According to the International Monetary Fund (IMF), the most popular and simplest definition is the one used by the World Bank, ‘abuse of public power for private benefits’. This does not mean that bribery and corruption cannot exist outside the public sector.
According to Transparency International, bribery and corruption can happen anywhere, in the open or in shadows, can involve anyone and can evolve in response to changes in rules, legislation and even technology.
Not all acts of corruption are taking/making bribes only. An officer taking sick leave to enjoy a vacation, getting a distress loan to purchase some luxuries, misappropriation or misuse of public funds, inaction, failure to remain alert, misinterpretation of and shielding behind regulations, taking delayed, ill-timed, injurious, unfair, unjust, harmful, wrong, immoral and unethical decisions as well as not taking decisions are all forms and acts of corruption.
The Economic Times refers corruption as misusing public power for personal gain by anyone in authority. Bribery and corruption are deceitful behaviours that people in positions of power exhibit for personal gain. They are most commonly seen amongst government officials or managers.
There are different forms of corruption, including bribery, embezzlement, extortion, networking, under-the-table transactions, manipulation, money laundering and more.
Bribery, corruption and public sector
The topic itself suggests and admits that bribery and corruption prevail in the public sector. Is the public sector corrupt? Is only the public sector corrupt? Is the entire public sector corrupt? Why is the public sector corrupt?
The public sector alone is not responsible for an offence of corruption. The giver of a bribe is equally at fault as the taker.
The public sector official is the agent of the state, who executes the mandate and functions of the state. He is the conduit between the state that delivers and the public that receives. He is paid, maintained and trained with public funds.
The public sector is large and can influence all segments and many actions of society. The public sector makes laws and regulations. It creates institutions. It delivers certain goods and services. It provides grants, concessions, incentives, exemptions and facilities. German scientist Max Weber defines bureaucracy as a highly structured, formalised and also an impersonal organisation.
When the word corruption is heard, one thinks of bribery, commissions and greasing someone’s palm. But corruption in the public sector covers a wide range of actions, starting from making a bad decision to taking a sizable commission, covering failure to deliver and play the expected role and avoidance, aiding and abating and turning a blind eye to corruption, inefficiency, indecisiveness, delays and lethargy.
Cost of corruption
The cost of corruption is several fold: deterioration and/or loss of freedom and rule of law (political cost), opportunity for participation and trust in decision-making (social cost), healthy environment and a sustainable future (environmental cost) and opportunities for growth/development (economic cost).
An IMF report in 2016 estimated the cost of bribery alone to be between US $ 1.5 and US $ 2 trillion per year. This represents a total economic loss of approximately 2 percent of global GDP.
In 2018, the IMF adopted a Framework for Enhanced Engagement on Governance. The framework aims to promote more systematic, effective, candid and evenhanded engagement with member countries on governance matters, including corruption that impacts macroeconomic performance.
At the press briefing on the Extended Financial Facility (EFF) programme for Sri Lanka, the IMF representatives stated that the EFF arrangement is built on strong policy measures and prioritises five key pillars. The fifth pillar was structural reforms to address corruption vulnerabilities and enhanced growth.
The UN Human Rights Office report published in September 2023 stated, “Sri Lanka suffers from a continuing accountability deficit – be it for war crime atrocities, more recent human rights violations, corruption or abuse of power – which must be addressed for the country to move forward …”
The World Bank Country Director in May 2023 stated, “The real cost of corruption lies in sub-standard infrastructure or medicines, often bringing both health and economic consequences. … Corruption dissuades investment and when corruption allows certain firms or interest groups to control the economy, rather than market efficiency and fairness, the result is weakened competition and sluggish growth. Corruption rots the social contract between the people and government and this can lead to loss of trust and instability.”
The World Bank Country Director in May 2023 said, “Discretionary approaches to decision-making are rife in many important areas in Sri Lanka. For example, there are complex and discretionary trade policies, tax advantages provided to certain industries, firms or interest groups and conflicts of interest and opaque decision-making regarding the oversight of state enterprises.”
Bribery and corruption are robbing us of our future as well as our present.
