Reducing Corruption in Public Governance: Rhetoric to Reality1

K RajasekharanKerala Institute of Local Administration

Mulagunnathukavu, Thrissur 680 581Email rajankila@hotmail.com Ph: 0487 2200244

AbstractThe article argues that the democratic governance in India is now at the crossroads with many positive elements of good governance on one hand and the most shameful aberrations of bad governance including mounting corruption, on the other, which demands a close look at its nuances.. Corruption is here defined as abuse of public office for personal gains or actions causing transfer of public money to private hands, normally in violation of rules or without it. The article points out that the corruption exists where monopoly power plus discretion minus accountability exists without transparency. India had a strong framework of law to deal with corruption, right from the beginning and some of them are described. Even though laws play a key role in preventing corruptions, the provisions are not well-suited to deal with such a difficult task. Uprooting corruption has turned out to be a formidable task. Every attempt to deal with it tends to degenerate, lapse or disappoints the actors in the long run. Hon Kong’s initiative in 1985 to root out corruption in the police department has been explained as an excellent learning exercise. The experience of the least corrupt county Finland is also explained. The article states that a system that provides fewer incentives or opportunities for corruption is the right prescription for reducing corruption and the corruption can be dealt with by some well formulated strategic steps. Citizen’s inability to demand accountability from the Government leads to unabated corruption. The article concludes that all those who refuse to take part in governance and make it good will have to suffer under bad men whom we elect.

Introduction

Public Governance refers to the process of decision making in the management of social and economic resources of a country or its units and the mechanisms by which decisions are implemented for its development. Democracy, as a system of governance, signifies a government of, by and for the people and entails features of good governance such as timely elections, rule of law, accountability, transparency, predictability, non-corrupt practices etc. Corruption, a menace that plagues effective functioning of governments, exists both in democratic and authoritarian forms of governance even though democracy is considered to be the best form of governance so far invented. Corruption is an insidious disease of public governance that damages welfare measures, weakens economic growth and distorts the focus of governance.1 This paper has been selected for inclusion in a book titled Governance and Corruption edited by Prof S B Dahya & Prof Kavita Chakravarty to be released as part of a seminar in March 2011 at Maharshi Dayanand University, Rohtak

What is Corruption?

There is no single universally accepted definition for corruption. Attempts to develop such a definition did not result in success. But there were many attempts that identified the core features of corruption in an identical manner.

Corruption2 is abuse of public office for personal gain or actions causing transfer of public money to private hands, in violation of rules. It entails acts of omission, commission or illegality. Some kinds of corruption go on even within the framework of laws appearing as lawful acts. Procedural correctness in administration does not preclude the possibility of corruption. Similarly the deficiencies in procedures or lapses in formalities alone cannot be inferred as actions falling within the ambit of corruption. Corruption occurs even as part of policy formulation aimed at benefitting some interest groups without violating any statue, rule or regulation.

Corruption can be classified into two – coercive and collusive. In coercive corruption, bribe giver is forced to give bribe whereas in collusive corruption the bribe giver is an equal partner. Corruption can again be classified as petty or grand, passive or active and so on.

Corruption or bribery leads to undue actions and bestowing of undue benefits to in eligible persons by establishing the vices of governance like favouritism, nepotism and clientelism. Corruption normally involves payment of money to politicians or government officials to obtain license/permit, by-pass regulation, avoid delays, jump queues etc even though many forms of rent seeking are possible within it. Corruption reflects patronage, nepotism, red-tape, ineffective revenue generation, bribery in procurement, failure in service delivery etc which may or may not involve direct financial consideration.

Indian Scenario

India, the largest democracy in the world is now at a crossroads with many positive elements of good governance on one hand and shameful aberrations 2 A historical perspective of corruption is detailed in Jain(2001) PP 11-32

of bad governance including growing corruption, on the other. Corruption and concern about it is not new in India. Political history indicates that India has never been free from corruption in ancient times, the colonial period or even the Nehru’s period after independence. Many higher level civil servants are believed to be corrupt or accomplices of corrupt ministers. Lower bureaucracy involves in speed money or bribes. Legislature, judiciary, media and independent professionals are not devoid of corruption. Allegations on corruption to harass political opponents leveled by political parties when they remain in opposition and not doing anything on it when they are in power later, politicized the allegations on corruption as a tool to gain power. Legislative attempts could not make any marked difference in dealing with corruption. Investigative journalism could expose innumerable instances of corruption, but without much sustainability or stable remedial action. So a close look at its nuances is imminent, if we want to deal with it effectively.

