly regulated economies and, as noted above, corruption breeds demand for more regulation. In transition economies economic rents can be enormous because of the amount of formerly state-owned property essentially “up for grabs.” The discretion of many public officials may also be large in developing and transition economies, exacerbated by poorly defined, ever-changing, and inadequately disseminated rules and regulations. Finally, accountability is typically weak in these settings. The ethical values of a well-performing bureaucracy may have been eroded or never established. Rules on conduct and conflict of interest may be unenforced, financial management systems (which normally record and control the collection of revenues and the expenditure of budgeted resources) may have broken down, and there may be no formal mechanism to hold public officials accountable for results. The watchdog institutions that should scrutinize government performance, such as ombudsmen, external auditors, and the press, may be ineffectual. And special anticorruption bodies may have been turned into partisan instruments whose real purpose is not to detect fraud and corruption but to harass political opponents.
A defining characteristic of the environment in which corruption occurs is a divergence between the formal and the informal rules governing behaviour in the public sector. The World Bank is unaware of any country that does not have rules against corruption, although not all countries have all the rules that may be necessary. These range from laws making it a criminal offense to bribe a public official to public service regulations dealing with the expected behaviour of public officials, conflicts of interest, the acceptance of gifts, and the duty to report fraud. Government agencies—police and army, tax and customs departments, local governments, and public enterprises—may have their own regulations and codes of behaviour. Organic laws, often embedded in constitutions, cover budgeting, accounting, and auditing, supported by laws and regulations on public procurement and the safeguarding of public assets. In addition, there are laws on the conduct of elections and the appointment of judges, and codes governing the conduct of legislators. Some of these laws are a colonial inheritance, some have been adapted from countries with a similar legal tradition, and some are additions to existing laws (for example, providing for special anticorruption commissions and other watchdog bodies).
Where corruption is systemic, the formal rules remain in place, but they are superseded by informal rules. It may be a crime to bribe a public official, but in practice the law is not enforced or is applied in a partisan way, and informal rules prevail. Government tender boards may continue to operate even though the criteria by which contracts are awarded have changed. Seen in this light, strengthening institutions to control corruption is about shifting the emphasis back to the formal rules. This implies acknowledging that a strong legal framework to control corruption requires more than having the right legal rules in place. It means addressing the sources of informality, first by understanding why the informal rules are at odds with the formal rules and then by tackling the causes of divergence. In some countries the primary reason for divergence may be political, a manifestation of the way power is exercised and retained.
Economic research. The body of research addressing the economic effects of corruption has grown significantly in recent years. The research is both macroeconomic and microeconomic, theoretical and empirical. Its conclusions depend in part on what the researcher views as the bottom line: short-term economic efficiency in private markets, long-term dynamic efficiency and economic growth, equity and fairness, or political legitimacy.
One strand of literature explores, primarily from a theoretical perspective, the likely economic effects of different forms of corruption. Some writings of this group argue that corruption can be efficiency enhancing.
First, the argument is made, corruption may not distort the short-run efficiency of an economy if it merely entails a transfer of economic rents from a private party to a government official. Thus a bribe to an official who is allocating, say, foreign exchange or credit in short supply can be seen as a market payment for ensuring that resources go to the party most likely to use them efficiently (the one who can pay the highest bribe). The problem with this line of reasoning is that it fails to take into account any objective other than short-term efficiency. In the long run, expectations of bribery may distort the number and types of contracts put up for bid, the method used to award contracts, and the speed or efficiency with which public officials do their work in the absence of bribes. It may also delay macroeconomic policy reform. In addition, the gains from such bribery may be inequitably distributed (accessible only to certain firms and public officials).
Second, bribes can theoretically increase economic efficiency if they allow firms to avoid overly restrictive regulations or confiscatory tax rates. That is, bribes lower the costs of bad regulations to firms that bribe. There may be some validity to this argument, particularly in the short run. Yet such bribery defuses pressure for broader reform and invites firms to evade good regulations as well as bad.
Furthermore, the costs of such a system may fall disproportionately on smaller firms. A policy framework based on many legal restrictions and widespread bribery to avoid them is like a highly regressive system of taxes on the private sector, and few would argue for such a system in developing countries. And in some transition economies such restrictions have proliferated in an uncontrolled way with the express purpose of extracting rents. This causes a shift of economic activity to the informal sector.
To summarize, models purporting to show that corruption can have positive economic effects are usually looking only at static effects in the short run. In the long run, opportunities for bribery are likely to lead public officials to change the underlying rules of the game or their own behaviour in the absence of bribes, and the results are likely to be costly in terms of economic efficiency, political legitimacy, and basic fairness.
Another strand of literature examines the links between investment, economic growth and the quality of government institutions. It finds that weak public institutions, as evidenced by unreliable contract enforcement, unclear property rights, unpredictable policies, inefficient public administration, corruption, and other indicators, significantly reduce private investment and lead to slower growth. While useful in highlighting the broad economic effects of institutional deficiency, much of the literature has been unable to separate the effect of corruption from other dimensions of government quality.