Overcoming bribery and corruption
In Sri Lanka, since independence, every successive government has added one or more to the existing legal arrangements and institutional structure to combat and overcome bribery and corruption in the public sector. In addition to the establishment of several state agencies, parliamentary committees, presidential commissions, committees, legislations and amendments, new legislations were passed.
There is a host of agencies, opinion makers, whistle blowers, political parties, INGOs, national movements, civil social organisations and chambers talk and work to overcome corruption. Sri Lanka may be the only country, which even elected a government of Good Governance.
The Anti-Corruption Bill recently passed by Parliament is the latest piece of legislation added with high expectation and noble motive of overcoming corruption.
It is “An act to give effect to certain provisions of the United Nations Convention against Corruption and other internationally recognised norms, standards and best practices, to provide for the establishment of an independent commission to detect and investigate allegations of bribery, corruption and offences…”
All such arrangements basically and largely deal with bribery, corruption and related offences happening in the public sector. Majority, if not all of these interventions, take the nature of post mortems aimed at penalising a few individuals, who are caught or reported. These processes are time consuming, lengthy, cumbersome and less result oriented, ending up as futile exercises.
A recent news item appeared on the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), under the title of ‘Auditor General slams CIABOC for poor prosecutions; hundreds of cases languishing for over five years’, speaks for itself.
Overcoming corruption would be a distant dream, if the state lets happening corruption and launches only post-mortem operations to catch a culprit occasionally. By the time the gates are closed, the horse has already bolted out.
Identification and elimination of the causes is equally or even more important and effective than post-mortem interventions in a process of overcoming bribery and corruption in the public sector.
A paper prepared by Vito Tanzi, an economist of international renown, for the IMF in 1998, on ‘Corruption Around the World: Causes, Consequences, Scope and Cures’, shed lights on this. The paper is 25 years old but views are valid and relevant for today.
As Tanzi says, corruption is a complex phenomenon and cannot be explained by a single cause and therefore, overcoming corruption cannot depend on intervention in a single area. Establishment of an independent commission to detect and investigate allegations of bribery, corruption and offences related alone will not help to overcome bribery and corruption.
Bribery and corruption take place due to not taking timely swift action, excessive complicated documentation, age-old acts, presence of too many layers and too many officers, absence of coordination, bureaucratic lethargy, delays, inefficiency, lengthy procedures, time-consuming approaches and the list can go on. Particular aspects of government activities, processes, provisions and procedures create fertile grounds for corruption.
In any country, especially in developing countries, state functions are carried out by rules and regulations. How simple or complicated the activity, the public has to get authorisation, permits, licences and documents from several offices. Regulations are not transparent; they are complicated; they are not in the public domain. Officers can refuse, delay or not attend to certain functions. Only the bribing will oil the machine.
Procedures in tax administration provide opportunities for corruption. Tax regulations are complicated, difficult to understand, vague and leave room for interpretation. Exemptions, incentives, limits and liabilities are not clear.
The government procurements lack transparency, clarity, simplicity and effective institutional controls. The government provides some goods and services free or at subsidised prices, social security grants, concessionary credit facilities. There is discretionary power in important decisions – investment, land allocation, granting approvals and tax concessions. These are the breeding grounds for bribery and corruption in the public sector.
Lack of transparency in rules, laws and processes, existence of too many regulations, frequent introduction of regulations and absence of some regulations distract the focus, leaving room for corruption.
Some documents are lengthy, complicated and filled with cages calling for unnecessary information dating back to generations. News reports are coming out daily on bribery and corruption in the procurement process, school admission, obtaining documents such as an identity card, passport or driving licences.
In procurement, Technical Evaluation Reports are not prepared in time; in some cases, they are purposely delayed, leaving room for so-called ‘emergency procurement’ to suit identified suppliers.
The issuing of important documents in a single place has compelled people of all walks to come to Colombo. The public, who travel miles and hours and undergo much inconvenience and hardship, are keen to get back home as soon as possible. The easiest way out is bribery. With facilities available and overstaffed public service, decentralisation of these services to the districts would close avenues for bribery and corruption.