Consequences of Corruption

Corruption in public offices has grown worse over the years and has become a threat to the stability of governance and democracy in India and the world over. It may destroy peoples trust in state institutions. Every office is a position of trust. The cancer of corruption has seeped into the blood stream of every sphere of our polity and public governance. It touches every sort of activity in every sector and that leads to inefficiency3, injustice and inequity. The very existence of governance systems seems to be at stake. Corruption renders governance into a state of near non-governance or misdirected governance. Corruption that has been with us from time immemorial spoils the moral foundation of the society.

The cost of corruption is enormous. Many of our development problems would have been solved, if there were no corruption. The poorest in the society are the greatest victims of corruption. A society with high level of corruption has low level of rule of law. Corruption at the top distorts fundamental policies on developmental priorities. Unless we address the

3 The concept of speed money has become one of the most serious reasons for delay, inefficiency and maladministration.

issue of corruption, we cannot ensure equity, equanimity and prosperity through the system of governance. Corruption aggravates inequality and can end up in the emergence of an unequal society. Corruption reduces public revenue, distorts resource allocation, retards economic growth and weakens rule of law. Corruption threatens the hopes of the poor by draining the money that reaches them for education, health, employment support etc. Poor will be denied basic justice in economic, political and social spheres. No country can afford to have high degree of corruption which leads to loss of confidence in public institutions and retards its all round development.

Why corruption occurs?

The corruption thrives where monopoly power plus discretion minus accountability exists without transparency. Meager salaries of staff, no incentive for performance and mild penalties can help flourish corruption.

Many instances of corruption are collusive and in collusive corruption, the mutual interest of the bribe giver and the recipient make it difficult to unearth corruption. In coercive corruption, the unwilling victims are intimidated. Such cases can be unearthed. Corruption is generally an outcome and a symptom of poor governance. Corruption and poor governance go hand in hand. Poor governance can lead to corruption and corruption can weaken governance going in a cyclic manner. Corruption enhances the exercise of undue political or administrative discretion and creates consequential rent seeking opportunities at a larger scale. The ‘political will’ of the government with focus on improving governance is paramount in any attempt to reduce corruption. Costly elections create a requirement for more unaccounted money and that political environment develops a fertile land for political corruption touching every aspect of corruption.

Corruption has now become something to be scared to those who engage in it. It has turned out to be a low-risk high reward activity. Corruption occurs when rents are high, discretion is extensive and monitoring is nominal or soft. Absence of separation of powers, checks and balances, transparency, system

of justice and clearly defined roles in governance mechanism inevitably lead to corruption.

The factors that promote corruption are

Failure to ensure accountability through oversight bodies, active opposition parties, independent media, fair and less costly elections

Weak law enforcement structures, poor surveillance of violations etc Missing regulatory frameworks – legislation, codes of conduct and audit

requirements Low levels of individual values, societal values and transparency in

governance. Unprofessional civil service, poor practice of ethical codes

Bad systems, bad ethics and bad incentives induce people to engage in corruption. Lack of transparency, inadequate oversight and weak enforcement can cause corruption. The institutional design largely influences the occurrence and opportunities for corruption.

The Legal Framework in India

India had a very good framework of law to deal with corruption, right from the beginning4 even though we failed to translate the legislative intent into practice.

Indian Penal Code (IPC) enacted in 1860 was the main tool to prosecute corrupt in the pre-independence India. The sections 161 to 165 were sufficiently good enough to deal with offences by public servants. The large scale corruption in Second World War forced the law makers to formulate an exclusive law Prevention of Corruption Act (PCA) in 1947 to reduce bribery and corruption which was amended in 1964 to incorporate the recommendations of the Santhanam Committee. It gives immunity to bribe giver. The Criminal Law Amendment Act was subsequently passed in 1952 which provided for attachment of wealth obtained by a “public servant”

4 See Committee on Prevention of Corruption (Santhanam Committee), Report of the Committee on Prevention of Corruption. New Delhi, Ministry of Home Affairs, 1964

through corrupt means. The IPC sections for the purpose were deleted thereafter.