Finally, there is the uneven performance of countries to contend with. While few would disagree that corruption has undermined development in Africa and has slowed the emergence of well-functioning market economies in the former Soviet Union, the coexistence of high growth and systemic corruption in some Asian countries challenges those who believe that corruption is always economically harmful. Several explanations have been suggested.
First, perhaps predictability is what matters, and some governments reliably deliver what is “bought” with bribes while other governments do not.
Second, others view highly concentrated corruption at the top of the political system (cited as more the model in some Asian settings) as less distortionary than uncontrolled corruption at lower levels (as in parts of the former Soviet Union).
Third, if political systems are well established and the rules of the game are known to all, the transactions costs of rent seeking may be less costly than in less stable, less certain environments.
Fourth, corruption may be imposing environmental and social costs that are not captured in national accounts data. We do not know these costs, and country experience differs widely even within Asia. Nobody, however, argues that corruption is good for development, and recent research suggests that corruption may be restraining growth even in Asia. What is clear is that the nature and dynamics of corruption vary greatly among countries, making it a diverse and complex phenomenon to address.
Political Science. Political scientists look beyond the visible signs of corruption to the broader setting in which it occurs. They see corruption in relation to the legitimacy of the state, the patterns of political power, and the engagement of civil society. Corruption may be a manifestation of the way political power is contested and exercised. To the leadership the creation and allocation of state rents serves political purposes: rewarding supporters, buying off opponents, ensuring the backing of key groups, managing ethnic diversity, or simply accumulating resources to fight elections. To obtain these resources, leaders may forge alliances with business groups or create and distribute rents through the bureaucratic apparatus. The resulting policies may favour or discourage capital accumulation and economic growth, depending on the nature of the alliances struck. Politicians in such countries may be aware of the distortionary consequences of such rents but view them as a necessary tool of political management. If this is the case, the pattern of corruption will change only if the power structure changes, which may result from a popular outcry against corruption.
Political scientists also take a historical perspective. Over time most industrial countries have developed merit-based bureaucratic values, institutionalized competitive politics, established transparent government processes, and fostered an active media and an informed civil society. These mechanisms constrain political and bureaucratic corruption, making it the exception rather than the norm. The transition may be spurred by an enlightened ruler or, more likely, by the growing power of new political groups with an interest in better-performing government. In developing countries, in contrast, government institutions are weaker, civil society is less engaged, and political and bureaucratic processes are less accountable and transparent. An effective state apparatus and capacity for law enforcement may be virtually non-existent. In such settings, sustained progress in building an honest and effective state apparatus requires addressing the mix of factors in the state and in society that give rise to both corruption and weak social and economic performance. This is an exceedingly complex and long-term effort.
Public Management. The public management view of corruption is clear-cut. Systemic corruption, in the form of graft and patronage and the inefficiencies that accompanied it, spurred the nineteenth-century reforms in Europe and North America that created the modern bureaucratic state. Corruption opposes the bureaucratic values of equity, efficiency, transparency, and honesty. Thus it weakens the ethical fabric of the civil service and prevents the emergence of well-performing government capable of developing and implementing public policies that promote social welfare.
The machinery of modern government, as it evolved in industrial countries and has been transferred to developing countries, includes systems that protect public organizations from corruption and promote accountability. These systems, including a meritocratic civil service and watchdogs such as supreme audit institutions, ombudsmen, and public service commissions, should not be neglected. Some OECD countries seeking to improve government performance through New Public Management reforms are developing “risk management” perspectives on corruption. But they do so within a framework of strong financial management control systems and a renewed emphasis on the ethical values of public service. While economies may still grow in countries in which corruption is entrenched in the public sector, the public management view is that successive stages of economic and social development will be harder if not impossible to achieve without well-performing government. Ultimately, countries need to create durable institutions to foster and protect integrity in public life if public policy is to achieve the objectives (such as poverty reduction and environmental protection) that are at the core of sustainable economic and social development.
1. Low Pay scales/ Wages: Most of the employees in government sector are paid low wages and salaries. Hence some employees revert to corruption for more financial benefits.
2. Low Job opportunities: This is another cause of corruption. Due to lack of job opportunities at will, there are many people who like to go for corruption mode to get the job offer. They will be ready to pay lump sum amounts for the job offer to the higher officials or politicians.
3. Lack of Strict and fast punishments: Even if someone is found guilty or even caught red-handed by the anti-corruption officials or media, the convicts get less punishment. First they will be suspended for few months or weeks and then re-posted to another location with same Job grade and pay. So this means the official who did the corrupt practice is given a free license to continue his practice. If the government is so strict that any such corrupt incidents will lead to permanent removal from job and also punishment like several years imprisonment then the corruption will come down to a large extent.
4. Lack of ill fame: If a person is found to be corrupt or has done some unacceptable misconduct, he or she has to be avoided and not be respected. But in India those with corruption and other offense related history are given prominent positions like the Member of Parliament or even higher posts. Instead of being disrespected they are respected.