According to circulars issued on school admission, proof of residence within close proximity for admission to national schools is well known. It is so well known that parents start preparing forged documents since the day a child is conceived. The result is passing bribes in cash, kind and sexual favours, depriving admission to genuine children within the approved limits.
Introduction of a more transparent, less complicated procedure i.e. taking students from an aptitude test, would seal the opportunities for corruption. Simplification of documents, decentralisation of essential services and minimising duplication and overlapping can be done within a shortest possible time, perhaps with a single pen stroke.
Low wages attract less honest and incompetent people to the public sector. Corruption is discovered by chance or by outsiders, media and whistle blowers and only among a fraction. Concerns for fundamental rights, civil rights and human rights make government taking lackadaisical actions against offenders.
Many archaic centuries-old acts create opportunities for bribery and corruption. To mention a few such acts in Sri Lanka are Fauna and Flora Protection Ordinance 1937, Excise Ordinance 1912, Forest Ordinance 1907, UGC Act 1978, BOI Act 1978, Paddy Land Act, Land Reform Act, Tea and Rubber Estates (Control of Fragmentation) Act and Tea, Rubber and Coconut Plantation Land Fragmentation Board. These acts have to be revisited and revised to suit modern-day development trends and needs eliminating grounds for bribery and corruption.
The Anti-Corruption Bill is “An act … to provide for the establishment of an independent commission to detect and investigate allegations of bribery, corruption … to promote and advance the prevention of corrupt practices, to educate and raise awareness amongst the public to combat corruption.”
Five, out of 10 objects of the act, are related to prevention of bribery and corruption. Unfortunately, only one clause (Clause 40 – Measures to prevent corruption and proper discharge of its functions, etc.), out of 164 clauses and one page out of 150 pages of the bill, are allocated for prevention.
According to an extensive investigation by Washington, DC-based Global Financial Integrity, importers and exporters intentionally falsify the declared value of goods on invoices filed with Sri Lanka Customs, to make an average of US $ 4.093 billion (Rs.1.471 trillion) evaporate every year. They have, accordingly, plundered US $ 36.833 billion (Rs.13.246 trillion) over nine years through intentional, dodgy invoicing and stashing the foreign exchange earnings offshore.
There are instances that some corporate sector players have used corporate social responsibility (CSR) to evade payment of taxes. Black money comes in the form of investment. Bribery and corruption can close the eyes of the public sector to such operations.
But the public sector turns a blind eye on these operations. Only explanation comes from bribery and corruption.
In spite of all arrangements made, institutions established, bills passed, bribery and corruption goes on in the public sector. Lack of coordination, bureaucratic lethargy, ignorance, excessive and confusing documentation, rules and regulations, centralisation of services and functions are only a few instances that lead to bribery and corruption.
Post-mortem operations are leaving opportunities to cultivate corruption. Overcoming bribery and corruption and holding the offenders to account can only happen if we understand the way corruption works and the systems that enable it.
Ways of overcoming corruption can be found in the causes for corruption. Some actions introduced to curb corruption have turned into digging own burial grounds. Some incentives are inducement to corruption rather than to investment.
As Vito says, the fight against bribery and corruption cannot proceed independently from the reforms of the state. Bribery and corruption will be reduced in countries where the governments are reduced. Regulatory reform, deploying complaint-handling platforms and systems for citizens to lodge complaints, reforming public health procurement with tech-based, open contracting and monitoring, online course to train anti-corruption officers, use of artificial intelligence, block chain and big data analytics in the area of anti-corruption, reflecting the support that the ethical and responsible use of technology provide to preventing, tackling and finally overcoming bribery and corruption.
I am addressed as ‘Loku Putha’ (elder son) by my maternal-side relatives. Once, one of my uncles told me, “Loku Putha, if anyone else of our family was in your position, we all would have been emancipated.” That tells the whole story about bribery and corruption in the public sector.
(Chandrasena Maliyadde, former Secretary of the Plan Implementation Ministry, can be reached at Chandra.maliyadde@gmail.com)