Later, the Prevention of Corruption Act 1988 was enacted by consolidating the provisions of Prevention of Corruption Act 1947, the Criminal Law (Amendment) Act 1952 and some provisions of IPC. The objective of the act was to “make the existing anti corruption laws more effective by widening their coverage and strengthening the provisions”. The act defines public servant as “any person who holds an office by virtue of which he is authorized or required to perform any public duty”. This expansive definition does not allow anyone who does public functioning escape the ambit of the act. The act makes it an offence to habitually accept or agree to accept “any gratification other than legal remuneration as a motive or reward” A public servant can be prosecuted under the law if loss was caused to government and no public interest was served in the transaction by the public servant that led to the loss. It is not necessary to establish that he benefited from it. The public servant who possesses assets disproportionate to his sources of income can also be hauled up for corruption as per the act. The history of the act shows that it could not be used effectively to punish any political leader so far in the last twenty to years of its existence in spite of having many effective provisions in it.

In 1967, Government of India, set up a committee to curtail the growing menace of corruption existed then in India. There existed another law titled, The Benami transactions (Prohibition) Act 1988 that provides for confiscation of properties illegally acquired by corrupt means, but allied rules were not formulated and the law remains unimplemented so far.

The parliamentary privileges, not enlisted into a code or law, provide undue protection to the members and they need revisiting. The Members of Parliament or legislative bodies should not have privileges to cover corrupt acts, in the name of impunity on their parliamentary duties.

The legal codes in our country evolved from colonial rulers are not deeply rooted in our culture or tradition and that make the laws ineffective.

Need for Reforming Laws

Laws play a key role in preventing corruption. But the legal provisions on corruption now existing in India are not well-suited to deal with such a difficult task on the whole.

In India, taking gratification other than legal remuneration in respect of an official act is considered tantamount to corruption. It includes accepting or agreeing to accept, or obtaining or attempting to obtain, any illegal gratification as a motive or reward for doing or forbearing to do any official functions, favour or disfavor to any person or for or attempting to render any service or disservice to any person.

The Prevention of Corruption Act of 1988 does not define corruption, but lists offences of bribery, other related offences and penalties. But experience shows that such an indirect definition of corruption cannot cover a whole range of corrupt practices detrimental to public interest. So it is better that the laws on corruption should be drafted with more general provisions. For example corruption can be defined as “abuse of public office for private gain” which by definition encompasses a whole lot of malafide acts rather than including a few imaginable activities within the definition and leaving aside so many outside its fold.

Prosecution of public servants under the prevention of corruption act requires prior sanction of the competent authority. This provision is designed to protect the bonafide official actions of the executives from malicious or vexatious prosecution with cooked up evidences. But the precaution is being misused in many cases to guard the powerful corrupt executives.

Enacting and enforcing unenforceable laws on social maladies normally create an environment for corruption. Unpreventable social problems need to be addressed not legally, but by other means such as awareness building, attitude development and social engineering. The amendments to anti-corruption law at times with stringent penal previsions seem to be a ploy to

create an illusion that action is being taken against corruption while little is really done in practice. If any law is unenforceable or kept not being enforced generally, it will remain redundant, meaningless or remain as a mere mockery that encourages corruption. In practice, many legal provisions relating to corruption are not being enforced or enforceable practically making them a mere mockery. Lack of ‘political will’ and absence of administrative reluctance in many situations drain the enforcement agencies relating to anti-corruption to remain without obtaining enough resources from the government and remain functionless or inactive. In some cases, the obstructive procedures make some provisions of laws unenforceable. Legislations, by their poor drafting or weak constructions, create circumstances that lend themselves to corruption. Carefully thought-out and skillfully drafted legislations can create an environment in which corruption is less likely to occur.

Ambiguous and complex laws governing administrative practices such as service delivery or regulatory exercises of power, which allows the public servants to have differential interpretations, set a stage for corruption. So the laws that lack careful thinking and skillful drafting develop an environment for corruption and the laws drafted in clear language and unambiguous can minimize areas of discretion to officers in governance. Skillfully worded laws with divine clarity can create an environment in which corrupt activities are less likely to occur. Anti-corruption laws and the administrative machineries created thereby also should not lend themselves to corruption just because of weak drafting or poor designing.

