Bureaucrats’ corruption and competition in public administration

Competition in public administration is often advocated as a solution to bureaucrats’ corruption. However, there are no well developed analyses of how competition could succeed and the issue of its detailed design has not been carefully addressed so far. In this paper, we put forward a series of models that help understand what competition in public administration can actually accomplish. We distinguish two different shapes that corruption may take: bribery and extortion, and we demonstrate, under the usual assumption of asymmetric information as to the honesty of the bureaucrats, that while competition is effective in fighting extortion it exacerbates bribery. Given that corruption normally manifests itself simultaneously under the two different shapes, an anti-corruption policy based upon competition is bound to face a serious trade-off: trying to curb one of them through competition implies making the other worse. This result holds, with some differences, under exogenous and endogenous bureaucrats’ “honesty”. The dual aspect of corruption is probably one of the most serious—and so far largely neglected—obstacles to any effective anti-corruption policy.     

Organizational corruption by public hospitals in China

This article studies the rise of organizational corruption by public hospitals in China since the 1990s and its impacts. Organizational corruption refers to the exploitation of public authority by a government agency for its monetary or material gains. This article argues that a combination of three major factors contributed to the rise of organizational corruption by public hospitals. First, the Chinese government substantially reduced its financial commitment to the health sector since the mid-1980s. To compensate for the retrenchment of government health outlays, public hospitals are authorized to earn revenue, keep and use all budgetary surpluses. This policy provided numerous opportunities and incentives for hospitals to engage in corruption. The second factor concerns the excessive and chaotic development of the pharmaceutical sector. Intense competition has prompted many drug firms to offer bribes to public hospitals so that their products would be purchased. Finally, the state regulatory infrastructure has failed to check the spread of corrupt practices. The study raised two broader implications. First, it highlights the pitfall of retrenchment of government outlays and the subsequent policy of allowing state agencies to generate, retain and use the revenue, in the absence of an effective regulatory infrastructure. Second, the prevalence of organizational corruption indicates that the nature of public hospitals in China has been transformed. Instead of providing efficient, safe and affordable treatment for patients, many public hospitals have engaged in predatory behavior that is harmful to patients’ health.     

Factors which deter public officials from reporting corruption

A survey of over 800 public sector employees was conducted to explore the factors which would be most likely to deter public sector employees from reporting workplace corruption. Respondents were asked to consider whether they would make a report in the absence of certain factors which have been found in past research to impact on the decision to make reports. The aim was to determine which workplace strategies managers should make a priority when encouraging employees to report workplace corruption. Concern about not having enough proof was the most commonly reported deterrent, followed by the absence of legal protection from negative consequences. The factors which were reported as deterring the least number of respondents were the absence of role responsibility for reporting corruption and not being directly affected by the corruption. Respondents from lower income groups were more likely to be deterred from reporting corruption in the absence of encouraging factors. In addition, a relationship was found between a lack of information about mechanisms for reporting corruption and a negative attitude toward reporting corruption. This revised version was published online in August 2006 with corrections to the Cover Date.     

Political corruption and the role of public prosecutors in Italy

This paper analyzes the problem of political corruption in Italy and the role public prosecutors have played in unraveling such a phenomenon. The factors that have contributed to fostering systemic corruption as well as those that have contributed to uncovering such a system are given careful consideration. The most relevant conclusion is that whereas endogenous forces in the judiciary (prosecutors and judges) — in particular, its low level of institutional autonomy — have prevented it from containing corruption, exogenous forces — which have broken the conditions that had favoured the stability of the so-called first Republic — have led prosecutors to engage in massive investigations.This article is a revised version of the paper prepared for delivery at the 1994 Workshop on Corruption and Politics held at the Instituto Internacional de Sociologia Juridica, Onati (Spain), July 13–14, 1994. I am appreciative to Prof. Giuseppe Di Federico (University of Bologna) for his deep insights of this complex matter and for his very useful comments.     

