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Tuesday 21 May 2019
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Why we may finally be winning the fight against corruption

Kiran Mathur Mohammed
Kiran Mathur Mohammed

kmmpub@gmail.com

Trying to stitch up its corruption problem, Nepal has issued its airport workers with pocket-less trousers.
What can we do so we’re not caught with our trousers down?
It is little surprise to most that we rank 78th on Transparency International’s Corruption Perceptions Index – 51 places behind Barbados. It is less surprising still that it classifies us as a “flawed democracy.”
The costs are much more than just cash siphoned out of state coffers.
It is also lost productivity. If people or businesses can get rich through corrupt practices, they will naturally conclude that their time and energies are better spent working out how to game the system instead of on productive, entrepreneurial activities.

Profs Mehmet Ugur and Nandini Dasgupta and the UK Department for International Development reckon that an increase of just one unit in their corruption index is associated with a 0.86 per cent reduction in economic growth.
Troubling though that is, it is also a cause for cheer. It means that there are easy gains to be had. Reducing corruption is one of the least expensive and most straightforward ways of increasing economic growth.

Veteran investigators tell us the only way to stop criminals is to first understand them. Most people who pay or receive bribes are, consciously or not, rationalising the decision to themselves.
If they bribe an official, the benefit is that they may gain a contract, speed a government process, or obtain a favourable regulatory decision. The potential cost is the risk of being caught, prosecuted, convicted, and then fined and imprisoned, sacrificing their freedom and reputations.
And what of the perceived cost of keeping to the straight and narrow? Some may rationalise that if they are not corrupt and their competitors are, they may be penalised in the market, and lose market share. Individuals may fear incurring other costs in the form of lost time or treasure. Indeed, a recent study of India’s motor vehicle department found that officials moved more slowly in order to prop up bribe prices.

So many have been jaded for so long that even good people have accepted this flawed logic. Efforts against corruption have therefore attracted only lacklustre support from a sceptical public. But something is changing.
It began in 2015, when Parliament passed the Public Procurement and Disposal of Public Property Act. That act was not (and still has not been) proclaimed, and so faded into the background. But a bipartisan Parliament has now injected the fight against corruption with new vigour through the passage of the Civil Asset Recovery and Management and Unexplained Wealth Acts.

I spoke with Transparency International’s Dion Abdool, who is firmly in favour of putting these acts to work. They should be proclaimed as quickly as possible and given teeth. Not just that. The Whistleblower Protection Bill and upcoming campaign finance legislation (promised before next year’s election) might still be an opportunity for bipartisan reform not seen in decades Passing them could restore people’s faith in the grandeur and high purpose of Parliament.
It is true these acts could be used by one side or the other as political weapons. But any party that does so can be sure that the weapon will be turned against them in opposition. This can deter any abuses, creating an equilibrium of sorts.

Technology can support these efforts. In the same way that ride-sharing apps like Uber allow people to trust drivers in strange cities (knowing they must follow the app’s suggested route), technology can help take the uncertainty out of public procurement.
The World Bank cites Chile’s ChileCompra, a public electronic system for purchasing and hiring. As far back as 2012, users completed 2.1 million purchases, issuing invoices totalling US$9.1 billion, allowing greater transparency and efficiency.
Norms develop slowly. In their infancy they are a confluence of interests.

It is no accident that most indicators look at the “perception” of corruption. Corruption happens not just through greed or evil, but when ordinary men make calculations driven by fear: fear of being left behind or being dominated by others. This is buttressed by other, comforting thoughts. “Everyone else is doing it.”.“The chances of being caught are slim.”
New legislation combined with strong prosecution is upending these calculations. People will perceive that the chances of prosecution are no longer slim, and return their brown envelopes. Perception becomes reality.
As competition for rents and favour fades, more wealth will be generated, which will be ample compensation. More importantly, we will restore our true values, and rediscover what is right.

Kiran Mathur Mohammed is a social entrepreneur, economist and businessman. He is a former banker, and a graduate of the University of Edinburgh

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