The National Law Commission in December 2001 as per its 179th report wanted to formulate a law to protect the whistle blowers who have a critical role in reducing corruption. Nothing much has happened in that direction but a bill as passed by Rajya Sapha is introduced recently in Lok Sapha. As well, there is under-utilization and neglect of existing anti-corruption laws. It is better to make corruption, a criminal offence. As well, seizure or forfeiture of proceeds of corruption should remain as a corruption mitigation mechanism in the laws.

Difficulties in fighting against Corruption

Uprooting corruption is a formidable task. Every attempt to deal with it tends to degenerate, lapse or disappoints the actors in the long run. The public outrage which every scandal brings out at the outset tends to subside sooner or later. It is always difficult to sustain and hard to institutionalize the public interest against corruption. So corruption always re-emerges in a cyclic manner with different players.

In many instances of corrupt practices, government servants cannot be proved guilty for misappropriation, but they can be removed from service for causing monetary loss to the State. Imposition of penalties on the guilty and corrupt in public service is a difficult task due to complexities in procedural formalities. But it is possible.

A major difficulty in fighting against corruption is due to the inherent paradox that the cost of corruption is invisible and spread over a large number of people whereas the visible benefits are limited to a few corrupt people in power positions. Getting even a lobby to fight against corruption is thereby a difficult proposition. There is widespread public cynicism about anti-corruption intervention. Political indifference, bureaucratic inertia and citizen’s apathy make anti-corruption effort much difficult. In spite of this, sincere and strategic endeavors in some parts of the world show spectacular success in bringing down flagrant institutionalized corruption.

The fight against corruption should not be an end in itself; rather it should be a skilful strategy to reform the governance or to vitalize service delivery. Preventing corruption can raise revenue, improve service delivery and stimulate people’s participation. Government should look into more important reform areas like public service effectiveness, working with private sector, empowering citizen and making vibrant economic development for launching innovative initiatives. If the approach towards fight against corruption is oriented towards the path of administrative reforms, the result would be more positive, productive and motivating. It can then both prevent the plundering of public money and help in improving the services. Let us look at two of those examples.

Two Prominent Anti-corruption Case Studies

Hong Kong’s Anti Corruption Strategy

Hon Kong’s initiative in 1985 to root out corruption in the police department remains as an excellent learning exercise5. Police corruption created a climate of distrust in the entire government and lead to a loss of international investment. The usual solution such as stronger laws, more powers to anti-corruption offices and detailed investigation failed to address the growth of corruption.

Hong Kongs then governor Mac Lehore adopted a new strategy. He created a new Independent Anti Corruption Agency (IACA) with talented staff, good leadership and five oversight boards to guide and monitor the agency. The agency emphasized prevention and citizen’s participation. For prevention, the government functions were analyzed, reduced the monopoly, streamlined discretion and promoted accountability. As well, service delivery was improved. The citizens were educated about the harmful outcomes of corruption and mobilized them to provide information.

The independent commission against corruption had three departments

Operations Department for investigation Corruption prevention Department for taking remedial measures Community Relation Department to involve people

The results were remarkable and the systematic corruption in the police force was broken.

Experience of the Least Corrupt Country

The experience of Finland , the least corrupt country in the world, shows that they could reduce the corruption because of a set of conditions such as provision of welfare services for the aged and unemployed, good status and pay for civil servants, induction of lawyers on senior civil service posts, refendeary system for researching and suggesting options on issues 5 Klitgaard, Robert et al: Corrupt cities: A practical guide to cure and prevention. Washington, World Bank Institute, 2000. P 17

publicized by the Government, non-political civil servant as Heads of Ministries, transparency and openness, the duty to provide public explanation on decisions, collective decision making, personal independence and responsibility in administration, a closed civil service career system etc .

In Finland, the Supreme Court is endowed with clarification and examination of legal and administrative norms. Everyone in public service is reminded of the limits and correct interpretation of the norms.