5. Lack of Unity in public: Public openly criticize corruption but interestingly there is no unity among the public to stop corruption. If a person wants to get his done his work, he gets it done by corruption means if possible and then later criticizes the corrupt official. If the public stands united against corruption in such a way that no one is ready to offer bribes to get their work done then the corrupt officials will have no other option but to work in corruption free manner. During election, politicians try to lure the people by offering money and other things. If these politicians win and get power, they try to regain 10 to 100 times the amount spent for their elections.
6. Lack of transparency in affairs and deals: Many seat selection processes like in education, contracts for job, employee income reports (wealth possession), etc. lack transparency. For this purpose, there is a new act namely RTI : Right to Information, but the act is not strong enough to prevent malpractices.
7. Lack of Independent detective agency: India has no independent detective agency which can investigate with full power and freedom to expose the corrupt individuals. The existing agencies like Central Bureau of investigation are named by the highest court of Indian judicial system as a parrot which indicates how frees these investigating agencies to work. Hence anyone who commits offense will not be as afraid of the investigation as they can escape from it by taking help of ruling political party.
8. Option of many political parties: In India anyone can establish a political party. So there are many political parties in India. If the political party wins, then the members in it will desire to expand the party to all over the country. To do so, they need enough financial reserves. For this, once they come into power, they opt for corrupt means to make the wealth needed to expand the party.
9. Lack of enough powers to the judicial system and other independent organization: Like the election commission cannot ban a politician from contesting in case they make a mistake or do not comply with the rules during election campaign (like distributing money to people etc.). Similarly, the judicial system has low options to punish someone who is found to be
10. Lack of accountability: In government there is a big trend of corruption. This is because of lack of accountability. The employee’s on government offices do not perform to their par excellence. If they receive 100 files to be cleared in a week they may not even clear 50 of them in that week. They tend to post-pone the clearance of the files. So those who are in urgency of the clearance have to get them done by rewarding the officials involved in the clearance office. This lack of accountability in government offices is chief cause of corruption. If there is a mandate that all the files or at-least 95% of files received by government offices for clearance are cleared in the said period than corruption can be minimized to a large extent.
11. Encouragement of unhealthy competition: Competition in business is a good sign for quality of service to be delivered. But in India there is encouragement of unhealthy competition. When there is a tender, you can notice that only few companies bid for it. This is because the companies having political relations have higher chances of winning while others do not. So, companies with no political influence will not bid for the tender in-spite of being a good company. That is here the number of bidders for a tender will be low due to political interference. These causes of corruption have to be eliminated for better growth of the nation.
5 Places Where Corruption Exists Most: -
1. Lekhpal, a government official, whose job is to examine report and keep all records of lands. But recently, there have been a lot of cases in the court, which are based on land dispute. Why is it so? This is due to the flaws in the department of lekha vibhag. As far as this department is concerned, if the people pay attention towards professional accountability, land disputes can be considerably reduced or resolved faster. This would account for a fairly large control over corruption.
2. Another type of profession where corruption is rampant is the medical sector. How? There are many government hospitals and public health centres in villages and cities. There are some doctors, appointed for the treatment of the people. But in government hospitals, there is hardly ever proper treatment for the common man. Doctors have started opening their own private clinic to earn more money. The public hospitals lack adequate medicines and other required facilities. Doctors may not be found on the scheduled timings. The poor people, who only depend upon the government hospitals, are suffering since they can’t afford treatment from the private hospital. If the doctors would come in time, and in hospital there is sufficient medicines and proper treatment available, then most of the people would have been healthy. Thus doctors need to give their job professional accountability.
3. Third one is the revenue department. In this department, a fairly large number of the employees are corrupt. They take bribes and leave the person who didn’t even give tax off the hook. For e.g. income tax. If every person is honest towards his/her profession then a heavy loss of Indian government may be saved.
4. There is a lot of crime around us and criminals are doing their work without any fear. If police becomes serious then there will be control over corruption to the extent of nearly, say about 60-70%. They should perform their duty honestly. The day all the officers will be serious towards their profession, we may expect a corruption-free environment.
5. And last but not the least, is the Department of Judiciary. We know there are several lakh cases which are pending in the courts in India. The process of justice is very delayed in our country. Due to this, the numbers of cases are increasing day by day. If the proceedings are fast, people may see that if they do wrong or commit any crimes then they will have to face punishment. People thus will hesitate to take bribe. To recall and mention a famous quote here, ‘Justice delayed is justice denied’.
BAN ENTRY OF CRIMINALS INTO POLITICS. THERE SHOULD BE NO CRIMINAL CANDIDATE IN ALL TYPE OF ELECTIONS. CORRUPT PERSONS MUST BE PUNISHED STRICTLY; ALL BLACK MONEY MUST BE SNATCHED FROM THEM, MOREOVER PENALTY SHOULD BE IMPOSED ON THEM. ALL LAWS IPC OR CRPC SHOULD BE REFRAMED OR REVIEWED ACCORDING TO CURRENT CIRCUMSTANCES SO THAT A PERSON MAY GET JUSTICE HONESTLY IN TIME.
