Curb Corruption By Cutting Discretionary Authority

The World Banks World Development Report for 1997 stresses that any effective strategy to reinvigorate the public sector should aim at reducing opportunities for corruption by cutting back on discretionary authority.

All policies that lower controls on foreign trade, remove entry barriers for private industry and privatise state firms in a way that ensures competition, will go a long way in combatting corruption, says the report released yesterday.

Such reforms should not be half-hearted. Reforms that open avenues for private entry into the closed sectors of economy at the discretion of public officials without establishing open and competitive processes, also throw up tremendous scope for corruption.

 

Formal checks and balances can also help reduce official corruption, but they are seldom enough, the report argues.

Reforming the civil services, restraining political patronage and improving civil service pay-scales have also been shown to reduce corruption by giving public officials more incentive to play by the rules. Where corruption is deeply entrenched, more dramatic effort will be needed to uproot it, says the report. These efforts should be focused on better monitoring of official action both by formal institutions and by individual citizens, and punishment of wrongdoing in the courts.

In Hong Kong, an independent commission against corruption is one successful example of such an approach. Likewise, recent reforms in Uganda have incorporated several elements of the anti corruption strategy outlined in the report, with some encouraging results. The report says that the same mechanisms could be applied around the globe: corruption, despite claims to the contrary, is not culture specific. Reducing it will require a multipronged, which must include the private sector and civil society more broadly. The briber has as much responsibility as the one being bribed and effective penalties on domestic and international business must be part of the solution.

The report points out that a clear negative correlation exists between the level of corruption as perceived by businesspeople and both investment and economic growth. This is confirmed for investment levels by the results of the private sector survey conducted for this report. Other surveys and anecdotal evidence suggest that the greatest victims of petty corruption are usually the poor.

The report warns that those who have so far achieved high rates of economic growth despite serious corruption may find themselves paying a higher price in the future.