Fight Against Corruption - After Deterrence Comes the Structural Changes

A campaign against corruption must be credible. The public has grown cynical. Citizens and bureaucrats have heard all the words before. They have even seen a few minor prosecutions. But the culture of corruption remains, especially the feeling of high-level impunity. As a result, people feel that awful sense of structural shame that characterizes underdevelopment. Its awful, but there is nothing one can do about it. Its part of the system, part of the culture. As one Italian said before the remarkable recent events, In some parts of the world corruption is a fact of life. Here, its a way of life.

Experience indicates that frying big fish can help break that culture of corruption. Big corrupt actors must be publicly named and punished so that a cynical public believes that an anti-corruption drive is more than words, more than a campaign against a political opponents. Importantly, therefore, the first big fish must come from the party in power.

Having said this, the fishing of big offenders can be overdone. At some point it is a mistake to focus on the past if it takes energy away from a focus on the future. An analogy with health policy is germane. If illness is rampant, it must be treated. But in the long run, prevention deserves priority. In the case of reducing corruption, prevention means reducing monopoly power, limiting official discretion, and enhancing transparency in institutions of the public and private sectors.

Therefore, after frying a few big fish, we must turn to the reform of institutions. In the case of government corruption, experience shows that public officials should be involved in the solutions. We should begin with the positive. In particular, work with line officials to define ways to measure public sector success, and then link part of the officials' compensation to the achievement of results.

Private citizens should also be involved in the campaign to reduce corruption. The greatest enemy of corruption is the people. People can be sources of information about where corruption occurs. Popular participation may substitute, in some cases, for bureaucracy, thus reducing the scope of corrupt allocations. I have described in Controlling Corruption the many ways that popular participation was used in Hong Kong successful battle against corruption: hot lines, call-in shows, educational programs, barrio councils, oversight bodies for public agencies, involvement of professional organizations, and so forth.

How should we think about prevention? Corruption occurs when individuals find their economic calculation favors corruption. If the probability of being caught is small and the penalty is mild and the payoff is large relative to the positive incentives facing the government official, then we will tend to find corruption. Fortunately, it is possible to locate areas within an organization where corruption is most likely. Some people call it vulnerability assessment.

Here structural changes are worthy of systematic analysis: reduce monopoly, clarify discretion, enhance accountability, increase penalties, raise the probability of being caught, and link pay to performance. Also, a government may wish to create a special anti-corruption agency, as in Hong Kong and Singapore, whose role is not just investigating corruption but working with departments to reform policies and procedures in order to reduce the vulnerability to corruption.

Successful change requires a strategy against corruption. This may sound obvious, but in fact so-called anti-corruption campaigns often lack just this. Having a strategy means recognizing that we cannot attack all forms of corruption at once, even if we do not declare this publicly. We must distinguish various types of corruption and recognize that they are not all equally harmful, even if we do not say so in public. For example, corruption in the courts or in the police is usually more pernicious than corruption in the Customs Bureau or the Drivers License Department. In general, inspectors of all varieties must be cleaner than service-providers must be.