The below are some ways which can help in removing the Corruption:-
EDUCATION: With the help of education we can reduce corruption. According to a survey the least corrupt state is Kerala, because of Kerala has literacy rate is highest in India. It is due to unawareness in the field of law, public rights and procedures thereof that a common and an uneducated suffer out of the corrupt society. This suggests that if we are educated, we can understand our rights well. The first tool is ‘education’. With the help of education we can reduce corruption. According to a report by Transparency International, the least corrupt state is Kerala, the reason being that Kerala’s literacy rate is highest in India. So we can see how education effects education. In most of the states, normally a fairly large number of people are uneducated. Those who are uneducated do not know about the process, provisions and procedures through which they can get justice. Corrupt public servants try to make a fool of them and often demand bribes. It is due to unawareness in the field of law, public rights and procedures thereof that a common and an uneducated suffer out of the corrupt society. This suggests that if we are educated, we can understand our rights well.
Individual Contribution: Main cause of corruption is lack of values, student's minds must be inculcated with values such as honesty, integrity, selflessness etc., we should be honest to ourselves. Until and unless we will not be honest, we can’t control corruption. If each of us is honest towards our profession, then corruption will automatically decrease. Ask for bills, even when you buy anything. Make it sure that the vendor also has a counter copy of the same.
Whenever you convey any message to authority, make it via registered mail or e-mail; else record the call and make sure you ask the name of the concerned with his/her employee id. Feel free to file RTIs. This can make many things move in right direction. Make it to use in a legislative way
Whenever you are fined, never give bribes; nor use political power. Ask the authority, in writing, to mention the lead time for a given task. If you forget it first time, file RTI for it.
Eligibility of politician: One can only become politician of he/she should not have any criminal record. If the members of the governing body are government officials, there will certainly be fewer reports of the criminal cases. The provision is that, if there is any case filed against a person then he would not be eligible for election. Unfortunately a fairly large number of them are a part of it. If the members of the governing body are government officials, there will certainly be fewer reports of the criminal cases. The reverse may be possible only when there are no more criminal politicians in our government. The provision is that, if there is any case filed against a person then he would not be eligible for election. But if we see 100 politicians then about 60% of those would have a criminal case against them. If these ‘criminal’ politicians are in charge of forming and implementing laws, what type of law would be formed, one can only guess! Thus during election, we should keep in mind the person for whom we shall not vote. In India there is a provision that no person as a criminal shall be allowed as a Member of Parliament or member of legislative. Unfortunately a fairly large number of them are a part of it.
Bring political parties under RTI: Currently, political parties are required to report only donations above ₹20,000 to Income Tax Department. Political parties are exempted from filing income tax returns and contributions to political parties are deductible from assesses total income. Thus, political parties keep no record of donations less than ₹20,000. Donations only in above of ₹20,000 are reported to the Election Commission. This is crucial because about 75% of donations to political parties fall into the below ₹20,000 category. Thus, there is no record of source of funds for almost 3/4th of the funds received.
RTI will affect the smooth functioning of political parties. Political rivals will start using RTI tool with malicious intent. Existing I-T provisions enough to ensure financial transparency.
Increase in digital and e-governance: Using CCTV in the govt offices and exposing those videos in the media. Also several case studies of e-government applications from developing countries report some impact on reducing corruption. Many governments have chosen to go on-line in departments such as customs, income tax, sales tax, and property tax which have a large interface with citizens or businesses and are perceived to be more corrupt.
Corruption treatment: That means, instruments which are in use, are not running properly. For example Prevention of Corruption Act 1988 came into force on 9th September, 1988. But corruption is still flourishing. Why? Because of weak actions and proceedings towards corrupt people. People don’t have any fear of this act and the court. The act may thus be revised for its better implementation. Lack of effective corruption treatment is another reason. That means, instruments which are in use, are not running properly. Despite the Prevention of Corruption Act 1988, corruption is still flourishing. Why? Because of weak actions and proceedings towards corrupt people. People don’t have any fear of this act and the court. The act may thus be revised for its better implementation.
Transparent tax structure by clean and clear enforcement: Our direct taxes are no longer unreasonable, so there's little excuse for trying to evade them. But there is an unhealthy trend in piling on surcharges on various pretexts. Also, there are tons of other taxes that can add up to quite a bit. Finally, there's the larger question of how efficiently and honestly taxpayers' money is put to use — when you see the state of government hospitals and schools, and rotten roads, you wonder where the money you paid as tax has gone.
Salary increase: This would minimize the 'need' for bribes. Their salaries could be bench-marked against corporate sector salaries. But higher salaries should be combined with exemplary punishment, including dismissal from service and a police case if an employee is caught indulging in corrupt practices. Mere transfer or suspension won't do.