A Policy Framework for less corruption in Governance

A framework or system that provides fewer incentives or opportunities for corruption is the right prescription for reducing corruption. One’s exclusive discretionary control over any good or service without accountability provides a good environment for corruption. So the system should have reduced monopoly power, limited discretion and increased accountability to minimize the possibility of corruption.

A strong political will of the government is a sine qua non for reducing corruption. Anti corruption initiatives will become unsuccessful without strong political will. The legislators can strengthen systems of accountability, reduce opportunities of corruption, improve incentives for probity and promote popular demand for integrity. The Parliament6 can join in the fight for corruption by enacting appropriate laws and overseeing the enforcement of these laws through its committees. But more laws create more scope for red tape, more red tape create more scope for corruption.

Media plays a critical role in curbing corruption through investigative reporting and exposure. Recent incidents like revelation in Radia tapes and 2G scam indicate that a section of media is part of public corruption in our country. Existence of transparency laws, vibrant civil society, citizen’s charter etc is the other essential requirement. Civil society in association with media can act as critical watch dogs to reduce corruption.

6 For more details see the book Role of parliament in Curbing corruption edited by Rick Stephen et al. Washington, The World Bank, 2006. The book describes in depth the consequences of ignoring or tolerating corruption. The role of parliament in anti-corruption legislation is described in chapter 5

All procedures, laws and regulations that breed corruption or come against efficient delivery system, will have to be eliminated. Enforcement of rule of law and deterrent punishment can reduce corruption. A policy of zero tolerance to all types of corruption which permeate governance, legal systems and administration can do a lot.

Distinct separation of powers, checks and balances, transparent actions and clear do’s & don’ts are remedial mechanisms against corruption. Avoid complex laws, rules and regulations. Simple and clear administrative systems with little discretion will reduce the possibility of corruption. Since corruption remains as a low-risk and high-gain activity to those who are being involved, there is need to raise the punishment and make its risk very high. Our criminal system should provide penalty that we give for murder for serious crimes causing heavy public loss or widespread suffering. As well, increase the incentives such as high salary to prevent corruption. Efficiently managed services provide fewer opportunities for engaging in corruption as citizens neither need to compete for nor to pay bribes to get the services or resources.

A merit based, professional and non-partisan civil service which is appropriately sized and well motivated, is a pre-requisite to establish good governance in public spheres. Meritocracy can reduce corruption to a great extend if civil servants are paid adequately. Adequate pay may dispel the temptation for corruption arising out of lack of means for living. Inadequate management and remuneration of the civil servants are sure causes of corruption in bureaucracy. Adequate wages to employees can pre-empt them from opting to the path of corruption. Well managed, broad based and visionary civil service reforms including wage enhancement to adequate level can do a lot in reducing corruption.

Sound financial management system – with proper budgeting, accounting and auditing - which allows objective setting up of targets, appropriate allocation of resources and efficient implementation should be in place. There should be transparent preparation, effective execution and careful monitoring

of budget. Rigorous accounting, timely financial reporting and meaningful auditing are essential elements in establishing a good public governance system. The procurement practices should be proper, prudent and that disallows exercise of patronage by those who handle it.

An accountable, impartial and corrupt-free judiciary is essential to exercise oversight function. Vigorous application and enforcement of laws and prosecution of offenders is essential. Weak investigation, policing and prosecution should be strengthened to ensure compliance with law. Independent Ombudsman can be effective to contain corruption and maladministration. In order to reduce corruption, judiciary should function in such a way to bring corrupt executives to book. Use of purposeful disciplinary action in administration can reduce corruption considerably. Appointment of Ombudsman - quasi-judicial court - can do a lot in reducing corruption by referring corruption complaints to anti-corruption agencies or prosecutors whenever needed and dealing with instances of injustice by its own decision..

Audit institutions can play a great role in controlling corruption by ensuring accountability, transparency and sound financial management. Audit can detect fraud , or abuse and can foster strong financial management. So empowerment of audit is necessary which can be done by ensuring the qualifications of auditors, fixing standards of audit procedures and avoiding neglect of audit recommendations.

A sample code of conduct that spells out appropriate behavior of both elected and appointed functionaries is a preventive mechanism to fight against corruption. Enhancement of people’s participation in public affairs will reduce corruption. Governance should be designed to make it easy for functionaries to do good and difficult to do evil while exercising statutory powers. Simplification of rules and regulations is a clear pre-condition for less corruption.

