How to stop plague of state corruption in its tracks
Corruption has emerged as one of the biggest threats to humanity in developing and developed countries. It distorts economic growth, lowers foreign direct investment, decreases productivity due to the inefficient allocation of contracts, provides an incubator for general crime and dilutes societal norms and values.
Two years ago, President Cyril Ramaphosa established a number of commissions to probe the conduct of senior public servants in the government and state-owned enterprises (SOEs), thereby signalling the intent to arrest the scourge of corruption.
Corruption is not a new phenomenon and has its roots in ancient history. The existence and recognition of corruption dates back to documents produced by the Greek philosophers. Archives recovered from the Middle Kingdom in Assyria in about 1400BC refer to public servants taking bribes. There are also references to bribery in Old Testament scriptures.
With specific reference to corruption in the public sector, the process of procuring goods and services provides wide scope for corrupt activity such as paying bribes to secure contracts, inflating invoices, insider dealing by public servants and settling invoices for goods and services that were not delivered.
Need and greed
Corruption is driven by need and greed and takes many forms. It may be incidental (paying bribes to junior public officials such as traffic cops), systematic (which affects whole areas of government and harms revenue, trade and development) or systemic (kleptocracy or government by theft, which makes honesty irrational and has a huge developmental impact).
Any policy or regulation that is not certain or creates an artificial gap between supply and demand opens up a profitable opportunity for opportunistic middlemen and rent seekers from the private sector. With an armoury of rules and regulations behind them, public servants can use rigid application requirements to create unnecessary bureaucratic delays.
In other instances, public tenders are withdrawn and re-advertised for no apparent reason. It is also not uncommon for bid adjudication committees to be reconstituted at short notice. These are telltale signs that the process is awaiting payment of “speed money” to accelerate the bureaucracy and finalise the decision.
To be eligible for a corrupt transaction, a public servant or bribee, as the recipient of a bribe, must necessarily be in a position of power in an institution that gives him or her discretionary authority.
Research in the past decade, particularly by Eugen Dimant and Thorben Schulte, on the nature of corruption has shed light on the three “worlds” that influence a person’s decision to become corrupt.
In the “internal world”, two perspectives play a decisive role — the rational assessment and the behavioural assessment. The rational assessment is the result of a cost-benefit analysis by both the briber (the payer of a bribe) and the bribee, who individually consider four factors:
- The expected gains from crime relative to earnings from legal work.
- The risk of being caught and convicted.
- The extent of the punishment.
- The opportunity cost of the briber’s time allocation. This means the more time a briber spends on criminal activity, the less time is available for legal activities. The opportunity cost therefore represents the amount of income the briber gives up or loses to attend to the criminal activity.
The behavioural assessment enriches the pure rational choice with the inclusion of psychological aspects such as willpower and the extent of a person’s self-control.
The “middle world” adds another layer to the decision-making process and takes into consideration sociological and criminological factors, such as a person’s social norms, culture, education and past criminal conduct.
The “external world” includes economic, legal and political factors that directly or indirectly have an influence on corruption. In the economic sphere, poor governance affects economic performance and provides fertile ground for corruption. Weak legal and political institutions frame inefficient regulations and erode trust that, in turn, weaken the fight against corruption.
The outcomes of these three “worlds” come together to fortify a person’s decision and the biases and mental shortcuts that influence and alter his or her perception of what is right or wrong. This ability to rationalise unethical behaviour pushes out feelings of guilt and shame and renders corrupt activity justifiable.
The complex nature of corruption requires a multidisciplinary approach to deal with it because state reform and corruption are two sides of the same coin. The state can increase public-sector wages, educate public servants about the laws that prohibit corruption and the consequences, introduce more severe punishment, institute more effective controls and make policy changes that reduce the demand for corruption by scaling down regulations and retaining policies that are substantially nondiscretionary. These reforms are targeted to disrupt the cost-benefit calculation and to make corruption less attractive.
However, a strategy that can be implemented immediately to affect the cost-benefit calculation is a cash reward scheme to incentivise and encourage honest and clean behaviour. For starters, the scheme could be introduced in the procurement divisions of the government and SOEs. This strategy has the potential to score tangible and immediate benefit, renew investor confidence, begin to change the mindset and culture in the public sector, make public servants and SOE employees more resistant to offers of bribes, and enhance their sense of responsibility and self-worth.
With the political will in place to deal with corruption, South Africans are eagerly expecting 2020 to be the “year of the orange overalls’’. It can also be the year when public servants and SOE employees proudly hold up their certificates of honesty.
• Naidoo is the ANC’s legal adviser.