Police reforms and stronger judicial: This has been discussed for decades but there's been no action. The recommendations for reforms are already there. Set a time frame for implementation. This will make the police not just a professional force that's not at the beck and call of politicians, but also a trained one with in-built checks against developing vested interests. Today the situation often is that the investigator (police officer) is answerable to the person being investigated (politician). Also, separate the police into two wings: one for investigation and the other for maintaining law and order. The two functions are different and require different skill sets.
Blacklist corrupt businessmen: Private businesses caught indulging in corrupt practices or bribing officials should be blacklisted for, say, 10 years and be barred from government projects. In the category of corrupt practices would fall use of shoddy material -- like road contractors who give one inch of tar when they are supposed to give four inches and the road crumbles after one monsoon. Bigger instances of private businesses cutting corners in public projects by colluding with corrupt officials should attract exemplary punishment.
Give equal representation to all castes/communities in all political positions and government jobs by reserving seats equally among all communities. Once there is reservation for every community and that's fixed, no community can cry hoarse playing a victim card and hence voting on caste lines. Accountability can be set in all the government jobs with hire and fire policy. i.e., if a government servant is not doing his job well he can be fired. People will agree upon the firing of incompetent and corrupt officials if they know the seat is reserved for their caste/community, and another person of the same community will be placed into that position vacated. Hence there will be no cry for caste/community based harassment of when firing a corrupt govt official. Things will improve gradually.
Feedback Collection: - There would be mandatory anonymous feedback collection for every task done by every govt official. Personnel who consistently get poor ratings below a threshold must be fired periodically. This will induce fear among the govt officials and corruption will reduce to a great extent.
Direct Contact with Government: - We can reduce corruption by increasing direct contact between government and the governed. E-governance could help a lot towards this direction. In a conference on, “Effects of Good Governance and Human Rights “organised by National Human Right Commission, A. P. J. Abdul Kalam gave an example of the Delhi metro rail system and online railway reservation as good governance and said that all the lower courts should follow the example of the Supreme Court and High Court and make judgements available online. Similarly, Sivraj Patil said that the Right to information should be used for transparency. We have legal rights to know a lot of information. According to this act, (Right to Information act 2005), generally people should follow the procedure of law given to then when their work is not being implemented in a proper way in public services. This act is a great help in the order to control corruption.
Being Honest: - Lack of transparency and professional accountability is yet another big reason. We should be honest to ourselves. Until and unless we will not be honest, we can’t control corruption. If each of us is honest towards our profession, then corruption will automatically decrease. We need to pay attention towards professional accountability i.e., how much we are faithful and truthful towards our profession. Corruption may be controlled by handling five major professions: lekhpal, medical, revenue, police and judicial.
Investment in Security Infrastructure: - Camera in most govt offices is a must. In every ATM there are cameras to keep a watch on the public taking their money. Then why not government offices have cameras to have a watch on the employ performance. Even there are many employees who openly take bribe in presence of common men. This public bribery is due to confidence that public wants their work more than the amount they are paying to them as bribes.
Speed up the work process in govt institutes: Most corporate offices are in full-fledged running by 8-9 am. But the government offices start by 10 to 11 am and wind up by 3.30 to 4 pm with a lunch break of one & half hour in between. This indicates how much of commitment lies in the work and how fast the work goes on. If there are mistakes in the work or delay in the work, civilians have to run behind those workers to rectify or complete the work. In doing so they pay bribes to get the work done. This makes the chances of corruption more or else work is not done. So there should be accountability of daily work done in government works and targets to complete the work on time basis. Or else instead of being public servants, they tend to act as public bosses.
Make Media responsible and fix laws to be so: There are many major scams and corruption events involving media. Though the media is well aware of the corruption happening they stay silent due to their support for some political parties or else their owners get some monetary benefits from the rulers. Even there are many reporters who though come across some scam or corruption; they stay silent without revealing it for press for having received monetary benefits to do so. If media personnel are found to be guilty for not having exposed the scam or corruption intentionally, they have to be prosecuted and their license be withdrawn.
Verify the selection procedures: Many people compete for government jobs and in the process there are corruption happening in the selection of candidates for the posts. So let the selection criteria and procedure used be transparent and any misconduct from this should be punishable.
Also while allotment of natural resources for business companies; the selection of bids should be transparent. There should be online details with regards to the benefit to the government, the purchase price and even benefit to the company out of the deals. This will limit the corruption related to quid pro quo.
Keep inflation low: This is another factor for keeping corruption high and also persistent. Due to rise in prices, any amount of income seems to be insufficient. This inflation is a corruption involving politicians and businessmen. Businessmen try to raise the prices to sell their inventory or stock of goods at higher price. For this the politicians support them and are paid monetary or other benefits. This is a cheap business tactic but even the so called richest business magnets play this corruption game.
Speed up the judgment and increase the courts: Many cases of corruption take years to be given verdict. This delay in cases creates lack of fear for being corrupt and also huge time span for court trials gives sufficient time to make alterations in the witness. Establishing fast track courts and giving severe punishment for corruption practice will keep a control on corruption. Besides these there should be collective efforts from the public to prevent corruption.