Political parties are now considered as the most corrupt institutions. The tendency of political leadership to ignore policy making and to involve in routine administrative actions which are in the domain of bureaucrats in public governance is on the increase. It should be discouraged to ensure

proper checks and balances between the elected functionaries and appointed officials. The public functionaries, in general, consider the official position as an opportunity to plunder public money.

Decentralizing state functions with due accountability mechanisms can reduce corruption. Decentralization brings people closer to governance and creates forums for involving them in governance. Corruption operates best under the veil of secrecy when no one else is there to oversee.

Increasing public access to information is a powerful mechanism for ensuring accountability. Public complaint mechanisms, citizen’s charter and regular assessment of service delivery can do much in reducing corruption.

Launching an Anti-Corruption move

Corruption can be dealt with by some strategic steps7.

There should be national or state level strategies footed on ‘political will’ to promote good governance and eliminate corruption. The strategies should engender transparency and accountability in all sectors covering all active or passive actors in corruption. Specialised anti-corruption agencies with autonomy are needed to push the drive and coordinate the actions.

Any anti corruption move should start with an assessment of the nature and extend of corruption by using surveys, interviews and other appropriate means. Determine how corruption works, who is involved, who benefits and who is adversely affected. An assessment of institutions should also be made to find out which institutions are affected by corruption and how they can be placed in the anti-corruption drive. This would help in identifying the priority in reforms needed in different kinds of institutions. Any assessment or analysis of corruption should be done in a holistic and participatory manner. While beginning any anti-corruption drive, it is better to start with the types of corruption that are more visible or hated by the people so that it will get better mass support.

7 A brief account of anti-corruption strategies are described in the Commonwealth Expert Group Report titled Fighting Corruption: Promoting Good Governance. London, Commonwealth, 2000 PP 3-21

A workshop of stakeholders should be convened to develop, implement and evaluate anti-corruption strategies that are needed. Such workshops should set goals, timeline and sequencing of actions.

As well, it is essential to prosecute and punish high level visible perpetrators, as a symbolic act to build the confidence of public activists. In order to rupture the culture of impunity, key corrupt actors should be punished visibly as a model act to build the confidence of people. Simultaneously, there would be attempt to educate the citizen about the varied harms that may arise out of corruption.

The fight against corruption should focus on corrupt systems rather than on individuals. Prosecuting the guilty is also important. But prosecution alone does not reduce the opportunities or incentives for corruption. A change in the system may yield better results than any change in the individuals in the system. If we do not change the institution or the environment, the next occupants of the position will likely to be corrupt as their predecessors because of the mismatch between the rewards and the risks associated with corruption. Any strategy towards enhancing the quality of governance and reducing the degree of corruption should result in effective public services as its outcome rather than mere reduction in corruption as an end in itself.

Existing laws should be carefully analyzed, re-defined and modified with better practices and enhanced penalties, for avoiding chances of corruption. It is better to have Ombudsman to attend cases of mal-administration, neglect or inefficiency in discharging duties. Decentralization initiatives that lead to real devolution of power down to the people will also reduce corruption as it widens the citizen’s access to governance. In short, diagnosing the corrupt practices, designing a strategy and implementing the activities sincerely can contain corruption, improve efficiency and bring in good governance.

Any anti-corruption activity should seek to find its possible allies - institutional and individual - during its progress and such allies can boost the drive against it. An anti-corruption drive with high voltage publicity can change the public perception and values

Conclusion

Elimination of corruption is a moral necessity and an economic need to make governments work well. Citizen’s inability to hold the Government accountable and to demand accountability from the Government leads to unabated corruption. Corruption can be reduced if we nip it at the bud rather than handling it after the event or at a stage when the handling has become difficult. In corruption, prevention is better than cure.

There is a saying that when the ruler himself is right, the people naturally follow the right course. If the ruler is wrong, it would be difficult for the ruled to remain on the right path. On the other hand, it is true that as is the ruled so is the ruler. A corrupt government is the result of a corrupt society. Whatever be, all those who refuse to take part in governance will have to suffer under corrupt men whom we elect.

References

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