What can be done against public corruption and fraud: Expert views on strategies to protect public integrity

A number of questions dominate the debate about public corruption and fraud. First of all, of course, there is the question of the content of these phenomena. What is corruption, what is fraud and how is it related to power abuse and public waste? Some scholars stress that these questions are unanswerable if ethnocentrism is to be avoided. Others are more positive about the possibility to grasp the central meaning of the concepts. A second type of questions has to do with understanding public corruption and fraud. To define a concept is something; to understand it is something different. Understanding means knowing the causes and consequences. To be able to understand it, corruption should be given a place in the framework of knowledge about public structure, culture and behavior. This is all but a simple endeavor because it will make a difference which theoretical and methodological framework is chosen as a starting point. This article seeks to avoid this obstacle by choosing an approach which could be categorized as pragmatic and eclectic, trying to discover whether there are causes which are seen as important by a variety of experts with different academical and occupational backgrounds: is there a common core present in different approaches? Third, there is the normative debate. What are the positive and negative consequences of corruption and fraud and how can cost and benefits be compared and judged? Nowadays, most scholars and practitioners in the field stress the negative consequences of public corruption and fraud. Such a critical attitude almost automatically leads to a fourth type of debate, about the question “what to do about it?”. Which methods and strategies are thinkable and what works? This subject is the central one in this article.     

Women in government, public corruption, and liberal democracy: a panel analysis

Ever since a 2001 World Bank report, many policymakers have come to accept a gender-based approach to corruption control, which posits that women in government reduce corruption because females are more ethical than males. An alternative explanation asserting the spuriousness of the gender-corruption link suggests that both gender equality and lower corruption result from a functioning liberal democracy. In this study, eight hypotheses are formulated and tested with longitudinal data for 204 countries. Findings demonstrate that neither the level of women in government nor a change in it has any impact on the prevalence and/or short-term trend of corruption. But both the strength of liberal institutions and an increase in this strength predict the prevalence and trend of corruption.     

The multi-shade paradox of public corruption: the Moldovan case of dirty hands and collective action

Corruption is an undoubtedly a difficult conceptual area to operate in. This is particularly accurate for the post-Soviet space, where seemingly mutually exclusive forces appear to coexist on regular basis, defying and rejecting rational interpretations. Standard assumptions, definitions and theoretical perspectives often fail to generate useful understandings of corruption in Eastern Europe, habitually obscuring fundamental patterns, hence leaving corruption largely misunderstood. In order to construct anticorruption policies that would be effective in the environment where corruption is systemic, it is critical to resist the temptation of eschewing the complexity of societal factors by over-focusing on the corrupt individual. In an effort to reemphasize the imperative role played by societal variables in explaining corruption in the post-Soviet space, this article uses insights gathered from studying corruption in Republic of Moldova to discuss the role of three fundamental dynamics: “dirty hands,” the problem of “collective action” and the achromatic schema of white-gray-black corruption.     

The ethics of maxima and minima combined with social justice as a form of public corruption prevention

In recent decades, corruption has become one of the main problems perceived by Spanish society. As a result, the country’s citizens are experiencing a high level of disenchantment with politics and a general loss of confidence in the way public institutions function. Although in the last few years more stringent laws have been brought in to speed up procedures and help pursue crimes of corruption, the fact of the matter is that they have done little to reduce these cases and so they are not enough to put an end to the problem. There is a strong likelihood that, if a positive morality and a strong mutual union between ethics and politics were in place, legal loopholes would not be used for individual profitmaking operations that make a mockery of justice and the common good. Because of this, and taking public ethics as a basis, this article will review and discuss Adela Cortina’s hermeneutic definitions “of maxima and minima” and Agustín Domingo Moratalla’s concept of “social justice” in order to suggest tools that can be applied in preventing and fighting against political corruption.

     

From corruption to extortion: Conceptualization of post-communist corruption

Moral outrage and lack of comparison distorts the understanding of the natureand politically determined functions of governmental corruption in post-communist transition. As post-communist societies move towards open market systems and corruption is no longer limited to the public sector, politics is transformed into a potent tool for illegal transactions. The political structureitself creates corrupt practices that become a structural feature of transition societies. This article offers first a critical discussion of both moral theories of corruption and the thesis that posits a link between corruption and democracy deficit in post-communist countries. Subsequently, it sketches a neo-functionalist approach that puts corruption in a specific social context.With respect to East/Central Europe, corruption is presented as a betrayal ofpublic trust that serves specific requirements of an emerging ``extortioniststate.' These requirements relate to the expansion of extortion opportunitiesand their institutionalization into a semblance of a Tule of law system.     