When people realize the benefits of enhancing & exercising their spiritual qualities in daily life and also when they are aware of the serious bad consequences of corruption; then, instead of practicing this selfish & evil social habit called corruption; they will become more loving, sincere, kind, empathic, dutiful and rightful people away from corruption.
Corruption free election for all public representatives like Members of Parliament [MPs], Members of Legislative Assemblies [MLAs], Members of Municipal Corporations [MMCs], Village Board Members [VBMs], Students Unions [SUs] etc. will be a good move to counter corruption.
Top-Down approach i.e. leaders at the top like president, Prime Minister, Cabinet Ministers, State Ministers, Chief Ministers, Other Ministers, Governors, Secretaries, Department Heads, Institute Heads, NGOs etc. should be the examples of integrity and clean governance, administration & management by their own actions.
Social encouragement & high respect for the people who practice the spiritual qualities like honesty, dutifulness, sincerity, impartiality, hard work, dignity of labor etc. should be the regular norm of the people in society.
Economic Policy reforms should be a main pillar of an anticorruption strategy in many countries. Deregulation and the expansion of markets are powerful tools for controlling corruption.
Deregulation and the expansion of markets:
Markets generally discipline participants more effectively than the public sector can, and their power to do so is closely linked to sound economic policy. Enlarging the scope and improving the functioning of markets strengthens competitive forces in the economy and curtails rents, thereby eliminating the bribes public officials may be offered (or may extort) to secure them. There is a strong correlation between policy distortions and corruption. Some policy reforms can have quick results, particularly some macroeconomic reforms and deregulation, which do not make heavy demands on institutional capacity. The incentives of economic actors can be changed overnight by the removal of controls and the introduction of market-determined allocation systems in areas like foreign exchange and bank credit. The state’s role in supporting rather than supplanting markets is now widely accepted around the world.
Macroeconomic and sector policy reforms that contribute to the expansion of markets and the reduction of rents include:
• Lowering tariffs and other barriers to international trade.
• Moving from dual to single exchange rates, with market-determined rates.
• Introducing competitive credit markets.
• Eliminating price controls.
• Cutting subsidies to enterprises.
• Reducing regulations, licensing requirements, and other barriers to entry for new firms, both domestic and foreign.
• Privatizing government assets in clearly competitive markets.
• Abolishing monopoly export marketing boards.
Policy reform has helped reduce opportunities for corruption in many countries. In cases where countries have carried out economic reform programs and corruption persists, part of the answer lies in an unfinished reform agenda. In many countries the benefits of macroeconomic reforms have been blunted by the absence of complementary microeconomic reforms at the sector level.
Policy advice when government continues to play a role:
In some areas, advice on policy reform may need to pay more attention to anticorruption goals. Typically, these are areas in which the government must continue to be involved because of market failure but in which public policy can work only if sufficient institutional capacity exists. Without institutional capacity well-intended policies can lead to poor outcomes and even greater corruption. Several examples illustrate the links between design and institutional capacity: infrastructure privatization, environmental regulation, tax reform, and public expenditure reduction. In each of these areas the issue is not that the policies are necessarily misguided but that institutional capacity is crucial to a successful outcome and that policies must be designed in the light of a realistic assessment of this capacity.
In the long run privatization should decrease corruption, because it reduces the power and discretion of public managers and bureaucrats and increases competition and transparency. In the short run, however, the complex negotiations required for privatization—usually in a situation of shifting policies and regulations—create temptation and opportunity. Weak institutions are unlikely to resist temptation. If corruption becomes evident, a negative image of privatization builds in the public’s eye—even though the transactions themselves still make good economic and financial sense.
The dangers are particularly acute in infrastructure privatization, in which, in most cases, the stakes are large, the negotiations before the sale are elaborate, and continued government oversight is justified. When a firm is divested into a competitive market, the opportunities for corruption more or less end. In the case of a natural monopoly, corruption can continue indefinitely in the regulatory system. Governments embarking on privatization of state enterprises need to reinforce institutional capacity so that clear rules can be impartially applied, both before and after sale. In the case of infrastructure, privatization should not be undertaken without also establishing a minimum regulatory capacity. It has proven costly to privatize first and try to install a regulatory regime later. Corruption is not an argument for not proceeding but for better design and implementation of privatization programs.
The environment is a sector in which governments have tended not to be involved enough in the past and are now seeking greater involvement through regulation. But tighter regulation without strong institutions is likely to lead to more corruption, because it creates rents and gives the government more coercive powers. A careful balance between policy and institutional capability is crucial but is easily overlooked. Some countries are testing new and innovative ways to use market mechanisms for environmental control. These include, for example, auctions of tradable permits to pollute and negotiated contracts with industry groups on acceptable pollution levels in a particular watershed basin. In each case the level of acceptable pollution is set by the government but how that level is reached is ultimately decided by the market or the private sector.
In most cases tax reforms that eliminate multiple rates and exemptions and limit the discretionary powers of tax official’s help reduce corruption and enhance economic efficiency. However, tax rates that exceed what taxpayers view as legitimate or what tax offices can administer encourage the informalization of the economy and induce tax evasion and the corruption of tax officials. High tax rates coupled with weak collection arrangements simply inflate the gains from corruption without increasing the risk of detection. Where this is the case, efforts should be made to design tax structures and rates that better match institutional capacity and to strengthen that capacity over time (and adjust policy accordingly).
Public expenditure reduction:
Corruption may also increase when governments are under pressure to reduce the public wage bill’s share in the budget but find it politically difficult to do so. In such circumstances a mandated reduction in the wage bill translates into yet lower real pay for government employees. Pay cuts can have devastating effects on government performance, through the loss of skilled professionals, demotivation of those who remain, and lowered resistance to corruption. When the erosion of pay makes it impossible for staff to maintain basic living standards, the government can quickly lose its capacity to control fraud, and even the honest can be driven to absenteeism and moonlighting activities that may conflict with their roles as public servants. On the surface the formal processes of government may be maintained, while underneath an alternative set of informal rules operates to the detriment of public welfare. Large public sector wage bills are fiscally unsustainable and must be addressed. But this should happen within an integrated framework of public sector and governance reform.
Building strong institutions is a central challenge of development and is key to controlling corruption. Well-functioning public management systems, accountable organisations, a strong legal framework, an independent judiciary, and a vigilant civil society protect a country against corruption. Institutional strengthening is thus expected to form a key part of country anticorruption strategies.
In strengthening institutions to control corruption, countries have moved forward in three areas:
• Building traditional systems of well-performing government: a professional civil service, sound financial management, disciplined policymaking, and a balance of responsibilities among central, state, and local governments.
• Strengthening the legal framework, including the judicial system.
• Increasing transparency and introducing other measures that strengthen the role of civil society in demanding better government.
Civil Service Reform:
One of a country’s most important institutions is a professional and well-motivated civil service, with selection and promotion based on merit rather than patronage. A well-performing civil service resists petty corruption and provides the staff for many of the institutions that protect integrity in government: finance and personnel ministries, government tender boards, technical departments that evaluate bids, bodies that implement regulatory policy, accounting units, and internal and external audit departments.
Government should undertake only what it can do well within its resource constraints. In many countries matching policy and affordability means changing assumptions about the role and optimal size of government.
Good financial management systems are powerful instruments for preventing, discovering, or facilitating the punishment of fraud and corruption. They allocate clear responsibility for managing resources, reveal improper action and unauthorized expenditures facilitate audit by creating audit “trails,” and protect honest staff. By reducing opportunities for corruption and increasing the risks of detection, good financial management systems help change corrupt conduct from “high profit/low risk” to “high risk/low profit.”. Inoperative control systems permit wide scale fraud, and in many cases auditing is impossible.
Tax and Revenue Departments:
Tax and customs departments are often the locus of major fraud and corruption and thus are candidates for inclusion in national strategies to control corruption. Such malfeasance can often be meaningfully addressed—assuming strong commitment from the top—by giving revenue agencies greater managerial freedom (relative to normal civil service rules) to hire and fire staff and to set pay levels while subjecting their performance to close scrutiny. By controlling theft, good financial management systems change the economics of bribery, and businesses no longer have an incentive to collude with a corrupt official to avoid taxes. Rather, their incentive is to report extortion. Organizational restructuring (for example, separating the tax assessment function from the collection function) and staff rotation can also help reduce opportunities for corruption, as can control systems that require supervisors to attest that they have checked the work of subordinates. Tax policy may also affect anticorruption goals. Simplifying tax and tariff schedules and keeping rates at moderate levels reduces the discretion of tax and customs staff and narrows the scope for corrupt payments. Sound macroeconomic policy also plays a role by reducing the risks of distorted valuations. How governments spend the revenues they collect also matters. If taxpayers do not see their taxes put to good use, evasion and corruption may become socially acceptable.
Government procurement and contract management systems in both rich and poor countries are highly vulnerable to fraud and corruption. These risks are exacerbated when budgets come under pressure. Payments are delayed and incentives to bribe increase. Institutional capacity weakens if civil service pay and conditions are inadequate and the processes that ensure transparency and good record keeping are eroded.
An increased effort is needed to help interested borrowers build capacity to procure goods and services and manage contracts. A Country procurement assessment reviews be developed into a more effective vehicle for improving public procurement. The Govt should work to integrate the development of sound public procurement into country strategies for public sector reform and continue to search for new techniques and approaches that help minimize opportunities for corruption and improve value for money.