Privatisation and corruption in Romania

Editor's note. The regime change in East and Central Europe and the reslting shift toward market economies and new political institutions have raised complex questions regarding the relationships between the public and private sectors of the economy and society. Romania's transition has been particularly difficult in both political and economic terms. That nation confronts the challenge of creating new conceptions of ownership and citizenship, and new standards of conduct, in a setting in which the government charged with these tasks has legitimacy problems of its own. In this Research Note drawing upon Romanian press accounts, Liliana Popescu-Birlan reviews the early stages of this process. She focuses in particular upon the difficulties involved in privatisation, and upon the implications of the process for problems of corruption.     

Inexplicable wealth and illicit enrichment of public officials: A model draft that respects human rights in corruption cases

The employment of crimes of inexplicable wealth as an anti-corruption tool has been increasingly advocated in recent years. The United Nations Convention against Corruption calls for the creation of a crime of illicit enrichment. This paper seeks to evaluate the drafting of such crimes from human rights and criminal justice perspectives. The author considers the jurisprudence from the United States, Canada, United Kingdom and South Africa, as well as the European Court of Human Rights. The paper also evaluates the Hong Kong inexplicable wealth offence and subjects it to criticism in terms of the rights of defendants and the lack of clarity in drafting. The author concludes that there is no need for a specific crime of inexplicable wealth. A crime of corruption is perfectly adequate. All that is required is the use of a special rule of evidence which places the evidential burden upon the defendant. The use of a mandatory presumption of law is the most clear analytical method of drafting. This is consistent with human rights standards and common law jurisprudence. Finally, regulatory offences requiring proper financial record keeping and declarations of wealth should be created alongside the more serious corruption offence. These could impose strict liability. Wealth previously declared by public officials should not be presumed to be corrupt funds for the purposes of any corruption prosecution. This approach is consistent with the United Nations Convention Against Corruption and would represent an acceptable mode of implementing that treaty.     

Internal strategies against corruption: Guidelines for preventing and combating corruption in police authorities

While corruption is not an entirely new phenomenon in Germany, the number of cases suggests that proactive measures should be taken to strengthen prevention and detection. This article proposes a number of measures which, used separately and in combination, aid prevention and detection. It then proposes a wider management approach to dealing with corruption which ranges from general to specific strategies and actions that are intended to prevent corruption, to design out the circumstances in which it may occur and to provide means of detecting areas of risk and vulnerability. The article particularly focuses on police organisations but has applied relevance to all public sector organisations. This revised version was published online in July 2006 with corrections to the Cover Date.     

Democratic transitions and forms of corruption

Any transition to democracy has implications for corruption. This papertakes a contextual and procesual approach to the analysis ofdemocratisation and corruption. It disaggregates some variables wherebydemocratisation can provide the context for the development of corruptionand crime. This paper does not argue democratisation causescorruption and crime. Nor does it argue democratisation does not providethe social space for the reduction of corruption and crime. This paperconcentrates on the areas in which democratisation provides an oftencomplex environment for the development of corruption and crime.     

Symptoms of corruption and union denial

Labor Racketeering is often the result of collusion between employers and employee representatives in which in exchange for something of value the employee representative ignores his obligation to union members. Given the limited investigative resources of unions, proving the receipt of a bribe is most often beyond their ability. However, the artifacts of racketeering such as inexplicable substandard contracts or lax contract enforcement remain evident. The harm to the members remains the same. As a consequence, in disciplining union employees, unions should sanction them for involvement in the creation of these artifacts as if bribes were proven. Charles A. Carberry is the Chief Investigator for the Independent Review Board (IRB), the body that pursuant to the Civil RICO settlement between the International Brotherhood of Teamsters (IBT) and the government investigates corruption and supervisors resulting disciplinary actions against union members. The views expressed herein are Mr. Carberry’s and not necessarily those of the IRB.     

Organized crime, corruption and power

The perception of organised crime as an external threat to political stability and integrity, as well as to orthodox commercial activity, is based on an assumption about the motives and intentions of organised criminals. It invariably results in a call for a war against crime. The reality and the possible solutions are less dramatic but also more complex. Organised criminals are concerned with both legal and illegal businesses where bribery of public officials and involvement with orthodox commercial activity are part of that business. While organised criminals may want to enjoy the profits of their business rather than subvert societies what they do and how they do it can have adverse consequences for societies and should be addressed. In seeking to do this, however, it is necessary not only to analyse threats to target resources more effectively but also discourage those public figures and orthodox businesses whose enthusiasm for short-term benefit overrides their moral judgement and thus allows organised crime to be tolerated within the societies to which they are supposed to be an external threat.