Decentralization involves the shifting of power to lower tiers of government or the granting of greater authority to line managers. Its effect on performance and corruption depends on the setting. Decentralization can help reduce corruption if it improves government’s ability to handle tasks while increasing transparency and accountability to local beneficiaries. But decentralization can also increase corruption if local and regional governments have stronger incentives (because of lower formal pay levels, for example) or more opportunities to carry out fraudulent activities and are less constrained by financial management and auditing systems (which are often in even shorter supply in regions than in the center). In many countries, industrial and developing, more corruption is thought to exist in state and, in particular, local governments than in the national government. This is not an argument against decentralization, which for many other reasons may still have a positive economic impact. Rather, decentralization initiatives must take into account the relative accountability and capacity of national and subnational levels of government when considering the structure of power sharing and must work to develop the capacity of decentralized entities alongside the devolution of functions.
Legal and Judicial Reform:
A country’s legal system—its laws and regulations as well as the processes and institutions through which they are applied—is vital for addressing corruption, just as it is for resolving civil conflicts, enforcing property rights, and defining the limits of state power. Laws and regulations that delineate market-friendly policies are powerful anticorruption tools.
Judicial Reform. Enforcement of anticorruption legislation requires an efficient, predictable, and accountable judiciary. There should be proper criteria for the selection and removal of judges, pay scales, training, and judicial ethics, improved court administration and cash flow management; procedural reform, including reducing ex parte communication between judge and litigants; better access to justice (through small claims courts, alternative dispute resolution mechanisms, and legal aid); and legal education and bar entrance requirements. Steps also need to be taken in many countries to counter corruption by court staff who, as gatekeepers to the adjudication system, may extract bribes.
Special Anticorruption Bodies:
There is now extensive experience worldwide with independent bodies, typically set up by statute, to increase integrity in public life. These include ombudsman offices, inspectors general, and independent corruption commissions. Experience in developing countries with ombudsman offices, which pursue allegations of abuse of official power, is mixed. In Sub-Saharan Africa and other regions the prevailing model has been an “executive” ombudsman, reporting to the head of the government rather than to the legislature and thus lacking the independent status a true ombudsman should have. Inspectors general can be powerful agents for controlling fraud and corruption within departments and agencies, depending on how they are established and operate, but they can also work at cross purposes to accountability and performance.
Corruption commissions and special fraud units have been highly successful in Chile, the former territory of Hong Kong, and New South Wales (Australia). In a number of developing countries, however, they have been used as instruments of partisan politics, undermining their effectiveness and public support. In the wrong hands powerful anticorruption legislation can be abused. In some Latin American countries independent attorneys general have proven effective in bringing charges against those at the highest level of government (Brazil, Colombia, and Venezuela). Had they been part of the executive branch, they would not have had the independence necessary to act decisively against high-level corruption.
Anticorruption bodies appear to be a promising option if they can be made truly independent of the executive and if there is a strong and independent judiciary. However, we need to better understand the experiences of these bodies—where they have been effective and where they have failed—before recommending them to governments.
Civil society and the media:
Civil society and the media are crucial to creating and maintaining an atmosphere in public life that discourages fraud and corruption. Indeed, they are arguably the two most important factors in eliminating systemic corruption in public institutions.
Corruption is controlled only when citizens no longer tolerate it. Private organizations, professional organizations, religious leaders, and civil groups all have a stake in the outcome of anticorruption initiatives and an interest in the process. They also may play an important role as watchdogs of public sector integrity, and there is scope for expanding this role and sharing the experiences among countries.
In countries where the government has sought The World Bank assistance in developing an anticorruption strategy, policymakers may be interested in taking a nonpartisan approach. EDI’s integrity workshops can facilitate this process by providing a forum for the discussion of international experiences and local alternatives. This is a new and promising activity for The World Bank, but it requires careful preparation and sensitive handling. This type of activity should be carried out only in response to a request from the national authorities, and in partnership with them.
Open and Transparent Government:
Corruption thrives in the dark. We should support efforts to encourage open and transparent government. Publication of government budgets and their availability in easy-to-read summary form, frequent reports to the legislature on budget implementation that enable comparisons to be made between budgeted and actual revenues and expenditures, and timely preparation of public accounts and audit reports and their scrutiny by the legislature and the media are some of the foundations of open and accountable government. Government departments and agencies should be encouraged to produce annual reports on their activities, achievements, and financial results, and national governments should report these in consolidated form. To the extent that performance information can be included, agency accountability should improve. In some countries “sunshine” laws (which require agencies to hold public hearings before making policy or program decisions) and freedom of information laws (which require governments to make information surrounding decisions available unless there are supervening public policy reasons for secrecy) may be appropriate. Court decisions should be published. And the regular publication of consultative documents when new policy is contemplated is good practice everywhere.
The Government of India, The President of India, and The Prime Minister of India should take effective measures to STOP all forms of Corruption from India. Both the Central & State Government of India and every individual of our nation should contribute so as to bring the much needed change in our country for the overall Growth and Prosperity of the nation.
Besides these there should be collective efforts from the public to prevent corruption. Hope all the Officials of Government of India (Central and State) and every individual of our nation can and will definitely bring the much needed positive change in India. An Awareness mail from a Well Wisher of our Nation who wants to bring a change for the betterment and growth of our great nation INDIA.
From Mr. Asha Kanta Sharma
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